Category Archives: Strategy

What Will Your Company Be Like?

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So, here is something I want you to think about. As technology is integrated into your business model, what does your company look like in five years, ten years? When we can measure all kinds of things in real time, in feedback loops with algorithms that detect meaningful change (or stasis), what does work look like?

Autonomous driving vehicles are tested and adopted in plain sight. The mining industry prefers autonomous machinery because accident rates have dropped to almost zero, component wear (brakes, tires) dramatically reduced, productivity dramatically increased.

What will happen to your company as you afix sensors to almost everything? Below is a little list. If you have something else you are measuring, let me know, I will add it. What will change in your business model? More importantly, what will be the new work created?

  • Physical Pressure
  • Air pressure
  • Barometric pressure (altimeter)
  • Humidity (air, surface, soil)
  • Temperature sensor
  • Fluid pressure sensor
  • Fluid flow sensor
  • Fluid position sensor – mechanical position
  • Fluid specific gravity
  • Fluid accumulation sensor (rain)
  • Vibration
  • Accelerometer
  • Photo pixel shift (movement)
  • Photo pattern recognition
  • Photo contrast (light-dark)
  • Photo color sensor
  • Bio – photo oximetry (SpO2)
  • Bio – fingerprint sensor
  • Electric current switch sensor (On-Off)
  • Electric current voltage sensor
  • Electric current resistance sensor (Ohms)
  • Electric current touch sensor
  • Proximity sensor
  • Infrared sensor (transmission – reflective)
  • Sound wave sensor (sonic, sub-sonic, ultra-sonic)
  • Smoke sensor
  • Gas sensor
  • Alcohol sensor
  • Temperature sensor
  • GPS sensor
  • Gyroscope sensor
  • Tilt sensor

Your five year thinking will be a one year tactical plan in four years? -Tom

What Keeps Us From Thinking?

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There is an NLP (Neuro-linguistic programming) process that encourages the act of visioning. This imaginary exercise requires the subject to place themselves into a future state (point in time) without the encumbrances of the present. Encumbrances of the present limit the vision of the future and prevent the creative imagination to guide real, substantive change. Difficult to see down the road while looking at the bug on the windshield.

  • ToysRUs
  • Radio Shack
  • Sports Authority

It is likely these companies saw the advance of technology and understood the implications to the survival of their business model. Yet, in spite of feeble efforts to adopt technology initiatives, worse yet, failing to understand the significance to their business model, these companies failed. Survival is optional.

An emerging characteristic of those companies who successfully adapt, is the abandonment of legacy thinking. I always thought it curious that Uber seldom considered how to comply with local taxi authorities and focused on a business model that in large part ignored those restrictions. I watched and chuckled as Uber was forbidden to serve a market because they refused to comply, only to watch municipal magistrates eventually remove those restrictions in the face of market demand.

One would think that a local taxi company would examine and copy Uber’s technology to compete head to head. It was certainly available to them. What stopped the effective adoption of technology had nothing to do with the technology.

What stopped the effective adoption of technology was the sacrosanct immovability of the legacy thinking. A legacy taxi company cannot imagine a world where they own no vehicles. A hotelier cannot imagine a world where they own no physical hotel properties.

It’s a Trap

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There were twelve incredible opportunities staring at Roger, all of them saying, “Pick me!”

Once an organization gets some traction in their market, over the hump of cash flow and all that, the next biggest trap is the incredible opportunities.

As your company grew, everyone said, “You’ll never make it,” but your company did. Who is to say that your company cannot be successful at all of the other opportunities staring down at you?

Sometimes, the most important decisions that you make, are the decisions about what not to do. The growing organization needs to focus its efforts on becoming more successful at their core business. There will be plenty of time, later, to chase down that incredible restaurant deal or that mail order pharmacy company.

Disciplined focus, execution, not opportunities. Stay out of the trap.

Stop Working Harder

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From the Ask Tom mailbag –

Question:
Last night, I got out of the office at 9:45p. I don’t know what it is. This has been going on for the past three weeks. On Monday, things don’t look so bad, but come Thursday and Friday, the work just seems to pile up. I worked the last three Saturdays and last week, had to come in on Sunday. Missed the football game.

If I had known ahead of time, I could delegate some of the work out and it would already be done. But I don’t know about some of this stuff until it’s too late, or don’t realize how long it is really going to take. All of sudden, the pile is stacked up and everyone has gone home. The work’s gotta get done.

