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…

 

re-inventing the wheel

Here’s a secret,  most of what we do in the technology space has already been done.  Unless you work for the  VERY small number of companies who are actually breaking new ground, its already been figured out. If you aren’t sure if you work in one of those companies doing those things…here’s a hint, if you you have to ask, you already know the answer….

Knowing this, does it flip your world???   Instead of turning away and trying to figure out how to do the next great something, why not start here…

who has done this before and what can we copy

By copy I mean just that…Don’t take the concept and tweak it. Don’t waste any time on it, think your email server is different from everyone else? What about CRM? ERP? … what if their are no special cases for most things?  What if you could just copy …

there is nothing so quite useless, as doing with great efficiency something that should not have been done at all. Peter Drucker

What would that mean??? Project agility goes up, certainty goes up, costs go down, the business benefits (and its ALL about the business right?)…

And here’s the thing, if , in your search for what HAS been done before, you discover something that hasn’t… you might have actually uncovered something, a true differentiator

The only thing standing in the way of this is us….

 

Assumptions

We run our world on them, but do we owe it to ourselves during these seriously troubling times to seriously challenge them?  I would suggest we need to totally rethink our paradigms, given that some pretty fundamental globally impacting decisions are being made based upon them.

Austerity as a way out of recession has driven global policy, particularly in Europe. The assumption was that the empirical evidence used in it was correct. Ops.  Now you have a situation in which over 50% of young people are unemployed, economies like Greece are retracting faster than ever predicted and a huge amount of social unrest.  Incidentally, while we are talking assumptions, here’s one – that these economies will solve these issues through political and economic means…. i predict not, The last time we had huge social inequality and a ruling class that ignored the masses, revolution occurred.  What is clear to me is that economists don’t actually know what is going on.  Their models are predicated on some structural stability that might be mythical … so its all wrong? Could be..

Next assumption – that banks are safe and trust worthy. Clearly not, these institutions have gotten away with some of the biggest scams of all time, some overtly criminal

These traffickers didn’t have to try very hard. They would sometimes deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows in HSBC Mexico’s branches

Others, a massive con, convincing customers that they are acting in their good only to add no value at all…

The entire financial management industry is a rentier arrangement: they skim immense profits and return no productive yield at all.

Would you, as a member of the public be ok if a member of known organised crime ring went into a powerful public position, like the ministry of justice and got some monetary benefit by making that move?  Seems absurd, yet that’s what is happening in the finance industry. Assuming that those in the public sector are working for our good seems naively absurd in today’s world.

What about the assumption that you should go to university, get qualified and you’ll do well in life? Another myth busted by the GFC, leading some to overtly state its not worth it.

Innovation is

So before you embark on your next initiative, challenge everything.

  • Who is proposing it, the people with the most to loose, or those with true intent, it is a rare turkey that votes for Christmas
  • What belief drove the decision you are being asked to make,
  • Is the data accurate ( like Reinhart, Rogoff)

So as a starting point to some new paradigms…economists don’t really know whats going on, banks aren’t trustworthy, CIO’s and IT shops are knowingly hampering your business, education isn’t always the answer, innovation – everyone is talking about it and virtually no one is doing it.

is disruption inevitable?

Reading the mainstream press you would think so… “hey we’re going out of business because we got disrupted”….Kodak, Dell, Borders…. all poster child examples of it…

But is it inevitable?

I think the first thing to get clear on is what is disruption. I summarised it (a long time ago using Clayton Christensen’s model), But it is light on an incumbents inertia to change (hey, i’ve learnt a bit since then). It appears that product disruption is slightly more granular…
There ARE unpredictable technology advances ….but in writing this, I was struck by how hard they are to identify… to me there aren’t really that many. I’m thinking truly revolutionary stuff – the printing press, electricity, 3D printing, the wheel, lasers.  I think they are truly disruptive because they caused a large discontinuity in the natural evolution of the product.. For instance, could companies who make eye glasses have reliably picked lasers would compete with them (LASIC), do builders/OEM think 3D printers are a threat to them?  For printing its an evolution, for them… thats different.

swardley

Being disrupted by unpredictable market change is part of business BUT ….. being disrupted by a predictable market change is a sign of woeful strategic failure

But then there is a bunch of things that are labeled disruptive (including by me), but really are predictable. Digital printing (kodak invented it), streaming content, cloud computing, IP telephony…. all predictable evolutions. Failure in these instances is a management failure…but its more convenient and easy for management to blame disruption or an outside force, than it is to accept responsibility.

