Mar 28, 2012 | Leadership, Management
“Politics” is a dirty corporate word, but “Organisational Dynamics” appears to be OK, and is gaining traction as a cliché.
What is the difference?
Both describe the process of accumulating the wherewithal to exercise influence, and dictate outcomes.
It is a fact of life that those who have control of resources, the money, people, and information, have the power to deliver should they have the intellectual and personal drive to do so, have at some point exercised political power in some form.
We have all seen the individual with organisational power but who could not tie his/her shoelaces without help, and the one who with little formal power seems to be able to get stuff done. Both find ways to influence outcomes using the same resources in differing ways, differentiated only by the innate capabilities of the individual.
Mar 23, 2012 | Management, Personal Rant
Not the latest desperate revenue raising measure from a proliferate government, but the cost to stakeholders of the multiple levels of management that infest most large organisations, but which add no direct value.
Management manages, it manages those underneath them, successive levels of filtering, shaping, compromising, and dissembling of information between the coal face and the top.
I recently completed an assignment for a large organisation and realised early on that the job was not to consider the problem presented in a new light, to apply a new set of eyes and experiences to it, but to present to senior management a set of ideas that had in the past not got through the filtering process, and this assignment was a last ditch effort by a committed middle management to question the status quo.
This may be a legitimate management tactic, a way to progress an idea, but it is hugely wasteful. In this case, the conclusion was obvious to all but those who finally allocated the resources, and who owed their exalted positions to the continuance of the status quo. It was a redistribution of resources from shareholders to a bloated senior management without an original idea in 20 years, and to me, a grateful consultant.
Such redistributions in the hands of governments are called a “Tax”, why should it be any different in business?.
Mar 19, 2012 | Management, Operations
It takes discipline to concentrate on the process, and to let the outcome take care of itself, recognising that there will be stumbles along the way, but in the long run, the results will come when the process is optimised.
Business is filled with sporting analogies, very useful in making a simple point, so here are two more that make my point.
- Manly rugby league is seemingly currently having a tough time. Defending premiers, their coach left for the enemy under unsettling circumstances, and now their stars are being wooed to go elsewhere, after premierships in 2011, and 2008, and being runners up in 2007. A winning team is slowly being broken up. If you recall, several of their stars left after the 2008 premiership, and again in 2009 when they failed to do much, “what are they going to do for a half-back” the pundits cried 2 years ago. Well up stepped a young bloke to whom they paid relative peanuts, and turned it all around, and now wants to be paid his worth. Their team is packed full of rep players, many of whom have come through the ranks, if not from Manly, then elsewhere, and had their potential realised by the processes at Manly. This does not happen by accident, it is the result of the combined brainpower of the management and coaching staff. They have in place a set of processes, talent selection and management, injury management, players skills, team cohesion on the field and management of the players as individuals. All this comes together on the field, and is extremely hard to replicate in total, it is the bundle of processes that drives the results over time. It remains to be seen if Manly can continue when several of the key brains in building and improving these processes have left, but the playing roster is, for the moment, unchanged.
- Some years ago I watched the British Open on TV with my sage old Dad, (2005 I think) the one Tiger Woods blitzed by 5 shots, and seemed unstoppable. It was noticeable that he often hit off the tee with an iron when the others in his group all used woods, even on some of the long holes. This seemed incongruous to me, but obviously worked. Dad explained it by asking the objective of golf:
“Obviously, to get a low score I responded”
“How do you do that”?
“Get as close to the hole as possible, then sink it” I said, (or something like that)
“Is a long first shot always necessary”?
By then the penny was slowly dropping. Clearly not, the best shot is the one that makes the next one easier, and contributes the most to the outcome, a low score on the hole.
Dad reckoned Woods mentally put himself standing at the flag, and worked out his shots backwards, deciding where each shot should end up to make the next one easier, and more certain, and then selecting the appropriate club. By concentrating on improving the golfing equivalent of the interdependent processes required to get a low score, the low scores did come, more often than his opposition.
Pity he did not apply the same discipline to his life off the course, and I resist the temptation to pun on “score”.
Mar 15, 2012 | Category, Collaboration, Management, Marketing, Social Media, Strategy
Produce marketers are not all that different to most FMCG marketers, except that the power of the retailer in produce categories is magnified by the total lack of proprietary branding, effectively insulating the consumer from the producer, making brand building and innovation a greater challenge. This lack of branding power and engagement with the consumer puts them at the mercy of retailers.
In an effort to put some parameters round the problems, the Mildura Development Corporation funded a study that sought to articulate the challenges and choices faced by producers in the Sunraysia region, particularly by drawing the comparisons with the competitive environment in the UK.
The headline elements in the conclusions are:
- The power of the retailer
- Scale of producer operations
- The role of the business model employed
- The increasingly critical nature of data, its collection, analysis and leverage potential
- Marketing choices made.
These factors are all connected in cause and effect relationships with each other, and with the customers, and consumers of produce, but most forget, or get confused about the differences in the approach, which can be summarised as:
Sell to your customers
Market to your consumers.
Perhaps the report can add to your thinking, contact me for a copy, or discussion.
There is a downloadable copy of the report in the “Sharing” pages of this site, let me know what you think of it.
Mar 14, 2012 | Management, Operations
Retailing is under pressure, all the established retailers are suffering declines in profitability, and the media is full of retail CEO’s bemoaning the eroding margins.
Australians appetite for flat screen TV’s over the last couple of years were is amazing, we now have TV’s in almost every room in the house, and prices have dropped precipitously as volumes have increased, and we are unwilling to pay for fat retail margins.
Surprise, surprise.
The reduction of the 40% margins for retailers, delivering from $530-600 for a unit 2 years ago, to single digit margins and $40 through the till today has all the retail CEO’s crying poor.
The change in the retail competitive environment has not been matched by the performance measures bricks and mortar retailers employ, and their business model is becoming redundant.
Retailers focus on dollars through the till, product and category margins, and returns for floor space. Generally they forget that business is about making a return on investment until the AGM, not counting margins that get chewed up by working capital requirements down the supply chain.
E-retail is driving a stake through the heart of bricks and mortar retailing of electronics, and it will come in white-goods very soon. E-Tail retailers focus on the return on funds employed, not margins. When you take the customers order and 10% deposit before you pay for the stock, and get the balance COD, it matters little if the margin is $40 when the volumes are skyrocketing, because the funds employed are very low.
Feb 22, 2012 | Management, Marketing, Strategy
Into the new year, most companies that have June 30 as year end will start the tortuous path of setting the new budget. I have seen the budget process take 6 months, and be as useless as a water pistol in a gunfight when it comes to delivering meaningful outcomes.
Two simple questions are often not asked:
- Why are we doing this?
- How are we going to get the outcomes satisfactory to the short term needs of stakeholders, and that also set the business up for long term commercial sustainability?
In other words, have a clear business purpose, and know what you have to do to progressively deliver on the undertakings.
