Month: September 2014

Mature Contract Workers – the next workforce restructuring opportunity?

Mature Contract Workers

 

Middle East interventions

What’s the opposite of tolerance? Genocide.  The group that acts the most brutally, can expect to gather the most contempt in the history books.

The road to war got just overtaken by the sky to war.

If Britain decides to copy America’s airstrike approach in the Middle East, it would be wise to first copy America’s laws for dealing with terrorism discovered inside its homeland.

Propaganda has the hardest job cloaking brutality. And the most desperate need to flourish, when brutality and intolerance prevail.

What unity without progress and what progress without unity?

 

Evaluating Strategic Options

Conventional wisdom regarding evaluating strategic options is to use a SAF approach:

S means Suitability of the strategy. A means Acceptability. F means conduct a feasibility study.

My personal opinion on this (am willing to be persuaded otherwise – what do you think?):
1. How can you truly judge suitability before you’ve seen the results? These days, defining the competitors and the market is hard as market boundaries become more blurry. A strategy professor (Prof George Tovstiga) at Henley Business School* suggests  that it’s now no longer about competitive sustainable advantage (as Porter had proposed), but that companies effectively move from one unsustainable advantage to another unsustainable advantage.
2.  If evaluating strategic options (using tools like cost benefit analysis & risk scoring say) is difficult, then evaluating feasibility (conducting feasibility studies) is likely to also be difficult, with the quantified results perhaps have a large margin of error in reality. Suggest that like for forecasting, all you can do is best efforts and be flexible enough to react tactically along the way, if things start going really pear-shaped. Organisations can try ‘proof of concept’ and prototyping of new product ranges/business models/business arrangements to new or existing markets, but there is still likely to be uncertainty on a) how competitors will react, b) how well the prototype will scale-up to full market or business model size, c) how long market demand for that product range/business model or business arrangement will hold.
3. Regarding acceptability,  I suspect many strategic options get chosen in organisations, largely on how the politics operate at the senior level (this would be a good post-grad research project for someone to test out). Also, if a private company has a majority shareholder who is also the Chief Executive (like Microsoft in the early days, co-owned by Bill Gates & Paul Allen, or Richard Branson with Virgin with his famous phrase ‘screw it, lets do it’), then gaining acceptability on specific strategic options is relatively easy. However, if members of the senior management team aren’t the business owners, but are fairly transparent about their plans to the majority shareholders/debt holders, acceptability still may or may not be an easy hurdle to jump.
http://www.henley.ac.uk/web/FILES/corporate/cl-Changing-the-way-we-strategise-GT-WEB.pdf

Charities, Impact & Leverage

I recently read an interesting interview on the New Philanthropy Capital website (www.thinknpc.org), with David McCulloch, the Chief Executive of the Royal Voluntary Service, talking about charity impact and some future trends for UK charity funding.

http://www.thinknpc.org/blog/the-time-is-now/?utm_medium=email&utm_source=New+Philanthropy+Capital&utm_campaign=4722080_3nd+eshot+Annual+Conference+Oct+2014-+September&dm_i=UL9,2T7KW,5JWQUY,A7PDC,1

Mr McCulloch said that ‘the challenge (of charities measuring and evaluating the effectiveness of what they do) is really what to measure and how.’ My own take on this is that impact is a three legged stool – impact outputs, impact outcomes and impact communication. Charities who want to be effective, therefore need to report not only impact outputs, but stretch to reporting impact outcomes as well. And unless they are able to communicate impact back to donors and to potential donors, as well as their own staff & other stakeholders, then a significant portion of the value of impact measurement is lost. It follows that a charity won’t be perceived by donors/potential donors to be as effective (as it could be), if it manages what it cannot measure, if it prioritises what it cannot measure and if it bases its goals & strategies on something it cannot confidently measure. Perhaps some future charities will design their scope around being impact-led, but only where impact can be confidently measured.

