Monthly Archives: March 2016

CAUSING DISRUPTION – A VIABLE STRATEGY?

Not so long ago, I looked at the steel crisis here in the UK and questioned whether China was executing a dedicated ‘Disruption Strategy’ rather than simply ‘dumping’ cheap steel onto the world market?

With steel and, especially, Chinese steel in the news again with the threat it has created to the UK steel industry, I thought I would take a closer look at what exactly a ‘Disruption Strategy’ is and how such strategies, when well executed,  provide a proven, viable way of launching new products into already crowded markets.

disruption1For some, seeking to launch a new or replica version of an existing product into a crowded market might seem like lunacy yet, over the years many companies have managed to do just that by the intelligent application of Disruption Strategy. And how such disruption strategies work should be a lesson to those already occupying space in the crowded market for if they aren’t paying attention it is they who might end up getting squeezed out!

How does the Disruption Strategy work?

Let’s take as our example the Japanese car industry. When firms such as Toyota, Datsun (the original name of today’s Nissan) and Honda wanted to enter US and European markets in the sixties they were faced with a number of challenges. Primary among these challenges were that they were perceived to be already overcrowded markets and that Japanese build quality was thought to be inferior.

In a nutshell, the Japanese manufacturers’ strategy was to attack the ‘discount’ end of the market with lower priced cars that had higher spec as standard than the western competition. This disrupted the accepted ‘norm’ and car buyers, liking the added, higher spec option, slowly started buying the new products. Some of those buyers were from the traditional discount end of the market but some were also people seeing a like for like product with the more expensive, higher specification models they had been purchasing. Gradually, this gained the Japanese a foothold, the big US and European manufacturers happy to concede a little ground at that end of the market to a ‘discount’ brand.

But having conceded that ground they opened the whole market to their new competitor. The market was disrupted and the western ‘big boys’ struggled to recognise what was happening. The Japanese companies slowly started competing higher up the quality/price chain, the western manufacturers conceded more ground although now it was not quite so voluntary but the initial damage had been done.

In the UK, it was British Leyland’s build quality that started to be questioned; “not as good as the Japanese” according the buying public. They couldn’t respond and a slow death began.

Meanwhile the Japanese continued to gradually disrupt the previously accepted way of doing things until they reached a point where market share and their own size allowed them to compete not just as equals but in many cases as superior products. The battle for a significant share of the market had been won.

Today, the Japanese are the world’s largest manufacturer of cars. The British automobile industry has been decimated; the US is still struggling to come to terms with the new reality and European companies like Saab have disappeared. The German auto industry reacted both the fastest and the best and now has a reputation for extremely high build quality which has allowed it to survive and thrive in a market redefined by the Japanese.

Elsewhere, the Korean manufacturers have studied, learned and then employed an almost carbon disruption strategy to that of their Asian neighbours 40+ years ago.

In the last decade or so we have witnessed the ultimate triumph of the disruption strategy which enters at the discount end of a market with its arrival as a luxury brand. Back in the sixties and seventies they would never have believed you had you told them how prestigious Toyota (as Lexus) and Datsun/Nissan (as Infiniti) would be in the 21st century.

 

© Jim Cowan, Cowan Global, 2011, 2016

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IGNORANCE DRIVEN INSANITY IN BUSINESS

“There is not a manufacturing company in the world that could afford to abandon close to 15 per cent of its production capacity, and the same applies to every country whether it is small, like Scotland, or enormous, like China or India.”

20__martin_luther_king_jr__by_sfegraphics-d4t18xzI come across examples of companies, third sector organisations, national and local government, in fact every sector, getting equality and accessibility wrong more times every day than I care to count. And when it comes to equality, ignorance is not an excuse. Shaking your head before stating ‘it is common sense’ won’t wash. We all need to take a look in the mirror and ask where we could do better. For organisations in all sectors equality needs to be a question of strategy, of planning to reach those people with one or more of what are termed ‘protected characteristics’ in the 2010 Equality Act.

