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June 5, 2010

Originate your strategy from risk

Author: derek - Categories: management

The first duty of an organisation is to … anyone? anyone?

If you answered “to secure sustainable competitive advantage” or “create shareholder value” I would argue that you’ve identified the second duty. Your answers would have won first prize between 2002 and 2007, but they have been shifted due to lessons currently being learnt about ignoring risk.

Drucker says “The first duty of business is to survive, and the guiding principles of business economics is not the maximising of profits, it is the avoidance of losses” which we’ll agree with here.

If you are revising an organisational strategy, as you should be doing all the time, the avoidance of loss would therefore be a good and natural  place to start. This is a negative position, however, and does not address growth or competitive response. So lets rework that a bit and say:

Originate your strategy from your evaluation of risk

Risk can be destructive and threatening or rewarding and fortuitous – it all depends on how it is addressed, mitigated and what the appetite for risk in the organisation is.

  1. Define the organisation and the environment
  2. Identify and assess risks in and to the organisation
  3. Address negative risks and responses to opportunities
  4. Plug these in to the current strategy and determine modifications
  5. Action, monitor and review

You see, as negative and conservative as risk does sound, it is one of the only organisational analytical methods that force management to focus on the future. When asking management to innovate, forecast or develop scenarios one will get a poor response from untrained executives. By changing the focus to risk management is more comfortable with their business drivers, shortcomings and opportunities rather than untethered blue-sky thinking.

One could say that a person’s preoccupation with the past or the future can point to a dissatisfaction with present circumstances. In an organisation the same is true, although it is not unhealthy. Historic and future analysis help determine direction in a dynamic environment. Fixation on the present is fine for operational and support personnel, and these people look to the past to establish precedent and the future to gauge risk. Therefore to get people to think strategically the process has to be couched in terms of risk.

Focus on the past or future indicates dissatisfaction with the present

May 19, 2010

Can organisations dream?

Author: derek - Categories: management, twitter
an organisations dream?
Everyone has a Dream in their lifetime, some have a few. It is so intensely personal that only you really know what your Dream is.
To define these Dreams are tricky as dreams are an overused, perjured term. What occurs in your mind when you are sleeping is not the Dreaming I mean. The Dream I mean is more aptly defined as an urgency to do something important to you. It is a feeling that you have even before adolesence and it is against this that you measure your purpose and success all your life. It is important to adhere to all those cliches when you are young about doing your best, doing what you love because they define the Dream and, more importanly, discard what is not the Dream.
At the individual level these Dreams are usually not specific such as “to be a ballerina” but more general as “to be a dancer” or “to be a builder” or “to be president”. One can hold these dreams and change them as circumstances dictate. So the ballerina Dream may change to becoming a mother. Even while many people die without fulfilling their Dreams many more give up on their Dreams. To truly know someone is to know what they have to become. It could be argued that your Dream is a function of the circumstances you grew up in and your earlies success, failings and influences by role models. It could be influenced strongly by culture or religion.
I’m purposefully steering clear of New Age thought on dreams as that methodology is to accept without qualification every and any idea (Provided that thinking did not occur in the Western world after the Dark Ages). Nevertheless it is important to point out that the Australian Aborigines believe their values and laws are shaped in the Dreamtime and Laurens van der Post was told by Kalahari San that “there is a dream dreaming us”. These ideas of imperatives arrived at by non-rational thought is in keeping with the idea.
Now I’ll take it as given that any performance activity is enhanced if the person doing it is fully engaged in it. They love the job. They are
committed to the process. They have strong personal stakes in the outcomes.
Can an organisation dream? Well, if we accept that a Dream is the urge to start something and carry on regardless whilst making use of the faculties
at hand then the original Dream is that of the founders.
The American Dream of the early 20th Century was well set out and coincided with the individual dreams of its people. People at that time,
especially immigrants, had a long European dream of personal freedom, open spaces. To me, the strength of this collective agreement was that
Americans of all backgrounds got together to fight ugly wars half way across the world. The American Dream went off track after world War 2 when the
US saw itself as a global player until Martin Luther King brought it more or less back on track.
A political organisation can Dream. It lays out its Dream as a manifesto in order to attract parts of the electorate. The electorate indicates a vote rather than the sum of individual dreams. Politicians may wax grandiloquently about “the Dreams of the People” but in reality its just a preference. Political parties that define themselves by being against a current view rather than for a new view are bankrupt of Dreams. The US Repbulicans and UK Labour spring to mind, being anti-Democrat and anti-Tory more than anything.
A government department cannot Dream. It is a function. Even if the government should change it is likely the functionaries will remain. Individual
Dreams of service are subordinated to process, which in turn is subordinated to policy, which is subordinated to the political organisation.
A military organisation cannot Dream. Again it is a function that was set up. Individual members in the military often share similar Dreams which
are taken for granted in the ethos: to survive, to stretch oneself, to achieve, to dominate, to belong. The organisation is therefore capable of
performance greater than the sum of its parts.
Can a business Dream? The founder has a Dream borne of a strong personal need. That need is personal and cannot be passed on. All that can be hoped for is that the dreams of subsequent employees may coincide with the relevant life-stage of the company. Employees can share in the founders Dream if it is clearly defined (think of Microsoft and Bill Gates’ vision of a PC in every home and business). Nothing spells a lack of a strategic plan for success than a dry mission and vision statement. Can a business have a Dream that is based in non-rational thought? Yes, it speaks of intuition if it is solidly backed up by the business case and the numbers.
In business environments I’ve yet to be asked what my Dream is. Goals yes, but goals could include “to get through this week”. Alignment of individual’s Dreams with functions could prove to be very powerful if we accept that an organisation that encourages Dreaming is highly switched on.

