Dec 24, 2021 | Change, Governance, Leadership
The PM has made an absolute mess of it, bouncing from one headline to another like a clown on speed. You must give credit for the energy, pity it is expended on trivialities rather than tackling the big questions.
The government has changed tack in the face of the coming election, they cannot any longer claim to be the better fiscal managers of the economy, better husbanding our tax money in the face of the huge deficit, largess to corporations under job keeper who did not need or qualify for it, and the massive pork barrels rolled out over the past few years. $1.9 billion to government seats, while labour held seats received $530 million. The most recent report being a review of 19,000 grants in a ratio grossly favouring government seats published by the SMH. The one I live in, the marginal seat of Reid in Sydney, has received $14.8 million, so the member will be crowing about how effective she has been. To be fair, she does seem to have been a smart and engaged local member with an impressive academic and community engagement resume, as well as a solid foundation of common sense. The neighbouring seat of Grayndler, held by the opposition leader, in at least as needy a place as Reid, received $718,000. Will it be enough to save Reid for the Liberal party? Who knows, but amongst my peers it is the solid view that a vote for an effective and moderate local member is also a vote for an ineffective, narrow minded, spin driven and vindictive Prime Minister. If this is the state of governance in an area with publicly available information, heaven knows the mess that those areas, increasingly protected from public view, is in.
In March the Royal Commission into Aged care dropped onto the table, detailing a chronically under-governed industry making the privatised providers a fortune at the expense of the most vulnerable amongst us. It is a wrangle between the feds who regulate aged care, and the States who fund it, nobody carries responsibility. On top of the deaths that occurred in Victoria from Covid mismanagement, it is surprising that this has been wiped off public awareness. It is an ongoing disgrace. Perhaps it is the result of the monumental cock-up the feds made of the vaccine rollout in the early part of the year, and the wrangling the went on amongst the states that has wiped the Commission’s findings from public condemnation.
There was a gabfest in Glasgow, which seemed to be useful, apart from the lack of contribution made by Australia. Sadly, the PM made his ground-breaking presentation outlining ‘The Australian way’ to a packed house of a cleaner, sound recordist and journalist who copped the ‘dog watch’ and was probably asleep. Even the hecklers were too disinterested to show. I continue to find the contrast between the reliance on the science in relation to Corona, and the total dismissal of the science in relation to the reality of climate change, a complete mystery.
Then, just as we thought the worst was over, along comes Omicron, and once again, we are caught with our heads up our arses. My old dad used to say everyone made mistakes, but only a retard made the same one twice. The federal leadership must all be retards by that measure.
At the state level, there has been wholesale leadership change in NSW, and it has become very clear that premiers vowing to keep their states sovereign is a winning strategy. I conclude that the winning is only because of the total leadership vacuum coming from Canberra.
The Covid battle, seemingly being won towards the end of the year, has suddenly in December been put back on the agenda, this week blowing up with record cases being identified. The emergence of this new, hyper-spreadable omicron version may yet force punitive action to again stamp on human beings doing what they need to do for their own psychological well-being, congregate and communicate in person. As I write this on Christmas Eve, new Covid cases are comfortably over 5,000 a day, a level that a month ago would have induced panic amongst NSW politicians, but now seems rather ho-hum.
Rorts have become so common, they are almost ignored by the media and voters, apart probably from that modest percentage of voters who are deeply engaged and angered in the process. There have been plenty to pick from. Almost $300 million given to Australia’s largest companies who actually increased earnings during the lockdown seems just so wrong. Another 6.2 billion was forked out to businesses with more than 10 million in turnover that did not meet the 30% fall in turnover threshold in the first 6 months of the scheme. Meanwhile, small businesses are closing, and those in the arts, a foundation of our cultural life are left to their own devices. Despite the faults and rorts, the money pumped into the economy has been essential, and cushioned the Covid induced fall in activity that happened.
The ‘Merde massive’ perpetrated by the government unilaterally tearing up the submarine contract then lying about the circumstances leading up to, it leaves Australia looking like an unreliable partner. Not much antidote to our trade problems there, coming as they do on top of the idiotic rattling of our tiny sabre towards our biggest trading partner China. Let’s hope they are sufficiently gentlemanly to hold off until we have our new subs, about the time my granddaughter will be retiring.
