Execution & Strategy

Not All Questions Have An Answer

2017-02-19T08:30:00.000-08:00

Have you noticed how many articles now have a number as the starting point of the article i.e.

3 ways to improve your sales
5 tactics to improve profits
2 exercises to get a flat stomach etc etc

It seems almost that us humans want any issue boiled down into a few succinct bullet points and "hey presto" you have a solution to an issue.

However, I am coming to the uncomfortable realization that the rate of change in industry and the effects on the planet and its inhabitants are happening so fast that not only may we not be prepared for the changes but we do not know how to prepare.

Questions that are clearly being discussed but where the ability to forecast is simply guesswork at best, include:

What will be the global impact of 1 Billion people moving out of poverty (source) be on the worlds resources i.e. food requirements, disposable goods consumed, pollution etc

What will the impact of Artificial Intelligence and its role in Automation on societies. In a widely noted study published in 2013, Carl Benedikt Frey and Michael Osborne examined the probability of computerisation for 702 occupations and found that 47% of workers in America had jobs at high risk of potential automation (source) i,e.

Imagine a world where there are no taxi drivers, bus drivers, truck drivers, train drivers, pilots.
Image a world where surgery in hospitals were conducted by flawless robots whose combine knowledge of 1000's of similar surgeries have made their decision making more accurate than any human
Imagine a world where the ability to computer code is no longer a skill but a commodity and technological advancements are underpinned by low income / paid coders from any 3rd world country.

What is the real economic impact of people living longer i.e. what will retirement look like in 20 to 30 years? Will you retire at 75 to enjoy your twilight years to 90?

The reality is that there has always been change. The Industrial Revolution and the Digital Revolution for example have had everlasting impacts on the world in which we live and as optimists point out we live longer than ever before,due to (but certainly not limited to) improvements in health care and jobs simply shifting i.e.remember how ATMs were supposed to cause huge job loses in banking but actually ended up creating jobs in technology. So therefore change must be good! Right?

I'm not putting on my pessimists hat. I'm just putting on my "I am not sure" hat. The introduction of ATMs did indeed help create new jobs in technology but those ATMs never, to my knowledge, were considered artificial intelligence with the ability to learn and improve their function. What if they did? Would they be "intelligent" enough to self improve, self service and therefore reduce the reliance on human interaction for maintenance?

Perhaps now is not the time to look for the "3 steps to secure the future of mankind" or "5 ways to ensure global security" but actually a time for leaders to listen. Listening may not provide a short term solution that so many seem to demand but it may help to articulate the real issues. Once we understand the real issues we may begin to look at the real solutions. I can honestly say I am neither the optimist nor the pessimist but that I am in the "I am uncertain" group so if now is the time to listen, tell me, given the rate of change in industry and the effects on the planet and its inhabitants how do you suggest we prepare?

I look forward to hearing from you.

The Funny Side Of Conference Calls

2016-05-22T17:30:00.000-07:00

I haven't written (obviously) in sometime however this video gave me genuine giggle followed by the thought "I really need to post this".

I am sure everyone who has dialed in to a conference call will enjoy this :)

What Will Impact Your Profit In 2015?

2014-12-31T09:00:00.000-08:00

Profit is vanity
Assets are Sanity
but Cash is king!

I am not too sure who came up with that phrase but whoever did is spot on. I have previously written about the problem of profit and have seen first hand how a profitable business almost went under due to a cash flow issue.

Understanding the issues related to managing 'by profit' is important as are understanding the benefits.

One of the key benefits of Profit and Loss statements are understanding the business expenses. As we head in to 2015 my question to you is:

"If you have more than 1 customer, do you know which customer (or customer channel) incurs more of your costs, and if so, are you adjusting your pricing or cost allocation method to account for the differences?"

Put another way, do you know your Cost To Serve?

In the retail / wholesale sector you will often find department stores with a very high cost to serve. In other words, wholesalers who distribute through the retailers will need to provide the retailer with a high first margin, rebates, marketing funds and potential markdown contribution. These costs potentially erode the wholesalers ability to fund future growth. Passing these costs on to the consumer is difficult as the retailer will want to manage their price points and in a competitive market may not want to pass on wholesaler costs to the consumer. Hence the wholesaler is in the difficult position of managing its ability to generate profit through careful expense management.

However these wholesalers typically distribute through a number of retailers. A cost allocation P&L will allow the business to see which retailer has a higher cost to serve. By understanding the cost to serve the business is able to allocate resources in a manner that generate the most profitable outcome.

Imagine the following scenario:

Customer A generates -2% profit / $10 mil revenue
Customer B generates 4% profit / $3 mil revenue
Customer C generates 15% profit / $1 mil revenue

or alternatively

Product A generates -2% profit / $10 mil revenue
Product B generates 4% profit / $3 mil revenue
Product C generates 15% profit / $1 mil revenue

Knowing this would force you to ask questions such as:

a) How do we make the the $10 mil revenue profitable? i.e. Is it possible to increase the gross margin, what costs can be reduced etc?
b) How do we grow the $1 mil opportunity? etc etc

Obviously this is much easier said (or written) than done but ultimately this is what good businesses do everyday. So back to my question. I'll put it another way. Even if your biggest customer will be expensive to manage in 2015 (the customer has a high cost to serve) will they be more or less profitable for you?

HR - Change is coming

2014-08-10T09:00:00.000-07:00

"It’s time to say good-bye to the Department of Human Resources. Well, not the useful tasks it performs. But the department per se must go." Ram Charan, HBR July 2014

Every now and then you might read an article that gives you genuine food for thought. This happened to me last month when I read the one page HBR article, titled 'It's Time to Split HR' by Ram Charan. To be honest though I think I may be in the minority when I viewed the various defensive and HR apologists comments on the online article.

With the apologists in mind, I am most likely being optimistic in suggesting that my proposal, that I will call 'Building On Charan's Idea 2.0', is also given due consideration.

Charan's proposal is to eliminate the Chief Human Resources Officers and split the HR function into two, namely:

HR-A (for Administration): "would primary manage compensation and benefit. It would report to the CFO"
HR-LO (for leadership and Organisation): "would focus on improving the people capability of the business and would report to the CEO"

The driver behind Charan's proposal is that CEO's disappointment in the HR function are borne out of the fact that the department it is staffed by employees who have not worked on the front line and do not understand the operational complexities of managing a business unit, division, business or company.

I agree with this!

And because I agree with this I am proposing a potentially more radical solution - merge the HR-LO into the line management and not have it as a separate reporting line. The Chief Marketing Officer should take the responsibilities of the HR-LO for Marketing. Likewise the National Sales Manager should take the responsibilities of the HR-LO. Don't pull line managers out of their operational role, bring the HR Leadership and Organisation into their role. The role of the HR-A will be an administrative support function. It does not get a seat at the table. However the capability is critical in making sure those line managers with the HR-LO responsibilities have the available tools to execute the role efficiently. This proposal is a high level outline and no doubt the naysayers will be vocal.

A number of organisations have tried this in parts however I have yet to see it successfully implemented. Issues I see around the reason for failure are that CEO's are often reluctant to let go of their CHRO due to the fact that:

The CHRO is often seen as a "trusted adviser".
The thought of making line managers responsible for the LO function is politically unsavory due to the backlash many may see as a burden on their already strained workload.

My view is simple. You either accept the status quo as positive for your business or you make fundamental change. It is simply not acceptable to keep lamenting on the inadequacy of an entire organisational function yet at the same time not adopt a model for change. CEO's, Managers and Bloggers alike need to stop bashing HR. The department is an easy target. It's time those that do bash HR stand up and take on the HR-LO responsibilities and bring the front line operational thinking and capability to the most important part of any organisation, people.

Dr Jekyll and Mr Hyde: Struggling To Land That Job

2014-06-15T09:00:00.000-07:00

I was talking to a HR contact recently about first perceptions when hiring and she relayed the following story to me. My contact was recruiting for a customer service based role. She put the ad up on a job board and clearly stated that one of the key requirements for the role was "To provide outstanding level of customer service." The following day the first resumes started to arrive. As she read each resume there was a standout applicant whose resume matched exactly what she was looking for. So she called the person and the call went through to voice mail where she was greeted with a very gruff "You know what to do". That's it. No "Hi you have called..." No pleasantries. Nothing but a gruff "You know what to do". Yep this person would be great at customer service!

I had a similar experience. I was receiving a number of resumes and one arrived in my inbox from big....@ (I'm not going to go in to details needless to say the applicant thought he was an adult film star). The tragedy was that is resume was actually quite good. However I could not get over the email address and kept thinking if this person was going to send me something like this what might they send to our customers.

It may sound harsh and I am sure many of you will read this and say it is just a voice mail or an email address but take a step back and think about it from the person doing the hiring. When one writes the job description an image of the ideal candidate is created. Sure we are not all perfect, but if you are someone who is going to be replying to a job ad it pays to think simply beyond the resume.

