tag:blogger.com,1999:blog-81648395082303794022024-03-14T07:20:57.563+00:00Exceeding Expectations...the key to Competitive AdvantageCompetitive Strength is the key factor in determining the long term performance, value and sustainability of every business.
Competitive Strength is defined as:
How capable a business is compared with those that want to beat it and also how capable it is of mitigating the impact of those forces out there that can cause it to be beaten...Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.comBlogger55125tag:blogger.com,1999:blog-8164839508230379402.post-72006940714572348132012-05-21T16:26:00.000+01:002012-05-21T16:26:04.148+01:00Needlessly Blind Demand a Better White Stick!<br />
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<i><span style="font-family: Times, 'Times New Roman', serif;"><span style="font-size: large;">Pace of change ‘too quick’</span><br /><span style="font-size: x-small;"><strong class="f-author"><a class="fg-" href="http://www.thetimes.co.uk/tto/public/profile/Dominic-Walsh" style="color: black; text-decoration: none;">Dominic Walsh</a></strong> - The Times - </span><span style="color: #666666;"><span style="font-size: x-small;">Published at 12:01AM, May 21 2012</span></span>Companies are struggling to keep pace with a rapidly changing business environment, putting their futures at risk, according to a survey of business leaders. The findings of the Fit to Change report, to be published today by the IT services group Fujitsu, place a question mark against Britain’s ability to adapt and remain competitive.<br />Two thirds of the 150 senior executives surveyed said that the pace of change was too quick for British business, while 57 per cent felt an inability to respond rapidly to change was one of the most significant risks they faced. The report highlights the falls from grace of Nokia and Kodak as examples of a failure to keep up with changing consumer preferences. In extreme cases, companies such as Woolworths and La Senza had failed.</span></i></blockquote>
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<span style="font-family: Times, 'Times New Roman', serif;">Fujitsu's report </span><span style="font-family: Times, 'Times New Roman', serif;">actually</span><span style="font-family: Times, 'Times New Roman', serif;"> </span><span style="font-family: Times, 'Times New Roman', serif;">said</span></div>
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<span style="font-size: 13px; line-height: 19px; text-align: left;"><i><span style="color: blue; font-family: Times, 'Times New Roman', serif;">To tackle change successfully, respondents were clear that strong leadership is the key ingredient – 97% felt this. Additionally, the capacity to change and available resources topped the list of ingredients required to be fit to change. However, when comparing the ingredients that business leaders believe are essential to being fit to change with those they believe are most lacking across UK plc, the gaps occurred in three areas – a robust ecosystem of suppliers; a long term vision and the right technology solutions.</span></i></span></blockquote>
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<span style="font-family: Times, 'Times New Roman', serif;"><span style="line-height: 18px;">Bah Humbug! What a disastrously missed opportunity, and yet, how inadvertently revealing this report is about the mindsets that cause the problem. .</span></span></div>
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<span style="font-family: Times, 'Times New Roman', serif;"><span style="line-height: 18px;">The key factor in the solution of this problem is the organisational and personal attribute that we call </span><b style="line-height: 18px;">Changeability</b><span style="line-height: 18px;">. This manifests itself as the capability of being effective in making change happen. It is rooted in a complex array of attitudes, behaviours and beliefs. Although an individual leader can exhibit this attribute, and we have met several that do, this alone is never enough to transform the performance of an organisation. That requires the majority of the people in the business to develop Changeability as well. Few leaders have the ability to do this themselves, or know how to make that happen.</span></span></div>
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<span style="font-family: Times, 'Times New Roman', serif;"><span style="background-color: white; color: red; line-height: 18px;"><b>The desperately sad fact of life is that if you do not understand what Changeability is, you will not recognise it, even when you are looking straight at it.</b> </span></span><br />
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<span style="font-family: Times, 'Times New Roman', serif;"><span style="line-height: 18px;">So, when a number of typical business leaders are asked "What do you think the problem is?" they will say only what they know, and then parrot, "Oh teacher, teacher, it's a leadership problem". In Shakespearean terms "Stap me vitals lads, I thought you were the leaders!"</span></span></div>
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<span style="font-family: Times, 'Times New Roman', serif;"><span style="line-height: 18px;">And then, if they are asked the "right" questions in the "right" way, they will agree that the answer is provided by the researcher's agenda - supplier <i>(Who? Me?)</i>, vision <i>(What?Mine?)</i>, and technology solutions <i>(Oh gosh, that's what we do. Fancy that?)</i>. Oh dearie, dearie me.</span></span></div>
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<b style="font-family: Times, 'Times New Roman', serif; line-height: 18px;">Changeability </b><span style="font-family: Times, 'Times New Roman', serif;"><span style="line-height: 18px;">is possessed naturally by a minority of individuals, but, it can be acquired through application and practice. We know how to do this, we have been developing the capability to do this for more than 15 years. We have achieved this with a wide variety of organisations from SME to corporate divisions. And, this is the killer, we have developed our <b><i><span style="color: blue;">Competitive Strength Report </span></i></b>process, a powerful tool to measure it in a business leadership</span></span><br />
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<span style="font-family: Times, 'Times New Roman', serif;"><span style="line-height: 18px;">Frankly, we are becoming frustrated by the failure of UK business leaderships, and the business commentariat, to realise that the key to survival of their businesses and our </span></span><span style="font-family: Times, 'Times New Roman', serif;"><span style="line-height: 18px;">economy (and my pension, dammit!), lies in facing up to, and tackling the management of attitudes, behaviours and beliefs in a rational, structured and disciplined manner. That means that they will need to abandon their comfortable excuse of Blindness ("Leadership failure", Indeed!) and <b>learn</b> something new, a different way of thinking.</span></span></div>
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<span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><i><span style="background-color: white; color: #333333; font-size: 10pt; line-height: 14px;">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson</span></i></span><span class="apple-converted-space" style="font-family: Georgia, serif; font-size: 16px;"><i><span style="background-color: white; color: #333333; font-size: 10pt; line-height: 14px;"> </span></i></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><i><span style="background-color: white; color: #000066; font-size: 10pt; line-height: 14px;">partners in</span></i></span><span class="apple-converted-space" style="font-family: Georgia, serif; font-size: 16px;"><i><span style="background-color: white; color: #000066; font-size: 10pt; line-height: 14px;"> </span></i></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><span style="background-color: white; color: #000066; font-size: 10pt; line-height: 14px;"><a href="http://www.achievementcoachinginternational.com/"><i><span style="color: #5588aa; text-decoration: none;">Achievement Coaching Internationa</span></i></a><a href="http://achievementcoachinginternational.com/"><i><span style="color: #5588aa; text-decoration: none;">l</span></i></a> <i>where</i></span></span><span class="apple-converted-space" style="font-family: Georgia, serif; font-size: 16px;"><i><span style="background-color: white; color: #000066; font-size: 10pt; line-height: 14px;"> </span></i></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><b><i><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;">we help businesses to learn</span></i></b></span><span class="apple-converted-space" style="font-family: Georgia, serif; font-size: 16px;"><b><i><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;"> </span></i></b></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><b><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;">different thinking</span></b></span><span class="apple-converted-space" style="font-family: Georgia, serif; font-size: 16px;"><b><i><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;"> </span></i></b></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><b><i><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;">to enable </span></i></b></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><b><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;">different actions</span></b></span><span class="apple-converted-space" style="font-family: Georgia, serif; font-size: 16px;"><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;"> </span></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><b><i><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;">that deliver the </span></i></b></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><b><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;">different results</span></b></span><span class="apple-converted-space" style="font-family: Georgia, serif; font-size: 16px;"><b><i><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;"> </span></i></b></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><b><i><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;">that</span></i></b></span><span class="apple-converted-space" style="font-family: Georgia, serif; font-size: 16px;"><b><i><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;"> </span></i></b></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><b><span style="background-color: white; color: #cc0000; font-size: 10pt; line-height: 14px;">Make a Big Difference</span></b></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><i><span style="background-color: white; color: #000066; font-size: 10pt; line-height: 14px;">.</span></i></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><i><span style="background-color: white; color: #333333; font-size: 10pt; line-height: 14px;">. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. We publish regular articles using a recent business/financial topic to highlight different perspectives and conclusions to those obtained by conventional thinking and techniques. You can read the other three blogs at </span></i></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><span style="background-color: white; color: #333333; font-size: 10pt; line-height: 14px;"><a href="http://www.businessbloop.blogspot.com/"><i><span style="color: #5588aa; text-decoration: none;">"Business Bloop Award"</span></i></a></span><i>,</i></span><span class="apple-converted-space" style="font-family: Georgia, serif; font-size: 16px;"><i><span style="background-color: white; color: #333333; font-size: 10pt; line-height: 14px;"> </span></i></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><span style="background-color: white; color: #333333; font-size: 10pt; line-height: 14px;"><a href="http://www.yourehavingalaughseriously.blogspot.com/"><i><span style="color: #5588aa; text-decoration: none;">"You're having a laugh ... seriously?"</span></i></a></span><i>and</i></span><span class="apple-converted-space" style="font-family: Georgia, serif; font-size: 16px;"><i><span style="background-color: white; color: #333333; font-size: 10pt; line-height: 14px;"> </span></i></span><span class="apple-style-span" style="font-family: Georgia, serif; font-size: 16px;"><span style="background-color: white; color: #333333; font-size: 10pt; line-height: 14px;"><a href="http://www.capitalismorcommonsense.blogspot.com/"><i><span style="color: #5588aa; text-decoration: none;">"Capitalism or ... Common Sense"</span></i></a></span><i>.</i></span>
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</div>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-33925409165671555022012-03-30T11:01:00.007+01:002012-03-30T11:22:03.618+01:00What Do They Know That Others Don’t?<p class="MsoNormal" style="font-weight: normal; font-size: 100%; font-family: Georgia, serif; margin-bottom: 6pt; line-height: 30pt; "><span style="font-size: 16pt; ">Three cleans up as larger rivals flounder</span></p><p class="MsoNormal" style="line-height: normal; font-family: Georgia, serif; font-size: 100%; font-weight: normal; margin-bottom: 6pt; "><span></span></p><p class="MsoNormal" style="font-family: Georgia, serif; font-size: 16pt; margin-bottom: 6pt; line-height: normal; "><span><b><span style="font-size: 10pt; font-family: 'Times New Roman', serif; ">Nic Fildes, The Times - </span></b><span style="font-size:10.0pt;font-family:"Times New Roman","serif"; mso-fareast-font-family:"Times New Roman";color:#666666;mso-fareast-language: EN-GB">Published at 12:01AM, March 30 2012<o:p></o:p></span></span></p><span> <p class="MsoNormal" style="font-family: Georgia, serif; font-size: 16pt; margin-bottom: 3pt; line-height: normal; "><span style="font-size: 10pt; font-family: 'Times New Roman', serif; ">Britain’s smallest mobile phone network has racked up more than eight million customers after scooping up defectors from larger rivals in the second half of last year. </span></p><p class="MsoNormal" style="font-family: Georgia, serif; font-size: 16pt; margin-bottom: 3pt; line-height: normal; "><span style="font-family: 'Times New Roman', serif; font-size: 10pt; ">Three, which is owned by Hutchison Whampoa, Asia’s largest company, recorded an 18 per cent rise in customers to 8.2 million as larger networks reduced their previously unlimited data packages.</span></p> <p class="MsoNormal" style="font-family: Georgia, serif; font-size: 16pt; margin-bottom: 3pt; line-height: normal; "><span style="font-size: 10pt; font-family: 'Times New Roman', serif; ">Other British parts of the Hutchison Whampoa empire have also thrived. Cheung Kong Infrastructure, which includes Northumbrian Water and EDF’s British energy distribution network, boosted revenue by 8 per cent to HK$30 billion (£2.4 billion) in the year, while its operating profit increased 26 per cent to HK$13 billion.<o:p></o:p></span></p> <p class="MsoNormal" style="font-family: Georgia, serif; font-size: 16pt; margin-bottom: 3pt; line-height: normal; "><span style="font-size: 10pt; font-family: 'Times New Roman', serif; ">Meanwhile, its ports business, which owns Felixstowe, Britain’s biggest port, and Harwich and Thamesport on the Medway, improved revenue by 8 per cent to HK$33 billion with operating profit up 16 per cent at HK$8.2 billion.<o:p></o:p></span></p> <p class="MsoNormal" style="font-family: Georgia, serif; font-size: 16pt; margin-bottom: 3pt; line-height: normal; "><span style="font-size: 10pt; font-family: 'Times New Roman', serif; ">Its retail arm, A. S. Watson, which owns the Superdrug chain, reported revenue growth of 37 per cent to HK$144 billion with operating profit up 18 per cent to HK$9.5 billion.<o:p></o:p></span></p> <p class="MsoNormal" style="font-family: Georgia, serif; font-size: 16pt; margin-bottom: 3pt; line-height: normal; "><span style="font-size: 10pt; font-family: 'Times New Roman', serif; ">Three reported an operating profit of £30 million, which was 83 per cent lower than in 2010. However, Richard Woodward, the chief financial officer, said that the profit in the previous year was boosted by a significant one-off gain and the 2011 performance was effectively its first year of profitability.<o:p></o:p></span></p> <p class="MsoNormal" style="font-family: Georgia, serif; font-size: 16pt; margin-bottom: 3pt; line-height: normal; "><span style="font-size: 10pt; font-family: 'Times New Roman', serif; ">“This growth is not a flash in the pan. We’re not a one-hit wonder,” he added.<o:p></o:p></span></p> <p class="MsoNormal" style="font-size: 100%; margin-bottom: 3pt; "></p><p class="MsoNormal" style="margin-bottom:6.0pt"><span style="font-size:10.0pt; line-height:115%;font-family:"Arial","sans-serif"">This is a really interesting story. It opens up many issues about the sources of outstanding results and leadership mythologies.<o:p></o:p></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span style="font-size:10.0pt; line-height:115%;font-family:"Arial","sans-serif"">Robust research, by Dr Vinod Singhal of Georgia State University, established that companies that achieved operational, managerial and organisational excellence delivered massive Comparative Competitive Strength that, in turn, produced outstanding financial results. <o:p></o:p></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span style="font-size:10.0pt; line-height:115%;font-family:"Arial","sans-serif"">This point of view suggests that Hutchison Whampoa should be expected to be significantly more competent across a number of dimensions than their competition. <o:p></o:p></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span style="font-size:10.0pt; line-height:115%;font-family:"Arial","sans-serif"">Financial experts might well look to see where else that competence is going to deliver outstanding results. <o:p></o:p></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span style="font-size:10.0pt; line-height:115%;font-family:"Arial","sans-serif"">Competitors might seek to find out what there is in the behaviour, attitudes and beliefs of managements and people in Hutchison Whampoa's widely differing companies that delivers such a consistency of excellent performance?<o:p></o:p></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span style="font-size:10.0pt; line-height:115%;font-family:"Arial","sans-serif"">The "flash in the pan" question depends on whether the leadership of Hutchison Whampoa are consciously competent in their Competitive Strength. Have they developed a really robust business culture? The fact that they are ahead in four such distinctly different business sectors suggest that they might have. On the other hand, the potential fragility of such winning cultures was well illustrated by Jim Collins in "Good to Great" where he examined the relationship between outstanding business performance and individual leadership; not every company continued to prosper after changes of CEO.<o:p></o:p></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span style="font-size:10.0pt; line-height:115%;font-family:"Arial","sans-serif"">We know from our direct experience with clients that the behaviours, attitudes and beliefs that can deliver outstanding Competitive Strength can be built and sustained. Different thinking can enable different actions that deliver significantly different results – it is simple, but not easy. We have also seen that this outstanding Competitive Strength can be destroyed, even within a few months, by a different leadership that fails to understand the importance of the behaviours, attitudes and beliefs that have made such a difference. Such effects are not unusual in takeovers and mergers, as we have written in other blogs.<o:p></o:p></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span style="font-size:10.0pt; line-height:115%;font-family:"Arial","sans-serif"">So there could be much to learn from Hutchison Whampoa. There could be much that they have to teach us all. There could be much for their future competitors in any new market they enter to worry about!<o:p></o:p></span></p><p></p></span><p style="line-height: normal; font-family: Georgia, serif; font-size: 100%; "></p> <p class="MsoNormal" style="line-height: normal; font-weight: normal; font-size: 100%; font-family: Georgia, serif; margin-bottom: 6pt; "><span class="apple-style-span"><i><span style="font-size: 10pt; line-height: 115%; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson</span></i></span><span class="apple-converted-space"><i><span style="font-size: 10pt; line-height: 115%; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "> </span></i></span><span class="apple-style-span"><i><span style="font-size: 10pt; line-height: 115%; color: rgb(0, 0, 102); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">partners in</span></i></span><span class="apple-converted-space"><i><span style="font-size: 10pt; line-height: 115%; color: rgb(0, 0, 102); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "> </span></i></span><span class="apple-style-span"><span style="font-size: 10pt; line-height: 115%; color: rgb(0, 0, 102); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><a href="http://www.achievementcoachinginternational.com/"><i><span style="color:#5588AA;text-decoration:none;text-underline:none">Achievement Coaching Internationa</span></i></a><a href="http://achievementcoachinginternational.com/"><i><span style="color:#5588AA; text-decoration:none;text-underline:none">l</span></i></a> <i>where</i></span></span><span class="apple-converted-space"><i><span style="font-size: 10pt; line-height: 115%; color: rgb(0, 0, 102); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "> </span></i></span><span class="apple-style-span"><b><i><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">we help businesses to learn</span></i></b></span><span class="apple-converted-space"><b><i><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "> </span></i></b></span><span class="apple-style-span"><b><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">different thinking</span></b></span><span class="apple-converted-space"><b><i><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "> </span></i></b></span><span class="apple-style-span"><b><i><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">to enable </span></i></b></span><span class="apple-style-span"><b><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">different actions</span></b></span><span class="apple-converted-space"><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "> </span></span><span class="apple-style-span"><b><i><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">that deliver the </span></i></b></span><span class="apple-style-span"><b><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">different results</span></b></span><span class="apple-converted-space"><b><i><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "> </span></i></b></span><span class="apple-style-span"><b><i><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">that</span></i></b></span><span class="apple-converted-space"><b><i><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "> </span></i></b></span><span class="apple-style-span"><b><span style="font-size: 10pt; line-height: 115%; color: rgb(204, 0, 0); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">Make a Big Difference</span></b></span><span class="apple-style-span"><i><span style="font-size: 10pt; line-height: 115%; color: rgb(0, 0, 102); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">.</span></i></span><span class="apple-style-span"><i><span style="font-size: 10pt; line-height: 115%; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; ">. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. We publish regular articles using a recent business/financial topic to highlight different perspectives and conclusions to those obtained by conventional thinking and techniques. You can read the other three blogs at </span></i></span><span class="apple-style-span"><span style="font-size: 10pt; line-height: 115%; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><a href="http://www.businessbloop.blogspot.com/"><i><span style="color:#5588AA;text-decoration:none;text-underline:none">"Business Bloop Award"</span></i></a></span><i>,</i></span><span class="apple-converted-space"><i><span style="font-size: 10pt; line-height: 115%; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "> </span></i></span><span class="apple-style-span"><span style="font-size: 10pt; line-height: 115%; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><a href="http://www.yourehavingalaughseriously.blogspot.com/"><i><span style="color:#5588AA;text-decoration:none; text-underline:none">"You're having a laugh ... seriously?"</span></i></a></span><i>and</i></span><span class="apple-converted-space"><i><span style="font-size: 10pt; line-height: 115%; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "> </span></i></span><span class="apple-style-span"><span style="font-size: 10pt; line-height: 115%; color: rgb(51, 51, 51); background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial; "><a href="http://www.capitalismorcommonsense.blogspot.com/"><i><span style="color:#5588AA;text-decoration:none; text-underline:none">"Capitalism or ... Common Sense"</span></i></a></span><i>.</i></span><span style="font-family:"Arial","sans-serif""><o:p></o:p></span></p>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-46279255549109953452011-12-09T10:34:00.007+00:002011-12-09T10:59:16.254+00:00The Day Job and the Change Job<span class="Apple-style-span" >Yesterday The Times reported</span><div><span class="Apple-style-span" >"<span class="Apple-style-span" style="line-height: 18px; ">Taxpayers will foot the bill for a further £2 billion on a failed NHS IT project even though the Government has already pulled the plug on it."</span></span></div><div><span class="Apple-style-span" ><span class="Apple-style-span" style="line-height: 18px; "><br /></span></span></div><div><span class="Apple-style-span" ><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', Times, serif; line-height: 18px; ">It is reported that it is such</span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', Times, serif; line-height: 18px; "> a huge contractual </span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', Times, serif; line-height: 18px; ">mess that there is now no way out of it.</span></span></div><div><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', Times, serif; line-height: 18px; "><span class="Apple-style-span" ><br /></span></span></div><div><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', Times, serif; line-height: 18px; "><span class="Apple-style-span" >Now, we are told. the reform of the NHS is under way. The cost of the change process is now estimated at £3.4 billion. It is staggering, breathtaking - and appalling.</span></span></div><div><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', Times, serif; line-height: 18px; "><span class="Apple-style-span" ><br /></span></span></div><div><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="line-height: 18px;">Any business management that is just managing to survive the present economic storm is learning what those that are already prospering and growing (sometimes at their expense) know. They are learning that you have to combine your </span><b style="line-height: 18px; ">Day Job</b><span class="Apple-style-span" style="line-height: 18px;"> (running the business - delivering service, products, customer satisfaction) with the </span><b style="line-height: 18px; ">Change Job</b><span class="Apple-style-span" style="line-height: 18px;"> (reducing waste, improving performance, re-structuring, introducing new technologies, operating smarter- etc.). They cannot afford to sit around and splash out big bucks for someone else to do it for them. They cannot afford to hire extra staff to "give themselves the time" (ah diddums) to do the Change Job. They have their hands on and in it up to their elbows - and their minds on making it better.</span></span></span></div><div><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="line-height: 18px; ">One of our clients put it perfectly "I expect the people to run the business, and my managers to improve it"</span></span></span></div><div><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="line-height: 18px; "><br /></span></span></span></div><div><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="line-height: 18px;">Until the Public sector learns this lesson, nothing will change.</span></span></span></div><div><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="line-height: 18px;"><br /></span></span></span></div><div><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="line-height: 18px;">We know how to enable this to happen. It is so frustrating to see no sign whatsoever that anyone in Government or Public Sector leadership recognises the need to build the Change Job into the Day Job. </span></span></span></div><div><span class="Apple-style-span" ><span class="Apple-style-span" style="line-height: 18px;"><br /></span></span></div><div><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; background-color: rgb(255, 255, 255); "><i>Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; background-color: rgb(255, 255, 255); "><span class="Apple-style-span" style="color: rgb(0, 0, 102); "><i>partners in </i><a href="http://www.achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; ">Achievement Coaching Internationa</a><a href="http://achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; ">l</a><i>where </i><b style="font-style: italic; "><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">we help businesses to learn </span></b><span class="Apple-style-span" style="color: rgb(204, 0, 0); "><b>different thinking</b><b style="font-style: italic; "> to enable</b><b>different actions</b> <b style="font-style: italic; ">that deliver the</b><b>different</b></span><b><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">results<i> that </i>Make a Big Difference</span></b><i>.</i></span></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; background-color: rgb(255, 255, 255); "><i>. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. We publish regular articles using a recent business/financial topic to highlight different perspectives and conclusions to those obtained by conventional thinking and techniques. You can read the other three blogs at</i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; background-color: rgb(255, 255, 255); "><a href="http://www.businessbloop.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; ">"Business Bloop Award"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; background-color: rgb(255, 255, 255); "><i>, </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; background-color: rgb(255, 255, 255); "><a href="http://www.yourehavingalaughseriously.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; ">"You're having a laugh ... seriously?"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; background-color: rgb(255, 255, 255); "><i>and </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; background-color: rgb(255, 255, 255); "><a href="http://www.capitalismorcommonsense.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; ">"Capitalism or ... Common Sense"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; background-color: rgb(255, 255, 255); "><i>.</i></span></div>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-55979719447405592352011-08-22T11:33:00.007+01:002011-08-22T12:24:02.908+01:00IT Turkeys act as Black Swans<div><span class="Apple-style-span" style="font-family: Arial; line-height: 18px; ">Big IT projects are spiralling out of control, costing shareholders and taxpayers billions of pounds, according to new research published this week in the <i>Harvard Business Review</i><span class="Apple-style-span">,</span></span><span class="Apple-style-span"><p style="margin-top: 0cm; margin-right: 0cm; margin-left: 0cm; margin-bottom: 0.0001pt; line-height: 13.5pt; "><span style="font-family: Arial; ">
