Category: Uncategorized

What’s your minimum scale?

Posted on by simongterry in Uncategorized

What’s your minimum scale of operation? Disruption means businesses often have to survive declines in revenue as they change business model. Are you able to adapt to the future disruptions or will your business model be a barrier to change? Remember that the capabilities of your people will be a key element of any transformation.

Focusing on Minimum Scale of Operations

Clay Shirky wrote a telling account of the challenges facing printed media in the NY Times The insight is that inherent in any business model is a minimum scale of operations.  We are used to thinking of overhead.  However, Shirky points out that falling volumes can turn the infrastructure of operations into overhead. At a given scale, there’s no point continuing. The need to operate above that scale becomes a barrier to responsiveness and even survival in times of disruptive change.

We don’t pay much attention to the minimum scale when we are growing. We look for investments to make to grow the business. Our myopia only becomes an issue when we need to make changes to our business models.

Turning Growth Investments into Overheads

Often the investments in growth we make on the way up are the overheads we struggle with as we change the business model to respond to disruption:

  • Need national sales offices or store network to grow? It will be overhead as you shrink. Ask any bank about the challenges of keeping branches economic as transactions, sales and advice move elsewhere. 
  • Need a custom built IT system? It will be overhead when competitors adopt agile solutions in the cloud. 
  • Need a warehousing, distribution or manufacturing operation to cater to growth? It will determine the minimum number of units your need to sell. 
  • Need a fancy office for your growing workforce? At least you can probably sublet this overhead as your workforce shrinks or works from home.

The business cases for each of these investments would be based on steady business volumes and predictable growth. These assumption mean that the business has ruled out the ability to handle exponential growth or any significant decline in activity. Few investment plans consider the need for agility or the impact of the investment on future changes in business model. Requiring greater consideration of optionality in an organisations approach to growth would change the business model to a more responsive one at the outset.

Investing in the Agility of People 

Many organisations respond to their failure to create a responsive business model by aggressively cutting their personnel costs. Undoubtedly, disruptive change will mean a loss of jobs as business models change. In this process organisations need to take care that they don’t lose the human capital critical to the potential to respond to change.

People can be cut far more quickly than writing off one of the growth investments above. Announcing a personnel cut, often has a far more acceptable hit to the profit and loss statement for the share market. Cutting personnel can become a substitute for a strategy to respond to change in the market.

To avoid this outcome organisations need to consider on the way up that talented people can be redeployed more easily than an investment in infrastructure. Instead of investing to deskill people with infrastructure that become overhead in times of disruption, we can invest in agility and the capability of our people. Organisations also need to chose their activities to maximise the value that their people create. People can learn, adapt and create new ways to work and create value for customers. A responsive business will have at its heart a team of people working both in the business and on the business model, constantly learning new ways to be more effective, to respond to customers and to grow.

Struggling to maintain their growth, businesses facing disruption can face surprising new challenges in their scale of operations. Organisations need to plan for optionality as they develop a more responsive business model. They also need to consider the role of our employees as the engine of responsiveness. 

Posted on by simongterry in Uncategorized

Simple thinking is good. Clear thinking is great. Occam’s razor works. 

Simplistic thinking takes simplicity too far. There is too much of a good thing.

Simplistic cuts down the complexity, averages out the uniqueness and narrows the debate. What gets left out are the insights, the opportunities to grow and the potential to do differently.

You are bothered.

Posted on by simongterry in Uncategorized

Boldly going #mambo

A photo posted by Michelle Williams (@mia_will) on Apr 7, 2015 at 2:25am PDT

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Change doesn’t just happen. Your leadership opportunity is that things bother you enough to make change. Make change happen.

There is an insight in the image above from Michelle Williams. Most people simply can’t be bothered. These are the people who say ‘surely someone is responsible for fixing that’ or ‘I am sure that change would be too hard’.

Of the few who do start to act, many abandon action at the first difficulties.

The responsibility to lead change often falls to those who chose to act differently. People want change but they can’t be bothered. When they see someone who acts, they can get on board or at least not get in the way. Authority to lead is given to those who chose to act. 

Change is hard. It doesn’t just happen. Take what is bothering you. Find more people who are bothered too. Turn your collective concern into action. Persist.

That annoying bother won’t be fixed any other way.

A whole person

Posted on by simongterry in Uncategorized

I have a family. I have friends. I have a community. I have networks of acquaintances and a fair few who dislike me. I also have colleagues at work.

I have purpose. I have dreams & passions. I have interests. I even get distracted. I have ambition. I also have work to do.

I have a history. I have experiences. I have learned and done a lot. I have had success, achievements and failures. I also have a resume.

I have strengths. I have talents. I have my weaknesses and I have potential. I have many roles, responsibilities and jobs at work and in life.

I perform better as a whole person. Don’t narrow my contributions.

The One Thing Management Needs

Posted on by simongterry in Uncategorized

No Snake Oil.

