Paul McKey - Synergistic Design

Redbean - Hello. Heads are funny things. This post is coming to yours from deep inside my head. One of the most unmapped territories on earth!

I am in here rustling about in the archives as I do my PhD literature review. A sadistic process of elation, frustration and long lonely hours that for some reason becomes mildly addictive. And then you write blogs to break out…

I was sent this link from the shiny new blog of Christine Geith who is an advocate of open learning amongst other things.

Chris put me on to this blog by Umair Haque that rails against the dragging of 20th century business models into the 21st century. Music to my ears.

The example Haque is citing is one he has pursued before yet now seems to have come true. The article FaceBook Turns Evil shows how a seemingly 21C company is applying 20C tactics and thinking to monopolise a market while ignoring many of the very 21C privacy concerns of its users. Intriguing stuff.

So I am going back to the relative safety of my head but when I find out why organisations desire to be evil I will let you know. After careful elimination of many possible reasons including “doing good is boring” and “evil just looks fantastic in the mission statement” I think I might be on to a strong lead. Money, power and access to Tiger Woods’ address book! Can’t confirm that yet but I’ll let you know what my research shows up…

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Redbean - It’s not often I comment politically but I am interested in the phenomena of media - should they charge for ‘quality’ journalism?.

I picked up a copy of the Australian newspaper at the weekend (owned by NewsCorp and Rupert Murdoch) that changed my opinion. What a right wing rag it has become.

It had two targets in its sights. Climate change and Kevin Rudd, Prime Minister of Australia. I believe this reflects its bias in the USA against climate change and President Barack Obama.

With the demise of newspapers well documented you would think they would aim for quality and objectivity instead of beating up people and ideas they don’t like. Politicians I can understand but what is the vested interest in so much climate change denial and hatred of anyone who accepts the planet is in dire straits?

So while I am always prepared to pay for ‘quality’ journalism this level of tripe from a leading national paper just reinforces why people are flocking to alternative news and opinion sources.

I think Rupert has dug his own grave and is now just trying reverse the inevitable. For newspapers its either get real and objective or it’s bye-bye I ‘m afraid.

Redbean - Last month I wrote that thinking is the new strategy so this month I have a strategy that supports that concept.

Blue Ocean Strategy by W. Chan Kim and Reneé Mauborgne initially looks like one of those Business School essays that got turned into a book. ( Read an overview of the book here - http://en.wikipedia.org/wiki/Blue_Ocean_Strategy )
The book and strategy, in a nutshell, suggest you go where the nobody has gone before to create either new markets or new value in existing markets. This is a great but hardly new idea.

What is new is the development of tools such as the ’strategy canvas’ that attempts to formalise the one off creative sparks that companies sometimes have into a repeatable means of developing new strategy. This canvas supports the use of analysis as a launch pad for creativity as opposed to just beating the competition.

Strategy that is competition-centric is based upon analysis and is incremental in nature. Blue Ocean strategy attempts to be creative and exponential in nature. The example given in the book is that of Yellowtail Wines. Where the wine industry was competing strategically within the boundaries of the current market, Yellow tail came along and created its own expanded market, simply by tweaking the existing ‘norms’ of the market.

What interests me is the process for coming up with that creative strategy. ie the thinking. The tools in the book are a useful start to getting an organisation thinking outside its current ocean.

Unfortunately the book falls down on implementation with the usual ideas to drive change via dynamic leadership, overcome power politics etc. to create exemplars and then successfully execute plans. Nothing new here.

The thing is that we know far less about successful implementation (the important bit) than we know about coming up with new strategies (the relatively easy bit). More often than not the only way to truly innovate in an existing organisation is to create a new organisation that doesn’t have the inherited shortcomings of its parent.

Combining Blue Ocean Strategy with the guts to back your creativity in a new venture is a far more intriguing and possibly successful strategy. Or if Robert Frost was writing about strategy he might have called it - “the road less travelled strategy”.
http://en.wikipedia.org/wiki/The_Road_Not_Taken_(poem)

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The age of dumb capitalism is over. Dumb capitalism based upon excessive consumption fuelled by easy credit has run its course.