The reality, we as humans, make snap decisions based on first impressions. In fact some decisions can be made so fast that the reasoning mind has not even had a chance to react. Princeton Professor, Alex Todorov found in a study that "when we see a new face, our brains decide whether a person is attractive and trustworthy within a tenth of a second....people respond intuitively to faces so rapidly that our reasoning minds may not have time to influence the reaction". (Source).

Additionally the first impression can truly be the last impression. In a 1992 study in the Journal of Personality and Social Psychology (Vol. 64, No. 3), Nalini Ambady, PhD, of Tufts University, and Robert Rosenthal, PhD, of the University of California, Riverside, found that after the first 30 seconds of the first class, students' evaluations of a teacher were similar to students who rated the teacher after the entire semester. (Source)

Landing that next great job is not easy. There are sure to be a multitude of candidates and competition will be tough. The question you have to ask yourself is will you be seen as Dr Jekyll or Mr Hyde? If decisions that will effect your career can be made so quickly, you need to ensure that you are one step ahead of the decision maker. There is no use having the resume of Dr Jekyll but answering the phone as Mr Hyde. Return to paragraph one if you remain uncertain.

Selling On The Web: What I've Learnt About Websites, Social Media......

2014-03-16T11:00:00.000-07:00

I was first involved in e-commerce over 14 years ago. At the time I was working for a Venture Capitalist / Accelerator who had invested in an online advertising aggregation site. I am sure you can imagine the pitch, "There are millions of small businesses out there and it is impossible to reach all of them but if we created a portal .....". Anyway it was hugely enjoyable, a massive learning experience and I got to be a part of the whole dot.com boom and bust. As an FYI to those who are interested in the true nature of the bust, when we were raising our second round of finance our revenue model predicated a US$400 million annual gross revenue when the site did not even have the ability to take a credit card. Good times :)

Fast forward 14 years and I thought I would summarise a couple of recurring points I see time and time again.

1 - It is not easy.

Forget the hype about how you can get an e-commerce website for $1 per day. That is the easy part. However scaling up to a serious business model takes hard work. Anyone can get a website but can you get anyone to come and buy your product.

I have lost count of the times that people say to me that they built a website but are disappointed with the income generated.

2 - Not all traffic is created equally.

Anyone can get traffic. With focus, SEO effort, new content etc your traffic will grow. So what! Do you want a million visitors with 10 buyers or 50 visitors with 15 buyers. If your target market is not coming to the site then who is?

It is critical you focus on building you traffic based on you genuine target audience and not simply the desire to increase your Google rankings.

3 - Google is GOD!

Here is some sobering data:

Search Market Share

Source:

http://www.comscore.com/Insights/Press_Releases/2013/8/comScore_Releases_July_2013_US_Search_Engine_Rankings

That’s right, 2 out of every 3 of your customers, who use search, are coming through one company.

Which brings me to the next piece of data from said company:

Source: http://goo.gl/4RdLul

So basically even when you spend money advertising with Google, almost half (2*.72=1.44 of the original 3) of your customers are being driven by a search algorithm rather than the advertising.

In summary, it pays to go to the church of Google as almost half your customers who use search as part of their purchasing decision, are coming through this all powerful single entity.

4 – Conversion vs Traffic (Content)

One of the best internal web teams I saw set up was a very large retailer that had separate teams as part of their web strategy.

At this organisation the Traffic Team is responsible for bringing customers to the site. The Conversion Team is responsible for converting the visitors to sales. The beauty of this model is it means that the teams were highly specialised in their fields and not distracted by metrics outside of their control. For example the Conversion team does not every worry about the number of visits as this was outside their control however the conversion rate of those that visited is a measure that is always top of mind.

I am sure there are countless methods of team set-up’s that exist however I found the simplicity and rifle shot focus of this model particularly interesting.

5 - Cowboys

Every industry has its fair share of cowboys but without any data and only my gut instinct I am certain that the e-commerce industry is home to more cowboys per capita of "specialists" than any other industry. How many companies (I use the term companies loosely here as who knows if the websites purporting to be companies truly are) promise:

we promise to get you on page 1 of Google
double your income
100% ROI GAURANTEED !!!!!

I am not an expert at sifting out the pros versus the cowboys. I am the first to admit that a number of cowboys have made off with more of my money than the ROI that was promised. Do your best to do reference checks etc. Make sure you read the contract thoroughly. Beware of the cancellation periods of the contract. Make sure you can walk away on your terms.

6 - Experts

Having just written that the industry if full of cowboys, I have had the pleasure of working with genuine experts who do add value to the given e-commerce strategy. If you find a good expert listen, learn and pay....

7 - It's Expensive

That's right pay. Yes you can get a website for free. Yes you can buy a domain name for next nothing but the reality is that if you want to scale up to a million dollar e-commerce offering then you will end up spend a considerable amount of money.

The following articles are worth reading for the reality of e-commerce spending

'How Much Does An E-commerce Website Cost?'' - http://goo.gl/RMW36g - provides a great insight into e-commerce website costs and includes the opening statement,"We cut our teeth on e-commerce design back in 1996 while working on an online store for Footlocker. The project budget was approximately $500,000 and although I’m not involved anymore, the site continues to require upwards of $1,000,000 a year in maintenance and enhancements."

'E-commerce: I’ve never heard so much bullshit talked about a business model,' says Razorfish boss"- http://goo.gl/J0e8hh

"spin and bullshit" - http://goo.gl/S3wZf - note this is a guy who has built a $5 Billion business.

8 - Investing in social media

Is social media important? Yes. Is it the answer to all your prays to grow revenue? No. A little while ago a wrote an article titled "The Fundamental Problem With Social Media". As I have written previously on this area I am not going to say much more except reiterate my firm belief that Social Media is a marketing medium like TV, radio, direct mail, pr etc. You would not believe it with all the hype surrounding social media but it is a medium and as such like all marketing expenses requires an investment to generate revenue.

So those are some very high level findings along my e-commerce learning voyage. Remember you always hear / read about the minority i.e. those few who built Amazon, Facebook, etc etc but you never read about hundreds of thousands (as at August 2013 there were over 700 million websites world wide - source http://goo.gl/9Boj04) who have also tried but not been as lucky and or successful. Why? See point 1.

The Fundamental Business Problem With Social Media

2013-11-28T13:31:00.001-08:00

The fundamental problem of social media within the context of traditional business metrics and reporting is that no matter how much of a media darling it is, Social Media is merely another medium in the total marketing pool and hence falls within the expense category.

Think about the last time you looked at a P&L, did you see the following financial metrics?
- Number of Likes
- Number of Followers
- Number of Friends
- Number of Re-tweets
- Number of +1's?

Obviously not. That's because none of these "metrics" are directly related to the financial reporting of any business.

How about Marketing, Advertising, IT and Payroll? Of course because these are standard expense lines in the P&L.

As a fan of Social Media, I am a true believer in the power of the medium. A recent article on Huffington Post rightly points out that, "Social media is powerful at two points during the sales process: the beginning (lead generation) and the end (customer retention)." Another major attraction of social media is that it is cheap. Small businesses have access to Instagram, Facebook, Twitter etc just as large corporate's do. Sure, there are snake oil salesmen out there who will tell you have to spend a fortune to "design and implement an integrated holistic social media strategy", but I have come to the realisation that there is a direct correlation between the crap talk and the amount billed.

Another major benefit of Social Media is that so much of it is trackable. That is, you can see what revenue your expenses are generating. Tools such as Google Analytics are excellent at providing tracking of the financial impacts of social media activities. With a little coding on a website, one can track the Facebook link through to check out. However, for any non-accountants out there, from a financial reporting mechanism, the Facebook link is not recognised as revenue but as an expense.

Tragically, as some articles point out, one of the key reasons for generating a Social Media ROI is to "justify the expense". In my view this comes down to the fact that Social Media seems to have been discussed as a New World revenue model, rather than accepting its' true fate as an expense.

Having read countless articles about the ROI of Social Media (here are a couple of thousand, if you are keen to completely waste your time - http://goo.gl/YWjFNX), I have often thought I was a laggard of the social media medium. However, I was delighted to read a report from Business Intelligence with the none too subtle page header, "The Death Of Social ROI -- Companies Are Starting To Drop The Idea That They Can Track Social Media's Dollar Value". It seems the corporate world is catching up to the fact that measuring the benefit of social media is more than "Likes + Shares = $$$"

For businesses looking to invest in social media as part of the their marketing effort, the benefit can generate fantastic results. However these results are an outcome of an expense because, as I just mentioned, social media is an investment. Is social media the best marketing medium available? I don't have any facts to suggest it is better than a major TV campaign, although pretending that this is a medium that sits outside a traditional P&L because it is new and special, is absolute nonsense. Social media is an expense. Spend well and the financial gain will hopefully exceed your costs. Spend poorly, then close your eyes and pretend that "Likes + Shares = $$$" (and polish your resume).

Are You Being Served?

