Jan 12, 2013 | Change, Management, Small business
Below are 10 predictions I made at a meeting this week of owners of SME’s in Sydney’s inner west. It is a quick list I jotted down in the 10 minutes before the meeting, but on reflection, I actually thought they were OK, therefore I am prepared to live or die by them.
So, here goes:
- Marketing is digital and personal, mass marketing is dead! Get personal and get digital, they are complementary, not mutually exclusive.
- Social media will overtake traditional news dissemination channels. Just look at where the news about the current fires came from, those on the spot with mobiles and net connections. The rest of us get the dramatic pictures a few hours later if the cameras can get in, but the real “news” is reported by individuals on the spot using twitter et al. (Just think about that as evidence of empowerment for a moment)
- A few smart SME’s will do very well, but the rest will at best struggle, and many will fail. The scale of operations necessary for success is relative to the size of the niche occupied, and most SME’s try to be all things to all people, and fail at being relevant to enough to ensure success.
- The new “cool” for our kids is to train as a “tradie” as there are insufficient fulfilling jobs left for those with modest, non vocational degrees, to fill demand from the aforementioned graduates.
- The shortage of willing and able workers will continue, as we no longer train people to work, we train them to “expect”.
- The 40% of SME’s who do not have web sites, or have sites that act only as an electronic brochure rather than as a magnet to their target customers need to realise they are missing the opportunity to grab the lifeline. Failure to grab the lifeline, well, refer to prediction 3.
- “Big Data” the combination of traditional data bases and the behavioural and attitudinal data scavenged from social media will become the next big thing during 2013.
- Mobile will take over from fixed line, comprehensively, and across all communication channels.
- The economy will continue to slow, consumers are cautious and risk averse. We are caught between a European economy that is truly stuffed, a US economy that whilst showing some signs of life, is extremely fragile even after the dills kicked the “fiscal cliff’ down the road a bit, a Chinese economy that is still robust on paper but is turning inward to meet domestic demand rather than exporting manufactured goods, and so needs less of our commodities. These things together with the very high $A, and a determination by our “leaders” to continue to say how well we are doing while denying the caveat that we are doing well relative to the rest, who are really crap. (compared to blokes on crutches I am still a fast runner, but compared to anyone who can really run, I am nowhere near where I was 40 years ago). This is notwithstanding Bruce’s optimism, and correct assessment that his industry is a “canary in the mine” but look where the housing market has been in the last couple of years.
- Around July/August, the economy will stumble into a really nasty hole as we approach a Federal election. Never in my memory have we been “led” by two such unpopular leaders. Unpopular they may be, as have been others in the past who have in fact been successful leaders, but the flip side, respect, is not there either, and being unable to respect your leaders, even if you do not like them is a real problem.
There you go, my 10 predictions.
Hold me to them as we progress through the year, it may make for some lively debate at some point.
Jan 10, 2013 | Management, Operations
How often have I heard the phrase ” he needs to get his ducks in a row before he can progress”, or some variation thereof.
Often, and most recently yesterday, as a reason that less than expected progress had been made on a project. Unexpected distractions had prevented the foundation work being done, just as it had before Christmas, and in October.
I do not want to hear any more about the challenges of organising to get the ducks in a row, I want to hear what you are doing with the bloody ducks!
Are your ducks flapping, delivering value, in 2013?
Jan 8, 2013 | Management, Strategy
Ever heard of John R. Boyd? I hadn’t until I stumbled across this article in Fast Company magazine.
Observation, Orient, Decision, Action.
Instinctively it seems to make sense, Observing and understanding the pressure points, orienting your thinking to reflect the evolving situation, making resource deployment decisions to leverage the opportunities emerging, then executing on them, whilst going through the processes again, and again, as more information becomes available.
A variation on the Shewhart circle, which is now well known as the Plan Do Control Act (PDCA) circle in manufacturing, applied to competitive strategy with the wrinkle that the focus is not improving your own performance, but destroying the oppositions ability to compete effectively.
I have often said that getting inside your oppositions head is the best competitive strategy you could have. The OODA loop is simply a template to organise and focus the process.
Update: August 2017. I found this long article on Medium that also provides an outline of OODA. A useful addition.
Jan 3, 2013 | Customers, Management, Sales
Some informal research I completed recently amongst businesses in my “patch” turned up a surprising result.
One the questions I asked was “what is the most important job in your business?
The surprise was that so few respondents nominated “sales” at all, let alone in the top three.
When you think about it, without sales to pay for the apparently more important functions like, HR, Marketing, OH&S management, engineering, NPD&C, and all the rest that got a mention, all those more fashionable functions will not be around.
Has “Sales” become its own metaphor?
Sales is often an entry level role personified by the keen young bloke (or gal) with the brief-case, glib tongue, and “crash or crash through” attitude to human relations, and as a result is being left behind in the corporate furr-ball. Do well in sales, and you might be promoted to marketing.
Perhaps we should rename sales “Revenue Generation”. Call it what it is, focus more on those carring the direct responsability to conduct conversations with those who write the orders, and perhaps that might focus the mind a bit better?
Dec 18, 2012 | Change, Governance, Management, Social Media, Strategy
Like most newspaper groups, Fairfax has failed to evolve to accommodate the depredations of the digital revolution. Their business model is broken, and the way forward is unclear.
The one spot of light in a gloomy future was the NZ auction site “Trade Me” which Fairfax bought for $700 million in 2006, then floated 34% onto the ASX, and a further 15% last year, raising $422 million, leaving them with a 51%, share which they are now selling for $616 million. The proceeds of the sale, are being used to pay down the debt accumulated to keep a redundant business model alive, offering an opportunity for it to change before being terminal.
Trade me was delivering profitability, superior return on funds, and an important toe in the digital water, but is being sacrificed to keep the legacy business afloat while it tries to adjust. In addition, Trade Me, along with Fairfax’s other less prominent digital assets offer the opportunity to experiment, test, to learn how to survive and compete in the digital environment.
The lesson in all this is that if you do not cannibalise yourself, somebody else will accommodate, and the pain of chewing your fingers will pale into insignificance against the pain of being chomped around the waist by a white pointer. The irony however is that the only digitally sustainable asset in the house has to be sold to buy some time, but leaves the business without any significant cash generator in the digital space. At least Fairfax shares rose yesterday, so directors are probably happy this morning.
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?