Everyone has a Dream in their lifetime, some have a few. They are so intensely personal that only you really know what your Dream is. Don’t you?

To define these Dreams are tricky as dreams are an overused, perjured term. What occurs in your mind when you are sleeping is not the Dreaming I mean. The Dream I mean is more aptly defined as an urgency to do something important to you. It is a feeling that you have even before adolesence and it is against this that you measure your purpose and success all your life. It is important to adhere to all those cliches when you are young about doing your best, doing what you love because they define the Dream and, more importanly, discard what is not the Dream.

At the individual level these Dreams are usually not specific such as “to be a ballerina” but more general as “to be a dancer” or “to be a builder” or “to be president”. One can hold these dreams and change them as circumstances dictate. So the ballerina Dream may change to becoming a mother. Even while many people die without fulfilling their Dreams many more give up on their Dreams. To truly know someone is to know what they have to become. It could be argued that your Dream is a function of the circumstances you grew up in and your earlies success, failings and influences by role models. It could be influenced strongly by culture or religion.

I’m purposefully steering clear of New Age thought on dreams as that methodology is to accept without qualification every and any idea*. Nevertheless it is important to point out that the Australian Aborigines believe their values and laws are shaped in the Dreamtime and Laurens van der Post was told by Kalahari San that “there is a dream dreaming us”. These ideas of imperatives arrived at by non-rational thought is in keeping with the idea.

Now I’ll take it as given that any performance activity is enhanced if the person doing it is fully engaged in it. They love the job. They are committed to the process. They have strong personal stakes in the outcomes.

  • Can an organisation dream? Well, if we accept that a Dream is the urge to start something and carry on regardless whilst making use of the faculties at hand then the original Dream is that of the founders.
  • A country can dream. The American Dream of the early 20th Century was well set out and coincided with the individual dreams of its people. People at that time, especially immigrants, had a long European dream of personal freedom, open spaces. To me, the strength of this collective agreement was that Americans of all backgrounds got together to fight ugly wars half way across the world. The American Dream went off track after world War 2 when the US saw itself as a global player until Martin Luther King brought it more or less back on track.
  • A political organisation can Dream. It lays out its Dream as a manifesto in order to attract parts of the electorate. The electorate indicates a vote rather than the sum of individual dreams. Politicians may wax grandiloquently about “the Dreams of the People” but in reality its just a preference. Political parties that define themselves by being against a current view rather than for a new view are bankrupt of Dreams. The US Repbulicans and UK Labour spring to mind, being anti-Democrat and anti-Tory more than anything.
  • A government department cannot Dream. It is a function. Even if the government should change it is likely the functionaries will remain. Individual Dreams of service are subordinated to process, which in turn is subordinated to policy, which is subordinated to the political organisation.
  • A military organisation cannot Dream. Again it is a function that was set up. Individual members in the military often share similar Dreams which are taken for granted in the ethos: to survive, to stretch oneself, to achieve, to dominate, to belong. The organisation is therefore capable of performance greater than the sum of its parts.
  • Can a business Dream? The founder has a Dream borne of a strong personal need. That need is personal and cannot be passed on. All that can be hoped for is that the dreams of subsequent employees may coincide with the relevant life-stage of the company. Employees can share in the founders Dream if it is clearly defined (think of Microsoft and Bill Gates’ vision of a PC in every home and business). Nothing spells a lack of a strategic plan for success than a dry mission and vision statement. Can a business have a Dream that is based in non-rational thought? Yes, it speaks of intuition if it is solidly backed up by the business case and the numbers.

In business environments I’ve yet it inquired of someone what their Dream is. Goals yes, but goals could include “to get through this week”. Dreams are personal and embarrassing because uttering them invites fear of failure.

