How to apply logic to the development of KPI’s

How to apply logic to the development of KPI’s

Mar 12, 2018 | Governance, Leadership, Management

‘If it matters, measure it’

There are many variations in that old saying, but it holds true. How therefore do we end up with hundreds of measures that seem not to matter?

Fear.

Fear of missing a measure that does matter, so we create metrics for every-bloody-thing to ensure that we do not miss one.

That is crap management.

Let’s think about measuring stuff that does matter, and then measuring it at the point where the decisions and actions that influence the outcome are made. This is tying cause and effect together at the point where they intersect, not looking at a range of data and wondering what happened to cause that!

How do we define what matters?

To me it is simple, if it moves the performance indicator, it matters. Clearly, the converse is also true.

Ask yourself, does the number of Facebook likes you have impact your profitability? If it does not, and I would contend it never does, so why use it as a KPI? It is simply a readily available metric that has no relevance to performance. It is what those ‘likers’ do with your information that counts, much harder to define and measure, but if you understand that, and the cause/effect chains, it just might move the performance needle and become a KPI worth measuring.

In short, behaviour determines the outcomes, so set out to measure the behaviours you need to deliver the performance you are looking for, not the other way around.

How do we measure what matters?

A measure without a target is not of much value, as we cannot see if any movement is relevant to performance. A measure should articulate the performance against which we need to move the performance needle in a strategically significant manner. This setting of targets is challenging if we do it properly. Applying a 3% increase in last year’s performance is not doing it properly, it is just extrapolating, accepting that history will repeat itself.

To measure properly, we need to consider the factors at work that will influence performance, seeking the causes, and measuring them, not just glancing at the metrics and having no idea of whether or not any movement is significant. Holy cow Batman, we just got another 5,000 likes on the Facebook page. Wow! But so what?

A further caution. ‘Sandbagging’ so called KPI’s is common in situations where there is little strategic linkage, and analysis of flow on impact. Two examples. Sales people when incentivised only by a target will be tempted to keep the targets as low as possible in order to achieve their bonuses.  Who has not seen that? Purchasing people incentivised only by purchase price will not care too much about the performance of the cheaper version they opt for, which in the factory, may corrupt the efficiency numbers, and have a far greater financial impact than the saving of a few bob on the initial purchase price.

Do not focus on averages.

Too many times I see piles of measures, taken at a high level, so that they reflect the average of a whole lot of other factors. If I have one foot in an ice bucket, and the other in the fire, on average the temperature of my feet is about right.

Nonsense.

Measure the outliers, the things that are unseen in averages in order to better manage them. For a KPI to be meaningful, it has to influence the outcome. Removing one foot from the fire will influence the average, but if I have not realised that the effect is caused by the removal of the foot in fire, I will at some point put my foot back in the fire.

I do not remember much from the statistics I did 45 years ago at university, but one of the ideas I do remember is that of standard deviation.  I recall little of the mathematical gobbledy Gook and probably do not need to any longer, as the formula is in Excel, just fill in the boxes, but I do remember what it means. (Forgive the pun).

In the normal distribution curve we are all familiar with, 68% of outcomes are within one standard deviation of the mean. These can reasonably be classified as an ‘expected’ result, given that forecasting is not an exact science, it is just a best informed guess, and the level of ‘informed’ varies hugely, depending on who has their mouth open at any one time.  95% of outcomes fall in the range of 2 standard deviations, and 99.7% fall in the range of three standard deviations. This is commonly called the ‘Rule of 68’

A focus on the unexpected, the outliers, will give you far greater leverage on the outcomes than a focus on the averages, or expected. It might lead to taking one foot out of the fire, and understanding that this is what has caused the increase in the comfort level.

 

 

 

 

 

Defining the outliers, like most things in life, can be made easier by imagery. A core piece of process improvement is defining the levels of variability, and then seeking to understand the causes of that variability. A visual way of communicating this is a performance graph that includes what you define as the limits of the variability you would consider to be ‘normal’. Commonly this is called a ‘statistical control chart’, and includes the upper and lower limits of what can be expected. Anything outside these limits needs to be investigated.

