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Monday, 22 December 2008

What Westminster and Whitehall don’t want to know

In his novel “High Profile” the brilliantly laconic American author Robert B Parker mentions, quite in passing, “Tax-and-spend big government liberals” and “Spend-and-no-tax big government conservatives. 

In Europe we would call this the choice between “Tax-and-spend big government social democrats” and “Spend-and-no-tax big government conservatives”.  I suppose that there might be an alternative such as “No-spend-and-no-tax big government”, but that option could only be for the economically reckless.

Following Parker’s logic, there is an another alternative –

No-spend-no-tax-and-not-big government.

“Not-Big-Government?”   This is so radical an idea that it is regularly declared impossible. 

Why?  There are three major factors -

Vested interests – tens of thousands of managerial jobs depend on the unnecessary complexity of big government – thousands of bureaucrats don’t want to give up their  power – millions of public employees benefit from the make-work activities that keep them occupied, pay their wages and promise their unaffordable pensions. 

Inability to innovate – the prevailing managerial ethic in the public sector, whether national or local, is to operate by precedent – they always do what they have always done (and when faced with a new challenge, they search for the nearest similarity to apply so that, once again, they can do what they have done before) – and they get what they always got – inefficiency selectively breeding even greater inefficiency.

Overwhelming arrogance of leadership – the public sector is systemised to the ultimate degree to  try to ensure that the outcome of every decision is pre-determined – it demonstrates micro-management to an absurd level – there is no trust by their leadership in the competence and judgement of public sector workers – they are led by a politicians who genuinely believe they know how people should lead their lives and do their jobs better than they do – with all this exacerbated by a media that constantly seeks to allocate blame and demand infallibility.

Given these three drivers of perception – change really is inconceivable – it has become unthinkable.

These three drivers helped kill the UK‘s Motor Industry, Shipbuilding, Steelmaking, Mining, Textiles, Chemicals and Electronics industries – and others.   The bulk of these have gone to other countries – nevertheless in the UK tiny pockets of Excellence do survive where they Think Different.  There is no “other country” to take away our Public Sector – although they have even tried to give it away.

Our Public Sector as it currently exists, and is developing, is no longer sustainable in our economy.  If it does not change, it will totally destroy our nation’s wealth.

We all know it is a problem, but the real PROBLEM is HUGE –

The alternative is so unthinkable that NOTHING is being thought!

So let’s try Thinking Different about Government. 

Let’s apply the Competitive Strength point of view to the Public Sector and see what it might tell us.

The high numbers of public reports of administrative incompetence tell us, in general, the public sector can barely control its Cost of Quality.  We know that, in the private sector, those companies with outstanding comparative Competitive Strength have moved way beyond Cost of Quality control by massively reducing their Cost of Behaviour.  We know that difficulty in managing the Cost of Quality is exhibited in the Competitive Strength condition we call Constrained  and we know that those outstanding businesses define the level we call Free.  The Comparative Strength Report tells us that the economic difference between Free and Constrained is between 75% and 85%.  It is a huge gap of enormous significance.

The significance is that it means –

If the Public Sector were to operate at the Free level of comparative Competitive Strength, it could deliver all current services for between 20% and 33% of the current cost.

Financially, that really is Not-Big-Government. And, as it happens, the cultural imperatives that drive the transformation of performance to the Free level would ensure that organisationally it could not be “Big-Government” and that the service experience would be massively better all round.

A Solution Is Possible

“Not-Big-Government” is not inconceivable.  But it won’t be easy to get there.

It will be massively different from our current doomed state. It will need political leadership of the highest order. It will require a total regeneration of ethos in the Civil Service leading to substantial changes in internal leadership and organisation.  It will demand a complete transformation of operational managerial competence in the Public Sector, national and local. It must be matched with a vigorous programme to re-distribute a high proportion of the nation’s employed base from non-productive public sector activity into nationally (and personally) enriching economic output.  There will need to be continuous change for many years but it needs to be fast, sustained and self generating - that will require the acquisition of high Changeability by thousands.  That has been demonstrated, it is not impossible.

