Oct 13, 2025 | Change, Innovation, Leadership
If everyone in the room agrees, you are probably all wrong. Innovation does not come from consensus; it comes from the friction created by different ideas and perspectives.
If you listen to comedians, there is a common thread through everything they say. A friend of mine who does a bit of fun standup calls it the ‘1,2,5’ of conversation. The first statement sets the scene, the second reinforces the first, the next is entirely unexpected. It is not the obvious ‘3’, rather, it is oblique, often the opposite, and always a surprise. The laugh, or in my friends case, occasional quiet chuckle, comes from that unexpected punchline.
Consider the survival chances in a hostile environment of two groups of people.
One is a homogenous group, that automatically sees things in a similar way.
The second is a neurologically diverse group that sees things from different perspectives.
Which is the more likely to survive that hostile environment?
This leads to the obvious but often ignored idea that the way you make up the groups in your business requires some heretics, comedians, and philosophers.
Rather than randomly allocating people to a group tasked to undertake a specific challenge, would it not be better to ensure you have a neurologically diverse group undertake it, as they are way more likely to surface new, different ideas. Some of those ideas, even most, may be absolute crap, but it just takes one to deliver the idea that changes everything.
Nicholas Copernicus presented the idea that the earth was not the centre of the universe, using Galileo’s newly invented telescope. This led to him being excommunicated for heresy by the Catholic church. Later, he was proved right, which did not help him. In time however, it helped the rest of us as it completely changed the way we think.
Every new idea starts as a heresy noted 19th century philosopher Thomas Huxley.
If you want these ideas that are often extremely inconvenient, to emerge from your group, you need to work for them.
Header: The eyepiece of Galileo’s telescope
Sep 18, 2025 | Change, Innovation, Leadership
The secret isn’t glamorous. It’s not an app, a hack, or a shiny new framework.
It’s the part everyone pushes down the priority list as they break a problem into its component parts. The hardest bit. Break the problem into its pieces, then go straight at the hardest part first.
AI now helps us do the problem analysis faster. It can model options, run simulations, and point out blind spots. However, it cannot focus your attention on the hardest bit first, that requires you.
Failure is the toll on this road. Edison’s “I now know what doesn’t work” wasn’t optimism, it was realism. Most attempts will miss. Data won’t rescue you when you’re in uncharted territory. Only cycles of trial, error, and learning will.
And here’s where humans stumble. We hate failure, and often failure has consequences in corporate life, so we become risk averse. We look for shortcuts, silver bullets, or easy wins. AI makes the shortcuts more tempting because it gives us mountains of plausible-sounding answers in seconds. But plausible isn’t proven.
The real advantage belongs to people who can keep their “discovery tempo” steady, using AI as an accelerant while still accepting that most paths will be cul-de-sacs.
AI has changed the speed and nature of problem-solving. What hasn’t changed is the rule: robust innovation comes from persistence through failure. The cycle is now faster, but the psychology hasn’t shifted.
So, the winners will be those who combine two rare qualities: the resiliance and patience to face repeated failure, and the discipline to use AI not as a crutch, but as a lever to attack the hardest part of the problem first.
Jun 20, 2025 | Change, Governance, Innovation
Australia’s governments over time have, rightly, believed that the commercialisation of innovation is the key to long term prosperity.
As a result, governments of all persuasions and at all levels dole out billions each year in all sorts of grants, subsidies, and parallel programs.
Then, on a regular basis we have enquiries by well meaning and usually highly qualified people that come up with similar conclusions that the previous few and often very expensive enquiries have delivered: we are crap at it.
In successive weeks, the PM and Treasurer presented their view of the challenges facing us at the National Press Club. Both were very impressive performances, and in particular the treasurer hooked his agenda firmly onto the ‘Productivity’ challenge.
The Treasurer outlined the principles of his agenda. However, he did not get into the weeds of the sources of the failure to date that see us struggling with productivity in the economy, the problem to be solved. He did however acknowledge that hard to measure services are increasingly dominating, and we are all getting older, making the productivity challenge that much greater.
Sensibly after repeating the same mistake numerous times, and ending up where we are now, we should be asking ourselves ‘Why’.
My take on ‘Why’.
Bureaucracies have two conflicting, irreconcilable imperatives:
- On the one hand, they want to be fair and treat everyone the same. This makes commercial in confidence often challenging. (perhaps I overemphasise this as a result of a very nasty incident in my commercial past that will never be forgotten)
- On the other hand, they want to exercise discretion and take account of individual circumstances and technical advances made by program participants engaged in the various programs.
There’s no way to easily optimise these conflicting objectives at the same time.
On top of those two drivers of bureaucratic fossilisation, you have two further impediments in the Australian context:
- The impact of personal ambition, turf protection, and management of public sector KPI’s that have nothing to do with outputs, but everything to do with inputs that hobbles public sector engagement.
