Dec 16, 2024 | AI, Leadership
The characteristics of leadership we expect from the local nonprofit or sporting club, to the largest businesses in the country, to the Prime Minister, are pretty much the same.
Trust.
We need to trust them. Trust is earned by the behaviour we observe, never just given. It is also incremental, built over time, but is also fragile, and can be brought down in a minute by one bad example. The test, if there is such a thing is whether we believe that the private conversations the ‘leader’ is having are the same as the public ones, and would they be prepared to say those private things on the 6 O’clock news. By this test, many in prominent so called ‘leadership’ roles in this country fail. Dismally.
Dependability.
This has many forms, from delivering on the big promises made, to turning up on time for an appointment with the local hairdresser. In any leadership role, no matter the size, when a real leader finds themselves from time to time unable to deliver, they do not walk away from the fact, they acknowledge the failure, learn from it, and move on. To many, this is the essence of leadership, to me, in it’s simplest form, it is just common courtesy painted on a wider canvas.
Competence.
Someone placed in a leadership role, who is an example of the Peter principal is corrosive to the rest of the organisation. Those being led must believe that the leader is someone they can follow, and learn from. That does not mean they never make a mistake, it does not mean they are never unsure of themselves, or exhibit human frailties, it just means that we believe that they have the wisdom, skills and experience to get the job done.
Humanity.
We are herd animals, we rely on those around us for safety, and security. We have evolved and prospered as a species because we are able to collaborate and care for one another and rely on our neighbours in times of stress and crisis. In short, we care about others. Someone in a leadership position who does not care about those being led, is not a leader, at best they are a manager, dispensable and easily replaced.
When an individual displays these four characteristics, followers just seem to appear.
Header by DALL-E, who cannot be made to spell correctly no matter how hard I try to get its digital brain cells to listen!!
NOTE: Before posting this, I saw I had written an almost identical post a few years ago. While the four parameters are the same, the way I expressed them is a bit different. So, rather than scrapping it, as i have done before when realising i am repeating myself, I elected to post it anyway. Repeating a good idea is rarely a bad thing.
Dec 9, 2024 | Communication, Management
From time-to-time leaders and managers must deliver bad news.
Delivering bad news is one of the most stress inducing actions any manager and leader must undertake from time to time.
My technique over the years has been what I call ‘delivering a Sh*t sandwich’.
The bad news sandwiched between two pieces of better news.
For example:
‘Sales are going well and are above budget’.
‘Sales in your area are poor, your colleagues are carrying your short-comings and are becoming very tired of that’.
‘We are sending you to the ‘Harvard improve your sales skills course’ next month hoping it will help you improve.’
This generally works quite well.
The alternative as demonstrated by the following story I found from an anonymous source, is to deliver some outrageous and imaginary really bad news, which then makes your bad news seem like a huge relief in comparison.
“Dear Mom and Dad
I’ve dropped out of school. Bob and I have moved to Alaska. His penal officer has found him a job, and we live above the gas station where he pumps gas. The doctor says my pregnancy is coming along as well as can be expected.
Love,
Jane
P.S. There’s no Bob, I’m not pregnant, and I didn’t drop out of school. But I got a D in chemistry. I just wanted you to read this with the right perspective.”
Note: this last technique also works in reverse.
Rolls Royce no longer display their cars at auto shows. In that environment, they are hugely expensive vehicles, with many very good, and much cheaper alternatives. Instead, they now display at air and boat shows, where by comparison, a Roller is pocket change.
Nov 20, 2024 | Communication, Management, Strategy
When thinking about selling your business ensure you spend time and effort identifying the intangible components that could contribute up to 90% of the value of the sale
Almost 6 years ago I wrote a post that identified intangible value at 87% of the Standard and Poor’s index. An update to that index done by Ocean Tomo now puts the number at 90%. While this is a small increase only, it is off an extraordinarily high base, and the index is based on 2020 numbers. Given the run of technology stocks over the last couple of years, I hazard a guess that the number is now well over 90%. It is the last 10% that is, as everyone knows, the hardest to capture.
This is a considerably greater percentage than the other major stock market indices. For example the European S&P at 75%, Shanghai Shenzhen index is at 44%, and the Nikkei sits at 32%.
This wide disparity comes from the makeup of the indices.
The US S&P top ten contains nine technology businesses the outlier being Berkshire Hathaway. In order, on Nov 16, 2024, the top ten and their share of the index is:
NVIDIA 7.2%. Apple 6.8%, Microsoft 6.2% Amazon 3.8%, Meta 2.5%, Alphabet 2.1%, Tesla 1.8%, Broadcom 1.7%, Berkshire Hathaway 1.7%.