This will need Different Thinking to get Different Actions to deliver Different Results.

Different Thinking?

The first step to be effective in the Transformation of Performance is to Decide to Act.  This decision must be unconditional – there is no need for any feasibility study, process of consensus, strategy mapping, or any of the other techniques that can be used to avoid decision. 

The first step is to decide that Something needs to Be Different, what that Difference needs to look like, why alternative outcomes must be rejected and how you will Know when the Difference is achieved.  That is all that is necessary.

The present state of our State is not sustainable.  

If nothing changes, then nothing will change.

Can we Decide to Act? 

Is there a sufficient will to survive left in our over-regulated, over-spun, over-manipulated, demoralised, dispirited, and newly impoverished population?

We don’t know.  We do know that individuals and businesses can Decide to Act.  They can elect to Transform their Performance up to the level of comparative Competitive Strength that we call Free – and they will, like those existing pockets of Excellence we mentioned before, win themselves the maximum probability of continued survival, freedom of choice, and prosperity.

You can Decide to Act, before it is too late.  

Have a look at our web site and then contact us to find out how we can help you to help yourself.

Wednesday, 26 November 2008

Competitive Strength = FREE - What's It Like?

In our Blog posts, we write about the various levels of comparative Competitive Strength  - we regularly refer to Constrained, Comfortable, Excellent – and only every now and again do we find the opportunity to refer to Free, the highest level.  Why is this?  Because it is rare and precious – the businesses that operate at the Free level are the organisations that are outperforming the average by at least 50% on all financial measures.

So what is it like to be Free?  For a start it is not a list of things that the organisation does – it is not policies, methodologies, procedures, systems, assets, training programmes – although all of these may be outcomes of their essential difference.  That essential difference is that they Think Different – they have a different way of mind – they have a different way of being – they have a different way of working - they are on another planet – the planet Beyond Excellence.

A wonderful coincidence -  I have just joined Skype because it comes with the “3” mobile that is replacing my “Orange” phone (12+ years of customer loyalty lost as they have slid from Excellent down through Comfortable to Constrained, time to get out).  And, whilst finding out about Skype, I found this address by their Chief Executive to his team – extracts only

Home Improvement - Josh Silverman on November 20, 2008

"Skype remains a work in progress. We’re a dynamic, fast-growing company that learns from a changing world and adjusts accordingly. For us to continue thriving, change cannot be a one-time thing. It has to be a way of life. Stagnation, the dismal alternative, requires no effort and creeps up silently. People tend to get stuck in their ways and companies are no different. When they get bigger, they get clumsier.

I’d rather avoid that last bit. So, in August we began evaluating our structure to make sure, really sure, that we don’t join the Clumsy Club.

Now, 2008 has been a very good year for us. Our growth rate has been terrific and I’m cautiously optimistic about healthy growth in 2009 as well. Obviously, anyone claiming to have a reliable crystal ball is either a fool or a gambler. We’re neither. But in difficult times, people tend to turn to value. And Skype represents value. We’re monitoring the market closely, but based on what we see at the moment, we plan to continue growing our team to help achieve Skype’s full potential.

Excited as we are about bringing new colleagues aboard, there’s more to reorganizing our structure for continued growth. Back in the summer, we set out to be smart about it. And transparent. And fair.

Which is why we held numerous workshops to gain input from the team on how our structure and ways of working need to change. Change that we hope will lead to sustained growth, better products and an even more empowering work life at Skype. One of the things we’re doing is to create smaller “companies” within the company: consumer-, business-, mobility-, and developer-focused business units vaccinated against shackles that curb innovation and risk-taking. Each new business unit is designed to emulate the feel of a start-up and to cultivate a deeper sense of ownership.  

This is just a low-resolution snapshot from what’s a continual journey of change. There’s much more to it, of course. Replotting our roles, responsibilities and accountability takes time. While we think that we’ve done most things right, some won’t come through as intended. Tweaking them for a few months should make life at Skype work well for everybody.