Alignment of individual’s Dreams with functions could prove to be very powerful if we accept that an organisation that encourages Dreaming is highly switched on.

*  Provided that thinking did not occur in the Western world after the Dark Ages
May 15, 2010

The danger language of unclear strategic objectives

Author: derek - Categories: social media
How does strategy work when the objective is not clear?
Creating shareholder value. Winning the war. Reducing the deficit.
SHAREHOLDER VALUE
Does everything boil down to this maxim?
I would put it to you that the ultimate strategic aim happens like this from the top down:
If it is a public company, the market expects to see consistent returns that are growing. This is so that fund managers and other analysts can have a tactical opportunity to make money out of the company’s performance.
If it is private the owners will be wanting consistent returns that are growing. They may want to sell or increase their stake, their opportunities are therefore strategic. Both expectations of the company’s performance are the same although the intent is different
Management have performance drummed into them. It is not theirs to glimpse behind the board curtain but if they do are told that the shareholders expect value. In meetings with the rest of the staff they will repeat this order; it helps enforce unpopular decisions as they can lay the blame for them at almighty, faceless, indifferent shareholders.
Business rather aims at creating sustainable competitive advantage – a mantra drilled into a generation who receptively understand the power of the brand. In simple terms – try and do better than everyone else and keep at it. In difficult times and especially with new business development senior managers are, at least originally, content if they just see some progress.
WINNING THE WAR
The aim of war is usually to win it, especially as winning means defeat of the enemy and further advantages to be claimed from the vanquished. But what happens when there are wars with no clear linear narrative and hazy ultimate objectives? Take Afghanistan. People will generally argue over the reason to invade which may include
to remove the Taliban as they were oppressive (left-wing uninformed view)
to restrict the rise of Islamic fundamentalism which would endanger Western interests in the area, including access to oil (centrist uninformed view)
to punish the country for tenous links with Al-Qaeda and therefore to 9-11 (right-wing uninformed view)
Afghanistan is a threat to its neighbour Pakistan, who has nuclear capability. If Pakistan becomes a failed state it would create a power shift in the region as India has ties to Russia and Central Asia would not be under US/Nato influence (geopolitical strategic view)
Support for a war requires people to be “on message”. None of the above views were steadfastly denied as no strong meaning was given for the war. The closest occurred when a Taliban offensive into Pakistan in late 2009 put Pakistani nuclear missiles within a few hundred kilometres of extremist control. The seriousness escalated and this “reason” was given for Pakistani urgency. It had observers questioning if this was the raison d’etre for the entire war in the first place or simply for the battle.
What is the strategic objective for the NATO powers in Afghanistan? Options include: to oust the Taliban outright; to sue for peace; to contain the Taliban; to get the new Afghanistan powers to take over the campaign – what? At any point in time it is not possible to know if the war is being won or lost and by what standards these outcomes are measured.
REDUCING THE DEFICIT
The economies of many countries are in a problematic state. The immediate response is what is it that needs fixing? Some would say the deficit is the problem which means that the country has to pay of its debts ie. make money and reduce other costs to service the debt. But others would disagree and say that the banking and credit system was the initial problem that exposed other problems and therefore that needs to be restructured before anything else is attempted. Others say that failures of certain systems led to reduced confidence among investors generally. With money not being invested the result is that companies and countries cannot grow (even if it is lending) and therefore they need to stay at there present size. Many financial systems require constant growth to survive, and therefore failure leads to unemployment and divestment which leads to less money going around etc.
My point is that it is not clear what the strategic aim of any recovery plan is. You cannot discount the tactic of “Wait and see” as the global economy is so fine-tuned that a financial crisis in one country (eg Greece) immediately affects a slew of other countries and financial institutions around the world.
CLEAR STRATEGY
When you have pressing problems there is a need for people and process to be aligned with the ultimate strategic objectives. While that sounds glib I’ll ask you to imagine a person in the organisation who is presented with a unique scenario and has to act with no recourse to a higher decision maker. This happens every day in the following environments:
call centres in cities
foot patrols in third world villages
politicians in front of the media and behind closed doors
religious leaders in day to day administering
market traders
all levels of management
I would venture the problem of giving out unclear strategic objectives is an outcome of diffusion of message. Give a press conference in neutral “safe” language in front of the various media and they will misinterpret the message by accidet or by design. Leaders often now this and then resort to PowerPoint which displays the overview which leaves the detail open for interpretation.
Communication is a hollow term in all of these aspects of organisational life. As it is not quantifiable it is regarded as a “soft skill”, but I warrant it is the cause of more system failure than anything else

How does strategy work when the objective is not clear? It cannot work effectively as individuals are put in situations at times where they need to act and need to be “on message”. Surprisingly, some of the everyday scenarios and key problems of our age do not have clear strategic objectives. What the public objective is may detract from the effectiveness of a constructive strategic objective. Consider the following trite maxims.