Anything inside the control limits is by definition, ‘normal’ and therefore not necessary to spend a lot of time considering. What however is worth great consideration is determining what the control limits are, where the normal becomes abnormal, which is where action must be taken. Over time, in an improvement process, the control limits will be progressively tightened as the outliers are progressively understood, so they become part of the normal, or eliminated.

 Cascade the KPI responsibility

Having any more than 6 or 7 KPI’s to manage creates a situation where we skate over the top, not able to devote the time and energy to improving the things that matter, that move the performance needle. The things that really matter will be different at each level, and in each part of the enterprise.  Therefore, constructing KPI’s relevant to each role should be a core part of the process of managing the resources of the enterprise, and especially in encouraging the behaviour we want  that will collectively, move the performance needle. Within each functional area, there will be a cascade of KPI’s that together add up to the 6 or 7 KPI’s to which the functional manager is held accountable. This is not to forget that the processes we are measuring are very often cross functional, and ignoring those cause and effect chains leads to sub optimal performance as in the purchasing/operations example noted earlier. This can be addressed by ensuring that the purchasing manager has a KPI that involves operational efficiency in the measurement.

Use the narrative in reporting.

A dashboard of a few easily understood performance indicators is terrific, it tells you what has happened, but lacks two vital pieces of information: Why it is happening in this way, and what should be done about it.

Narrative is the best way to communicate these vital factors, the core of great management, indeed, leadership. Knowing clearly what is happening is step 1, steps 2 and 3 are what make the difference between the companies that struggle to survive and those that prosper and grow. Illustrating these narratives with graphical KPI movements over time is a powerful way to illustrate the impact of performance at any level.

 

Credit Wikipedia: Rule of 68-95-99.7.

Header credit: Hugh McLeod Gaping void

 

11 practises to build a performance culture.

11 practises to build a performance culture.

Mar 1, 2018 | Governance, Leadership

Managing personnel KPI’s, performance reviews by another name, are one of the most intimidating and easy to put off tasks most managers have.

Having recently written about behaviours delivering KPI’s rather than the other way around, it may be useful to do a quick audit of your own practises, and that of your employers.

If you want to shape behaviour, you need to communicate, and more importantly, display the behaviours before they will be taken up by others in the organisation.

This is a crucially important aspect of every person in a position to manage the output of others.

In  no particular order, following are some of the things I  have observed over the years that impact positively in behaviour, and clearly the converse is also true, their absence is telling.

Start from the beginning.

The first thing a new employee should understand is the behaviour that is required, and the connections these have to the KPI’s. Start as you want to continue, as someone who is willing and able to assist the new employee to learn, and contribute to the organisation. So often I see new employees disheartened by the reality of a new job not matching the rosy descriptions given during interviews. This is a bad mistake.

Feedback is a two way street.

Recognise that giving feedback is delicate, and is also a two way street. Positively managing the performance of other people requires a relationship, and no relationship can exist without some give and take. Every employee has expectations of their boss, so you should also ensure they have the opportunity in the conversations about performance to give you feedback. When this happens as a matter of course, as a part of natural conversation, it is a really healthy sign.

Responsibility and credit.

Taking responsibility for the failures around you, but giving credit where credit is due, publicly, is one of the most powerful motivators I have seen. It builds respect, and importantly also builds a well of goodwill amongst those around you, as well as from those reporting to you.

Feedback should be cultural.

Make performance feedback part of the culture. It should not be a once or twice a year conversation,  but an ongoing part of the discourse. This is not an easy part of being a manager, it means you need to be thinking of others all the time, rather than concentrating on yourself.  Have a look through the terrific Netflix culture doc, it is a very useful guide from a business that has managed exponential growth while disrupting established marketers, and building what appears to be a great place to work. Clearly, they know something about performance management and culture that the rest of us can learn from.

Remove emotion.

Keep emotion at bay, by concentrating on facts, and demonstrable cause and effect. This is a challenging task, but emotion is the killer of constructive and mutually beneficial conversations.