Even amongst these behemoths, there is a strong skew to the top three. This top ten constitute 35.4% of the total value of the 500 companies in the S&P index. The Pareto Principle at work, again.
The trend is also clear amongst the other major indices. From much lower bases, they are all heading towards the increasing valuation of intangibles in the total value of their stock.
Ignoring this trend and failing to respond is leaving money on the table.
Over the last few years, I have consulted on several projects where small businesses have been sold. In each case, the sale has been made at a considerable premium to the standard industry multiples that would usually be applied. The driver of the premium has been the effort put into identifying and articulating the value of intangibles to the purchaser. I’ve called it finding the ‘Rembrandts in the roof’, a phrase I picked up somewhere after reading of a dusty Rembrandt was discovered and authenticated in the roof of an old house in Amsterdam 30 years ago.
Are you actively looking to identify and quantify your hidden Rembrandts?
Nov 18, 2024 | Governance, Innovation, Leadership, Strategy
The latest economic complexity rankings put out by Harvard were recently released. Australia dropped from 93 in the world to 102. One place ahead of Yemen, one behind that manufacturing innovator, Senegal.
I had missed the report until an article in the auManufacturing LinkedIn group brought it to my attention.
The best that can be said about Australia’s drop from 93 in the previous ranking to 102 in this current ranking is that we have made possible the performance of the 101 countries that are above us.
This includes such stunners as Bangladesh at 100, Honduras at 97, Uganda at 96, and the home of Voodoo, ranking as one of the world’s poorest countries, Benin at 99.
To be fair, the ranking methodology struggles to adequately quantify the benefits accrued by services in its calculations. This compromises the ranking of Australia which has an advanced but hard to count services sector, while exporting mostly commodities, which is easy to count.
Nevertheless, while politicians are ensuring the public debate (aka playground squabbles) is around irrelevancies like the chairman’s lounge, long term challenges in education, aged care, housing, equality of opportunity, and economy wide productivity go uncontested.
Take education for instance.
This is a very substantial sector generating billions in economic activity by educating the children of our Asian neighbours. Many see it as a road to residence, which will benefit our economy doubly, as they have paid for their own education. However, many return home, enabling the ‘connections’ highlighted in the report as critical to complexity to be made. Meanwhile, for our own kids, we have continued to make getting an education more expensive to the point where it is becoming unaffordable in the absence of parental support.
In our wisdom, we are in the process of ringbarking this pathway to complexity.
How stupid can we be?
I recall in 1980 then Singapore PM Lee Kuan Yew warning that Australia was destined to become the ‘White trash of Asia’. It seems his warning is coming to pass.
PS. November 22. This ‘Visual Capitalist’ graph of the 30 largest exporters came into my feed today, adding some flesh to the bones of the index. The make-up of exports of several of them should lead to some deep thought. For example, Holland, Switzerland, Belgium, even the battered UK, where there are no hydrocarbons or minerals in the mix, outrank our commodity driven export mix. This is a solid indicator of the ‘complexity’ to which we should be building.
Nov 7, 2024 | Analytics, Management, Marketing, Strategy
How do you anticipate the reactions of competitors to your initiatives?
First you must understand them holistically and well. The better you understand them, specifically the strategic and tactical frameworks they work with, the better able you will be to anticipate and respond. You should also reflect on the leadership of your competitors, as their behaviour drives their decision making.
11 questions to ask yourself and your team:
- Will they react at all?
- Will they see and understand the strategic and tactical drivers of your actions?
- Will they feel threatened?
- Will mounting a response be a priority?
- What options will they actively consider?
- Do they have the right mix of resources to respond meaningfully?
- Which option are they most likely to choose?
- How many moves ahead do they look: do they play draughts or chess?
- What metrics do they use that will influence their decision making?
- What are the lead times required to respond effectively?
A final and key question in this volatile environment that is often missed:
- Who might emerge to be a competitor, who could change the dynamics of your market that currently would not be classed as a genuine competitor?
Commercial history is littered with failures to see the possibility of a disruptive new competitor emerging from left field.
Anticipating competitor reactions to your initiatives is a competitive superpower.
It enables you to strike at their weak points, and repel their advances at minimum cost to you, while having them consume resources for no result.
The downside of focusing on competition is that your customers do not see the world as you do. They are looking for the supplier who best addresses their need, solves their problem, or scratches their itch.
Those who spend their time looking over at their competition are risking taking their eyes away from their current and future customers. Lose sight of your customers, and one way or another, you will be eaten!