Naturally, changes will be most meaningful to us on the inside. If you’re a Skype user, I hope you don’t care too much about our organizational plumbing. The pleasures and struggles of your own life are much too important for that. But here’s the thing. Our structural rethink isn’t about change for change’s sake. From day one, everything at Skype has boiled down to delighting the customer.

With a bit of home improvement to support further growth and innovation, we’re just making sure it stays that way.

Skype will always be a work in progress."

I have highlighted the interesting key indicators in bold

If you can see how different this is, and you are intrigued, there may be hope for you and your business. 

If you think that they are just riding the wave of novelty and have yet to “grow up” – (e.g. if “they don’t know they are born” flashes across your mind) - you and your business are probably doomed.

Josh Silverman knows that

If you always do what you always did, you will only get what you always got

He is demonstrating a deep understanding of Changeability and a serious commitment to making sure that it remains high in his ever expanding empire.  He is actively seeking to continue to Transform Performance and, in setting the path for further expansion in troubled times, exhibiting his confidence in the comparative Competitive Strength of the business.  He has understood the importance of agility and flexibility – he realises that his fleet of gun boats has the potential to run rings around the clumsy battleships of traditional telecoms companies.

The Competitive Strength Report Process is the only tool available from anyone, anywhere that provides an objective measure of Competitive Strength compared to the very best in the world. It is based on extensive and rock solid research into what it takes to create and sustain an organisation that can exceed expectations in every respect. 

The Competitive Strength Report enables a company leadership to understand where they are positioned, in comparison to the very best, where their main threats lie, what the implications are and helps them decide very clearly,  collectively and speedily  what they need to do. There is nothing else as fast, as accessible or as affordable

Find out more about it on our Competitive Strength web site page – or at the Competitive Strength Report web  site.

Friday, 14 November 2008

Why am I feeling Good today?

Yesterday was bad news for a good person.  Today, my attention was drawn to the other side of the coin, some good news.

There are a tiny minority of companies with the highest level of comparative Competitive Strength - the condition we call Free.   One of these is AEASEAL in Rotherham.

Here is an extract from one of their web site news pages

How does the Exceptional Customer Service Industry Leader, Stay Ahead?
The answer is simple: They invest in Technology, People and Processes.

There are few 9-axis machine tools running in the UK today, even fewer tasked with making small batches (1 to 3 off) in an ultra fast-response environment. AESSEAL® has now bought 9-axis machining centres for their dedicated Hydrocarbon Processing Manufacturing cells. The vision is simple; to provide exceptional customer service for unique and custom made Oil and Gas mechanical seals.

AESSEAL® is the industry leader at providing exceptional customer service for the mechanical seal industry. The business delivers 62% of ALL its products within 24 hours and 72% within 72 hours…. pretty impressive when you have 66 sites located in over 30 countries.
Exceptional customer service values run through the organisation’s veins. Service enhancement developments are second nature. This is true even for complex, low volume, custom made non-standard designs as found in the Oil and Gas Industry.

If you were to consider making a one-off engineered component on a highly complex and expensive multi-axis machine tool, some may well question your sanity.
However, given the fact most mechanical seals found in the Oil and Gas industry are hard piped, the last thing the customer wants is the expense of changing this when the seal needs changing. Therefore, practically every gland plate is custom made to suit the application making it impossible to put advanced inventory in place.

When you can’t put an item in inventory, you create a process and invest in technology that eliminates the need for inventory. 

By making parts in a fraction of the time that it would typically take using conventional methods, eliminating the need to set-up the machine tool at the same time, the vision of delivering exceptional service on non-standard products becomes a reality.
In a unique initiative, AESSEAL plc is creating machining cells in which the machines themselves and the supporting infrastructure replace the need for inventory. Complex geometrical components will be made so quickly that customers will receive seals as if they had been already produced and available “off the shelf”.
The highlighting colours and bold emphases are mine, not AEASEAL's

This is Different Thinking and is delivering Different Results.  
AEASEAL is a UK Manufacturing company that has maintained unbroken growth  since its foundation in 1983.  Their total focus is, and has been from Day 1, on Customer Service.  Please go to their web site and read all about them(there is a link at the bottom of this page) .  