Be specific about expectations, exhortations to do better are of no value unless you are able to tell  them exactly how to do better, and the metrics by which that performance will be measured.

Context.

Help people to see their work, and place in the organisation from a broader perspective than just their own little part of it. Understanding the context of a role, and the impact the performance of it has on others is a very powerful motivator.

Educate for the next job

Recognise explicitly that most people move on at some point, and that you take it as a personal challenge to ensure that when someone does move on, it is to a better, more senior job, and that you have contributed to the success that gets them there. Helping them build a career path is a part of your job as a leader and manager, and they will be grateful. When you give something of value to someone else, reciprocity kicks in, and in some way, at some time, most will repay the ‘debt’, often with interest.

See the context of peoples working lives.

Understand the patterns and drivers of the lives of those for whom you are responsible. While keeping a distance is easy, and natural, unless you understand what is going on in someone’s life outside the time they  spend as an employee, you will not  be able to understand them as well as you might, and will therefore fall short of being the perfect boss. This can be a very fine and variable line. Some may not welcome what they see as intrusion, but to one what may be intrusion, to another is genuine interest in them as a an individual.

Address the molehills immediately.

Adverse behaviour does happen, and unless called out immediately, will quickly become  accepted as ‘normal’. When you see something great, immediate recognition will drive a repeat performance, and the opposite is also true, and corrosive. Once poor behaviour becomes the norm, it is very hard to change. Nip it in the bud!

Write it down.

There are regulatory requirements, as well as good governance that relies on things being written down and recorded. Some would  say without a written record, it did not happen. Agreeing a written record with the other party goes a long way towards cementing the  changes you need.

No threat no sweat.

‘Performance review’. Just the words elicit a sweat, an impending doom, that affects the conversation. Remove the implied threat, and the conversation can be mutually constructive. Of course, there are the odd occasions where threat is an intention, but it needs to be the exception, rather than the rule.

In these fractured post Weinstein days, ‘gender politics’ may also play a role, particularly if you are a middle aged, heterosexual white guy with the power. Enough said.

Remove with humanity.

Finally, when someone has to go, do it explicitly, but with humanity. Firing someone, particularly someone with whom you have worked closely, for whom you have had responsibility, and who you might like personally, is the hardest management job there is. Do not shirk it, and do  not leave any room for ambiguity. It is not about blame, it is about both parties moving on in their own best interests. You also need to consider those that remain in employment. They will see the termination,  and the manner of it, and come to their own conclusions about how it was handled, why it was necessary, and how it may impact them. Survivor syndrome is remarkably strong and often overlooked.

What have I missed from your experience?

 

Base KPI’s on behaviour, not outcomes, for best results

Base KPI’s on behaviour, not outcomes, for best results

Feb 21, 2018 | Governance, Leadership

It is budget season, so amongst the detritus of everyday management, we have to make time for creating the budgets for the next 12 months, in Australia usually starting July 1. Hopefully, budget preparation is a normal part of the management ‘flow’ of your enterprise, where it follows naturally after a regular strategic review and preparation of operational plans. The budgets then become a financial expression of the operating plans, but sadly, it is most often not the case.

Irrespective of the procedures that dictate preparation, part of the budget process is the setting, or in most cases, the resetting of Key Performance Indicators, KPI’s.

In almost every case I see, KPI’s are all about outcomes, achievements that more often than not are recorded in the financial reports, which are an alarmingly one dimensional reflection of performance in today’s world.

Would  it not be better to set KPI’s based on the behaviours we want, which are after all the underpinning of outcomes. It is unlikely the outcomes will be favourable unless the behaviours that occur are constructive.

There are many challenges in  setting KPI’s  in this way:

It is hard to do, therefore we take the easier route

To be effective, behaviours, and specifically the behaviours we want, need to be made sustainable, part of the everyday routines,  not something that happens when the boss is watching.

