Dec 16, 2011 | Customers, Management, Small business, Strategy
Being a supplier to FMCG retailers is really, really hard. The two gorillas are demanding, unreasonable, and often just plain stupid, at least that is a suppliers assessment. If you asked the retailers, they would just be doing their jobs, maximising the revenue and margin returns from their shelf-space, minimising their costs, and competing aggressively for access to the consumers wallets.
It is just a matter of perspective, but whilst the customer is not always right, they remain the customer, and if you want to serve them, it is you, the supplier who must adapt or die.
The current pressures on SME food industry manufacturers, a high $A, the retailers push into housebrands, difficulties in funding working capital, skills shortages particularly in regional areas where many of them are situated, and promotional costs, are pushing many to the wall. The long term impact of these changes appear to be all bad for the economy, as food security, balance of payments, regional jobs and skills, and having a manufacturing base from which to innovate, are all compromised. However, there is not much joy in complaining, clearly the various governments do not care, or are more engaged in important debates like gay marriage, and spending our money on sectional interests who seem to have a few votes, so we have to address the problems ourselves.
Manufacturing, let alone food industry manufacturing no longer even warrants a seat around the cabinet table, clearly we are on our own, so we adapt or die, and many will die, the few who successfully adapt will be very good indeed.
Dec 15, 2011 | Collaboration, Management, OE, Social Media
Ronald Coase was first to recognise and articulate the economic relationship between individuals and the co-coordinating structures necessary to organise the work of individuals, coining the term “Transaction costs” in his 1937 essay “The nature of the firm”
Coase in his original paper set up the theoretical framework for the huge cost reductions now possible, enabled by the tools of the web 2.0, which are gathering momentum at a huge rate.
What he did not spend too much time thinking about, because it was not relevant at the time, were the costs imposed by a redundant status quo. Cultures of organisations often require that costs to be absorbed simply because the operating environment has not evolved sufficiently to allow the collaboration tools now available to be used to their potential, leaving co-ordinating overheads to do the work now possible with a mouse, and a bit of nouse.
The possible competitive advantage to organisations, particularly ones with widespread operations is huge, as most of the competition will have trouble making the leap.
Let them pay the cost of yesterday, you have the opportunity to grab the future in recognising the power of the new collaboration tools.
Dec 14, 2011 | Management, Personal Rant
Busy, busy, busy, everyone is too busy to do anything important.
We have had a reshuffle of the federal cabinet, busy people, dedicating limited time to gay marriage and other such important matters, a client of mine is so busy some the basic management stuff simply does not get done, and most large organisations I see are so busy reviewing and planning that there is little time left for doing.
Three simple rules to get more done:
- Keep it simple
- Be prepared to fail sometimes
- Have a go.
In a lovely juxtaposition last night, there was a rerun on one of the digital channels of the “Yes Minister” episode dealing with a rumoured reshuffle, and Minister Hacker reviewing his options. Very close to the current bone.
Stop being busy, and to borrow the phrase, “just do it”
Dec 7, 2011 | Collaboration, Management
Currently, I am in the middle of a project that seeks to find a way to motivate a collaboration between a group of industry and government bodies on a pressing problem. None of these bodies have a culture that welcomes external collaboration, they often seem to have trouble even internally.
In the process I came up with a list of “must haves” that the proposed co-ordinating body must take on just to get the prospective collaborators to the table to talk about it.
Any comments, and additions would be welcome
- Independence,
- Transparency
- Plays a catalytic role in the collaboration
- Ensures the governance of the collaboration is robust and consistent.
- No self interest beyond the role to facilitate the collaboration
- Serves as a co-ordinating body for activities,
- Serves as the communicator, but without any exclusivity
- Serves as the “warehouse” for codified IC
- Acts as the dissemination mechanism for IC, and contributions to the process.
- The body needs to have the confidence of all stakeholders.
- Dispute resolution mechanism
Dec 5, 2011 | Leadership, Management
Respect is a word bandied about a fair bit, but what does it really mean in an organisational sense?
It seems to me that respect is rarely built by an avoidance of conflict, rather by the willingness to meet it head on with three behavioral characteristics:
- Using facts and data when available on which to base a view, not relying on personality and position.
- All assumptions made are absolutely transparent, and any relevant data is available to all for analysis and debate.
- “Due process” during the discussions is clear, all parties have ample opportunity to put views, particularly dissenting ones, on the table for discussion.
By contrast, the easiest way to destroy respect is to allow personal stuff to intrude.
Nov 30, 2011 | Management, Strategy
The detail of Strategy development is different for every situation. There is no template that is able to account for the nuances that exist, despite the claims to the contrary.
There are however quite a few sensible and easy to say but usually hard to do things that should feature in your considerations.
1. Go to where the work is done. Too many businesses treat strategy development as an exercise to be completed in isolation, assembling lots of data and PowerPoint slides. There is no substitute for going to where the work is done and realistically examining the issues. In lean parlance, “go to the gemba“, talk to a few customers, some who you would like to be customers, and a few outside the boundaries of your current market aspirations.
2. Identify the assumptions that do not get questioned, those that often make up the foundation of a strategic exercise, and then question them, to ensure they make sense. The “what business are we in” question and “every customer buying a 2mm drill really wants a 2mm hole” observations are a key to strategy development, use the opportunity to make sure you are focusing on the right customer, and what it is they are really looking for.
3. Use stories and analogies to make your points. People relate to stories, they understand analogies, and they are way more fun that moving data around a spreadsheet.
4. Do some scenario “what if” thinking, and make them relevant, but a bit far out there to get the juices going. Several years ago doing a strategic exercise with a client whose business was significantly impacted by the $A, for both the import of raw materials, finished product, and competitive offerings in their market, we did just this exercise. At the time, the $A was around $US.70, and we spent some time discussing what would happen at all exchange points up to $1.20, almost inconceivable at the time, but facing them a few short years later.
5. Make the strategy “porous” in the sense that as new information, situations, and opportunities emerge, that can be absorbed into the strategy, facilitating adjustments in resource allocations and priorities, without compromising the purpose and values of the business.
In the end, strategy is about choice. It is as important to articulate what you will not do as it is to articulate what you will. Making intelligent and robust choices only comes as a result of gathering and understanding data and combining that with the insights and wisdom that are often found out in left field.
