Aug 9, 2010 | Change, Innovation, Marketing, Strategy
Perhaps I am dreaming, but there appears to be a “nudge” (not yet a trend) amongst the manufacturing firms I talk to towards a review of the cost/benefit of overseas sourcing of manufactured products.
At the end of the spectrum where ownership of IP, and innovation are important, firms appear to be reconsidering the value of “off-shoring” recognising that keeping the processes that create value closer to home, where they can be developed, and leveraged with a more sensitive hand over the long term is better than taking a short term cost benefit.
This is not to say that there is any real future for commodity manufacturing in a high cost environment like Australia, apart from the very few areas where we should have a natural advantage, wool processing for instance, but there is a rich future for the development of sophisticated, market sensitive, innovation led manufacturing, so long as we are able to grasp the drivers of that success.
Jul 22, 2010 | Branding, Communication, Innovation, Marketing, Social Media
It will be fascinating to watch how Apple, the masters of digital marketing, handle the latest hiccup with the antenna problems on the iPhone4.
Apple has now stumbled twice in a short time, the first was the furore over the wages paid to employees at Foxconn, one of their major suppliers factories in China, leading to an unusually high suicide level, and now the dodgy antenna story, furiously being stirred by Apples grateful competitors.
The speed that such problems emerge and are all over the user communities has outstripped the response times of even the most sensitive and paranoid of businesses, and now it appears that Apple is going in to defiant mode by using Steve Jobs to front the problem and say, in effect, “all smart phones suffer from the same problem, we are no worse than the others.”
Apple has grown in an extraordinary way for the last decade, tapping in to the mindset of the early adopters to become apostles for their brand and products, and by being consistently first out there with a product that delivers a highly differentiated proposition. The Apple brand is now a very tall poppy indeed, and attracts attention, so they had better be careful that the legions of fans who have fed the myth do not turn around and bite it, because their hero shows themselves to be fallible, and therefore not worthy of being their hero, in fact, it becomes a source of satirical comment that speeds the process of brand erosion.
Such loyalty scorned can turn nasty very quickly.
Jul 13, 2010 | Communication, Innovation, Leadership
Straying from my usual “beat” I read the Rolling Stone article that caused the downfall of General Stanley McChrystal, the US commander in Afghanistan.
It seems to me that he was fired, not because he was insubordinate, but because he failed to manage the politics surrounding the adventure in Afghanistan.
The article is a revealing, and fascinating narrative of an innovative, unconventional manager who got things done by ignoring the weight of the status quo, and its proponents. The parallels in management are everywhere, to be different, take closely considered risks, apply the unconventional, take information from the “front line” and argue with authority, all are traits necessary in a leader who is successful, and particularly successful at implementing innovative solutions to seemingly intractable problems.
Afghanistan has been a problem for every army since Alexander that has sought to place its stamp on the place, the US is no different. Engagement there screams for the unconventional, as the conventional has never worked, but conventional leaders cannot deliver unconventional solutions.
Many more will die, and more billions spent before the US and its “allies” including Australia wake up, but it is hard to admit you are wrong.
Jul 7, 2010 | Innovation, OE, Strategy
In the last federal budget there was money allocated to the task of digitising health records allocated, and there was some pretty unedifying comment on the amount, the progress to date, and the implications on privacy.
What dross.
Australian health costs are huge currently, and rising at a far greater rate than the economy expanding, creating a substantial emerging “hole”. Digitising this data, and making it available for improvement initiatives across our health services is imperative.
It is accepted that data is the first step on the road to improvement, without data, everything is speculation. Here is one of the greatest tests of public policy for the future, and we hide away from the blindingly obvious benefits that can flow from process improvement and innovation to protect existing vested interests, and unrealistic, unsustainable concerns about increasing the degree of transparency.
If the public sector was a business with a bottom line, and there was a competitive need to improve and change in order to survive, instead of a monolithic testament to the past, the efficiency of our current expenditure would be increased by probably 50%. Sounds unrealistic, but businesses that have effectively implemented real Lean principals into their operations and demand chains have found 50% is readily achievable.
Note that I have specifically indicated that the efficiency would increase 50%, and not that costs would be reduced 50%, although cost reduction is the corollory. There is a real difference, and the difference is the one that appears to separate the successful Lean implementations from the unsuccessful, because success in Lean is about behaviour change and productivity improvement, not slash and burn cost reduction. Reduction in unit cost comes about only when extra capacity, freed up by the elimination of waste, is used, and is effectively for free, as the piper had already been paid.
Jul 6, 2010 | Customers, Innovation, Marketing, Strategy
The easier it is to quantify, the less it will be worth. This appears to be a pretty harsh judgment, but the reality is that if you can quantify and standardise something, it can be copied.
This is the case, until you consider the value created by subtle differences, particularly in consumer products, and original creations, a painting, poem, piece of music , new gadget, a new expression, or a new use for a staple product
An original Van Gough is worth tens of millions, but a copy it would take an expert to pick, done by very capable technicians in China, can be had for a modest amount. It is not that the copy is a lesser painting technically, it is just not the original.
Seeking the original is the core of innovation and commercial sustainability, as the alternative is to chase the cost curve to the bottom, where in the long run, the best return possible for the lowest cost producer is around the cost of capital.
Jun 24, 2010 | Change, Innovation
The current debate, such as it is in Australia in relation to climate change, is all about the sort of tax regime that is required, and the need to change peoples behavior, and thus their attitudes.
What all this misses is the fundamental nature of the change that is needed, and the only way to get that is to recognise that commercial opportunity and activity will eventually deliver the answers (although it is likely we will not like all of them) by providing the incentives and long term funding of technical development, then commercialising it.
The role of governments here should be to assist in creating the field in which the technology, typically with 20 year horizons, can evolve. Playing with today’s tax regime is just putting a band-aid on a gaping wound, useless as anything beyond a gesture.
This argument is put very convincingly by the clip “Reinventing Fire”, that has come from the Rocky Mountain Institute, a very smart think tank and technology developer in the US. It deserves some air-time.