Behaviors are a product of  the environment in which we exist, so the task of management is not just to mold behaviors, but too mold the context in which you want them to evolve. Commonly this gets called alignment, but almost always it implies financial alignment, rather than the broader definition that includes revenue generation activities, operations, process optimisation, and capability development I think appropriate

Behaviours are integrated into the processes of any enterprise, together they make up what is commonly called ‘Culture’. Again, these do not evolve without senior management taking control, and being seen to do so, thus enabling the processes to evolve in a direction consistent with the objectives of the enterprise.

Are the behaviours in your enterprise all contributing to the objectives, or are they disconnected, the KPI’s just a set of optimistic benchmarks dreamed up in the boardroom designed more to intimidate than motivate?

 

 

9 reasons why SME’s should invest in a governing board

9 reasons why SME’s should invest in a governing board

Jan 31, 2018 | Governance, Leadership, Small business

 

Very few of the small and medium sized businesses I interact with have a governing board of any real quality. Many have a ‘board’ required under the various regulatory regimes they must meet, but very few have a board that acts in the manner of a public company, as an independent oversight of strategy, financial and operational performance, culture, and of the senior management effectiveness.

This is something that should be remedied.

The short term costs are in my experience  heavily outweighed by the benefits over the medium to long term.

Some of the benefits I have seen can be summarised as:

  • Introduction of industry knowledge and networks.
  • Introduction of business management expertise and experience from a wide range of backgrounds.
  • Provides time and the catalyst for management to consider wider issues than the normal ‘urgent’ things that dominate the daily routines.
  • Provides diversity of views, values and ideas
  • Keeps management and particularly the CEO focussed on the issues that will impact long term commercial sustainability, as well as the short term financial outcomes.
  • Adds depth to the management functional capability by enabling mentoring and coaching
  • Thought starter and sounding board for management
  • Acts as a catalyst and guidance for longer term capability development of employees, and the manner in which the business captures and leverages those capabilities.
  • Oversight if not development of strategy, and oversight of strategy implementation, feedback and renewal.

 

There is an old saying that most of the smartest people in your industry work somewhere else. Therefore it makes sense to try and tap into that expertise in some way, and a well considered ‘board’ is a great method.

These bodies do not necessarily operate under the rules of  the Corporations Act, where there are enforceable fiduciary responsibilities. They are usually more of an advisory body, often meeting  formally only 4 times a year, but with significant interaction with management on an as needed basis.

 

What governments can learn from small business.

What governments can learn from small business.

Jan 29, 2018 | Governance, Leadership, rant

Apart from the obvious, of doing sufficient due diligence on the important detail, such as knowing your nationality, there are many other lessons to be learnt.

Amongst the key ones is the depth of consideration small business owners need to give to the deployment of their very limited financial and operational resources. In most cases, some level of financial and strategic consideration is applied, and trade-offs are always necessary and usually painful. Governments on the other hand are not similarly constrained, spending is welcome, and rewarded, whereas constraint and tough choices are avoided, and there is no bank to refuse an increase in the overdraft.

Those I work with are encouraged to consider their commitments from three buckets:

  • What is required to keep the business going, which includes operational and necessary capital expenditure.
  • What is required to build the resilience and agility of the current business, enabling it to grow and prosper at the rate, and in the manner necessary to be commercially sustainable.
  • What is required to move the business to the ‘next level,’ whatever that may be in the context of their competitive and strategic environment.

Those that give this sort of framework deep consideration generally come out on top.

By contrast, Governments seem to consider their expenditures only in two buckets.

  • Sustain operations and get elected. In other words, never take anything away, but find creative ways to rebadge it so that it seem you are always giving.
  • Who is entitled to what from the bottomless purse of money to be spent. Joe Hockey when delivering the 2014 budget referred to ‘The end of the age of entitlement’ and look where it got him, and the Abbot government. A bad dose of adversarial short term politics by the opposition, and marketing incompetence by the government ensured that the age of entitlement continues, to this day.

 

Let’s hope that in this new year we see some common sense and vision emanating from Canberra. A big ask, but after a year of utter and complete chaos, irresponsibility, and self-congratulatory bullshit in 2017, I think we all deserve more.