2013-10-13T08:00:00.000-07:00

I was recently talking to a colleague, who was excitedly opening her package from asos, about shopping online. One of her primary reasons for shopping online was she preferred the customer service. I pointed out that when she made the purchases she did not deal with anyone face to face and the whole process was simply click a mouse. "Exactly" was her response.

How many times have you purchased something online and where genuinely happy when the product arrived at your specified destination. Why were you happy? My guess is that your expectations were fulfilled. Now think about visiting a bricks-and-mortar store and purchasing a similar product. Did you you leave the store with the same level of satisfaction?

One of the challenges I see taking place in the retail sector is how the definition of customer service is changing. Take, for example, returning product. Most traditional retailers will happily exchange a product if the size etc is wrong however many will not refund the purchase and merely provide a credit. On the other end of the spectrum internet retailers of significant scale appear happy to provide a full refund if you are not happy with the purchase. Check out the returns policy from asos - http://www.asos.com/help/pgehtml.aspx?cid=17989#/level10.

Whilst some retailers are struggling to come to terms with the change in customer expectations others are doing a better job at creating a seamless experience across the various shopping channels. This approach, often referred to as Omni retailing, was articulated by Macy's CEO Terry Lundgren almost three years ago when he said:

"We talk a lot at Macy’s about “omnichannel” retailing. Our customer is multi-dimensional. She is busy at work and out with friends. She always has her mobile device in her hand. She’s active on Facebook and Twitter and YouTube and a dozen other social media sites. She is smart and demanding. We want that customer to be able to interact with Macy’s no matter where she is or how she shops. It makes no difference to us whether she buys something in our store or online … or whether she is shopping from her desktop computer or her Droid or her iPad. Macy’s best customers are those who shop us in-stores and online. We have a whole series of strategies in place to drive our store customers to the Web, and our online customer to the stores. We strive to have a 360-degree view of the customer. Today’s customer is not monolithic. And that’s the way we are approaching our customer."

When reviewing Macy's instore refund policy vs their internet refund policy one can see the 'omni' approach:
1 - Store policy - https://customerservice.macys.com/app/answers/detail/a_id/612/~/return-policy-for-store-purchases
2 - Internet policy - http://www.macys.com/service/contact/international/faqs/returns.jsp

This 'Omni' approach is absolutely the right approach but the issue I see is that it is all well and good to suggest a level playing field in customer service, where a business adopts the 'Omni' approach, however the reality is not so. A classic example is the 'up-sell' or 'cross-sell'. All of us will have made a purchase on an online site and been shown "similar items others have purchased" or "you may also be interested in". This is a very simple tool to drive an increase in sales. The online e-commerce provide Shopify's second most popular add-on is the app Product Upsell. The ability to see similar or better products is often taken as a given for the online shopper. But what about the bricks and mortar retailer? How often are you offered an add-on or shown a more expensive item only to think negative thoughts about the sales process? Same process, different method, different outcome!

The true challenge for traditional retailers is not simply improving customer service but adapting to 'Omni' view of the customer without overburdening the business in increased expenses. Customers expect to deal with experts in the store who can provide knowledgeable solutions, just as big data helps tailor options to the shopper based on their specific purchasing habits online. This provides a challenge for the traditional retailer in that retail floor staff are an expense not borne by online retailers. Even more so if retailers are to provide experts where such expert knowledge may come at a cost over and above the standard floor staff rate. One solution may be as simple as providing all floor staff with a tablet. Imagine approaching a Customer Service Representative who knows the floor product well but also refers to the website for product information. At the same time the service rep could point to the tablet showing similar items others have purchased.

There is no doubt that the advent of online retailing has been disruptive for traditional retailers. Considering the Netscape Navigator (early browser for those not familiar with the name) launched nearly 20 years ago we can all marvel at the impressively slow response of so many retailers to the world of shopping. However, as I always tell clients, it is a hell of a lot easier to criticize a decision than it is to fix a business. Solutions to the challenge appear available however the challenge to run an Omni approach will lie in the ability to manage the cost base whilst providing the desired level of customer service. This may sound logical but according to my colleague, great customer service meant not dealing with customer service. Go figure?

Listen To The Real Experts

2013-06-15T14:41:00.000-07:00

I recently ran a workshop for a small business. The owner of the business asked for my help to improve the business performance and as part of the initiative I suggested, like all good consultants to “borrow the watch, tell the time and then charge for the privilege”. In other words I was going to ask the business what was wrong, and then tell the owner what was wrong based on what the business had told me was wrong! OK, slightly facetious but you will get the idea.

There were 10 managers who joined us for an exercise I call “The CEO’s bunch of 5’s”. It is a simple process of:

Asking each individuals for the 5 things they would do to achieve the desired outcome. In this case the desired outcome was to “grow profitable sales”. At this stage each person writes their 5 actions without discussing their action list with any of the other participants
I then created groups of two. It depends on how large the total group is i.e. you may choose to have groups of 3 or 4 etc. The groups were to discuss each of their 5 actions (10 in total assuming no crossover) and then come back to the main group with only 5 from the list. The purpose of this is to force the participants into prioritising what is important for the business.
Each group then presents their 5 actions
As the moderator for the activity it is important to listen to the key themes. In every session I do this the outcome is always the same

There are a number of common themes
The answers are general and lack detail

Congratulate everyone for their work but then I say something to the effect “it is not good enough. As a CEO you can’t make general recommendations. We want to hear the detail behind your recommendation.”
The groups go back to their 5 key action list and re-write the list with specific detail
Moderator summarises the action list and charges the client for the privilege.

This specific exercise is something I came up with myself (I am sure there are similar ones out there) but the technique was learnt by watching all the big consulting firms come in, interview the staff, slice the numbers and charge a fortune for the recommendations. I always found it unbelievable how many times I saw, verbatim, the recommendations from my colleagues make their way on to the smart guy paper.

However, there is significant merit in the consultants methodology. The fact remains that most good employees can see the issues in a company and have probably thought about potential solutions to the issues. The consultants are smart enough to know that listening to these employees will inevitably lead to a probable outcome that is palatable to management.

As managers, business owners or CEOs, you are faced with challenges every day. Whether you chose to outsource the solution finder or look internally is entirely up to you. However before you decide, phrase your two options as such:
a) Employee, we value your opinion and will listen to what you have to say
b) Consultants, we value your opinion and will listen to what our employees have told you

You may have just saved yourself a lot of money, potentially made even more and all by listening to the real experts ... in your business!

Strategy, Execution and the role of Leadership

2013-03-12T09:30:00.000-07:00

If you don't yet subscribe to strategy+business by global management consulting firm Booz & Company, you are missing out on some impressive management and thought leadership pieces.

Two articles that recently caught my attention are:

The Thought Leader Interview: Cynthia Montgomery by Ken Favaro and Art Kleiner
How Leaders Mistake Execution for Strategy (and Why That Damages Both) by Ken Favaro

I am in complete agreement with Ken Favaro when he says that, "If the corporate five are the cart and strategy is the horse, leaders who put the cart first often end up with no horse at all.

Before they get to the corporate five, companies need to address five much more fundamental, and difficult, questions. Let's call them the “the strategic five”:

1. What business or businesses should you be in?
2. How do you add value to your businesses? (in the comments section of the article, Ken elaborates stating "how a company contributes to the performance of its businesses relative to their respective markets")
3. Who are the target customers for your businesses?
4. What are your value propositions to those target customers?
5. What capabilities are essential to adding value to your businesses and differentiating their value propositions?"

Source: http://www.strategy-business.com/article/cs00006?pg=all

I recall being involved in a big strategy presentation to around 100 execs of $Billion (revenue) sized company. The CEO was presenting and the slides appeared to have been put together by a major consulting firm. A number of slides talked about vision and provided data of where the company was versus where it needed to be. Unbelievably the majority of the examples used in the session were large retail company turnarounds. Why was this unbelievable? Because this company in question was a wholesaler. In a nutshell they nailed The Corporate Five but ignored The Strategic Five. Many of the executives left the session utterly perplexed with a very senior exec commenting to me "Do they even know what business we are in?". Long story short, what followed was years of loses including major market share erosion.

Cynthia Montgomery, the Timken Professor of Business Administration and former chair of the strategy unit at Harvard Business School has a resume many could only dream of, whether it be in the world of academia co-editoring with Michael Porter of the influential anthology Strategy: Seeking and Securing Competitive Advantage (Harvard Business School Press, 1991) or in the corporate world as Director at companies such as Newell Rubbermaid. Her insights into strategy are outstanding but it is how she defines the role of leadership in terms of the Chief Strategist that resonated so much with me when I thought of Ken Favaro's "The Strategic Five". Cynthia states, "When I think about a leader being the chief strategist what I mean is ultimately bearing responsibility for the choices that fundamentally determine what a business is and why it will matter.....Having a compelling answer to "Who are we and why do we matter?", that's where leadership starts. And for me that is what strategy is all about..."

As I have written before, building a solid fact base is critical in helping to devise a substantive strategy but as Cynthia points out "A leader builds a strategy through in-depth conversations with a group of his or her peers, testing the ideas against a variety of situations. Knowing how to do that well will serve the graduates better as leaders than any particular plan they develop at Harvard Business School.