- Our federated system drives fragmentation.
Published today is an excellent analysis of the way forward by John Howard (not that one) from the Action Institute that I hope is widely read and deeply considered by those who will be involved in the treasurers productivity roundtable in August.
Mar 7, 2025 | Customers, Innovation, Marketing, Small business
I have started seven businesses, so I have some entrepreneurial form.
One I sold, one delivered profits over a 5-year period, but circumstances led to its closure, several did the dead cat bounce, and a few more struggled a bit before common sense cut in, and one, StrategyAudit has been going for 30 years. On top of my own gigs, I have been involved, engaged, and accountable for many, many more as a consultant, interim manager, and contractor.
After all that effort, sweat, broken dreams, conflict, disillusionment, and frustration, mixed in with some ‘I told you so’s’ what have I learnt?
Timing is crucial. Two of my dead cats were just timing: I was too early, and others since have done similar stuff and made a killing, proving that a good idea is rarely yours alone. Connected to this, but not in a causal way, is that it always takes longer than you think. Take your worst case time-frame, the one that cannot happen, then double it. If successful, that impossibly long time frame might be close. We never hear of this from the start-up porn inhabiting the web.
You are never too old. Ray Kroc was a 52 year old appliance salesman when he had the brainwave that led to McDonalds. In Australia, the age group most likely to start a business is 35-39 years old, comprising 19% of start-ups. The likelihood of extreme success keeps rising until the mid to late 50’s, so Ray Kroc is not an outlier. This is contrary to the common perception of the hoodie wearing entrepreneur who only needs to shave once a week. In my case, all my efforts except StrategyAudit were born before I was 40, the earliest, not counting my efforts to make a bob while still at school and University, was when I was 22. StrategyAudit was born from necessity when I was 44.
Focus and commitment are mandatory. Entrepreneurs by their nature are curious, perceptive, and usually see things from an uncommon perspective. As a result, they are easily distracted by the new shiny thing, or great idea to bolt onto their baby. Sometimes these great bolt-on ideas come from early users, whose opinions carry considerable weight because they are so important to you. The internal struggle with this fragmented attention and less than absolute commitment is often a real problem. In my case, it probably cost me at least two potentially extremely successful businesses. I have often wondered at the role of ‘necessity’ in the game of unicorn chasing.
Boot-strap or take equity partners. Every start-up is short of two things: cash and capability. It is enormously tempting to address one of both or these by taking in partners by one of the many avenues open. Often this is the right thing to do, it usually makes scaling quicker and easier. The downside is the loss of control. Most entrepreneurs have some level of ‘control-freak’ in their DNA, and struggle when they go from having the final word, and having to take on board the views of others.
Capability shortfall. No entrepreneur can cover all the capability bases required for a successful business. That leave the choice of how, when, and sometimes if, you fill the gaps. Getting this wrong causes all sorts of terminal events. Often these are around cash flow shortages, particularly when the enterprise appears to be rapidly gaining ground and being successful. However, all the other functions that must be executed by a growing business are equally vulnerable. These days it is sometimes little more than finding and keeping the right people who operate at whatever ‘coalface’ you service.
Solve a problem felt by others. Solving a problem only you have will not lead to a business unless others have the same one. Equally solving a problem you think others have, when they do not feel the impact of it, or your solution costs more than the problem costs them, is not useful.
Round pegs and square holes. In most SMEs seeking to scale, or even just survive, the choice of personnel, and the jobs they do is critical. Make a mistake and it can be terminal, as SME’s do not have the cushion of scale to absorb those mistakes. The adage of ‘hire slowly, fire fast’ is especially important for SME’s.
Too little marketing. Marketing is an investment in future cash flow. Often this is really, really hard when current cash flow is in the toilet. It is profoundly different to the conversion to a transaction, usually called sales, which is just the end point of the process. When you just have the end point, with too little or misdirected effort at the wider functions of ‘marketing’ in the revenue generation process, you will have a mix of productivity suck-holes and opportunity costs that will not show up in any standard set of accounts.
Too little attention to the numbers. The ‘numbers’ critically include the financial numbers, but they are not the only ones that should be monitored, managed, and leveraged. While I obsess about cash with those I work with, cash in the bank is an outcome of a wide range of other things that have gone as anticipated, or if the bank is empty, not as expected. The most critical ones fall into two categories:
- Internal numbers. These are the numbers over which you have direct management control. They range from the costs of manufacturing and service input, to the overheads resulting from the costs associated with keeping the doors open every day. Inventories, cash conversion cycle time, capex and the timing and quantum of expected returns, personnel productivity, and many more consume cash and importantly for an SME, time.
- External numbers. Critically, these are the numbers around the behaviour of customers. They will vary depending on the product you are selling, but customer acquisition costs, referral rates, lifetime value, and repeat purchase rates will all directly impact on the cash in your bank account. They also should include some consideration of the market context, trends, competitor assessments, and regulatory considerations.