 

11 trends that will influence success in 2018

11 trends that will influence success in 2018

Jan 15, 2018 | Governance, Leadership, Strategy

This is not really a set of predictions, those are around at this time of the year aplenty. Rather it is a mix of the things I am thinking about, the trends I see underlaying the performance of both the public and private sectors, and the performance of marketing and strategy in these changing contexts.

It is pretty easy to make predictions, get a few right, and you become seen as a ‘guru’ but few remember the many you got wrong, so I am not going to try this year.

Are monopolies OK?

Facebook and Google between them control 75% of the global digital ad spend, not a monopoly, but certainly a global duopoly.  Currently around 40% of advertising spending is digital,(depending on whose numbers you use)  and the lack of transparency and accountability is huge. The rock was kicked over by Procter & Gambles  Mark Pritchard in a presentation to the IAB in January 2017, and the roaches are still scuttling from the light. There has been movement for the better as Colgate, and several other major advertisers followed the lead of P&G and slashed their digital ad budgets until their suppliers could/would supply data that supported their claims. However, advertising is only a slice of the cake.

Facebook as a ‘community’ holds unprecedented power, with the attendant opportunity for morally challenging situations to arise, something Mark Zuckerberg  acknowledged in his 2018 letter, and  needs to be addressed.

Amazon continues its march to world retail dominance, (so long as you ignore Ali Baba which is more an exchange platform rather than a retailer) and the retailers we are all familiar with are racing to the wall. Amazon bought Whole Foods for $13.7billion, cash, on August 28  and the next day, the Amazon share price jumped $15.6 billion. In other words, Amazon got paid $1.9 billion to buy Whole Foods and got a distribution base into the bargain as well as a whole swag of quality relationships with produce suppliers, and a great brand. At the same time, the share prices of Walmart, Target and other major retailers took a bath in the wake of the purchase.  On top of Amazon as a retailer, we have Amazon providing an unprecedented breadth of services from Amazon Web Services, to a vast array of web tools, to space exploration, to demonstrating newspapers can still work with the turnaround of the Washington Post. 

Google copped a €2.4 Billion fine in June 2017 for anti-competitive behaviour as it used its dominant position in search to give itself the edge in price comparisons, from which it may take a cut when the product has been advertised  using AdWords. While Google is disputing the ruling, the evidence seems pretty clear, and in any event, the fine is only a few weeks profit, so is easily afforded.

As a new year resolution, Mark Zuckerberg has pledged to clean up Facebook. This guy is really smart, he has built the biggest communication platform in history, and in the process made billions for himself and a relatively few others, but I cannot help wondering if the juggernaut can be turned around by anything other than regulatory intervention, without which there is  no incentive to turn the tap off. History would suggest differently, and perhaps the impending IPO of Snapchat will put a dent in the flow of Facebooks  ‘automatic’ ad revenue. By automatic I mean hands off, they give you the tools to micro focus on segments, a great capability easily manipulated as demonstrated by both the Trump campaign and the Russians.

The apparent lack of ‘moral governance’, of the new digital behemoths that are now 5 of the 10 biggest companies in the world, Google, Facebook, Amazon, Tencent (still unknown to many) and Alibaba, all of which were just start-ups in 2000, will encourage regulators to try and throw a rope around their activities. However, if history repeats itself, they will be replaced at the top of the pile by companies we have not yet heard of inside 25 years. The corporate life of a major enterprise seems to be reversing Moore’s law, and increasingly diminishing every couple of years. This reality creates great challenges, as well as opportunities.

 

We will figure out how to use data

We are awash with data, the vast majority of it currently unused. Consider the opportunities to use the data currently around, in all sorts of applications from SME’s collecting and leveraging data on their customers to Governments digitising medical records, activity, and diagnoses to improve the productivity of the investments they are making by reducing waste, and improving the  delivery of health outcomes for patients. On top of that we have the emergence of ‘Blockchain’ technologies, with the attendant hype and bubble. However, it seems to me that the applications of this technology are both wide and deep, but require a wholesale change in the manner in which our private and public institutions work, and that will not happen in a hurry. Or will it?