What about the leadership wrangling in the junior government partner, the National party, giving us Barnaby back as deputy PM. Clearly, Barnaby and the usual PM can barely stand to be in the same room, not a recipe for good governance. Nobody seems to like the Nats, outside of the few seats they manage to hold, which I suspect will be subject to aggressive independent focus in the lead up to the next election. Speaking of which, many of the sensible moderates in the liberal party will be up against it, as they struggle to publicly support climate policies they must privately consider no better than wishful thinking by a few recalcitrant nig-nogs.
Amongst all this, the Liberal Government discovered belatedly that the culture in and around parliament house stank. In fact, it stinks so much that in any other workplace, executives would be fitted for striped suits and shipped off for an extended holiday at public expense. This has been very inconvenient in the early stages of an election runway for some time early in 2022. However, the PM is making the supreme effort to put it all behind him as he massages messages, and the truth. I wonder if the report, promised to be public, commissioned by the PM from his departmental secretary investigating the accusation of rape in the defence ministers office will ever see the light of day? I guess not.
More broadly, despite the covid induced trading environment, property prices in Sydney and Melbourne have gone mad. Lots of people taking advantage of the historically low interest rates, ignoring the consideration of what happens when interest rates go up. The reserve bank governor after reassuring us they will stay low for several more years has recently softened his language. This leads to a conclusion that we will see them creep upby the middle of next year, which could lead to a middle-class bloodbath. Please note, I am absolutely unqualified to make this prediction, but common sense does dictate an increase soon.
Meanwhile, Small Business struggles to generate revenue, pay wages, and keep the place going. A quick look around most shopping areas at the closed retail outlets, and industrial parks at the locked factory units will tell you how well that is going.
The war (or was it another ‘police action’?) in Afghanistan is over. Pity about those Afghans left there, particularly the reviled Hazaras who are paying a high price for our so called ‘principles’. Australia played its part in the deception of those in the region, and ourselves, right from the beginning of the mess when President Bush decided to punish Al Qaeda after 9/11 2001, and invaded Iraq. The excuse was the non-existent WMD, which had nothing to do with 9/11. We ended up 20 years later with an ignominious withdrawal from Afghanistan after massive expenditure of gold and more importantly, lives.
The Americans managed to get rid of their President in the November 2020 elections, with Biden taking over in January, but not before the US Capitol was subjected to scenes reminiscent of a coup in some South American backwater. The dangerous sniping from the sidelines by Trump continues unabated, but it appears to me that fewer beyond the rotten heart of the republican party are taking notice every day.
Division throughout the developed world has seen the rich get richer and the gap widening to all the rest over the last 12 months. Social media has played a role in this, and the backlash will lead to regulation of some type. In the US, Congress is starting to consider how they go about this. Problem is, very few of them have the foggiest idea, so the potential for stupidity is substantial. Europe has had a try, but the GDPR (General Data protection Regulation) regulations have not slowed down the rates of ‘anti-social’ material by much, largely because the main platforms are US owned. Australia’s pathetic attempt to fund journalism becoming law in February by forcing social platforms to pay for news content, has just helped News Corp to fatten its bottom line. Facebook demonstrated its contemptuous corporate power by shutting down in Australia for a day, reminding everyone that they were the biggest bully in the playground. This dog is best repealed, quickly, and replaced by some sensible measures drawn up with the public interest in mind.
Supply chains around the world have been ripped apart. If you can get a container delivered to Sydney or Melbourne it will cost you 4 to 5 times what it cost a year ago. Imported finished products and raw materials are in short supply, and prices have skyrocketed. There is a real possibility our trucks will stop progressively in the absence of AdBlue, an additive made from urea, an ingredient in fertiliser. Australia’s only producer Incitec Pivot is closing its Brisbane factory because they cannot get a reliable gas supply, ironic given Australia is the biggest supplier of LNG into the world market. China makes 83% of the world’s supply of urea, and needs it in the domestic industry, so no more exports, and the rest of us can get stuffed. This is an example of economic power being wielded by what is on some measures already the biggest in the world, and on target to be the biggest on all measures within a year or two. This assumes that the fragile Chinese financial system does not crash, that an economy controlled by a central power can defy the laws of economics as we currently understand them. Russia failed 40 years ago in a similar experiment, but I suspect the Chinese are smarter, and have learnt the lessons of history.