Inertia…it definitely exists, i’ve pushed against it for years. But again its a scapegoat kind of word. All change is hard, changing the what a company does, how and why .. the fundamentals is even harder. But given the stark choice of obsolescence, or taking on hard stuff.. what are you gonna do?

How to deal with predictable disruption is also pretty well documented, (he’s my quick summary). However it is not convenient, easy or without risk… CEO’s prefer not to battle politics rather than fund a step out, they’d rather milk the cash cow than canabalise their existing revenues. (interestingly, hard ass CEO’s of great companies do this)

Embracing Commoditisation

Today saw the double announcement that Salesforce and Rackspace (and hints that Amazon) are entering the mobile app development space. In fact actively commoditising it.

Outside of the hyperbole about how mobile is the platform de jour, what struck me about this is it was entirely predictable.  I’ve fast become a big fan of the work of Simon Wardely. if you read his latest series of posts, you will see what I mean about predictability.

Firstly, everything evolves, and the commoditisation of mobile app development is no different.  Today’s announcement probably saw a rapid movement up the curve for some companies, the ones still in the custom build phase, however the SDK’s are now a product bordering on a commodity.

Simon Wardley's evolution model

Simon Wardley’s evolution model

The second reason this was predictable was using Simon’s ILC model. My view on this is that in the greater game of strategy, it is always in someones interests to be doing the commoditising, as opposed to being commoditised.  And in the new world of cloud computing, the big guys in this space have figured out models that actively target sectors to target. (see Simon’s post on Amazon)

Simon Wardley's Innovate, leverage Commoditise model (ILC)

Simon Wardley’s Innovate, leverage Commoditise model (ILC)

The thing is, in actively commoditising other industries, these cloud players drive scale onto their platforms, create ecosystems of developers wedded to their platforms, drive more integration into their core offering (SFDC) and can see the new breed of winning plays in which to acquire.  Then rinse & repeat.

Now, I know what it is to live in a company that is being disrupted, you worry about today’s numbers and how you marginally improve your portfolio day in and day out… and I know that it is easy to look back in hindsight and say “that was predictable”.  The trick for us all, and i think the true message in Simon’s serious of recent posts,  is that we owe it to our companies or ourselves to undertake the process of predicting what will happen to our company and jobs and take the appropriate steps to react.

It’s that lack of understanding [of] Why which will almost certainly be behind the highly probable and unnecessary disruption of once great companies such as HP, Dell, IBM, Oracle and SAP by a predictable market change such as cloud computing. These companies by right of their position should never face disruption by a predictable market change. They should only be disrupted by an unpredictable market change

In fact Simon is pretty scathing on companies who fail to react to what is predictable (more on this in another post)

The content conundrum and NZ fibre

I read the latest in a series of articles indentifying a lack of digital content as one of the main barriers to take up of fibre (UFB here in NZ). In NZ by far our most important digital content is sport, and Rugby is the king of the heap here …

For my international readers a brief history.   There is a government funded rollout of fibre to 85% of the households here.  Take up of the fibre services is low (circa 2.8% of premises past). There has been enormous structural change in the industry given the forced separation of the dominant Telco into a network (chorus) and retail arm.  This has forced duplication and system work onto the industry that they are still trying to deal with… mundane under the hood things like how to buy, provision and manage the fibre solutions at a retail level.  To top it off the dominant pay TV station is Sky, who owns a monopoly on movie and more importantly sports content…

And that is the rub … because, dear  New Zealanders, if you want to continue to have the best rugby team in the world (the All Blacks), then you need to pay enough to hold the talent here…. and sky TV are the lynch pin in that….  no big TV rights, no quality players, and no quality players… no world champions…. and no world champions means a unhappy nation…(on the whole).

The government is trapped… politics is about popularity… and it won’t do anything to ruin the national sport… so until someone ponies up enough to fund the retention of the players and deliver the content over the glass instead of Satellite… high value sports content is going to remain locked up …. sure you will see the normal bombast from the governement… but my prediction is very little action..

Sure i can solve the movie challenge with a small amount of effort, but I can’t get the sports…