May 26, 2025 | AI, Governance, Strategy
Innovation using physics is forging ahead at an accelerating rate.
Remember the speed at which a covid vaccine was brought to the market after the first identification of the virus. Instead of the usual 10 to 15 years we suddenly had that process compressed into 18 months.
And yet there remained those who refused to accept the vaccination for a range of personal and behavioural reasons which many would say are irrational.
Somewhere the line between the technical innovation involved in the hyper-rapid final stage development of the vaccine and the humanities driving behaviour crashed into each other.
As the rate of technical innovation across every domain accelerates it is likely we will continue to stumble across this barrier to adoption, and a fragmentation of adoption across a range of behavioural parameters.
Simply another social tension driven by the speed at which the modern world is evolving. It is way beyond the speed at which our DNA allows behaviour and attitudes to evolve.
The situation in front of us right now is the degree and manner in which AI is accepted and adopted by organisations and by individuals.
We managed this dilemma in the motor industry as it became obvious that it was profoundly important to incorporate safety into the vehicles as a means to save lives. As a result, it became mandatory to design crumple zones into cars, and install seat belts. Regulatory intervention and oversight 60 years after it became obvious that a car could kill its occupants.
Where will the equivalent crumple zone emerge in the arena of AI, and will it be in time?
Apr 24, 2025 | AI, Marketing, Strategy
‘Lean thinking’ is a mindset and toolbox to drive optimisation. Little more, beyond the use of common sense and humanity.
Prominent amongst the tools, and the one I probably use the most is ‘5 why’.
AI has given us an entirely new use case that leverages the insights that a 5 why process when done thoughtfully can deliver.
Prompt development.
There are now hundreds of prompt templates and mnemonics emerging from the woodwork, many claiming to be ‘the one’.
All I have seen use a variation of the Lean ‘5 why’ tool.
Most AI users look at the first output of a prompt into any of the LLM tools, and it is sub-par. Generic recitations of what the trained information base reflects as best practice. The beauty of these data driven assistants is that you can push back as much as you like without them taking it personally.
You can point out areas of failure, misinformation, gobbledy-gook, or imagined fairy tales. You can ask for specifics, deeper analysis, sources, or give it examples. The output then improves with each iteration.
You can also ask it what you might have forgotten to ask, or has been missed for some reason, and ask for suggestions. This interrogation of the tool can reveal things you would not have thought of under normal circumstances.
Go through that process 5 times, and in all likelihood, you will not only have something entirely different to the first response, but it will also be infinitely better, and tailored to the need. You will have cleared away the unnecessary, banal, insignificant, and generic, leaving a response that equates to a first principle response to your evolved prompting.
Continuous improvement by AI driven lean thinking.
What a boon!
Apr 14, 2025 | Change, Communication, Governance, Leadership, Marketing, Strategy
When you look you see Hofstadter’s law around you everywhere, every day.
We all understand Murphy’s law, which accurately states that is something can go wrong it will, probably at the worst time. Murphy has a sibling, articulated by Douglas Hofstadter which states: ‘A task always takes longer than you expect, even when you take into account Hofstadter’s law’.
Planning is a part of our lives. Some things are easy to plan, the consistent characteristic of these is that there are very few variables over which you do not have control. For example planning a trip to the supermarket, you can check what you need you control the time, the choice of supermarket, where you park, how you work the store, the choices you make between brands. Very few uncontrolled variables.
By contrast strategy is an exercise not just in predicting the future, but then making choices how best to deploy your resources in a way that enables you to shape the future to your benefit by exerting some influence over the range of variables over which you have no control.
Entirely different challenge, as there is never an explicit ‘right’ answer.
When we talk about strategic planning we are effectively mixing two incompatible factors. The uncertainty of the future and the forces over which we have no control, and the certainty of the resources we have to deploy, with uncertain outcomes.
Currently in this country we have a huge black hole called defence planning into which billions of taxpayers dollars are being poured, in the mistaken view that we are able to predict the future and therefore plan as if we could control the variables.
The better way is to have a robust strategy which enables flexibility in the way assets are deployed short term.
Projects tend to expand to fill a time available, while at the same time we habitually underestimate the time that is required to complete any given task, no matter how rigorous we are in the planning.
Mar 31, 2025 | Marketing, Strategy
Most businesses confuse price with pricing.
Price is just the number you slap on the tag. Pricing is the process that gets you to the right number, the one that optimises today’s profit while building tomorrow’s success.
Unfortunately, most businesses treat pricing as an inclusive way to do cost-plus calculations. The finance team sets a target margin, the sales team references the market leader, and the final number is more wishful thinking than strategy.
That is not pricing. That is strategic abdication.
Real pricing is deliberate. Strategic. Ruthlessly focused on outcomes.
You see strategic pricing in odd places.