But it is not only in order to comply with the law or even to act like a decent human being (although that would be nice), there is a serious business incentive to understand equality and improving accessibility.

The quote in italics above is from double Formula One world champion Jackie Stewart’s excellent autobiography ‘Winning Is Not Enough.’ It is more than the usual sporting biography, in that it covers his career after Formula One where he went on to become an extremely successful businessman.

GP29942865A common thread throughout the story is Stewart’s struggles with Dyslexia. How he went through his childhood believing he was “thick”. How despite being one of the most successful sportsmen ever to live he was continually aware of a sense of inadequacy. Until a chance meeting with a doctor who was running some tests on his son led to him also being tested and, in his 40s, finding out he wasn’t thick after all. He has a learning disability called dyslexia.

Ten per cent of the population is dyslexic. Think about that figure. In the UK that is over six million people. Four per cent are severely dyslexic; that is over 2.5 million people.

It is right and proper that every one of those people should reasonably be able to access the products and services that everyone else does. It is also right and proper that every one of those people should reasonably be able to expect the same treatment as everyone else does. Indeed the 2010 Equality Act does not insist that companies make all adjustments it asks only that they do what is reasonable.

But beyond that, can your company afford to reduce its potential market by 6 million people because of something as inexcusable as ignorance? Surely not, it is common sense isn’t it? And yet thousands of companies do exactly that every day simply by (through ignorance) using inappropriate fonts or colour schemes in marketing paraphernalia, in communications (sic) documents and on websites. In short, they deliberately reduce the potential size of their market.

I call that ignorance driven insanity.

That is ten per cent of the population. Where does Jackie Stewart’s 15% come from? Dyslexia is different from but shares characteristics with dyscalculia, dyspraxia and colour blindness. Individuals with one of those disabilities often have one or more of the others. In total they make up fifteen per cent of the population.

Over nine million people in the UK. More people than live in Greater London. 9,000,000 people. More people than live in Scotland and Wales combined. A lot of people.

I recently came across an example of this ignorance driven insanity when attending a business meeting at a hotel. During a break I nipped out of the meeting room to visit the toilet and found them easily enough. However it struck me that the signage did not consider one of the characteristics often seen in people with dyslexia, dyscalculia, dyspraxia and/or colour blindness – the tendency to take things literally.

During the lunch break I revisited the task of finding the toilets but this time took every sign I saw literally. In short, the signs took me via a couple of stair cases on a loop back to the place I had started, not to the toilets. I double checked with a colleague attending the same meeting who is dyscalculic. “Yes,” she said, “it took me a while. In the end I waited until someone else wanted to go and went with her.” Good thing she wasn’t desperate!

What has this got to do with business? Putting a couple of signs in the right place would cost very little. Being in ignorance of the discrimination caused by their absence could cost……? The hotel will never know because the dissatisfied customer might say nothing but simply never return. And among fifteen per cent of a population you can be sure there are more than a few decision makers who will be booking conference facilities based on their judgement of suitability.

One step removed, companies booking the facilities at this hotel are trusting their corporate reputation to the hotel’s ability to deliver. Think about the feedback; “great conference but poor venue.” That’s more lost business for the hotel as that conference goes elsewhere next year.

And if you are in competition with that hotel……do you really need me to explain both the gap in the market and the potential market in the gap?

There is a serious business imperative for getting equality right. Ignorance is no excuse. Equality is a very wide area and is not just about minority groups. Women, for example, are a majority group in the UK (over 31 million/51%).

I have focused on only one group of people who sit under the broader umbrella of disability. In all, people with one or more disabilities make up 25% of our population (over 16 million potential customers in the UK).

Other ‘protected characteristics’ covered by the Equality Act are age, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

In advising companies on equality strategies and in conducting accessibility audits for organisations, I have come across all kinds of oversights, some even driven by being well-meaning but, nonetheless ignorant thinking. These are just a small sample:

  • The sports centre accessible toilet whose door opened inwards.
  • The ‘buy 2’ special offer which was more expensive than buying two singles.
  • The government agency equality monitoring form.
  • The ‘required’ qualifications on a job specification.
  • The bus time table.
  • The university marketing campaign.
  • The white ‘design feature’ at a conference venue.

