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.
When expecting your staff to execute strategy, are you sure that they understand what you are talking about?
I’ve been thinking about mechanisms to improve the execution of strategy. If nothing else, this involves communication of the strategy (posters, emails, the occasional management seminar) and linking to KPIs (and the associated dashboards). The idea is that employees will be motivated by the KPIs to achieve the organisations grand strategy (this is a gross simplification and totally disregards structure and culture). But, if this doesn’t work, where do the problems lie?
Poor strategy execution usually ends with blaming the KPIs, or the managers for poor communication, or structure, culture, environment, but I think something is missing, which is a basic understanding of strategy constructs and strategic planning for all employees who are tasked with its implementation (therefore pretty well everyone). My reasoning is simple:
We wouldn’t dream of letting an employee drive a forklift without training on its operation, yet staff are expected to drive strategy without any training at all.
Without the great majority of decision making staff possessing an understanding of strategic planning principles, I don’t see how any organisation is going to really achieve breakout results. Communication of strategy is I think the #1 goal of strategic leadership, yet strategy is almost always communicated in notoriously subjective strategy parlance. Tools like strategy maps aren’t saviours either, I love strategy maps, but the first step in training a business database user is not to show them a table schema diagram.
So, when you have a strategy to communicate, and you want your staff to understand, what do you do? Training
Have your strategy savvy staff, MBA trained managers or even the CEO (Andy Grove held a phenominal amount of training sessions at Intel) take your staff through some short courses on strategy, here are some good ideas to start:
- Buy a good entry level book on strategy (Financial Times guide to strategy by Richard Koch is am awesome example) and convert it into a short course to run over a few afternoons.
- If you use a mainstream framework that is published (balanced scorecard/strategy maps, integrated choices), have a series of training sessions where you discuss the original paper or book that this comes from (great case material abounds, like your company!).
- If you have someone who is up to it, a history of corporate strategy session is always useful to get people thinking about strategy.
- Finally, strategy has its own technical language, which to complicate things nobody follows in the exact same way. Construct a taxonomy of strategy terms for your organisation and train your staff in it. Include it as a glossary to ALL strategic plans.
Most universities and professional bodies (like the AIM in Australia) will have short courses or executive training on strategic planning which is another great source way of getting your baseline training up, although I’m really a big fan of branded corporate training. It makes the teachers clarify their thoughts, allows you to create materials that reflect your organisation, and admittedly can be a bit cheaper (but remember opportunity costs!).
Sadly, I haven’t come across a company that uses enterprise microblogging? I really think this is a technology that hasn’t quite found its feet yet has some great benefits and is worth a second look.
Microblogging (as in services like twitter) is a technology that has been getting increasingly mainstream and conservative press recently (if it’s getting mentions in the companydirectors magazine then I’d say it’s mainstream). However most of what I’ve been seeing is about the social side of microblogging, connecting to communities on the internet to build engagement, improve responsiveness etc. While a lot of the social, outward facing benefits of this technology have been overstated in my opinion (I am in the wrong market sector admittedly), I think that the internal benefits have not gotten anywhere near the attention they deserve.
There are a few providers in this market (yammer, and socialcast for more pure microblogging apps) and I think that organisations should pay them a little more attention – in particular if they want to build their internal social structures, or have an interesting, ubiquitous way of building an organisational knowledge base (more details below):
- Building Social Structures – Social structures in an organisation traditionally will travel 2 or 3 steps away from someone at most. You know everyone in your team, but you’ll only know a few people in other teams within your division, and nobody outside that. What microblogs do is create opportunities to discover people in the organisation who they don’t know. Sure some of this time might be wasted with social stuff “Hey who wants to go out to X for knock off drinks tonight!!!”, but a lot of the time, people will be asking questions, asking who knows about a certain industry, product or client. This sort of information doesn’t freely propogate in an organisation, spending time creating digitally enhanced social structures is a good thing!
- Developing Organisational Memory – Ever since Nonaka and Takeuchi published The Knowledge Creating Firm, managers have been looking for ways to take the tacit, difficult to communicate knowledge and put it into a format that organisations can build upon. I think that microblogging’s mechanism of putting organisational conversations online, in a searchable, hashtaggable, asynchronous manner will provide an incredibly rich stream of data, experience and memory that other more formal social communication forms such as blogs or wikis cannot. Where the difficulty arises is that organisations need to encourage people to move the behaviours that they normally restrict to email into the microblogging area (asking and answering questions in particular). Organisations who can encourage the more social conversations rather than the one-on-one email based conversations.
