Oct 10, 2010 | Leadership, Management, Strategy
This is a term I commonly use to describe a management style that I believe delivers the best results to any enterprise.
In one sense, central management is loose, against a clearly articulated and understood strategic purpose, it allows line management to make decisions, determine activity priorities, encourages mistakes by enabling calculated risk taking, experimentation, and just getting things done that delivers value to customers.
On the other hand, management is very tight, there is a rigorous planning and risk management regime that does not weed out risk, but exposes it to scrutiny, there is a culture of quantification, but equally, recognising not everything, particularly new stuff can be easily quantified, and there is a deep commitment to continuous improvement, and all its associated disciplines.
In these circumstances, creativity will flouish without losing sight of the main game, but it calls for the enterprise leadership to give up a key attraction for many leaders, using the office to get people to do whay you say on a daily basis.
Oct 7, 2010 | Customers, Management, OE, Sales, Strategy
Since man sought to organise themselves beyond family groups, geography has been the fundamental organising principal of almost all the institutions created, it was really the only thing that made sense. Everything from businesses to empires and the church(s) were geographically organised structures.
Since the 70’s, many commercial institutions have attempted to reorganise along a customer or product driven logic, largely with limited success. Geography and the transaction costs associated with removing the natural barrier of distance have conspired to make it difficult and costly, and the old management silos are hard to break down until the enterprise is in real trouble, as IBM was in the 80’s.
For the last 10 years at a huge rate the net has removed geography as a significant driver of organisational structures. It simply makes no sense to now have multiple overheads in neighboring geographies, when the net tools enable the sharing of everything immediate.
The outcome, structure your organisation to focus on what keeps it alive, customers!
Oct 6, 2010 | Change, Innovation, Strategy
Innovation is an organic process, and it seems that only with the benefit of hindsight, when the papers are written, does the rationalization of errors, dead-ends, side-tracks, and jumping on the spot, occur to make it seem linear.
The best we can do is create the conditions where innovation flourishes, just as a farmer creates the optimum conditions for growth and productivity on his farm.
Sep 29, 2010 | Management, Small business, Strategy
All businesses are conflicted, small ones more obviously than larger ones.
On one hand, the immediate urgency to do whatever necessary to generate the cash to pay the bills, and on the other, the necessity to build capability, relationships, and definitive market position, all critical elements for commercial sustainability, but there is rarely enough time to do both as well as you would like.
There is no easy answer to this dilemma, but in my work with small businesses there are a number of strategies, largely borrowed from large businesses that pay dividends:
- Act like a larger organization internally, by doing things such as having a formal monthly management meeting, regular formal performance reviews, an overt strategy generation process that involves employees, and detailed operational planning.
- Delegate both responsibility and authority clearly. Often those who start businesses do so because they want to feel in control, and delegation does not come easily
- Spend 50% of your time (assuming you are the CEO) outside the businesses with customers, and demand chain partners building relationships.
Small businesses benefit hugely from these disciplines, partly because they are so important for the smooth running of any businesses, and partly because it acts as an “insulation” to the unanticipated. Most in small businesses do not see the need, as they are in daily contact with all in and around the businesses, and therefore, some of these things are seen as unnecessary bureaucracy, when in reality they are more like shock absorbers.
Sep 26, 2010 | Demand chains, Management, Operations, Strategy
A while ago I wrote that there seemed to be the beginnings of some thinking amongst the smaller manufacturing operations I interact with about the relative value of manufacturing in high cost Australia, and retaining control of, and having the opportunity to develop, the intellectual capital involved, rather than sending manufacturing offshore in pursuit of lower costs.
I came across this article reflecting the same view, but amongst some of the biggest manufacturers in the US, and it also reflects the beginnings of this trend.
In Australia, we have let our trade skills erode so dramatically over the last 25 years that if we do start to see some sophisticated manufacturing return to our shores, and the obvious contender is photo-voltaic cells, now almost exclusively manufactured in China with Australian technology, we may not have the technical manufacturing skills to deliver.
If this nascent trend does harden, it will usher in a huge gap in our operational skills capability, one that will take a generation or more to fix, and most importantly to any solution, we need a recognition by federal and state politicians that we have a problem bigger than the next election cycle. The long term investment in education and the culture changes necessary will add another big chunk of time to the reaction, possibly a generation.
Sep 22, 2010 | Change, Communication, Innovation, Leadership, Social Media, Strategy
A Wall Street Journal op-ed by Eric Schmidt, chairman of Google argues that the demise of printed media, particularly newspapers and magazines is as much a result of their own hubris as it is the advent of new media, and that the opportunities for journalism have flourished rather than diminished.
Fairfax have just announced that the outcomes of a strategic review conducted by McKinsey will result in significant changes to their commercial profile over time, with greater emphasis on electronic media. About time they woke up, having lost huge slabs of classified advertising, their “Rivers of Gold” revenue streams, to specialist web sites like “Car Sales”, “Seek” and others. The tenor of the public announcements still smells of them seeing electronic publishing as a competitive force, rather than a very different but complementary one that will not go away.
Print has lost its immediacy over a long time, first to radio, then TV, more latterly the web, but the process has not been one that should have taken them by surprise, the challenge is to harness the fundamental two differences the web has enabled:
- Anyone can be a publisher now, in a variety of formats from print to photographic and video.
- The whole communication process is now 2 way, hugely networked and fragmented, no longer a one way broadcast, the source of Fairfax’s success last century.
My instinct is that it is too late for incremental change to their business model, even at a rapid rate, the game has moved on too far for them to recapture the fortunes of the past. Glad I am not a shareholder, although Fairfax chairman Roger Corbett has a track record in instituting rapid improvement that generates great returns.