<br /></span></p> <span lang="EN-GB" style="font-family: Arial; ">In a study of about 1,500 projects, <st1:place st="on"><st1:placename st="on">Oxford</st1:placename> <st1:placetype st="on">University</st1:placetype></st1:place> and McKinsey & Co, the management consultants, found that one in six grew so massively out of control that they threatened the survival of the companies that commissioned them. These so-called “black swans” were so disastrous that, on average, they ran 200 per cent over budget and 70 per cent over schedule, the researchers found</span><p></p></span><span class="Apple-style-span"><span class="Apple-style-span" style="font-family: arial; "><span class="Apple-style-span" style="line-height: 18px; ">The researchers said that the average cost overrun for all the IT projects was 27 per cent, but it was there was a </span><span class="Apple-style-span" style="line-height: 18px; ">minority</span><span class="Apple-style-span" style="line-height: 18px; "> of cases with the biggest budget blowouts accounting for most of the losses however, </span>the percentage of problem projects was 20 times higher than they expected to find. They cited </span><span class="Apple-style-span" style="font-family: Arial; ">the example of Auto Windscreens, </span>in 2006, <span class="Apple-style-span" style="font-family: Arial; "> the second-largest car glass company in the <st1:country-region st="on"><st1:place st="on">UK</st1:place></st1:country-region></span><span class="Apple-style-span" style="font-family: Arial; "> with sales of £63 million and 1,100 employees, which changed its financial IT system. By the end of last year, it had been forced into bankruptcy by a combination of falling sales, problems managing its inventory and overspending on the IT project.</span></span></div><div><span class="Apple-style-span" style="font-family: arial; line-height: 18px; "><span class="Apple-style-span">
<br /></span></span></div><div><span class="Apple-style-span" style="font-family: arial; line-height: 18px; "><span class="Apple-style-span">The project leader, Bent Flyvbjerg, of Oxford’s Said Business School, said: “We were shocked when the data came in. IT projects are now so big and touch so many aspects of business, government and citizens’ lives that this poses a singular new challenge for top managers".</span></span><span class="Apple-style-span"><span class="Apple-style-span"></span></span></div><div><span class="Apple-style-span">
<br /></span></div><div><span class="Apple-style-span"><b>We wonder </b>to what extent these shocking (but not surprising) results reflect the prevailing fashion in Management to de-skill and de-humanise business operations? Substituting "process" for individual competence and responsibility appears to be widely seen as "good practice".</span></div><div><div><span class="Apple-style-span">
<br /></span></div><div><span class="Apple-style-span">The resulting levels of over-elaboration and over-definition generate complexity at exponential rates. So if the same mind numbing approach is used in the IT development itself, this is a Management Culture failure as much as anything else, so it is hardly surprising that dumb gets dumber and chaos ensues.</span></div><div><span class="Apple-style-span">
<br /></span></div><div><span class="Apple-style-span">We were not surprised by this report, we have heard too many anecdotal stories of such tragedies (many sheltering under threat of libel action if publically reported) and recall one CEO stating "We are betting the Corporation on XXXXX" when he invested nearly 30% of his business' net worth in "an IT revolution". That bet was nearly terminal for the company, and definitely for that CEO. We recall one of our clients realising that a £2 million investment in "doing the same again but with more complexity" could be massively reduced so that they could "do it very different and simple" with just 4 PC's!</span></div><div><span class="Apple-style-span">
<br /></span></div><div><span class="Apple-style-span">We think that it is time Managers reversed this slide into mediocrity and re-learned how to allow people to manage their own jobs; that is what the exceptional organisations do (you know, like Autonomy). They are the ones with the employee satisfaction awards and the excellence awards - oh yes, and the outstanding profitability and massive Comparative Competitive Strength.</span></div></div><div><span class="Apple-style-span">
<br /></span></div><div><span class="Apple-style-span">It is interesting that this news should follow so closely on our previous blog about the effects of this insidious de-braining approach on the Probation Service. If you treat people as stupid then, first, they will respond accordingly and second, what perhaps might that tell the world about you?</span></div><div><span class="Apple-style-span">
<br /></span></div><div><span class="Apple-style-span"> </span></div><div><span class="Apple-style-span">So, once again, we repeat that is is the attitudes, behaviours and beliefs of a business leadership and management that determines the performance of the organisation. It looks as though this research shows that if you are dumb enough to think that a monster IT investment in complex systematisation will act as a substitute for competence in leading and managing your people, you will get exactly what you deserve. </span></div><div><span class="Apple-style-span">
<br /></span></div><div><span class="Apple-style-span">The tragedy is that your employees, suppliers and shareholders do not deserve to lose so much.</span></div><div>
<br /></div><div><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; background-color: rgb(255, 255, 255); "><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i>Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><span class="Apple-style-span" style="color: rgb(0, 0, 102); line-height: 20px; "><i>partners in </i><a href="http://www.achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; ">Achievement Coaching Internationa</a><a href="http://achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; ">l</a><i>where </i><b style="font-style: italic; "><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">we help businesses to learn </span></b><span class="Apple-style-span" style="color: rgb(204, 0, 0); "><b>different thinking</b><b style="font-style: italic; "> to enable</b><b>different actions</b> <b style="font-style: italic; ">that deliver the</b><b>different</b></span><b><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">results<i> that </i>Make a Big Difference</span></b><i>.</i></span></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i>. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. We publish regular articles using a recent business/financial topic to highlight different perspectives and conclusions to those obtained by conventional thinking and techniques. You can read the other three blogs at </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><a href="http://www.businessbloop.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; ">"Business Bloop Award"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i>, </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><a href="http://www.yourehavingalaughseriously.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; ">"You're having a laugh ... seriously?"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i> and </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><a href="http://www.capitalismorcommonsense.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; ">"Capitalism or ... Common Sense"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i>.</i></span></span></div>Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-3117070323698301082011-07-29T12:43:00.002+01:002011-07-29T12:48:42.747+01:00Formula One ideas can transform Probation Service!<p class="MsoNormal"><span lang="EN-GB">Last weekend I watched Lewis Hamilton drive his McLaren right round Fernando Alonso on the outside of a bend (wonderful mastery) on his way to win the German Grand Prix.<span style="mso-spacerun:yes"> </span></span><span lang="EN-GB">Behind him two dozen Formula 1 engines spent over 100 minutes each revving up to 18,000 rpm or more for the whole 60 laps – and yet only 3 cars retired for mechanical reasons. And Lewis drove better than he knew how!</span></p><p class="MsoNormal">It offered an penetrating insight to Thursday’s radio news when I listened to Kenneth Clarke, the Justice Secretary, vowing to end the "tickbox, bean-counting culture" of the probation service after MPs revealed that officers spend as much as 75% of their work time on administrative duties rather than dealing directly with offenders. The MP’s report said that micro-management is continuing. It said NOMS (National Offender Management Service) is currently attempting to detail every component of every aspect of prison and probation work, measuring the time it takes to complete and then costing it.</p> <p class="MsoNormal">It is abundantly clear that the top team in NOMS certainly cannot even spell “Management” or “Service”. <span style="mso-spacerun:yes"> </span>Even now, in the 21<sup>st</sup> century , we see a public sector leadership bogged down in the prehistoric “work study” management approach (and even making a mess of that).<span style="mso-spacerun:yes"> </span>There has been a complete revolution in management knowledge and competence since the 1970’s – but not in <st1:city st="on"><st1:place st="on">Whitehall</st1:place></st1:city>.<span style="mso-spacerun:yes"> </span>NOMS is just one tip of the iceberg of ignorance that permeates so much of <st1:country-region st="on"><st1:place st="on">UK</st1:place></st1:country-region> management practice – and journalism (the silly questions Clarke was asked!).</p> <p class="MsoNormal">Every organisation is a machine – a mechanism for converting funds into outcomes.<span style="mso-spacerun:yes"> </span>The job of operational management is to design a viable mechanism and then operate it effectively.<span style="mso-spacerun:yes"> </span>The “Scientific Management” methodologies of the 1970’s understood this badly, teaching the type of approach that we see from NOMS.<span style="mso-spacerun:yes"> </span>Systemisation, detailed tasking, tight targeting and intense measurement were to be the keys to successful operational performance – except they proved not to be.<span style="mso-spacerun:yes"> </span>The approach ignored the uncomfortable fact that the mechanism of organisation contains some essential components that are neither mechanical nor systemised – people.<span style="mso-spacerun:yes"> </span>It has taken us nearly 40 years to discover how to surmount this.</p> <p class="MsoNormal" style="text-align: center;">“What on earth has this to do with Formula 1 engines?”, you may ask.</p> <p class="MsoNormal">Many years ago I met one of the leading engineers in Cosworth Racing, at the time when their engines dominated Formula 1.<span style="mso-spacerun:yes"> </span>He told me something so amazing that I never forgot it.<span style="mso-spacerun:yes"> </span>It should amaze you too.<span style="mso-spacerun:yes"> </span>I guess we all assume that our car engines are great solid lumps of metal with bits whizzing around inside – and that the same is true of pretty much all the machines we come across. And so, we might assume, all the bits in these machines fit together much the same when they are stationary as when they are working.<span style="mso-spacerun:yes"> </span>So, when managers think about organisations – the mechanisms for converting funds into outcomes – they may make the same assumption.<span style="mso-spacerun:yes"> </span>And then specify all the components accordingly – wrong!</p> <p class="MsoNormal">The Cosworth chief engineer told me that their race engine increased and contracted in height by 0.030 inches (1/32 inch, or 0.762 millimetres) during every single engine rotation and that this was at a different time for each of the 8 cylinders so the height varied along the cylinder block.<span style="mso-spacerun:yes"> </span>Consequently every other component (piston, connecting rod, crankshaft etc) also stretched and compressed to match, and all of this happened at 18,000 rpm, so that the whole engine was in fact like a great elastic vibrating jelly. All of the components stretch and compress to work together perfectly. Wow!<span style="mso-spacerun:yes"> </span>What an amazing and scary fact.</p> <p class="MsoNormal">The difference between an engine and an organisation is that, in the organisational mechanism, a high proportion of the components are people – and unlike in the engine, these parts are intelligent, flexible and adaptable.<span style="mso-spacerun:yes"> </span>Smart leaders and managers have learned how to combine robust operational systems with the best of human adaptability and flexibility.<span style="mso-spacerun:yes"> </span>And, unlike machine parts, people can learn how to perform better all the time. That is how the very best companies massively outperform the average – they are not only built better, they think better too, from top to bottom.<span style="mso-spacerun:yes"> </span>Winning mechanisms are flexible, champion organisations learn to be better all the time.<span style="mso-spacerun:yes"> </span>Unlike the mechanism that NOMS is building which will be rigid, proscribed and of course will have eliminated “thinking” altogether.<span style="mso-spacerun:yes"> </span>An approach that has been proven many times to fail .</p> <p class="MsoNormal">It’s not just us saying this.<span style="mso-spacerun:yes"> </span>There is a long line of research stretching back to the late 1980s that supports our conclusions.<span style="mso-spacerun:yes"> </span>My partners and I are excited, and flattered, to see that McKinsey have just published research that once again confirms our own long held knowledge that peoples’ attitudes, behaviours and beliefs profoundly affect business performance – exactly as proved by Dr Vinod Singhal in 2001 and used as the basis for our Competitive Strength analysis published in 2003.<span style="mso-spacerun:yes"> </span>McKinsey’s Scott Keller and Colin Price have coined the phrase “Organisational Health” to describe this; unfortunately, they offer no details of how it might be measured, but outline their strategy by which the necessary transformation may be achieved.<span style="mso-spacerun:yes"> </span>Four years ago we launched our Competitive Strength Report to objectively measure exactly this dimension, and with a proven process to achieve the transformation needed.<span style="mso-spacerun:yes"> </span>However, our approach will not compare with McKinsey’s as ours is incredibly rapid and very inexpensive.</p> <p class="MsoNormal">So as I heard Kenneth Clarke, with the MP’s, railing at the incompetence of his management, I had an immediate mental picture of Lewis Hamilton exceeding his own expectations in front of all those extraordinary engine components.<span style="mso-spacerun:yes"> </span></p> <p class="MsoNormal">Passing the competition round the outside of the bend – that is Beyond Excellence.<span style="mso-spacerun:yes"> </span>You and your organisation can do it too, even the probation service might do it, but not with NOMS involved.</p><p class="MsoNormal"><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i style="font-weight: normal; ">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><span class="Apple-style-span" style="color: rgb(0, 0, 102); line-height: 20px; "><i style="font-weight: normal; ">partners in </i><a href="http://www.achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">Achievement Coaching Internationa</a><a href="http://achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">l</a><i style="font-weight: normal; ">where </i><b style="font-style: italic; font-weight: normal; "><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">we help businesses to learn </span></b><span class="Apple-style-span" style="color: rgb(204, 0, 0); "><b>different thinking</b><b style="font-weight: normal; font-style: italic; "> to enable</b><b>different actions</b> <b style="font-weight: normal; font-style: italic; ">that deliver the </b><b>different</b></span><b><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">results<i style="font-weight: normal; "> that </i>Make a Big Difference</span></b><i style="font-weight: normal; ">.</i></span></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i style="font-weight: normal; ">. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. We publish regular articles using a recent business/financial topic to highlight different perspectives and conclusions to those obtained by conventional thinking and techniques. You can read the other three blogs at </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><a href="http://www.businessbloop.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">"Business Bloop Award"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i style="font-weight: normal; ">, </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><a href="http://www.yourehavingalaughseriously.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">"You're having a laugh ... seriously?"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i style="font-weight: normal; "> and </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><a href="http://www.capitalismorcommonsense.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">"Capitalism or ... Common Sense"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i style="font-weight: normal; ">.</i></span></span></p>Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-46161112978643089972011-07-22T12:44:00.004+01:002011-07-22T18:29:50.660+01:00Network Rail - Waterlogged or Sinking?<p class="MsoNormal" style="margin-bottom:6.0pt"><span class="Apple-style-span" style="font-family: Arial; font-weight: bold; ">Network Rail says bad reputation means that it just can’t get the staff</span></p> <p class="f-standfirst" style="margin-top:0cm;margin-right:0cm;margin-bottom: 6.0pt;margin-left:0cm;line-height:15.75pt"><span class="Apple-style-span" style="color: rgb(102, 102, 102); font-family: Arial; font-size: x-small; line-height: normal; ">Excerpt from <b>The Times</b> July 22 2011 – by David Robertson</span></p><p class="f-standfirst" style="margin-top:0cm;margin-right:0cm;margin-bottom: 6.0pt;margin-left:0cm;line-height:15.75pt"><b style="mso-bidi-font-weight:normal"><span style="font-size:10.0pt;font-family:Arial;color:black">Chief says company is seen as a stain on the CV<o:p></o:p></span></b></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:6.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:10.0pt;font-family:Arial;color:black">Network Rail has claimed that it is struggling to hire talented managers because some people believe that their careers could be damaged by the company’s reputation.<o:p></o:p></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:6.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:10.0pt;font-family:Arial;color:black">David Higgins, chief executive, said, at Network Rail’s annual meeting in <st1:city st="on">Birmingham</st1:city> yesterday, that ensuring the company had high-quality people to manage the <st1:country-region st="on"><st1:place st="on">UK</st1:place></st1:country-region>’s rail system was the single biggest issue he faced. ………..<o:p></o:p></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:6.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:10.0pt;font-family:Arial;color:black">Mr Higgins said: “We are just not an attractive organisation with all the turmoil that has been going on. We are not seen as a good company for people to have on the CV.”<o:p></o:p></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:6.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:10.0pt;font-family:Arial;color:black">This recruitment crisis has been brought to the fore as Network Rail moves from a centralised management model to a regional one.<o:p></o:p></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:6.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:10.0pt;font-family:Arial;color:black">It is recruiting ten route managing directors, who will have oversight for a particular rail network. These route managing directors will be supported by five or six key executives who will be responsible for areas such as safety, maintenance and punctuality.<o:p></o:p></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:6.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:10.0pt;font-family:Arial;color:black">“We have been out in the market to get route MDs but we have been unsuccessful. We may get only one out of ten route MDs externally,” Mr Higgins said. “We need 60 or 70 people as we devolve route responsibility. We have to go to people in our organisation and take a risk with them. We have enough experienced people to monitor them. Finding quality people is the single biggest issue this company faces.”</span></p><p style="margin-top:0cm;margin-right:0cm;margin-bottom:6.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:10.0pt;font-family:Arial;color:black"><br /></span></p><p style="margin-top:0cm;margin-right:0cm;margin-bottom:6.0pt;margin-left:0cm; line-height:13.5pt"><span class="Apple-style-span" style="line-height: normal; "><b>We</b> all now know that the biggest single factor affecting difference in business performance is the people in the business - their behaviour, attitudes and values. Network Rail has a long history of leadership that has demonstrated zero competence in this area; its culture remains stuck in its past.</span></p><p class="MsoNormal"><span lang="EN-GB" style="color:black"> <span class="apple-style-span">Until they deal with this, nothing will change - nothing can change.</span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span lang="EN-GB" style="color:black">It does not have to be expensive Mr Higgins - but it will be mighty uncomfortable. Sadly, changing the organisation chart and recruiting new faces will change nothing - except to damage the recruits' careers (as they obviously have spotted).</span></span><span lang="EN-GB"><br /><br /><span class="apple-style-span">So, Mr Higgins, you need to start with the attitudes, behaviours and beliefs of your top team - "the recruiters". You need different thinking to drive different actions that will deliver different results. </span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span lang="EN-GB" style="color:black">Only then perhaps, at last, you may start to achieve the real transformation of performance that we all need to see.</span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span lang="EN-GB" style="color:black">Some of your suppliers learned to do this, once upon a time - so it is not impossible in the Rail Industry</span></span><span class="apple-style-span">. </span></p><p class="MsoNormal">Here is a starter question - Do you think you might first need to become a sufficiently attractive Leadership Team to attract and then retain the quality of management you seek?</p><p class="MsoNormal"><span class="apple-style-span"><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i style="font-weight: normal; ">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><span class="Apple-style-span" style="color: rgb(0, 0, 102); line-height: 20px; "><i style="font-weight: normal; ">partners in </i><a href="http://www.achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">Achievement Coaching Internationa</a><a href="http://achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">l</a><i style="font-weight: normal; ">where </i><b style="font-style: italic; font-weight: normal; "><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">we help businesses to learn </span></b><span class="Apple-style-span" style="color: rgb(204, 0, 0); "><b>different thinking</b><b style="font-weight: normal; font-style: italic; "> to enable</b><b>different actions</b> <b style="font-weight: normal; font-style: italic; ">that deliver the </b><b>different </b></span><b><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">results<i style="font-weight: normal; "> that </i>Make a Big Difference</span></b><i style="font-weight: normal; ">.</i></span></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i style="font-weight: normal; ">. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. We publish regular articles using a recent business/financial topic to highlight different perspectives and conclusions to those obtained by conventional thinking and techniques. You can read the other three blogs at </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><a href="http://www.businessbloop.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">"Business Bloop Award"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i style="font-weight: normal; ">, </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><a href="http://www.yourehavingalaughseriously.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">"You're having a laugh ... seriously?"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i style="font-weight: normal; "> and </i></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><a href="http://www.capitalismorcommonsense.blogspot.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">"Capitalism or ... Common Sense"</a></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); font-size: 13px; line-height: 20px; "><i style="font-weight: normal; ">.</i></span></span></p>Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-70149142031143674762011-02-28T14:36:00.007+00:002011-02-28T15:08:39.443+00:00Merrill Lynch - Wrong Thinking Wrong Conclusions<p class="MsoNormal">Last week, Merrill Lynch admitted it had been wrong to hold an “underperform” rating on ARM the <st1:city st="on"><st1:place st="on">Cambridge</st1:place></st1:city> based technology company since November 2009.<span style="mso-spacerun:yes"> </span>Over that period the value of ARM’s shares tripled and they have broken into the FTSE 100!</p><p class="MsoNormal">In a note published last week (entitled “ARM Wrestling”) Merrill admit that they <i>“… had underestimated the potential for royalty rates to increase … and the sheer pace of end market growth addressable by ARM’s customers … and failed to appreciate the impact of Microsoft selecting ARM’s designs as the basis for the next generation if its Windows software …”.</i></p><p class="MsoNormal"><i></i>How did they get it so wrong and for so long?<span style="mso-spacerun:yes"> </span>This is the inevitable outcome of using conventional financial and business analysis to attempt to pick the next winner in an increasingly unconventional world. This way of thinking also assumes that all businesses perform in a conventional way and will therefore perform broadly in line with market conditions rather than outperform or underperform.</p><p class="MsoNormal">However ARM is not a conventional business in the way it thinks and behaves.<span style="mso-spacerun:yes"> </span>If we apply the Competitive Strength perspective we can see that ARM have achieved a Competitive Strength condition of Excellent and may even have progressed to Free.<span style="mso-spacerun:yes"> </span>Quite simply this means they are able to do things that other businesses with weaker conditions of competitive strength cannot.<span style="mso-spacerun:yes"> </span>In this case the outcomes are higher royalty levels, customers who have exceptional rates of end market growth, major breakthrough deals with the likes of Microsoft and so on.</p><p class="MsoNormal">Merrill’s conventional approach is trying to spot the golden eggs, which goose is likely to lay them, as well as where and when.<span style="mso-spacerun:yes"> </span>The Competitive Strength perspective identifies which geese have the capability to lay golden eggs because, as the Competitive Strength research base shows, that is invariably what they do. Can you also spot which is likely to to be the short term and which the long term investment perspective?</p><p class="MsoNormal">In spite of Merrill’s wrong call the market as a whole appears to recognise what ARM were capable of, though how many of the investment decision makers involved really know why is still a question in our view.</p><p class="MsoNormal">Can ARM do now wrong?<span style="mso-spacerun:yes"> </span>Well watch out for any conventional sounding statements from the company, any sense of complacency and that they feel they have cracked it (no pun on the egg theme intended) and have become unassailable. This can be a sign that the Competitive Strength condition, how they think and behave, is slipping towards the Comfortable condition, where they will become vulnerable to external forces.</p><p class="MsoNormal">What about Merrill?<span style="mso-spacerun:yes"> </span>They have now upgraded their stance on ARM to “neutral”.<span style="mso-spacerun:yes"> </span>This indicates they are still using conventional thinking and analysis and/or maybe “neutral” is about exciting as it gets at Merrill Lynch these days.</p><p class="MsoNormal"><i style="font-weight: normal; ">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson </i><span class="Apple-style-span" style="color: rgb(0, 0, 102); line-height: 20px; "><i style="font-weight: normal; ">partners in </i><a href="http://www.achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">Achievement Coaching Internationa</a><a href="http://achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">l</a><i style="font-weight: normal; "> where </i><b style="font-style: italic; font-weight: normal; "><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">we help businesses to learn </span></b><span class="Apple-style-span" style="color: rgb(204, 0, 0); "><b>different thinking</b><b style="font-weight: normal; font-style: italic; "> to enable </b><b>different actions</b> <b style="font-weight: normal; font-style: italic; ">that deliver the </b><b>different </b></span><b><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">results<i style="font-weight: normal; "> that </i>Make a Big Difference</span></b><i style="font-weight: normal; ">.</i></span><i style="font-weight: normal; ">. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. We publish regular articles using a recent business/financial topic to highlight different perspectives and conclusions to those obtained by conventional thinking and techniques. You can read the other three blogs at </i><a href="http://www.businessbloop.blogspot.com/" style="font-style: italic; font-weight: normal; ">"Business Bloop Award"</a><i style="font-weight: normal; ">, </i><a href="http://www.yourehavingalaughseriously.blogspot.com/" style="font-style: italic; font-weight: normal; ">"You're having a laugh ... seriously?"</a><i style="font-weight: normal; "> and </i><a href="http://www.capitalismorcommonsense.blogspot.com/" style="font-style: italic; font-weight: normal; ">"Capitalism or ... Common Sense"</a><i style="font-weight: normal; ">.</i></p>Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-1242037297542430522011-02-15T18:20:00.004+00:002011-02-17T18:01:36.409+00:00Flying Blind - again<h3 style="margin:0cm;margin-bottom:.0001pt"><span style="font-size:12.0pt; font-family:Georgia;color:black;mso-bidi-font-weight:normal">Administrators called in at Auto Windscreens</span></h3> <p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:Georgia; mso-ansi-language:EN-US">The Times</span></b><strong><span lang="EN-GB" style="font-size:9.0pt;font-family:Arial;color:black"> - Marcus Leroux</span></strong><span lang="EN-GB" style="font-size:7.5pt;font-family:Georgia;color:black"><o:p></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB" style="font-size:8.0pt;font-family:Arial; color:#666666">Last updated February 15 2011 12:01<span class="dateampm">AM</span><o:p></o:p></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:3.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:9.0pt;font-family:Arial;color:black">One of <st1:country-region st="on"><st1:place st="on">Britain</st1:place></st1:country-region>’s largest windscreen repair companies collapsed into administration yesterday without enough cash to pay its 1,100 workers.<o:p></o:p></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:3.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:9.0pt;font-family:Arial;color:black">Deloitte was called in as administrator after the company received a winding-up petition from Revenue & Customs over unpaid tax bills. Lloyds Banking Group, the state-backed lender, had earlier appointed Deloitte to try to find a buyer in an attempt to limit its exposure.<o:p></o:p></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:3.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:9.0pt;font-family:Arial;color:black">Matt Cowlishaw, a Deloitte partner, said: “It is extremely disappointing to see such a well-known business enter administration. The company worked extremely hard to try to recapitalise the business, but unfortunately this could not be achieved in the time available.We are now in urgent discussions with the key stakeholders and interested parties in an attempt to save the business.”<o:p></o:p></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:3.0pt;margin-left:0cm; line-height:13.5pt"><span style="font-size:9.0pt;font-family:Arial;color:black">The company, the largest in the market after Autoglass, was well known to football followers as the sponsor of the Auto Windscreens Shield in the 1990s. It turned over £63 million last year. In 2009, the last year for which records are available, it lost £5.3 million on revenue of £77 million, compared with losses of £18.7 million on revenue of £99 million in 2008.<o:p></o:p></span></p><p style="margin-top:0cm;margin-right:0cm;margin-bottom:3.0pt;margin-left:0cm; line-height:13.5pt"><span style="color: black; "></span></p><p class="MsoNormal" style="margin-bottom: 6pt; "><span class="apple-style-span"><span lang="EN-GB" style="color: black; "><span class="Apple-style-span"></span></span></span></p><p class="MsoNormal" style="margin-bottom: 6pt; "><span class="Apple-style-span"><span class="apple-style-span"><span lang="EN-GB" style="color: black; "><b>Sad, but from the figures quoted here, inevitable. </b>They fail the common sense test.<o:p></o:p></span></span></span></p><span class="Apple-style-span"> <span class="apple-style-span"><span lang="EN-GB" style="color: black; ">With sales </span></span>at £57,000 per employee, how might anyone expect this type of business (operators in vans with stock) not to lose money? And how can "re-capitalisation" be relevant when the cost base is so obviously too high and the revenue line too low?<o:p></o:p></span><p></p> <p class="MsoNormal" style="margin-bottom: 6pt; "><span class="apple-style-span"><span lang="EN-GB" style="color: black; "><span class="Apple-style-span">This is a company with low Comparative Competitive Strength, and it has been so for some time. And now, inevitably, it has hit The Abyss. An objective view of its Competitive Strength could have seen this coming at least 4 years ago, time to have done something effective.<o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin-bottom: 6pt; "><span class="apple-style-span"><span lang="EN-GB" style="color: black; "><span class="Apple-style-span">Probably an unnecessary failure, so it is sad for the employees, they have been badly failed by their management. Once again it looks as though the people on the flight deck have deluded themselves that all is OK, the wings have not fallen off, the fuel tanks have not run dry and the oh too solid ground is not 2 feet below them and approaching fast – “all we need is a little more time” (i.e. new wings, fuel , airspace = someone else’s money). </span></span></span></p><p class="MsoNormal" style="margin-bottom: 6pt; "><span class="apple-style-span"><span lang="EN-GB" style="color: black; "><span class="Apple-style-span">How often do we see management teams in failing businesses convincing themselves that they are “OK Really” when they really are not? How many allegedly professional advisors support such leaderships in this wishful thinking because, let’s not beat about the bush here, this is where their fees come from?<o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin-bottom: 6pt; "><span class="apple-style-span"><span lang="EN-GB" style="color: black; "><span class="Apple-style-span">However, bankers, accountants, financiers and creditors could have looked at their Competitive Strength long ago, and taken precautions. They did not, so they deserve no sympathy. </span></span></span></p><p class="MsoNormal" style="margin-bottom: 6pt; "><span class="apple-style-span"><span lang="EN-GB" style="color: black; "><span class="Apple-style-span"><b>Actually they should be hung, drawn and quartered for Wasting our Nation’s Wealth</b><o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin-bottom: 6pt; "><span class="apple-style-span"><span class="Apple-style-span"><span lang="EN-GB" style="color: black; ">The funds they have allowed to be squandered here could have been used to support other companies with the High Competitive Strength that can grow the economy and create jobs.</span> So they have not only kept afloat a ship that should have sunk – but denied opportunities for success to others who deserve, and who we all need, to succeed<o:p></o:p></span></span></p> <p class="MsoNormal" style="margin-bottom: 6pt; "><span class="apple-style-span"><span lang="EN-GB" style="color: black; "><span class="Apple-style-span">Until the financial decision makers and key influencers grow up from their dependency on accountancy practices and traditional indicators, they will forever be looking backwards. That means that they will continue to focus on the craft that haven’t crashed yet, watching where they have been to guess where they are going. This is because they don’t know how to look forward, how to recognise those businesses that can and will soar. </span></span></span></p><p class="MsoNormal" style="margin-bottom: 6pt; "><span class="apple-style-span"><span lang="EN-GB" style="color: black; "><span class="Apple-style-span">The Comparative Competitive Strength point of view can sound tough, but it does look forward not backwards.</span><span class="Apple-style-span" style="font-size: 11pt; "><o:p></o:p></span></span></span></p><p class="MsoNormal" style="margin-bottom: 6pt; font-size: 9pt; "><span class="apple-style-span"><span lang="EN-GB" style="font-size: 11pt; color: black; "><span class="Apple-style-span"></span></span></span></p><div><span class="Apple-style-span"><span class="Apple-style-span" ><i style="font-weight: normal; ">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson </i><span class="Apple-style-span" style="color: rgb(0, 0, 102); line-height: 20px; "><i style="font-weight: normal; ">partners in </i><a href="http://www.changeworld.co.uk/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">ChangeWORLD</a><i style="font-weight: normal; "> & </i><a href="http://www.achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">Achievement Coaching Internationa</a><a href="http://achievementcoachinginternational.com/" style="color: rgb(85, 136, 170); text-decoration: none; font-style: italic; font-weight: normal; ">l</a><i style="font-weight: normal; "> where </i><b style="font-style: italic; font-weight: normal; "><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">we help businesses to learn </span></b><span class="Apple-style-span" style="color: rgb(204, 0, 0); "><b>different thinking</b><b style="font-weight: normal; font-style: italic; "> to enable </b><b>different actions</b> <b style="font-weight: normal; font-style: italic; ">that deliver the </b><b>different </b></span><b><span class="Apple-style-span" style="color: rgb(204, 0, 0); ">results<i style="font-weight: normal; "> that </i>Make a Big Difference</span></b><i style="font-weight: normal; ">.</i></span><i style="font-weight: normal; ">. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. We publish regular articles using a recent business/financial topic to highlight different perspectives and conclusions to those obtained by conventional thinking and techniques. You can read the other three blogs at </i><a href="http://www.businessbloop.blogspot.com/" style="font-style: italic; font-weight: normal; ">"Business Bloop Award"</a><i style="font-weight: normal; ">, </i><a href="http://www.yourehavingalaughseriously.blogspot.com/" style="font-style: italic; font-weight: normal; ">"You're having a laugh ... seriously?"</a><i style="font-weight: normal; "> and </i><a href="http://www.capitalismorcommonsense.blogspot.com/" style="font-style: italic; font-weight: normal; ">"Capitalism or ... Common Sense"</a><i style="font-weight: normal; ">.</i></span></span></div><p></p><p></p>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-16884103851084316172010-10-22T13:34:00.005+01:002010-10-22T18:23:45.213+01:00The analyst who gets itWe have previously criticised conventional financial analysts' pronouncements on the fortunes and futures of businesses. Too often we believe their assessments and opinions do not identify the key drivers of performance because they are too focussed on the financial factors.<div><br /></div><div>However Richard Fletcher, city editor of the Daily Telegraph has spotted perhaps the first example of an analyst who in his words "gets it". Richard Fletcher himself must have been "getting it" for sometime himself because he clearly knows one when he sees one.</div><div><br /></div><div>The analyst is Marc Geall and his 26 page note on Autonomy, a software business is the subject of Richard Fletcher's article in the Daily Telegraph on 13th October. He reports that Mike Lynch, the Chief Executive of Autonomy, <i>"used to claim that the city analysts didn't get it. With limited experience of software companies, he argued, the city scribblers struggled to get a grip on the complex £3.4bn business he had spent years building"</i>.</div><div><br /></div><div>However Richard Fletcher reveals that Geall actually worked for Autonomy for more than two years before joining Deutche Bank in June, so he knows the company from the inside. Richard Fletcher states that whilst <i>"Geall does stress at the beginning of his note that Autonomy hs a "unique product" that "dominates", his dissection of the group's management and business model is damning".</i></div><div><br /></div><div>Here are some of the extracts he quotes from Geall's note:</div><div><br /></div><div><i>"The management structure, control and sytems at Autonomy are more representative of a start-up than a major global player ... The senior management team is talented but lacks bandwidth. This can lead to some decision paralysis as the middle management is sometimes limited in its autonomy".</i></div><div><i>Autonomy still manages a very flat structure with a tight chain of command into the CEO and CFO,"... Although they have managed this effectively to date, we believe the business is becoming too big and time is now becoming the limiting factor. There after all only 24 hours in the day and 90 days in the quarter."</i></div><div><i>But it is not only the senior management that is found wanting. Autonomy's sales force are "hunters not farmers", according to to Geall and ill-prepared for the inevitable transition to account management as Autonomy grows and the number of "repeat" customers increases."</i></div><div><i>"Autonomy's margin structure is too high ... and the investment in the business has lagged revenues ... [which] could affect customer satisfaction towards the product and value it delivers."</i></div><div><i>Autonomy's service business is "too lean" ... "risks falling short of standards demanded by customers".</i></div><div><i><br /></i></div><div>We are not saying that Geall is necessarily right, we don't have the facts behind these statements to make that judgement. What struck us though is that for the first time in our experience here was an analyst focussing on HOW a business thinks and behaves and the potential consequences this has for future performance, rather than just WHAT it does financially. Compare this with a few other analysts' comments reported in the Telegraph on the same day.</div><div><br /></div><div><i>"Traders said that the efficiency review had hit ... and that there were worries over the prospect of the government attempting to renegotiate contracts".</i></div><div><i>"... he expected first half cash flow to be miserly ... and advised investors to bring your magnifying glass. He added that he anticipated continued revenue declines".</i></div><div><i>"... one of the most compelling retail roll-out opportunities ... clear and visible growth over the medium term backed by strong cash generation".</i></div><div><i>"... remains structurally challenged given its geographical and revenue channel exposure ..."</i></div><div><br /></div><div>We do not claim that any of these are wrong, just very one dimensional. They are commenting only on financial outcomes, WHAT has happened and WHAT may happen rather than on HOW these outcomes came about. By contrast Geall comments on aspects of the core characteristics of Autonomy's organisational culture, how it thinks and behaves and how these could impact on future performance.</div><div><br /></div><div>There is a growing realisation, backed by a growing body of research that the deep seated managerial and behavioural values and competences of a business are the main determinant of whether, over time, it will substantially outperform its competitors and successfully withstand unpleasant surprises. These values and behaviours manifest themselves in the form of the <b><i><span class="Apple-style-span" >Competitive Strength</span></i><span class="Apple-style-span" style="font-weight: normal;"> condition of a business, which is:</span></b></div><div><b><span class="Apple-style-span" style="font-weight: normal;"><br /></span></b></div><div><b><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" ><i>How capable a business is compared to those that want to beat it</i></span></span></b></div><div><b><span class="Apple-style-span" style="font-weight: normal;">and</span></b></div><div><b><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" ><i>How capable a business is of mitigating those forces out there that can cause it to be beaten.</i></span></span></b></div><div><b><span class="Apple-style-span" style="font-weight: normal;"><br /></span></b></div><div><b><span class="Apple-style-span" style="font-weight: normal;">So without knowing it, we suspect, Geall has offered his analysis of the weaknesses in Autonomy's </span><span class="Apple-style-span" ><i>Competitive Strength</i><span class="Apple-style-span" ><span class="Apple-style-span" style="font-weight: normal;"> condition and what the consequences could be. These weaknesses may currently be hidden by the advantage of its products' uniqueness and market dominance. If Geall is right then the research on which the concept of </span><i><span class="Apple-style-span" >Competitive Strength</span></i><span class="Apple-style-span" style="font-weight: normal;"> is based demonstrates they could be doing up to twice as well right now. Furthermore unless corrective action is taken the cracks will start to show, it is only a question of when.</span></span></span></b></div><div><b><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="font-weight: normal;"><br /></span></span></span></b></div><div><b><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="font-weight: normal;">Should Autonomy take Geall's comments on board, given that he cannot be accused of not knowing the business? Autonomy shares fell substantially after it warned two weeks ago that full- year profits would be below market expectations, blaming "volatility rather than demand" in its markets. So if we were them and knew what we know then we would take Geall's analysis seriously. But we are not them and they may or may not know what we know, so we shall see.</span></span></span></b></div><div><b><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="font-weight: normal;"><br /></span></span></span></b></div><div><b><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="font-weight: normal;">Finally thanks to Richard Fletcher for spotting and publishing the difference. Let's hope it encourages more analysts to think about HOW rather than WHAT.</span></span></span></b></div><div><b><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="font-weight: normal;"><br /></span></span></span></b></div><div><b><span class="Apple-style-span" ><span class="Apple-style-span" ><span class="Apple-style-span" style="font-weight: normal;"><i>Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson of Business Breakthrough Coaching. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. We publish regular articles using a recent business/financial topic to highlight different perspectives and conclusions to those obtained by conventional thinking and techniques. You can read the other three blogs at <a href="http://www.businessbloop.blogspot.com">"Business Bloop Award"</a>, <a href="http://www.yourehavingalaughseriously.blogspot.com">"You're having a laugh ... seriously?"</a> and <a href="http://www.capitalismorcommonsense.blogspot.com">"Capitalism or ... Common Sense"</a>.</i></span></span></span></b></div>Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com1tag:blogger.com,1999:blog-8164839508230379402.post-20302133758863194962010-08-03T14:36:00.006+01:002010-08-03T17:26:29.798+01:00What Goodwill can REALLY be worth<p class="MsoNormal">Our last article back in March in the <a href="http://www.exceeding-expectations.blogspot.com/">Exceeding Expectations</a> section of our Excellence Quartet blog was about “Goodwill”, the difficulties of putting a value on it and the consequences if you get this valuation wrong.</p> <p class="MsoNormal">In July in our <a href="http://www.capitalismorcommonsense.blogspot.com/">“Capitalism or … Commonsense”</a> section we wrote about how if <span class="apple-style-span"><span style="mso-bidi-font-style: italic">you can do all the right things and you do them really well one of the results will be superior profitability and returns for shareholders<i>.</i><o:p></o:p></span></span></p> <p class="MsoNormal">In this article we bring these two ideas together in a story about how one business discovered just how much the goodwill they had created through doing <span class="apple-style-span"><span style="mso-bidi-font-style: italic">all the right things and doing them really well could be worth.<o:p></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span style="mso-bidi-font-style: italic">This is the story of Hotel Chocolat and its “Chocolate Bond”.<o:p></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span style="mso-bidi-font-style: italic">For those of you that don’t have a sweet tooth and may not have heard of Hotel Chocolat they are a producer and retailer of top quality, exclusive chocolate.<o:p></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span style="mso-bidi-font-style: italic">From the start the founders, Angus Thirwell and Peter Harris were determined to do the right things and to do them really well.<span style="mso-spacerun:yes"> </span>For them this included being brazenly committed to producing only authentic chocolate using only authentic wholesome ingredients.<span style="mso-spacerun:yes"> </span>It also included their policy of “engaged ethics”.<span style="mso-spacerun:yes"> </span>This not only involves<span style="mso-spacerun:yes"> </span>paying their cocoa farmer suppliers above the world market rate but also being directly involved in helping them improve their own, their families’ and communities’ lives and futures.<o:p></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span style="mso-bidi-font-style: italic">The result of all this is that over the 15 years since they were founded they have grown sales to £52m and have over 500 employees, a success story by any comparison.<o:p></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span style="mso-bidi-font-style: italic">Earlier this year they decided to raise some capital to invest in further growth.<span style="mso-spacerun:yes"> </span>To find this investment they did not go to the banks, the stock markets, venture capitalists or even a rich Aunty … they went to their customers.<o:p></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span style="mso-bidi-font-style: italic">Hotel Chocolat has over 100,000 customers registered as members of their Tasting Club.<span style="mso-spacerun:yes"> </span>So they not only know where to find them but they also know their taste in chocolate and have carefully nurtured their enthusiasm for their products and company.<span style="mso-spacerun:yes"> </span>These customers were offered the opportunity to buy “Chocolate Bonds” redeemable in full in 3 years and paying interest in … chocolate!<span style="mso-spacerun:yes"> </span>This was equivalent to an interest rate of over 6% if paid in cash.<o:p></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span style="mso-bidi-font-style: italic">The bond issue was approved by the FSA and raised £3.7m.<span style="mso-spacerun:yes"> </span>This will be used to expand Hotel Chocolat’s <st1:country-region st="on">UK</st1:country-region> factory and invest in facilities in their wholly owned cocoa plantation in <st1:country-region st="on"><st1:place st="on">St Lucia</st1:place></st1:country-region>.<span style="mso-spacerun:yes"> </span>They believe up to 250 new jobs will be created.<o:p></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span style="mso-bidi-font-style: italic">The Chocolate Bond was an innovative idea but without the goodwill that had been built through doing all the right things really well it would never have delivered any value.<o:p></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span style="mso-bidi-font-style: italic">If you would like to find out what doing the right things and doing them really well could do for the value of your business why not take some time to talk to us.<span style="mso-spacerun:yes"> </span>Call Steve Goodman on 07802 385586 or Tony Ericson on 07973 138253.<o:p></o:p></span></span></p><p class="MsoNormal"><span class="apple-style-span"><span style="mso-bidi-font-style: italic"><span class="Apple-style-span" style=" color: rgb(51, 51, 51); line-height: 20px; font-size:13px;"><i><span class="Apple-style-span" style="color: rgb(0, 0, 102); ">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson. It is one of our "Excellence Quartet" of blogs promoting the concept of Excellence as the key to prosperity. Each article uses a recent business/financial topic to highlight different perspectives and conclusions from those obtained using conventional thinking and techniques.</span></i></span></span></span></p> <p class="MsoNormal"><o:p> </o:p></p>Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-66070584298500037302010-03-31T16:05:00.009+01:002010-04-01T11:41:58.757+01:00Goodwill - What is it and what's it worth?As reported in the Telegraph two weeks ago Fat Face the surfwear retailer reported losses of £225m in its accounts to end May 2009. The retailer has been forced to write off hundreds of millions of pounds of "goodwill". It conceded that its value has more than halved since it was bought by private equity firm Bridgepoint in 2007.<div><br /></div><div>In general use "goodwill" is an accounting term used to reflect the portion of the value of a business entity not directly attributable to its assets and liabilities. It is an intangible asset that reflects the ability of the business to make a higher profit than would be derived from selling the value of the tangible assets. This value is often created and or crystallised at a point of acquisition or merger. However businesses have also been known to write "goodwill" valuations into their balance sheets to reflect what they believe is the true value of the business.</div><div><br /></div><div>Actually valuing "goodwill" is much more of a challenge than simply accounting for it. In the case of Fat Face the explanation for the write down was "that it will take longer for the brand to achieve its full potential than ... previously believed". BC Partners recently wrote off the whole of its investment in Foxtons estate agents "... we made the wrong call". Frequently premiums paid for acquisitions are not reflected in subsequent financial performance.</div><div><br /></div><div>Valuations of "goodwill" can get inflated to unrealistic and unsustainable levels. For example:</div><div><ul><li>A business may have traded during exceptionally benign economic and market conditions, achieving levels of profitability that cannot be sustained when more "normal" conditions are restored.</li><li>A business may achieve a genuinely competitive advantage but then does not have the ability to sustain that in the face of greater competition and/or changes in market conditions.</li><li>And of course - when greed overtakes fear as the main driver of judgement</li></ul>In contrast we had an example of a client whose advisors were quite unable to understand why the business had superior ability to make profits compared to its competitors and the consequent superior value of the business. They failed to attract buyers for the business at anything like its true worth.</div><div><br /></div><div>So valuing "goodwill" is not easy and there are no clear criteria or formulae for getting it right. However the consequences of getting it wrong, whether upside or downside, can be serious. If we apply our <i><span class="Apple-style-span" style="color:#000066;">Competitive Strength</span></i> perspective to this we can immediately see the fundamental problem. Valuing "goodwill" is about the future but all the data and dimensions used are from the past and present - what a business has shown it can do in economic and market conditions that have existed up to now, rather than what it will need to be able to do in conditions as they might be in the future. Every offer for investment carries the health warning - past performance is no guarantee of future returns!</div><div><br /></div><div>What is really needed is 20:20 foresight, but is that possible? We believe it is. Whilst it is very difficult to forecast the future it is possible to make an objective assessment of a business' ability to cope with and even to thrive in whatever the future turns out to be.</div><div><br /></div><div>The key is to be able to make an objective assessment of the <i><span class="Apple-style-span" style="color:#000066;">Competitive Strength</span></i> condition of a business entity. This is a new business measure and is made up of two components:</div><div><br /></div><div><i><span class="Apple-style-span" style="color:#000066;">How capable a business is compared to those that want to beat it</span></i></div><div><br /></div><div>and</div><div><i><br /></i></div><div><i><span class="Apple-style-span" style="color:#000066;">How capable a business is of mitigating the impact of those forces out there that could cause it to be beaten.</span></i></div><div><br /></div><div><i><span class="Apple-style-span" style="color:#000066;">Competitive Strength</span></i> is the manifestation of the deep seated managerial and behavioural values and competences in a business that are the main determinant of whether, over time, it will substantially outperform its competitors and successfully withstand unpleasant surprises. The rock solid research which identified this linkage also established that there are massive differences between the financial performance and sustainability of an average<i> <span class="Apple-style-span" style="color:#000066;">Competitive Strength</span></i> condition and the truly excellent - much greater than previously thought.</div><div><br /></div><div>This is because the greater the <i><span class="Apple-style-span" style="color:#000066;">Competitive Strength</span></i> the higher the organisational level of <i><b>Changeability</b></i>. <i><b>Changeability</b></i>, quite literally the organisational "ability and capacity for change" is a key attribute for superior performance and sustainability. We first defined and publicised this new business culture criterion in our "Why Excellence" seminars in 2003. It has been good to see that research carried out by Dr. Michael Jarrett, adjunct professor of organisational behaviour at London Business School and published in his book "Changeability" in 2009 has confirmed our own work and experience.</div><div><br /></div><div>Hence the <i><span class="Apple-style-span" style="color:#000066;">Comparative Competitive Strength</span></i> condition of a business is a reliable indicator of its ability to make a higher profit than would be derived from selling its tangible assets and the potential value of its "goodwill". You don't have to forecast the future, just objectively assess the business' ability to to cope with and thrive in whatever that future might be - 20:20 foresight achieved!