Oct 8, 2009 | Management, Small business, Strategy
As we appear to be coming out of the worst of the downturn, as highlighted by the .25% increase in the prime rate day before yesterday, it would be a mistake to think that the good times are back without trying to learn from the pain of the last 18 months.
Across my little group of clients, a number of things are clear:
- Cash is king, and will remain so for some time. If you have it, great opportunities will arise, if you do not have it, life is very difficult indeed.
- Customers buy on price unless there is a compelling, relevant, and engaging value story attached to your product. Where that story exists, price is not an issue. The middle ground appears to have been significantly eroded, never was branding so important, and at the other end of the spectrum, without a brand, you need to be the lowest cost supplier to survive, and there is always someone who is about to supplant you as the lowest cost supplier.
- It is uncertain how the government stimulus package will impact over the coming months. Confidence appears to be pretty fragile, and looming are the political difficulties inherent in pulling back on announced initiatives, alongside the difficulties of a ballooning deficit. Do not rely on the public stimulus as anything more than a transient, one-off cash generator.
- Information moves at the speed of the mouse, and is totally insensitive to your situation. Spin is easily recognised for what it is, and attracts the cynical response we all think it deserves, and good news or bad, your opportunity to manage it is greatly reduced, so you better be under-promising & over-delivering, or you will find yourself left on the shelf.
- Creativity and innovation were never more important, being like everyone else is a recipe for a slow commercial suffocation.
- Focus on fewer things, and make sure they are strategically the key items. Focus makes everything you need to do easier to execute, but it is very hard to stop being attracted by the siren song of expediency. Resist the temptation, remembering the old adage that if it sounds too good to be true, it probably is.
Oct 7, 2009 | Leadership, Management, OE
Organisation charts almost always depict organisations as an equalateral triangle. It is a simple change in perspective, to see it with a third dimension, like the Egyptian pyramid. Suddenly, it is clear that the guts of the organization are largely hidden from view.
It also becomes clear that enterprises can really only work when there is engagement across the third dimension, with all the complication that engagement implies.
This simple act, of thinking about the organisation and how it works including the third dimension is an easy way to recognise the complications inherent in the management processes and decision-making necessary to make the thing effective. Cross functional co-operation then becomes an obvious necessity, not something mandated by someone with a good idea.
Oct 6, 2009 | Leadership, Management, Strategy
One of the most widely known strategy tools is the SWOT, but it is widely misunderstood.
Often there is confusion about what is a strength, and what is an opportunity, similarly, what is a weakness, and what is a threat.
Strengths and weaknesses are internal to the business, they are under the control of those in the business, and a strength is not just something you do well, that is like having a watch that tells the time, it is something that makes your business distinctive.
Threats and opportunities are a result of external conditions, and usually there is little a business can do to create them, the best they can do is anticipate and manage the adverse impacts, and leverage the opportunities.
Most businesses automatically set out to build on their existing strengths, when often improving on their weaknesses offers a better return on the resource investment necessary. Turning a weakness into a strength also has the potential to create surprise, and the resulting competitive edge, simply because it is unexpected.
Sep 30, 2009 | Leadership, Management, Uncategorized
Right? Probably wrong 90% of the time.
Superficial logic says when there are lots of people looking for jobs, it should be easy to find one to do yours, this may be true, but is it the right person for the job???.
A colleague of mine is looking for drivers, there should be plenty around in a downturn, but there are very few to whom he chooses to give the keys of his very expensive trucks, carrying perishable loads. When he finds a good one, the price has not gone down, but his costs in finding him have gone way up, as the volume of unsuitable applicants that need to be culled has increased.
Good times or bad, the greatest challenge is finding the right employee, not the cost of the exercise.
Sep 29, 2009 | Management, OE
One of my clients is currently undergoing a risk management exercise, pretty ordinary, albeit important stuff. List all the conceivable risks, rate their probability of occurrence, consider the impact if they occurred, and the consider the costs of mitigation. From that matrix, some sort of priority list for investment can be developed and implemented.
However, when we started considering the IT risk, we found ourselves confronted by an expanding list of considerations that seemed to grow the more we considered it. The pervasive nature of IT as it has evolved over the last 10 years has changed its risk profile in a profound way.
The boundaries between management functions have been blurred, as have the processes that drive manufacturing, procurement, customer management, and everything else where we routinely now use IT.
Even a simple IT failure is no longer isolated to the immediate functional area impacted by the loss of data, it impacts through the supply chain, and across functional areas in ways we had great difficulty predicting.
The message is simply that IT is sometimes easy to ignore, to treat as an expense, because it us so much part of the environment, but ignoring it is the worst possible outcome, instead, it should be at the front of discussions about investment (financial & human) productivity, process improvement, risk management and competitive advantage.
Sep 28, 2009 | Leadership, Management
It is unusual for a leader to apologise on their own volition, for anything from a minor misjudgement, to a major fluff-up, but when they do, it gives great assurance to those around that the person is human, and big enough to publicly concede a mistake, and the consequences of the mistake.
Goodwill is like money in the bank, you need to deposit it before you can draw on it, and an apology is a deposit with interest.
Being seen to be big enough to admit a mistake adds greatly to the ammo in the pouch when negotiating or leading, people are far more likely to take your word when they have evidence that you will admit it when you are wrong.
