dated business models

I’ve been waiting on a parcel to be delivered, eagerly tracking it as it moved around the world from Minesota, via Ohio, Kentucky and now New Zealand.  I can see now that the parcel delivery company (in this case NZ Post) has been to my house

Delivery not made, left a Card to Call, item at depot. Please call us on XXX

I’ve had this before.  The card will say something like ” we will make another attempt to deliver the package, and then you have to pick it up from our local depot”

I’m struck by how wildly ineffecient the process is and how the carrier (and i’m not pointing the finger at NZ Post – well not just them) are abdicating their responsiblity to me…. as invariably they will attempt to deliver the package during the hours of 9am and 5pm.

Their whole business model is based on the data premise that 50% of the population is sitting at home, just like the used to in the [insert decade].

Why instead don’t these companies do some analysis. Data driven probability stuff.

Here’s what i’d do.  Look at my neighbourhood, find out how many people are working age, those that are at home parents, elderly etc. Then take a punt that in all probability, the majority of houses will be unattended during normal working hours.  So why waste time on a delivery. Instead try during the hours of 7am to 8.30 or after 6pm (again the laws of probability state if you work you are lmore likely to be home druing these hours.  The drivers can choose but as they are contracted they can make more on a single delivery than multiple failed attempts.  This isn’t even very sophisticated…

Imagine if the delivery company went all out and asked me when someone would likely be home on average…and stored that in a secure (SECURE) manner.  People are driven by routine, so on average this would vastly reduce the number of failed delivery attempts, resulting in cost savings, less pollution and happier customers…

I’m sure there are other business models like this, i know the internet has changed things somewhat but just occassionally (and normally only on really important occassions) you have to go into places like ….banks that don’t open on the weekend, local government, … why don’t you open when i’m not working??

the First rule of strategy is have an appetitie to do it.

I like strategy, when I see it developed and executed it’s a thing of beauty.  I love the game play and like deciphering what the competition is doing – incidentally imho Simon Wardley’s work is as ground breaking as it is simple)

But what is apparent to me is that a lot of companies talk about strategy, but actually have no appetite for it.

let me explain.  Recently I’ve recently had the fortune to have some catch ups with some of my old strategy colleagues. They have all cycled out of the business and for various reasons are now back ..they’ve come back wiser and with energy and lots of opinions… and many of the discussions we have (strategy being collaborative and benefiting from the network effect) often have a flavour of “ this business should”…. I’m listening to them, and its good thinking, but i know that the chance of it actually happening are virtually zero.

I know this because the moment i hear the world “should”, i know it won’t happen.  Should is a word we use to beat ourselves up.  It’s a forever word, one day maybe we’ll get onto that, a word that disempowers you… “i should go to the gym”… “I should spend more time with the kids”… “we should do that”.. “i should cycle in today”.  Well I can tell you, the days I cycle in are the ones I choose too, even when its subzero outside or raining.  There’s no question, no choice, I just do it.

I bet runners like Ben Kepes don’t say ” i should run today, they just plan it and do it. Founders of companies don’t say ” i have a good idea, i should do something about it”. They just get going and working on the idea.

Delivering on a strategy is the same.  Unless the business is up for it, focussed on that (and not the next fire / deal or trinket) the chances of success are very limited.

Next big question is how to get the business up for it.

 

content, comments and the customer

I had a recent twitter conversation with Chris Keal, the technology editor from the NBR.co.nz

In essence, NBR put out a story about how Season 4 of the Game of thrones being released by HBO was being geo-restricted by being  distributed through even less channels. Whereas last year it was availble in iTunes Australia, this year it wouldn’t be until the local distributor had aired all the episodes.

This artical was originally available free.  Then Chris tweeted that the story had now been moved behind the paywall, ie NBR had restricted access to the content.

@ChrisKeall is that irony or what?

Apparently not according to Chris,

@paulq Nope. Anyone from anywhere can choose to subscribe to NBR Online. HBO is restricting GoT online access by geography

he seems to think that because the NBR is available to all,  there are no paralells here.  Lance Wiggs agreed –

I agree with Chris – it’s about access, not about cost.