When someone next starts talking to you about the strategic direction of the company you work for, at, in or own, ask yourself whether the conversation is centred on The Corporate Five or The Strategic Five. If the conversation is focused more on The Corporate Five then remember Cynthia's words, "Having a compelling answer to "Who are we and why do we matter?", that's where leadership starts."

If you are in a leadership role, or aspire to be in one, the last thing you want is executives leaving your meetings asking "Do they even know what business we are in?"

If- by Rudyard Kipling

2013-02-24T09:02:00.000-08:00

Last month (18th Jan) was the anniversary of Rudyard Kipling's death. Who has not read or seen the Jungle Book?

I was reading Kipling's poem "If-" again, as it is an amazing piece of literature, and I thought I would share here in case you have not read it.

------------------------------------------------------

If-

If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too:
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated don’t give way to hating,
And yet don’t look too good, nor talk too wise;

If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim,
If you can meet with Triumph and Disaster
And treat those two impostors just the same:
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools;

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss:
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: ‘Hold on!’

If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much:
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a man, my son!

Rudyard Kipling written 1895

Catching The Right Wave

2013-01-30T07:00:00.000-08:00

A very (very very) long time ago I tried to learn to surf. The reality was I did not excel at it but I did learn that if you chose the wrong wave you could end up being ‘dumped’ in a painful way. On the other hand a decent wave could make for a highly pleasurable experience.

Recently two new CEO’s joined different surfwear companies and clearly chose different waves.

On the 9th May 2012, Billabong appointed Launa Inman as the new company CEO. Launa was previously the CEO of Target Australia where she did an impressive job delivering solid growth in a very competitive environment. However the market was not happy with the appointment. Shares fell on the announcement of Launa’s appointment with the market questioning the related skill set to the surfwear industry. Since the announcement Launa has had to deal with a difficult capital raising, massive write down and had no less than six takeover proposals from four different companies.

A quick paddle onto another wave, on the other side of the Atlantic, Quiksilver recently announced the appointment of Andy Mooney as the new CEO. WOW – the market loves Andy. Andy was formerly with Disney and Nike, which just like Launa, has a strong surf pedigree. O wait ….. according to the market that actually does not matter. In Andy’s first 4 weeks as CEO the company’s stock has risen almost 50%. However Andy had already picked the right wave as the market was pricing considerable growth for Quiksilver prior to Andy’s appointment.

Source: http://goo.gl/kSzcY and http://goo.gl/JOxwd

Nice wave Andy!

So why is it that two people with non-surf industry backgrounds can join similar companies and yet see dramatically different results? The reality is the companies themselves have been riding different waves.

The following is a very good summary of what went wrong at Billabong from the website SmartCompany:

“Inman says Billabong did not make a mistake going into retail; but it did make mistakes in the way it did so. The result? The company has already closed 58 stores, reducing store numbers to 634, and intends to close another 82 in the current financial year. Paying out leases on closed stores, selling off the inventory at reduced prices, then the reduction in sales from fewer outlets and the partial sale of Nixon all contributed to the significant and exceptional items. Then a big American customer, PacSun dropped Billabong and started making its own house brand.When sales fell, the company slashed its marketing budget. “In our quest to save profit, we cut our marketing budget, but that reduced our sales,” Inman told analysts and investors today, shouldering responsibility for a decision taken before her time. “Then, because of poor sales, we ended up with excess stock and had to mark it down.”
Source: http://www.smartcompany.com.au/retail/051449-surf-rescue-how-launa-inman-plans-to-save-billabong-2.html

Quiksilver, on the other hand, stuck to its core and the investment in World Champion Kelly Slater as the brand ambassador, helped drive the brand. Additionally the success of the DC Shoes brand as well as the recovery, albeit slow, of Roxy have all aided in the success of the overall Quiksilver company.

A quick view of some numbers shows the impact of the differences of the strategies. At the macro level, life for the two companies appears fairly similar.

Source: http://goo.gl/8RXIN and http://goo.gl/k5MlQ

However a little further down the P&L the sea becomes very rough for Billabong.

Source: http://goo.gl/8RXIN and http://goo.gl/k5MlQ

And finally a couple of stand-out lines in the Cash Flow statement

Source: http://goo.gl/8RXIN and http://goo.gl/k5MlQ

Put simply, Billabong is broken and Quiksilver is not. Launa paddled into the wrong wave and Andy the right one. Launa is going to have to paddle 10X harder than Andy. Sure Andy will have his pressure to improve Quiksilvers’s performance but he has caught a much MUCH better wave.

At some stage in our career we will all face a similar choice. It may not be to run a surfwear company but it will be about choosing the right role. The saying, “you have to be in the right place at the right time” is never truer than when making a decision regarding your next role appointment. Choose the right wave and the sky’s the limit. Choose the wrong wave and you can get dumped. Painfully.

Epic Steve Jobs Video On Brand Building

2012-12-16T08:00:00.000-08:00

I love this video.

It is short. It is simple. And it is relevant to anyone who is trying to build a business, whether it be as a self-employed consultant, manager of a business unit or CEO of a large company.

For those who think that the rebuilding of the Apple business / brand does not apply to them, watch how seamlessly Steve Jobs talks about other categories including Milk and Shoes in the context of branding.

Brilliant.

X Marks The (Differentiated) Spot

2012-12-09T08:00:00.000-08:00

It does not matter what industry you work in, there is always a company that is held up, and more often than not Benchmarked, as the best. In technology it is Apple, in retail it is Zara, in the 80's Toyota was the automotive doyen and in the airline industry South West Airlines seems to spring to the fore. These companies are defined by commentators as 'the best' with Business Schools and Consultants charging clients fortunes to try emulate the success.

In a recent article in the UK publication, Mark Ritson, examines Microsoft's strategy which appears to merely replicate Apple. Mr Ritson states, "There are three things wrong with competitor orientation. First, it’s impossible to differentiate because you are literally doing what your rival did before you. Second, you struggle to pull off your strategy because it was designed for a different organisation with different brand associations and very different core competencies. And third, there is no guarantee over the long haul that a brand like Apple has the right strategy either. Who knows if following it is actually the best move for the future?"

Such a statement should be of no surprise to followers of Harvard University Professor, Michael E.Porter, who is generally recognized as the father of the modern strategy field, and whose ideas are taught in most business schools around the world. Professor Porter is quoted as saying, "The granddaddy of all mistakes is competing to be the best, going down the same path as everybody else and thinking that somehow you can achieve better results."

In the article, 'Stop Competing To Be The Best', author Joan Magretta articulates Professor Porter's thinking by writing, "Everyone in the industry follows the same advice. Companies benchmark each other's practices and products. Customers, lacking meaningful choice, buy on price alone. Profitability deteriorates...... Nothing is more absurd — and yet more widespread — than the belief that somehow you can do exactly what everyone else is doing and yet end up with superior results."

With this in mind, think about your own position, whether you are a 'one-man-band' or part of a much larger organisation. Do you want to aim to be the best or do you want to be differentiated? One sees it time and time again, be it banks fighting each other based on interest rates, telco's fighting over handset prices or large accounting and legal practices winning business based on fees. Very little differentiation other than price! Trying to create value on price alone is an incredibly difficult strategy particularly if there is an established price leader - just ask all those failed businesses who have tried to compete against Aldi (German), Tesco (UK) or Walmart (US) on the basis of price. Yet it is differentiation that allows Target to co-exist with Walmart.

So what makes you or the business you work in unique? What is that point of differentiation that allows you to create value? Are you following the same path as your competitors, hoping it will lead to a better place, or have you clearly marked your differentiated X on the business landscape? Joan Magretta sums it up best when she writes, "Porter urges a different kind of competition: compete to be unique. Focus on innovating to create superior value for your chosen customers, not on imitating and matching rivals. Give customers real choice and price becomes only one competitive variable."

So how many competitive variables do you have?

TED: Top 20 Most Watched

2012-11-18T08:00:00.000-08:00

Regular readers will know I am a big fan of TED.

A couple of weeks ago ( 8th Nov) TED updated the list of the 20 most watched talks. The list is based on tracking of various site including "TED.com, YouTube, iTunes, embed and download, Hulu and more".