The last new technology that I thought had a bunch of cool applications for enterprise was google wave, and admittedly, it worked out spectacularly badly (for google at least). I would hope that organisations can see the potential, look beyond the marketing/social/community aspects, and see microblogging’s potential as a new knowledge and social 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.
When I’m thinking about any subject I usually like to organise my thoughts around what the main parts of a subject are. My day job is consulting, mostly in strategy, and as a field strategy has some order as to what it include, if you take some financial analysis, economics, and marketing, add in organisational and system dynamics you’ve got a pretty good core toolkit for a strategist. Recently Tim Kastelle had a great post on what defines innovation, and Hutch Carpenter on blogging-innovation has developed 25 definitions of innovation, but what is the core toolkit for an innovator? I’ve studied technology and innovation management at uni, but didn’t quite feel that I learned the whole deal, and since then I’ve put a bit of brain power to what skills make an innovator and came up with the following:
- Design thinking and creative problem solving – Design thinking is becoming super cool at the moment, and although I don’t think an MFA is going to save your company any more than an MBA was 20 years ago, understanding the concepts of design and “design thinking” are a good start for making a company more innovative and creative.
- Social science/market research – Personally, I think that the quantitative and qualitative arts of social science, and the business focussed version – market research, provide the tools and techniques to understand important stakeholder groups and use this understanding as an important input into innovation.
- Business modelling – Business models have emerged as one of the most important aspects of capturing innovation within organisations. Learning the art of business modelling provides innovators with the skills to structure businesses around innovations and hopefully capture enough value (i.e. money) to keep the doors open.
- Research and development – Whether scientific, engineering, product, or software R&D, I think that all innovators have to understand some of the fundamentals of research and development. Although, I think that R&D management has a long way to go (i.e. “money != innovations”), there is some good ground to be made by learning the systems of research, including: peer review, knowledge management and collaboration, and the systems of new product development.
- Project and portfolio management – This might seem a bit operational, and it is, but as almost all innovations are project based, and as all innovations are risky, unless you can afford for a company to go down due to one misfire, you’ll need a portfolio of them. There is a huge literature on project and portfolio management out there (the PMI is a good place to start) and it’s worth looking at to provide some rigor to budgetting, resource planning, risk management and valuation of organisational innovation programs and innovation portfolios.
- Intellectual property protection – Innovations are usually built upon a core of valuable and unique knowledge. While you might not neccessarily need own that core to capture value, if you do, understanding the mechanisms for protecting intellectual property, both legal and non-legal (not illegal, through business models and the like) is important for ensuring the payoff on hard R&D work.
Finally, there are a few others, but I’m unsure about how “core” they are, including:
- Evolutionary economics – underpinning all innovation theory is Schumpeter’s evolutionary economics, although I wonder if the economist view of innovation vs the innovation studies view of innovation is developing into a similar schizm to the military and business strategy schizm we see today (although I’m sure you still see the occasional copy of Von Clauszwitz on a CEO bookshelf).
- Social network analysis – recently trendy, and surprisingly useful for understanding innovation networks and the like, though I wonder how useful it is for the innovation practitioner. I think the combination of SNA, system dynamics, and epidemiology would make a pretty potent innovation dynamics toolkit, although I don’t know if that’s out there at the moment.
- Community building – This is hard to define, and while there are a number of books out there on building web communities, I don’t really know how defined it is as a discipline in it’s own right and whether it’s truly core to innovation.
There you go, of course, any fully rounded business leader should be comfortable with both strategy and innovation, as well as the essential operational and hard to define leadership skills. But that’s my thoughts on what makes an innovator. Any feedback?
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.
I’m a little late on this one, but google wave, which I wrote about here as a great tool for idea generation, is now public and out of closed beta, so if you haven’t played with this great (and underutilized) tool I recommend you check it out.
If you want more information on using google wave I really liked this guide (http://completewaveguide.com/) by Gina Trapani.
Photo: Big Wave Surfing Teahupoo Tahiti by flickr user thelastminute