Sep 27, 2009 | Change, Leadership, Management
A short while ago I found myself in a fairly robust debate about the merits or otherwise of the various industry “marketing & R&D” bodies that have inhabited Australian agriculture for decades.
Dairy, meat, Horticulture, grains, all have, or have had, a range or bodies regulating and collecting levies for the so-called collective good of the “industry” .
It struck me towards the end of the conversation, which was getting a bit heated, particularly about the recent removal of the single wheat marketing desk, that the positions we were all taking bore the hallmarks of an argument that had happened many times, the various pros & cons recited almost by habit by all concerned.
Whilst they were expressed as considered views, informed by facts, what they really were, on all sides, were recitations of a view expressed many times by rote from within the boundaries of a point of view that was unlikely to change under almost any circumstances.
Next time you find yourself reciting a mantra, go back to the basic facts, consider who benefits, look at the location of margin and profit, and then think about the view you are comfortable with, genuinely informed by the facts.
Sep 22, 2009 | Change, Innovation, Leadership, Strategy
There is a growing trend driven by the difficult times for management to set very big goals (Big Hairy Audacious Goals… BHAG),and hope to create the focus necessary to achieve the BHAG outcome.
Often however, the opposite appears to occur, as those in the organization charged with the execution of the plans simply do not believe the objectives are achievable.
Sometimes this is just that the objective is divorced from the reality of the competitive environment, sometimes it is simply a failure of leadership, but most often, it is just that the goals emerge from wishful thinking that puts off difficult decisions for a bit longer.
JFK said in 1961 “I believe this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon, and returning him safely to earth. ” This is probably the most famous BHAG of all. It is a statement in a single sentence that contains the three elements of a successful BHAG. It creates the vision of where we want to go, the measures of success are clearly articulated, and everyone recognised the resources necessary to achieve the task would be made available, because the President had committed himself to the goal.
No room for wishful thinking or bland leadership in that statement, and it was achieved. Would it have been achieved, had any of the three conditions been missed? Probably not, because it would have just been the wishful musings of the President.
Sep 16, 2009 | Change, Innovation
Aggressive defense of the status quo by powerful firms, or a consortia of firms in some sort of industry lobby body often indicates a fat profit plum ripe for the plucking, or a closed shop that protects inefficiency. Perhaps they are the same thing.
Look at the defense of the record industry against the digital music revolution, the aggressive defense of the pharmacy drug (legal) distribution monopoly, the newspaper distribution monopoly (would you buy a newsagency now with the e-distribution of news taking over?) and the artificially high entry barriers imposed on new entrants to many professional bodies and you will see potential profit in the breaking down of the status quo, which protects someones easy life.
Usually, everyone apart from the defenders benefit when these strong guardians of yesterday are wiped away, as they usually are, with a greater level of pain than would be incurred if there was a sensible and creative discussion about alternative models.
In the end, all the lobbying does is create added waste and pain, and the chance to protect the profits of incumbency by innovation, and evolving the business model to better serve customers is lost in the determination to protect the status quo.
Sep 13, 2009 | Change, Innovation, Leadership
Transaction costs occur when you do something, opportunity costs, even harder to measure, occur when you do nothing.
Transaction costs are well hidden inside the activities that take place in your business, and short of introducing activity costing, are usually hard to determine with certainty. However, what is certain in every business I have ever seen is that they can be reduced, usually significantly.
It takes common sense, determination, leadership, and a willingness to break open the status quo to reduce transaction costs, none of which are easy, which is why it can be such a powerful competitive tool, your competitors will find it just as hard, and will often shy away.
Opportunity costs are even harder to measure, and usually it is only with hindsight that any measurement is possible, but then almost nobody wants to point out what could have happened if you had done something differently, and that is exactly why it is such a powerful concept to consider.
Ask yourself: “If we…………., what might happen?” as a part of your planning processes.
Sep 10, 2009 | Change, Management, Uncategorized
Intel co-founder Gordon Moore, used a graph 40 years ago to predict the rate of growth in IT capacity by stating his belief that the number of transistors that could be put onto a chip would double every two years.
He was talking about computing power, a long way from the environmental debates raging around us currently.
On the radio a day or two ago, I heard a credible source observe that he was astonished to note the rate of carbon being released to the atmosphere was roughly double estimations made just a couple of years ago.
This comment brought to mind Moore’s law, and started me wondering if it perhaps applied to the climate change debate. A recent Newsweek article also observed the rates of carbon emissions were well up on estimates, and that the rates were increasing, significantly because the rate of change was feeding on itself, creating a sort of multiplier effect, Moore’s law at work.
The unedifying sight of Australia’s two political parties taking opposite sides of the debate, simply because that was their allocated role, and apparently refusing to allow the facts to get in the way of a good argument smacks of Monty Python, not the serious debate that is required to start to address the scientific, commercial and social issues surrounding reality, or otherwise, of human induced climate change.
If Moore’s law holds true in the rate of release of carbon into the atmosphere, and the release of carbon is indeed a cause of global warming, we will need to move very quickly indeed to prevent, or perhaps at best mitigate, a catastrophe.