Sir Ken Robinson says schools kill creativity (2006): 14,850,200 views
Jill Bolte Taylor‘s stroke of insight (2008): 11,225,783
Pranav Mistry on the thrilling potential of SixthSense (2009): 9,897,347
David Gallo‘s underwater astonishments (2007): 8,204,051
Pattie Maes and Pranav Mistry demo SixthSense (2009): 7,747,690
Tony Robbins asks Why we do what we do (2006): 7,564,235
Simon Sinek on how great leaders inspire action (2010): 7,539,516
Brene Brown talks about the power of vulnerability (2010): 5,861,510
Steve Jobs on how to live before you die (2005): 5,444,022
Daniel Pink on the surprising science of motivation (2009): 5,534,123
Hans Rosling shows the best stats you’ve ever seen (2006): 5,249,928
Elizabeth Gilbert on nurturing your creative genius (2009): 5,020,869
Arthur Benjamin does mathemagic (2005): 4,951,918
Mary Roach on 10 things you didn’t know about orgasm (2009): 4,793,334
Dan Gilbert asks: Why are we happy? (2004): 4,759,217
Keith Barry does brain magic (2004): 4,475,303
Stephen Hawking asks big questions about the universe (2008): 4,470,236
Johnny Lee shows Wii Remote hacks for educators (2008): 3,997,174
Jeff Han demos his breakthrough multi-touchscreen (2006): 3,982,775
Barry Schwartz explores the paradox of choice (2005): 3,836,350

It really is a staggering array of topics although I wonder if there is some relationship between no.'s 14 and 15 :)

Source:

Oxygen: How Is Your Corporate Culture Breathing? (Part 3 - Final)

2012-10-31T13:06:00.000-07:00

This is the third and final post in the series "Oxygen: How Is Your Corporate Culture Breathing?". Please see the previous posts for Part 1 and Part 2.

This final chapter looks at the primary drivers of a toxic culture.

Did you know Enron had core values that were known throughout the company as RICE? These core values were summarized as (Seeger, 2003, p. 65):

Respect: We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don’t belong here.
Integrity: We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we won’t do it.
Communication: We have an obligation to communicate. Here, we take the time to talk with one another ... and to listen. We believe that information is meant to move and that information moves people.
Excellence: We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be.

To me, these are at the opposite end of a toxic culture spectrum. So what went wrong at Enron and continues in the toxic environments of so many organisations today? Answer - a toxic triangle. A vicious combination of Leadership (Destructive), Groupthink (followers) and the Business (Conducive) Environment.

In the book 'The Allure of Toxic Leaders: Why We Follow Destructive Bosses and Corrupt Politicians-and How We Can Survive Them' the author, Jean Lipman-Blumen, concludes that toxic leaders' followers are willing victims who allowed misguided bosses to appeal to their deepest needs, anxieties and fears i.e. the need for an ongoing wage. The author also explores how "followers inadvertently keep themselves in line by a set of insidious control myths that they internalize. For example, the belief that the leader must necessarily be in a position to "know more" than the followers often stills the followers objections."

Appealing to one's "deepest needs" is something we all live with. Who wants to lose their job in a tough economic climate? To see this articulated brilliantly I urge you to read the comments section of an article that appeared in Army Times, 'Army wants to rid top ranks of toxic leaders'. For example a reader commented, "Sad thing, nothing will happen. I know of many toxic leaders that got great OERs and are not only promoted, but are placed in command. Reality is, when you have a senior leader who is toxic, no one will step up because they know it will end thier (sic) career."

If Destructive Leaders are a key driver of a toxic culture is it possible for followers not to contribute or play a supporting role is such an environment? From a theoretical point of view, suggestions include, "At the follower level, organizations should ensure safe outlets exist for ‘outing’ leaders who engage in destructive behaviors and rhetoric. A second strategy might include establishing an ethics ombudsperson who, in addition to investigating organizational corruption, could also investigate allegations of leader toxicity." (Source: Leader toxicity: An empirical investigation of toxic behavior and rhetoric: Kathie L. Pelletier).

Similarly Lipman-Blumen suggests:

Five strategies can help followers move away from a toxic leader and do better in the
future:

"Matriculating in the school of anxiety" – Confront the fear and worry of challenging a toxic leader. Exercising courage will make you stronger.
"Seeking the leader within and strengthening democratic institutions" – Become independent. Use democracy to foster good leaders and vote out bad ones.
"Demanding leaders who disillusion us" – Toxic leaders spread false comfort through their visions. Instead, embrace reality and live up to the demands of authenticity.
"Kicking the vision habit and the we/they dichotomy" – Be willing to strive without being reassured that you are extra special and that a happy ending is in sight.
"Drafting the next generation of leaders" – See leadership as a duty, not a privilege.

The best way to repel toxic leaders is to recruit nontoxic leaders. Urge more humble, fair-minded potential leaders to step forward and “accept the valuable inconvenience of leadership.” (Source).

However practice and theory, like Execution and Strategy, often do not go hand in hand. The reality is that the most common means for followers to break the shackles of the toxic environment is to, as the article in CIO Magazine eloquently states,"... decide whether to stay or leave." Which sees me coming full circle to Part 1 in this series. Businesses with ethical cultures generate better returns for shareholders, whilst toxic environments have an adverse impact on the bottom line. Fact, not theory!

Oxygen: How Is Your Corporate Culture Breathing? (Part 2)

2012-10-07T08:00:00.000-07:00

A couple of weeks ago I wrote ‘Oxygen: How Is Your Corporate Culture Breathing (Part 1)’, which focused on quantitative research about the effects a toxic corporate culture can have on employee output and an organisation's performance as a whole.

This week’s follow-up article looks at the signs of a toxic corporate culture and how it affects employees personally.

So just what constitutes a toxic corporate culture?

An academic paper published by International Journal of Leadership Studies, titled from “Toxic versus cooperative behaviors at work: The role of organisational culture and leadership in creating community-centered organisations” (Gilbert, Carr-Ruffino, Ivancevich, Konopaske) provides an excellent summation of defining a toxic workplace: “A workplace may be toxic if:

mediocre performance is rewarded over merit-based output (Colligan & Higgins, 2006; Doyle & Kleiner, 1993)
employees avoid disagreements with managers for fear of reprisal (Jones, 1996);
personal agendas take precedence over the long-term well-being of the company (Atkinson & Butcher, 2003);
leaders are constantly on edge and lose their tempers often (“Middle,” 2003);
new leaders do not stay long and employee turnover is common; and,
employees are treated more like financial liabilities than like assets (Macklem, 2005), and
bosses routinely throw temper tantrums, make unreasonable demands, scream, and use obscenities (Anonymous, 2008).”

One word springs to mind when I read a list like this - Values. It is clear that when assessing those companies whose culture is defined as toxic, the values of the organisation are either corrupt, non-existent or exist in the world of PowerPoint templates only. In other words values misalignment equals toxicity. In such environments many people choose to leave the organisation. An early 2012 survey by Corporate Crossovers of more than 300 female entrepreneurs found almost a quarter (23%) cited that culture and values misalignment was the main reason they have left their corporate jobs. The results, as demonstrated in the previous post (Part 1) can materially impact the bottom line.

But what about those employees who stay? In a tough labour market, job choice is often limited and hence employees may be unable to resign without the security of a confirmed new job. Employees who continue to work under the stress of a toxic environment risk effecting their health. In a paper titled 'Workplace Stress: 'Etiology and Consequences' (Colligan and Higgins), the authors noting Katherine Macklem's work (point 5 above) state,

"Toxic workplaces are characterized by “relentless demands, extreme pressure, and brutal ruthlessness” (Macklem, 2005). Moreover, employees within a toxic work environment operate consistently in fear, paranoia, and increased anxiety states. Appraisals of threat or harm that arise from both high work demands and over-controlling/harassing environments have been found to be most often stress producing (Karasek & Theorell, 1990; Mausner-Dorsch & Eaton,2000). Employees experiencing chronic work stress have been shown to develop unstable blood pressure, increased cholesterol levels, muscle tension, diabetes, hypertension, ulcers, headaches, substance abuse, and clinical depression. Moreover, their capacity to concentrate and retain information becomes a problem. The employee also may experience significant anxiety, anger, and irritability (Israel et al., 1989), which may affect his or her capacity to maintain interpersonal relationships outside of the organization. Workplace stress has been shown to lower productivity, increase absenteeism, and create pervasive patterns of dysfunction in the workplace (Anderson & Puluch, 2001; Levin-Epstein, 2002). Stress has also led to changes in work habits, changes in personality (or social behavior), and job burnout. It is estimated that disorders related to stress annually claim nearly 10 percent of the earnings from businesses (Dyck, 2001)."

Often we talk and read about corporate culture as though it is merely academic theory in some business school's text book. However corporate culture is very real and a toxic corporate culture very dangerous. As the research shows a toxic work environment not only effects the health of an organisation, as measured by the bottom line, but also the physical health of employees. The evidence clearly demonstrates that it is in everyone's best interest, be they directors, managers or employees, to ensure that a toxic culture is not allowed to develop. So if you think your company's culture is sickly, chances are you may end up seeing a doctor... literally!

-----------------------------

Part 3 (Final) will focus on the primary causes of a toxic corporate culture.

Oxygen: How Is Your Corporate Culture Breathing? (Part 1)

2012-09-16T08:02:00.000-07:00

How often do you think about oxygen? Me, hardly ever. Why? Well in part because I am healthy but I think another big part is because I cannot see, feel or taste oxygen. But I do know that I need it to live. You can lose more than one limb and still survive but without oxygen it's all over. And what happens when the oxygen levels deteriorate and the air you breathe becomes more and more toxic to your body i.e. carbon dioxide retention. You don't need to be a genius to work out that is not going to end positively.