Fortunately, none of these organisations assumed knowledge they lacked. None allowed themselves to be led by ignorance. However, sadly for equality, unfairly for significant sections of society and unfortunately for the businesses concerned, I do encounter those who clearly didn’t ask on a more than daily basis.

Understanding equality is good for business. Don’t be guilty of ignorance driven insanity.

If you would like to find out more about this topic and/or would like to discuss arranging an Accessibility Audit for your business or organisation, please get in touch via the ‘drop me a line’ link below.

 

© Jim Cowan, Cowan Global, 2012, 2016

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CORPORATE STRATEGY – NOT A NEW IDEA BUT NOT AS OLD AS YOU THOUGHT

At a recent speaking engagement I was comparing how new Corporate Strategy is when compared to Military Strategy or the strategy of training for performance sport. I was later asked if I could write a short piece about the birth of Corporate Strategy. Happy to oblige, here it is.

corporate-strategyStrategy as a concept has been around for centuries, for millennia. The first published thoughts on strategy are commonly believed to be the works of Sun Tzu and Wu Tzu from 2500 years ago. Sun Tzu’s ‘The Art of War’ is still essential reading in military academies around the world and should probably be required reading for business leaders too.

For 2300 years the principles of strategy, of formally identifying what success looks like and planning a route to achieve it was left to the military. That is until the early 1800s when ‘pedestrianists’ – early race walkers – took to planning their training, albeit in somewhat basic format. In the late 19th century athletes took up formal planning and gradually the idea of developing strategies for the training of sportspeople evolved and developed into the science (and art) of today.

Meanwhile, the post-industrial revolution world awaited ‘strategy’ in any formal sense. Managers and leaders thought and planned after a fashion but with little genuine cohesion and it was not until the 1950s that the term ‘strategy’ was regularly applied in a business context.

Then, in 1965, along came H Igor Ansoff and the business world would never be the same again. Ansoff’s publication ‘Corporate Strategy’ introduced the term, new thinking and the formulation and implementation of ‘strategic management’ and suddenly corporate strategy became a requirement for all businesses, large and small.

Ansoff stated that strategy was, ‘a rule for making decisions.’ He distinguished between objectives, which set the goals, and strategy, which set the path to the goals; something many modern businesses have forgotten. ‘Corporate Strategy’ also stated firmly that ‘structure follows strategy’ – something else a significant minority (majority?) of modern managers and leaders overlook.

Ansoff flagged up the important issue that has troubled formulation of strategy ever since; most decisions are made inside a framework of limited resources. Whatever size the company is, strategic decisions mean making choices between alternative resource commitments.

The process defined by Ansoff typically unfolds thus:

  • Mission Statement and Objectives – describe the company’s mission, vision and values and define measurable strategic (and financial) objectives.
  • Environmental scanning – the gathering of internal and external information analysing the company, its industry and the wider environment (e.g. the 5 Forces of Competition, SWOT and PEST analyses, etc.).
  • Strategy formulation – competitive advantage, core competence, corporate thinking, ‘inside out and outside in’.
  • Strategy implementation – communicating the strategy, organising resources and motivating teams to deliver.
  • Evaluation and control – measure, compare, adjust.

Since Ansoff, writing about Corporate Strategy has grown to become an industry all of its own and, like all industries, it is populated by the good, the bad and the indifferent. The growth of the internet has seen a boom in ‘off the shelf’ strategy templates for business. For the individual seeking text books on the topic it is now a case of caveat emptor. For the businessman seeking a quick fix download it is a world populated with poor options and little else.

Strategy should be personal; borrowed templates will never deliver quality. There are no short cuts; getting strategy right and, beyond that, of quality, is hard work.

