Mar 23, 2015 | Collaboration, Innovation, Leadership, Management, Strategy
Plan backwards
All sorts of planning activity is aimed at defining the point where we want to be, then assembling the resources and capabilities to get there.
That is how planning is done, almost always, because by and large, it seems to work, and it keeps the spectator crowd happy.
Libraries have been written that describe all sorts of methods and models that can be used. They can be very useful and thought provoking, providing a framework to help articulate the factors that will impact the business, and the options you have in responding, but they rarely offer an antidote to the malaise affecting the development of really distinctive capabilities, genuinely new products, processes and business models.
The real innovations, the things that change everything seem to come from a different place, “left field” being the most common description.
Most planning ends up being just an extrapolation of the past, despite the well meaning and significant effort to make it something else.
Perhaps a better way is to put yourself in the future place, then work backwards, identifying the steps that need to have been taken to reach the point where in your mind, you are now.
Be specific about the end, articulate it clearly, and then “Plan Backwards” by considering the factors that delivered value for you. I generally call this process ‘Hindsight Planning’.
- What did you do that worked, and conversely, what might you have done that did not work?
- What capabilities did you need to develop?
- What trends drove changes to the industry you were able to leverage?
- Where did the technical innovations you leveraged come from?
- Which markets and customers were successfully addressed?
- What big customer issues were addressed?
- What did the business model(s) you used look like?
- And finally, How were you able to extract value for all these things?
This sort of analysis, if it is to lead to a positive outcome, requires that you recognise and deal with two types of barriers:
Management barriers.
People like consistency and predictability, so when the forecast future looks very like the past, just a bit blurry, they are happy with it, endorse it, and resource it. By contrast, being the harbinger of change that will affect the status quo is no way to get ahead in most organisations. However, it remains a truth that the future never looks the same as the past, no matter how much we would like it to be so.
- Idea averaging. Management absorbs and usually just “averages” or applies committee thinking to a good idea, but at worst, just rejects them for a range of reasons that sound absurd and utterly naive with the benefit of hindsight. Existing businesses are rooted in the networks and frameworks required to make them successful today, and are usually intolerant of new things that involve risk. Usually successful incumbents are well evolved, so are resistant to change, their current way has enabled the current business to be successful, why change? There are many examples of this phenomena, Kodak being a standout, Polaroid another, Cobb & Co another. The current attempts by the taxi industry to resist the encroachment of Uber in my hometown, Sydney, is an example unfolding, and the music industry prosecuting their customers for using their products is an example of one that is just about folded.
- New business models. The successful commercial execution of a real innovation generally requires some new way of delivering the value to customers and extracting value for the suppliers. In short, a new business model. Industry incumbents rarely completely disrupt themselves, by definition, they have too much to lose. Therefore, there needs to be new strategies and supporting business models developed by those outside or on the fringes in some way of an industry. Uber and Apple came from way outside the industries they disrupted, and can you imagine Hilton, or Accor funding that mad idea AirBnB that was gong to crucify their budget tourist dollars?
- The Profit paradox. Profit is counted by looking backwards rather than forward, rewards came after the fact. Forecasting profit, or “fortune telling” is inherently risky, as the only think you know for sure is that you will be wrong, the real question is by how much, but the consequences of getting this brand of fortune telling wrong are significant. However, in the long term, you are only truly profitable if your returns are greater than the cost of capital. If they are equal, you may as well put your money in the bank, because it is safe, less than that and you are long term destroying capital. This simple fact is ignored in almost every profit forecast, statement or review I have ever seen. The conundrum is that to generate a return greater than the cost of capital you must take risks and do stuff differently, some of which will not work out, or only work out in the long term, therefore risking the current profit. It is pretty easy to ramp up the profit made today at the expense of tomorrow, but in this case, tomorrow does actually come.
Creative barriers.
Creative barriers evolve around points of the assembly of ideas, where information, insight, experience, are mixed up to create the otherwise unlikely connections that are the foundation of a creative solution to a problem, situation, or challenge. These are the barriers that most businesses try and get around by the off site strategic planning sessions that rarely seem to be able to deliver the promise of the day. The energy and drive in the workshop room gets absorbed by the day to day of being back in the business. Removal of the barriers is a high priority challenge for management.
The barriers to creativity are many and varied, often overlapping in many places. Following is a ‘brain-dump’ list of the ones I consistently find.
- No commitment from the ‘top’
- It is not OK to be wrong.
- Give up too easily. Edison’s famous quote “Now I know 999 ways that do not work” whilst experimenting to develop the lightbulb resonates still.
- Creativity is hard to quantify, and is therefore often not measured. The old adage what gets measured gets done is right, so creativity is extinguished.
- Lack of resources, time, equipment, money, are all used as excuses for being too willing just to accept the status quo.
- Enterprise culture eliminates risk as far as possible, and creativity is inherently risky and “out there”.