I have missed a lot; it has been a busy and eventful year despite the successive lockdowns. Let me know what the two or three things you felt were most important to you.
I have tried to think of good things that happened, thought I would leave them to the end. Well, here I am, at the end, and I cannot think of any. Must be some, help me here.
In any event, have a safe and merry Christmas, and come back in 2022 looking for some improvement personally, professionally, and in our communities.
Thanks for reading, commenting, and sharing this year, or even if this is the first dose, make it the first of many.
Merry Christmas, and have a great 2022, a low bar to be better than 2021
Allen.
Dec 15, 2021 | Leadership, Management
What happens if you are on the receiving end of negative feedback during a debate, or an ‘executive heckle’ during a presentation?
How do you respond?
Our natural reaction is to push back, to defend your position, which creates friction and ‘heat’.
That is what happens when you respond to a negative proposition with ‘Yes but’. You are setting yourself apart from the questioner, defending an alternative position.
By contrast, had you responded to the heckler with ‘Yes and’: what you have just done is agree with the heckler, at least partially, and then been able to move onto the reasons why it is an ‘and’
This subtle but fundamentally important distinction was brought home to me years ago. I was in a running debate with the MD of a conglomerate to whom I reported as GM of a division at EBIT. I had taken over as the GM after 5 years as Marketing manager, running the logistics, and part of the sales in my spare time. It had been turned around from a disaster into a commercially aggressive, successful and profitable entity.
The MD’s latest ‘brain-fart’ at the time was to incorporate the division into the much larger core division of the company. The much larger division was monolithic, and relatively unprofitable, lacking the innovation, commercial skills, and ‘can do’ culture of our much less bureaucratic smaller division. The MD’s view was that an amalgamation would bring to the larger division the commercial hard edge of its smaller cousin, thus making the larger entity more responsive.
My view expressed strongly was that to amalgamate the smaller division into a larger division would kill the very culture that had been built which made the smaller division successful. There were better ways to address the problems of the larger division than risking smothering the culture of the smaller one.
It was a debate I lost, and resulted in me leaving a short time later, rather unceremoniously.
With the great benefit of hindsight, and from experience gained in the almost 30 years since, what I should have done instead of saying ‘yes but’, and having the argument, which I was certain to lose, was to say ‘yes and’ agreeing that the problems of the larger division were real and needed fixing. I could have then suggested creative and practical solutions to the problems. Instead, I unknowingly chose to lose the argument.
It still may not have worked, but the odds would have moved dramatically into my favour. However, at about 40 years old, and having been given the responsibility of running the business, almost my perfect job, I was too self-unaware and perhaps arrogant to acknowledge the inevitable failure of the path I unwittingly chose to argue the case.
Simple and subtle changes of words can have a profound impact on the response they bring.
Dec 6, 2021 | Change, Innovation, Leadership
The old way of thinking and working in silos, based on organisation charts, is gone.
The key commercial question now is how to develop and commercialise innovative solutions to problems faced by individuals, and the wider community, faster and more efficiently than others.
We all know that we work better in small groups, differently but better, more productively. The problem is we have had imposed on us the structures originally conceived to enable scaling from cottage industries to mass manufacturing, where the benefits of scale outweighed the transaction costs incurred.
We have now reached a point where the worm has turned.
The transaction costs are greater than the scaling benefits, because of the transparency enabled by digital.
The nasty covid pandemic has accelerated the process of digitisation to the extent that we have consumed a decade or more of change in a year or so. Some have not made the change, and long for the return of the ‘normal’ way before covid. However, the truth is that we must go forward, we need to accommodate the new world as it is now by the way we collaborate.