You too could follow this path - if you have the courage, the determination, the sustained inventiveness and develop the disciplines, the attitudes, the values and the competence they have.  If you develop the Different Thinking that they, and all the others that are at this level of Competitive Strength, have learned to do.  We have spent 15 years developing tools and techniques to help you to help yourself to make this transition, better, faster, cheaper.

Why do I feel good about this?  In 1982 I went to work for McDonnell Douglas Automation Company to sell their new CAD/CAM technology here in the UK.  Way back then, I saw an extremely complex and urgently needed ( 4 days to launch) Space Shuttle component being machined whilst the design was still being completed - the Design to Manufacturing lead time was 30 minutes!  I learned at that moment that nothing was impossible.

Over the next 6 years our small McAuto UK team helped British manufacturing pioneers to introduce this new technology to transform their businesses - mould and tool makers, aerospace component makers, telephone companies, machinery makers, and JCB.  Others followed.  We were encouraging a revolutionary manufacturing strategy, the ideal goal of maximum flexibility and adaptabilty in manufacturing capacity - the shorthand was "Economic Batch Quantity equals One". ("EBQ=1" - does anybody remember that buzzword?).

Now, 26 years later, this is a perfect demonstration of the achievement of that goal - and for a business differentiating purpose - outstanding Customer Service.

You can find out more about the new concept of comparative Competitive Strength on our web site page.   You can learn more about Different  Thinking for Different Results on our insert page.
And you can learn more about AEASEAL, a beacon of Excellence - here.

Wednesday, 12 November 2008

Why I Feel Bad Today

Today I learned that a prophecy I had made to someone nice had come true, for  them.  And it is not good news.

Last week I phoned VirginMedia to tell them that they were trying mistakenly to extract payment for my cancelled account.  I had to quit VirginMedia Broadband because they totally failed to perform, and repeatedly misled me. My ChangeWORLD business partner, also a long time Virgin customer,  had to quit after a total and lengthy failure of service.  He was told by Offcom (it was that bad) that they were in breach of contract.

My call was answered by someone who insisted that there was a penalty charge - when I questioned this and asked to speak to a supervisor I was disconnected - that is what we have come to expect from VirginMedia.  My second call was answered by someone totally different. This lady checked the facts, apologised nicely for an administrative error, and acted at once to cancel their end of the Direct Debit arrangement.  I was so pleased to be treated with courtesy and respect.

So pleased that, as I said goodbye, I suggested to the lady that she should start as quickly as possible to find a new job.   I explained that I was one of the authors of a business health measurement tool and that it was indicating that VirginMedia was going downhill, fast.  I told her that I was very sorry, after all the good years I had enjoyed with VirginNet, at the certainty that many jobs would be lost - possibly hers too.

We predicted this via the Competitive Strength point of view elsewhere in this Blog series.

Today's news is that VirginMedia will shed 2,000 jobs.

There are times when it is horrible to be proved right.

Get Your Life Rafts Ready - NOW

Different Thinking for Different Results is our constant theme.  It is the essence of  Changeability, the key to survival in these turbulent economic conditions.

We are so grateful when it is vividly highlighted as in the excerpts below: -

From November 12, 2008 - David Wighton: Business editor's commentary

Gordon Brown should take note of Vodafone's strategy for the recession as the telecoms giant battens down the hatches

Vittorio Colao and Gordon Brown are adopting rather different strategies for piloting their vessels through the economic storm. At the good ship Vodafone, Mr Colao is battening down the hatches and reefing the sails.

At HMS UK, Mr Brown has thrown away the charts and is going full steam ahead.

The market reaction has also been different. Mr Colao's promise to cut costs, focus on cash and forget about acquisitions was rewarded with a 6 per cent jump in the share price yesterday.

Mr Brown's promise to cut taxes, focus on spending and forget about government borrowing saw sterling sink to a new 12-year low.