</div><div><br /></div><div>By combining the research with our own work on <i><b>Changeability</b></i> we developed the <i><span class="Apple-style-span" style="color:#000066;">Competitive Strength Report</span></i> to enable business leaders and managers to objectively measure the <i><span class="Apple-style-span" style="color:#000066;">Comparative Competitive Strength</span></i> condition of their organisation, to clearly understand the implications for it future financial performance and its survival and to decide quickly and clearly what they need to do about it. What is more the web based process is fast (3 weeks), requires a minimum of executive time and is very low cost, so is it accessible by a very wide range of types and size of business.</div><div><br /></div><div>So if you are a business owner thinking about an exit, or you are considering an acquisition, or you an investor considering where to make your next investment, or an advisor to clients in any of these scenarios,go to our <a href="http://www.competitivestrengthreport.com/">website</a> for more information on <i><span class="Apple-style-span" style="color:#000066;">Competitive Strength</span></i> and how it can help you make that all important valuation of "goodwill". </div><div><br /></div><div><i><span class="Apple-style-span" style="color:#000066;">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson. It is one of our "Excellence Quartet" of blogs promoting the concept of Excellence as the key to prosperity. Each article uses a recent business/financial topic to highlight different perspectives and conclusions from those obtained using conventional thinking and techniques.</span></i></div><div><i><br /></i></div><div style="text-align: center;"><i><span class="Apple-style-span" style="color:#000066;"></span><b>Different thinking - Different results </b></i></div><div><br /></div><div><br /></div>Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com1tag:blogger.com,1999:blog-8164839508230379402.post-32273521691660422682009-12-15T17:39:00.006+00:002009-12-15T18:01:29.077+00:00Self-stuffing Turkeys. New? No<p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">BA cabin staff have announced that they will strike for 12 days over Christmas.</span></span><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"><o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">The public response has been overwhelmingly negative. The media is awash with puns on </span></span><st1:country-region st="on"><st1:place st="on"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">Turkeys</span></span></st1:place></st1:country-region><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"> and Christmas. </span></span><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"><o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">Is it that word “British”? Does this word in a company name cause its employees, like the tragic folk at the British Motor Corporation/British Leyland, to believe that they are entitled to unlimited public support and funding despite their employer being seriously uncompetitive and underperforming on every front?</span></span><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"><o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">30 years ago and nothing learned. BMC/BL and even its final incarnation Rover is long gone, and all its jobs with it. </span></span><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"><o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">BA has been at a very low level of </span></span><b><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"><span class="Apple-style-span" style="color:#000099;">Comparative Competitive Strength</span></span></span></b><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"> for far too long. Its management has shown few signs of understanding this, its shareholders and advisors certainly do not. So it is not too surprising that its cabin staff should be deluded too. </span></span><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"><o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">Over the last ten years BA has swanned along smug in the self belief of its own invulnerability and almost god given right to go on for ever whilst in fact sliding steadily down through the </span></span><b><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"><span class="Apple-style-span" style="color:#000099;">Comparative Competitive Strength</span></span></span></b><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"> level of </span></span><b><i><span style="color:#333333"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">Comfortable</span></span></span></i></b><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"> into now the lower levels of </span></span><b><i><span style="color:red"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">Constrained</span></span></span></i></b><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">. The fact that 90% of the cabin staff have just demonstrated they do not understand how desperate the situation is reflects the poor quality of management and leadership. Mr Walsh’s dramatics have been too little and far too late to be believed, and too many of his management have remained in denial. It is no wonder communications have failed. Look again at BMC and then subsequent BL and Rover leaderships.</span></span><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"><o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">Are we about to witness the Longbridge tragedy all over again? Is BA off to join BMC in </span></span><b><span style="color:#CC0000"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">The Abyss</span></span></span></b><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">? Is this perhaps a terrible insight into the psychology of large scale corporate failure? Is this yet another case where sheer size, market dominance and organisational inertia obscures the recognition of corporate death at the time of actual occurrence. The business appears to carry on but ultimately, much later, and as a “sudden surprise”, the sunlight hits the wrong bit and the whole zombified structure suddenly collapses in a heap of mouldy dust?</span></span><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"><o:p></o:p></span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">Might the more thoughtful BA cabin staff use this time away from work to find out what happened to the workers at BMC? Could they realise that there is no such thing as a Perpetual Money Machine, and team up with BALPA and other longer sighted employees to work together to win themselves the management leadership and business transformation that they all so desperately need? And get themselves a future?</span></span><o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom:6.0pt"><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">This forthcoming tragedy is predictable and therefore potentially preventable. Indeed, as Louis Gerstner demonstrated at IBM, it might even be reversible. A key indicator is the<span class="Apple-style-span" style="color:#000099;"> </span><b><span class="Apple-style-span" style="color:#000099;">Comparative Competitive Strength Report.</span></b> If you would like to know more about this uniquely independent and objective assessment of the managerial and leadership potential competitive capability of an organisation, and the financial implications of that, please have a look at the introduction on our web site <a href="http://www.changeworld.co.uk/competitivestrength.html">here</a>.</span></span></p><p class="MsoNormal" style="margin-bottom:6.0pt"><span class="Apple-style-span" style="color: rgb(0, 0, 102); line-height: 20px; "><em><span class="Apple-style-span" style="font-family:arial;"><span class="Apple-style-span" style="font-size: small;">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. Each blog has a new article each month using a recent business/financial topic to highlight different perspectives and conclusions from those obtained using conventional thinking and techniques. You can read the other three blogs are </span></span></em><a href="http://yourehavingalaughseriously.blogspot.com/" style="color: rgb(153, 153, 153); text-decoration: none; "><em><span class="Apple-style-span" style="font-family:arial;"><span class="Apple-style-span" style="font-size: small;">"You're having a laugh ... Seriously?",</span></span></em></a><a href="http://businessbloop.blogspot.com/" style="color: rgb(153, 153, 153); text-decoration: none; "><em><span class="Apple-style-span" style="font-family:arial;"><span class="Apple-style-span" style="font-size: small;">Business Bloop of the Month Award"</span></span></em></a><em><span class="Apple-style-span" style="font-family:arial;"><span class="Apple-style-span" style="font-size: small;">, </span></span></em><a href="http://capitalismorcommonsense.blogspot.com/" style="color: rgb(153, 153, 153); text-decoration: none; "><em><span class="Apple-style-span" style="font-family:arial;"><span class="Apple-style-span" style="font-size: small;">"Capitalism or ... Common Sense"</span></span></em></a><em><span class="Apple-style-span" style="font-family:arial;"><span class="Apple-style-span" style="font-size: small;"> .</span></span></em></span></p>Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-87517404485142609552009-09-25T14:59:00.003+01:002009-09-25T16:40:46.539+01:00Oh, What a Surprise! Get your Bacon with your Beauty?<p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">There are companies who consistently exhibit both agility and inventiveness. They are more likely to “think outside the box”, to be “a bit of a maverick”, to do “something surprising”. Once the dust has settled and the consequences of the innovation can be seen clearly, the “surprise” is frequently downplayed by commentators with 20/20 hindsight as being “just common sense” and “obvious”. It wasn’t obvious then, it isn’t now and it won’t be in the future – agility and inventiveness has become part of the genetic structure of such companies. They will always surprise.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">This ability to surprise is both a consequence, and a symptom, of the highest level of </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Comparative Competitive Strength</span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">, the condition we call </span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;color:green;"><span class="Apple-style-span" style="font-size:small;">Free</span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">. Robust research has proved that these companies produce financial results that massively outperform both their direct competitors and the general pattern of corporate returns. Their superior profitability endows them with a much greater freedom of strategic and tactical choice, and that in turn, allows them to consider greater risks to obtain larger returns. And, here is the elegant Catch 22, the vastly superior competence that enables them to deliver their high profitability can also underwrite their innovative enterprises so that, for them, the risks can be much lower than for others. Their true difference lies in the leadership, managerial and operational culture that pervades the whole of their business. Succinctly, they Act Different because they Think Different. So, unlike most of their competitors, they can afford to surprise.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">Here is a wonderful example. In the news today, 25</span><sup><span class="Apple-style-span" style="font-size:small;">th</span></sup><span class="Apple-style-span" style="font-size:small;"> September 2009 – </span></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:6.0pt;margin-left:36.0pt; line-height:14.4pt"><b><span style=" ;font-family:Arial;color:blue;"><span class="Apple-style-span" style="font-size:small;">Waitrose</span></span></b><span style=" ;font-family:Arial;color:blue;"><span class="Apple-style-span" style="font-size:small;"> is aiming to double the number of its grocery stores by making a push into the convenience market, the company revealed yesterday. Its food will go on sale in </span><b><span class="Apple-style-span" style="font-size:small;">Boots</span></b><span class="Apple-style-span" style="font-size:small;"> as part of the plan.</span><span class="Apple-style-span" style="font-size:small;"><o:p></o:p></span></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:6.0pt;margin-left:36.0pt; line-height:14.4pt"><span style=" ;font-family:Arial;color:blue;"><span class="Apple-style-span" style="font-size:small;">The employee-owned retailer said there is potential to open up to 300 convenience stores. This would be boosted by the huge store portfolio of more than 2,000 outlets owned by Boots. In return, Boots’ health products will be sold by Waitrose.</span><span class="Apple-style-span" style="font-size:small;"><o:p></o:p></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">This looks like one of the biggest “Win –Win” deals of all time in UK Retail. As its competitors race around fighting endless Planning battles to secure “Convenience Store” sites (making local newspaper headlines right across the </span><st1:country-region st="on"><st1:place st="on"><span class="Apple-style-span" style="font-size:small;">UK</span></st1:place></st1:country-region><span class="Apple-style-span" style="font-size:small;">) and then reaching deep into their pockets to build and outfit them, Waitrose sails serenely past with 2,000 ready to run new outlets at little cost. Talk about being the swan in the duck pond!</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">And, what’s in it for Boots? Two things, increased footfall in their current premises, and more volume for their healthcare products. Sounds like a bit of a moorhen moment?</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">Well, it is better than nothing – and to be brutally frank, nothing is what Boots has had to look forward to, for a long time. Boots is a classic example of a once great company that remained in the </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Comparative Competitive Strength</span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> frame of mind we call </span></span><b><i><span lang="EN-GB" style=" color: rgb(51, 51, 51); font-family:Arial;"><span class="Apple-style-span" style="font-size:small;">Comfortable</span></span><span lang="EN-GB" style="color:gray;"><span class="Apple-style-span" style="font-size:small;"> </span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">until, one day, its leadership and its shareholders were shocked to find that it was on a road to nowhere with the real prospect of sliding into serious financial trouble. The world around it had changed, and it had not. They had fallen into the </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Comparative Competitive Strength</span></span></b><span lang="EN-GB" style="color:navy;"><span class="Apple-style-span" style="font-size:small;"> </span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">condition we call </span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;color:red;"><span class="Apple-style-span" style="font-size:small;">Constrained</span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">. They were truly headed for </span></span><b><span lang="EN-GB" style=" color: rgb(204, 0, 0); font-family:Arial;"><span class="Apple-style-span" style="font-size:small;">The Abyss</span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">Over the last few years Boots has struggled to innovate. They have had apparently “good ideas”, such as the Dental Clinics that disappointed, and their Opticians that, at one time, was losing a fortune. However, they had become a </span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;color:red;"><span class="Apple-style-span" style="font-size:small;">Constrained</span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> culture – and that meant that they did not have the cultural leadership, managerial and operational competence to manage such innovations effectively. So they didn’t. </span></span></p><p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">There have been significant changes in the leadership at Boots since the merger with Allianz and returning to private capital ownership. It is interesting to note that, seen only through the anecdotal “cultural thermometer” of Customer Service experience, there are signs that the long march back is under way. This deal with Waitrose looks like a comparatively low risk innovation for Boots which should not be outside the competence of an organisation that is now travelling from the </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Comparative Competitive Strength</span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> condition of </span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;color:red;"><span class="Apple-style-span" style="font-size:small;">Constrained</span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">, through </span></span><b><i><span lang="EN-GB" style=" color: rgb(51, 51, 51); font-family:Arial;"><span class="Apple-style-span" style="font-size:small;">Comfortable</span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> and is obviously aiming for </span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;color:blue;"><span class="Apple-style-span" style="font-size:small;">Excellent</span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">From the Boots point of view, there is another benefit that is unlikely to be spotted by conventional business analysts. It has such a substantial potential value that it would make it worth them paying Waitrose rent to be in their sites. It is the opportunity to learn from this commercial partnership, to gain insight and understanding of the cultural realities of a </span><b><i><span style="color:green;"><span class="Apple-style-span" style="font-size:small;">Free</span></span></i></b><span class="Apple-style-span" style="font-size:small;"> organisation. But, are they ready and do they have the ability to listen, look and learn?</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">On the other hand, there is a potential threat to Waitrose which again, conventional analysis will not have highlighted. Have they spotted it and are they prepared for action?</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">This threat has been observed in a number of mergers and acquisitions where a company with a high level of </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Comparative Competitive Strength</span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> </span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">has deployed its financial muscle to</span><b><span class="Apple-style-span" style="font-size:small;"> </span></b><span class="Apple-style-span" style="font-size:small;">scoop up a competitor with a much lower level of such strength. In many cases they have not taken into account, or have been blithely unaware of, the substantial cultural differences between the organisations. Generally, an </span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;color:blue;"><span class="Apple-style-span" style="font-size:small;">Excellent</span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> level culture mixed into a </span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;color:red;"><span class="Apple-style-span" style="font-size:small;">Constrained</span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> level organisation has not produced, through some magic, an </span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;color:blue;"><span class="Apple-style-span" style="font-size:small;">Excellent</span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> level outcome. Diagnosis can be muddy because, in many cases, such moves have been accompanied by financial engineering that, through excessive gearing, has had the effect of simultaneously moving the buyer, unconsciously, towards a </span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;color:red;"><span class="Apple-style-span" style="font-size:small;">Constrained</span></span></i></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> condition. This has been a typical outcome of the lack of awareness of </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Comparative Competitive Strength</span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> <span class="Apple-style-span" style="font-weight: normal;">cultural</span> </span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">factors</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">As a general rule, in mergers and acquisitions, it appears that the lowest common denominator of </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Comparative Competitive Strength</span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> </span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">will prevail. There is the same risk in commercial partnership.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"><span class="Apple-style-span" style="color:#FF0000;">Waitrose must be on their guard</span>. They will need to work out how much extra effort they will be prepared to put into managing the consequences of the lower levels of managerial and operational competence they are likely to meet in their Boots interactions. They should be prepared to be disappointed and to have strategies ready to manage this constructively. The overall economics are not likely to compare to those 100% within their own control. This is tangible stuff, necessary otherwise it could all end in tears. </span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"><span class="Apple-style-span" style="color:#FF0000;">Waitrose must be doubly on their guard.</span> Much more important, they have “the Partnership”, a unique and spectacularly successful working culture. They will need to think about how to protect the cultural integrity of those partners they require to work with Boots. Their partners have acquired a complex mix of attitudes, habits and ways of thinking and working that, outside the Waitrose environment, may prove to be quite fragile. Waitrose have to make sure that they do not allow the lower common denominator, the Boots culture, in any way to contaminate and destroy their working way of life. This is intangible stuff, essential otherwise it could all end in tragedy.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">So let’s hope that the operational leadership and management of Waitrose are as consciously competent in their understanding of their own culture as their strategic leaders in the John Lewis Group. The key to the future prosperity of UK plc lies in the whole economy striving to approach their level of </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Comparative Competitive Strength</span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">Our unique </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Competitive Strength Report</span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> </span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">is a rapid and inexpensive way for any organisation to compare itself with the very best in the world and to find out whether its prevailing culture is </span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;color:green;"><span class="Apple-style-span" style="font-size:small;">Free</span></span></i></b><span lang="EN-GB" style=" ;font-family:Arial;"><span class="Apple-style-span" style="font-size:small;">, </span><b><i><span style="color:blue;"><span class="Apple-style-span" style="font-size:small;">Excellent</span></span></i></b><i><span class="Apple-style-span" style="font-size:small;">,</span><b><span class="Apple-style-span" style="font-size:small;"> </span><span style="color:#333333;"><span class="Apple-style-span" style="font-size:small;">Comfortable</span></span><span class="Apple-style-span" style="font-size:small;"> </span></b></i></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">or</span></span><b><i><span lang="EN-GB" style=" ;font-family:Arial;"><span class="Apple-style-span" style="font-size:small;"> </span><span style="color:red;"><span class="Apple-style-span" style="font-size:small;">Constrained</span></span></span></i></b><span lang="EN-GB" style=" ;font-family:Arial;"><span class="Apple-style-span" style="font-size:small;"> </span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">and to fully understand the financial and strategic implications of that result. We know that the insights from the </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Comparative Competitive Strength</span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> </span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">point of view will show you things you had not previously seen and illuminate unexpected opportunities. </span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">You can find out more about </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Comparative Competitive Strength</span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> </span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">and</span><b><span class="Apple-style-span" style="font-size:small;"> </span></b></span><b><span lang="EN-GB" style=" color: rgb(204, 0, 0); font-family:Arial;"><span class="Apple-style-span" style="font-size:small;">The Abyss</span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> from our </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">ChangeWORLD</span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"><a href="http://www.changeworld.co.uk/competitivestrength.html"> site</a> or the </span></span><b><span lang="EN-GB" style=" ;font-family:Arial;color:navy;"><span class="Apple-style-span" style="font-size:small;">Competitive Strength Report</span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"> </span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;"><a href="http://www.competitivestrengthreport.com/">site</a>. Why not meet us to explore the ideas further?</span></span></p><p class="MsoNormal" style="margin-bottom:6.0pt"></p><div><span style="COLOR: #000066"><em><span style="FONT-FAMILY: verdana"><span style="font-size: small; " class="Apple-style-span">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. Each blog has a new article each month using a recent business/financial topic to highlight different perspectives and conclusions from those obtained using conventional thinking and techniques. You can read the other three blogs are </span></span></em><a href="http://yourehavingalaughseriously.blogspot.com/"><em><span style="FONT-FAMILY: verdana"><span style="FONT-SIZE: small" class="Apple-style-span">"You're having a laugh ... Seriously?", </span></span></em></a><a href="http://businessbloop.blogspot.com/"><em><span style="FONT-FAMILY: verdana"><span style="FONT-SIZE: small" class="Apple-style-span">Business Bloop of the Month Award"</span></span></em></a><em><span style="FONT-FAMILY: verdana"><span style="FONT-SIZE: small" class="Apple-style-span">, </span></span></em><a href="http://capitalismorcommonsense.blogspot.com/"><em><span style="FONT-FAMILY: verdana"><span style="FONT-SIZE: small" class="Apple-style-span">"Capitalism or ... Common Sense"</span></span></em></a><em><span style="FONT-FAMILY: verdana"><span style="FONT-SIZE: small" class="Apple-style-span"> .</span></span></em></span><br /></div><p></p><p class="MsoNormal" style="margin-bottom:6.0pt"><br /></p>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-12136412933168992872009-05-01T19:12:00.004+01:002009-05-01T19:31:41.587+01:00Going, Going, Gone? – Auction of the Vanities?<div><p class="MsoNormal" style="line-height:8.25pt"><span class="small"><span lang="EN-GB" style="color:black;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: arial;">From</span></span></span></span><span class="apple-converted-space"><span lang="EN-GB" style="color:black;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: arial;"> </span></span></span></span><span class="byline"><span lang="EN-GB" style="background:#F8F1D8;color:#666666;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: arial;">The Times </span></span></span></span><span lang="EN-GB" style=" ;color:black;"><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: arial;"> </span></span></span></span><span lang="EN-GB" style="color:#666666;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: arial;">May 1, 2009</span></span></span><span lang="EN-GB" style="font-family:Arial;font-size:8.0pt;color:black;"><o:p></o:p></span></p> <h1 style="margin:0cm;margin-bottom:.0001pt;line-height:14.4pt"><span style=" ;font-family:Georgia;color:black;"><span class="Apple-style-span" style="font-size: large;">Need to know:</span><span class="apple-converted-space"><span class="Apple-style-span" style="font-size: large;"> </span></span><o:p></o:p></span></h1> <p class="MsoNormal"><span class="apple-style-span"><b><span lang="EN-GB" style="font-family:Arial;color:black;"><o:p><span class="Apple-style-span" style=" font-weight: normal; font-family:Georgia;"><span class="apple-style-span"><b><span lang="EN-GB" style="font-family:Arial;color:black;"><span class="Apple-style-span" style="font-size: small;">Motorola</span></span></b></span><span class="apple-style-span"><span lang="EN-GB" style="font-family:Arial;color:black;"><span class="Apple-style-span" style="font-size: small;">: The </span><st1:country-region st="on"><st1:place st="on"><span class="Apple-style-span" style="font-size: small;">US</span></st1:place></st1:country-region><span class="Apple-style-span" style="font-size: small;"> mobile phone maker reported a first-quarter loss of $231 million (£156 million), an improvement on its $194 million loss for the same quarter last year. Sales were down by 28 per cent.</span></span></span></span></o:p></span></b></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="apple-style-span"><b><span lang="EN-GB" style="font-family:Arial;color:black;"><span class="Apple-style-span" style="font-size: small;">DSG International</span></span></b></span><span class="apple-style-span"><span lang="EN-GB" style="font-family:Arial;color:black;"><span class="Apple-style-span" style="font-size: small;">: The owner of Currys and PC World has raised £310.6 million to shore up its capital base after credit insurance fears contributed to a surprise rise in its net debt.</span></span></span></o:p></span></p> <p class="MsoNormal"><span class="apple-style-span"><b><span lang="EN-GB" style="color:black;"><o:p><span class="Apple-style-span" style=" font-weight: normal; "><span class="apple-style-span"><b><span lang="EN-GB" style="font-family:Arial;color:black;"><span class="Apple-style-span" style="font-size: small;">Chrysler</span></span></b></span><span class="apple-style-span"><span lang="EN-GB" style="font-family:Arial;color:black;"><span class="Apple-style-span" style="font-size: small;">: The American carmaker has gone into Chapter 11 bankruptcy protection, having won $8 billion (£5.4 billion) in </span><st1:place st="on"><st1:country-region st="on"><span class="Apple-style-span" style="font-size: small;">US</span></st1:country-region></st1:place><span class="Apple-style-span" style="font-size: small;"> government funding to help it to restructure.