Feb 4, 2010 | Branding, Change, Leadership, Marketing
The corporate left brain/right brain conflict is alive and well in Jetstar.
Currently Jetstar is spending on TV advertising their Asian destinations, pushing that they are not just a cut price airline, at the same time they are facing a PR debacle, having left passengers in Penang airport for several days due to mechanical problems with an aircraft. (perhaps they should change their advertising; “an extra 4 days at your expense” not a great idea?)
Gail Kelly at Westpac got it horribly wrong a few weeks before Christmas, raising the banks home mortgage rate beyond the increase in the prime rate, how many advertising dollars did that send down the crapper? Anyone who actually thought about the pricing challenge from a customer perspective would have predicted such an outcome, that the mistake was made by the former CEO of St George whose culture was all about customer care is inexplicable. Even the vaunted Toyota is struggling with a recall in the US of 9 million cars with sticking accelerators, not a good addition to their market positioning.
The list of companies that sacrifice their long term position to get out of a hole in a crises goes on, and on. The corporate “numbers groupthink” takes over, no-one states the obvious, but uncomfortable truth that the P&L needs to take a short term hit for the benefit of the long term.
Very occasionally, someone does it right. The classic is J&J’s recall of Tylenol in 1982, and subsequent leadership in introducing tamper evident packaging. Short term cost was huge, but the long term position was enhanced enormously. Arnotts in Australia had a similar experience in 1993, and came out of it smelling like roses.
Why do most businesses continue to make the same mistake when faced with a crisis, a short term focused response?
My conclusion is that the power of the short term performance metrics overwhelms common sense, and the only antidote to this long term poison is to build a culture that genuinely sees customers as central to the reason for the business existing, and only by serving customers can commercial sustainability be achieved. This commitment to long term customer value needs to be a part of the culture, as fundamental to an organisations shape and actions as DNA.
Feb 3, 2010 | Change, Marketing, Strategy
On the web, you have lost control of the conversations that can impact on you, anyone can say virtually anything they like, and unfortunately because it is “out there” it can gain traction, take on some credibility.
If you cannot control it, you need to be aware and find a way to participate in the conversation as a means to present the facts, alternative views, or a different perspective as a means to debunk the nonsense that can accrue in the absence of facts.
To do this, you need to be an active participant on the web in the forums and communities that talk about your product or service.
In the old days, (and even today) if someone prints lies in a magazine, you could sue, gain a retraction, an apology, some compensation, but on the web, you can do little to force a retraction, the best you can do is enter the debate and point out the nonsense.
Are the skills and aptitudes to effectively debate on line present in your organisation? At the very least, they will be cheaper than lawyers who will be totally ineffective, so look at the cost just as insurance if you cannot see the value in communicating directly with those interested in your product.
Jan 28, 2010 | Change, Management, OE, Operations
Scientific method calls for experimentation where you vary one variable at a time, observe the effect, making further changes only after consideration of the cause and effect relationships in the first experiment are understood.
Unfortunately, this is the opposite approach unwittingly adopted by many improvement initiatives, where there is a brainstorming session to identify “improvement opportunities” which are listed, prioritised, and implemented.
In the event of any improvement happening, we cannot tell which of the changed variables drove it, indeed, you may have good ideas in the mix whose positive impact is masked by the poor ideas and their outcomes.
One at a time takes more time, but not only offers the certainty of a positive outcome, it also educates you on the reasons why improvement has occurred, which can only benefit the ongoing process.
Jan 27, 2010 | Change
The Australian Government has finally grasped the nettle and created a web site that is supposed to keep “score” on the performance of Australian schools, much too the chagrin of the rent seekers in the education sector, primarily the teachers union. The public sector unions representing the pen pushers in the department are pretty quiet, I suspect because they want others to carry the poison can. Unbelievably, the P&C association also does not want the site.
I have never, ever, seen a successful improvement initiative that did not start with a comprehensive, and quantitative review of the status quo. You need to know the starting point in order to know what to change.
The state departments of Education have been collecting huge amounts of data for years, they have massive infrastructure devoted to nothing else, but have failed to use it to improve the education of our kids. We have increased responsibility being foisted on schools for things we reasonably expect parents to cover, and we seek to protect kids from the world. The education system should assist to prepare our kids for a world changing at a huge rate, rather we teach them to comply, to be subservient to the status quo, not to rebel, not to ask difficult questions, and not to learn to think for themselves, display leadership, or be inquisitive.
Had the various institutions we pay for collectively to provide education to our kids done their job, the scorecard would not be necessary, the information collected over 30 years would have been used to improve the educational outcomes, instead of filling warehouses with useless bits of paper.
The scorecard clearly has some downsides, but if it gets some of the rent seekers off their collective arses, if for no reason that they need to in order to cover them, it will have been successful, as the improvement opportunities will have the chance to be aired, and implemented. Ironically, the debate sparked by the publication of the site is the first step in a rational review of the way in which the education dollar is spent, the outcomes we should expect from that expenditure, and weather the expenditure is both sufficient in total, and sufficiently well directed to deliver the sort of education necessary for our kids to contribute and prosper in the years to come.
The pain to the few that will be caused by poor use of the site will in the long run be worth it.
Jan 24, 2010 | Change, Innovation, Leadership
Good art is never boring, it always “says” something new, irrespective of weather it is a drawing, a poem, a piece of music, a hairstyle, or anything else, it is never safe, predictable, and attractive to everyone.
Defenders of the status quo always try and put numbers on risk, but how do you put numbers on things that are new and different, and encouraging of change?
Art creates a platform, a means for people to engage, people who have nothing in common other than an appreciation of the piece of art in front of them will find a way to engage with each other, facilitated by the piece.
What an opportunity for product designers to appeal to markets that are vastly different in demographics, but in some behavioral way, very similar!
Take a risk, and engage with designers who see things differently to ypu, and most of the market, but first you need to get the defenders of the status quo to accept that what makes them uncomfortable is good.
Jan 21, 2010 | Change, Innovation
The Google phone, perhaps “G-phone” is another transformational innovation in this industry driven by the most consistent innovator of the last decade.
The standard business model in the mobile phone industry has been to effectively give the phones away in return for a contracted monthly fee for a period. Consumers have got used to this model, but generally dislike the opaque pricing.
The “G-phone” will be sold from the Google website, without a carrier, each consumer will be able to make their own arrangements. This will change the base of the business model if the Gphone reaches any sort of scale, particularly when a carrier in a market does a deal for Gphone owners based on the opportunity offered by a potentially large group of consumers .
Googles “Kindle” reader is rapidly building penetration, and has recently gone international, and is a huge threat to the existing institutions that inhabit all stages of the book industry. The phone has a similar disruptive potential.
