One of the unfortunate disadvantages of living in an isolated (yet otherwise wonderful) nation such as Australia is that occasionally concepts, businesses and products can take a little while to filter over from the US or Europe. Things like touch-and-go bus passes only recently arrived (in Brisbane at least), we still don’t have either Netflix or Hulu (although iTunes, Foxtel and Telstra are partially filling that gap) and wearing American Apparel over here will either make you really trendy or get no reaction at all (dependent on the current scene).
But with this isolation comes an advantage to locally savvy businesses and entrepreneurs who have an external focus to bring these ideas, products and businesses to their local markets. I don’t know how many BRW articles I’ve read showing some new startup which is doing something I’ve seen online in the states a couple of years back. If you’re lucky enough to travel regularly spotting an international trend, business model, idea, strategy or simply a product that hasn’t made it to your local market can be, in itself, a great strategy. Although large strategies like Virgin Blue are obvious translations, relatively innocuous things such as blogs can be successfully tweaked and localised in the form of Australianised (insert your local form here) content as has been seen here in Things Bogans Like which has been pretty successful if the reviews of the book I’ve spotted in GQ and the Australian are anything to go by, is pretty clearly influenced by Stuff White People Like, a US based blog, and marketing juggernaut, which makes fun of “white america” (which seems to translate to hipsters and suburbanites).
Although there are a million and one ways of localising I’ve built a table below that has a few examples that I’ve identified (this misses obvious ones such as simple products).
|Corporate Strategy||Virgin Blue copying the low-cost carrier form proven with Southwest Airlines
Big W taking the store concept from Walmart in the US (although not taking the small town component of the strategy)
|Business Model||Internet – Catch of the Day (catchoftheday.com.au) localising Woot! (www.woot.com)|
|Content Strategy||Localisation of TV shows (Biggest Loser etc.).
Localisation of publishing style – Chaser in Australia copying The Onion in the states (yes, shock horror, the chaser originated as a pretty lame localisation of a massively funny US comedy publisher).
Humor and/or websites (Things White People Like becomes Things Bogans Like)
Personally, I actually think the best example of a market that would respond well to this strategy is a westernised, yet slightly isolated nation such as Australia – it might translate to other cultures but I haven’t thought about that yet. As per usual, use your brain when localising, cultures and economies are not completely compatible.
I actually think this is a pretty interesting topic (particularly for Australia) and I’m sure there are way more examples of this and I’m going to set up a collaborative list when I figure out the best platform.
Tim’s post was seemingly in opposition to another book I was looking through this afternoon called “Making Strategy Work (Making Strategy Work (Amazon Link)), a compilation of essays containing a section on “testing before doing” by Robert Sutton of Stanford U, which stated the need for evidence before action. Now as my previous post stated I’m a big believer in scientific method or “evidence based management” (EBM) where it is needed, but I really think that people need to understand where you can measure something, and where you need to make a logical jump that no matter how much market research you do, will never come up in a focus group.
Robert Sutton’s example is of the CEO of 7-Eleven, upon walking into one of his stores and receiving bad attitude from the clerk spending millions of dollars on an outstanding service program, including awarding one of the 7-Eleven franchisees who had perfect service ratings $1 Million dollars and another bunch of initiatives, but after the fact realising that customers of 7-Eleven didn’t really care about the interaction with the employees, rather they just wanted to shop as quickly as possible. In this case, a really simple bit of market research such as a COMB analysis would’ve pointed out the misdirection of effort towards something that, while important, wasn’t really the greatest concern of the organisation.
Although analytical approaches such EBM are completely the right way to go when performing analysis in domains that aren’t new to the world (like customer service), when you’re playing a completely new game, you need to take some leadership rather than following. Last night I was watching Mad Men season 3 where the inimitable Don Draper is faced by focus group market research which opposed his idea for an ad campaign for cold cream but he went with it anyway, stating that if someone was to hold another focus group after his campaign ran for a year, it would back him up. I really thought about the creative leadership that CEOs like Jobs with the iPad who created products, that on first view and market sentiment wouldn’t have passed traditional market research, but through focussed leadership were given the go, and found success (admittedly this paragraph is begging for a post on ethnography and its importance in new product development and research).
Breakout successes that construct or reinvent market segments like the iPad, or Netflix, or Zipcar will never come out of market research or focus groups. These products require creative leadership, someone who sees a market need before anyone else does, even consumers. Solely following market whims (for it is an incredibly useful skill) usually results in firms who won’t ever be outstanding innovators. For companies to get really successful they need to understand when to be research and market driven, and when to let creativity rule.
How do you motivate staff, do money and perks still cut it? Or is possibly setting up your employees in their own entrepreneurial system a better way?
Recently, I’ve been thinking about the issues of retaining highly motivated and intelligent staff within knowledge intensive firms such as IT or consulting. Seems to me that the attrition based management of hire-lots-of-people-work-them-hard-and-the-people-that-don’t-burn-out-must-be-management-material isn’t really the basis of an outstanding business (clearly it does work to an extent, PwC has about 135,000 accountants globally), and I honestly think it’s going to float even less in the future.