There are some pretty scary implications in all this, as well as the benefits to be gained.

 

The final frontier: Attention.

The greatest challenge in marketing is the fight for attention, and it is becoming a more challenging, expensive, and bitter fight by the day.

The so called panacea, ‘Inbound marketing’ can and does work, but needs to be built on a solid foundation of marketing strategies directed at specific customers who will value what you have to offer above all else. Otherwise, the leads you to spend money to generate via inbound campaigns are going to be largely useless, as the conversion rate will be low. The name of the game is to get to those whose attention is valuable to you, and generally, these people at the top of the corporate food chain are very selective about to whom and when they give their attention. I think we are almost at a tipping point  where the personal contacts of yesteryear are becoming as important as any inbound activity, with the caveat that the digital stuff out there offers fantastic resources to do research to select out those who may be of value to you and then find them in a highly personalised way, if not in person.

Account based blather.

So called ‘Account Based Marketing’ became a buzzword over the last year or two, with all sorts of automated solutions vendors breathlessly declaring it the saviour. This will become recognised as the bullshit that it is, a tactic to flog software, not a solution to the basic challenge of marketing, to find, engage, service and retain customers.  It is not new, it is as old as selling, but those with a ‘shiny new tool’ to sell act as if they had discovered the holy grail. Define your target customer as closely as possible, ensure the exact alignment with your value proposition, research their company as well as the individuals as much as possible, and turn the on-paper prospect into a warm lead. It has always been so, and slowly marketers will come to realise that software is no substitute for creative and informed thinking and strategy development.

Brand building will again be seen as the key to sustainable success.

In a commoditised and connected world where information is freely available, brands are struggling to maintain their role as an assurance of value, just as consumers need it the most.

Building a brand has always been challenging, time consuming, risky, and expensive, but the return was there when  successful. In a world of sameness, the return is still there when successful, but the task of building a brand has become geometrically harder. This will not go away, but  there is light in the tunnel. The tools available enable very tight marketing, customer and value source definition to be done, enabling brands to be built that are relevant to a very specific group of people, and  therefore able to deliver value to them that is sufficiently unique to act as insulation from the general competitive milieu. Niche brands will become the go. In truth they always were, even the biggest brands occupied some sort of segment rather than the whole breadth of any market.  Even Microsoft, as the US Department of Justice was seeking to break it up to destroy the ‘Monopoly’ position it was seen to hold, was not the only option at the time.

The brand building skills of the ‘old guard’ will come back into fashion, simply because they are more relevant and effective than ever when armed with the digital tools. The generations of so called marketers who can use only the tools without understanding the principals behind their use, will struggle.

Given brands can be targeted, the message must necessarily be unambiguous and specifically relevant to the receiver. It makes it necessary for marketers to make very clear choices about who they will target, and with what, as generic offers have no weight. The greater the degree of personalisation and specification the more likely it will be received favourably, by the few who really want it.

Marketing in the boardroom

Increasingly marketing will be seen as a profession, requiring not just the creative and collaborative skills of the past, but also deep  technical and management skills.

Investment in marketing technology is accelerating at a huge rate, driven by the competitive pressures that come from the increasing productivity coming from marketing automation. Therefore the marketing personnel will increasingly be responsible for huge IT investments that determine the effectiveness of the strategic choices that are made. Marketers need to be qualified to make those choices, and more importantly, need to have the credibility in the boardroom necessary to gain the support for the allocation of the limited resources available, and to prepare the business case underpinning the choices. Those businesses without marketing in the boardroom will fall progressively behind their competitors.

The time for marketers to step into the top jobs has never been better, the ability to focus an enterprise on customer outcomes which are then reflected in the financial results will become the mark of successful leaders who shape enterprises for commercial sustainability.

Time frames will continue to compress.