Importantly, and often overlooked until too late is the most fundamental number of all: Sales revenue. None of the above is the slightest bit relevant un the absence of revenue. Go after it early and hard!!
There you go, 50 years of hard-won wisdom in a 5 minute read. Call me when you need more.
Dec 18, 2024 | Change, Innovation, Strategy
In a world where technological generations now live and die within months, can another government review truly capture the lightning-fast pace of innovation? Two years after ChatGPT’s launch transformed our understanding of artificial intelligence, we’re facing a critical question: Are our innovation assessment methods becoming obsolete before the ink on the report has dried?
Australia’s innovation landscape tells a stark story. We’ve plummeted from 55th to 102nd in the Harvard Economic Complexity Index, a precipitous decline that demands more than traditional bureaucratic soul-searching. The challenge isn’t just about understanding our innovation ecosystem—it’s about reimagining how we nurture and accelerate technological breakthroughs in an era of unprecedented change.
Consider the breathtaking velocity of recent technological transformations. The journey from the ENIAC computer in 1945 to today’s AI-driven technologies has compressed decades of innovation into mere years. When I first encountered computing via punch cards in the early ’70s, the idea of conversational AI or neural interfaces would have seemed like pure science fiction. Now, these technologies are not just possible—they’re rapidly becoming commonplace.
The transformer mechanism described by Google researchers in 2017 didn’t just advance machine learning—it rewrote the entire rulebook of technological innovation. ChatGPT and its successors have demonstrated how quickly breakthrough technologies can move from theoretical concept to global phenomenon. The time between laboratory conception and widespread adoption is now measured in months, not decades.
Our current innovation review approach risks becoming a retrospective exercise—an autopsy of technological opportunities already lost. By the time a high-powered government board completes its comprehensive examination of the R&D ecosystem, the technological landscape will have shifted. We need a more dynamic, real-time approach to understanding and supporting innovation.
What might this look like? Instead of traditional lengthy reviews, we need:
– Rapid, continuous assessment mechanisms that can track innovation in near-real-time
– Flexible funding models that can quickly pivot to emerging technological frontiers
– Direct channels between researchers, entrepreneurs, and government decision-makers
– International collaboration frameworks that transcend bureaucratic boundaries
Countries like Israel and Singapore offer compelling alternative models. They’ve created innovation ecosystems that are less about rigid planning and more about creating adaptive, responsive environments where breakthrough ideas can flourish.
The stakes are too high for business-as-usual. Our global competitiveness depends on our ability to not just track innovation, but to actively cultivate an environment where breakthrough ideas can emerge and scale at unprecedented speeds.
Another government review won’t solve our innovation challenges. What we need is a fundamental reimagining of how we support, measure, and accelerate technological progress.
The future of Australian innovation isn’t waiting for a committee to finish its report. It’s happening right now—and we need to be ready to catch it.
Dec 2, 2024 | Branding, Innovation, Strategy
A phenomenon in my local area, Sydney’s inner west.
Suddenly, there are electric cars everywhere from manufacturers I had not heard of a couple of years ago. That is in addition to the venerable brands, Volvo, MG, Lotus, and others now owned by Chinese investors, leveraging brand heritage.
China now is manufacturing very good EV cars at a fraction of the cost of traditional manufacturers. They have established technically sophisticated and innovative supply chains and are discovering and leveraging the benefits of technology. The US, Japan and Korea can only wish for the cost base the Chinese now have across their industry. Chinese manufactured EV’s now control 40% of the biggest market in the world, China.
Central planning pointed Chinese industry towards EV’s, and assisted development, while western manufacturers relied on lobbying and subsidies to maintain the dominance of petrol and diesel. The only real innovation over the last decade they have undertaken has been in racing, particularly F1. The logic expressed was that the innovation would ‘trickle down’ into our everyday cars.
It didn’t work so well with economics, but that lesson has been ignored.
Tesla may have started the ball rolling, but China has given it momentum, and now delivers 60% of global EV registrations, and accelerating.
The acceleration of global EV market penetration, perhaps hobbled only by the shortage of recharging infrastructure, and the time necessary to recharge has come at an astounding pace.
It is a classic case of don’t just change the rules, change the game.
Steve Jobs did the same thing with the iPod, then the iPhone.
The header is by DALL-E, and highlighted the further takeover of the auto industry by using Pirelli, now Chinese owned, on the track hoarding.
When you need to think differently about your strategy, revise your thinking, and figure out how to compete in the future, call someone who has seen it before.
E&OE. This analysis of the comparative costs of EV manufacturing came out a week after publishing the post. It delivers numbers that highlight the problem faced by western legacy car-makers. https://www.linkedin.com/posts/juergenstackmann_544-minutes-worth-watching-ed-conway-ugcPost-7271897558170456065-ETSC?utm_source=share&utm_medium=member_desktop