SHAREHOLDER VALUE
Does everything really boil down to this maxim? I would put it to you that the ultimate strategic aim happens like this from the top down:

If it is a public company, the market expects to see consistent returns that are growing. This is so that fund managers and other analysts can have a tactical opportunity to make money out of the company’s performance.
If it is private the owners will be wanting consistent returns that are growing. They may want to sell or increase their stake, their opportunities are therefore strategic. Both expectations of the company’s performance are the same although the intent is different

Management have performance drummed into them. It is not theirs to glimpse behind the board curtain but if they do are told that the shareholders expect value. In meetings with the rest of the staff they will repeat this order; it helps enforce unpopular decisions as they can lay the blame for them at almighty, faceless, indifferent shareholders.

Business rather aims at creating sustainable competitive advantage – a mantra drilled into a generation who receptively understand the power of the brand. In simple terms – try and do better than everyone else and keep at it. In difficult times and especially with new business development senior managers are, at least originally, content if they just see some progress.

WINNING THE WAR
The aim of war is usually to win it, especially as winning means defeat of the enemy and further advantages to be claimed from the vanquished. But what happens when there are wars with no clear linear narrative and hazy ultimate objectives? Take Afghanistan. People will generally argue over the reason to invade which may include

  • to remove the Taliban as they were oppressive (left-wing uninformed view)
  • to restrict the rise of Islamic fundamentalism which would endanger Western interests in the area, including access to oil (centrist uninformed view)
  • to punish the country for tenous links with Al-Qaeda and therefore to 9-11 (right-wing uninformed view)
  • Afghanistan is a threat to its neighbour Pakistan, who has nuclear capability. If Pakistan becomes a failed state it would create a power shift in the region as India has ties to Russia and Central Asia would not be under US/Nato influence (geopolitical strategic view)

Support for a war requires people to be “on message”. None of the above views were steadfastly denied as no strong meaning was given for the war. The closest occurred when a Taliban offensive into Pakistan in late 2009 put Pakistani nuclear missiles within a few hundred kilometres of extremist control. The seriousness escalated and this “reason” was given for Pakistani urgency. It had observers questioning if this was the raison d’etre for the entire war in the first place or simply for the battle.

What is the strategic objective for the NATO powers in Afghanistan? Options include: to oust the Taliban outright; to sue for peace; to contain the Taliban; to get the new Afghanistan powers to take over the campaign – what? At any point in time it is not possible to know if the war is being won or lost and by what standards these outcomes are measured.

REDUCING THE DEFICIT
The economies of many countries are in a problematic state. The immediate response is what is it that needs fixing? Some would say the deficit is the problem which means that the country has to pay of its debts ie. make money and reduce other costs to service the debt. But others would disagree and say that the banking and credit system was the initial problem that exposed other problems and therefore that needs to be restructured before anything else is attempted. Others say that failures of certain systems led to reduced confidence among investors generally. With money not being invested the result is that companies and countries cannot grow (even if it is lending) and therefore they need to stay at there present size. Many financial systems require constant growth to survive, and therefore failure leads to unemployment and divestment which leads to less money going around etc.

My point is that it is not clear what the strategic aim of any recovery plan is. You cannot discount the tactic of “Wait and see” as the global economy is so fine-tuned that a financial crisis in one country (eg Greece) immediately affects a slew of other countries and financial institutions around the world.

CLEAR STRATEGY
When you have pressing problems there is a need for people and process to be aligned with the ultimate strategic objectives. While that sounds glib I’ll ask you to imagine a person in the organisation who is presented with a unique scenario and has to act with no recourse to a higher decision maker. This happens every day in the following environments:

  • call centres in cities
  • foot patrols in third world villages
  • politicians in front of the media and behind closed doors
  • religious leaders in day to day administering
  • market traders
  • all levels of management

I would venture the problem of giving out unclear strategic objectives is an outcome of diffusion of message. Give a press conference in neutral “safe” language in front of the various media and they will misinterpret the message by accidet or by design. Leaders often now this and then resort to PowerPoint which displays the overview which leaves the detail open for interpretation.

Communication is a hollow term in all of these aspects of organisational life. As it is not quantifiable it is regarded as a “soft skill”, but I warrant it is the cause of more system failure than anything else.

May 12, 2010

I love a good UK election, me

Author: derek - Categories: management, political

I have no stake in the outcome but an amateur’s interest in a developed country which is steeped in ancient history and recent identity politics. Class, media, wealth, socialism, capitalism, liberalism and many ideas of the Enlightenment get an airing here, without the supernatural and supranatural factors of religion (Continental Europe) or race (South Africa).