Time frames for everything from long term R&D as in the pharma industry to the local start-up and political actions are being radically compressed, and this will not change, just get faster. If you are unable to keep up by changing at least as quickly as a those around you, the abyss is just down the road.

20th Century institutions are not able to cope.

Anyone can now start a business with a laptop and a few dollars, and physical location is becoming increasingly irrelevant. This is leading to a whole new structure of internationalised competition and governance,  self and part time employment, multiple jobs and career paths. Our institutions were simply not designed to accommodate the pace and breadth of change, no matter how much we may not like that reality.

The future of creativity in an increasingly automated world

What is the future of creativity, which takes time, energy, imagination, and does cost, in an increasingly automated and short term world?  Does the volume of ordinary ideas required to keep the ‘content machines’  turning outweigh the few big ideas? This is not just marketing, our lives are increasingly programmed, often without us realising, e.g. the Facebook algorithms that deliver to our feeds the ads, and stuff that the algorithms ‘think’ we might respond to, this is just telling us more of what we already think, removing the need and urge to think, to make leaps of logic, and see a different perspective.

It seems to me that we are pretty good at seeing what is coming from within our narrow domain, but very poor at seeing what is coming from outside, which is where most change comes from, and where creativity has the opportunity to deliver real leverage. Most of the great blunders thrown around reflect this reality, while the companies concerned continued to be successful within their own boundaries. Edison’s failure to recognise the benefits of AC over his baby of DC, Thomas Watsons declaration that there is a market for only 5 computers, Bill Gates initially missing the internet (then, remarkably turning Microsoft on a dime) Steve Ballmer dismissing the first iPhone, IBM missing the shift to personal computers, Xerox not commercialising any of the stuff they invented in PARC, (except laser printers which were right in their playground of document reproduction), that now underpin much of the tech we use every day, and many others. These are obvious with hindsight, but when you think about the context of the missed opportunities, each came from outside the essential expertise that had delivered initial success. The lesson is that creativity is more essential than ever, it is the source of innovation and change but usually only obvious with the benefit of hindsight.

The public vs private world

We are demanding more of our public sector, schools, hospitals, teachers, and all the services we take for granted, but we are also demanding we pay less. Partly this is a response to the waste we all see in the public sector, but there is a longer term trend at play that will focus attention on the really challenging problems associated with the revenue side of public budgets, rather than just the expenditure. Large corporations with an international footprint can select their tax domicile to minimise tax, and the releases of the ‘Panama Papers‘ and the more recent Paradise Papers have at least lifted the rock a bit so we can see a few of the roaches running for cover, but it is the tip of the iceberg.  With the US corporate tax rate dropping to 21%, we (in Australia) will have to adjust to changed flows of US capital, one of the underpinnings of the Australian economy, potentially drying up while politicians argue about our corporate tax rates, and how reducing them is giving back to the rich at the expense of the poor. The reality is that the pie is getting smaller. Then we have the movement in the economy from  PAYE employees to contractors and small businesses with the attendant tax benefits. The  impacts of all this will be an increase in the heat of the political debate, with a geometric increase in the bullshit that  gets served up, when what we really need is some genuine leadership that is prepared and able  to articulate the core issues driving these trends, and execute sensible strategies to start the process of addressing them.

Are we at the tipping point?

To end with, this is a question that will continue to bother me, as the implications to the management of both private and public institutions, and the rules to which they are supposedly accountable, are profound:

Are we reaching a tipping point in a range of tech enabled areas? Artificial intelligence, Augmented Reality, Virtual Reality, Autonomous everything,  new generations of quantum and neuromorphic computing, and most particularly renewable energy.  All are being rapidly developed, or already being incorporated into our daily lives without us really seeing it, after 100 years of science fiction. It seems to me that the revolution that took place 100 years ago as electricity revolutionised our lives, is about to be repeated, but from a different direction. we will be confronted by the change from disruption to collaboration,  and I do not think most of us are ready for it.

Ray Kurzweils observation (I think it was Ray) that ‘The future comes very slowly, then all at once‘, seems to be coming true.

What do you think?