But what are the alternatives to running a company based on the churn-and-burn policy? I personally think that the doesn’t have a simple solution, where you can somehow motivated your staff through measures that may have worked in the past (money, training, perks). I really think that traditional organisational structures, where a pyramid of progressively more well paid individuals work away under a small pool of owners is not the most effective way to build a company.
Where I think organisations should be going in the future, is thinking about their organisation from a question of ownership, actually thinking about how they motivate employees by giving some part of their company to their employees, and go into business with them directly as partners rather than employing them as subordinates and waiting for them to get a better offer. This is a view that is somewhat mirrored in the interesting WSJ article The End of Management, and also in the great Richard Koch book the 80-20 Revolution. A future point of differentiation may be that organisations become excellent at finding ways of reversing ownership in through development of spin-outs, Joint Ventures, intrapreneurship or any number of mechanisms.
There’s a lot more to be said about ownership strategy (or maybe anti-ownership) and the consequences that will arise in organisations, I think I’ll write a little more on this in the future, but if anyone has any inputs on looking at ownership as competitive advantage, I’d love to hear about it.
After watching the documentary revolution OS about the boom of linux and the FOSS (Free and Open Source Software) movement, I was inspired to read the somewhat seminal essay on the open source development model, “The Cathedral and the Bazaar”, by Eric S. Reymond (available here and later bundled with some more essays into a book – amazon link).
The essay is a somewhat geeky anecdote of both the success of the linux project and the author’s experimentation with using the open source development model on the fetchmail software program. What, I found interesting was that that the essay actually made really good reading on the importance of building a network while you’re building something or doing business (not facebook friends, actual networks where people help each other out). Most of the OSS observations that I read seem to think that it’s magic fairy dust that turns crap software into gold and where you can get people to update your outdated app that’s been underinvested in for many years. The essay was primarily for software development but I think there are some useful lessons for anyone who wants to engage community in what they do. Particularly, what I took out of the essay was that:
- People need to value something to get involved. I think a lot of mainstream commentry about Linux’s success has been about how people prefer open systems and freedom of software usage, but I actually think that people just like better software. You can see linux dominating in the web server and HPC sectors, where it is vastly superior to closed source systems, but still far from achieving market share in desktop markets (~1%). Users value the software, a couple contribute and everyone is happy.
- Lots of linkages are great, cultivate the few really valuable ones. Although having loose connections with hundreds or thousands of people are great, but the real value is to be had in cultivating a core network of people who will actually tell you when things aren’t going right or give you good ideas. ESR (Eric’s tag) in this essay cultivates his core with an email list (the essay is pre-facebook era), who he is careful to keep motivated with chatty emails and genuine appreciation of input and feedback.
I’m sure there’s a lot more to take out of the essay, but I’ll stop there. I’d really love to figure out how you would apply (or even if it’s possible) some of the more interesting parts of the OSS business model to a more traditional business. I know in my heart of hearts that command-and-control (and really all management is command-and-control in some way or form) isn’t the most effective way of running a business, but I can’t quite put together the whole picture of an alternative.
Often when taking an organisation through a strategic planning exercise, a not-inconsiderable amount of time is spent defining what “strategy” is. Invariably you get 12 perceptions of what strategy is in any room, and what I’ve come to realise that attempting to find a perfect explanation is a fools errand as there is no one explanation for what strategy is. Arguments I’ve come across go around what is “strategic”, and what is “operational” and usually these are arguments that make very little progress. Personally, I couldn’t care less about distinctions such as what makes a “corporate”, or “operational”, or “communications”, or “innovation”, or “social media” strategy or what’s tactical, or operational (as opposed to operations, which are day to day processes) because making these distinctions doesn’t improve the quality of strategic planning.
Where I think organisations fail when planning or “strategizing” is that they do not take the time to define the scope of the strategic activity, that is: where are the boundaries of the plan. When you take time to agree upon this scope at the front of the process, all questions of “isn’t this operational”, “isn’t this tactics” go out the window, it’s either in scope, or out of scope and shouldn’t be included. For example your “corporate strategy”, without defined scope could cover a range of activities from: everything (literally) the organisation does for the next 5 years, to a simple competitive advantage statement. However, beginning planning with a statement is much more clear:
“our corporate strategy outlines for the next 3 years: the regions that we will operate in, the businesses that we will field, the competitive advantages that we are going to pursue in these, and the corporate and financial structures we are going to put in place to support these activities”
A statement such as this makes that planning process much more clear. Nobody going into a planning event given the above scope is going to talk about CRM platforms, or what web content strategy should be pursued, or what projects are currently running in product development (maybe that’s a little utopian). Defining scope up front will hopefully improve focus, allowing for the right decisions to be made at the right levels in the organisation, which in my mind is always a good thing. I don’t know if this is the ultimate answer (which might be begging a question), but I’ve never seen a scope statement at the start of a strategic plan, however I have seen a lot of (senior) people confused by their own organisation’s strategic plan.
So: when building your strategic plan, define the planning scope first.
Photo by David Kjelkerud (CC2.0)