For the last 30 years we have struggled with the growing inefficiency and resulting lack of engagement of employees down the organisation chart, driven by the remoteness from decision making.
We tried to fix it with various forms of matrix organisation, but we approached it from the old mindset of accountability and responsibility. ‘How can I be responsible for something over which I have no control????’ This question has loomed large on many occasions.
Matrix organisations with a silo management mentality do not work.
We need to embrace not just the ‘radical transparency‘ espoused by the likes of Ray Dalio, and Atlassian where it is a core value, but ‘radical adaptability’ to prosper.
Giving control and accountability for outcomes over individual workplaces to the people in them is the new way. Finding ways to speed up the process of change, to be able to adapt and innovate has become the path to commercial survival. We have been talking about it for ages, but trying to build it from a siloed mentality starting point will go nowhere.
The ‘radical transparency’ of Dalio will not suit everyone. You need to be a resilient personality to take and grow from the negative feedback. Recognising this, Dalio only hires what he calls ‘arseholes’, those who are resilient enough to take the feedback and learn from it.
A business with a culture of being ‘nice’, polite, keeping ideas and views to yourself, and not articulating those views and ideas to others, leads to the politics we see in most organisations. Things that are thought, and said privately, that will not be said publicly are corrosive of trust and collaboration.
Radical transparency needs an entirely different mindset.
That different mindset can lead to ‘radical adaptability’, as any idea is a good one until it is taken down by a better one, or by finding some flaw in the argument. By another name, in other circumstances, this is ‘Evolution’ or ‘Survival of the fittest’, and John Boyd’s OODA Loop at work.
Accountability & candour lead to collaboration, and collaboration is the key to growth in this new, digitised world, as it compounds effort and outcomes.
Header cartoon credit: WWW.Gapingvoid.com Highlights the challenges of enabling transparency. It is usually great for others, and in principle, but not for me!
Dec 3, 2021 | Leadership, Management
How often have you heard the question ‘tell me about your weaknesses‘ in an interview of some sort?
As a corporate bloke climbing the greasy pole I heard it a lot, and it has popped up from time to time in the last 25 years I have been consulting.
It always struck me as the question disinterested people would ask, when they ran out of sensible questions.
However, all is not lost.
A recruiter I know looking to fill an interim role called me, and we got caffeinated, during which he expanded his view that I was partly wrong.
A part of his process is to define the four crucial ‘Must haves’ for a role he is filling. Towards the end of an interview, he asks the candidate to rate themselves on the 4, best to worst.
It is a more sophisticated way of asking the dumb question, and engages the candidate in a conversation about their self-confessed strengths and weakness in the context of what is important to the role, after the interviewer has had the opportunity to make their own assessment. Any significant divergences can be further investigated.
If I was interviewing for a B2B sales manager, I might have the following 4 ‘must haves’ :
Coaching – How do you work with front line sales people to help them improve their performance?
Attention to detail – Are you a detail person, or a ‘big picture’ person?
Creativity – Are you someone who finds creative solutions to problems, or are you best communicating and working with an established process.
Growth – How good are you at finding new avenues to grow, by better leveraging the resources you have?
Recruiting for a senior financial manager, or CMO, would require a different four questions, but you get the picture.
I was not the right person for the job my recruiter friend had open, we both knew that, but I came away from the conversation with a great insight into a common question, one that I have sometimes had difficulty answering politely (I once responded with ‘you will have to hire me to find out’. Did not get that gig).
Nov 22, 2021 | Collaboration, Leadership
When the owner of a medium sized business is thinking of selling, the road in front to complete a transaction is a rocky one.
On top of the pressure and tension of financial and strategic due diligence, there are always questions about employee reaction.
- Will it impact on the value of the business?
- Will productivity drop?
- Will key employees leave?
- Will they disrupt the process?
- How will I replace any that leave when the business is for sale?
These questions, and more will be out in force.
Given that the large majority of private sales processes do not end in a transaction, the long term impact of a failed process can be significant.
Is it better to take employees into your confidence, and include them in the process, giving them the opportunity to contribute, or better to keep quiet and hope they do not find out?