</span></span></span></span></o:p></span></b></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="apple-style-span"><b><span lang="EN-GB" style="font-family:Arial;color:black;"><span class="Apple-style-span" style="font-size: small;">Smith & Nephew</span></span></b></span><span class="apple-style-span"><span lang="EN-GB" style="font-family:Arial;color:black;"><span class="Apple-style-span" style="font-size: small;">: The London-listed medical devices company reported an 18 per cent rise in first-quarter profits to £66.2 million, as the benefit of cost cuts outweighed a 5 per cent slump in revenues, caused by patients deferring non-essential orthopaedic surgery and by hospitals tightening their expenses.</span></span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-weight: bold; "><span class="Apple-style-span" style="color: rgb(0, 0, 153);"><span class="Apple-style-span" style="font-size: small;">From the Competitive Strength Point of View </span></span><span class="Apple-style-span" style="font-size: small;">–</span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><b style="mso-bidi-font-weight:normal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Going</span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;"> – </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">Motorola</span></b><span class="Apple-style-span" style="font-size: small;">, a once great technological leader that loudly trumpeted its own excellence that has been struggling for years.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">At best this is a company that is exhibiting the </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(0, 0, 153);"><span class="Apple-style-span" style="font-size: small;">Comparative Competitive Strength</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> symptoms of a </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;">Constrained </span></span></i></b><span class="Apple-style-span" style="font-size: small;">condition.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">There is much that it needs to do to recover its previous value to shareholders, customers and employees – market leadership, product innovation, quality and delivery are examples.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">The fact that none of these are new factors over the last 18 months suggests that the only focus is now survival – that is a </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> condition.</span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style=" "><b style="mso-bidi-font-weight:normal"><span lang="EN-GB"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">Going</span></span></span></b><span lang="EN-GB"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;"> – </span></span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">DSG International</span></span></b><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">, a large business that loudly claims market leadership but has been the subject of our adverse predictions over a number of years.</span></span><span style="mso-spacerun:yes"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;"> </span></span></span><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">The list of operational quality failures is massive and widely documented, especially where there is interest in customer service experiences.</span></span><span style="mso-spacerun:yes"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;"> </span></span></span><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">This report seems to indicate the next step in the inevitable death throes as this business slides from </span></span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0); "><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></span></i></b><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;"> towards </span></span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style: normal"><span class="Apple-style-span" style="color: rgb(204, 0, 0); "><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">The Abyss</span></span></span></i></b><span class="Apple-style-span" style="color: rgb(204, 0, 0); "><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">.</span></span></span></span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style=" "><b style="mso-bidi-font-weight:normal"><span lang="EN-GB"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">Gone? – Chrysler</span></span></span></b><span lang="EN-GB"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">, a motor company that has been so spectacularly uncompetitive for so long that the only wonder is that it has lasted so long.</span></span><span style="mso-spacerun:yes"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;"> </span></span></span><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">However, it has never been immodest – the blowhard communication habits of the Motor Industry run through its veins. The various managements of this vast corporation have been ducking and diving over the decades with acquisitions such as Jeep, international misadventures such as the shambles that was Chrysler Talbot, mixed ventures such as the mutually disastrous tie up with Mercedes, and a new vehicles that remain firmly unmatched to market needs (just look at the current range!) – and last but not least, a quality and reliability reputation that almost any Third World vehicle builder can beat hands down.</span></span><span style="mso-spacerun:yes"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;"> </span></span></span><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">This is a long </span></span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0); "><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></span></i></b><span class="Apple-style-span" style="color: rgb(255, 0, 0); "><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;"> </span></span></span><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">business that has toppled into </span></span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style: normal"><span class="Apple-style-span" style="color: rgb(204, 0, 0); "><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">The Abyss</span></span></span></i></b><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">.</span></span></span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">The tragedy now is that their extensive Supply Chain will suffer a massive financial blow that they are also ill equipped to withstand.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">It is very probable that much of their Supply Chain is also in </span><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;">a </span></span><b style="mso-bidi-font-weight: normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></i></b><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">condition and that </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="color: rgb(204, 0, 0);"><span class="Apple-style-span" style="font-size: small;">The Abyss</span></span></b><span class="Apple-style-span" style="font-size: small;"> awaits them too.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">And, meanwhile, the worthless Brand Name totters on in the name of job protection, is there any other logical reason?</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">This time about to be hitched to the paragon of automotive quality leadership that is FIAT – </span><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;">another </span></span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> organisation that exists only by governmental fiat – what a combination that promises to be..</span></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-weight: bold; "><span class="Apple-style-span" style="font-size: small;">A Lesson from Chrysler – the LCD Effect</span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">The brutal reality of the </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(51, 51, 255);"><span class="Apple-style-span" style="font-size: small;">Competitive Strength</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> point of view is that, in the majority of cases,</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">in any interdependent business relationship the </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">Lowest Common Denominator</span></b><span class="Apple-style-span" style="font-size: small;"> sets the pattern of values, thinking and behaviour for the whole.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">So, because Chrysler has been for so long in a </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> condition, tragically many of their suppliers may also have come to share the condition – and be therefore be doomed in turn.</span></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-size: small;"> The Mercedes/Chrysler tie up illustrates this so well.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style="font-size: small;">Mercedes</span></b><span class="Apple-style-span" style="font-size: small;">, strong in</span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;"> </span></b><span class="Apple-style-span" style="font-size: small;">the self belief that they were an example of </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(51, 102, 255);"><span class="Apple-style-span" style="font-size: small;">Excellence</span></span></i></b><span class="Apple-style-span" style="color: rgb(51, 102, 255);"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">in</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(0, 0, 153);"><span class="Apple-style-span" style="font-size: small;">Competitive Strengt</span></span><span class="Apple-style-span" style="color: rgb(51, 51, 255);"><span class="Apple-style-span" style="font-size: small;">h</span></span><span class="Apple-style-span" style="font-size: small;">,</span></i></b><span class="Apple-style-span" style="font-size: small;"> entered a joint venture with Chrysler (a </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></i></b><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">operation desperately seeking yet another silver bullet).</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">There were two unexpected outcomes – first, Mercedes’ reputation in the USA for quality and reliability with engineering excellence suffered nearly terminal damage from their first locally built vehicles – second, the world wide market spotlight fell across the quality and reliability of all Mercedes’ range and they too were seen to be found wanting.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">Mercedes’ self perception of </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(51, 102, 255);"><span class="Apple-style-span" style="font-size: small;">Excellence</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> had been a myth – they were in fact, and had been for some time, merely in a </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(102, 102, 102);"><span class="Apple-style-span" style="font-size: small;">Comfortable</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> condition.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">And that is why they slipped downhill with Chrysler without even realising that it was happening.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">However, although it has taken a few years, Mercedes’ leadership realised what was happening, distanced themselves from Chrysler as far as possible, and made a massive investment in restoring their internal culture towards </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(51, 102, 255);"><span class="Apple-style-span" style="font-size: small;">Excellence</span></span></i></b><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">The only question now is whether they have made enough progress to withstand the credit crunch?</span></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-size: small;">However, the News is not all doom and gloom today -</span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><b style="mso-bidi-font-weight:normal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Staying – Smith & Nephew</span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">, is a company with a quiet reputation for excellence in everything that they do.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">It has demonstrated a high degree of agility in both market shaping and leadership through an adept and innovative mixture of</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">product leadership and flexibility in distribution channel development.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">In fact, it exhibits several symptoms of the </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(0, 0, 153);"><span class="Apple-style-span" style="font-size: small;">Competitive Strength</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> condition beyond </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style: normal"><span class="Apple-style-span" style="color: rgb(51, 102, 255);"><span class="Apple-style-span" style="font-size: small;">Excellence</span></span></i></b><span class="Apple-style-span" style="color: rgb(51, 102, 255);"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">that we call </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-size: small;">Free</span></span></i></b><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">So it is no surprise to see, as reported, that they have been able to respond rapidly and productively to a sudden shift in market conditions.</span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-weight: bold;">So, does your company think it is the greatest?</span></span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-weight: bold;"> </span></span></span></o:p></span></p><p class="MsoNormal"><span lang="EN-GB"><o:p><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"></span></span><span class="Apple-style-span" style="font-size: small;">Do you shout your superiority from the rooftops?</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">Are you one of the business leaders fooling your customers, your suppliers, your shareholders and, worst of all, yourself that You Are The Best?</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;"></span></o:p></span></p><p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-size: small;">Times are tough – and in Warren Buffet’s memorable phrase - the tide is going right out.</span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">In terms of </span><b style="mso-bidi-font-weight: normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(0, 0, 153);"><span class="Apple-style-span" style="font-size: small;">Competitive Strength</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> levels - </span></span></p> <p class="MsoNormal" style="margin-left:36.0pt;text-indent:-18.0pt;mso-list:l0 level1 lfo1; tab-stops:list 36.0pt"><span lang="EN-GB" style="font-family: "Courier New";mso-fareast-Courier New"font-family:";"><span style="mso-list: Ignore"><span class="Apple-style-span" style="font-size: small;">·</span><span style="font:7.0pt "Times New Roman""><span class="Apple-style-span" style="font-size: small;"> </span></span></span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">If your business is in the condition of </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(51, 102, 255);"><span class="Apple-style-span" style="font-size: small;">Excellence</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> – you are in for some nasty surprises</span></span></p> <p class="MsoNormal" style="margin-left:36.0pt;text-indent:-18.0pt;mso-list:l0 level1 lfo1; tab-stops:list 36.0pt"><span lang="EN-GB" style="font-family: "Courier New";mso-fareast-Courier New"font-family:";"><span style="mso-list: Ignore"><span class="Apple-style-span" style="font-size: small;">·</span><span style="font:7.0pt "Times New Roman""><span class="Apple-style-span" style="font-size: small;"> </span></span></span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">If your business is in the condition of </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style: normal"><span class="Apple-style-span" style="color: rgb(102, 102, 102);"><span class="Apple-style-span" style="font-size: small;">Comfortable</span></span></i></b><span class="Apple-style-span" style="color: rgb(102, 102, 102);"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">– you are in for a terrible time – you will very probably slide into a </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="color: rgb(255, 0, 0);">Constrained</span></span></i></b><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="color: rgb(255, 0, 0);"> </span>condition without knowing it has happened until it is too late.</span></span></p> <p class="MsoNormal" style="margin-left:36.0pt;text-indent:-18.0pt;mso-list:l0 level1 lfo1; tab-stops:list 36.0pt"><span lang="EN-GB" style="font-family: "Courier New";mso-fareast-Courier New"font-family:";"><span style="mso-list: Ignore"><span class="Apple-style-span" style="font-size: small;">·</span><span style="font:7.0pt "Times New Roman""><span class="Apple-style-span" style="font-size: small;"> </span></span></span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">If your business is in the </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size: small;">Constrained</span></span><span class="Apple-style-span" style="font-size: small;"> </span></i></b><span class="Apple-style-span" style="font-size: small;">condition – you are unlikely to survive </span></span></p> <p class="MsoNormal" style="margin-left:36.0pt;text-indent:-18.0pt;mso-list:l0 level1 lfo1; tab-stops:list 36.0pt"><span lang="EN-GB" style="font-family: "Courier New";mso-fareast-Courier New"font-family:";"><span style="mso-list: Ignore"><span class="Apple-style-span" style="font-size: small;">·</span><span style="font:7.0pt "Times New Roman""><span class="Apple-style-span" style="font-size: small;"> </span></span></span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">If your business is in the </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-size: small;">Free </span></span></i></b><span style="mso-spacerun:yes"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-size: small;"> </span></span></span><span class="Apple-style-span" style="font-size: small;">condition – you don’t need us to tell you what to do, you will already have done it.</span></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style=" "><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">Whether you are a business leader, proprietor, investor, financier, supplier, banker, manager or employee – you would be wise to look hard at the </span></span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(0, 0, 153); "><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">Competitive Strength</span></span></span></i></b><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;"> condition of the companies with which you are closely associated.</span></span><span style="mso-spacerun:yes"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;"> </span></span></span><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="font-size: small;">If they are going down, they may take you with them without you even realising that it is happening.</span></span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">If you want to find out more about the </span><b style="mso-bidi-font-weight:normal"><u><span class="Apple-style-span" style="font-size: small;">C</span><span class="Apple-style-span" style="color: rgb(0, 0, 153);"><span class="Apple-style-span" style="font-size: small;">ompetitive Strength Report</span></span></u></b><span class="Apple-style-span" style="color: rgb(0, 0, 153);"><span class="Apple-style-span" style="font-size: small;">,</span></span><span class="Apple-style-span" style="font-size: small;"> the true financial value of exceeding expectations and the importance of changeability for survival and prosperity, please look at our </span><a href="http://www.changeworld.co.uk/"><span class="Apple-style-span" style="font-size: small;">ChangeWORLD web site here</span></a><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">If you have the courage to wake up and face reality – contact us before it is too late. </span></span></p></div><div><span class="Apple-style-span" style="font-size:small;"><br /></span></div><div><span style="color:#000066;"><em><span style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. Each blog has a new article each month using a recent business/financial topic to highlight different perspectives and conclusions from those obtained using conventional thinking and techniques. You can read the other three blogs are </span></span></em><a href="http://yourehavingalaughseriously.blogspot.com/"><em><span style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">"You're having a laugh ... Seriously?", </span></span></em></a><a href="http://businessbloop.blogspot.com/"><em><span style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">Business Bloop of the Month Award"</span></span></em></a><em><span style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">, </span></span></em><a href="http://capitalismorcommonsense.blogspot.com/"><em><span style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">"Capitalism or ... Common Sense"</span></span></em></a><em><span style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;"> .</span></span></em></span><br /></div>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-33268997813776929922009-03-16T09:12:00.005+00:002009-03-16T09:50:59.505+00:00The Fallacy of Market ShareIn our last Exceeding Expectations article we demonstrated how being in a high growth market sector and/or having a temporary market advantage are not reliable indicators of long term performance for a business. In this article we explain why “market share” is misunderstood and misused as an indicator of future performance – and so often also as a strategic goal. Given that the <strong>ONLY</strong> rationale offered to persuade Lloyds TSB shareholders to support the merger with HBOS was the “largest-market-share-in-UK-retail-banking-Gordon-has-given-us-the-nod” argument , this is a highly relevant subject to address.<br /><br />The argument in favour of achieving high market share is that this creates many advantages that lead to superior financial performance. This fallacy has a corollary– the conclusion that high market share requires a very large organisation. Frequently this prompts boards to “shortcut” their way to increased market share through merger and acquisition. However as the record shows, M&A has a chance of between 50 and 80% of failing to produce value; what does this say about the advantages of high market share?<br /><br />The research on this subject appears superficially to back the notion that high market share leads to superior financial performance. However one piece of research identified a crucial element needed if this superior performance is to be sustainable. The research, carried out at Harvard and still ongoing is titled Profit Impact of Market Strategies (PIMS). This research involved gathering performance data over many years from many thousands of business units to identify the business strategies most likely to lead to success in a range of contexts. In their book (“The PIMs Principles”) Robert Buzzell and Bradley Gale showed how their PIMS research discovered that <strong>only </strong>market share growth based on <em><strong>relative perceived superior quality</strong></em> will result in market share growth that delivers <strong>sustainable</strong> superior financial performance.<br /><br />For an example of how the lack of <em><strong>relative perceived superior quality</strong></em> results in poor financial performance in spite of high market share we need look no further than DSG, the owners of Currys and PC World. This company built itself into the market leading electricals retailer and showed all the characteristics of a high market share operator, e.g. using its buying power to offer low prices and occupying prime retail sites throughout the UK. Three years ago, after one of our clients suffered one of the worst customer experiences we have witnessed from PC World’s so called Business Division, we looked at DSG from our <em><strong>Competitive Strength perspective</strong></em> and warned that all was not well. Since then other commentators began to voice concerns and in due course DSG’s profits began to slide along with its share price.<br /><br />Then came the recession and of course this has meant a tough period in retail. In spite of this a few retailers have been able to report results that exceeded expectations whereas DSG announced trading results that were every bit as bad as expected. The media’s financial and business pundits once again cited market conditions, the credit crunch, shifts in demand for one technology or another, and so on. DSG attempted to cushion the bad news by reporting that trials of new store formats had delivered increased sales and margins. On the strength of this news one analyst actually changed his recommendation from sell to hold – obviously he has never heard of the Hawthorne Effect (research that showed the refurbishing of working environments can improve performance – but only for an extremely short time). The thinking (or is it a Prayer?) goes that if the market leader upgrades all their stores, the improved performance seen in the trial will replicate across the business to restore the high market share and once again deliver high profits.<br /><br />We have to ask - has this analyst or any of the other commentators actually tried to buy anything recently from a DSG store? If they had, they might just understand why even an infinite number of expensive store refits will not stop DSG plunging further and crashing – why there is no sign of a competent pilot and no River Hudson nearby.<br /><br /><em><span style="font-family:georgia;">Recently, my wife and I popped into our local (large) branch of Currys. She wanted to buy a new electric iron. There was a reasonable choice of items lined up along a display shelf. The chief decision maker examined them and finally decided which one she wanted to buy. We looked at the lower shelves for the boxed item. It was not there – in fact, there were boxed examples of fewer than half the items “on sale”. After a search, I found two assistants busy chatting and asked for help. Visibly irritated at being interrupted, one of them came to the shelf, removed the label, disappeared to a computer terminal and then returned. “We don’t have one, but you can order it”. We asked when, if we were to order, would it be available? He did not know. He asked another lady assistant who said that a delivery would be in 4 days. Would it include that item? “Probably – if you order it”.<br /></span></em><br /><em><span style="font-family:georgia;">My wife asked if we could buy the display item? Could we have the box and instructions? “Oh no, we throw those away. We would be full of cardboard boxes, wouldn’t we?” My wife then asked how much reduction they would offer for the item as incomplete. “Oh no, we can’t reduce it because it is a current stock item. You can order it”. She walked out, fuming. We went straight to Sainsburys – a whole 300 yards. Within 10 minutes she found what she wanted and bought it.<br /></span></em><br />This is why DSG are doomed. Disastrous Customer Service experiences and the inability to deliver the basic function of a “shop” (somewhere that sells things you can buy there and then) demonstrates DSG’s relative perceived inferior quality. Disposing of the packaging and thereby devaluing all their display stock is simply one of many inevitable, stupid consequences of the core problem. This core problem is <em><strong>low Comparative Competitive Strength</strong></em> for which no amount of “bigness”, whether in market share or anything else, can compensate.<br /><br />Their new chief executive is promising change “but it will take time”. With rapidly diminishing <em><strong>Competitive Strength</strong></em>, my friend, you don’t have the time. This is a business behaving in a way that spells disaster even in good times. What hope does it have in a time of economic crisis? The <em><strong>Abyss</strong></em> looms – and a great deal faster than you may wish to believe. Size matters, a bit – the Titanic took much longer to slide under the waves than a rowing boat, but the only variable was the time, not the sinking. And, as a very large organisation, when DSG crashes, the tsunami will drown many others that do not deserve to die. If, as they have announced, DSG think they need redundancies – it is not in the stores – it is in their leadership.<br /><br />If you own DSG shares, forget them, write them off. If you are a DSG employee, sorry, look for another job now. If you are a DSG Supplier – get ready for massive contractions at any minute. If you are a DSG Creditor – take protective action now. If you are a Financial Analyst, ask yourself if you are saying the right things but for the wrong reasons and consequently at risk now of giving wrong advice? If you are an Institutional Investor (on behalf of my pension fund perhaps?) and if you still hold a stake, you should be sacked, now.<br /><br />If you think we are just picking on DSG, what about Lloyds TSB and HBOS? Sorry, Lloyds shareholders, it is probably too late, get ready to sue your Board members and the government.<br /><br />The only hope the UK has in these troubled times is for every business to raise its game NOW. There is no longer time to pussy foot around. Every enterprise that fails, as DSG seems determined to do, will be an avoidable burden on the few survivors. Don’t expect the Government to help – they haven’t a clue about <em><strong>Comparative Competitive Strength</strong></em> or its importance to saving the British economy – just a few stalwart pursuers of <em><strong>Excellence</strong></em> will, if the banks don’t stop them, provide the only solid base for our future economic survival.<br /><br />Frankly it makes us want to cry. But if you are of stouter heart, and want to know more about how you can raise your game – NOW – please have look at our <a href="http://changeworld.co.uk/">website</a> here and at the <a href="http://changeworld.co.uk/competitivestrength.html"><em><strong>Comparative Strength Report</strong></em> </a>page here.<br /><br /><span style="color:#000066;"><em><span style="font-family:verdana;">Exceeding Expectations is brought to you by Steve Goodman and Tony Ericson. It is one of our "Excellence Quartet" of blogs promoting the cause of Excellence as the key to prosperity. Each blog has a new article each month using a recent business/financial topic to highlight different perspectives and conclusions from those obtained using conventional thinking and techniques. You can read the other three blogs are </span></em><a href="http://yourehavingalaughseriously.blogspot.com/"><em><span style="font-family:verdana;">"You're having a laugh ... Seriously?", </span></em></a><a href="http://businessbloop.blogspot.com/"><em><span style="font-family:verdana;">Business Bloop of the Month Award"</span></em></a><em><span style="font-family:verdana;">, </span></em><a href="http://capitalismorcommonsense.blogspot.com/"><em><span style="font-family:verdana;">"Capitalism or ... Common Sense"</span></em></a><em><span style="font-family:verdana;"> .