This is the same way I feel about corporate culture which is often referred to as the character of an organisation. What does your culture look like? Can you touch your corporate culture? Edgar Schein (1996) defined organizational culture as the “shaped norms, values and assumptions” of how organizations function (p. 229). Quite simply corporate culture is the oxygen of an organisation.

When there is the right amount of oxygen (corporate culture) the outcome is quantifiably positive. Research by CBE found "there is a strong correlation between business performance and a strong ethical culture: stronger ethical cultures were found to deliver higher shareholder returns over a 10-year analysis period." However when the oxygen levels decrease a harmful environment is created. Likewise a corporate culture can be toxic. Think I am being melodramatic. The facts suggest not.

By interviewing "several thousand managers and employees from a diverse range of U.S. companies" authors Christine Porath (Assistant Professor at USC’s Marshall School of Business) and Christine Pearson (Professor at the Thunderbird School of Global Management) summarised the responses as follows:

%	Comments
48%	Decreased their work effort
47%	Decreased their time at work
38%	Decreased their work quality
66%	Said their performance declined
80%	Lost work time worrying about the incident
63%	Lost time avoiding the offender
78%	Said their commitment to the organization declined

Sources: The Cost of Bad Behavior: How Incivility Is Damaging Your Business and What to Do About It and How Toxic Colleagues Corrode Performance

I find these numbers staggering. Whether you are in a large organisation or a small business, having nearly 1 in every 2 employees decrease their effort or time at work, will have an effect on the bottom line. The authors detail the efforts of Cisco Systems to analyze the cost of incivility in their company. Cisco found that "the organization wide costs for potential time lost by targets who worried about additional uncivil incidents and future interactions with offenders totalled nearly $2 million per year. With estimates for the costs of weakened commitment (also calculated as lost productivity value) and job changes (calculated on the basis of cost per hire) added in, the total topped $8 million." For a company that does around $6Billion in net income annually, $8mil is a small number. However make $8mil cumulative over 5 years and you have a $40mil cost (obviously no NPV has been applied). It all adds up very quickly.

On a significantly larger scale you can look at the effect the toxic corporate cultures have had on the collapse of Enron, Tyco, WorldCom and HealthSouth. Multi-billion dollar companies ruined along with many employee reputations. Author David R. Lease (Norwich University) noted, "The executives at Enron, WorldCom, and HealthSouth independently built their toxic organizational cultures, while the greed-crazed executives at Tyco were facilitated by an established board and management structure. Nevertheless, the results were the same: toxic leaders created organizational cultures that, up until the end, effectively masked their personal and the organizations’ unethical behavior, ultimately destroying the viability and reputation of their organizations and the public image of their employees (if only by association)."

In part because it is impossible to wrap your arms around corporate culture or look at it on a spreadsheet, conversations around the concept of corporate culture are often emotive yet vague in their ability to convey a bottom line benefit. Perhaps this is a reason so few financial analysts seem to focus on corporate culture although Stephen Sadove, chairman and chief executive of Saks articulated it brilliantly when he said in a New York Times piece, "When I talk to Wall Street, people really want to know your results, what are your strategies, what are the issues, what it is that you’re doing to drive your business. They’re focused on the bottom line. Never do you get people asking about the culture, about leadership, about the people in the organization. Yet, it’s the reverse, because it’s the people, the leadership, the culture and the ideas that are ultimately driving the numbers and the results."

In summary the right oxygen levels equals a healthy body, the wrong amount can lead to oxygen toxicity which ultimately can lead to a religious experience. Just ask former Enron COO, President and CEO Jeffrey Skilling who was quoted in the immediate aftermath of Enron’s bankruptcy filing as saying, “We were doing something special. Magical. It wasn’t a job – it was a mission. We were changing the world. We were doing God’s work.”

----------------------------------------------------------------------------------------------------

Part 2 will focus on identifying what defines a toxic corporate culture and its broader effects

Free. The World's Greatest Cloud Based Solution

2012-08-05T08:00:00.000-07:00

OK, two obvious issues:
1-This is not a typical article that I would write. It is more simply me using my blog as a tool trying to source a solution I have not been able to find (after considerable searching).
2 - The title is misleading but hopefully catchy and therefore gets more reads which in turn should lead to a quicker result. It should read; "I have an idea for a cloud solution that is yours free to develop".

I have had this idea for a while and I have not found a solution. I know I am not the only one as the is a question on Quora about the issue. So without further ado here is my idea:

Photos Online
(Think Picassa + Windows + Cloud)

The Concept:
In simple terms think Picassa sitting over your Windows file structure all in the cloud. The idea is for users to be able to keep all their photos and video on a cloud solution. The photos and videos should be able to be categorised and tagged. Users need to be able to have easy access to all their photos, hence batch upload and downloads are required. Finally if a user chooses to upload all their photos to the cloud service the fie structure (file categorisation) should remain intact and likewise remain so for the download. Here is an example of my file structure - image

Does anything like this exist at the moment?
No. At present you can store your photos on Picassa, Flickr, Windows Live Photo Gallery in a cloud service. Or you can add photos to Facebook, Instragram, Google + etc. However you cannot batch upload AND download all your photos. Cloud services like Dropbox offer the ability to batch upload and download but they do not have the ability to categorise and tag images etc. Also, and this is critical to the concept, you cannot download and upload an entire file structure. For example if you have saved all your photos in separate identifiable folders you may want to download the file structure with contents to make an external back-up.

Why is the file structure so important?
Like many people out there I have hundreds of photos saved on a hard drive in various files and folders. A number of these photos are from old scanned negatives or scanned photos i.e. old family albums. As these photos are from scans they are not embedded with the date of the photo etc. As such the way I have categorised my photos is important and meaningful to me. The last thing I would want is to upload all my photos to a cloud based provider and at some later stage discover when I downloaded them they were no longer categorised as originally set out.

There are a number examples provides in the Quora question but none provide the total solution. www.thislife.com seems to be the closest.

Key Requirements:
1. The ability to batch upload and download photos and video in their file / folder structure to a cloud service
2. Secure sign-on with strong privacy rules
3. Ability to organise and categorise photos and video i.e.
a. Tags
b. Hierarchy
c. Dates etc
4. The ability to share specific photos / folders with external users
5. Potential ability to customise key parts of a user’s area. i.e. A professional photographer may want to create a branded page and give access to clients to review photos.

The reason that I am putting this idea up on the web is;
1 - there may already be a solution. PLEASE do not email me with a half baked solutions. If it does not tick all the boxes above then, as I suspect, the solution does not yet exist.
2 - I use open source programs and I am always blown away by the generosity of those who put the time and effort into creating software to give it away. As such I would love this to be developed in an open source environment.
3 - If someone does decide to build the solution for commercial purposes. it would be great, if like Drop Box, Sky Drive etc that an intial amount of Gb of storage were available for free.

So that is it. If it exists let me know please. If it does not exist, for good reason, please let me other readers know why by using the comments section below.

If it does not exist and you decide to build it, I wish you the all the best. By me a beer when your solution has made you your fortune :)

Outsourcing To Crowdsourcing

2012-07-24T09:00:00.000-07:00

Outsourcing is defined as the process of contracting an existing business process which an organization previously performed internally to an independent organization, where the process is purchased as a service (link).

The word 'Outsourcing' is highly emotive in the pubic domain. Loved by consultants as a means to cut costs, it is loathed by those whose industries and livelihoods have been "off-shored". More recently the term Crowdsourcing has entered the mainstream vernacular even though early Crowdsourcing articles appeared some six year ago (2006)

Interestingly the term Crowdsourcing does not appear to attract the negativity of Outsourcing even though the definition is almost identical. Crowdsourcing is a process that involves outsourcing tasks to a distributed group of people.

The difference between crowdsourcing and typical outsourcing is that a task or problem is outsourced to an undefined public rather than a specific entity, i.e. an external organisation (link).

Like Outsourcing, Crowdsourcing can generate significant cost savings. However a key benefit of Crowdsourcing over Outsourcing is scale. Using a hypothetical example, lets assume I wanted a new Logo or Website designed for my business. Due to various reasons the Marketing department has seen a reduction in employee numbers as a decision was made to outsource various previously helped in-house roles i.e. a Designer. Under the Outsourcing model, the decision would lead to preferred supplier arrangements established with Design agencies who would produce the work on an as needs basis. However using the Crowdsourcing model the business could turn to a site such as 99 Designs. Rather than a couple of preferred suppliers you have, potentially 10, 20, 30 designers bidding for the work. Rather than a handful of options the business will be faced with potentially hundreds of designs to choose from. And finally, rather than paying a design firm thousands in fees the business may incur a total cost in the low hundreds.