Some characteristics that have appeared out of this election are important to gain a better understanding of, well, change management in particular.

  1. The outcome appeals to me as a centrist libertarian – which means, apart from being pompous and different, that I believe the Left and Right of the political spectrum are just moods; there’s a time to vote Left or Right yet refusal to budge from ideological battles is dangerous. It also means I believe that better outcomes are normally guaranteed by increasing liberties of the individual. I do believe there is a place for state, state control and organisation which is where I differ with anarchists (of the Left and Right).
    The current result shows that Conservatives have had to come closer to the centre. This in order to grapple with existing Labour legislation as well as the media image of conservatives. It necessarily creates a vacancy on the right wing which will see disaffected conservatives occupy.
  2. I hold that politics, metaphysics, history and management describe a pendulum effect. Too much in one direction creates a force for its extreme opposite. The swing to conservatism was natural after 13 years of Labour socialism and social engineering; the added boon to the Liberal Democrats was a response to the nanny-police state.
    While the Liberal Democrats polled few votes their influence was felt in the last month where voters indicated their support. More would have actually voted for them but for tribal politics built largely out of fear. It is probably fair to assume that the Liberal Left, who were Blairite or simply useful idiots, will identify themselves as Liberal Democrat during the coalition period.
  3. I called it wrong. I believed that Clegg would be king-maker by making the deal with Labour to remove Gordon Brown on April 21st. It was a valid option once the Conservatives one it would have been remarkably cynical. While a week can be a long time in politics, reputations last a long time. Many tribalists will not vote Tory because they remember their parents grumbling about Thatcher, or they can image grandparents wearing cloth caps and therefore feel affinity to Labour.
  4. Spin was the basis of Blairite NuLabour politics. Style over Substance, US presidential-style, ‘Cool Britannia” and the Spice Girls etc. It sold NuLabour to the rank and file union workers along with the promise of materialism. It was the glue that sold leftist politics to the middle class and trendiness to the uninformed. Where Campbell was the spinmeister, Mandelson was Machiavelli.
    Thatcher and the Conservatives of the 1980s divide the UK today still: conventional wisdom holds that they ruined society and trod on the poor. The myth was constructed and damaged the Conservatives since that time. The effects of spin also became the undoing of Labour in the campaign as distrust was rife within their upper ranks and the divisions between old Labour and Blairite Labour became pronounced.
  5. Tribal politics is the groupthink of the electorate. Democracy is constructed ostensibly to create the outcome of various rational thoughts, “wisdom of crowds” if you will. When people have few choices and are pressured to vote for the lesser of evils one gets parties that are divisive on identity politics and blandly similar on progressive ideas.
  6. Ideology is always dangerous. One of the species’ key takeaways from the 20th Century, perhaps because Labour straddled two centuries it allowed them to miss it. NuLabour was filled with educated and ambitious professionals who had the idealistic spark common to all revolutionaries. They were not Conservatives and therefore mobilised the rank and file of the existing Labour movement, bringing in new tactics of being media savvy and having a sound economic policy. They appealed to the middle class who felt guilty voting Conservative and built on that.
    However, there were elements of Marxism still in Labour that adhered to Frankfurt School principles which require society to be deconstructed to build something more fair, in the parlance of NuLabour. While that may retain some noble bearing it occasions problems when it has to be slipped into policy insidiously. See, no electorate likes to know it is being socially engineered. This caused the usual uproars against immigration and political correctness which can be managed. The recession was not factored in, nor was the disgruntlement of the white working class. Remember, fascism and socialism are but two moods of the working class, not the sworn enemies their controlling classes pretend them to be. Labour lost the confidence of its core vote and while there was a fear of defection to the extreme right wing the tribal loyalties remained.
  7. Taxation and representation. The Home Counties (Scotland and Wales and Northern Ireland) get a percentage of taxpayer spend in return for representation. They are overwhelmingly Labour constituencies in Scotland as Scotland is heavily subsidised by the state. Labour is a creator of the big state. Get the picture?
    The situation creates some flash but no bang, until the various nationalist parties in Scotland and Wales offered to join a Labour-Liberal coalition in return for more substantial state subsidies. This leads on to the debate about proportional representation which will have a political impact rather than an operational impact for the next five years.
May 10, 2010

What is a team player?