- Rules rule. Particularly in public enterprises, and creativity is not in the rules.
- Challenging orthodoxies, assumptions and the status quo is frowned upon.
- Lack of what I call ‘environmental intelligence’ or an understanding of the macro trends and individual movements in the commercial and strategic environment in which you compete. Seeing trends that impact an enterprise, and their intersections is a rich source of creativity.
- Lack of discipline. Perhaps counter intuitively, creativity includes a range of activities that if subject to some disciplined and focused thinking can deliver great results.
- Not having the right people. Creativity is perhaps the most collaborative of human activities, well, almost. Not having the right people is a commonly owned albatross.
- Everyone can say “no”. Formal layers of approval for ideas act on creativity like a wet blanket on a campfire.
- Creativity is not a required contribution from everyone, it is assumed to be the product only of the young, or the marketing department, of the boss’s wife. Creativity should be everyone’s job!
I could go on, the list is huge, it is a wonder that creativity survives at all given the barriers.
An idea is the outcome of all that has gone before, and the triggers around at any given time, rarely is it the ‘Eureka’ moment. Ray Kurzweil who has a stellar track record in seeing the future in technology believes we need to become comfortable with what he calls “Hybrid thinking” and I can only agree but see that the ideas he articulates have a far greater range than just creativity and innovation in technology.
Feb 9, 2015 | Governance, Leadership, Management, Marketing
Gaining some sort of commitment is the first stage of any commercial process, and repeats continuously up till, and after a transaction takes place. Sufficient commitment to click an opt in button, allocate the time to a webinar, look at your product demonstration, conduct a trial, or commit to a purchase, all require that in a variety of ways, the seller has in some way engaged with you, and built your commitment to them.
It does not matter if you are BHP, a local tradesman or the suburban lawyer, addressing these four pillars will bring you business.
- Demonstrate you care. People will be attracted to those who care about what they care about, and who care about them. Showing interest by asking questions and genuinely listening to the answers and responding appropriately demonstrates you care. Next time you phone someone and you get a recorded message telling you that your call is important to them, and then wait 10 minutes to be connected to a call centre in Bangalore, you know they do not really care.
- Demonstrate you can be trusted. Nobody wants to have anything to do with those they do not trust. It follows that demonstrating you can be trusted, that you do what you say you will do becomes a fundamental foundation of a relationship, even a passing one. pretty important. Trust is the foundation of any relationship, and in a commercial one, a money back guarantee usually goes a long way.
- Demonstrate your influence. Being able to get things done, to cut through the complication and hubris that exists in most situations builds confidence in your capacity to deliver on your undertakings. This is sometimes a bit challenging, particularly in the early stages of a relationship, but there are usually ways. Some time ago, I had some work done on my house, and the architect as part of his service took on the task of dealing with the notoriously pedantic and difficult local council. No big deal, no fuss, just part of the service. Clearly he knew who to talk to get things done, and as it turned out, he did.
- Demonstrate your authority. In the past your title used to be a demonstration of authority, but no longer. Just being a lawyer of accountant, or the CEO used to be enough, but we now know that these titles just assure us that there is still a pulse. In these transparent times, authority is usually earned rather than bestowed. Finding ways to demonstrate the authority of your knowledge, leadership and position is a marker to those who may be in a position to seek out your services or products. Social proof is rapidly becoming the marker of authority, the number of comments and shares of a post, speaking at industry gatherings, published material, all point to some level of authority. Of course organisational authority is still important, but significantly less so than yesterday, and tomorrow, it will become just a label.
Your marketing challenge is tangled up in these four parameters of relationship building, and working on them all, tiny piece by tiny piece will improve your outcomes measurably in a relatively short time.
Call me when you need help, or trawl through the years of accumulated knowledge demonstrated in these 1400 odd posts.
Feb 3, 2015 | Leadership, Management, Strategy
For years I have followed Seth Godin’s musings, ideas and presentations, a remarkable collection of original thoughts, metaphors, instruction, and repackaging of the complicated into the simple, shared with enormous generosity.
This post that came out this morning, his productivity pyramid, is such a simple idea, bits of which most of us have considered in one way or another, but it takes a deeply inventive mind to articulate it in such a simple way.
I think it was Michelangelo who said something like “Simplicity is the ultimate sophistication”, may have been Mark Twain, perhaps you can correct me, but irrespective, simplicity is really hard, and this is really simple.
I just added the visual.
Thanks Seth.
Jan 27, 2015 | Leadership, Small business, Strategy
Time to think
Those who run small businesses have some very common challenges.
Significant amongst them is insufficient time to get everything done that needs to be done, and no time left over for “self”
The old cliché working “in the business and not on the business” is a cliché because it is appallingly true.
Most, if not all have also heard about the “urgent but not important to Important but not urgent” continuum, certainly I have written about it in the past.