</span></em></span><span style="font-family:verdana;font-size:85%;"><em> </em></span>Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-22924319799354389352009-01-22T17:01:00.018+00:002009-01-23T16:00:50.982+00:00The Fallacy of the "Market"As we move into the early part of 2009 one of the business names shortly to be added to the casualty list is Foxtons estate agents.<br /><br />Foxtons grew rapidly on the back of the London property boom and became famous for the Minis in Foxtons livery darting around the streets of London. Jon Hunt, the founder, sold the business to BC Partners for £360m just before the credit crunch. Now comes the news that Foxtons have breached their banking covenants and BC Partners have conceded that its decision to buy the business was a mistake. “As housing markets fall, so do estate agents, so we got that wrong. In hindsight, we made the wrong assessment of the market,” said a spokesman.<br /><br />Well yes you did, but the really wrong assessment was not “of the market” – it was of the company itself. Jon Hunt had done a great marketing job, the company Minis were just one example. He rode the boom astutely, opening more offices, taking on more staff, positioning the business as THE estate agent in London and timing his exit impeccably – good luck to him! Yet many who had attempted to buy or sell a house with Foxtons had perceived the company as inefficient, its staff incompetent and unprofessional (remember the Put-A-Sign-on-Anybody’s scandal?) and putting its own interests before those of its clients. A bit of research amongst Foxtons’ clients and London house owners who had had anything to do with them would have revealed a business that was likely to be unsustainable other than in a booming market.<br /><br />There is a mindset amongst many investment analysts and managers that leads them to believe that investing in businesses in so called “high growth” market sectors and/or with apparently unassailable market advantage in their products/services is the Holy Grail that will produce the stellar returns they seek. This leads them all too often in to over-valuing the “biggest” – because, “obviously it must have grown more”. The same immature logic has driven company directors to pursue Top Line growth regardless of expense, because it will impress these analysts who will then recommend their shares.<br /><br /><div align="left">This is just rubbish thinking because all “high growth” sectors and any market advantage are at best temporary and frequently illusory as BC Partners experience with Foxtons illustrates. There is no substitute for being a good, well run business that has developed a high level of <strong>Competitive Strength </strong>that ensures it stays that way.<br /><br />In 2003 Irish Drinks Group C&C, launched Magners Cider. Described as “a triumph of marketing” the new concept of “Cider Over Ice” swept all before it. Sales grew strongly during three successive summers and into 2007’s early Spring heat wave. Over the same period C&C’s share price grew strongly too, from €2 to €14. However in reality this was based on just two assumptions – that no competitor would enter the market and that it wouldn’t rain.<br /><br />Well, S&N launched Bulmers Over Ice in 2006 and recaptured 20% of the market - and it started to rain. In two months C&C shares dropped to €6 as sales and profits collapsed. The business simply did not have the <strong>Competitive Strength</strong> to maintain and build on the advantage it had gained with its new product. Their share price is now around €1.45, their Chief Exec has gone to be replaced by John Dunsmore former Chief Exec at, guess where, S&N!</div><div align="left"> </div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left">For the most spectacular example of a booming market masking fundamental weaknesses in the business, look no further than the banks!<br /><br />However an example of how this works in reverse is Sainsbury’s. For some time their market share, sales and profits wilted as competition from Tesco, Asda and Morrison’s hotted up. Financial and investment analysts were forever claiming that Sainsbury’s must reposition up market, down market, sideways, anywhere where there was less competition if they were to have a future. Successive managements arrived, tried, failed and went.<br /><br />Then along came Justin King, with the novel strategy of making Sainsbury’s a “better business”. The result has been growing market share, sales, profits and the resilience that will see it through the downturn, all of which had nothing to do with the market. Can you imagine the previous state of the company enabling it to introduce its expanded non-food offer and its new value lines as effectively as they have done now? As a “better business” Sainsbury’s are not only spotting changes in the needs of their customers but are actually now capable of responding.<br /><br />We are not saying that the market and/or market advantage from a break through product or process will not have an effect on the performance of a business, it is just that on its own it is not as crucial as many think it is and certainly not as significant as <strong>Competitive Strength</strong>. Businesses with high <strong>Competitive Strength</strong> conditions, what we call <em>Excellent</em> or <em>Free</em>, can not only respond faster to market changes but are frequently the instigators of those changes. They can profit from high growth and continuously create and renew their market advantage.<br /><br />Experience and rock solid research has proven that how an organisation thinks and behaves, the deep seated managerial and behavioural values and competences of a business, are the main differentiator of whether over time they will substantially outperform their competitors and successfully withstand unpleasant surprises.<br /><br />This manifests itself in the form of <strong>Competitive Strength</strong>, a new measure of business performance.<br /><br />Yes, you can actually measure Competitive Strength, either in your own business or in any businesses you are considering investing in. The <strong>Competitive Strength Report Process</strong> is the only tool available from anyone, anywhere that provides an objective measure of <strong>Competitive Strength</strong> compared to the very best in the world. The <strong>Competitive Strength Report </strong>enables a business 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.</div><div align="left"><br /><span style="color:#000000;">Find out more about it on our Competitive Strength </span><a href="http://www.changeworld.co.uk/competitivestrength.html"><span style="color:#000000;"><strong>web site page</strong></span></a><span style="color:#000000;"> – or at the Competitive Strength Report </span><a href="http://www.competitivestrengthreport.com/"><span style="color:#000000;"><strong>website</strong></span></a><span style="color:#000000;">.</span></div><br /><br /><span style="color:#000066;"><em>Exceeding Expectations is brought to you by Steve Goodman & Tony Ericson of ChangeWORLD. For more lighthearted comment with a serious point on current business related topics go to our </em><em><a href="http://yourehavingalaughseriously.blogspot.com/"><strong>You’re having a laugh … seriously?</strong></a> and <a href="http://businessbloop.blogspot.com/"><strong>Business Bloop of the Month Award </strong></a></em></span><em><br /></em>Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-14347484986715364772008-12-22T14:47:00.000+00:002008-12-22T14:54:03.647+00:00What Westminster and Whitehall don’t want to know<p class="MsoNormal" style="margin-bottom:6.0pt"><i style="mso-bidi-font-style: normal"><span lang="EN-GB" style="font-size:11.0pt;font-family:Arial">In his novel “High Profile” the brilliantly laconic American author Robert B Parker mentions, quite in passing, <b style="mso-bidi-font-weight:normal">“Tax-and-spend big government liberals” </b>and<b style="mso-bidi-font-weight:normal"> “Spend-and-no-tax big government conservatives</b></span></i><b style="mso-bidi-font-weight:normal"><span lang="EN-GB">”</span></b><span lang="EN-GB">.<span style="mso-spacerun:yes"> </span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">In </span><st1:place st="on"><span class="Apple-style-span" style="font-size: small;">Europe</span></st1:place><span class="Apple-style-span" style="font-size: small;"> we would call this the choice between </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">“Tax-and-spend big government social democrats”</span></b><span class="Apple-style-span" style="font-size: small;"> and </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">“Spend-and-no-tax big government conservatives”.</span></b><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">I suppose that there might be an alternative such as </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">“No-spend-and-no-tax big government”</span></b><span class="Apple-style-span" style="font-size: small;">, but that option could only be for the economically reckless.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Following Parker’s logic, there is an another alternative – </span></span></p> <p class="MsoNormal" align="center" style="margin-bottom:6.0pt;text-align:center"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">No-spend-no-tax-and-not-big government.</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></b></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><b style="mso-bidi-font-weight: normal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">“Not-Big-Government?”</span></span></b><span lang="EN-GB"><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">This is so radical an idea that it is regularly declared impossible.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Why?</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">There are three major factors - </span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><u><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Vested interests</span></span></u><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;"> – tens of thousands of managerial jobs depend on the unnecessary complexity of big government – thousands of bureaucrats don’t want to give up their </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">power – millions of public employees benefit from the make-work activities that keep them occupied, pay their wages and promise their unaffordable pensions.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><u><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Inability to innovate</span></span></u><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;"> – 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.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><u><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Overwhelming arrogance of leadership</span></span></u><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;"> – the public sector is systemised to the ultimate degree to </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">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.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Given these three drivers of perception – change really is inconceivable – it has become unthinkable.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">These three drivers helped kill the UK‘s Motor Industry, Shipbuilding, Steelmaking, Mining, Textiles, Chemicals and Electronics industries – and others.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">The bulk of these have gone to other countries – nevertheless in the </span><st1:country-region st="on"><st1:place st="on"><span class="Apple-style-span" style="font-size: small;">UK</span></st1:place></st1:country-region><span class="Apple-style-span" style="font-size: small;"> tiny pockets of Excellence do survive where they </span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style="font-size: small;">Think Different</span></b><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">There is no “other country” to take away our Public Sector – although they have even tried to give it away.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><b style="mso-bidi-font-weight: normal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Our Public Sector as it currently exists, and is developing, is no longer sustainable in our economy.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">If it does not change, it will totally destroy our nation’s wealth.</span><o:p></o:p></span></b></p> <p class="MsoNormal" align="center" style="margin-bottom:6.0pt;text-align:center"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="color: red; "><span class="Apple-style-span" style="font-size: medium;">We all know it is a problem, but the real PROBLEM is HUGE –</span><span class="Apple-style-span" style="font-size: medium;"><o:p></o:p></span></span></b></p> <p class="MsoNormal" align="center" style="margin-bottom:6.0pt;text-align:center"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="color: red; "><span class="Apple-style-span" style="font-size: medium;">The alternative is so unthinkable that NOTHING is being thought!</span><o:p></o:p></span></b></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">S<span class="Apple-style-span" style="font-size: small;">o let’s try </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">Thinking Different</span></b><span class="Apple-style-span" style="font-size: small;"> about Government.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Let’s apply the </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">Competitive Strength</span></b><span class="Apple-style-span" style="font-size: small;"> point of view to the Public Sector and see what it might tell us.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">The high numbers of public reports of administrative incompetence tell us, in general, the public sector can barely control its </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="font-size: small;">Cost of Quality</span></i></b><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">We know that, in the private sector, those companies with outstanding </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">comparative Competitive Strength</span></b><span class="Apple-style-span" style="font-size: small;"> have moved way beyond </span><b style="mso-bidi-font-weight: normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="font-size: small;">Cost of Quality</span></i></b><span class="Apple-style-span" style="font-size: small;"> control by massively reducing their </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="font-size: small;">Cost of Behaviour</span></i></b><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">We know that difficulty in managing the </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="font-size: small;">Cost of Quality</span></i></b><span class="Apple-style-span" style="font-size: small;"> is exhibited in the </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">Competitive Strength</span></b><span class="Apple-style-span" style="font-size: small;"> condition we call </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span style="color:red"><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">and we know that those outstanding businesses define the level we call </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span style="color:green"><span class="Apple-style-span" style="font-size: small;">Free</span></span></i></b><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">The </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">Comparative Strength Report</span></b><span class="Apple-style-span" style="font-size: small;"> tells us that the economic difference between </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span style="color:green"><span class="Apple-style-span" style="font-size: small;">Free</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> and </span><b style="mso-bidi-font-weight: normal"><i style="mso-bidi-font-style:normal"><span style="color:red"><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> is between 75% and 85%.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">It is a huge gap of enormous significance.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">The significance is that it means – </span></span></p> <p class="MsoNormal" align="center" style="margin-bottom:6.0pt;text-align:center"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">If the Public Sector were to operate at the </span><i style="mso-bidi-font-style:normal"><span style="color: green"><span class="Apple-style-span" style="font-size: small;">Free</span></span></i><span class="Apple-style-span" style="font-size: small;"> level of comparative Competitive Strength, it could deliver all current services for between 20% and 33% of the current cost.</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></b></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">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.</span></span></p> <p class="MsoNormal" align="center" style="margin-bottom:6.0pt;text-align:center"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="font-size:14.0pt; color:blue">A Solution Is Possible<o:p></o:p></span></b></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><b style="mso-bidi-font-weight: normal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">“Not-Big-Government” is not inconceivable.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">But it won’t be easy to get there.</span><o:p></o:p></span></b></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">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.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">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.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">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 </span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style="font-size: small;">Changeability</span></b><span class="Apple-style-span" style="font-size: small;"> by thousands.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">That has been demonstrated, it is not impossible. </span></span></p> <p class="MsoNormal" align="center" style="margin-bottom:6.0pt;text-align:center"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: medium;">This will need </span></span><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="color: blue; "><span class="Apple-style-span" style="font-size: medium;">Different Thinking</span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size: medium;"> </span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size: medium;">to get</span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style="font-size: medium;"> </span></b></span><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="color: blue; "><span class="Apple-style-span" style="font-size: medium;">Different Actions</span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size: medium;"> </span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size: medium;">to deliver</span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: medium;"> </span></b></span><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="color: blue; "><span class="Apple-style-span" style="font-size: medium;">Different Results</span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-size: medium;">.</span><o:p></o:p></span></b></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><b style="mso-bidi-font-weight: normal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Different Thinking?</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></b></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">The first step to be effective in the Transformation of Performance is to </span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style="font-size: small;">Decide to Act</span></b><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">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.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">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.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">That is all that is necessary.</span></span></p> <p class="MsoNormal" align="center" style="margin-bottom:6.0pt;text-align:center"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="color:red"><span class="Apple-style-span" style="font-size: small;">The present state of our State is not sustainable. </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></b></p> <p class="MsoNormal" align="center" style="margin-bottom:6.0pt;text-align:center"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="color:red"><span class="Apple-style-span" style="font-size: small;">If nothing changes, then nothing will change.</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></b></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><b style="mso-bidi-font-weight: normal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Can we Decide to Act?</span></span></b><span lang="EN-GB"><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Is there a sufficient will to survive left in our over-regulated, over-spun, over-manipulated, demoralised, dispirited, and newly impoverished population?</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">We don’t know.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">We do know that individuals and businesses can </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">Decide to Act</span></b><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">They can elect to </span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style="font-size: small;">Transform </span></b><span class="Apple-style-span" style="font-size: small;">their</span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;"> Performance</span></b><span class="Apple-style-span" style="font-size: small;"> up to the level of </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">comparative Competitive Strength</span></b><span class="Apple-style-span" style="font-size: small;"> that we call </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span style="color:green"><span class="Apple-style-span" style="font-size: small;">Free</span></span></i></b><span class="Apple-style-span" style="font-size: small;"> – 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.</span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><b style="mso-bidi-font-weight: normal"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">You can Decide to Act</span></span></b><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">, before it is too late.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size: small;">Have a look at our </span><a href="http://www.changeworld.co.uk"><span class="Apple-style-span" style="font-size: small;">web site </span></a><span class="Apple-style-span" style="font-size: small;">and then contact u</span><span class="Apple-style-span" style="font-size: small;">s to find out how we can help you to help yourself.</span></span></p>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-43817776180248618542008-11-26T11:22:00.003+00:002008-11-26T11:34:43.820+00:00Competitive Strength = FREE - What's It Like?<p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">In our Blog posts, we write about the various levels of comparative Competitive Strength<span style="mso-spacerun:yes"> </span>- we regularly refer to <b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0);">Constrained</span>, <span class="Apple-style-span" style="color: rgb(102, 102, 102);">Comfortable</span>, <span class="Apple-style-span" style="color: rgb(51, 51, 255);">Excellent</span></i></b><span class="Apple-style-span" style="color: rgb(51, 51, 255);"> </span>– and only every now and again do we find the opportunity to refer to <b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(0, 102, 0);">Free</span></i></b>, the highest level.<span style="mso-spacerun:yes"> </span>Why is this?<span style="mso-spacerun:yes"> </span>Because it is rare and precious – the businesses that operate at the <span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);">Free </span></span></span>level are the organisations that are outperforming the average by at least 50% on all financial measures.</span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">So what is it like to be <b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style: normal"><span class="Apple-style-span" style="color: rgb(0, 102, 0);">Free</span></i></b>?<span style="mso-spacerun:yes"> </span>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.<span style="mso-spacerun:yes"> </span>That essential difference is that they <span class="Apple-style-span" style="font-weight: bold;">Think Different</span> – 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.</span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">A wonderful coincidence - <span style="mso-spacerun:yes"> </span>I have just joined Skype because it comes with the “<b style="mso-bidi-font-weight:normal">3</b>” mobile that is replacing my “<st1:place st="on">Orange</st1:place>” phone (12+ years of customer loyalty lost as they have slid from <b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(51, 51, 255);">Excellent</span></i></b><span class="Apple-style-span" style="color: rgb(51, 51, 255);"> </span>down <span class="Apple-style-span" style="color: rgb(102, 102, 102);">through </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(102, 102, 102);">Comfortable</span></i></b> to <b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0);">Constrained</span></i></b>, time to get out).<span style="mso-spacerun:yes"> </span>And, whilst finding out about Skype, I found this address by their Chief Executive to his team – extracts only</span></p> <p style="margin-bottom:6.0pt"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">Home Improvement</span></b><span lang="EN-GB" style="mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;"> - Josh Silverman on November 20, 2008<o:p></o:p></span></p> <p style="margin-bottom:6.0pt"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">"Skype remains a work in progress</span></b><span lang="EN-GB" style=" mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">. We’re a dynamic, fast-growing company that learns from a changing world and adjusts accordingly. For us to continue thriving, <b style="mso-bidi-font-weight:normal">change cannot be a one-time thing. It has to be a way of life</b>. 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.<o:p></o:p></span></p> <p style="margin-bottom:6.0pt"><span lang="EN-GB" style=" mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">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.<o:p></o:p></span></p> <p style="margin-bottom:6.0pt"><span lang="EN-GB" style=" mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">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.<o:p></o:p></span></p> <p style="margin-bottom:6.0pt"><span lang="EN-GB" style=" mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">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 <b style="mso-bidi-font-weight: normal">smart</b> about it. And <b style="mso-bidi-font-weight:normal">transparent</b>. And <b style="mso-bidi-font-weight:normal">fair</b>.<o:p></o:p></span></p> <p style="margin-bottom:6.0pt"><span lang="EN-GB" style=" mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">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 <b style="mso-bidi-font-weight:normal">an even more empowering work life</b> 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 <b style="mso-bidi-font-weight:normal">vaccinated against shackles that curb innovation and risk-taking</b>. Each new business unit is designed to <b style="mso-bidi-font-weight:normal">emulate the feel of a start-up </b>and to cultivate a <b style="mso-bidi-font-weight:normal">deeper sense of ownership</b>. <o:p></o:p></span></p> <p style="margin-bottom:6.0pt"><span lang="EN-GB" style=" mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">This is just a low-resolution snapshot from <b style="mso-bidi-font-weight:normal">what’s a continual journey of change</b>. 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.<o:p></o:p></span></p> <p style="margin-bottom:6.0pt"><span lang="EN-GB" style=" mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">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. <b style="mso-bidi-font-weight:normal">From day one, everything at Skype has boiled down to delighting the customer. <o:p></o:p></b></span></p> <p style="margin-bottom:6.0pt"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style="mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">With a bit of home </span></b><span lang="EN-GB" style="mso-ansi-language:EN-GB;font-family:Arial;font-size:10.0pt;">improvement to support further growth and innovation,<b style="mso-bidi-font-weight:normal"> we’re just making sure it stays that way.<o:p></o:p></b></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><b style="mso-bidi-font-weight: normal"><span lang="EN-GB" style="font-family:Arial;font-size:10.0pt;">Skype will always be a work in progress."<o:p></o:p></span></b></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><i style="mso-bidi-font-style: normal"><span lang="EN-GB">I have highlighted the interesting key indicators in <b style="mso-bidi-font-weight:normal">bold</b><o:p></o:p></span></i></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">If you can see how different this is, and you are intrigued, there may be hope for you and your business.<span style="mso-spacerun:yes"> </span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">If you think that they are just riding the wave of novelty and have yet to “grow up” – <i style="mso-bidi-font-style:normal">(e.g. if “they don’t know they are born” flashes across your mind) </i>- you and your business are probably doomed.</span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">Josh Silverman knows that</span></p> <p class="MsoNormal" align="center" style="margin-bottom:6.0pt;text-align:center"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB"><span class="Apple-style-span" style="color: rgb(204, 0, 0);">If you always do what you always did, you will only get what you always got</span><o:p></o:p></span></b></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">He is demonstrating a deep understanding of <b style="mso-bidi-font-weight:normal">Changeability</b> and a serious commitment to making sure that it remains high in his ever expanding empire.<span style="mso-spacerun:yes"> </span>He is actively seeking to continue to <b style="mso-bidi-font-weight:normal">Transform Performance</b> and, in setting the path for further expansion in troubled times, exhibiting his confidence in the comparative <b style="mso-bidi-font-weight:normal">Competitive Strength</b> of the business.<span style="mso-spacerun:yes"> </span>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.</span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">The <b>Competitive Strength Report Process</b> is the only tool available from anyone, anywhere that provides an <b>objective</b> 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.