Author: derek - Categories: management, risk management

I’ve never heard of a person in a professional setting disclaim themselves as a team player. This in spite of two general views on the definition:

  1. A team player always puts the needs of the team above their own. The tactics decided on by the team will be acceptable to this viewholder even if they are not aligned. The viewholder is likely to work well in the team as potential conflict is negated.
  2. A team player works well within the team. Much as in sport, the team’s goals are almost always the same as the individual’s goals. When the team requires the viewholder to prioritise the team’s objectives in conflict, the viewholder has room to disagree.  Disagreement does not mean exclusion and it may resort to consensus or compromise.
  3. A team player is someone who can be counted on to do their work and not let the process or other operators down. I discount this view as you have your KPI right there and I will assume the other views above naturally include these attributes in their definitions.

THE PROBLEM
These two viewpoints may seem largely similar until conflict arises and then it resolves to a dichotomy. Regardless of the reader’s feelings on free will or group dynamics it is impossible to hold both viewpoints.

teamplay

Tribal party politics experience these problems, which is where the system of ‘party whips’ is evoked. Rationality and merit then disappears as game theory dictates the opinion holders to go for the predicable option.
In organisations with a strict authoritarian culture viewpoint 1 is more prevalent although some military structures famously included consensus decision makers (boers, ANZACs)

THERE IS NO I IN TEAM
In the first viewpoint the only reward for being a team player is inclusion. Inclusion may translate to safety, benefits or status. In the second system there is some scope for self-actualisation.

PREFERENCE
It may seem the case is being made for the second viewpoint only although it should be argued that they are different options at different times. One would not encourage viewpoint 1 in school, novice manufacturing or in some forms where accelerated decision-making is required (emergency services).

ANOTHER VIEW
A viewholder may hold the belief that they can work for the team best by being outside the team. They prefer not to be involved in group dynamics which often scupper rational and meritorious decision-making and find their position on the fringes of the group. They necessarily can’t be leaders yet are specialist peers. In sport they are likely to be the specialist coaches; in politics perhaps functionaries in the civil service and in corporates they are probably consultants, internal analysts, business development managers or some project managers.

These viewholders tend to be specialists or ex-specialists and carry management and organisational skills. They prefer not to use influence or informal channels as often the weaker decisions triumph in those settings. They twin their objectives with that of the team but expect to leave when the job is complete.

When you’re next asked the glib “Are you a Team Player?” question, ask them to define their terms ;-)

May 4, 2010

The problems of dynasty

Author: derek - Categories: social media - Tags:
The problems of dynasty
Why strategies of change, leadership and organisation structure are highly important once power has been consolidated.
EARLY DAYS
Having been put in power, the leader is first given a period of grace. This is as much to find his or her feet as it is not to embarrass those that put the leader there or for rivals to identify their attack. With the first few challenges comes the risk and therefore the opportunity to define the leadership. Problems will always crop up, and the more successfully dealt with by the leader, the more people they will sink into the subconscious. The leader therefore needs a goal that is easily marketed and that will define the strategy of the group as well as come to judge the legacy of that time. It is critical to get everyone “on message” but more critical to get it to succeed, as any sign of failure will become a brickbat to be used against the leader.
ENTRENCHED LEADERS
When a leader has seen off more than one considerable challenge and the viewpoint of rivals is not considered, one can consider that entrenched leadership. Everyone is on message. Everything runs smoothly. The leader’s wish is a mission statement and makes things happen. This has to coincide with a period of stability in the environment. Very few dynasties have been forged in unstable times unless that has been of their own making. The markets have to be stable, the city has to peaceful, the company has to be growing.
RIVALS
There are not often rivals to leaders in an organisation, but they are rife at the executive level (political level) and at the operational management level (merit level). Internal conflict can be positive but when one explores the nature of employees who leverage political power one gets to the logical conclusion that the best ideas and people do not rise to the top. It is argued that those who implement best rise to the top instead although I posit that those implemenations are, again, accomplished through personal political relationships and not rational business processes and practices.
STRUCTURE
The organisation begins along functional lines which is easier for the leader to manage. The leader will be behaving tactically and therefore needs vertical chains of command. Over time, this silo structure develops into a divisional structure to adapt to markets and operational requirements speedier. The division may also become an asset or a dog that the leader can sell off without disruption to the rest of the organisation. The leader can then pull back and adapt a strategical approach.
WHEN THE LEADER DOES NOT PULL BACK
If he or she chooses to micro-manage and the market is stable or favourable, then the window of innovation and strategic forecasting can not occur because the second tier of management is behaving tactically and the third tier of management operationally. No-one is thinking strategically which is a problem. In an unstable market it is more forgiving although when the leader has a council of between 10 and 20 members and the organisation is rife with “dotted lines”, execution can only happen slowly.
In unstable times (recession, need to diversify, external change) the leader requires management to think differently. But they cannot as they have been solidified into silo mode. Those who desired change have probable left the organisation. The leader has only tactical tools to address a large strategic problems. The consequences can be identified in:
executive level managers stay because they smell change at the top which could be beneficial to them
groupthink is endemic
middle managers need to load-balance between directionless employees and a tactical leader
thought-leaders are entertained as they appear to bring strategy, but the executive level snuff the threat
the leader sees the divisions as assets and is undecided which to sell and which to consolidate around
market share is lost
talk of a management buy-out increases. The leader does not deny this as it provides an exit strategy
a problem arises, operational or environmental, as they always do. This time the response is weakened and everyone does notice.
the only thing worse than groupthink, randomthink, now occurs as distrust has pervaded all levels of decision-making
What tends to happen after this is a visceral call is made to retreat to a defensible position. Divisions are culled and the core is defended, even if it is in a declining market. Why? Becauses goodwill exists with the brand and it can carry the organisation for a few years as it diminishes. Attack always wins over defence, and the organisation can only defend and therefore must lose.

