Jun 3, 2015 | Change, Governance, Management
For 20 years, Mary Meeker of KPCB has been collating and publishing an annual report on the growth and growth of the net and the services and products it carries.
This 20th publication contains information that will be useful to every business.
The local lemonade stand, to the huge Multinationals dominating the commercial landscape, there is vital stuff for you.
Just a few of the points that jumped out at me:
- Mobile data usage rose 69% last year
- 55% of mobile data traffic is from video
- Ads in mobile account for 8% of ad spend, but mobile accounts for 24% of time spent with media.
- Mobile use in underdeveloped economies is disproportionately strong. In effect, they are jumping the stage of fixed line infrastructure developed economies went through. If you want to do business in Asia and India, go mobile.
- Government policy, regulation and use of the net lags public usage substantially, around the world
- The number of hours a day people are spending in front of a screen s still growing, and though it has flattened off a bit, but it is 9.6 hours/day. (US data)
- The number of productivity tools becoming available is still exploding, as is the number of platforms for distribution of information and data
- The nature of work is changing rapidly, as is the location of those doing it.
Whoever you are, if you are in business, and want to stay there, it is worth flicking through the report.
PS. June 13.
Mary Meeker released a presentation of her amazing report, listening to her talk through the report makes it easier to absorb, way easier than just looking through the huge pile of slides.
Everyone should watch this, absorb it and figure out how to leverage it for your business.
Jun 1, 2015 | Governance, Strategy
image thanks to Hugh McLeod www.gapingvoid.com
Writing about strategy, and practicing its development with clients, there are always a number of things that do not fit comfortably into the various academic boxes.
That is the nature of the beast, uncertain, instinctual, and driven by insights that usually evolve over time.
I have recorded them just so they do not get forgotten in the general “whoopsy” that goes on in a strategy process. The orderly, sequential process so beloved by scholars and PowerPoint designers is a rarity in my experience.
I am sure you have stumbled across others, but following is my list of reminders.
- Almost all strategic outcomes evolve from trends and developments outside your business, things over which you have no direct control. The best you can do is prepare, anticipate and react better and quicker than your competitors.
- Peter Drucker said that “the only truly sustainable competitive advantage is innovation” and he was right. However, innovation for itself is of no value, it only gains value in the hands of a customer. Therefore the earlier you can get an idea, new product, new business model, whatever it is into the hands of your customers the better, then you have real market research to work with. What often passes for “innovation” that is internal is virtually always (I have never seen it otherwise) better called operational improvement.
- Competitive advantage arises not just when your product is a new gizmo, with new packaging, it arises when you beat up on your competition, create new demand, and open new markets. That is why you are doing this stuff, to win, so don’t be seduced by clichés.
- Strategy is as much about, if not more about, what you will not do, rather than just what you will do. At a base level, strategy is about choice, which markets, which customers, which priority resource allocations are made. These choices should, in a fundamental way, drive everything else
- Size usually does matter, but in the case of strategy, it is one of the few exceptions. In fact, it often seems to me that the smaller enterprises benefit more from a good strategy well implemented than a large one. Perhaps this is a measure of greater opportunity due to the lesser existing coverage.
- Speaking of size, growth for the sake of it is stupid. Commercial activity is all about returns on the funds employed, putting your money to work doing “A” instead of ‘B” because the long term returns are better. Size for the sake of itself only plays a role when human ego gets involved.
- Setting out to “delight” all customers is nonsense. Nobody can be all things to all people, and it is probably the case that if you are not annoying some you have backed away from some of the hard strategic choices. Net result of that is your overall strategy is weaker.
- Committing to a well thought out strategy does not require heroic quantitative predictions about the future. Commitment to a strategy requires that the tough choices be made that create a framework for future priority setting, resource allocation and decision making which together anticipate, accommodate and leverage the future as it arrives.
- An understanding of the differences between agility and flexibility is required. Being strategically flexible implies that you change your strategy as events unfold, which is a sure sign that tough up front choices have not been made. Agility by contrast implies that you are able to accommodate events as they unfold in the most appropriate manner without losing sight of the overall objectives. Generals have known through the ages that strategy rarely survives the first contact with the enemy, the same applies to commercial strategy, “lose the battle, win the war”. This truism demonstrates the difference between agility and flexibility.
- Finally, you get 1/10 for talking, the other 9/10 are reserved for doing. Moving ahead with a strategy that may still have some holes, and learning as you go, is far better than waiting until all the i’s are dotted, and t’s crossed, as that involves lots of talking, not enough doing.
What things have you come across that could be added?
