Has ‘The Bug’ created an organisational crossroad?

Mar 16, 2020 | Change, Strategy

 

 

My eldest son has been talking to his employer for some time about remote working.

He and his family wanted to get out of Sydney, with its attendant challenges, and have a simpler lifestyle.

Problem has been, the simpler lifestyle also limits the job opportunities, particularly in the relatively narrow field where he has developed experience  and expertise.

He conducted an experiment, both for himself and his employer, by working remotely for 6 weeks, from Tasmania. His boss was happy, as was he, and so the idea flourished to the point where he sold his unit a couple of weeks ago, just after his boss’s boss informed them that remote working was not on the agenda, and not acceptable.

This was all before the great dunney paper rush motivated by ‘The bug’ over the past few weeks.

I wonder if the attitude has changed? I know Geoff and his family are committed, and in the absence of a job, will move anyway and try their luck, cashed up as they are.

What does Geoff’s employer have to do to make remote working a part of the way they work?

They have to undergo a digital transformation,  supported by a cultural one. In a global company in a regulated market, this is not easy. In fact, the only easy thing about it is to kick the can down the road, so it is someone else’s problem to solve.

However, Millennials are not the same as us baby boomers. They are looking for something more, and are very mobile, risk takers, and unlikely to stay with an employer who does not meet, or even try to  meet their needs.

I have prepared a list of the elements  Geoff’s employer needs to think about, if they are to transform, and have the chance at retaining the training, commitment and intelligence Geoff, and his cohort bring to the table.

  • Change of this nature requires leadership and overt commitment from the very top, cascaded through the organisation. This means that there is a mandate to change from the top, and the necessary resources and leadership are made available. When change is slow, or not forthcoming, the leadership needs to remove the roadblocks, ensuring the ball keeps rolling, building momentum.
  • All stakeholders need to understand the reasons for  the change, and the value that is created by the outcome. In the absence of an articulated reason for the change, it will stutter.
  • Organisation structures need to change from vertical siloes to cross functional collaboration. While this is organisationally and operationally difficult, it is logical, as the customer does  not care which part of the organisation addresses their needs, they just care that it is done in a timely, reliable and efficient manner. Organisation structures have to evolve to reflect the customer journey, they can no longer dictate how that journey will be fulfilled. Siloed organisation structures generate ‘transactional friction’ for customers, and the millennials amongst them generally will no longer tolerate it, so they will go  elsewhere.
  • These changes are not a digital transformation, they are an organisational transformation that uses the evolving digital tools to add value to customers. Too many become obsesses with the tools, when it is the outcome that counts.
  • Transformation of any type ultimately boils down to the people, it is them who will engage and push the cultural transformation needed, it just requires the permission and tools to do so.
  • Somebody, somewhere, has to build and approve the business case for all this. Change is risky and potentially expensive, but is a necessary part of commercial sustainability. In the absence of a business case that finds a way to articulate the desired outcome, in a manner that everyone understands, the change process will grind to a halt under the weight of the status quo.

The bug may be the catalyst that kick starts remote working. If I was a share market punter, I would be tumbling all my spare cash into businesses whose product was enabling this move. Zoom,  for example, as well as the integrated cloud systems, Microsoft, Cisco, Zoho, et al. My son is well down in the pecking order of a very large corporation, and seemingly irrelevant to the success or otherwise of the organisation, but losing him, and others like him, will slowly rot the business from the core.

 

 Header cartoon courtesy Mike Luckovitch

Mistaking growth for optimisation can be terminal

Feb 5, 2020 | Change, Strategy

 

Generating rapid growth in a business entails a constant choice that simply must be made, but is usually missed.

It is the choice between ‘growth’ and ‘optimisation’.

They require different skills, strategies, and resources.

Let me explain.

‘Growth’ implies something less than a double digit year on year increase. While that may stretch resources, it is often  ‘Doable’, while very challenging. ‘Rapid growth’ is much harder,  requiring the acquisition of many new customers, assets, movement into new markets, product or geographic areas, and a higher risk profile. It is often aspired to, even budgeted, but is relatively rare.

‘Rapid growth’ is also usually very scrappy, you are fixing things on the run, adding resources, are short of cash, and so it requires people comfortable with ambiguity, uncertainty, and a drive to do new stuff.

By contrast, optimisation is taking what is currently done, and improving it, bit by bit, on a continuous basis. The scrappy, seemingly undisciplined and almost random frenetic activity of a rapid growth enterprise makes them uncomfortable.

Think about Olivetti, the king of the typewriter market.

They made wonderful typewriters, best in the business, optimised continuously for 75 years. Into this mix comes a scrappy unreliable substitute, the word processor and attached printer, that costs more than an Olivetti, and does not deliver the same quality of output.