Mr Colao's call for the company to make better use of what it already has rather than chasing new markets looks eminently sensible.

After years of fast growth and acquisitions, there should also be plenty of efficiencies to be squeezed out. The aim to build a leaner and more nimble organisation plays to the strengths of Mr Colao, a fanatical competitive cyclist.

And there was clear evidence of the new cost regime yesterday. Rather than the lavish spread previously provided at press conferences, journalists had to make do with a few stale buns left from the analysts' presentation.

The new focus on “giving customers what they want” is a bit of an indictment of what it was doing before.

But it also reflects the reality that in rapidly deteriorating conditions businesses need to be very sensitive to the changing needs of customers and tailor products and pricing accordingly.

Vodafone’s leadership is demonstrating Different Thinking – and because it looks likely to contain downside risks in the current economic turmoil – it will deliver Different Results.  This behaviour is  characteristic of an organisation with the level of comparative Competitive Strength that we call Excellent.  This is the flexibility, adaptability and readiness to ask itself the tough questions that takes such companies into leading their marketplace, rather than playing catch-up.

These are courageous decisions for an organisation that, like its peers in the mobile communications marketplace, has been hell bent on growth, customer head count, volumes and headline revenues and fuelled by truly cosmic levels of leveraged debt.  Swinging the internal culture into a focus on operational excellence, on outstanding competence, on extraordinary effectiveness in all matters, is going to be a big challenge. 

Never is this more true than when a business culture has been Sales led. We have seen this demonstrated massively, and disastrously for us all, by so many of the Banking sector.  This is where our assessment last year of their comparative Competitive Strength condition as Comfortable turned out to be far too true – so Comfortable that within a few weeks of a changed environment they found themselves flailing about in the Constrained condition – and we found ourselves , with them, peering into The Abyss.

Mr Colau is too smart to let this happen.  But, he will have to get his battleship sized organisation to move rapidly and convincingly into the new way of acting that he has identified.  And that will require a New Way of Thinking.  That can be done but has not been easy, as other large corporations have found. We wish him well, and will watch with interest.

On the other hand, Mr Brown is not too smart, as we all know.  He is going to keep on doing what he has always done – and we are going to keep on getting what we have always got.  God Help Us All. 

There is no organisation that is more totally “Sales” led than this Government.  There has been such a consistent pattern of the same behaviours repeated over and over again, the delusion that giving something a different name actually causes it to change, that shuffling data to show different results means that change has been achieved, the constant changing of organisational structures for “Sales” purposes – I better stop here, my frustration is all so non-productive – as is its subject.  This is, in our terms, more like what we would describe in a corporate comparison as a  Constrained condition – but down at the lowest level of that, next to what we call, in a deeply technical phrase “Basket Case”.  Beyond the sort of remedial transformation that businesses might be able to achieve.

So, we are all in the same boat.  And, as the article suggests, we are sailing at full speed into the ice fields with our Mad Captain on the bridge  - with his charts torn up, his radar switched off and listening to none.  Moving the deckchairs is not going to make any difference.  Like Mr Colau, we all need to apply Different Thinking to make sure that we too get Different Results, that we too are as prepared as we can be for the nasty surprises that lie ahead, that we too are focused on What Matters and not on what we might have been up to now. We must all have our life rafts ready and survival kits prepared.  It is time for Different Thinking.

We developed our Competitive Strength Report to help business leaderships start their Different Thinking better, faster and cheaper, than any other tool before.  The Competitive Strength Report Process is the only tool available from anyone, anywhere that provides an objective measure of Competitive Strength compared to the very best in the world. It is based on extensive and rock solid research into what it takes to create and sustain an organisation that can exceed expectations in every respect - the demonstrated doorway to increased resilience and survivability. 

The Competitive Strength Report enables a company leadership to understand where they are positioned, in comparison to the very best, where their main threats lie, what the implications are and helps them decide very clearly,  collectively and speedily  what they need to do.