May 26, 2015 | Governance, Leadership, Strategy
cartoon courtesy Hugh McLeod www.gapingvoid.com
Part of what I do day to day is made up of business reviews. Whilst every business is different, and the competitive environment is different, there are some common questions to be asked that tend to reveal the effectiveness and impact of strategic and business planning.
Strategic planning has become a cliché, often just meaning the three day off site that stuffs up your week, and takes some preparation in case you are asked some difficult questions, but following is a checklist of things I look for in a plan, which may assist your thinking.
Major trends. What are the external, big picture things that are, or will impact on your business. Trends such as technology, the regulatory environment, trade barriers, et al that have the potential to change the context in which the plan has to live. These are generally much “bigger” than a one year time frame, although the pace of technical change often gives the lie to that generality.
AAR on previous forecasts. “AAR” is an acronym, “After Action Review” which emerged from the US army after the debacle of Vietnam. They sought to quickly, and from a grass roots perspective, understand what went wrong, what worked, and how it could have been improved. In effect is it a continuous improvement cycle. Applying the same thinking to the previous years forecasts and assumptions always reveals opportunities for learning. If it is the first time, do it for the last 2 or three years, and analyse what the businesses did, or should have learnt from these experiences.
How and why the differences. Planning should be a rolling, self improving process, but so often I see planning done in isolation of the opportunities to learn from the past. Understanding the reasons why forecasts are different from one planning period to another requires an explicit understanding of the assumptions made. This step builds on the AAR above.
How would you double the business. Most business planning tends to be incremental, a 3% increase in sales, a 2% decrease in costs, it is all easy to agree to in a planning meeting, after all, who would not agree to increments of improvement? To get away from incrementalism, consider what it would take to double, or triple the business. What would you need to do differently, what new products, markets, customers would you have to acquire. I like to change the perspective to this by adopting a position 3 years down the track, imagining the business has doubled, and imagining what changes had been necessary, and how they had been implemented. With the benefit of imagined hindsight, what did we do right, what mistakes were made, what capabilities and capacities did we have to increase, how did we fund the increase, all sorts of confronting questions that in the answering offer insights to the planning process.
Where is the growth coming from. Everyone predicts growth, it is part of the commercial DNA, but articulating where it is coming from introduces some reality checks. If it is from a competitor, why will they just let the volume go? what will their reactions be, and how will you in turn react to their responses? If it is from new products, why would a customer buy yours instead of the one they had been buying, and if it is a new market you are creating, how is your value proposition sufficiently compelling to get the attention of a potential customer, and how are you going to justify the new expenditure in a market that they are unfamiliar with?
What are your distinctive strengths, and how does the plan leverage them? It is astonishing to me how often when I ask this question that the responses are reflections of the market table stakes the things you have to do well just to survive and be competitive, they are not distinctive. It is like a watchmaker proudly claiming that their watch tells exact time. So what, to be a watch, you have to be able to reliably tell the time, it is not distinctive, it is table stakes. What makes you distinctive, does something really different, passes Seth Godins “purple cow” test. It may be that your watch is waterproof to 200 meters. Not many will take advantage of this strength, but to some, the guarantee of waterproof performance will be distinctive. The problem now becomes how you reach the small number of those who care at the time the are considering a purchase.
What differentiates you from the competition, and importantly, the potential left field competition? This question is often confused with the one above, a strength is not necessarily a distinctive capability that adds value to a customer that would drive them into your arms. To continue the watch analogy, when the Japanese started delivering digital watches, the Swiss that at that time absolutely dominated the watch market failed to recognise the attraction of the differentiation that had just taken place, and were decimated.
What would a private equity owner do with this business?. This can be a confronting question, but a very useful one. If you look at the business from an entirely different perspective, one whose time frame and investment return metrics are both aggressive, and usually entirely different to the prevailing horizons, it can stimulate some thinking that is very useful, and informs the rest of the discussion.
Creating a strategy that has real “grunt” and articulating that plan to all stakeholders that are impacted, and can contribute is a huge challenge, and takes time, commitment and brain power to achieve. Unfortunately, the success rate of strategic planning is very low, testament to the difficulty, and the number of things that can go wrong.
May 4, 2015 | Change, Governance, Personal Rant
FEATURES: DT FEATURES – Warren Wed illo, 11.05.11.
A business that does not make money will not be around for long. While money is just the mechanism to count success, or failure, the lack of it is terminal in every case.
Well, every case but one.
Government.
They just keep on putting it on the national credit card, building debt to garner approval and votes.
As we approach the 2015/16 budget the blathering goes on from both sides of parliament, with occasional irritating rejoinders from the peanut gallery.
