Jan 17, 2023 | Governance, Strategy
Eddie Jones is back as the Wallabies coach, a week after being sacked by England rugby, despite a contract that took him past the world cup in France starting in September. Under Jones, England did very well from 2015 to 2021, having a 73% win record. A dismal 2022 season blew that number away. The English team failed to perform in 2022, so the coach must go.
Meanwhile, back in Rugby Australia headquarters, coach bingo was starting again. Incumbent Dave Rennie failed to call ‘Bingo’ last week, being edged out by none other than Jones, who had snuck back in through the side door.
Jones previously coached the Wallabies from 2001 to 2005, with considerable success on the field. However, it seems he lost the game in the boardroom, which is the one that really matters to the nincompoops who run the game, so he had to go. Then came a conga line: John Connolly, Robbie Deans, Ewen McKenzie, Michael Cheika, and finally, Dave Rennie. If we had the broken contract payouts of that lot, we could build a stadium!
By vivid contrast, we have the current Australian Open draw. It is full of Canadians. Who would have guessed 20 years ago, as Jones was being sacked for the first time, that snowbound Canada, a country with so few tennis courts most would not have recognised them as such, would emerge as a tennis powerhouse. In just 20 years they would have gone from a tennis-less country to one others are looking towards for inspiration.
Canada has several real chances at a win in Melbourne, the ranks include a winner of a grand slam (Bianca Andreescu US Open 2019) several slam runners-up, and more semi and quarter finalists than so called tennis powerhouses like Australia have in the draw, and are the current holders of the Davis Cup.
It is instructive to look at the differences.
The fact that they are entirely different sports is irrelevant. What is absolutely relevant is that Tennis Canada developed a strategy that they stuck to, adjusting tactically as necessary. The absolute objective was, and is, to be a top performing nation in the tennis competitions that matter, the Slams, Masters, Davis and Federation (now Billie Jean King) Cups.
Coaching has been a key part of the Canadian strategy, as has been the early identification of talent, and the focussing of very limited resources on nurturing that talent, commitment, and patience, all heading towards that shared and unambiguous objective.
Meanwhile, Australian rugby bounces from coach to coach, without any evident strategy. Talent identification is left to the few schools that still play rugby, there is little pathway from park rugby to the elite level, star players are not encouraged to play domestically as their value is not recognised in the pay packets, and we even dismiss Israel Folau, the greatest crowd puller since David Campese because he has an invisible friend who makes him say stupid things.
Failure of the Wallabies to perform consistently on the field is the outcome, not the cause of the current malaise, and will not be fixed by more of the same. We have changed coaches almost as often as my grandson has his diapers changed, and for the same reason. Surely it should have sunk in by now that the performance problems are not just coaching, they hide elsewhere?
It is the total lack of a strategy, thoughtfully implemented over an extended period that is to blame, not the coaches.
Rugby Australia could learn a lot from Tennis Canada.
Header photo courtesy Rugby World magazine. (it looks like Eddie is watching his back).
Jan 16, 2023 | Marketing, Strategy
At the intersection of the science of the brain and Artificial Intelligence, is something called ‘The Frame Problem’
This is a term used to describe the way we, subconsciously, sort the relevant from the irrelevant in any context, or ‘frame’.
It locates the inflection point between artificial intelligence, getting smarter by the day, and the sentient intelligence we humans can bring to bear without conscious effort.
Often, we just call it common sense.
For example, if we saw a 3-year-old child we did not know about to jump into a swimming pool, we would automatically try and stop them. By contrast, if we also saw the kids mother waiting a few feet away to catch them, we are unlikely to even register the fact that they are about to jump into the pool.
The resulting ‘frame’ which drives our response is different, although the scene our eyes ‘see’ is identical. It is the interpretation our subconscious makes that is entirely different. That difference is how our brains interpret the factual scene our eyes register on our retina.
Applying the ‘Frame’ to largely qualitative contexts when outcomes are variable, and derived from a host of drivers, frees up cognitive capacity to do other, more important things. In differing contexts or ‘frames’ the variables stimulate differing courses of action, as the value of experience and domain knowledge comes in.
You cannot learn this stuff from a book, as no book can adequately predict which set of variables will show up at any given time in differing contexts. That variability will have a profound influence on the resulting action we take.
For a marketer, understanding the ‘frame’ of their target customer or market will enable you to tweak the drivers that will lead to a desirable outcome. Equally, it will enable discrimination between drivers so that investment is not made in combinations of drivers and situations that will not suit the marketing objective.
The key question to ask yourself is: What did we miss?
Dec 15, 2022 | Innovation, Strategy
Many of us are concerned with two key questions that will impact the lives of our children and grandchildren.
- From where is the next wave of innovation is going to emerge?
- How can we put Australia in front of that wave, so we can reap the benefits?