I say they’re wrong, cost is just another barrier

So lets look at why i think its ironic

Irony is defined as meaning

dissimulation, feigned ignorance”[1]), in its broadest sense, is a rhetorical device, literary technique, or event characterized by an incongruity, or contrast, between what the expectations of a situation are and what is really the case, with a third element, that defines that what is really the case is ironic because of the situation that led to it.

 

  1. a story about content being less available gets moved from free to paywalled ie less available = incongruity
  2.  the situation that led to this incongruity – a story about content restrictions get restricted.

Sure looks like irony to me.

But more important to me, was the whole argument.  The use of semantics to defend the position of one arm of the media is really enlightening.  Its enlightening because we all do it – deliberately or through cognitive bias.

In this instance its ok to place restrictions on content because it ” is sharper than ad funded”   ( as an aside – what the hell does that mean?)

As a consumer of both content types, i can tell you with absolute surity, all i see is restrictions.  The semantics of the situation and the whys and wherefores and rationalisation don’t mean much anything to me.

Its a great lesson, i’ve caught myself doing just this sort of thing.  You get lost in the technology, old business model or the absolute belief that you’ve got it right or the product is prefect… and you loose sight of the most imporant thing…how the end customer views it.

what cycling to work taught me about business

I started biking to work recently. Its been an interesting process both mentally and phyisically.

The mental process i went through to do this gave me some tremendous insights into myself and my business dealings.

Lets start with with the why

I couldn’t find the time to get to the gym and be the father and husband i wanted to be. And because of that i was getting fat, and i choose not to be fat. I’m not against fat people, its just a personal choice….i’m not going into middle age without a fight.

The decision process

Much internal debate here, where do I start

  1. Is it safe / will I die doing this (there was huge press coverage at the time about cycling deaths
  2. Will I actually do this… was it another fad like my gym membership
  3. What bike … road, moutain, full suspension, cost, … woah how much????
  4. Time – do i really have time to do this??
  5. Logisitcs – where do i put the bike at work and at home, how do i shower etc…

Tentitive steps

  1. i bought the cheapest bike i could – after all i still didn’t know if it was for me
  2. i tried out the route during the holidays  – less cars and minimal embarrasment if i couldn’t make it up the hill
  3. I road 2x in the first week, Monday and Friday…. i was exhausted by both… but it felt like progress

The result

  1. I’m not pathological – i ride 3-4 times a week…
  2. I leave slightly earlier in the morning but offset shower time at home with shower time here
  3. I take the 2nd hardest route home i can find, its a mother of a hill (there is one worse), and i ruthless about it. That blow-out is my exercise and I have always loved exercising really intensely
  4. I appear to beating the fat…
  5. I fit all this into my normal hours
  6. I am off-setting parking and petrol against the cost of the bike.. When i’ve paid off the that bike i might consider an upgrade, but untill then its still hasn’t earnt its keep

The learnings (personally and in business)

  1. There is always a tonne of reasons not to do something, in fact there may even be extensive research saying you shouldn’t. And we can always rationalise away the opportunity… that is easy.  Saying yes is the hard part
  2. All the reasons you had to say no become trivial when you get going…. I look over the list above and am embarrased they almost stopped me doing this…
  3. Starting something new brings its own energy and momentum. You have to push it along but eventually it will pull you too…. I’ve said before that i believe business is about momentum
  4. It took a mental ‘flip’ for me to seize this opportunity. I needed to see that I could fit in this exercise into the same commuting slots i had available… When i look at my days, they always appear busy, but when you look beyond the item to the what there are quite a lot of slots for you to fit in new initiatives…be they exercise, business or family releated.  The next time you sit down for some mindless TV, flick the ipad to facebook or whatever card game… or in my case wander to the car to commute, have a think about what else you could do in that time… actually you need to be stronger than ‘think’… time is like cash, you allocate the budget differently and get different results
  5. Start…. sometimes you won’t be able to work out all the details / logistics untill you are underway and that is ok… i’m inherently a problem solver, so addressing and optimising gaps becomes part of the process…. learning like children do (experiement)
  6. I initially used a whole bunch of tracking and mapping apps… i needed them to show improvement and keep me motivated when i was still half pregnant on the idea…. now though… i hardly use them. It’s my new normal i guess, but i can see when i take on the mother of all hills, i’ll be back. I will want to know how my times improve for a bit.

i’ve been reflecting.