With quality not quantity the new buzz in financial markets this will filter all the way down the retail chain because as the easy money (or credit) disappears the consumption patterns of everyone from individual customers, through small business and large corporations will become far more cautious and selective.

So for businesses the business plan of “just sell more stuff” has also expired. This could be fatal for many small businesses since the majority I come across have no other plan. Most have not experienced a downturn and have no knowledge of how to counteract the effects of one on their business.

Sacking staff, prices and services is both a short term and ultimately defeating strategy. That’s a quantity strategy. What is required is to follow your customers into the area of quality. Yes they will make fewer purchases but that doesn’t necessarily follow that they will make cheaper and lesser quality purchases.

Many firms also start discounting in a downturn. This results in a race to the bottom. You will most likely lose existing customers on the way since when price dominates you just become one of the pack.

A smarter strategy is to consider how you can help your existing customers and how you can weather this downturn together. For instance how can you maintain quality while giving them a break on finance? Instead of discounting give them a little longer to pay which has the same effect. Instead of lowering the quality of your services or stock allow them to pay in instalments.

What you really need in a downturn is not fear and drastic measures but creativity. Being creative seems not that important when things are going well. It is critical when they are going bad though.

Like all downturns we usually get warning signs and the time to act is as soon as they are confirmed. This is the time to take stock with key staff and advisers to consider both a protective strategy and a rescue strategy. The former is proactive, and includes creative approaches such as those mentioned above, while the latter is reactive in case certain key indicators do go horribly wrong. Assessing them both now, before the ‘proverbial’ hits the fan, is wise.

The key to a protective strategy is that it must be both creative and actionable and go beyond the clichés of sacking staff and cutting prices.

To develop that strategy take your advisory team somewhere nice, away from the doom and gloom news, take a good facilitator with you and spend time getting people into a creative groove so they can develop a protective plan that actually improves your competitive advantage in the current climate.

Bold moves like this are the sign of a good business and good businesses not only survive downturns but they actually emerge from them even stronger.

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Redbean, August 07. - I drive a Peugeot. In fact we have two Peugeots in the family and we have owned about six previously. All are beautifully designed and engineered well of course. Their biggest attraction is their value for money. Great European driving without the badge premium. We have had mixed results with reliability. Some were nearly faultless, one was a total lemon. This variation in build quality and/or just plain luck is probably similar in most makes of cars even of high quality.

What will my next car be? Probably a Peugeot. So why am I going back? We have a relationship so familiarity, habit, easy to do, all apply. They have new good product with no compelling alternative. They are still good value for money in my eyes (ie in what I consider important - safety, environment and driving experience).

But what really compels me to return to this brand over and over again? Two things - people and culture. These French entrepreneurs, designers and engineers are madly passionate about making great cars at an affordable price simply because they believe everyone should have access to quality design and engineering. That passion flows throughout the company, its dealers and even its owners.

So I know that I can buy the next model Peugeot, probably without even test driving it, since I know that the values of the people and culture they have developed will not let a bad product out the door. This is a radical departure to the old adage that the product design rules and anybody can sell it. Many auto companies without this foundation of people and culture can have huge variation in their products over time. They tend to chase innovation and market share by copying and competing on individual components such as power, features and price without ever considering the holistic brand. Hence they are inconsistent.

So because I trust Peugeot’s product, through its people and culture, this reduces my anxiety and risk and our relationship continues.

I use an Apple computer. In fact we have four in the family and we have owned about twenty previously… Well, you know the story!

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The majority of advice for success in business is still centred around concepts such as “get big or get out” and “you need to grow to survive”. This is the appropriate advice if you are in an industry which is highly competitive. If you don’t have something unique to sell then growth through low cost, geographic coverage or control of distribution channels will be necessary to provide competitive advantage. It is also the strategy of most public companies trying to satisfy their insatiable shareholders.