The challenge in this country to the generation of real innovation, the creation of new value, is that we do not invest sufficiently to be in the game. In addition, we spread it around, compromising the depth of research in any one domain we can undertake.
This insufficiency comes from the politicisation of science, its underfunding, and the fragmentation across public and private sectors, as well as regionally by state.
With a few notable exceptions, Australian owned enterprises do not have the scale to fund the depth of research required, little culture of philanthropy that funds science elsewhere in the world, and multinationals that do have the scale generally are not interested in Australia. This has resulted in a brain drain, and we suffer from a tendency to look backwards and extrapolate to make the bets that will shape the future.
As any innovator knows, constraint is often the best catalyst for original thinking. This has been exemplified over the last few years by the rapid development of covid mRNA vaccines from research labs into available vaccines in record time.
Enough of the problems, what are the trends driving the shape of the future wave onto which we can hitch a ride?
Medical science.
Australia punches above its weight in medical science, despite the constraints. CSL and Cochlear are international leaders, Moderna has announced an mRNA development lab in Victoria. Australian expertise goes all the way back to Sir MacFarlane Burnett, and past successes from the vaccine for the papilloma virus, innovative cancer treatments, and Fiona Wood who pioneered artificial skin are considerable. We may have sequenced our DNA, but the function of the vast majority of the 3.2 billion base pairs we all carry is unknown, a vast trove of potential knowledge to be gained!
Quantum computing.
The Quantum unit at University of NSW led by Professor Michelle Simmons is a world leading research institute. The potential of Quantum physics to drive development across a range of fields, including those listed here is agreed by the experts, of which I am not one, to be immense.
Materials science.
Australia is uniquely situated as a stable democracy blessed with an abundance of raw materials from the traditional minerals, to rare earth minerals, and an overabundance of sun and wind. The materials that will drive the emerging world will come from those sources, powered by advanced computing and materials science.
In short, we do not need to spend piles of money trying to reproduce the Australian version of Silicon Valley. We need to find our own way based on the unique position we are in, and the potential for that position to be leveraged by intelligent and focussed public and private investment.
We have the opportunity to define emerging fields of science that will deliver over the long term the innovative products and services that will reshape our economy. I wonder if we will have the will and foresight to grasp that opportunity, or as has happened in the past, we pass on it and go to the beach.
Header credit: Irina Blok at www.irinablok.com
Dec 13, 2022 | Innovation, Strategy
Strategy requires difficult choices are made, and to be truly effective there must be time constraints.
Achieve this…. By…….
The view many have of innovation is a free for all, unconstrained by the usually corporate constraints of time, budget, and resource availability.
Nonsence.
BEHAG is a term often used in strategy to define a long term ‘what by when’. The classic example being Kennedy’s BEHAG to put a man on the moon and return him safely by the end of the decade, made in 1961. The advances in the following 8 years were staggering.
Those advances came from within the framework of the strategic BEHAG, and therefore had time and resource constraints. By contrast, budget seemed to be available to pursue any potentially useful contribution to the reduction of risk in any part of the project, while ensuring the objective was met.
A similar scenario has played out recently with the extraordinarily fast development of Covid vaccines. What would in less constrained times have taken a decade, was squeezed into 18 months. In addition, a new and untried technology Messenger RNA was brought to the market in addition to the vaccines emerging from the existing technology base.
There must be lessons for leaders in there somewhere.
Lesson 1. Budget.
When budgets are unconstrained, multiple paths can be trialled in parallel, and the most promising selected, rather than trialling in sequence which not only takes longer but captures the probability of ‘sunk cost thinking’.
Lesson 2. Risk.
Risk has many faces. Personal, corporate, financial, and reputation. We are a risk averse species, and given the opportunity will minimise those risks, with the result that little that is genuinely new emerges. Remove the constraint of risk, indeed, make risk almost mandatory, and the usual constraints on thinking are removed.
Lesson 3. Outcomes.
Defining exactly the outcome required when that outcome seems inconsistent with existing possible outcomes focusses attention and creativity and on stripping the challenge back to its basics. The jargon would call it ‘thinking from first principles.’ It encourages people to think about a problem in fundamentally different ways.
Lesson 4. Time.
We humans work best when we are on a timetable. It is however a two-edged sword. When time constraints are seen as impossible, it induces stress and a range of productivity killing behaviours, so is not helpful. By contrast, having time constraints enables prioritising and the allocation of accountability, both very helpful to achieving an outcome. When combined with the freedom to experiment, for the individual or group to discover the ‘how’ the outcome is to be achieved in the time frame, it becomes an encouragement to creativity.
These four drivers are like a balloon. You can exert pressure on one point and the shape changes. Putting pressure on multiple points creates internal pressure as well as modifying the shape. There exists within the way these four drivers are combined a vast range of choices to be made. Therein lies the link to strategy, which is also a series of choices.