But then, it was ever so. As Sun Tzu wrote 2500 years ago; “Strategy is the great work of the organisation.”

 

© Jim Cowan, Cowan Global, 2016

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EQUALITY – WORTH THE BOTHER?

The value to business of understanding equality cannot be overstated but a recent email exchange leaves me compelled to wonder whether many businesses (and other organisations) view it as something not worth the bother?

Committed_to_Equality_1There are many very good reasons to ensure that your business takes Equality seriously. Of course, the biggest driver for many is the desire not to fall foul of the law even if, at the back of their minds, many view meeting the requirements of the Equality Act (2010) as little more than an exercise in red tape.

It would be nice to believe that, in the 21st century, laws to ensure access to equal treatment for all are not necessary and that we all seek to accommodate our fellow human beings as best we possibly can. Sadly that is not the case and I am not naïve enough to believe it is.

That does not mean most people deliberately put barriers in the way of others. What does happen is that ignorance drives practice and the right questions are not asked, reasonable solutions not found. And that is all that the 2010 Act requires; that reasonable adjustments be made.

But other than the legal and the ‘human’ reasons for trying to provide equal access to all for your company or organisation there is another; good business practice. It might sound obvious but I will say it anyway, the easier it is for more people to access your company or organisation, the more likely it is they will use your products or services.

Which brings me back to that recent email exchange…..

I will shortly be acting as an expert witness in a court case, an expert in Equality and in Accessibility. As part of the preparation for this I received an email from a solicitor asking that I pass comment on a document he had prepared for the Court. He was keen that if we were to be arguing a case based on equality, any documents submitted must reflect both expertise and belief in that area. In short, they should be as fully ‘accessible’ as humanly possible, as reasonable.

The content of both the solicitor’s email and the attachment read well and were factually correct, however both fell short of his aim due to his poor choice of font. I commented as such, suggested a different font and advised him why it made a difference.

His reply interested me. The attached document was now presented in a good, accessible font. However his email remained in the original font. I remarked on this over the phone and, to paraphrase his reply, was told, “Oh, that’s okay, the Court won’t see that.”

This attitude is not uncommon in businesses and organisations in all sectors. Government departments, local government, charities, sports clubs and others all discriminate against significant sections of society because they can’t be bothered to change once their ‘ignorances’ are pointed out to them.

The law requires reasonable adjustments be made. I believe changing the default font setting on emails is reasonable. I do not believe that not being bothered is but, to date, no test case has been brought to support my view.

But beyond the law, what about running a successful business, department, charity, club or whatever? Does it make sense to deliberately make it more difficult for large parts of society to work with you? Does it make sense not to make access as easy as competitors who do make reasonable adjustments? Does it make sense not to steal a march on competitors who do not make those reasonable adjustments?

You tell me. The example of the poor choice of font used above could negatively impact on dyslexics accessing and making use of that solicitor’s services. Ten percent of the population are dyslexic, 4% severely so. Even at four percent, that is potentially 2.5 million customers (UK) you are gifting to your competitors. Why? Because you can’t be bothered.

The Equality Act of 2010 is the legal driver behind businesses and organisations in all sectors making reasonable adjustments which will provide improved access for all. Some call it red tape, I prefer to think of it as acting like a decent human being.

But even if the legal and the human reasons don’t drive you to reasonable adjustment, maybe the business case should?

If you can be bothered.

If you would like to find out more about this topic and/or would like to discuss arranging an Equality Audit for your business or organisation, please drop me a line to the ‘drop me a line’ link below.

 

© Jim Cowan, Cowan Global, 2013, 2016

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VISIONLESS STRATEGY – DESTINATION UNKNOWN

Not too long ago the importance of establishing your Vision prior to developing your strategy was accepted practice. Increasingly however a school of thought is emerging which suggests that strategy does not require vision.

Far from being good advice, visionless strategy is a shortcut to…..destination unknown.