As we move into the craziness that is Christmas, i’ve been reflecting….

It seems to me that the current economic dogma we find ourselves in is one great ponzi scheme.

We appear to be in a cycle of belief in perpetual growth expectations.  Growth driven off  consumerism… you borrow more to buy more stuff so more people can stay employed and of course buy more…

The perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme.

Substitute higher returns for perpetual growth, what do you get…. one is wrong the other dogma

Isn’t this systemically flawed?  We live in a finite world that we are either depleting or damaging at an alarming pace..

There is ample evidence that consumerism makes us less happy… so why do we stick to it? Why not adopt a more sustaining and fulfilling dogma?

 

Choose: Plan and implement change or go with momentum

I’m increasingly convinced that for the vast majority of businesses, planning is a waste of resources – time, money and effort.

Very few companies actually have the ability to take the plan and force change, the type of change most business plans indicate. Instead they go through the motions

Without this, you might as well write a strategy which starts with general platitudes :-
“We’re going to be innovative, be efficient, be agile, focus on core, create a strong culture, create shareholder value, and establish ourselves in [XYZ]”
Where [XYZ] is fundamentally what everyone else is doing i.e. replace with whatever is popular amongst competitors at the time in hand and hence currently reported in the popular management press – HBR, Economist etc.
What these business actually do is driven by their momentum or business inertia.  They actively resist change, making the whole planning exercise nothing more than a compliance exercise.  You know what I mean, the type of excise where you hear the words
“here’s a one I did earlier”, or ” lets dust off the plan we wrote before”
If your business is like that, then save yourself the angst and don’t bother… focus your business on the momentum and stop burning through your human capital.  Sure, eventually you’ll go bust but hey. If you don’t implement the change needed, you will anyway.
Only 71 companies remain today from the original 1955 Fortune 500 list. Jim Collins, Built to last
But that’s not politically sustainable is it, its too fatalistic, you have to at least try right??
Well here’s the thing, true change requires big calls, rigid enforcement, investment and new stuff –  processes, people, methods and possibly, products…
In other words, hard stuff.
When I look at the great companies of today, they do the hard stuff. They kill off good ideas for great ones, they tell their shareholders where to go, they get into the predictable disruptions and live with canabalisation, they embrace new business models rather than protect the old, they change their business.
As an aside, we all know CEO pay has risen drastically, but they aren’t delivering the results. Interesting in the sharing economy that people aren’t tracking more correlation there.  I would also suggest that as shareholders, if you are holding for a long time and you keep hearing the same story at the AGM, maybe you should look at the leadership, because they aren’t implementing the change..they are dusting off the same plan and not delivering it…going with momentum rather than doing the hard stuff.

Did Ballmer consign Microsoft to oblivion

Its my belief that  CEO’s job is to run a company that will continue for the future.  They do that by putting a strategy in place that will enable the continued viability of the organisation….

I don’t buy into all of the capitalist market mantra out there.

  • I do not agree that growth will continue for ever,
  • I don’t agree with short term market demands like quarter by quarter reporting,
  • I do not agree that a CEO’s job is to only do a great job for shareholders.

The reason for this, is that it drives too many short term decisions.   The drivers are all wrong, given the trade off between moving to new markets or defending, defense always wins out.

Therefore when i look at Ballmers performance at Microsoft over the last 14 years, i’d say he’s failed to ensure Microsoft’s long term health.

one relatively new Apple product: the iPhone, is worth more than all of Microsoft

I really liked this piece by Ben Thompson, ” If Steve Ballmer ran Apple”… the playbook would have been simple, ramp up Sales costs, radically expand the product range to cover all possible segments, try and out muscle Samsung….and oh, maximise short term profits.

But no where in that mantra is their build products that customers love (not just want), There is nothing about entering new markets to stay relevant.  And heaven forbid doing that if it means the creative destruction for the core profit lines.   Steve failed

Microsoft was worth $600 billion the day before he assumed control. Yesterday its market cap was south of $270 billion

Steve couldn’t get his head around the changes needed to remain relevant and position MS for the future. I wrote this 4 years ago. Reviewing it now its a playbook on what not to do when a predictable disruption is on its way… and MS has remained largely a bit player in the cloud market.