However, taking some concrete action to free up the time is harder than the easy clichés of business coaches and consultants, so here are a few added steps to take along the path. They come from the “Lean” thinking movement that has so profoundly altered the way we manufacture things over the last 25 years.
First: distinguish between policies and procedures.
Policies are the things that deliver a framework for activities an decision making. Think about it as Google earth focussed on a large region. You can see the shape and limits, but not the detail of the roads, railways and suburban areas. Procedures by contrast are a step by step expression of the sequence of activities that together contribute to the outcome. To continue the analogy, they are the GPS, giving you street by street instructions on how to get from point A to point B.
Second: Make a list of all the things that are recurrent activities, and priorities them against a list of questions you ask yourself:
- Is it required for the business to function efficiently?
- Are there repeatable steps with specific start and end points and efficiency/productivity metrics?
- Does the task have to be done by me, or could someone else do it
- Is it the best use of my time?
Third: Be ruthless about eliminating those tasks that do not add value that make no contribution to your ability to serve customers, and by delegating to others.
Fourth: write the procedures to make the tasks that remain routine, repeatable, and robust. You generally have two options in writing procedures.
- Have a roundtable with all those involved in the task, and map it out on a whiteboard, or butcher paper, capturing all the interactions that occur.
- Take a bit of time, and keep a record for a couple of times the job gets done, then whiteboard it to standardise, and eliminate the unnecessary loops and rework that almost inevitably you will uncover. Think about it like building a house. Start with the foundations, then progressively fill in the external walls, internals walls, followed by the details of the fittings and fixtures.
Once documented, test the procedure a couple of time to “stress test” it, then delegate.
Fifth: Outsource where possible those tasks that take a capability not readily available in your business, or where there is a specialist available who can do it better and quicker, and therefor in the long run cheaper, than you.
Voila! For most small business owners, 4 hours a day.
Jan 25, 2015 | Governance, Leadership, Personal Rant
Australia day 2015
On Australia day for the last few years, I have made a point of reflecting on the place we live.
The post on January 26 2012, called for a mature debate on the challenges we face as a nation, the real, long term issues, rather than the diet of puffery and bullshit we normally are asked to digest. Quaint idea that, asking for a national debate on real issues.
In 2013, I asked what it was we wanted the place to look like in another generation, and I guess some degree of pessimism came through the words, again nothing.
Last year, 2014, I focussed on what I thought would be the defining trend that would drive our decision making, individually and for the nation, Data, and the essential truths that data can convey. This turned out to be absolutely wrong, about as wrong as anyone can be, and is again a salient lesson to those with a crystal ball hidden somewhere. Small businesses have not embraced data, Governments continue to hide it, and politicians use it to distort, mislead, and often fabricate, and we still take it on the snout, in relatively good humour.
So much for the transparency to be delivered by the internet.
This year, 2015, I will not be so grandiose or presumptuous.
Nick Kyrgios has just fought his way into the Aussie Open semi-final comprehensively replacing Tomic the tank as our favourite tennis player, the Canberra shuffle is back in full swing, educating our kids seems to be on the hands of kids, the boom of the last few years is comprehensively over and the lack if intelligent and bi-partisan comment and policy development that would enable the economy to weather the coming storm is supplanted by another call from the opposition leader for a debate on the coming republic.
For heavens sake, can we be adult about this?
Australia is the greatest country in the world, our economy is for reasons of luck and good management 20 years ago in pretty good shape relatively, but we are still failing to recognise that the piper needs to be paid now if the prosperity we have enjoyed will be handed to our children, some farsighted decisions need to be made irrespective of the political cycle.
I guess I am asking too much, pass the bottle, please.
Jan 1, 2015 | Leadership, Management, Marketing, Small business, Strategy
happy new year
It’s been the Christmas and new year period, and over the break some introspection occurred, along with the pud, family connections and some nice wine.
One of the insights that emerged was the application of Clayton Christianson’s “job to be done” idea to marketing, and specifically the manner in which I approach the task of developing, selling and delivering Intellectual Capital.
As I thought about what is was going to take to be successful in 2015, I needed to ask, and answer three pretty basic questions:
- What is it that I do every day?
- Why would people hire me?
- How can I help them do their job better?
When I worked my way through those, the answer was pretty simple.
The job of a marketer is to discover, develop, and tell interesting and engaging stories to people who care, who may receive value from the experience an wisdom contained in the stories, and who may take an action as a result that delivers them some benefit.
The job is not to make ads, or create blog posts or posters, it is to identify the ways that as marketers we can bridge the divide between what people are looking for, the challenges and opportunities they face, and how we can help them with the task of “finding.”
I trust 2015 will be a good year for us all, at least better than 2014.
Our families, friends, colleagues, and those who are in great need around this shrinking world need some simple wisdom, helping hand and quiet counsel, and it is up to us collectively to give that to them as we can, in the best way we can.
Happy new year.
Allen
