Jan 23, 2012 | Change, Management, Operations
Most of us know that if we set out to lose weight, a crash diet usually just works in the short term, what we really need is a change in lifestyle, or at least, some aspects of our lifestyle.
Obvious.
Why then is it that in corporate life we usually take the crash diet course?
There have been lots of headlines over the last few weeks about the probability of job losses in the banking sector, a response to the looming financial difficulties. The financial services sector has been doing very well, record profits despite the problems of a couple of years ago, and have been adding jobs, close to 40,000 over the last decade, and now they need to diet, so “crash” find 10,000 to cut.
Surely the problem is one of an ageing business model, in personal terms, too much junk food, not enough veggies and exercise, so now the management reaction is a commercial crash diet. History suggests there will be a lot of pain, and long term, little or no gain.
Those customers whose business is down the shallow end of the banks customer Pareto, the SME’s who are really the engine of sustainable growth in the economy will now find it harder to borrow. The banks are tightening the screws because of their crash diet, so there will be no-one to understand their SME customers business and consider their funding needs, and requests will be reduced to decision by an algorithm. Both the banks and the SME borrowers will lose under these conditions.
Pretty soon, hopefully, someone will realise the problem cannot be solved with a crash diet, it needs a lifestyle change, and only when that happens will sustainable recovery of commercial fitness be possible.
Jan 20, 2012 | Change, Management, Personal Rant
The Federal Government is regularly blackmailed into providing assistance for the Australian car making industry, hundreds of millions on the basis that the industry is strategically important. The real reason is the political poison that closure of a plant causes, as suddenly lots of voters are unemployed, and the support and component suppliers (and their voting employees) are in trouble.
Kim Carr is just the latest in a long line (a conga line?) of Industry Ministers to go to Detroit, only to find that the captains of the car industry do not really care about a modest market and manufacturing outpost that has no real strategic place in the global supply chain, and therefore is expendable. If Australians want to keep them open, here is the price!
What a difference to the processed food industry.
It employs just as many, probably more, and does have a genuine strategic role, feeding ourselves seems pretty strategic to me, but is more fragmented and therefore unable to point to individual electorates and predict disaster, so we just let it rot.
Hypocrisy, perhaps blind stupidity, of the first order.
Jan 19, 2012 | Change, Social Media, Strategy
If you have not yet caught up with SOPA, the “Stop Online Piracy Act” working its way through the US legislative system, you probably soon will, because if it gets up, the troglodytes in Canberra will pile onto the bandwagon pretty quickly.
The act is a response to the digital piracy enabled by the net, but the probability of unintended consequences is absolute.
It is clear that there are problems, why buy music when you can download it for free? The legacy industries of the C20 whose business is creating content would rather you do not have the right to create and share it yourself, they want to produce second rate crap and charge you for it. You being able to do it threatens their profits.
Better ask iTunes, a C21 business by the way, they seem to have done OK, their 10 billionth song was downloaded in February last year, or the boatloads of new bands who have a profile and market for their music via the net, but not a music company in sight, and the bloggers, who have a means to express themselves without a newspaper, the list goes on.
The push against piracy is understandable, businesses are having their business models trashed, and they want it to all go away, but it won’t, simply because the world has changed and they have not, so they need to move over, or as it is happening, be moved over. Painful to the few, but inevitable.
King Canute found the tide did not stop just because he wanted it to, and had pinned his future on being able to stop it, and I suspect the proponents of SOPA will discover the same thing. Being cynical, I suspect they already know it, but are just trying to buy time at our expense. This TED presentation by Clay Shirky, one of the real thinkers in this space says it better than I can ever hope to do.
Jan 15, 2012 | Change, Leadership, Personal Rant
The wall I refer to is the Australian processed food industry. It is being torn down by the high $A, the strategies of the two retail gorillas who are stocking shelves with housebrands, global sourcing of product, and lack of will by Australian governments and institutions of various types that inhabit the fringes of the industry.
On January 6, Heinz closed its tomato sauce plant in Victoria, transferring manufacturing to NZ. This comes on top of the Heinz closure of the beetroot plant in Brisbane, and further closures in Wagga, and a very long list of other closures by many local and multinational businesses that have occurred over the last 10 years.
Not only are we becoming just a quarry for the world, flog our minerals, and import the manufactured product, the same thing is happening to the food industry. Export the farm commodities while we still can, at commodity prices, and import the processed product.
According to the Australian Food & Grocery Council State of the Nation 2011 report, Australia is now a net importer of processed food. Can you believe that?