<span style="mso-spacerun:yes"> </span></span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">The <b>Competitive Strength Report</b> 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,<span style="mso-spacerun:yes"> </span>collectively and speedily<span style="mso-spacerun:yes"> </span>what they need to do. There is nothing else as fast, as accessible or as affordable</span></p> <p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN-GB">Find out more about it on our <span class="Apple-style-span" style="font-weight: bold;">Competitive Strength</span> <a href="http://www.changeworld.co.uk/competitivestrength.html">web site page</a> – or at the <span class="Apple-style-span" style="font-weight: bold; ">Competitive Strength Report <span class="Apple-style-span" style="font-weight: normal; "><a href="http://www.competitivestrengthreport.com/">web site</a>.</span></span></span></p>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-50710119437490158182008-11-14T16:48:00.003+00:002008-11-14T17:40:53.076+00:00Why am I feeling Good today?<span class="Apple-style-span" style="font-size: small;">Yesterday was bad news for a good person. Today, my attention was drawn to the other side of the coin, some good news.</span><div><span class="Apple-style-span" style="font-size: small;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;">There are a tiny minority of companies with the highest level of </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">comparative Competitive Strength</span></span><span class="Apple-style-span" style="font-size: small;"> - the condition we call </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-size: small;">Free</span></span></span></span><span class="Apple-style-span" style="font-size: small;">. One of these is </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">AEASEAL</span></span><span class="Apple-style-span" style="font-size: small;"> in Rotherham.</span></div><div><span class="Apple-style-span" style="font-size: small;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;">Here is an extract from one of their web site news pages</span></div><div><br /></div><div><div><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: arial;"><span class="Apple-style-span" style="font-weight: bold;">How does the Exceptional Customer Service Industry Leader, Stay Ahead?</span></span></span></div><div><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: arial;">The answer is simple: They invest in Technology, People and Processes.</span></span></div><div><span class="Apple-style-span" style="font-family: arial; font-size: 13px;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: arial;">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. <span class="Apple-style-span" style="color: rgb(204, 0, 0);">The vision is simple; to provide exceptional customer service for unique and custom made Oil and Gas mechanical seals.</span></span></span></div><div><span class="Apple-style-span" style="color: rgb(204, 0, 0); font-family: arial; font-size: 13px;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: arial;">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.</span></span></div><div><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: arial;"><span class="Apple-style-span" style="color: rgb(204, 0, 0);">Exceptional customer service values run through the organisation’s veins. </span>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.</span></span></div><div><span class="Apple-style-span" style="font-family: arial; font-size: 13px;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: arial;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);">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.</span></span></span></div><div><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: arial;">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.</span></span></div><div><span class="Apple-style-span" style="font-family: arial; font-size: 13px;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: arial;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-weight: bold;">When you can’t put an item in inventory, you create a process and invest in technology that eliminates the need <span class="Apple-style-span" style="color: rgb(0, 0, 0); font-weight: normal; "><span class="Apple-style-span" style="color: rgb(0, 102, 0); "><span class="Apple-style-span" style="font-weight: bold; ">for inventory.</span></span> </span></span></span></span></span></div><div><span class="Apple-style-span" style="font-family: arial; font-size: 13px;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: arial;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(0, 0, 0); font-weight: normal; ">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</span><span class="Apple-style-span" style="font-weight: normal; "><span class="Apple-style-span" style="color: rgb(204, 0, 0);"> exceptional service</span></span><span class="Apple-style-span" style="color: rgb(0, 0, 0); font-weight: normal; "> on non-standard products becomes a reality.</span></span></span></span></span></div><div><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: arial;">In a unique initiative, AESSEAL plc is creating machining cells in which <span class="Apple-style-span" style="color: rgb(0, 102, 0);">the machines themselves and the <span class="Apple-style-span" style="color: rgb(0, 0, 0); "><span class="Apple-style-span" style="color: rgb(0, 102, 0); ">supporting infrastructure replace the need for inventory</span>. 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”.</span></span></span></span></div><div><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-size: x-small;">The highlighting colours and bold emphases are mine, not AEASEAL's</span></span></span></div><div><br /></div><div>T<span class="Apple-style-span" style="font-size: small;">his is </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);">Different Thinking</span></span></span><span class="Apple-style-span" style="font-size: small;"> and is delivering </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">Different Results</span></span><span class="Apple-style-span" style="font-size: small;">. </span><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-weight: bold;"></span></span></div><div><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">AEASEAL</span></span><span class="Apple-style-span" style="font-size: small;"> 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</span><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-size: small;">(there is a link at the bottom of this page) </span></span><span class="Apple-style-span" style="font-size: small;">. </span></div><div><span class="Apple-style-span" style="font-size: small;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;">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 </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">Different Thinking</span></span><span class="Apple-style-span" style="font-size: small;"> that they, and all the others that are at this level of </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">Competitive Strength,</span></span><span class="Apple-style-span" style="font-size: small;"> 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.</span></div><div><span class="Apple-style-span" style="font-size: small;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;">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.</span></div><div><span class="Apple-style-span" style="font-size: 13px;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;">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?).</span></div><div><span class="Apple-style-span" style="font-size: small;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;">Now, 26 years later, this is a perfect demonstration of the achievement of that goal - and for a business differentiating purpose - outstanding Customer Service.</span></div><div><span class="Apple-style-span" style="font-size: small;"><br /></span></div><div><span class="Apple-style-span" style="font-size: small;">You can find out more about the new concept of c</span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">omparative Competitive Strength</span></span><span class="Apple-style-span" style="font-size: small;"> on our <a href="http://www.changeworld.co.uk/competitivestrength.html">web site page</a>. You can learn more about Different Thinking for Different Results on our<a href="http://www.changeworld.co.uk/differentthinking.html"> insert page</a>.</span></div><div><span class="Apple-style-span" style="font-size: 13px;">And you can learn more about <span class="Apple-style-span" style="font-weight: bold;">AEASEAL</span>, a beacon of <span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(51, 51, 255);">Excellence </span></span>- <a href="http://www.aesseal.com/">here</a>.</span></div><div><span class="Apple-style-span" style="font-size: small;"><br /></span></div><div><br /></div><div><br /></div></div>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-66917189498477941802008-11-12T14:24:00.002+00:002008-11-12T14:49:35.679+00:00Why I Feel Bad TodayToday I learned that a prophecy I had made to someone nice had come true, for them. And it is not good news.<div><br /></div><div>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.</div><div><br /></div><div>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.</div><div><br /></div><div>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.</div><div><br /></div><div>We predicted this via the Competitive Strength point of view elsewhere in this Blog series.<br /></div><div><br /></div><div><span class="Apple-style-span" style="font-weight: bold;">Today's news is that VirginMedia will shed 2,000 jobs.</span></div><div><br /></div><div>There are times when it is horrible to be proved right.</div><div><br /></div><div><br /></div><div><br /></div>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-7252841265482616442008-11-12T11:13:00.005+00:002008-11-12T12:10:07.907+00:00Get Your Life Rafts Ready - NOW<p class="MsoNormal" style="mso-line-height-alt:10.05pt"><span class="small"><b style="mso-bidi-font-weight:normal"><span lang="EN-GB" style=" ;color:black;"><span class="Apple-style-span" style="font-size:small;">Different Thinking for Different Results</span></span></b></span><span class="small"><span lang="EN-GB" style=" ;color:black;"><span class="Apple-style-span" style="font-size:small;"> is our constant theme.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">It is the essence of </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size:small;">Changeability</span></b><span class="Apple-style-span" style="font-size:small;">, the key to survival in these turbulent economic conditions.</span><o:p></o:p></span></span></p> <p class="MsoNormal" style="mso-line-height-alt:10.05pt"><span class="small"><span lang="EN-GB" style="color:black;"><span class="Apple-style-span" style="font-size:small;">We are so grateful when it is vividly highlighted as in the excerpts below: -</span><span class="Apple-style-span" style=" line-height: 13px; font-family:Georgia;font-size:16px;"><span class="small"><span lang="EN-GB" style=" ;font-family:Arial;font-size:9pt;"><span class="Apple-style-span" style="color: rgb(102, 0, 0); "></span></span></span></span></span></span></p><p class="MsoNormal" style="mso-line-height-alt:10.05pt"><span class="small"><span lang="EN-GB" style="color:black;"><span class="Apple-style-span" style=" line-height: 13px; "><span class="small"><span lang="EN-GB" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0); "><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: verdana;">From</span></span></span></span></span><span class="apple-converted-space"><span lang="EN-GB" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0); "><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: verdana;"> </span></span></span></span></span><span class="byline"><span lang="EN-GB" style=" background-image: initial; background-repeat: initial; background-attachment: initial; -webkit-background-clip: initial; -webkit-background-origin: initial; background-color: rgb(248, 241, 216); background-position: initial initial; "><span class="Apple-style-span" style="color: rgb(102, 0, 0); "><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: verdana;">The Times</span></span></span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="color: rgb(102, 0, 0); "><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: verdana;"> </span></span></span></span></span></span><span lang="EN-GB" style=" ;"><span class="Apple-style-span" style="color: rgb(102, 0, 0); "><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: verdana;">November 12, 2008 - David Wighton: Business editor's commentary</span></span></span></span></span></span></span></p><h2 style="margin:0cm;margin-bottom:.0001pt;line-height:13.2pt"><span class="Apple-style-span" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-size:small;"><span class="Apple-style-span" style="font-family: 'times new roman';">Gordon Brown should take note of Vodafone's strategy for the recession as the telecoms giant battens down the hatches</span></span></span></span><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;"><br /></span></span></h2> <p class="MsoNormal" style="line-height:10.05pt"><span class="Apple-style-span" style="color: rgb(102, 0, 0); line-height: 19px; "><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">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.</span></span></span><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;"><br /></span></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:2.0pt;margin-left:0cm; line-height:14.4pt"><span lang="EN-GB" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">At HMS UK, Mr Brown has thrown away the charts and is going full steam ahead.</span></span></span><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:2.0pt;margin-left:0cm; line-height:14.4pt"><span lang="EN-GB" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">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.</span></span></span><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:2.0pt;margin-left:0cm; line-height:14.4pt"><span lang="EN-GB" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">Mr Brown's promise to cut taxes, focus on spending and forget about government borrowing saw sterling sink to a new 12-year low.</span></span></span><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:2.0pt;margin-left:0cm; line-height:14.4pt"><span lang="EN-GB" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">Mr Colao's call for the company to make better use of what it already has rather than chasing new markets looks eminently sensible.</span></span></span><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:2.0pt;margin-left:0cm; line-height:14.4pt"><span lang="EN-GB" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">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.</span></span></span><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:2.0pt;margin-left:0cm; line-height:14.4pt"><span lang="EN-GB" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">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.</span></span></span><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:2.0pt;margin-left:0cm; line-height:14.4pt"><span lang="EN-GB" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">The new focus on “giving customers what they want” is a bit of an indictment of what it was doing before.</span></span></span><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></span></p> <p style="margin-top:0cm;margin-right:0cm;margin-bottom:2.0pt;margin-left:0cm; line-height:14.4pt"><span lang="EN-GB" style=" "><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;">But it also reflects the reality that in rapidly deteriorating conditions businesses</span></span></span><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(102, 0, 0);"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size: small;"> need to be very sensitive to the changing needs of customers and tailor products and pricing accordingly.</span></span></span><o:p></o:p></i></span></p> <p class="MsoNormal" style="margin-bottom:4.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">Vodafone’s leadership is demonstrating </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size:small;">Different Thinking</span></b><span class="Apple-style-span" style="font-size:small;"> – and because it looks likely to contain downside risks in the current economic turmoil – it will deliver </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size:small;">Different Results</span></b><span class="Apple-style-span" style="font-size:small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">This behaviour is characteristic of an organisation with the level of </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size:small;">comparative Competitive Strength</span></b><span class="Apple-style-span" style="font-size:small;"> that we call </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(51, 51, 255);"><span class="Apple-style-span" style="font-size:small;">Excellent</span></span></i></b><span class="Apple-style-span" style="font-size:small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">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.</span></span></p> <p class="MsoNormal" style="margin-bottom:4.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">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.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">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.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span></span></p> <p class="MsoNormal" style="margin-bottom:4.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">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.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">This is where our assessment last year of their comparative </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size:small;">Competitive Strength condition</span></b><span class="Apple-style-span" style="font-size:small;"> as </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(102, 102, 102);"><span class="Apple-style-span" style="font-size:small;">Comfortable</span></span></i></b><span class="Apple-style-span" style="font-size:small;"> turned out to be far too true – so </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(102, 102, 102);"><span class="Apple-style-span" style="font-size:small;">Comfortable</span></span></i></b><span class="Apple-style-span" style="font-size:small;"> that within a few weeks of a changed environment they found themselves flailing about in the </span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="color: rgb(255, 0, 0);"><span class="Apple-style-span" style="font-size:small;">Constrained</span></span></i></b><span class="Apple-style-span" style="font-size:small;"> condition – and we found ourselves , with them, peering into </span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style=""><span class="Apple-style-span" style="font-size:small;"><span class="Apple-style-span" style="color: rgb(204, 0, 0);">The Abyss</span></span></span></b><span class="Apple-style-span" style="font-size:small;">.</span></span></p> <p class="MsoNormal" style="margin-bottom:4.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">Mr Colau is too smart to let this happen.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">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.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">And that will require a </span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style="font-size:small;">New Way of Thinking</span></b><span class="Apple-style-span" style="font-size:small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">That can be done but has not been easy, as other large corporations have found. We wish him well, and will watch with interest.</span></span></p> <p class="MsoNormal" style="margin-bottom:4.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">On the other hand, Mr Brown is not too smart, as we all know.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">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.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(51, 51, 153);"><span class="Apple-style-span" style="font-size:small;">God Help Us All.</span></span></span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(51, 51, 153);"><span class="Apple-style-span" style="font-size:small;"> </span></span></span></span></span></p> <p class="MsoNormal" style="margin-bottom:4.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">There is no organisation that is more totally “Sales” led than this Government.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">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 –<span class="Apple-style-span" style="font-style: italic;"> I better stop here, my frustration is all so non-productive – as is its subject</span>.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">This is, in our terms, more like what we would describe in a corporate comparison as a</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style: normal"><span class="Apple-style-span" style="font-size:small;"><span class="Apple-style-span" style="color: rgb(255, 0, 0);">Constrained</span></span></i></b><span class="Apple-style-span" style="font-size:small;"><span class="Apple-style-span" style="color: rgb(255, 0, 0);"> </span>condition – but down at the lowest level of that, next to what we call, in a deeply technical phrase “</span><b style="mso-bidi-font-weight: normal"><i style="mso-bidi-font-style:normal"><span class="Apple-style-span" style="font-size:small;"><span class="Apple-style-span" style="color: rgb(204, 51, 204);">Basket Case</span></span></i></b><span class="Apple-style-span" style="font-size:small;">”.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">Beyond the sort of remedial transformation that businesses might be able to achieve.</span></span></p> <p class="MsoNormal" style="margin-bottom:4.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">So, we are all in the same boat.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">And, as the article suggests, we are sailing at full speed into the ice fields with our Mad Captain on the bridge</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">- with his charts torn up, his radar switched off and listening to none.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">Moving the deckchairs is not going to make any difference.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">Like Mr Colau, we all need to apply </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size:small;">Different Thinking</span></b><span class="Apple-style-span" style="font-size:small;"> to make sure that we too get </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size:small;">Different Results</span></b><span class="Apple-style-span" style="font-size:small;">, 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. </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style="font-size:small;"><span class="Apple-style-span" style="color: rgb(51, 51, 255);">I</span></span><span class="Apple-style-span" style="font-size:small;"><span class="Apple-style-span" style="color: rgb(51, 51, 255);">t is time for Different Thinking</span></span></b><span class="Apple-style-span" style="color: rgb(51, 51, 255);"><span class="Apple-style-span" style="font-size:small;">.</span></span></span></p> <p class="MsoNormal" style="margin-bottom:4.0pt"><span lang="EN-GB"><span class="Apple-style-span" style="font-size:small;">We developed our </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size:small;">Competitive Strength Report</span></b><span class="Apple-style-span" style="font-size:small;"> to help business leaderships start their </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size:small;">Different Thinking</span></b><span class="Apple-style-span" style="font-size:small;"> better, faster and cheaper, than any other tool before.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span></span><span style="mso-ansi-language:EN-US"><span class="Apple-style-span" style="font-size:small;">The </span><b><span class="Apple-style-span" style="font-size:small;">Competitive Strength Report Process</span></b><span class="Apple-style-span" style="font-size:small;"> is the only tool available from anyone, anywhere that provides an </span><b><span class="Apple-style-span" style="font-size:small;">objective</span></b><span class="Apple-style-span" style="font-size:small;"> 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.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;"><o:p></o:p></span></span></p> <p class="MsoNormal" style="margin-bottom:4.0pt"><span style="mso-ansi-language: EN-US"><span class="Apple-style-span" style="font-size:small;">The </span><b><span class="Apple-style-span" style="font-size:small;">Competitive Strength Report</span></b><span class="Apple-style-span" style="font-size:small;"> 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,</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">collectively and speedily</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size:small;"> </span></span><span class="Apple-style-span" style="font-size:small;">what they need to do. </span><span class="Apple-style-span" style="font-size:small;"><o:p></o:p></span></span></p> <p class="MsoNormal" style="margin-bottom:4.0pt"><span style="mso-ansi-language: EN-US"><span class="Apple-style-span" style="font-size:small;">If you would like to know more about this, or ask us any questions, please have a look at our <span class="Apple-style-span" style="font-weight: bold;">Competitive Strength</span> </span><span class="Apple-style-span" style="font-size:small;"><a href="http://www.changeworld.co.uk/competitivestrength.html">web page with video</a> - and our Different Thinking <a href="http://www.changeworld.co.uk/differentthinking.html">web page</a></span><o:p></o:p></span></p>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-65445900040499725422008-10-15T14:34:00.003+01:002008-10-15T14:49:52.877+01:00Just How Stupid are our Leaders?<p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-style-span"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">Probably more than we have ever dared to think.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">We are starting to suspect that their thinking may be based on deep and fundamental </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">ignorance. It is a terrifying thought.</span><o:p></o:p></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-style-span"><span style="font-family:Arial;color:#333333;"><span class="Apple-style-span" style="font-size: x-small;">An extract from</span><span class="Apple-style-span" style="font-size: x-small;"><o:p></o:p></span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-style-span"><b style="mso-bidi-font-weight: normal"><span style="font-family:Arial;color:#333333;"><span class="Apple-style-span" style="font-size: x-small;">Stumbling and Mumbling</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: x-small;"> </span></span></span></b></span><span class="apple-style-span"><span style=" ;font-family:Arial;color:#333333;"><a href="http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/"><span class="Apple-style-span" style="font-size: x-small;">Chris Dillon’s Blog</span></a><span class="Apple-style-span" style="font-size: x-small;"> 14</span><sup><span class="Apple-style-span" style="font-size: x-small;">th</span></sup><span class="Apple-style-span" style="font-size: x-small;"> October 2008</span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-style-span"><span style="font-family:Arial;color:#333333;"><span class="Apple-style-span" style="font-size: x-small;">On the subject of our economic leadership - </span><span class="Apple-style-span" style="font-size: x-small;"><o:p></o:p></span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-style-span"><span style="font-family:Arial;color:#333333;"><span class="Apple-style-span" style="font-size: x-small;">…….. “I</span></span></span><span class="apple-converted-space"><span style=" ;font-family:Arial;color:#333333;"><span class="Apple-style-span" style="font-size: x-small;"> </span></span></span><span class="apple-style-span"><span style="font-family:Arial;color:#333333;"><a href="http://www.investorschronicle.co.uk/Columnists/ChrisDillow/article/20080918/0e039230-84b4-11dd-9dcc-00144f2af8e8/Should-risk-managers-be-sacked.jsp"><span style="color:#CC6600;"><span class="Apple-style-span" style="font-size: x-small;">thought</span></span></a><span class="Apple-style-span" style="font-size: x-small;">: “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.</span></span></span><span style=" ;font-family:Arial;color:#333333;"><span class="Apple-style-span" style="font-size: x-small;"><br /></span><span class="apple-style-span"><span class="Apple-style-span" style="font-size: x-small;">It looks like we were wrong and Taleb right.</span></span><span class="Apple-style-span" style="font-size: x-small;"><br /></span><span class="apple-style-span"><span class="Apple-style-span" style="font-size: x-small;">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.</span></span><span class="Apple-style-span" style="font-size: x-small;"><br /></span><span class="apple-style-span"><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: x-small;">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.</span></b></span><span class="apple-converted-space"><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: x-small;"> “ ……..</span></b></span><b style="mso-bidi-font-weight:normal"><o:p></o:p></b></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">There were over 30 comments, all by erudite and thoughtful experts – and for me, all missing the point.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">I selected this </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">extract from Chris' blog because it highlights our core message</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></p> <p align="center" style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt; margin-left:0cm;text-align:center;line-height:19.0pt"><b style="mso-bidi-font-weight: normal"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">“To get Different Results you must apply Different Thinking”</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></b></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">As we say in our web site – </span></span><b style="mso-bidi-font-weight: normal"><i style="mso-bidi-font-style:normal"><span style=" ;font-family:Georgia;color:blue;"><span class="Apple-style-span" style="font-size: small;">if you always do what you always did, you will only get what you always got</span></span></i></b><b style="mso-bidi-font-weight:normal"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">.</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></b></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">And that is what the economists, the financial analysts, the bankers - and the government – have been doing.