If you would like to know more about this, or ask us any questions, please have a look at our Competitive Strength web page with video - and our Different Thinking web page

Wednesday, 15 October 2008

Just How Stupid are our Leaders?

Probably more than we have ever dared to think.  We are starting to suspect that their thinking may be based on deep and fundamental  ignorance. It is a terrifying thought.

An extract from

Stumbling and Mumbling  Chris Dillon’s Blog 14th October 2008

On the subject of our economic leadership -

…….. “I thought: “But surely they’ve learnt from statistics and experience by now. Their risk management can’t be as terrible as Taleb claims. I know bosses are stupid, but they can‘t be this gibberingly, imbecilically, carpet-chewingly, moronically cretinous, can they?” I suspect most economists thought my way.
It looks like we were wrong and Taleb right.
But this isn’t because Taleb had any great insights into the nature of risk. It‘s because he thought banks‘ risk managers were idiots, whilst economists didn’t think so - not even me.
In doing this, however, we were just following economists’ standard procedure - of assuming that agents were if not rational then at least not wholly stupid. “ ……..

There were over 30 comments, all by erudite and thoughtful experts – and for me, all missing the point.  I selected this  extract from Chris' blog because it highlights our core message

“To get Different Results you must apply Different Thinking”

As we say in our web site – if you always do what you always did, you will only get what you always got.

And that is what the economists, the financial analysts, the bankers - and the government – have been doing.  And that is why, when the balloon finally ran out of the hot air they had all been spouting, the fall was so fast and so catastrophic.

As an engineer, I learned the Laws of Thermodynamics. Amongst them were two topically relevant concepts - 
- All types of Perpetual Motion Machines are impossible.
- All transactions involving Energy are "lossy".

Wealth is the Energy that powers our social existence. The same rules apply.
We have had 12 years of the leaders of our economy ignoring, or trying to conceal,
  "lossiness" and imagining they had a Perpetual Motion Machine of Wealth – truly not understanding that they were doing.

We engineers learned that the energy efficiency of any device depends on how close we can make it to a hypothetical Perpetual Motion Machine – in other words – on how much we can reduce its “lossiness”. 

In ChangeWORLD we know, not just from experience but from rock solid research, that the organisations that massively outperform the rest, and that will be least threatened by the current economic shambles, are in fact those with the least “lossiness”, the lowest waste and the highest quality of business process .  They are the ones that, on our Competitive Strength Report scale,  will rate as “Free”.  There are very few.

The majority, with the Comparative Competitive Strength level of “Comfortable”, are now faced with the prospect of a very rapid, unexpected and enforced transition into “Constrained” - the doorway to The Abyss, total failure.  There will be absolute carnage over the next 18 months.  There does not have to be – there could be more survivors if they can apply Different Thinking fast enough.

The same rules and logic  apply to Government, and to our national economy.  If we have an excessively “lossy” economy, it will have low Comparative Competitive Strength.  It will become, inevitably, “Constrained”,  facing The Abyss.  Our leaders have indulged themselves in the illusion of success, ignoring the “lossy” economy, during the exceptionally benign economic conditions of the “NICE” decade.  Self-deluded and smugly claiming "Excellence" they were actually only “Comfortable”.  Now everything has changed, and they don’t know how to face The Abyss.

Like we all are, right now.  Have you noticed the number of references to the “Abyss” in the last two weeks?

Our absolute screaming  frustration is that all of this is known – and all has been ignored – because it is predicated on the idea  that:

Solid and sustainable Wealth is the outcome of applied and continuous effectiveness of performance. 

That has never been what the wheelers and dealers of the City, Whitehall and Westminster have ever wanted to hear – it is what they have never been able to do – it is what they have never understood.  And, sadly, it appears that the economic experts (as their lap dogs) have snoozed on their leads next to their food bowls!

Do you want to know what you can do right now to pull your business away from the Abyss?  Are you going to do it to them before they finally do for you?

Learn  more about the Competitive Strength and – Thinking Differently?  Have a look at our ChangeWORLD web site and the Competitive Strength Report web site.