That wine list at your favourite restaurant with the most expensive bottle first on the list. It is not an accident, done alphabetically, or random. That $500 wine is not there to sell, although occasionally it might. It is there to make the $70 bottle that costs $30 in the grog shop next door, look like a bargain.
Rolls-Royce does not put their cars into motor shows anymore. Why park next to a $30k Toyota and look ridiculously expensive when you can park next to a $10 million jet and look like a ‘pocket change’ purchase by comparison.
It’s called context, and it matters. Dan Ariely nailed this in a classic experiment using subscription costs to the  Economist, and his MIT graduate students as the research fodder.
First version:
- Web only: $59
- Print only: $125.
- Web + Print: $125
Result? Almost everyone picked the combo. The web + print option made it look like they were getting a version for free.
Second version:
- Web only: $59
- Web + Print: $125
This time, far fewer picked the combo. Why? No dummy option to anchor the deal.
That’s the decoy effect in action. It works because humans do not make rational decisions. We make comparative ones. Smart pricing taps into that.
Great pricing is not about squeezing the lemon. It is about understanding your customer, your position, and your objective.
Most small businesses leave money on the table by setting their prices too low, hoping never to lose a sale. However, you need to lose a lot of sales to make up for the positive bottom line impact of even a very small increase in the average price.
Want to prove that to yourself?
Track the impact of a 1% price increase through your P&L. Assuming you are using actual costs instead of some sort of confected percentage calculations, the whole amount of the increase will drop to the bottom line as increased profit.
You will never just slap a price on a label again.
Mar 20, 2025 | Branding, Change, Marketing, Strategy
We no longer own stuff, increasingly we are renting it in one form or another.
That lack of ownership discourages brand loyalty and makes defining the boundaries of a contested market all that much harder to do in a way that reflects the psychology of potential customers.
Years ago, while marketing fast moving consumer food products the logic was, we did 90% of the prep work in the packet. The strategy was to suggest to the overworked stressed woman who in those days did all the cooking, to add some garnish and therefore feel she owned the result. The best example is cake mix. Almost everything was done in the packet, all a cook had to do was add an egg, beat it with a fork, and stick it in the oven.
We’ve taken that idea much further now.
One of my sons lives in the inner the suburbs of Sydney and does not own a car. When he needs one, he simply uses the app and within a few minutes walk, there is a car waiting for him.
What we’ve lost in this process is the sense of ownership, the psychological comfort that something was ours. This spreads past the ownership of a car to things like music.
I have an irrational attachment to a couple of 50 year old vinyl records that played a significant role in my young life. The music on those records is ‘mine’. I do not play them anymore, don’t even have a working record player, but separating from those old vinyl records and their memories by association would be painful.
The challenge for marketers now competing in a subscription and rental driven world is how you replace that sense of ownership. If you can figure it out in your product category, you will win.
Feb 28, 2025 | Marketing, Strategy
‘Find a niche and own it’ has been a mantra of mine for years.
SME’s who have done this can do very well.
What it implies is that you have gone out and found those few people who overvalue what you do very well.
Defining what you do better than anyone else is the start.
You do not have to be the best in the world, you just have to be the best available to your ideal customer. For many SME’s that is a geographic market, for others, it may be personal service, or a particular blend of coffee beans the delivers a specific flavour, every time when made by Tony the barista.
When you excel at something that a potential customer overvalues, that is a recipe for success. Price will become a secondary consideration.
My eldest son paid his way through university buying and selling guitars, and valves for amps. He knew guitars and their value, so was able to make a few bucks on the arbitrage. However, he knew valves to an extraordinary level of detail. His market was highly specialised Blues guitarists in Sydney, those few insisted on valve amps rather than the modern electronic units. They came to him explaining the sound they wanted from their amp, and Geoff would assemble a valve set that delivered. It was a very narrow, deep, and specialised market and price was never a determining factor.
As University neared completion, he had to ask himself if there was a market in the niche, rather than just a niche in the market. His conclusion, yes there was a market in the niche, but the infrastructure and investment necessary to make a real commercial go at it, rather than just be a side gig for a uni student was more than he was able to make. As a result, he wound it down, and got a ‘proper job’ after graduation.
Briggs and Stratton is one business that years ago identified, leveraged, and now owns a global niche for mobile, small capacity internal combustion engines designed for outdoor use. Lawn mowers, outboard motors, pumps, and mobile generators all use B&S motors, often supplied and branded with the end product. For example, Victor lawn mowers in Australia is a venerable brand. The motor is branded Victor, the engine is actually supplied by B&S.
As their markets ‘electrify’ power systems (engines and batteries) for mobile machinery, it remains to be seen if they can retain their position.
When you are the only solution to a burning problem, even when only a few have it, price becomes increasingly less relevant as the urgency of the problem increases.
The marketing challenge is to identify and highlight the problem to which your solution is the only one possible.
Header drawing by DALL-E