VisionlessThe purpose of Vision is to provide your strategy with direction. In the same way that you can better plan a car journey if you know the destination, so you can better plan your business strategy (or any other strategy) if you know where it is you intend to get to.

Good Vision is a bit more than that; good vision answers the question; ‘what does success look like?’ To continue the car journey analogy, vision might give you a destination of ‘London’ – okay for planning in general terms but a bit vague. Good vision would be more specific; ‘the Lyric Theatre in Hammersmith W6 in time for a theatre show at 8.00pm.’

The problem with most businesses is that they simply do not understand strategy (McKinsey, 2011). This extends to the Vision which drives strategy too.

A couple of years ago I spoke at an event at which I was sharing the platform with Microsoft. The theme of my talk was creating good Vision. In preparing my talk I researched those I was sharing the platform with in the hope I could use them as good examples. Unfortunately, while researching Microsoft’s Vision I came across a great example of how not to do it!

I can hear you now; “hang on Jim, Microsoft. Are you sure? They are a pretty successful company!” Let me explain.

The Vision was; ‘A PC on every desk.’

Having found this poor example of Vision, rather than avoid it I phoned up my contact at Microsoft and explained what I had found and asked if they minded if I used it as an example of how not to do it. His reaction surprised me; he laughed. After he stopped laughing he invited me to go ahead before letting me know how relieved Microsoft were to have caught how bad that Vision was in time.

He explained; had Microsoft continued to blindly follow this Vision for much longer the smart phone, tablet, and mobile working tools revolution might have passed them by completely. Now, although they are playing catch up, at least they are in the game.

‘A PC on every desk’ was a Vision in the ‘destination London’ bracket. It gave a vague direction but failed to describe what success looked like and, worse, offered no deadline. To those peddling the idea of visionless strategy Microsoft’s poor ‘PC on every desk’ would be cited as evidence that Vision doesn’t work whereas the truth is that the Vision itself was poor.

Another reason for poor Vision, one I come across on an almost daily basis, is that of confusing Vision with Mission. Put very simply and in short, your Vision is where you are going, your Mission is why you exist. The two are often linked but not the same. The Girl Scouts used to cite their Vision as ‘help a girl reach her highest potential.’ This is a great example of an organisation mistaking what they do with where they are going; their Mission and their Vision. If applied properly as Vision, to drive strategy it is unlikely to prove successful. The visionless strategy peddlers will use this as an example of why vision doesn’t work, why it is unnecessary. The truth is that it is just poor vision.

The third group of visionless strategists have existed for far longer; they are that group who rather than figure direction prefer the idea of “just getting on with it.” They are easy to spot, they are often the people who seem permanently busy but generate little forward momentum other than by chance.

Their hero might even be Lao Tzu*; he who is mistakenly and frequently quoted as stating “a journey of a thousand miles begins with a single step,” (The more literal translation is, “a journey of a thousand miles begins beneath one’s feet”).

The ‘just get on with it’ brigade would start walking, literally taking the first step. However, more sensible first step might lie in first determining your destination. To return to the car journey analogy the person (business) who paused to first define what success looks like will arrive at the Lyric Theatre (and on time), those who just got on with it could well be……..….well……..…anywhere!

To put it in real terms, let’s say our Mission was to conquer space. What are our options when we come to our Vision?

  1. We don’t need a vision to give us direction, let’s just get on with it.
  2. “We are going to outer space.”
  3. “This nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to earth.” (John F Kennedy, 25th May 1961).

Whose Vision (or lack of) will give their strategy the sharper focus, the higher chance of success?

Who is your money on?

 

*To put Lao Tzu’s oft quoted words in perspective it should be noted he also said, “a good traveller has no fixed plans, and is not intent on arriving.” Indeed Lao Tzu, although frequently quoted in business, was not a strategist but a philosopher and writer who marvelled in the journey of life. He should not be confused with Sun Tzu, the Godfather of everything we define as strategy today.

© Jim Cowan, Cowan Global, 2012, 2016.

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