To Olivetti management, it was less than a threat, more of a nuisance, that would soon go away, so they continued to optimise their machines, rather than recognising that the scrappy, word processor would rapidly steal not only their market, which was typing pools, but destroy them, and create new ones. The word processor was an entirely different  tool, one that gave everyone the ability to type and print from their desk, a much quicker, more flexible, and hugely democratising change in organisational life. Olivetti was obsessed with their machine, not seeing the customers as anything more than users. Word processors gave everyone a power that had been concentrated in the executive suite, creating a terminal strategic change that Olivetti failed to see.

Is your strategy clearly making the distinction between optimisation and growth, as they are different beasts, requiring different capabilities.

 

Header photo courtesy Paolo Bpnassin via Flikr

 

 

 

3 factors creating an existential crisis.

Jan 19, 2020 | Change, Governance, Leadership

 

I recently found myself in the position of refereeing a ‘debate’ over lunch on climate change between 2 zealots, one from either side.

One who was a passionate advocate of the argument that it was real, and would kill us unless we did some challenging things, the science was in 30 years ago, and we have barely moved. Our public institutions have displayed, and continue to display, criminal negligence in that inaction.

The other, was a passionate advocate of the ‘why bother’ story. As Australia is a tiny contributor to global warming, unless the rest of the world did something, destroying our way of life was an irrelevant act of self -immolation. 

Thinking about it later, three things came to mind, that reflect the barriers to any major change in the way we work and live.

Denial. It is not happening, we cross our fingers and hope it goes away. Through history this has never worked, it is the ‘peace in our time’ solution.

Money.  Making the change will  not make any money, just impose unnecessary and unrecoverable costs. This assumes that tomorrow looks just the same as today, which is always wrong, we just cannot see the potential. Steve Ballmer dismissed the first iPhone as an expensive toy that would  never work,  Blockbuster did not see the potential in Netfliks, and Kodak, who invented digital photography, failed to commercialise it. With the short term  dominant in our institutional and public governance, the immediacy of money being generated  is a powerful argument for inaction, despite the evidence to the contrary.

Optimisation. We have optimised our current organisations, they are good at running exactly what it is now, and change is messy, expensive, risky, and dangerous to the personal advancement of those who advocate for it. In addition, the short term prospect of generating a return on investment is low, so our institutional risk aversion kicks in, often on steroids. Both time frames have their costs and benefits, quantifiable with significantly variable degrees of certainty. On balance, my money is on the ‘do something’ button, as history suggests those who do not change in the face of undeniable  change around them,  get run over by those who take the prizes. IBM and Olivetti used to own the typewriter business, Kodak owned photography, Hoover owned vacuum cleaners, all optimised businesses for the maintenance of the status quo, and none survived.

As I write this, the east coast of Australia, gripped by drought, has been on fire. We are only in the early part of what is usually called the  ‘fire season’, so things could easily get worse, although there may not be much left to burn. I suspect the views of both sides of the debate my lunch colleagues had will not have changed much as a result, a microcosm of the policy problem facing us.

However, every problem is accompanied by opportunity.

Climate change is a problem for everyone, a challenge for policy makers faced with the reality of short term populism to keep their jobs, and an opportunity for the few who see the problems as challenges to be solved.

 

 

 

How do you become a local overnight success?

Jan 6, 2020 | Change, Strategy

 

The great irony of the moment is that we have never been so ‘connected’ but so alone.

We are both connected and isolated by the digital tools that have emerged. This contradiction is slowly leading to the emergence of hyper-local initiatives that have the objective of reversing this trend, at least in their communities, and recovering some of the human contact at the core of our humanity.

I have spent a bit of time recently thinking about this challenge, as it seems to me that  ‘going local’ rather than reflecting the ‘go Global’ mantra is a strategy with real opportunities as we enter a new decade. The idea just ‘feels right’, an antidote to the relentless focus on breadth of relationships typified by ‘digital friends,’ at the expense of the depth of the relationships with a small number (Dunbar’s number) we evolved with.

The foundation question is: can it be commercially sustainable?

Hopefully a number of modest efforts I see around me currently underway with a small scale finished product in a limited geography will give some answers. The broader question, of what it requires to be ‘locally’ successful in a globalising world has caught my attention.

Following are 6 factors that seem to be worth your consideration.

Purpose. It is just a necessary for a micro geographic effort to  have a clear and attractive purpose articulated,  as it is for a global aspirant. Just because you are focussing attention just down the street does not absolve you of the necessity of articulating why that person down the road should care.

Business model. As for purpose, a commercially viable business model is required that is sustainable from the locality. Scaling is always a question, and the business model should be fit for purpose which includes the possibility of scaling, but first, it must be locally sustainable. Build your business model with this notion of locality scaling in mind from the outset, so should it become a viable option, you are ready.

Have a compelling value proposition. Marketing is about stories articulating the value to be delivered to which the audience relates. Without one, local or global, you are just another urger flogging a product. However, at a local level, where word of mouth is ultimately the determinant of success, it is even more vital.

