Dec 4, 2012 | Leadership, Management, Strategy
Listening this morning to a discussion about the value of a review of the GST sharing regime currently in place, a small part of the GST regime, I was reminded of the geometric nature of the complications that arise from complexity of a system.
The greater the amount of data, the greater the opportunity for analysis, apparently. However, the greater the amount of data, it usually follows that the level of complexity also increases, and as complexity increases so does the number of interactions, and cause and effect relationships that need to be anticipated and interpreted.
Unanticipated relationships that have an impact on the performance of the system, but have not been “risk-assessed” can create a huge risk to systems, simply because they are not in the rule-book. The system is supposed to be “fail-safe” so the response to an unanticipated situation is not enabled. Remember Lehmann Brothers, a massive institution that on paper was AAA, but in reality was so complex that risk was not easily assessable except with hindsight.
Finding the needle gets harder as the pile of hay gets higher, and the complexity of hay-stack increases.
How complex is your business model?
Dec 3, 2012 | Leadership, Management, Marketing
Can’t see the forest for the trees!.
This is a pretty common expression, almost a cliché observing that the pressure of the detail overcomes the view of the whole.
However, a tree is a part of the foundation of the forest, in the same way a single challenge or task is a part of a whole project, and it plays a role in the “fabric” of the whole.
The challenge is to see both the forest and the tree, the forest offering the context, the tree offering the vital details and relationships between the details, at the same time.
Failure to see both, and manage ambidextrously, will compromise both.
Nov 29, 2012 | Leadership, Management, Strategy
We measure return on the capital investments we make, there is an extensive, well understood, widely used set of tools that offer a framework for the calculations, most of us would be lost without them.
However, whilst we all know in our guts that there is a set of practices that together we would call great management, and the businesses they run are better than those run by “ordinary” management, there are few tools available. Trouble is, articulating what make great management has been a qualitative process, significantly informed by hindsight.
So what are the characteristics of superior management?
Seems to me there are three characteristics, that are all the result of extensive sets of individual and group behaviour:
- A well executed strategy that differentiates in a manner customers value
- The management team is a cohesive, but questioning bunch of trained, intelligent people who have a strong sense of team competitiveness. This characteristic is reflected in the groups that exist at all levels of the organisation.
- There are appropriate measures that drive continuous improvement throughout the organisation
For comparative purposes, the Worldmanagementsurvey.org site carries an extensive database with the results of a multiyear, multinational academic survey that offers an opportunity to benchmark management performance. It offers an opportunity to start the process of identifying the behaviours that lead to superior performance by management.
Nov 26, 2012 | Change, Collaboration, Leadership, Social Media
What you do, say and think is no longer private. Our lives are opening up to scrutiny as our previously private data moves into the public domain at geometric speed. Much of being human depends on our ability to forge relationships with a few people based on dreams, problems, challenges, and attitudes that are shared with a small group, often only one person.
Radical transparency is the new reality of privacy where the notions of privacy as they have applied in the past to individuals and institutions are simply no longer relevant. It seems absurd to me that we still have regulated privacy in situations where there is a clear benefit to that community to remove it, such as in the case of contagious medical conditions, and whilst we shake our heads at the photos our kids (grandkids?) put up on facebook, that is the new reality.
This change happening around us is emerging as one of the most radical social revolutions in history. How are we, and our institutions going to deal with the absolute ubiquity of information?
Over the last decade, we have effectively given away the assumption of privacy as we understood it, surely the challenge now is to figure out how to manage the new transparency rather than doing a “Canute” about it.
This notion is engaging greater minds than mine. Part one of an email conversation between a couple of the real thinkers in this area, Clay Shirky and Don Tapscott, appeared recently in the Atlantic. It deals forces of change unleashed by the collective intelligence of the net, the 4 broad principals of the internet age, Collaboration, Transparency, Sharing, and Empowerment, as outlined by Don in his June 12 TED talk.
Part two of that conversation examines the impact of the information revolution on the Arab Spring, and its wider implications, demonstrating again, the 4 principals at work .
Radical transparency is a part of our world now, it cannot be undone, so our corporations, institutions, and every individual need to respond to this new reality.
Nov 21, 2012 | Collaboration, Innovation, Leadership, Strategy
“The harder I work the luckier I get”
I’m not sure who said that first, but it is certainly widely agreed, absolutely true, and therefore almost a cliché.
The more ideas, the more the variation in the background, training, and attitudes of those exposed and asked to think about problems and opportunities, the greater the chance someone will see something new. It makes sense therefore to increase the diversity of people thinking about any problem or challenge, as their diversity brings different experience, perspective and understanding to bear, and can create connections not seen by others.
Discussion needs to be stimulated and encouraged, curated if you like, a hothouse for ideas and experiments, where every trial that does not work is one more way that we know does not work. “Edison’s law.”
The new collaboration tools of the web are fantastic, a breakthrough for innovation, but they still do not come close to the potential of motivated individuals exchanging ideas and views in a relaxing, but stimulating face to face environment.
Serendipity happens after the work has been put in, not before.
Nov 14, 2012 | Change, Innovation, Leadership, Strategy
The interesting and fun bits of our world are driven by the vision, imagination, and execution capabilities of people. Much of the capital and technical capabilities required to enable these great things to happen are tied up in our corporations, governed by the legislative, and community demands for absolute compliance to an established norm.
Almost by definition, the norm is boring, ordinary, “so yesterday” as my beautiful daughter would say. How is it then that the boards of those same companies, the people with the ultimate responsibility to determine the long term priorities of the business, and allocate the resources to deliver them for stakeholders make the necessary choices. They have to make choices between the creative, the risky, and the new stuff that will cannabilise their existing position, whilst being tied down to processes that demand short term, conservative, risk averse, and ultimately boring behaviours.
The Corporations Act and various accounting standards, domestic and International, require many things of directors, almost all are quantitative, take great time and energy, and deplete resources, when the real value is added by the qualitative.
As a community, we demand probity from directors, and largely we get it, but the few who play fast and loose, who feed self interest at the expense of the interests of those who are footing the bill, ensures that there are rules crafted to catch the 1%, but that hamstring the 99% in the process.
The few truly great leaders around in charge of our large corporations that manage to make those choices are the exception. Jack Welch at GE made six sigma the manufacturing standard of the west by driving GE along a path invisible to most, and his successor, Jeffrey Immelt followed by a pivot of GE into green power, and has created an 18 $billion manufacturing division in just a few years that promises to be hugely profitable whilst delivering enormous value to the planet. There are a few others, the oft cited Apple, FedEx, Disney, add your own, but it is a short list.
Perhaps it is happening again as the suppliers of the milling and moulding equipment used in manufacturing, are about to be made at least partially redundant by a few outliers who are putting manufacturing equipment on desktops.
Just a pity there appears to be so few in Australia.
