Sep 9, 2009 | Demand chains, Management
Power has shifted dramatically to consumers from the firms that inhabit the supply chains that serve them.
Scale used to give market power that could be leveraged, but IT development has radically changed the location of the power towards the customer.
Scale now just gives the opportunity through scope and access to resources, but that is no longer enough without the one to one engagement with customers enabled by technology.
You do not have to be big to be intimate with a customer, you just have to understand them and react to their needs, thereby turning the old notion of a supply chain on its head, creating a “demand chain”.
Sep 3, 2009 | Leadership, Management, Sales
Negotiation is a daily activity of most managers, almost irrespective of the size of the organisation, and the industry it sits in. On many occasions, a conversation may not be seen as negotiation, as it lacks the adversarial background that highlights a negotiation in progress, but if the conversation has an objective, it has in its nature some elements of a negotiation.
This was highlighted recently in a conversation with a client preparing for a friendly merger, where the outcome had been agreed in principal, all that was left was the “how to” bits, so below is a list I developed for that conversation, in no particular order.
- Any conversation that seeks an arrangement where both parties believe they have done better than their “walk away” point is a negotiation, recognise it when it happens.
- Failure to neglect or understand the other sides priorities and what drives them to participate in a conversation that is really a negotiation is a fundamental one.
- Do not let price hide the other factors that contribute to a successful outcome, particularly the emotional and psychological ingredients. A negotiation is a “climax” moment in a relationship, if there has been no work on the relationship, it follows that the climax will be sub-optimal.
- Allowing established positions to get in the way of sensible and creative compromise that serves the best interests of both parties is a common mistake.
- Early in the process of determining the nature of the negotiation, establish your BATNA (best alternative to a negotiated agreement)
- Processing information that emerges during a negotiation purely from the perspective of your inherent bias can prove to be fatal to achieving any outcome.
Sep 2, 2009 | Leadership, Management, Marketing
If it looks like a duck, walks like a duck, and sounds like a duck, it is probably a duck.
How easily some of us can be led to believe that what we are looking at is something other than what we see.
The old saying about the duck has never been truer than in the recent collapse of Bernie Madoff’s empire. Billions were invested by many otherwise sensible people in the mistaken belief that one investment business could consistently outperform the market under all circumstances.
Madoff conned people over an extended period, creating a “Ponzi” (to Australians, pyramid selling )scheme that became so big, and so successful at attracting new funds that most refused to believe it could be a Ponzi scheme
If it too good to be true, it usually is, irrespective of the hyperbole that may accompany it.
Aug 26, 2009 | Leadership, Management, Strategy
Management activity often seems to be telling people what to do, then fighting the fires when it is not done, or not done to a standard you deem acceptable, or not done on time.
A simple human reaction: “tell me what to do, and I will do it, but if you do not tell me what to do, how do I know I have to do it”?
A simple solution, hard to implement because you need to change first: stop telling people what to do which takes away their responsibly and ownership, and start encouraging them to take ownership of problems and propose solutions they then become responsible for implementing.
Management starts with helping people see problems, and making sure they have the skills, resources and motivation to fix them, and then it becomes leadership.
Taking the easy way out and doing it yourself sometimes appears the easiest solution, but it is rarely one that is the best solution, it is just a short term band-aid on a symptom, rarely a solution.
Aug 25, 2009 | Management, Strategy
Having a good strategy scores 1/10 on the useful meter, the other 9/10 are allocated for implementation, adjustment, and learning.
That is not to down-play the difficulty of developing a good strategy, and the crucial value of such an investment of resources, it is time consuming, demanding, and usually highly iterative, combining both data and judgment in ways that deliver a competitive advantage.
However, no matter how smart the strategy, the key to success is the implementation. I wonder how many great strategies have been developed, bound, and presented, only to grace the shelf, pristine in its pride of place.
There are many tools to assist the development process, SWOT, Porters 5 forces, Balanced Scorecard, and many others, but the number of tools available has had little impact on the quality of the implementation process in most businesses.
However, the key to strategic success is to be determined to implement and measure the effectiveness of the implementation of strategic decisions taken, and being prepared to make alterations as new information emerges, or competitive conditions change.
Aug 24, 2009 | Management, Marketing, Sales
At an industry round table a short time ago, a general conversation was bouncing around amongst a bunch of relatively senior executives about the uses their businesses had made of the internet as a marketing and communication tool.
Few were vocal advocates of the web, several had examples of fancy programs that yielded little for their businesses.
It became clear after a while that they largely saw the net as a way of avoiding the mailing costs, printing, envelope stuffing, and stamps, associated with “direct mail” and were grateful, but it did not work very well.
Memo:
The net is not just free stamps, it is a whole new way of engaging your market, of attracting and engaging a new bunch of people, probably who were never going to be on a mailing list, because they engage each other, they network with like minded people. The power is taken from you, and given to them.
Seeing this as a version of a snail mail direct mail program is really missing the point completely. The net is nothing like a free mailing service, it is a new way of working with your “tribe” rather than directing them.
