Apr 22, 2013 | Change, Governance, Leadership
It is always intriguing to get into a debate with one of my director peers about the way forward for an enterprise. Opinions vary, and the “chat” can become animated, as one did a few weeks ago. As a result, I jotted down a few points to email as a follow up, just for sport, (perhaps commercial suicide) but on re-reading, they seem to make sense. Following is a language edited version.
Bill, managing and promoting growth has a couple of dimensions:
The first is managing the customers, market dynamics, and value proposition that keeps the bills paid, the second in being able to look around the corner and see what is coming next. Not just in terms of the old “same/similar product/new customer/new market” matrix, but the genuinely new stuff, the revised business models, products that break the consumer usage mould, packaging of technology that genuinely changes the dynamics, i.e., the future.
This second part is really hard, but there are a few things that every success seems to have in common, that we need to consider:
- We need to understand what it is that we deliver, our purpose, why are we here?. Steve jobs did this better than anyone when he defined Apples purpose when he returned in terms of design, not the hardware or software, but the way in which consumers interacted with the product, and the design of the way it worked, and without being too wanky, its soul.
- See better than our competitors what it is we need to know to be successful in the future, indeed, we need to anticipate who may become competitors as the technology underpinning our business evolves. Those who saw the impact of the net first in terms of behaviour and the disruption of markets that occurred did best. Again, Jobs saw the future, and put bits of existing technology together in different ways and came to the market with revolutionary and disruptive products. By contrast, Jeff Bezos saw the future, and built Amazon to leverage that vision. In our business 3-D printing seems to have the potential to be a significant disrupter, it may miss us, but will not go away, so shouldn’t we be learning about the technology?
- Learn to unlearn, as they way we do things today will not be sufficient to survive in the future. This I see as a significant failure of the existing management, and our own demands of them. Rarely, outside the public sector have I seen a management so risk averse, but really, whose fault is that?
- Pilot, experiment, and take a lot of small steps, some of which individually may seem “flakey” but together provide the opportunity to learn. See comment above.
- Reward the behaviour you want, not just with money, as whilst money is important, far more important to our employees is recognition, and further opportunities to stretch their minds and build experience. They may move on with that knowledge and experience, but that is the world we live in, but while they remain, they contribute at a high level, and when they leave, they do so thanking us, not turning to Twitter to dump on us.
- Learn to live with the discomfort of not really knowing what is next, the disruption of the status quo that is fundamental to finding tomorrows successes. The twin notions of managing a project portfolio, and being prepared to pivot any project as circumstances demand rather than being wedded to some artificial business plan and operating budget should be embraced.
Unless we can agree that this list has some relevance to the way we direct the business, one of us has to go, and I would prefer it be me, as I do not want to be branded as one of the directors who failed to see the “crappola” coming, and when it hit, did not have the sense to turn off the fan. Besides, you are the chairman, and my peers like to be told what to do, so my departure can be seen as a “smoothing” of the board debates.
In short, it is my contention that we must manage the present, and invent the future, and to do this we need to develop a far higher degree of management ambidexterity, and sensitivity to our rapidly evolving marketplace.
I look forward to our next conversation.
Mar 28, 2013 | Governance, Innovation, Leadership, Operations, Small business
Manufacturing is not just an amalgam of industries, far more importantly, it is a capability, a way to capture imagination in a physical form.
In discussions about manufacturing, its slow demise in Australia, the level and type of support it should receive, its importance to long term prosperity, and the links between manufacturing and innovation, we leave one really important factor aside, one I suspect it is just not generally recognised. We define “industry” with the assumptions and words that came with the explosion of manufacturing in the last 100 years, the “food” industry, the “Auto” industry, the “Airline” industry, and so on. We do not seem to recognise that the capabilities are “cross industry” that the definitions we use no longer hold, if they ever did , beyond adding a bit of convenience to the language.
The lines are blurring further, rapidly and irrevocably.
Is Apple an electronics designer and manufacturer (Mac computers), a service provider (itunes) , or a product marketer (ipad)? My answer: They are all, and none of the above. Rather, Apple is a marketer that delivers its value proposition via a range of operational and sales channels that have nothing to do with the generally accepted definitions of industries. Certainly Apple has been able to leverage their collective imagination better than any other enterprise I can think of.
The next step is a truly scary one for many, the advent of 3-D printing.