What caused this? Well some of this is the capitalist mantra as above, some of this is purely wrong drivers.  Steve had such a personal vested interest in retaining the status quo (look at his wealth in shares). Isn’t it wrong that his wealth increased by nearly 3/4 of a billion just be resigning

His 333,252,990 shares of the company are worth about $11 billion, and the 7 percent run up in its stock after his announcement increased his stake, grossing him $769 million.

With that sort of personal inertia, MS was never going to make the changes it could…It takes someone truely exceptional to make the long term changes required for the continuing health of a company. Someone like a Branson, Morita, Bezos or Jobs… unfortunately for MS Ballmer was none of those…

For MS, the future is pretty grim. The trend is not your friend when the trajectory is down (read Stall points). They are late in cloud, irrelevant in mobile and becoming obsolete in the corporate.  I love Kinnect, and this could be a ray of hope. But the window of opportunity is closing…

 

CEO’s need to step up to technology

I heard a CEO speak recently. He’s well regarded, has a solid track record of success and quite pragmatic…but to me he said something unforgivable..

Look, most CEO’s struggle with technology… they don’t really get it …if we’re honest most of its gobbledygook …so in the end we have to trust the team, put in check points and measures and trust them to deliver

I was sitting there thinking ” OMG…this is a technology company he’s running and he doesn’t understand technology ”  that just doesn’t cut it…. Legitimizing this short coming by thinking you are part of the majority is even worse.

You cannot be an actor, pretending to be an expert if the very core of your business is based on technology, and you sure as hell shouldn’t ‘outsource’ it…

Hey, this is how we derive value and differentiation, which is like…really important … but i don’t know much about it, so i’m going to let these other people who confuse me and I think are experts,  make choices which could literally make or break the company… ok??? [P.S I really hope no one finds out..]

That is not leadership. Not in my world.

The companies making these leadership choices need to understand if they are technology businesses… And when you think that through, sometimes the answer is quite startling.  Financial services RUN on technology, – don’t believe me? Look at what CBA has done ….and then look at who did it..Telco‘s , utilities, transportation and logisitics, social services… the list goes on and on. The clear leaders in their field have understood technology’s role in their business and got CEO’s who not only get that..but understood technology enough to make great choices…[and avoid the BS]

LinkedIn, for all its benefits is awful at propagating this crap… all these folks randomly endorsing skills, I just don’ get it.  I’ve seen some people add skills and its a joke. Just because you work in an industry does not make you skilled, and it doesn’t automatically convey understanding either…

So, next time you are making leadership choices, get really really clear on what business you are in, and for goodness sake get someone who genuinely understands the technology that drives it. Then, and only then will you become a market leader…

I know a man

of immense integrity…

A man who I have seen take unpopular positions, because he saw the hype for what it was. BS…

A man who consistently takes the higher ground, not responding to the provocations of lessor people…

A man who willingly shares his knowledge, contacts and expertise without expectation of return…

A man who put his friends before money, because to him, it was the right thing to do….

A man who loves his family and loves his life….

I know a man inspires me to do better…

I know a man with immense integrity… and he is my friend. Thank you

 

 

…Trust them to deliver

The words no business manager or product team wants to hear….Its the corporate game. You have, just HAVE to use the internal team to deliver your project… there is no other way…. except

This team never delivers, not on time, not too budget, not to spec… and its not just you whining. They’ve been bench-marked…. you got the facts to support you…

Re-frame what you as a the business owner of a high profile, high budget project have just been told by more senior manager.  If you went to the market with a basic RFP and asked this service provider to provide you with a list of references… there would be none. If you asked them to tell you about a time when they had successfully delivered a similar project on time and to budget…they couldn’t…

And you STILL have to “trust them to deliver” ….A lack of candor forbids us from calling this out for what it is…absurd. It’s institutionalized failure on grand scale.

We need to call it, be unreasonable in our demands to the company to actually make the company better, get results and make progress…