Nov 20, 2011 | Change, Leadership, Management, Strategy
The chaos in the European monetary system, and the appearance of a lack of the required backbone to address the issues has parallels in every commercial change situation I have ever seen, irrespective of the size of the oranisation:
- It takes a while to stuff up a sound system with hubris an self-interest, the decline is slow, but with hindsight, absolutely clear.
- The leadership that got into the mess is unable to clean up its own poop, and needs changing.
- Necessary changes cannot be made until it seems there is no option, and the stakeholders recognise that the status quo is simply unsustainable.
- In change, some get hurt more than others, but most suffer from some austerity. If the stakeholders clearly understand that there is simply no option, and they trust the emerging leadership to take tough, but in the long term decisions that benefit all, they will suffer the short term pain to set things right.
In Europe we are half way through this process. Most Europeans would recognise the status quo is unsustainable, and that change must happen. The leadership is changing, Italy and Greece have changed, and Spain has an election coming up at which the incumbent government will probably be decimated, Ireland made the changes a year ago, and appears to be recovering, and Portugal is just tagging along, so far so good in driving change. Next step is to ensure the measures are appropriately tough, and that they “stick” despite the opposition that will emerge from organised vested interests.
It seems to me that the whole process is being facilitated by the Germans. They do not want the EU to implode as it would see their new Deutschmark soar, removing their current competitive advantage, so they are paying the price of short term financial market instability to force the changes elsewhere in Europe, to give impetus to the general understanding that aggressive change is the only way forward.
If Europe was a company, this is exactly what we would see if a number of key subsidiaries got into trouble.
Billy Bloggs & Co, my small client undergoing some painful restructuring is showing us what will happen in Europe.
Nov 17, 2011 | Collaboration, Strategy
Scientific collaboration is a challenging proposition, most scientists would agree that collaboration is a key component in problem solving, but few practice it beyond their immediate research group, as their careers are dependent on publishing. As a result, they hoard ideas, data, methods, and all the other stuff necessary for progress, and publish it themselves.
The culture of the scientific community is geared to recognize publishing new and original stuff in scientific journals, not sharing ideas on a wiki. Scientists do not get a job or more funding on the basis of wiki-sharing great ideas, but they do for getting marginal stuff published, so guess where the focus is! To build collaborative scientific effort, we need to reverse this relationship.
During the project to map the human genome, huge amounts of data were required, data that was dispersed amongst the various bodies doing the research that generated it. To facilitate sharing, an agreement that became known as the “Bermuda Principles” was forged that created the culture of sharing data immediately it became available, and this simple change turbo-charged the effort to complete the project.
What drove the difference the agreement created to most other scientific collaborative efforts was that the major funders agreed that the price of participation in the project was the sharing of data, if you wanted the funding, the absolute condition was sharing data. Bingo, collaboration was created by putting a price on participation.
Nov 16, 2011 | Marketing, Small business, Strategy
Woolworths and Coles price and promotion strategies are often shaped by what happens in the UK, as there is a history of successful imitation in Australia. The resurgence of Coles has taken the initiative from Woolworths, and the short term outcome has been price reductions to consumers, the flip side of course, and there is always a flip side, is a further hollowing of the production sector in Australia.
I am pretty sure that if you asked consumers which they would prefer, a price reduction today, or production security into the future, they would take the former, without understanding the probable consequences.
The Federal Court found last week in favor of Metcash in their effort to sell Franklins, saying in part that the competitive power of Woolworths and Coles served to keep prices to consumers down, solidifying the power of the status quo.
Nov 8, 2011 | Management, Strategy
The electronic revolution in all its guises is a paradox, and a huge challenge to any management group, and individual who seeks to make a mark.
On one hand, the advances in the capacity to process, store and transmit data is ravaging 20th century business models, on the other, it is creating huge opportunities to create new value.
The area in the middle of these two extremes is rough commercial terrain, full of quicksand for the unwary. This observation applies to both the businesses that survive on the web, as well as those more traditional manufacturing and processing businesses who still need factories and farms to produce stuff. It is just that all the processes that support the management activities have been changed dramatically.
Nov 4, 2011 | Branding, Communication, Marketing, Strategy
A consumers relationship with a brand is a bit like a friendship, if it is strong, you will be prepared to put up with a bit of nonsense and still be friends, if it is weak, you may not be. If the poor behaviour continues, it will normally be the end of the “brand friendship”, after all, a friendship is supposed to be a two way process.
It’s a simple equation, deliver the benefits of friendship, the “brand promise” to people who care, and you will not depreciate your brand, fail to deliver, and depreciation occurs, and as every marketer knows, building it up is always harder than tearing it down
Accountants understand the notion of friendship in a balance sheet, called “goodwill”, they see it all the time, problem is they do not understand how it gets there.
A quick scan of the commentary yesterday after the Cup day reduction of retail interest rates resulted in all the major banks, except NAB, passing on the whole reduction indicates, a customer PR bellyflop of significant proportions, a whack on the nose to all “brand friends” .
It really does not matter how justified the “banking” of .05% of the decrease by NAB may be, they have just spent millions telling us how they are different from the others, setting themselves up as the bank for service, one you can go to with your financial problems, your banking friend, and it has been an effective message. All gone, “Poof”.
A rational bankers decision based on the margin squeeze created by the rising costs of wholesale money, and the reducing rates in Australia, but taken in an emotional market. Dumb.
Want to see brand depreciation, just look at NAB for a case study.
Nov 3, 2011 | Change, Leadership, Strategy
It seems that the carrot and stick approach will work less in the future than it has in the past. Science is demonstrating that for tasks that require even a modest amount of cogitative skill, paying more for the task actually reduces performance. Again, the higher the rewards, the less the performance, and our world is rapidly becoming a place where routine and repetitive tasks are being eliminated.
So much for the notion of huge executive pay as an incentive. When you look around, it is pretty obvious. Linux, Wikipedia, Apache, the list goes on, major businesses emerging from an economically impossible business model, getting smart people to work for nothing, then giving away the results!
That should make an economists head hurt.
Humans work for a meal and a place to stay, be warm, and have some basic comforts, but once these basics are taken care of, they work for the satisfaction, the recognition, to achieve something meaningful, and to enjoy doing it. The trick therefore is to have a purpose in your business, one that engages and motivates, and allow your employees to exercise their innate creativity and insight to achieve the purpose.
Daniel Pink presents these ideas in an animated presentation that is as entertaining as it is informative.