Just as Outsourcing is not limited to Manufacturing, Crowdsourcing is not limited to design. Crowdsourcing website examples including:

Sector	Company Name (link to website)	Description
Domain Names	PickyDomains	Let the crowd help you choose a great url for your business.
Contracting (multiple services)	oDesk	Post your job / project description to thousands of potential hires.
Funding	Kickstarter	Have an idea that needs funding, then let the crowd at Kickstarter help you.
Funding	Start.ac	Similar to Kickstarter.
Product Development	Genius Crowds	“We serve as a platform for everyday people who have a product idea that they don't know how to bring to market. We help develop them into commercial ideas with big market potential and Genius Crowd creators share in the profits.”
Product design and development	Quircky	Allows amateur inventors to put their designs into production, releases new products at a breakneck speed.
Data	CrowdFlower	"Instantly hire millions of people to collect, filter, and enhance your data"
Content creation and data enhancement (charity)	Samasource	Large tech companies outsource small piecework that Samasource calls ‘microwork’ to people across the developed world.
Video Production	poptent	Crowdsourced video production
Contracting (multiple services)	Amazon Mechanical Turk	"The Mechanical Turk service gives businesses access to a diverse, on-demand, scalable workforce and gives Workers a selection of thousands of tasks to complete whenever it's convenient."
Food	Real Time Farms	The U.S. specific site seeks to document the entire food system. The aim is to provide a reference tool that will tell you where the food on your dinner table comes from.
Software and usability testing	uTest	The world's largest marketplace for software testing services

And do not just think Crowdsourcing is the domain of small businesses, contractors and entrepreneurs. Have a look at the Crowdsourcing effort www.kfcollaborationkitchen.com by Kraft Foods, a company that generates over US$50Bil in revenue (source).

Crowdsourcing is not going to replace all Outsourcing. For example in large scale manufacturing where the Outsource provider is required to make long-term capital intensive commitments with a requirement for ongoing / continuous production.

However there is no disputing the fact that Crowdsourcing is changing the face, or a significant part thereof, of Outsourcing. Small businesses have access to design capabilities of large corporations. New products can be development and sold with unprecedented time savings. Software entrepreneurs can have their code tested by an army of testers. When you think about it the opportunities that Crowdsourcing offers are amazing. Imagine a world where you could Crowdsource your business plan, marketing plan, logo and brand identification, new product concepts, product development,online sales platform etc. Whether you are a small business, mid-sized division fighting for attention in a large corporate or a sole entrepreneur the opportunities become equally available.

Like Outsourcing, Crowdsourcing provides the flexibility to save significant amounts of time and money. However unlike Outsourcing, Crowdsourcing can offer significantly more options when supplied by potentially thousands of service providers. Whilst detractors may point to the quality over quantity argument I prefer to turn to the French writer, Jules Renard who said, "Talent is a matter of quantity. Talent does not write one page, it writes three hundred."

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Additional info:

A) Feel free to add other Crowdsourcing websites in the comments section

B) Other links you may find interesting:
http://www.crowdsourcing.org/
http://www.topcoder.com/blog/2011/09/6-important-ways-crowdsourcing-is-different-than-outsourcing/
http://business.tonyrobbins.com/220/the-evolution-of-outsourcing%E2%80%A6-crowdsourcing/
http://www.smh.com.au/small-business/managing/blogs/enterprise/need-some-help-the-world-is-waiting-20110602-1fh0j.html

Jargon: "Never use a long word where a short one will do."

2012-07-16T08:00:00.000-07:00

Recently I circled back with some peers. We were trying to add some colour to deck the EIC had conceptualized. The intent was for a transformative break through but the numbers did not gel and the ultimately our collective was able to provide little value-add without throwing the EIC off course.

Translation: Who knows but this is the sort of nonsense I, and am certain you do to, come across often enough in the business world. Invariably it seems that when one word goes "out-of-fashion" it is replaced by two more in-vogue vocabulary busters.

Firstly, let me start off by saying that I have been guilty on many occasions of using jargon, in all its dubious forms. In part, I believe it is because the use of this language has become a norm in the corporate sector hence it is accepted with little to no resistance.

Before I delve a little deeper into the murky world of jargon let's look at the definition of the word. Merriam-Webster dictionary defines jargon as:

1.a: confused unintelligible language
b: a strange, outlandish, or barbarous language or dialect
c: a hybrid language or dialect simplified in vocabulary and grammar and used for communication between peoples of different speech

2. the technical terminology or characteristic idiom of a special activity or group

3. obscure and often pretentious language marked by circumlocutions and long words

But why did this become a norm? How did "confused unintelligible language" become so pervasive in our daily lives? Tragically it seems there appears to be a belief in the business sector that the more jargon used the greater one's intellect and ability. Conversely the greater the use of plain speaking the lower ones intellect / ability is. This ridiculous correlation appears more akin to a game of Scrabble than one's competence.

The good news is that there are many of you who appear to feel the same way towards the use of jargon in our daily work lives. The chart (Chart 1) is based on a survey from the Harvard Business Review blog titled "I Don't Understand What Anyone Is Saying Anymore". Over 9,000 votes later and "Thinking outside the box" takes first prize for meaningless expressions followed closely by one of my favourites "Synergy". The survey is fairly limited in its choices and excludes such examples (to name a few) as:

right-sizing
redeployment,
mission-critical
goal-oriented
best-practices
paradigm shifts
customer-centric
low-hanging fruit
value-add
keep me in the loop
optimize

Even with its limitations the survey does provide an insight into what expressions irk the most from a sizeable data set.

So how does one combat the barrage of meaningless expressions? Approximately 65 years ago George Orwell felt strongly enough about a similar topic that he penned the essay Politics And The English Language. In the Essay George wrote, "But one can often be in doubt about the effect of a word or a phrase, and one needs rules that one can rely on when instinct fails. I think the following rules will cover most cases:

Never use a metaphor, simile or other figure of speech which you are used to seeing in print.
Never use a long word where a short one will do.
If it is possible to cut a word out, always cut it out.
Never use the passive where you can use the active.
Never use a foreign phrase, a scientific word or a jargon word if you can think of an everyday English equivalent.
Break any of these rules sooner than say anything outright barbarous.

These rules sound elementary, and so they are, but they demand a deep change of attitude in anyone who has grown used to writing in the style now fashionable.

So the next time you are about to string a sentence together that comprises an "optimize" here and a "goal-orientated" there, stop yourself. Whilst the gentleman who wrote Animal Farm may have been expressing his views about writing and politics, his words are equally relevant in the today's business world. After all it is difficult to argue with, "Never use a long word where a short one will do". Now that is value-add :)

KISS: What Does Your Brand Stand For?

2012-06-17T06:16:00.000-07:00

For the purposes of this article, feel free to interchange the words Brand and Business where you see fit.

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The word 'brand' is derived from the Old Norse brandr meaning "to burn." It refers to the practice of producers burning their mark (or brand) onto their products (often animals) to signify ownership. I am sure most of you have witnessed how farmers brand their cattle, often featured on various shows / movies. The process appears painful but relatively simple. Additionally the 'mark' also appears relatively simple. After all what is the farmer going to do (or the old Viking for that matter)? Use calligraphy! The reality is the mark needs to be clearly visible and easily identifiable, as the animals are constantly moving and disputes over animal ownership should not require the expertise of an art interpreter.

Fast forward to today and the world of corporate branding has become a complex array of terminological, seemingly all designed for various consultants to impress their clients. Terminology that includes, but is certainly not limited to, Brand Pyramids, Brand Values, Brand Platform, Brand Promise, Brand Wheel etc etc etc all used to define and articulate the brand. The same goes for the current rage, Personal Branding. As you will see a simple Google search on Personal Branding will offer countless hours of reading on the subject. As an aside, the term Personal Branding appears to be have been first used and discussed in an article titled 'The Brand Called You' in 1997 by Tom Peters.

When did 'what you stand for' become so complex? Albert Einstein said: “If you can’t explain it simply, you don’t understand it well enough". Why is it we have allowed this level of complexity to enter the business vocabulary when it is the simple definitions that are so often the strongest? It is apparent the KISS acronym (Keep It Simple Stupid) has long been disregarded in the world of brand articulation. Do not get me wrong, the management of brands and businesses does require expertise and science. For example, without a distinct market position (Positioning) and well articulated brand attributes, the ability to clearly stand out in a competitive environment is highly improbable.

I agree with Mr Einstein. I believe that so many brands are similar and vanilla that they meld in to one, or put another way, commoditised. Perhaps this is the reason for the level of complexity as business owners and brand consultants try create imaginary positions in the market place. Unfortunately for these groups there is only one voice that matters. The customer. You can have the most brilliant looking slide deck defining the brand but if the customer does not get it then you have lost the battle. To paraphrase the Einstein quote, "If you can’t explain it simply, your customers won't understand it."