What happens to our rural communities, manufacturing capabilities, and innovation DNA? Without manufacturing to work with, innovation slows, and a vicious cycle of price driven commoditisation takes hold.
There is a bit of bleating going on like this post, but little useful is being done.
So, here is a short list:
- Assemble and make available a detailed database of the food industry. It is astonishing that one does not exist. Instead, there are many partial lists assembled by various industry bodies, service providers and government agencies that together would offer some real statistics to enable decisions to be based on facts, not assertions and vested interests. The first step in improvement is to clearly understand what you currently have.
- Encourage, indeed demand, a collaboration between all the various Government, industry, and research bodies that serve the industry, and reduce the wasted resources by focussing on a few priorities that are bigger than the local, and special interest issues that currently dominate. We can do far better, and spend far less with a bit of sensible strategic management of collective resources. The Federal Government is in a position to make this demand, as ultimately, they control the flow of funding. It should grow some “cohunes” and exercise some leadership for a change.
- Direct the Productivity Commission to produce a detailed industry profile to quantify the current situation, and provide a base for filling the gaps, and encouraging growth, capability development, and ultimately commercial sustainability.
- Be prepared to support sensible innovation, capability, and industry building initiatives, ones with a commercial justification, not just a political one. For example:
- Revive the Regional Food processing grant program, but have it run by commercial people with a detailed industry background, and flexible guidelines, not Canberra bound bureaucrats who measure activity not outcomes but by box-ticking.
- Reinstate trade training at regional TAFE institutions in critical capabilities, fitters, welders, electrical trades, boilermaking, and mechanical engineering.
- Rebuild sagging infrastructure, particularly rail and road/rail hubs. Road transport costs are strangling many regional manufacturing centres after the widespread and almost indiscriminate closure of regional rail lines.
- Crash through all the stupid State/Federal demarcation and duplication that stymies all of the above, and have a national approach, after all, it is a national challenge, not a state one.
Send me your policy suggestions, maybe, just maybe we can get somebody to listen.
Jan 11, 2012 | Change, Customers, Innovation, Marketing, Strategy
Kodak used to “own” photography, having a massive share of the film market, end to end.
No more, Kodak is virtually broke, subject to continuous take-over speculation.
The really interesting thing is that one of the assets that makes Kodak valuable to an aggressor is its bank of patents that relate to the technology that drives the product innovation in the digital space.
The failure for Kodak is therefore not in being unable to develop the science, for individuals in the labs to see a different path, and to imagine the next iteration but to do something about it in the marketplace, disrupt themselves before somebody else does it.
Coming in parallel, but I have not seen it really considered before is the fundamental change in the way people think about photography, a complete disruption in behavior that has gone unnoticed.
Photographs used to be used to preserve memories. No more, at least, not much.
They are now used as a foundation piece of the individual communication process.
What are we doing now, who we are seeing, where we are, an expression of ourselves are now the motivations to take a photo on whatever device happens to be in our hand at the time. Creating a record for our kids is a useful by-product of these activities, although I am not sure how the current 20 year old will react to their children in 20 years seeing photos of them pissed at a party 20 years before, so perhaps creating some records will be problematic in the long term.
The photographic market has been totally disrupted, not just by the development of digital technology, but in the way consumers behave. For a marketer, being able to build a corporate mind-set that enables the science, and at the same time embraces the ambiguity and uncertainty of consumer behavior changes is the challenge that keeps life interesting.
Jan 4, 2012 | Change, Communication, Innovation, Operations, Social Media, Strategy
In the communication revolution going on currently, the infrastructure to carry it all is vital, but how relevant will the 2010 infrastructure be to the world that greets it when it is finally completed roll-out in, when?, what was the last projection? ever?. The world is changing almost daily, the NBN as conceived by our political masters will be obsolete before it is 10% implemented.
In the October issue of “Wired” magazine is a fascinating analysis of the “Tech War” going on between Apple, Google, Amazon, and Facebook. It is a must read for anyone in business, it puts a competitive context around the maneuvering we all see happening, but do not necessarily connect the dots.
We, the Australian taxpayers, are making a multi-generational investment in the NBN, billions of dollars spent by those well known, fast moving, tech savvy innovators in Canberra. Lets hope they know what is going on outside the cocooned environment of the “bush Capital that are all so pleased to live in.
Somehow I doubt they have any idea, and that is truly scary, and there will be a whole lot more of this sort of failure, and the accompanying spin before anyone in Canberra admits to a huge boo boo.