Therefore, the core choice is the role that innovation will play in the achievement of a corporate objective. Depending on that choice, you can exert pressure on the ‘innovation balloon’ that best fits with the wide range of other choices made in articulating a strategy. Innovation becomes just one of the processes that needs to be in place, rather than the ‘outside normal hours’ status that it often carries. The implications for this integration into the strategic and management timetables have many impacts. Most particularly it will impact the way KPI’s are set and managed. KPI’s are usually set in functional silos, a practice which will be at odds with the incorporation of innovation into cross functional choices, and the implementation of those choices.
Innovation is the lifeblood of commercial sustainability, and few do it well. To be one of those few, you must to quote Apple advertising, ‘Think different’
Dec 7, 2022 | Change, Strategy
Too often I hear the term ‘Digital Strategy’ used as if it were an outcome, some discrete set of activities to be completed.
To my mind, this is a misuse of the term.
As it is usually used, the word ‘Digital’ is all about the devices, the technology, whereas the value in digital is elsewhere. It is in the ability to do things, and get things done, differently, more quickly, efficiently, and in a distributed manner by those best able to complete the activity with the minimum of organisational friction.
Digital technology is a toolbox enabling new business models, greater understanding of customers, and the ability to visualise and communicate ideas clearly. It is not about the RFID tags, VR, and all the other enablers of digital, it is the outcomes that count.
Your strategy may be enabled by digital, but you do not need a digital strategy any more than you need a telephone strategy. They are both just tools to be leveraged, the challenge is to recognise the nail, and grab the right hammer for the job from the toolbox.
Management of these changes is confronting, there is not much precedent to guide you. While there is a lot of advice around, usually it is given by those with a stake in the outcome, so caveat emptor. However, it seems to me that there are a few simple parameters worth considering.
Functional Silo thinking is poison. The communication enabled by digital is inherently cross functional, better reflecting the way customers and suppliers see us and want to interact. Functional silos have little to do with optimised outcomes anymore.
One step at a time. While the pace of change is getting faster, and the pressure to keep up increasing, we all know what happens when we try and run down a hill really fast. We end up falling arse over tit. Matching the speed of change to the pace at which your enterprise can absorb the changes is pretty sensible. Of course, if you are the slowest in the competing pack, it may be better to get out while you can.
Digital is a team game. Hand balling digital responsibility to the IT people is a mistake, you will end up getting what they think you might need. The real challenge is engagement of people not really focussed on digital. The primary example is in the space of marketing automation. Suddenly it is exploding, way beyond the capabilities and experience of most marketing people, who are nevertheless now investing more in tech than the IT people. It is essential that the right capabilities are built in the right places. Finally, everyone affected, which is everyone, needs to be in on the secret, with all the options, challenges, and opportunities transparent. The unknown is the father of all sorts of ugly children.
Think long term. Digital transformations are not just about which software you will install to automate a process. It is more about what the business may look like in 5, 10 years, and what steps do you need to take over that time to remain relevant to customers.
Long live strategic thinking!
Dec 5, 2022 | Leadership, Management, Strategy
The current ‘argy-bargy’ around wages policy makes the mistake of assuming it is a binary equation. Pay a dollar more/hour for labour and profit is reduced by the equivalent amount.
This assumes that people working for you are only doing so for the money, and money is directly proportional to output.
We all know this is crap.
While it is clear that many, mostly female dominated jobs, are underpaid compared to the costs of living, and simple value equivalence with other jobs. It is also true that people are not rational, they make decisions on many dimensions, of which price is only one.
Price. Key word.
Why don’t we consider the cost of labour as just the price of it, and consider our labour strategies in the same way we apply pricing strategy for our products to the marketplace?
When we do this properly, which too few do, price is only one factor in the equation. Depending on the context, it can often play only a minor part in the strategies we deploy.
Price is rarely a binary choice, just take it or leave it with no other options. It is also rarely considered how unfair it is to pay people whose performance is unequal, the same amount. We usually address this with piecework pay, which often has a detrimental impact on value delivery to customers. Just look at what is happening to Qantas currently in the handling of baggage for the evidence. It is a fine line between paying for customer value delivered, and piecework payment.
What would you rather have?
Better paid people who care about quality, DIFOT performance, productive time, and all the other things that lead to superior value delivery to a customer, leading to financial performance, or more lower paid people who do not care about any of those things?
Thinking in a binary manner will deliver the latter, never the former.
In these unusual times of inflation coupled with a flat economy, you need to find the most productive people you have, and model their behaviour to others, and compensate them appropriately. You may end up with less, but better paid and more productive people.
Trends in labour cost equations can be an extremely sensitive lead indicator of performance. Labour cost/dollar of revenue or gross margin can tell you a lot about future performance. By contrast, labour cost as an absolute can tell you nothing beyond how much you spend.
The question management needs to ask itself, is not how much labour costs, but how can we make labour a driver of performance.
Header cartoon credit: My thanks again to Hugh McLeod at gapingvoid.com for putting it so accurately