Within a very short time, 3-D printers will be as available and cheap as desktop computers, all you need is a digital design file and a printer. We will be able to produce everything from simple household items to highly specified parts for our cars, produced in our kitchen.
The marvelous wind powered devices of designer Theo Jansen have been printed in miniature, and work just like the full sized ones, and dramatically make the point. If you can imagine it, you can now print it!
Manufacturing is about to go through a change as profound as that brought on by the steam engine.
20th century notions and boundaries to “manufacturing” are as outdated as a bow and arrow in a gunfight, so we must change the language and intellectual boundaries of the conversation if we are ever to make any sense of the dynamics at play.
Mar 14, 2013 | Governance, Innovation, Personal Rant, Strategy
Leaving aside the fact that it is an election year, and rhetoric is the usual fare served up, there remains an economy to run.
Lots of space will be allocated to “Innovation” plans, the Manufacturing jobs announcements a few weeks ago, the Arts creativity and Innovation plan announced yesterday, big announcements, lots of largely recycled money that probably will not be delivered, and hot air expended, but what of the real dilemma?
Governments govern, they (attempt to) create repreatable processes that exclude variation and eschews risk, whereas innovation requires a high tolerance for risk and failure, the absolute opposite of the risk appetite of Government. Distinctly oil and water here!
How do we encourage and support startups, the innovation lifeblood of the economy? The stuff we can dig up and flog at commodity prices cannot in the long run be anything but a race to the bottom of the price curve, and we will lose, as we are unprepared to accept the labour, environmental and public oversight deficiencies of our less fussy international competitors.
At a time when our exports of services are declining, can we ignore the opportunities in tech startups and services? When Google puts its money where its mouth is, and gets together with a few entrepreneurs with a track record of success as they have with the Silicon Beach Action Group, should we listen?
Feb 18, 2013 | Collaboration, Governance, Leadership, Personal Rant
It is wonderful to consider the impact the Prime Ministers “A Plan for Australian Jobs” announcement over the weekend has had, already, on Australian jobs.
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- Multitudes of grateful bureaucrats have laboured mightily for months and months, crafting and re-crafting the words of the announcement to ensure it does not say anything that may attract any critical comment, and includes every existing program and hopeful announcement at least twice,
- Favoured consultants are rejoicing at the fees to date, and to come,
- Advertising and PR agencies wriggle to the bar to celebrate the coup of gaining “the account”,
- Engaged lawyers, consultants, bureaucrats, researchers, and grant trough dwellers, rejoice at the billion dollar bait now on the table.
But what about the rest of us, those who struggle to compete in the real world?
Lots of well meaning, multi-syllable words that ensure there is no accountability for anything, just continuous blather, platitudes and clichés. Oh, and the plan tells us they will spend a $billion of our money. It is after all, “our responsibility to assist in the structural adjustment process in the economy”. We, as obedient and loyal servants, should be grateful the Government has finally realised the parlous state of manufacturing in this country, and are doing something about it.
I read the plan, twice in fact because I thought I must have missed the important and insightful bit the first time through. You can save yourself a bit of time and read the summary, that is useful, but please consider the following whilst you do:
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- Minister Combet says in his introduction that the plan is “Supporting Australian industry to increase exports and win more business abroad”. Call me pedantic, but I thought increasing exports and winning more business abroad were the same thing, and besides, what has Austrade been doing for the last 40 years?. Having run a real business on contract for a Federal department, set up with the express aim of increasing agricultural exports with a budget of 6 million over 3 years, which attracted the ire of the “You cannot subsidise exports” Nazi’s in Canberra, I can only wonder what a billion is doing for their collective blood pressure.
- There is a fair bit of verbiage about “fostering clusters” in the report. There is no doubt that clusters can become innovation hotbeds. Everyone with a pig in the race points to the tech miracle of Silicon Valley, and the medical cluster centered on Boston, amongst a few others, but forgets that they took decades to evolve, (a bit longer than the average election cycle in the first world) and the evolution of successful clusters has had nothing to do with public investment beyond the provision of high quality public infrastructure, schools, universities, transport, and power. Every investment (to my knowledge)by a Government in an overt effort to build a “cluster” around the world has failed, or is failing in the absence of a long term investment in infrastructure.
- Oh the joy of a good acronym! The plan is full of them, some new, some recycled, but the gold standard is a beauty: G.O.L.D. standing for “Growth Opportunities and Leadership Development”. Wonderful isn’t it, must have come from an orgasmic Eureka moment for someone. Clearly, I am just being petty.