Employees in a medium sized business are generally close to each other. Rumour and assumptions that might impact them, accurate or otherwise, get around very quickly. It is also the case that employees are rarely stupid, they can see when the owner is getting near retirement, has had an approach, or just getting tired of the grind, and draw their own conclusions.
The stress of uncertainty is far more corrosive the certain knowledge of difficult things to come.
On several occasions, once in defiance of instructions, I have taken employees into my confidence when a plant has been nominated for closure. In every case, all I did was confirm what they suspected, and knowing the truth proved to be much better than the uncertainty of not knowing. In every case, the plant closure, or sale process has been greatly assisted by the employees, who now had a clear picture of what lay in front of them, and of the measures put in place to assist.
Similarly, I have been in several situations where the closure of a plant or sale of a business was kept as confidential as was humanly possible. In every case, the corrosive impact of the suspicion that something was up amongst employees greatly impacted the outcome negatively.
My recommendation: Always assume employees are not stupid, and that they will react positively to being taken into your confidence, and even assist the process, not just for your benefit, but for theirs. There are many examples around the world of the impact employees can have on the success of a business. I have been in a small way involved in several. The current poster-boy for employee engagement is Chobani founder and CEO Hamdi Ulukaya, who turned an old, broken yogurt plant in upstate New York into a global success by engaging employees, then told the story in this TED talk.
Cartoon credit: www.gapingvoid.com
Questions in cartoons
Nov 19, 2021 | Leadership, Sales
Cash is the final arbiter of commercial success. You cannot live without it, too much of it and you get lazy, too little and you are wheezing, struggling to breathe, living moment to moment.
There is a lot of advice around about how to manage your cash, reduction of debtor days, management of inventory, project progress payments, pricing structures and the ret. All are valid and should be managed explicitly.
One item not often considered in the context of cash is the sales process, the pre-order or sales pipeline, time and resources consumed in that process.
The Cash Conversion Cycle is usually started at the point where there is a direct cost to filling an order, or buying materials for inventory.
It is a small leap to extend it to a point at the beginning of the sales process. That might be at the point where a lead becomes a sales qualified prospect, whatever nomenclature you use. The point at which the odds of closing the sale increase past an inflection point of some sort.
Many sales pipelines I have seen are long, torturous, ambiguous, and subject to gaming by sales people to make their ‘numbers’. The advent of CRM systems, and the logging of prospects and the expected conversion rates to generate revenue forecasts has made fools of many senior executives.
In the absence of a disciplined and regular review of the numbers, they always tend to be optimistic, until the crunch comes, then it is a nasty surprise.
Sales, like everything else in a business that is repeated, is a process that can be broken down to its component bits, systematised and optimised. While normally hidden in the fixed costs of a business, the expenses incurred in generating sales consumes working capital. Any reduction in the working capital required to run a business, increases the value and profitability of the business. Therefore, treating the sales pipeline as a process to be optimised makes both financial and strategic sense.
Ask yourself how any sporting team that is successful over a period of time does it. The personnel changes, the opposition changes, but the success stays. An exemplar is the Melbourne Storm rugby league team. Few believed they could continue their long-term success in the absence of their three superstars, Slater, Cronk, and Smith, but they defied the expectations. How? I bet coach Bellamy has a playbook that contains all their standard plays leveraging the skills of the individuals in every position, which are practised and practised over and over until they are second nature. There will also be a set of plays tailored to the weekly opposition, and the individuals they expect to meet on the field, which are run over and over in the week leading to the game, so they are also second nature. In the heat of the game, nobody has to wonder what to do next, they have practised it.
How many businesses practice their sales game? Mapping out each stage, looking for the friction points and practising how they will be addressed, workshopping the best responses to all possible objections, and ways to smoothly move to the next ‘mini-close’ in the process.
Very few.
If you were to practice and practise while optimising, do you think the sales cycle would shorten?
Clearly it would, and it would also confirm those who are likely to become a customer earlier, and probably increase the net price at which they were converted.
Together that would shorten the lead time and optimise the leverage from the resources committed, leveraging the relationship between sales and financial outcomes.
As the old saying goes, ‘More sweat in training means less blood in battle’