It is easy to poke fun at the pollies, and to be utterly cynical about their motives. Their collective and often individual behavior and demeanor make that cynicism almost mandatory, and it seems to make us feel better. However, it rarely adds any value, as the real issues become clouded by rhetoric, blathering, bullshit, and outright, bald faced lies.
Where are the facts, the data to support the various notions put by various interest groups?
We call ourselves the lucky country, as we are.
Supported as we have been particularly in the last 30 years by continuous growth, which we largely put down to the luck we had in being in a place well stocked with resources, but the worm seems to be turning, and we have little wriggle room.
Unlike a business, where the sustainability of the business relies on commercial decisions, and the impact collectively they have on their budgets, the sustainability of the Australian budget seems to rely on our political sustainability.
Up until the last few years we have a pretty good record, but the last few, powered by the fragmentation of the media and increasing ability of individuals to have a say and gather tribes of like minded people to their cause has changed all that.
I am concerned at the level of political unsustainability that seems too be evolving, and driven by that lack of a solid foundation, the sustainability of the national budget.
Roll on the May 12 crunch and hopefully after the debacle last year, there will be some sensible debate that adds to the political sustainability as well as to that of Australian small businesses, upon which the sustainability of the national budget relies.
Sorry, I have reverted to my Don Quixote mode, the chances of any of that must be almost zero.
Apr 27, 2015 | Change, Governance, Marketing, Small business, Strategy
value chain arbitrage
There may be a niche in the market, but is there a market in the niche?
This question was posed to me many years ago as I pondered a new product business plan.
There was pretty clearly a niche in the market that was not well inhabited by competitors, but I was asked:
“Is this because you are just smarter than others, and had seen something they had not, or was it that they had concluded that there was no market in the niche”
Identifying a niche with no commercial potential that would deliver an ROI on the investment may be an interesting observation, one to be filed away for a look again later, but no real value now.
I have kept an eye on that niche for years, way after I left the employment I had at the time, and observe that at the time there was no return in the niche, but now, post digital marketing, there is, and it has been mined extensively and profitably by those who saw it.
The parameters of marketing have changed radically since I first identified the niche.
No longer are we constrained by geography, value chain middlemen who control key points and strangle out rents on the arbitrage value, and expensive, pot luck advertising.
Those constraints are gone, and we are left with a landscape of niches that do have a market in them, recently uncovered by the power of the digit.
Small and medium sized businesses have been delivered the means to scale their operations in ways not imagined 20 years ago.
Niches are now global.
They may be narrow, and deep, but when you find someone down there, they are there for a very good reason indeed, and are usually very receptive to offers that reflect their deep engagement with the niche.
Rich pickings for niche Small and medium players who move quickly, play well, and play smart.
Apr 1, 2015 | Communication, Governance, Innovation, Leadership
How do you know
Some pretty smart people say some pretty dumb (with hindsight) things.
“Everything that can be invented has been invented.” Charles H. Duell, Commissioner, US Patent Office has been widely credited with this quote in 1899. He may not have said it, but it was reasonable at the time given the pace of innovation that had occurred for the previous 50 years. It is no sillier than Bill gates saying in 1981 that “640k should be enough for anybody”, or “Man will not fly for fifty years,” Wilbur Wright, 1901.
It is really hard to get a handle on all the stuff you do not know, by definition, you do not know you do not know it.
However, coming to grips with the opportunities that become available when you discover something from an unknown left field is where the gold is.
So how do you begin to see things you do not know you do not know?
This question is not common, but has come up a couple of times ion the last few years when working with clients with deep technical knowledge, but perhaps a narrower than ideal breadth.
In considering the answer, there appears to be few simple strategies to put in place:
- Be constantly and remorselessly curious, and ask questions. Anyone who has had kids knows that for a few years, the most common question they have is “why”. Go Back to your childhood, and ask why all the time.
- Have a diverse group of people around you who will challenge the thinking, preconceptions assumptions and most importantly, the status quo.
- Be prepared to give and receive honest feedback. There are rarely any right answers when you go looking for the unknown, just more questions, and the often unexpected and insightful responses you get from people, use them.
- Make sure others know you do not know, and are seeking answers, not offering solutions.
- Read widely and with great variety. This is now easier than it has ever been, we are overwhelmed with information sources, and the problem is curation and absorption rather than finding stuff out.
We are undoubtedly in a knowledge economy, competitive advantage is in knowledge, so gathering, sharing and leveraging it should be high on every enterprises agenda, from multinationals to the small business around the corner.
