Oct 6, 2009 | Leadership, Management, Strategy
One of the most widely known strategy tools is the SWOT, but it is widely misunderstood.
Often there is confusion about what is a strength, and what is an opportunity, similarly, what is a weakness, and what is a threat.
Strengths and weaknesses are internal to the business, they are under the control of those in the business, and a strength is not just something you do well, that is like having a watch that tells the time, it is something that makes your business distinctive.
Threats and opportunities are a result of external conditions, and usually there is little a business can do to create them, the best they can do is anticipate and manage the adverse impacts, and leverage the opportunities.
Most businesses automatically set out to build on their existing strengths, when often improving on their weaknesses offers a better return on the resource investment necessary. Turning a weakness into a strength also has the potential to create surprise, and the resulting competitive edge, simply because it is unexpected.
Sep 22, 2009 | Change, Innovation, Leadership, Strategy
There is a growing trend driven by the difficult times for management to set very big goals (Big Hairy Audacious Goals… BHAG),and hope to create the focus necessary to achieve the BHAG outcome.
Often however, the opposite appears to occur, as those in the organization charged with the execution of the plans simply do not believe the objectives are achievable.
Sometimes this is just that the objective is divorced from the reality of the competitive environment, sometimes it is simply a failure of leadership, but most often, it is just that the goals emerge from wishful thinking that puts off difficult decisions for a bit longer.
JFK said in 1961 “I believe this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon, and returning him safely to earth. ” This is probably the most famous BHAG of all. It is a statement in a single sentence that contains the three elements of a successful BHAG. It creates the vision of where we want to go, the measures of success are clearly articulated, and everyone recognised the resources necessary to achieve the task would be made available, because the President had committed himself to the goal.
No room for wishful thinking or bland leadership in that statement, and it was achieved. Would it have been achieved, had any of the three conditions been missed? Probably not, because it would have just been the wishful musings of the President.
Sep 20, 2009 | Management, Marketing, Strategy
Modeling scenarios has become a pretty big business, but notice that you often get only the numbers out of the end of the model, rarely the assumptions that drive the outcomes, and rarely a range of options.
This has been brought home again as I read the “strategic plan” completed at great expense on behalf of an industry body that covers a wide range of individual sub industries, each with their own characteristics and issues, albeit with some common drivers such as water availability, labour availability and capital generation.
Consultants at great expense produced a model that churned out numbers supposed to show the way forward, but which common sense says has a lot of dodgy assumptions going in, because what is coming out is unusable by any of the individual enterprises in the industries, or the industry bodies supposed to assist them.
Most commercial models I see set out to prove a point of view, and that point of view usually aligns with some preconceived notion of what the outcome should be. In this above case, the outcome was driven by the consultants need to tell the industry body what they wanted, not necessarily what they needed to know.
Scientific method by contrast works in the opposite way, it sets out to disprove a hypothesis, and by that means, advance our knowledge a bit, as you reconsider the hypotheses on the basis on one more thing you know does not work.
Bit more time consuming, but outcomes that are untainted by an existing perspective.
Numbers are only as good as the assumptions that drive them, so next time you are given an argument backed by numbers, don’t look at the numbers, have someone explain and debate the assumptions that have driven them.
Sep 6, 2009 | Innovation, Leadership, Marketing, Strategy
Then notion of “industrial commons” as a metaphor for the clustering of firms of a similar type in an area put forward by Gary Pisano of Harvard Business School is immediately attractive, as it easily explains things we have all seen, without recognising the implications.
Pre industrial revolution, the notion of commons applied to the common land on which all villagers could graze their cattle, or carry out other communal activity.
In the post industrial age, it is about the manner in which particular skills assemble over time in a location that enables them to leverage the proximity of the intellect into goods and services. Silicon valley is the best known example, but there are many others.
This puts a simple platform under many publicly funded efforts to enhance “clusters” in my area of work, particularly in the production of high value specialty food products.
The growth of Orange in the central west of NSW as a fine food centre is supported by a wide range of agriculture, from broad acre cropping to intensive horticulture and wine making, further supported by mining operation which give some scale to the engineering services sector, and the University offering agricultural science amongst a wide range of disciplines. By contrast, nearby Mudgee has all the agricultural advantages, possibly more, but lacks the mining, university and the attraction to general tourism and passing trade, and so the clustering of food value adding has failed to gather the momentum of Orange.
The challenge in creating a “common” is the timeframe of the return on investment in the necessary infrastructure. Governments create and abandon a development program in sync with the electoral and economic cycles, commons will take a generation at least to gain traction, so governments should not be surprised to see their efforts largely fail, whilst next door, a “cluster” will evolve with little or no engagement of public funds beyond basic services, simply because it has all the natural conditions to thrive.
Sep 2, 2009 | Marketing, Strategy
Customers do not always fall into the easy demographic segments so favored by marketers. They think, and react to a range of stimuli that have little to do with their age, sex, family situation, education, where they live, how much they earn, and what job they do.
Each consumer is a market of one, and they must be won over by your brand and product offering, so make sure you really understand why they behave the way they do.
So called “new media” offers a channel to communicate with consumers individually rather than on mass, this does not make it easier than the old “mass media”, if anything it is harder, and it is certainly different.
Aug 27, 2009 | Innovation, Leadership, Marketing, Strategy
The world will look different when it emerges from the crunch, as we appear to be doing currently.
The globalization and connectivity of the world are trends that will not go away, and the chaos of the last 12 months will have enabled trends at the fringe to build momentum much more quickly that would have otherwise been the case.
Consider the acceptance, even demand, for increased government intervention in business, something that would have been impossible a year ago, the growth of twitter over the same period, the role pro-active networking of supporters using the web played in the success of the Obama campaign, and the explosion of sales of “green” cars like the Toyota Prius, and Honda’s equivalent at premium prices during a financial meltdown. All examples of disturbance at the periphery of activity which became full blown disruptions at the core in a very short time, motivated during the economic chaos by people seeking new ways to understand and deal with what was going on.
Building adaptability has become a key survival skill, taking lessons from the natural world where many small “experiments” at the fringes builds the capacity of the species to survive as the environment changes around you. It may be that Peter Drucker‘s maxim that the only core competence needed by an organization was innovation has been reinforced, as all the literature on successful innovation cites the ability of an organization to run many experiments as a key component of innovation success.
Anyone thinking the post crash world will look like the pre-crash one needs to think again.