Take a step back (figuratively) and ask yourself, "Can I define my brand in a handful of words". Then go ask the same question to another handful of employees / peers. Do the words line up? Can everyone explain, with simplicity, what the brand stands for? If the answer is yes then congratulations, you are better for it. However if the answer is no then I strongly urge you to implement a program that defines your brand clarity / articulation. Remember if you cannot do it, how do you expect your customers, potential employers, contacts etc to do it? And they won't. In today's environment where there is a substitute brand, product or business just waiting to gain the upper hand, no one is intent on hanging around waiting for you to try explain yourself or what your brand stands for. If Vikings burnt their mark to signify ownership, or 'brandr' as the old Norse would have called it, then how to you define what your brand stands for, to signify like you, as Albert Einstein said "understand it well enough". I suggest you start with a KISS.

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A couple of brand articles you may enjoy.

http://www.businessinsider.com/10-ways-to-build-your-personal-brand-2010-4
http://thebrandbuilder.wordpress.com/2012/01/03/r-i-p-personal-branding/
http://www.iuriel.com/brand-management/the-origin-of-branding/

You Are Not Special!

2012-06-14T07:00:00.000-07:00

"Contrary to what your U9 soccer trophy suggests, your glowing seventh grade report card, despite every assurance of a certain corpulent dinosaur, that nice Mister Rogers and your batty Aunt Sylvia, no matter how often your maternal caped crusader has swooped in to save you, you’re nothing special" David McCullough Jr, 2012

David McCullough Jr. is an English teacher at Wellesley High School in Boston, USA. His speech has gone viral and for good reason, it is brilliant! David has been in the media lately 'defending' the speech but in reality there has been massive overwhelming support / reaction to his considered words.

Here is the video for you to enjoy.

“Climb the mountain not to plant your flag, but to embrace the challenge, enjoy the air and behold the view. Climb the mountain so you can see the world, not so the world can see you.”

The Other 3 R's: Recognition, Remuneration and Retention

2012-06-10T07:00:00.000-07:00

A former colleague of mine was telling me about the new company she had just joined. She was baffled by the fact that employees would get their full bonus even if they only hit 95% of their revenue targets. Additionally, she could not reconcile how employees would receive considerable monetary recognition for non achievement. In her mind the bonus paid was recognition by the company for an employee achieving a set of metrics and not simply a form of salary paid for coming to work and not meeting budget.

To be blunt I was not any help in the conversation, as I did not have the facts. Was the 95% a set metric? Did 95% represent above industry average year on year growth? Without these facts it was difficult to provide meaningful input however the conversation did prompt me to think about how employees are recognised in the work place environment. In turn this also prompted me to consider the relationship between Recognition and Retention.

Research shows that Praise and Recognition are crucial for increasing employee productivity and engagement. An often cited study is the 2003 Gallup Employee engagement, satisfaction, and business-unit-level outcomes: a meta-analysis by Harter, J.K., Schmidt, F.L., & Killham, E.A. The study found that individuals who receive regular recognition and praise:

Increase their individual productivity
Increase engagement among their colleagues
Are more likely to stay with their organization
Receive higher loyalty and satisfaction scores from customers
Have better safety records and fewer accidents on the job
Lower negative effects such as absenteeism and stress.

It should be noted that the research included "more than 10,000 business units and more than 30 industries".

But what about money? Isn't a salary a key driver of retention? Well according to a number of surveys over various time periods the answer is no.

In 2000 executive search firm BridgeGate LLC conducted a study of 660 American workers. The study included looking at what would persuade the workers to stay with their current employer. BridgeGate found that although a raise was the most common response (43.2%), non-monetary issues were cited by more workers as motivators (50.5%). The non-monetary motivators included:

improved benefits programs (23.1%)
flexible work schedules (14.1%)
stock options (8.6%)
better training (4.7%)

A 2009 study by Robert Half International asked the executives, “Which of the following is most likely to cause good employees to quit their jobs?”

35% replied unhappiness with management
33% replied limited opportunities for advancement
13% replied lack of recognition
13% replied inadequate salary and beneﬁts
1% replied bored with their job
5% replied other/don’t know

Finally, a study of 1,000 executives by The Adele Lynn Leadership Group found that 51% of employees interviewed said that they would work for slightly less money if other conditions were present. The top four reasons cited for leaving an organization included:

organizational practices that weaken morale
poor fit between skills and culture
no concern for growth and development
inadequate training.

Whilst the findings of the various studies are noteworthy, I find it difficult to reconcile how salary seems lower on the importance scale for so many people, when I know that through the hundreds of interviews I have done with various job applicants two key reasons for not taking the job have been:

"The job is not paying enough."
"I received a counter offer from my current employer and have decided to stay."

The answer lies somewhere in between and is well articulated in the book The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want by David Sirota, Louis A. Mischkind, and Michael Irwin Meltzer (2005) who suggest through their "Three Factor Theory of Human Motivation in the Workplace" that there are three basic goals of people at work, namely

Equity: (To be treated fairly). In an article for Knowledge @ Wharton, Sirota states " Employees want to know they are getting fair pay, which is normally defined as competitive pay. They want benefits and job security. These days, employees especially need medical benefits, so those have become significant. On the non-financial side, employees want to be treated respectfully, not as children or criminals. Equity is basic. Unless you satisfy those needs, not much else you do is going to help. If I feel underpaid and if I feel that the company is nickeling and diming me, or wants to pay as little as possible, there is not much else an organization can do to boost my morale. This runs contrary to what a lot of people in my field say -- that pay is not that relevant. Baloney. It's terribly, terribly important."
Achievement: Employees need to take pride in their accomplishments by doing things that matter and doing them well. They need to receive recognition for their accomplishments and take pride in the organization's accomplishments. (Note: This is supported by the Gallop research above.)
Camaraderie: "The quality of social relationships in the workplace - its `social capital' - ... are critical for effective performance and, therefore, for a sense of achievement in one's work."

So back to my former colleague. Was she right to be upset? Who knows! Maybe the company had a poor incentivisation scheme, maybe it didn't. What I do know is that if you want to keep (Retain) great people, money is important in that it is crucial for an employee to feel as though they are paid fairly. However equally important are non-monetary factors such as Recognition that actually lead to monetary improvement for organisations. Like so many aspects of the corporate world this is a balancing act. However, as the data suggests if an organisation gets the balance wrong employees won't hang around to see if the company will right itself.

Help Wanted.

2012-05-30T07:30:00.000-07:00

It is hard asking for help. Not basic or simple help i.e. can you help me with my luggage but deep and real help i.e. I don't know how to fix this broken business and I need your help.

There are number of reasons, often mixed together, that I have witnessed or indeed been guilty of myself, which hinder one's ability to seek assistance. These include (in no particular order):

Fear
Pride
Stubbornness
Arrogance
Weakness
Shame

Fear: The most common fear I come across is the fear of getting fired. It is as simple as that. People are afraid to ask for help in case it gets them fired. Remember what I am talking about here is not simply an employee asking for some basic help, but an employee, manager, CEO asking for help because they are at a loss as to how to resolve a key business issue. For example, if a Head of Sales hits a brick wall and went to his / her General Manager and said, 'I need you assistance. I don't think I am going to be able to hit the number without your help", there is a common belief, rightly or wrongly, that the Head of Sales will soon be looking for a new job.

Pride: Most often coupled with Arrogance, Pride seems to be substituted for intelligent decision making, by those whose opinions of themselves are traditionally front and centre of all others. Pride is not only the domain of arrogant CEO's or established business owners, but can be witnessed existing in countless business schools where the word hubris is confused with a type of flora by the newly minted alumni. Trust me on this one, I have an MBA :)

Stubbornness: I remember a particular incident with a very wealthy business owner who was interested in fixing his business. It was a great start but when it came to actually applying the medicine, he dug his heals in for no other reason than we were tampering with a particular part of his business that was his passion. Even applying a fact based approach did not help. Fixing the part of the business where his head went before his heart was no issue. But fixing the part of the business which was lead by his heart was a no go zone.

Arrogance: "Smartest guys in the room", does not just apply to Enron (see Link). I have witnessed on a number occasions business owners or super smart financiers (sorry intelligence as measured by IQ), usually men,. say "Thanks but no thanks, we have it sorted.", "If it gets much worse we will call you but we think we have it covered" and my all time favourite, "We don't need F&#@ing help, we need sales." only for the primary creditors to call their preferred administrators a couple of months later to try claw as much of their money back as possible.

Weakness: This may relate to the topic of Fear in so much that the Manager, CEO, etc believes that by showing such weakness, their livelihood may be at stake.

Shame: I have spoken with a number of managers who talk of being "embarrassed" when consultants have been bought in (sometimes forced in buy external parties i.e. owners, creditors etc) to try improve the given business. This is particularly prevalent where business owners who have worked hard to build their business are often embarrassed by the given business predicament. In many such instances, to quote William Blake, “Shame is pride's cloak.”

So how do you fix it? A simple word, but seemingly difficult to execute in the modern corporate world:

Humility

Humility: As someone (unknown) wiser than I once said, "Swallow your pride occasionally... It's non-fattening!"

Putting up the 'Help Wanted' sign is not easy. But decide how you want to make your mark. Is it as someone who instigated the fixing process or is it as someone who knew there was a problem but sat on their hands? 'Was proud with sore hands' would not exactly make a great epitaph.