Response:
I don’t believe you. If you sat down and thought about it, almost all of your work is predictable, you just don’t think about it. You don’t delegate out, because you like working under the gun. Here’s the thing. You think you will get sympathy from me for all your hard work, but the just dessert for hard work is more hard work. You have to stop working harder and start working differently. -Tom

That’s Me

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“I don’t care,” Roberto insisted.

“What do you mean?” I asked.

“I don’t care if that is what the boss wants. It’s a stupid idea. And my role is not to do stupid shit.”

“Pushback?”

“Call it what you want. CEOs run fast, sometimes making a mess. That’s why I have a job, to clean up the mess they call strategy. Somebody has to execute. That’s me.”

What Has Changed Around You?

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Andrew was still upset. The contract was lost and there was nothing he could do about it. He had lost his appeal with the purchasing agent, the procurement manager and the director of operations.

“We did everything by the book,” he said. “This is the way we have earned all of our major contracts. Our reputation is stellar. I can’t believe this is happening.”

“You got sucker-punched,” I observed.

“What?” Andrew replied.

“Sucker-punched,” I repeated. “We often think that our future success lies in the fact that we had one small string of successes in the past. We think that the curve in front of us continues upward without hesitation. We do not realize that, as we continue to do things the way we have always done, the world subtly changes. The nuances of the deal creep up, new players enter the game without detection, and suddenly we are on our ass.” Andrew’s face showed no emotion on the outside, but his eyes betrayed a growing realization.

“There is good news, though,” I continued. “This is not a game. This is life. In a game, there are few second chances. The final period has an ending, even overtime is sudden death.

“In life, in business, there are lots of second chances and the final period can be extended. But only if you stop thinking about your past success and start thinking about what has changed around you.”

Market Responsive

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“You improved your quality, so your warranty program became a competitive advantage instead of a liability. Your lead time was down to four weeks. You lowered your cost structure. Your output and unit profit was consistent and predictable, systems focus. And then the rug got pulled out?” I asked.

“Yes,” Arianne reluctantly explained. “Everything, up to now had been internally focused. Efficiency, pace, quality. Then, the market fell out. Our customers would shrug their shoulders and buy from someone else. At first we thought they didn’t understand what a quality product we had. We even sent out our engineers with our sales people to explain why our product was more durable, lower cost and could be delivered faster. But, it was us who didn’t understand.”

“What do you mean?” I quizzed.

“We had been so internally focused that we didn’t notice a shift in the market. Our market moved. Our product was fine, but our market wanted something different. Our competitor smoked us. They had re-tooled a number of features based on user-feedback. We had no clue.”

I nodded my head, “Market responsive.”

“Yes,” Arianne confirmed. “It cost us a million dollars in stagnant inventory and months of development time to catch up. We had been so internally focused, we almost lost the ship.”

Debriefing Winners

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“Let me see the projects that you put in for review,” I said, as Sean handed over the list. I scanned down the page, “I see you selected six, tell me, how did you decide which ones for the group to do a post mortem on?”

Each quarter, Sean’s team spent four hours going over significant projects for the quarter, looking for lessons learned. “Oh, that was easy,” Sean replied, “these were the eight biggest money losers.”

“It is always tempting to debrief a project where things have gone wrong. Once you have corrected all those problems, where are you?” I asked.

“My guess is, we are back to even steven. No loss, no gain, no harm, no foul.”

“If you really want to make progress, you also have to analyze where things went right. Pick two or three winning projects to debrief. Find out why you were able to make significant margins. Where was the advantage in those projects? Where can you find more projects like those?”

Timing is Everything

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I just spent some time digesting the latest report from ITR. I have a sinking feeling in my stomach, mixed emotions. On one hand, the recovery is underway, but the next bump in the road is only a scant two years away. I have shared this news recently as a “tapping of the brakes,” but this month’s ITR Report uses the “R” word.

“We see the issues of future higher interest rates; higher taxes; federal, state, and local government deficits; unfunded pension liabilities and inflation (including energy and food) as contributing factors to what we think will be a recession that begins in late 2013 and encompasses all of 2014.”

Driving With Both Feet
And I am only talking about the gas pedal and the brake pedal. Between now and 2013, you have no choice but to charge ahead, as fast as you can prudently go. But keep one foot over the brake pedal. Depending on your industry, and some are still reeling (non-residential construction), be careful about building overhead that you cannot easily get rid of. The good news is that we have some warning and time to position ourselves appropriately.

I encourage you to subscribe to ITR, and pay attention. You can find out more information at this link ITR Trends Report.