But opening more stores or developing more products will not necessarily bring more profit. Most industry sectors have their ‘Goldilocks’ spot. Not too big, not too small. This is a mix of customer base, their willingness and ability to pay versus innovation and the ability to service at an agreed price. That is demand and supply keep each other in check through price and availability. So if the pie is only so large then having more of the pie is a viable strategy. In staple areas such as food, clothing, resources, transportation etc. this is still a dominant strategy.

There are other ways to compete however. What if your primary strategic direction is to compete on superior customer focus so as to improve the yield from your existing customers rather than spending money to attract more customers? Then growth is of limited value to your organisation.

In a new book, “Small Giants - Companies that Choose to be Great instead of Big”, author Bo Burlingham has studied fourteen successful companies, all of which at some stage in their history chose to neither get big nor get out but to stay and remain profitable. These companies include some well known US firms such as Anchor Brewing in San Francisco and Rhythm and Hues Studio who won an Oscar for their digital animation work on George Miller’s film, Babe.

These companies made a conscious decision not to grow for various reasons but in particular they all have redefined their concept of success to emphasise such things as quality of life, control, profitability and in several cases to try and retain their ‘mojo’, or that intangible that makes their company different and successful while making it an enjoyable place to work.

Ultimately it came down to passion versus growth for many. I have particularly enjoyed this book since at Redbean we love working with people who are passionate about their organisation, large or small, and are prepared to measure success in other than purely fiscal terms. These are what we call ‘Smart’ businesses.

The book is published by Portfolio (Penguin, New York) and I recommend it to anyone seeking informative yet inspiring stories on how to build a successful organisation.
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I have two types of clients. Those that think I am too expensive and those that think I am too cheap. Both are suspicious.

I feel sorry for the former and very happy for the latter. Yet how does this conundrum come about?

The engagement of a consultant begins in a number of ways for a number of reasons. The major scenarios are;

1. You have a non-specific problem which requires some creative thinking and possible innovation (you are buying a creative process);
2. You have a specific problem which requires an efficient and predictable outcome (you are buying a solution);
3. You need to brainstorm 1 to be able to reach 2.

So are you sure why you are engaging a consultant? Do you want Brains work, innovative fresh ideas, or do you just want a pair of hands to help out? There is a big difference in both approach and outcomes. The first is consulting, the latter is really contracting. In fact David Maister (Managing the Professional Services Firm) divides consulting work into three major styles defined by the outcome you need:

Expert - Brains work solving unique problems. Time is irrelevant here but results are critical. Strategic, organisational change and new design work falls into this category. This is defined by a partnering model and the client relationship. Good relationships with a creative team should yield ongoing results and competitive advantage.

Experience - Hiring a firm who has done this sort of work before and can therefore save you a lot of time and money by utilising their expertise and processes. Many law or market research firms fall into this category. This is about product and quality of service.

Efficiency - This is straight out commodity work. Repeatable processes you require done at a standard quality and price. This is the sort of work now being outsourced to India by the banks, software developers and even some accounting and legal firms. This is primarily about price and time.

Many consultants, when offered, will jump at all three styles of work. They argue they are efficient, have a solution and that they can help you solve problems. In fact these are highly specialised areas of service which require completely different approaches and business structures. Yes small generalist, and large multi-division, firms do exist, but even within these you should still look for individualised approaches to feel confident they can deliver. Yet surprisingly most consultants use the same fee structure regardless of the style of work (this is an indication that they are fee centric, not customer centric - beware! )

Hence an experienced consultant doing efficiency work will always look expensive. Conversely a good process consultant who helps your organisation to solve problems and create unique opportunities will always look cheap since the ‘value’ they can bring should be many times greater than their fee. Good consultants will often charge a value-based fee. The result may be nothing. This is the risk. Yet the process should always provide a rich learning experience for all involved. You can ask the consultant to separate process and performance fees. This will lower your risk and provide some incentive to the consultant for a tangible outcome, not just another report.