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">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.</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">As an engineer, I learned the Laws of Thermodynamics. Amongst them were two topically relevant concepts -</span><span class="apple-converted-space"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;"><br />- All types of Perpetual Motion Machines are impossible.<br />- All transactions involving Energy are "lossy".</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">Wealth is the Energy that powers our social existence. The same rules apply.<br />We have had 12 years of the leaders of our economy ignoring, or trying to conceal,</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">"lossiness" and imagining they had a Perpetual Motion Machine of Wealth – truly not understanding that they were doing.</span><span class="apple-converted-space"><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">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”.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">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</span></span></span><span class="MsoCommentReference"><span lang="EN-GB" style="mso-ansi-language: EN-GB"><span style="mso-special-character: comment"><span class="Apple-style-span" style="font-size: small;"> </span></span></span></span><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">They are the ones that, on our </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">Competitive Strength Report</span></b><span class="Apple-style-span" style="font-size: small;"> scale,</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">will rate as “</span></span></span><span class="apple-converted-space"><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span style="font-family:Georgia;color:green;"><span class="Apple-style-span" style="font-size: small;">Free</span></span></i></b></span><span class="apple-converted-space"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">”.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">There are very few.</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">The majority, with the</span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;"> Comparative Competitive Strength </span></b><span class="Apple-style-span" style="font-size: small;">level of “</span></span></span><span class="apple-converted-space"><b style="mso-bidi-font-weight: normal"><i style="mso-bidi-font-style:normal"><span style=" ;font-family:Georgia;color:gray;"><span class="Apple-style-span" style="font-size: small;">Comfortable</span></span></i></b></span><span class="apple-converted-space"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">”, are now faced with the prospect of a very rapid, unexpected and enforced transition into “</span></span></span><span class="apple-converted-space"><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span style="font-family:Georgia;color:red;"><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></i></b></span><span class="apple-converted-space"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">” - the doorway to </span></span></span><span class="apple-converted-space"><b style="mso-bidi-font-weight:normal"><span style="font-family:Georgia;color:#CC0000;"><span class="Apple-style-span" style="font-size: small;">The Abyss</span></span></b></span><span class="apple-converted-space"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">, total failure.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">There will be absolute carnage over the next 18 months.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">There does not have to be – there could be more survivors if they can apply Different Thinking fast enough.</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">The same rules and logic</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">apply to Government, and to our national economy.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">If we have an excessively “lossy” economy, it will have low </span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style="font-size: small;">Comparative Competitive Strength.</span></b><span class="Apple-style-span" style="font-size: small;"> </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">It will become, inevitably, “</span></span></span><span class="apple-converted-space"><b style="mso-bidi-font-weight:normal"><i style="mso-bidi-font-style:normal"><span style="font-family:Georgia;color:red;"><span class="Apple-style-span" style="font-size: small;">Constrained</span></span></i></b></span><span class="apple-converted-space"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">”, </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">facing </span></span></span><span class="apple-converted-space"><b style="mso-bidi-font-weight:normal"><span style="font-family:Georgia;color:#CC0000;"><span class="Apple-style-span" style="font-size: small;">The Abyss</span></span></b></span><span class="apple-converted-space"><span style=" ;font-family:Georgia;color:#CC0000;"><span class="Apple-style-span" style="font-size: small;">.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="color: rgb(0, 0, 0);"><span class="Apple-style-span" style="font-size: small;">Our leaders have indulged themselves in </span></span><span class="Apple-style-span" style="color: rgb(0, 0, 0);"><span class="Apple-style-span" style="font-size: small;">the </span></span></span></span><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">illusion of success, ignoring the “lossy” economy, during the exceptionally benign economic conditions of the “NICE” decade.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> Self-deluded and smugly claiming "</span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-size: small;">Excellence</span></span></span></span><span class="Apple-style-span" style="font-size: small;">" they were actually only</span></span><span class="Apple-style-span" style="font-size: small;"> “</span></span></span><span class="apple-converted-space"><b style="mso-bidi-font-weight: normal"><i style="mso-bidi-font-style:normal"><span style=" ;font-family:Georgia;color:gray;"><span class="Apple-style-span" style="font-size: small;">Comfortable</span></span></i></b></span><span class="apple-converted-space"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">”.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">Now everything has changed, and they don’t know how to face </span></span></span><span class="apple-converted-space"><b style="mso-bidi-font-weight:normal"><span style="font-family:Georgia;color:#CC0000;"><span class="Apple-style-span" style="font-size: small;">The Abyss</span></span></b></span><span class="apple-converted-space"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">.</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">Like we all are, right now.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">Have you noticed the number of references to the “Abyss” in the last two weeks?</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">Our absolute screaming</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">frustration is that all of this is known – and all has been ignored – because it is predicated on the idea </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">that:</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-converted-space"><b style="mso-bidi-font-weight: normal"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">Solid and sustainable Wealth is the outcome of applied and continuous effectiveness of performance.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></b></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">That has never been what the wheelers and dealers of the City, </span><st1:city st="on"><span class="Apple-style-span" style="font-size: small;">Whitehall</span></st1:city><span class="Apple-style-span" style="font-size: small;"> and </span><st1:city st="on"><st1:place st="on"><span class="Apple-style-span" style="font-size: small;">Westminster</span></st1:place></st1:city><span class="Apple-style-span" style="font-size: small;"> have ever wanted to hear – it is what they have never been able to do – it is what they have never understood.</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">And, sadly, it appears that the economic experts (as their lap dogs) have snoozed on their leads next to their food bowls!</span><span class="Apple-style-span" style="font-size: small;"><o:p></o:p></span></span></span></p> <p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">Do you want to know what you can do right now to pull your business away from the Abyss?</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> Are you going to do it to them before they finally do for you?</span></span></span></span></p><p style="margin-top:10.0pt;margin-right:0cm;margin-bottom:10.0pt;margin-left: 0cm;line-height:19.0pt"><span class="apple-converted-space"><span style="font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">Learn </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">more about </span><b style="mso-bidi-font-weight: normal"><span class="Apple-style-span" style="font-size: small;">the Competitive Strength </span></b><span class="Apple-style-span" style="font-size: small;">and – </span></span></span><span class="apple-converted-space"><b style="mso-bidi-font-weight:normal"><span style="font-family:Georgia;color:blue;"><span class="Apple-style-span" style="font-size: small;">Thinking Differently</span></span></b></span><span class="apple-converted-space"><span style=" ;font-family:Georgia;color:#333333;"><span class="Apple-style-span" style="font-size: small;">?</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">Have a look at our </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">ChangeWORLD</span></b><span class="Apple-style-span" style="font-size: small;"> </span><a href="http://www.changeworld.co.uk/"><span class="Apple-style-span" style="font-size: small;">web site</span></a><span class="Apple-style-span" style="font-size: small;"> and the </span><b style="mso-bidi-font-weight:normal"><span class="Apple-style-span" style="font-size: small;">Competitive Strength Report</span></b><a href="http://www.competitivestrengthreport.com/"><span class="Apple-style-span" style="font-size: small;"> web site</span></a><span class="Apple-style-span" style="font-size: small;">.</span></span></span></p>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-28330502112714205422008-10-01T11:19:00.007+01:002008-10-01T15:27:03.426+01:00God Save us from Experts!Recently a good friend of mine has been through a very unpleasant health scare. Whilst on business in Australia he was overcome by highly debilitating chest pains that pretty much completely <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">immobilised</span> him. Whenever he made any effort to move about the pains kicked in unbearably.<br /><br />My friend has a history of heart and artery related problems which he has been told will require surgery at some point. He had taken all his medical notes with him as a precaution which he gave to the Australian medics when he was admitted to hospital. They carried out all sorts of tests but could not find a cause for the pains. However they assured him it was not heart related.<br /><br />Eventually he was crated up and shipped back to the UK. Not a pleasant journey but he made it. More test and observations, still no answers and still "definitely not to do with your heart/ arteries". Last week he had an especially bad attack and was rushed into hospital again. This time and for the first time, either in Australia or the UK, they decided to carry out an <span class="blsp-spelling-error" id="SPELLING_ERROR_1">angiogram</span>. They discovered three blocked arteries including one that was 99% blocked, operated immediately and the problem is now both identified and resolved. This is after two and half months of suffering and anxiety for my friend and no answers from the combined medical experts of two advanced developed nations!<br /><br />Now I am no expert. I have not done the 5 years at medical school and all the other training besides to make me <span class="blsp-spelling-corrected" id="SPELLING_ERROR_2">technically</span> <span class="blsp-spelling-corrected" id="SPELLING_ERROR_3">qualified</span> to comment on this case. However if anyone had asked me "have they done an <span class="blsp-spelling-error" id="SPELLING_ERROR_4">angiogram</span> on Terry?", given what he has told me previously about his condition I would have replied "well I am sure they must have".<br /><br />This has got me thinking about another group of experts who are currently putting us all through suffering and anxiety. For example:<br /><ul><li>Did all these property developers really look into the market for new offices/shopping centres, flats etc.etc to ensure that the demand was really there? Well I'm sure they must have.</li><li>Did the banks do a thorough study on whether the strategy of falling over themselves to lend on any property deal to build more new shops/offices/flats etc. etc was sound? Well I'm sure they must have.</li><li>Did Northern Rock consider what they would do if their main source of funding from the wholesale markets was suddenly to dry up? Well I'm sure they must have.</li><li>Did Bradford & <span class="blsp-spelling-error" id="SPELLING_ERROR_5">Bingley</span> fully assess the risk of granting all those buy to let and self-certificated mortgages? Well I'm sure they must have.</li><li>Did all those financial institutions work out why it was such a good idea to lend money to people who cannot afford to pay it back? Well I'm sure they must have.</li><li>Did the accountants who signed off the big banks' accounts all reporting record profits over the last 5 years or so carry out a thorough audit? Well I'm sure they must have.</li><li>Has Hank <span class="blsp-spelling-error" id="SPELLING_ERROR_6">Paulson</span> worked out what he will actually do with $700<span class="blsp-spelling-error" id="SPELLING_ERROR_7">bn</span> to bail out the US banking system? Well I'm sure he must have. </li></ul>And so on.<br /><br />Why do the "experts" get so much wrong and let us all down so often? Because they think like experts and are incapable of adapting their thinking in the face of change. In fact they dislike and even fear change because it challenges their expert status by making their expertise outdated. They think that because they are experts then only they can come up with the right answers (Hank <span class="blsp-spelling-error" id="SPELLING_ERROR_8">Paulson</span> a graphic and disastrous example). Even when they cannot find the answer they cannot envisage anyone else being able to because they are not "experts".<br /><br />So once again we say, what is needed is different thinking and for experts it's accepting they probably don't know and that they need to learn how to find out. In fact this kind of thinking, accepting you don't know but knowing how to find out, is one of the characteristics of the few truly excellent organisations on the planet. What is more research has shown that these excellent organisations consistently outperform the rest and are best able to cope with the nasty surprises. To find out more about why this makes sense and how crucial it is visit the <a href="http://www.changeworld.co.uk/"><span class="blsp-spelling-error" id="SPELLING_ERROR_9">Changeworld</span></a> website.<br /><br />Different thinking is especially needed in our banking and financial sectors, their regulators and the governments that ultimately set the frameworks through fiscal, monetary and <span class="blsp-spelling-corrected" id="SPELLING_ERROR_10">economic</span> policy. If the thinking does not change then given the same circumstances the bankers, financiers and their associated organisations, will do exactly the same as they have just done, with exactly the same results.<br /><br />Will the thinking change? Right now I am not hopeful. When I read as I did yesterday in an article by Hugo Dixon in the Daily Telegraph that <span class="blsp-spelling-error" id="SPELLING_ERROR_11">Barclays</span> and <span class="blsp-spelling-error" id="SPELLING_ERROR_12">Nomura</span> have set aside a reported $3.5<span class="blsp-spelling-error" id="SPELLING_ERROR_13">bn</span> in bonuses for the staff of guess who - Lehman Brothers! This it is reported to be based on what was paid in 2007 to the staff of the Lehman's business being bought by <span class="blsp-spelling-error" id="SPELLING_ERROR_14">Barclays</span> and <span class="blsp-spelling-error" id="SPELLING_ERROR_15">Nomura</span>. How can basing this year's bonus on last years boom numbers make any kind of sense? As I said I am not hopeful.<br /><br />However for all our sakes and futures this has to change. We all of us have to insist that is does. This blog and the articles that we have and will continue to write and disseminate are just one part of the <span class="blsp-spelling-corrected" id="SPELLING_ERROR_16">effort</span> we are making to get this message across. We would love to hear from people who agree with us, or have another view, or even those who disagree.Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-22157685723764672692008-09-26T17:40:00.004+01:002008-09-26T18:02:18.108+01:00Different Thinking for a Different World<p class="MsoNormal"><span lang="EN-GB">Our constant focus in this series of notes is on the need to find a different way to think about<span style="mso-spacerun:yes"> </span>the imperatives that drive our business and our economic performance.<span style="mso-spacerun:yes"> </span>The key to success, and survival even, is to have high levels of comparative Competitive Strength. And the first step to achieving that is to become radically more adaptable, flexible, agile, and changeable. </span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p>As it says in our <span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);">Changeability</span></span> video, in <a href="http://www.changeworld.co.uk/changeability">our web site</a> – </o:p></span></p><p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(204, 0, 0);">“If you always do what you have always done, you will only get what you always got”.</span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p> <span lang="EN-GB" style="font-family: Wingdings;mso-fareast-font-family:Wingdings;mso-bidi-font-family:Wingdings;"><span style="mso-list:Ignore">§<span style="font:7.0pt "Times New Roman""> <span class="Apple-style-span" style="font-style: italic;"> </span></span></span></span><span lang="EN-GB"><span class="Apple-style-span" style="font-style: italic;">My English teacher will be so shocked – but this message cannot be made more clear by polysyllabic multi-miasmic plurals**t (my disrespectful phrase for academic/management speak).</span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-style: italic;"> </span></span></span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-weight: bold;">Never </span>has this been more true or more relevant than in this week of impending doom and disaster in the<span style="mso-spacerun:yes"> </span>financial world. <span style="mso-spacerun:yes"> </span>So it was with a sense of excited recognition that I read the latest newsletter from Brian Paxton at MBendi – one of the largest and most influential Web Service providers in <st1:place st="on">Southern Africa</st1:place> – please have a look at <a href="http://www.mbendi.co.za/">http://www.mbendi.co.za</a> – maybe their Blog would be a good starting point.</o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p> Here is the extract from Brian’s message that made me sit up and think –</o:p></span></p> <p class="MsoNormal"><span class="apple-style-span"><span lang="EN-GB" style=" ;font-family:Arial;"><span class="Apple-style-span" style="color: rgb(51, 51, 255);"><span class="Apple-style-span" style="font-size: small;">“The other thing that strikes me most forcibly as I consider these battered African and American families, is that maybe now the myth will finally be dispelled that the risks of living and working and investing in the developing world are somehow much, much higher than the risks of living and working and investing in the developed world. It's a myth that has been perpetuated for ever and a day by first world based credit rating agencies - perhaps they should be called discredited ratings agencies after their recent dismal performances - to the detriment of governments and companies and individuals around the world.”</span></span><o:p></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span lang="EN-GB" style="font-family:Arial;color:black;"><o:p><span class="Apple-style-span" style=" ;font-family:Georgia;"><span class="Apple-style-span" style="font-size: small;">I repeat - </span><span class="Apple-style-span" style="color: rgb(153, 0, 0);"><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">“If you always do what you have always done, you will only get what you always got”.</span></span></span></span></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span lang="EN-GB" style=" ;font-family:Arial;"><o:p><span class="Apple-style-span" style=" ;font-family:Georgia;"><span lang="EN-GB" style=" ;font-family:Arial;"><span class="Apple-style-span" style="color: rgb(51, 51, 255);"><span class="Apple-style-span" style="font-size: small;">“Just as the world's financial systems are about to be redesigned - no doubt with next to no input from the finance mandarins in Korea, China, India, Russia, Brazil, the Middle East and the other future economic powerhouses of this world - maybe it's also time to redesign the credit rating systems and procedures so that they no longer reflect the first world prejudices, subjectivity and, often, ignorance of the past but instead accurately measure risk in a completely dispassionate way. That would also make life less risky for families everywhere.</span></span></span><span class="Apple-style-span" style="color: rgb(51, 51, 255);"><span class="Apple-style-span" style="font-size: small;">”</span></span></span></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span lang="EN-GB" style=" ;font-family:Arial;"><o:p><span class="Apple-style-span" style=" font-weight: bold; font-family:Georgia;"><span class="Apple-style-span" style="color: rgb(51, 0, 51);"><span class="Apple-style-span" style="font-size: small;">This is Different Thinking</span></span></span></o:p></span></span></p><p class="MsoNormal"><span class="apple-style-span"><span lang="EN-GB" style=" ;font-family:Arial;"><o:p><span class="Apple-style-span" style=" font-weight: bold; font-family:Georgia;"><span class="Apple-style-span" style="color: rgb(204, 0, 0);"><span class="Apple-style-span" style="font-size: small;">There is a need for Different Thinking – NOW</span></span></span></o:p></span></span></p> <p class="MsoNormal"><span class="apple-style-span"><span lang="EN-GB" style="font-family:Arial;color:black;"><o:p><span class="Apple-style-span" style=" ;font-family:Georgia;"><span class="Apple-style-span" style="font-size: small;">Brian and his colleagues have a unique insight that comes from their geo-economic positioning and the extraordinary array of contacts and intelligence available to MBendi. </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">He is highlighting, from that different point of view, that the “traditional financial models” are bust. </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">He is suggesting that they are so broken that the financial future of our world will be governed by new faces, new minds and new structures in new locations. </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">It is an alarming prospect.</span></span></o:p></span></span></p> <p class="MsoNormal"><span class="Apple-style-span" style="font-size: small;">In Blog entry after entry here we have stated that conventional banking and investment analysts regularly miss the point by looking mostly at the numbers, and not the embedded behaviuors and mind sets. </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">We say that </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">Different Thinking</span></span><span class="Apple-style-span" style="font-size: small;"> is needed to understand the real potential of a business – we say that it is not </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">WHAT</span></span><span class="Apple-style-span" style="font-size: small;"> the business leadership thinks about their business, but </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-size: small;">HOW </span></span><span class="Apple-style-span" style="font-size: small;">they think about it that counts.<br /></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-size: small;">Our </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-size: small;">Competitive Strength Report</span></span><span class="Apple-style-span" style="font-size: small;"> </span></span></span><span class="Apple-style-span" style="font-size: small;">cuts through this barrier to understanding better, faster and cheaper than any other tool available. </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span><span class="Apple-style-span" style="font-size: small;">Find out more about </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-size: small;">The Competitive Strength Report</span></span></span><span class="Apple-style-span" style="font-size: small;"> at the Competitive Strength </span><a href="http://www.competitivestrengthreport.com/"><span class="Apple-style-span" style="font-size: small;">website </span></a><span class="Apple-style-span" style="font-size: small;">or with the short video on our web site Competitive Strength </span><a href="http://www.changeworld.co.uk/competitivestrength"><span class="Apple-style-span" style="font-size: small;">page</span></a><span class="Apple-style-span" style="font-size: small;">.</span></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-size: small;"> Oh yes, I must mention that our friends at MBendi host the </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-size: small;">Competitive Strength Report</span></span></span></span><span class="Apple-style-span" style="font-size: small;"> and </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(0, 102, 0);"><span class="Apple-style-span" style="font-style: italic;"><span class="Apple-style-span" style="font-size: small;">Achievement Network</span></span></span></span><span class="Apple-style-span" style="font-size: small;"> websites. </span><span style="mso-spacerun:yes"><span class="Apple-style-span" style="font-size: small;"> </span></span></o:p></span></p><p class="MsoNormal"><span lang="EN-GB"><o:p><span class="Apple-style-span" style="font-size: small;">Have you any idea what the advantages of a South African based web service may be – </span><span class="Apple-style-span" style="font-weight: bold;"><span class="Apple-style-span" style="color: rgb(51, 51, 255);"><span class="Apple-style-span" style="font-size: small;">Different Thinking!</span></span></span></o:p></span></p>Achievement Coaching Internationalhttp://www.blogger.com/profile/07521216382392255689noreply@blogger.com0tag:blogger.com,1999:blog-8164839508230379402.post-35664374326832039212008-08-27T15:46:00.005+01:002008-08-27T18:10:47.633+01:00The Olympic "edge"When you are running a blog entitled "Exceeding Expectations" you really have to include an article on the Beijing Olympics and especially the performance of Team GB.<br /><br />We define Excellence as exceeding both requirements and expectations, requirements being tangible and expectations being intangible. The team exceeded requirements in terms of both medal count and final position in the medal table. In doing so they exceeded the expectations of their funders and sponsors and of the country as a whole. Certainly we did not expect to become a sporting superpower but that's exactly what fourth in the Olympic medal table makes us and boy do we all feel good about that!<br /><br />We know that <em>Competitive Strength</em> is strongly linked to Excellence. High levels of <em>Competitive Strength</em> in any context enables people to exceed requirements and expectations. In the case of Olympic athletes this is not just about the talent, dedication, hard work and ambition of the athletes themselves but about the back up teams performing to the same level.<br /><br />Here is Bradley Wiggins a double gold winner and member of the all conquering GB cycling team on this subject. <em>"We have an unbelievable team behind us, management and technical. I know with confidence that when I step onto the track my bike will be in absolutely perfect working order. I can't remember the last time a mechanical problem was a factor in any GB races. When I start a race it is big boost mentally to have certain knowledge that nobody lining up against me starts with an edge. In fact it is always us who have the edge</em>".<br /><br />With this level of C<em>ompetitive Strength</em> our cyclists were nigh on unstoppable. They are best cyclists in the world with the best back up team. How many of us running businesses or public sector organisations can honestly say that our front line people can line up to do their jobs every day <em>"knowing they have the edge"</em>? What could they achieve if they did know this?<br /><br />Our last few articles have focused on the <strong><em>different thinking</em></strong> that is needed to achieve Excellence through <em>Competitive Strength. </em>So what about Usain Bolt then? This man is not built for sprinting says the conventional thinking. He is too tall, his stride is too long and slow and really he is much better suited to 400 or 800m. Well Bolt and his coaches have rewritten some of the rules of sprinting by finding a way to adapt his stride pattern in such a way that the supposed weaknesses are turned into competitive advantage. With this Bolt made history and now other coaches will have to <strong><em>rethink</em></strong> what it takes to sprint 100 and 200m. It certainly is not going to be "run a bit faster the way you have always run", because that isn't enough to beat Usain Bolt!<br /><br />The last two articles have focused on British Airways and how their conventional thinking dictates their strategy and response to challenges. In the last article we contrasted this with the <strong><em>different thinking</em></strong> displayed by Virgin Atlantic with an example of a stunningly high standard of customer service. Well today Virgin announced a leap in profits from £6m to £34.8M for the year. Profits for the first quarter of the current year are £23.5m and business class passengers (the most profitable) are up 22% with overall numbers up 7.6%. So whose employees know that they <em>" have the edge"</em> and does it make a difference? Answers in the comments please.<br /><br />So congratulations to Team GB and here's to London 2012. To find out more about <em>Competitive Strength</em> and <strong><em>different thinking</em></strong> go to the brand new <a href="http://www.changeworld.co.uk/">Changeworld</a> website.Steve Goodmanhttp://www.blogger.com/profile/12614859380224442732noreply@blogger.com0