- A headline objective of this plan is “Creating a stronger, fairer, and simpler tax and transfer system and reducing red tape” Great sentiment, but all through the plan is articulated the need for more legislation, regulation, and creation of various advisory and oversight bodies. When I was at school, these sorts of additions would consume added resources, add complication, and create demarcation squabbles amongst agencies. Not a lot of “simpler, fairer” in this lot that I can see.
- This is the last whinge, perhaps the best, so congratulations if you have got this far. There is a graph 5.1 on page 23 of the report that shows collaboration across a number of economies, which is presumably there to demonstrate the value of collaboration, which the government wants to (correctly in my view) foster. The figures show Australia at about 18% (of what is not really clear to me) next door to Germany, held up as a poster child of manufacturing excellence, at 19%, and China, at 19.5%. The field is lead by a Black Caviar like stretch by Britain at 69%, but the last time I looked, the British economy was a basket case. Perhaps the graph is a mistake, showing the opposite of the Governments argument, or perhaps the situation has changed because the data is so bloody old, or perhaps my simple old brain has been scrambled by the clichés and acronyms.
Australian manufacturing is in a hole, and rule 1 of my rules of holes says that “once you realise you are in a hole, stop digging”. There is little in this plan that actually throws away the shovel, it just burnishes it for more use. The real challenge is the endless duplication, commercial naivety, turf wars, lack of gumption, and the assumption that all problems can be legislated away that infests our elected bodies and their bureaucrats that is the greatest hurdle Australian manufacturing has to jump.
Header cartoon courtesy TomGauld.com
Feb 13, 2013 | Governance, Management, Operations, Small business
Ever put off a difficult decision? asked for more information that you know will not change the outcome? shuffled the responsibility elsewhere?
Most of us have, at one time or another, but we generally tell ourselves that we delayed the decision, sought a greater level of certainty, or something else when deep down we know that we have decided not to decide, or at least, used an artifice to enable us to not to act on the decision.
If all you have done is to kick the “pain-point” down the road a bit, you also generally realise that the pain when it comes will be worse for the waiting. In putting off the pain point, you have actually made a decision, one that will often come back and bite you.
I was reminded of this reality recently when the owner of a small business I work with failed to take a hard decision in relation to one of his employees. The inevitable conclusion to that employees departure was repeatedly put off because it is a small business in a regional centre, and sacking someone is hard, it becomes everyone’s business. It has become clear that the employee concerned realised the position, and rather than behave honorably, has committed the company to expenditure that is unnecessary, wasteful, and possibly terminal.
The price for deciding not to decide can be very high indeed.
Feb 11, 2013 | Change, Governance, Leadership, Strategy
How often do we hear that we learn more from our failures than our successes, that if we do not fail sometimes, we have not done enough, and that an innovative, exciting culture embraces failure? Thomas Watson Senior, creator of IBM once said “the fastest way to succeed is to double your failure rate.”
So how is it that we rarely see failure really celebrated if it is so productive? Such celebration is very rare in my experience.
An Canadian NGO, Engineers Without Borders has broken the mould, and published their “Failure Report” and attracted considerable attention, this article in the Guardian outlines the background.
How brave is that?
NGO’s depend for their funding from groups that you would expect to be pretty risk averse, they would hate to see their donations seemingly wasted, and admitting failure is on the surface at least, admitting to waste and potentially putting their funding at risk.
I wonder what would happen if Australia’s public companies were publish their own failure reports?
Rio Tinto’s foray into Aluminum , Harvey Norman missing the on line shopping revolution, Woolworths finally admitting Dick Smith had turned feral, James Hardie and asbestosis, Eddie and the Labor party, the list goes on. We get outside analysis, sometimes the entrails of failure are exhumed by legal processes, but never do we get the honest, gut-felt, reactions of those involved in the decision making examining their behavior, and taking responsibility for the failures. All we hear is the spin of the successes, and the message that the protagonists are all seeing, all knowing, who only act in the interests of others. Ducking of responsibility has become a management core capability, “I cannot recall” the last refuge of the villain.
How much better if we did as we say we should do, and celebrated failure as a part of the learning process, and that intelligent analysis of the reasons for failure, and the resetting expectations makes for a healthy culture.