A good consultant always brings an enquiring mind and modicum of cynicism to any task. I suggest these ‘fresh eyes’ are what you are really buying otherwise they are just a pair-of-hands and will always look expensive.

In summary then, your first step to a successful consulting engagement is to understand your needs sufficiently to define which style of service you require. One way to test this is to ask your prospective consultants which category they consider they fall into and why. This will expose their capability and allow you to evaluate if they will fit your needs and budget. Otherwise you will always remain suspicious.

I regularly present my current thinking at self-promoted seminars. And almost invariably, someone, usually a business owner, will ask me what I achieve from this activity. Since I am a consultant who doesn’t sell anything, except time and expertise, that is a fair question. And the answer is quite a lot!

I have just completed a seminar titled “Business Success with eLearning” in two cities on consecutive days. As always I learnt as much as I informed. Standing in front of an eclectic crowd of your peers can be a very resourceful , humbling and rewarding experience.

Resourceful in that you typically have a broad audience who have identified your seminar as one which interests them enough to invest time and go out of their way to attend your talk. While some of them will match your intended audience most will be on the fringes of your topic. Watching their reactions, hearing their comments and reading their evaluations is a truly educational experience providing informed market research you could well pay thousands of dollars for.

Knowing about these fringe dwellers and what their interest in you and your product or services is can be incredibly informative. Preaching to the converted will tell you little yet by convincing the fringe dwellers of your worth you will expand your networks and markets.

Humbling in that exposing your ideas to others is always an anxious experience yet one you should go through regularly. A seminar is an opportunity to test ideas and insights in public. Not everyone will agree with you but just the sheer act of exposure allows ideas to take on a life of their own which may result in unknown benefits in the future. I have had clients contact me months, even years, after one of my talks to let me know they have been chewing on something I said and now want to implement, act on, or discuss the idea further.

Remember even the great ideas don’t always get total acceptance first time around. Yet if your ideas are not aired they may well die with you. And you don’t want humanity to suffer like that, do you?

Rewarding is the only way to describe the experience you get for going through the hard work and anxiety involved in the delivery of a successful and popular seminar. Not the least because for an hour or two your ideas, products and services and personal character are all centre stage for your audience. If you treat them to a well organised event with a topical subject they will reward you with undivided attention and a critical ear. Provide regular elements of interaction and discussion in your format and you will get the added benefit of their expertise and contribution to your ideas. Yes people will be adding to and improving your ideas.

Ironically the inclusion of interactivity takes the pressure off you and adds variety to your event. People love to contribute. Give them the floor and facilitate a vibrant and intelligent discussion and your audience will come away enlightened and enthused. And once again it will be your ideas that sparked their fire.

So do it. Go ahead and plan a simple breakfast or evening get together. Provide an easy to access venue and some refreshments. Send the invitation to your mailing list with a catchy title and let them know what they will get out of attending. Whether you are selling, consulting or just airing ideas you feel passionate about, using seminars to launch those insights is a fast and valuable way to achieve credibility, enhance your own knowledge and ensure the world gets to hear about about you and what you have to offer. Good luck!

Critical to the design, and in particular the scope, of any organisation is the clear articulation of the business objectives and requirements, the metrics to allow us to know when they are met and the value they will bring the organisation when they are met.

Learning plays an important role in business. Yet to date business has taken little interest in learning other than as a cost. Innovative organisations however have always seen learning as an investment offering unique competitive advantage.

Various business models exist both across and within industry sectors. These models have differing structures and strategies. Business strategy in particular needs to be cognisant of the synergies and conflict afforded by the other organisational perspectives. For example if we change our distribution channel because of new technology then how does that affect our core purpose and business models? Will something such as a direct selling model cannibalise our current channels and perhaps ruin our smaller resellers? How can our people cope with a shift in business model, new processes or changing technology particularly if they occur simultaneously?

This category will accumulate the latest business innovations, ideas and practices and analyse them using Synergistic Design. In particular we will look at the business of learning and performance support.