Community engagement. Targeting a specific community with a product requires that you engage on a very personal level. You simply do  not have the luxury of numbers to service the revenue needed to run the business, so engagement on all sorts of levels is necessary. Gaining acknowledgement, engagement and  credibility in the community you are seeking to serve is essential. I suspect there is a tipping point that may become evident only with the benefit of hindsight.

Sustainable competitive advantage. Success locally will breed copycats originating in kitchens and garages around the locality. Price will be their only competitive weapon, to  be successful, there must be something else, not easily copied, that adds value. Competitive advantage is essential in any business, but sometimes in a larger scale, the urgency will be covered by the available numbers of possible customers. On a local level, this camouflage is not available to you.

Access. Communities work on reciprocity, the mutual benefit that comes from collaborating, and  trusting other parties in the community. Facilitating this communication and accountability loop will be  a foundation of success over the long term.

Becoming a success in any context is never an overnight thing. How often have we seen someone called ‘overnight success’ come after a decade or more of toil?.

 

 

 

Own your digital real estate, or slowly disappear in 2020.

Dec 22, 2019 | Change, Governance, Social Media, Strategy

It is getting harder and harder to be seen in the tsunami of stuff posted on various digital platforms.

The platform owners are wholesalers of eyeballs, their business is monetised by being the choke point between those who create material, and those who may benefit from seeing it.

Since the purchase of LinkedIn by Microsoft, the changes being made to generate a return on the $US26 billion paid have all been designed to build the case for monetising the access to the other side of the equation.

I have no problem with the principal, being paid for value delivered. However, for a small consultancy, wanting to inform, educate, demonstrate expertise, and add value, the costs can become significant.

There is an option.

Be really good, be different, and be of value to the few who really care.

Everything posted on the various ‘social’ platforms is first posted on my own digital home base, a point of distribution I own, so make the rules by which I operate, www.Strategyaudit.com.au . The alternative is to rely on platforms others own, where they make the rules by which you have to play.

For those who sometimes find value in what I write, subscribe to the posts on the site, rather than waiting to see them on LinkedIn or some other place, because you will miss most of  them.

Once subscribed, you have the option of reading them, or just skimming and moving on, the choice is yours, not that of an algorithm designed to extract rent for the privilege.

If the posts become less than valuable, unsubscribe. Easy.

For many years now the path has become increasingly clear: to be seen, you must own your own your digital real estate, not rent it from someone else. 

The recent changes in the LinkedIn algorithms have halved the number of people who see what I post, and moved them geographically. A set of eyeballs in Sydney is for me terrific, New York or Mumbai is of less value.

At some point soon I will simply stop posting outside my own digital real estate, relying on that oldest of marketing tools, word of mouth, to spread the word. At least then I know that those who see the stuff really care, perhaps learn, and might start a useful conversation, which is why I do it.

This is the last post for 2019. I hope it has been a good year for you.

As I sit here in Sydney, ringed by fire, and observe the impotence of the public governance  we have somehow inherited, the hubris and self interest that prevents sensible debate and change across our economy and social services, I can only believe we are at a tipping point. I remain an optimist, and hope against hope that 2020 sees the awakening of a feeling that we have to not only demand change for the better, but dig in and generate it, one by one, until it becomes unstoppable.

Merry Christmas, and I will see you next year

Do you need a Digital Strategy?

Sep 27, 2019 | Change, Governance, Strategy

 

 

‘Digital Transformation’ and its sibling ‘Digital Strategy’  have become clichés, unfortunately, as it distorts the management and leadership challenges involved.

However you choose to label the evolution from the analogue world of last century, to the digital ecosystems we now see evolving, it is a process, starting with the simplest things, and moving progressively along to the more complicated.

‘Digital’ is no longer a choice,  it simply is!

How many of you have a ‘Telephone Strategy’? Nobody, it is simply a necessary tool, used better by some than others.

The failure of many ‘digital transformations’ I have seen has little to do with the digital tools, and a whole lot to do with the way people are managed, led, and the manner in which the enterprise leadership enables the evolution to digital to occur.

As with any process, in any transformation, including ‘digital’, there are some pretty simple to say, but hard to execute steps to be taken,

  • Define the business outcomes you are seeking.
  • Start with the simple, test, learn, and move progressively to the more complex, building as you go.
  • Recognise and accommodate the wider impacts. In any digital evolution, your business model should evolve in sympathy. As you progressively digitise, the friction  between the old and the new will become more intense, and potentially disruptive to operations if not managed well. This seems to frequently lead to some expensive consultant recommending you devise a ‘Digital Strategy’.
  • Define the new capabilities required. Inevitably new capabilities will replace the ones that made you successful last century. This part of the evolution can be very confronting and painful, but is inevitable. It can also chew up lots of cash, which is often hard to justify using the short term quantitative measures we favour over taking a longer term, but more qualitative view of what the future might look like.

Nothing about a digital transformation is easy, but if it was, anyone could do it successfully, and we know from observation that is not true.

 

Header credit. Another stinging but insightful cartoon by Tom Fishburne at www.marketoonist.com