Management is complex enough. Managers are time poor. Their lives are full enough of challenge, change and complexity. They will always be tempted by the one thing that they can buy, hire or do to make life easier. Too many people offer a single magic solution.

There’s no magic solution. Anyone selling the one thing (or the 5 or 55 things) is selling snake oil. Snake oil sells. It can sell like crazy. It just doesn’t work.

Management is hard work. The complex doesn’t simplify well. The choices remain. Change is hard. People are diverse. Obstacles have to be overcome. Things don’t just happen. Management is hard work because the challenge makes it worthy work.

Managers do the hard work of leading teams to realise potential and create value. There’s no snake oil required there.

The Unbearable Lightness of Being [a Network]

Posted on by simongterry in Uncategorized

When we launched Change Agents Worldwide back in January 2013 we wanted to experiment with a new kind of organizational model.  We wanted to create a commercial enterprise that was effectively, a network.

Very excited by the opportunities of helping realise the potential of the Change Agents Worldwide Network. If we are to learn how to manage the future of work, it begins with new forms of practice.

Check out some of the great lessons from new forms of working as a network in Change Agents Worldwide to date.

The Unbearable Lightness of Being [a Network]

The Rise of Effectiveness

Posted on by simongterry in Uncategorized

In the last century management’s overwhelming focus was efficiency. An industrial mindset influenced our definition of effectiveness to be driven largely by delivering more for less.

The influence was straight forward. The efficiency of a machine is how well it turns inputs into its fixed outputs. If a machine’s quality is stable (a risky but common assumption), then a focus on efficiency works as a proxy for effectiveness. Effectiveness slipped from sight in a period of unmet consumer demand, long growth and expanding global markets. We focused our organisations almost solely on efficiency. When changes in effectiveness were required, they came in the form of new disruptive innovators and innovations that rewrote the quality definition and a focus on efficiency resumed.

Human effectiveness cannot be defined as simply as that of a machine. Our traditional industrial machines turn simple inputs through process steps into fixed outputs. Humans can be reduced to that work too. For many organisations it became the goal of human work to make it fixed, repetitive and predictable. It is not a surprise that they discovered that the quality of this repetitive work was rarely stable. 

Humans are capable of more than machine work. We are also capable of turning complex and diverse inputs into a simple open-ended output, like an action, a decision, a sentence, a service, a piece of knowledge or a song. Suddenly we can’t assume that inputs are consistent, quality is stable and that outputs are known. Our proxy has broken down and we need to return to a more direct focus on effectiveness.

The last decade has seen the slow rise of effectiveness as a management challenge and management grappling with new skills:

  • quality movements, continuous improvement and other disciplines have revisited the assumption around stable quality and even stretched to query whether the predetermined output matches what customers need
  • customer experience, design and similar disciplines have begun to look at the potential to shape new and better effectiveness of our products and experiences. 
  • increasing focus on disruptive innovation has raised the challenge of why the traditional model must break and new strategy models query the narrow focus on efficiency vs other ways to achieve greater effectiveness (see Blue Ocean Strategy, Roger Martin, etc)
  • realisations about the shifting nature of work has caused many to reflect on whether efficiency is the best or at least only model for connected knowledge workers or any other role.
  • consumers questioning the need, quality, sustainability, morality, environmental and social impact of the products of industrial machine models 
  • examining new models of leadership, organisation and development of people that encourage the development of true human effectiveness and realise untapped human potential.
  • rearguard actions to find ever more efficient machines (robots, big data, management algorithms, etc) that can replace humans in increasingly complex roles and work.

Responsive organisations recognise that the proxy of efficiency for effectiveness is fundamentally broken. The skills of efficiency remain relevant but they can no longer replace a focus on effectiveness.

The rise of effectiveness is on us. Our challenge is to adapt our approaches to work to make the most of our opportunities, not just to minimise our waste.

What’s your competitive advantage?

Posted on by simongterry in Uncategorized

The levers of competitive advantage drive evolutionary change in business. As our economic society changes with new transportation, energy and information technologies relative advantage shifts and the thriving business change. With the proviso that any gross generalisation is untrue in a particular case, here’s a brief sweep over economic history.

Before the 19th century, an organisations best competitive advantage was its location. Transportation, energy and information costs made location a critical and often insurmountable advantage.

In the 19th century, an organisation’s best competitive advantage was ownership of an asset or technology. New energy sources, new information channels and new transportation options enabled new scale in monopolies and new returns from asset ownership.

In the 20th century an organisation’s competitive advantage was its efficiency in use of information and processes. Global consumer markets and long periods of economic growth rewarded those who optimised their execution for efficiency to reach these markets at a cost or margin advantage.

Now an organisation’s competitive advantage is its people. Organisations need the mindsets, culture, talents and other capabilities to adapt each day to a world of information transparency, global networked connection and rapid change. The effectiveness of people matters even more, if business must adapt to new approaches to use of energy. The effectiveness of a Responsiveorg comes from every employee better leveraging their information, networks and capabilities.