Why strategies of change, leadership and organisation structure are highly important once power has been consolidated by a leader. While stability in the organisation and environment are key they are largely uncontrollable factors by the time of ascension.

EARLY DAYS
Having been put in power, the leader is first given a period of grace. This is as much to find his or her feet as it is not to embarrass those that put the leader there or for rivals to identify their attack. With the first few challenges comes the risk and therefore the opportunity to define the leadership. Problems will always crop up and the more successfully dealt with by the leader, the more people they will sink into the subconscious. The leader therefore needs a goal that is easily marketed and that will define the strategy of the group as well as come to judge the legacy of that time. It is critical to get everyone “on message” but more critical to get it to succeed, as any sign of failure will become a brickbat to be used against the leader.

ENTRENCHED LEADERS
When a leader has seen off more than one considerable challenge and the viewpoint of rivals is not considered, one can consider that entrenched leadership. Everyone is on message. Everything runs smoothly. The leader’s wish is a mission statement and makes things happen. This has to coincide with a period of stability in the environment. Very few dynasties have been forged in unstable times unless that has been of their own making. The markets have to be stable, the city has to peaceful, the company has to be growing.

RIVALS
There are not often rivals to leaders in an organisation, but they are rife at the executive level (political level) and at the operational management level (merit level). Internal conflict can be positive but when one explores the nature of employees who leverage political power one gets to the logical conclusion that the best ideas and people do not rise to the top. It is argued that those who implement best rise to the top instead although I posit that those implemenations are, again, accomplished through personal political relationships and not rational business processes and practices.

STRUCTURE
The organisation begins along functional lines which is easier for the leader to manage. The leader will be behaving tactically and therefore needs vertical chains of command. Over time, this silo structure develops into a divisional structure to adapt to markets and operational requirements speedier. The division may also become an asset or a dog that the leader can sell off without disruption to the rest of the organisation. The leader can then pull back and adapt a strategical approach.

WHEN THE LEADER DOES NOT PULL BACK
If he or she chooses to micro-manage and the market is stable or favourable, then the window of innovation and strategic forecasting can not occur because the second tier of management is behaving tactically and the third tier of management operationally. No-one is thinking strategically which is a problem. In an unstable market it is more forgiving although when the leader has a council of between 10 and 20 members and the organisation is rife with “dotted lines”, execution can only happen slowly.

In unstable times (recession, need to diversify, external change) the leader requires management to think differently. But they cannot as they have been solidified into silo mode. Those who desired change have probable left the organisation. The leader has only tactical tools to address a large strategic problems. The consequences can be identified in:

  1. executive level managers stay because they smell change at the top which could be beneficial to them
  2. groupthink is endemic
  3. middle managers need to load-balance between directionless employees and a tactical leader
  4. thought-leaders are entertained as they appear to bring strategy, but the executive level snuff the threat
  5. the leader sees the divisions as assets and is undecided which to sell and which to consolidate around
  6. market share is lost
  7. talk of a management buy-out increases. The leader does not deny this as it provides an exit strategy
  8. a problem arises, operational or environmental, as they always do. This time the response is weakened and everyone does notice the failure
  9. the only thing worse than groupthink, randomthink, now occurs as distrust has pervaded all levels of decision-making

What tends to happen after this is a visceral call is made to retreat to a defensible position. Divisions are culled and the core is defended, even if it is in a declining market. Why? Becauses goodwill exists with the brand and it can carry the organisation for a few years as it diminishes. Attack always wins over defence, and the organisation can only defend and therefore must lose.

February 18, 2010

Management by Gardening

Author: derek - Categories: social media
Daisy, Argyranthemum frutescens, Asteraceae
Image via Wikipedia

A folksy look at putting thoughts on one of my accidental hobbies down.

