Mar 2, 2012 | Change, Strategy
Will Moore’s Law, validated over nearly 50 years in digital technology development, also apply to renewable energy? This notion has interested me for a while, and it seems that currently our consumption of fossil fuel is a mirror image of Moore’s law, the challenge is to turn the thing 180 degrees so it works in our favor.
Early days, but the jury must be considering the proposition, as the development of technology starts to make an impact, even as new sources of hydrocarbons emerge, from coal seam gas, and shale oil, and may tend to ease the pressure for change in our energy mix, particularly as governments feel the fiscal pinch.
Amory Lovins of the Rocky Mountains Institute has been a persuasive advocate of alternative energy, his 2005 talk on TED has been widely spread, whilst recognising that fossil fuel is the foundation of first world prosperity, and will not move aside easily, so sensible strategy accommodates the evolution of one as the other ramps up. His current treatise “A farewell to fossil fuels” is as logical and convincing as his previous jottings.
In Australia, the debate has been absolutely debased into a school-yard standard populist name calling and distortion of the facts. It is clear change is coming, every industry evolves over time, it is just that energy is so fundamental to our prosperity, and so poorly understood, and so multi-dimensional and emotional, that it makes for good pollie fodder.
Feb 22, 2012 | Management, Marketing, Strategy
Into the new year, most companies that have June 30 as year end will start the tortuous path of setting the new budget. I have seen the budget process take 6 months, and be as useless as a water pistol in a gunfight when it comes to delivering meaningful outcomes.
Two simple questions are often not asked:
- Why are we doing this?
- How are we going to get the outcomes satisfactory to the short term needs of stakeholders, and that also set the business up for long term commercial sustainability?
In other words, have a clear business purpose, and know what you have to do to progressively deliver on the undertakings.
Feb 17, 2012 | Management, Strategy
- Which customers?
- Which markets?
- What is the vale proposition?
- What are the processes that are required to deliver the value proposition?
- What capabilities are required to deliver the strategy?
- What technology is required to deliver the strategy?
- What are the organisational enablers of the strategy?
And most importantly,
- How do we engage our people to participate in the definition of all these, then in the delivery, management, and improvement steps that follow?
Pretty simple really, or how enormously complicated, challenging, and ultimately rewarding, depending on how deeply you think about the list
Feb 14, 2012 | Strategy
Following up the post yesterday commenting on the changes the net has wrought in relation to Michael Porters ideas about substitutes. It seemed useful to add links to two useful articles by Joan Magretta, who has written a book on Porters work.
The first is the strategy mistakes Porters sees most commonly, and the second a great list of strategy do’s & don’ts.
There are many lists on the web, bloggers particularly know that response rates go up substantially with a list in the headline, but if you are going to take notice of anyone, it may as well be one of the giants of strategic thinking.
Feb 13, 2012 | Management, Strategy
Michael Porter transformed strategy development 30 years ago by asking two simple questions:
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- What are the drivers of industry profitability?
- What are the drivers of profitability of an individual firm in an industry?
He then provided a framework to analyse both, his “five forces“.
The possibility, and ease of entry of substitutes is one of the 5 forces that dictate strategy, and this remains the case, it is just that the possibility of finding an acceptable substitute is infinitely greater now than it was 30 years ago when the original thinking took place.
Almost every industry you can think of has been transformed in the last 10 years by the power of the web to offer substitutes. Access to substitutes of both the product of, and supplier to any business, immediately and transparently, is infinitely easier that just a decade ago.
Oh, and new industries have been spawned that have decimated, and changed forever those legacy industries, and most did not see it coming.
Porter’s framework got it right, it remains right, it is just that the time frames he worked with are now way shorter, and the entry/exit barriers lower. The net has completely altered the tactical dynamics, but the strategic thinking behind the model remains sound.
Jan 19, 2012 | Change, Social Media, Strategy
If you have not yet caught up with SOPA, the “Stop Online Piracy Act” working its way through the US legislative system, you probably soon will, because if it gets up, the troglodytes in Canberra will pile onto the bandwagon pretty quickly.
The act is a response to the digital piracy enabled by the net, but the probability of unintended consequences is absolute.
It is clear that there are problems, why buy music when you can download it for free? The legacy industries of the C20 whose business is creating content would rather you do not have the right to create and share it yourself, they want to produce second rate crap and charge you for it. You being able to do it threatens their profits.
Better ask iTunes, a C21 business by the way, they seem to have done OK, their 10 billionth song was downloaded in February last year, or the boatloads of new bands who have a profile and market for their music via the net, but not a music company in sight, and the bloggers, who have a means to express themselves without a newspaper, the list goes on.
The push against piracy is understandable, businesses are having their business models trashed, and they want it to all go away, but it won’t, simply because the world has changed and they have not, so they need to move over, or as it is happening, be moved over. Painful to the few, but inevitable.
King Canute found the tide did not stop just because he wanted it to, and had pinned his future on being able to stop it, and I suspect the proponents of SOPA will discover the same thing. Being cynical, I suspect they already know it, but are just trying to buy time at our expense. This TED presentation by Clay Shirky, one of the real thinkers in this space says it better than I can ever hope to do.