  1. You’ll make mistakes until you find out what your garden is able to be
  2. You’ll lose plants through things that are out of your control. You’ll lose even more flowers as they are more delicate. But you’ll gain through windfall and pleasant surprises, so it all balances in the end
  3. Until you figure out where the sun shines on your garden and where the rain falls in it, you’re going to be losing
  4. Some plants are made for your environment. A half-hour’s drive away and they struggle
  5. Weeds are tough. Weeds try to look like plants, grow rapidly and will take over your garden. You have to decide if you are willing to recognise and fight weeds or let them flourish and pass them off as flowers
  6. Some favourite parts of your garden have to be sacrificed. You ‘ll know when that time comes, and when you have to take your secateurs to it. Making the call and living with the consequences is a decision you have to make.
  7. Plants get a shock when being planted, even more so when being transplanted. Give them time and they’ll catch up
  8. Many shrubs like to be left alone and get along with it
  9. Harvesting your vegetables is a primal joy, to be time right. When you harvest too late, they go to seed. When you harvest too early, the taste and future growth is lessened
  10. Pruning and paring back is ugly at first – but its as necessary as providing fertiliser.
  11. You could fake a garden by bringing in an interior decorator and moving pots and grown plants around. However, they won’t be attuned to the soil and will suffer the usual shock of being planted – as they aren’t seedlings they’ll suffer more
  12. A garden is an investment in time and tactics
  13. You can’t stop the bugs. Just like you can’t stop the growth
  14. Put a plant in a small container and it will outgrow it. You can cut it back for so long, but eventually it will die
  15. Shrubs and trees create structure, flowers create focal points. The former can be beautiful, the latter can tie things together – but each has its primary role.
November 30, 2009

Making money with online media

Author: derek - Categories: social media - Tags:

In light of the Rupert Murdoch announcement and the poor show for established newspapers around the world, the only model that makes sense to me is the paid referral:

News websites should be built so that the link to the article is not seen or copied. If you want to forward the article/email/retweet you get credits to view another two articles.
The recipients of your link get to see the article, natch. The site continues with advertising on the article page.

If you aren’t a broadcaster, you can get a widget or feed of the news into your website/facebook page. If you agree, you will get access to the site or an email digest or both.

Sound familiar? Is Googlenomics – let the crowd do the viral work for you and have a net to maximise the reach.

November 19, 2009

Snippets: Treat shareholders as customers, and SocGen’s outlook

Author: derek - Categories: risk management

From The Telegraph 19 Nov 2009: http://www.telegraph.co.uk/finance/personalfinance/investing/shares/6588959/How-to-buy-shares-with-perks.html

How to buy shares with perks

Consumers can gain benefits ranging from thousands of pounds off the price of a new home to a 30pc discount on Eurotunnel travel just for holding shares in certain companies.


From The Telegraph 19 Nov 2009: http://www.telegraph.co.uk/finance/economics/6599281/Societe-Generale-tells-clients-how-to-prepare-for-global-collapse.html

Société Générale tells clients how to prepare for ‘global collapse’

Société Générale has advised clients to be ready for a possible “global economic collapse” over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.

November 16, 2009

Shareholder E-communication is like global warming

Author: derek - Categories: agm, governance, investor relations, shareholder activism

Electronic communication to shareholders is a philosophy as much as a practice – where possible collect email and mobile addresses of your shareholders to communicate directly, and cut down the costs associated with being a listed company, eg on the JSE.

Polar Bear

Polar Bear

  1. Because there is an argument for and against, there is doubt. Which means there is no consensus, so policy shouldn’t change. If the water is muddied enough, no-one can tell if there is or isn’t something in the water.
  2. The signs are there for climate change and for electronic comms, it is a visible thesis. This is the reason that both phenomena have legs, because we witness climate change and we witness greater use of electronic delivery.
  3. The toothpaste can not be put back in the tube. We can set a level of sustainability of life, but all the seas of plastic and remnants of carbon will be here for a long time to come. In the same way, the internet and email can not be stopped.
  4. Change will come from below. Our generation and those before had different mandates, so the kids will have to fix this mess. Ergo, the Digital Natives wrote school assignments on computers and with the internet. They are now administering your pension fund and don’t know what a masthead is…
  5. These problems come at the right time to create a perfect storm, which means the problem will either be faced and solved or not. Environmental issues (ironically!), shareholder activism, financial crisis et al have demanded that we look at electronic comms.
  6. The world expects instant information and instant fixes. The battles between bank queues and online banking, tax returns and e-filing,  memos and email have been won.
  7. It is an obligation to be fulfilled – looking after the environment is a legacy issue for generations to come; communicating to shareholders, to those who fund your growth, in their preferred manner is a duty.
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