Arguably, impact communication, like political speeches, is as much about reaching heads as reaching hearts.  Impact communication and impact outcome-reporting also needs to overcome two challenges. Firstly, of an extended value chain (where the charity donor or ‘principal’ providing the funding, perceives themselves as being too many steps removed from beneficiary results in the field). And secondly, of a concurrent value chain (in a disaster-relief setting, where multiple charities provide different forms of aid to the same beneficiaries, with multiple charities jointly saving lives and rebuild societies, but making discrete impact measurement more problematic).

New Philanthropy Capital, in the same interview stated that ‘charities have to work out ways that are proportionate to their size and resources.’ Mr McCullock’s response was that ‘it’s about measuring the thing that will best demonstrate your impact’ and that ‘new services are sometimes the best place to start.’  My take on this is that perhaps charities need to use leverage more routinely to avoid the constraints of their size and resources, to achieve the impact they seek. Does enough time get spent by charity senior management examining what and how leverage can be used to achieve charity goals? Furthermore, for an established charity, rather than measure impact on new services as they are developed, why not re-define all services in the context of what impact can be measured, since arguably impact is to charities what share price is to companies.

For substance-abuse charities, one aspect of leverage is examining how existing sufferers can help beneficiaries, since their credibility (deterrence and rehabilitation) is probably higher than for charity workers. Can sufferers help other sufferers, can early-onset sufferers help late-stage sufferers, can rehabilitated sufferers help early-onset sufferers? Perhaps impact is increased by using leverage, since rehabilitated and early-onset sufferers can gain new skills and strengthen their own lives as they help those less fortunate. The role for charity workers in the same scenario? Act as leaders and guides, supplying information and logistical help to the rehabilitated and early-onset sufferers helping others.

What about leverage in fundraising? Are charity resources best used by employing ‘chuggers’ to randomly collect small change from people on the streets? Why not instead invest on online business models to profile and solicit funding from wealthy individuals instead, linked to impact measurement and compelling storylines that target both head and heart?

What about exploiting charity leverage using a different business model – should small charities switch to mimicking SME start up business models and digital start up models, with light governance structures, global reach, low to medium upfront fixed costs and very low variable costs?

Lastly, what about exploiting charity leverage by revisiting incentive theory (principal-agent contracts)? Fundraising perhaps needs to create innovative contracts that recognise moral hazard (hidden action) and adverse selection (hidden information) issues for donors and potential donors. Such contracts could explicitly include impact reporting in the terms of the contract, in ways that reassure donors and increase total donor funding. In designing such contracts, charities would have to give more thought to which contracts are one-off or repeat game, which principals are risk adverse (and how), and what additional funding they could get from donors as information disclosure rents.

Leadership and the Rotherham example

Leaders who face huge criticism of bad things that happened ‘on their watch’ can avoid being stuck between a rock and a hard place by resigning their position. This sends a clear message that they take responsibility for being the leader when things went bad and preserves some semblance of personal honour on their part.

In the recent BBC report on the widespread child abuse in the Rotherham area between 1997 and 2013 http://www.bbc.co.uk/news/uk-28962144 the Rotherham Council Leader Roger Stone appears to have done the decent thing.

In direct contrast, the South Yorkshire Police & Crime Commissioner Shaun Wright has refused to resign his post. In not resigning, he’s implying either he was negligent (unaware of the mounting evidence) and therefore borderline incompetent, or that he approved of what was happening and was therefore corrupt. Either way, his position is untenable and the ongoing criticism about him remaining in the role will not only overshadow his ability to do his day job but tarnish the brand of the organisation he works for.

The famous phrase of ‘plausible deniability’ constructed to protect leaders in high office from events taking place in their name clashes directly with another phrase of ‘the buck stops here.’ Unless leaders are required to resign in the wake of significant failings, there is unsufficient deterrent to being negligent. Furthermore, where failings are significant, the organisation they work for  should not feel obligated to fight any civil case on behalf of such leaders, brought against them by the victims’ families.

Finally two quotes from Marcus Tullius Cicero, Roman philosopher, politician & lawyer (106-43 BC):

‘Any man can make mistakes, but only an idiot persists in his error.’

‘The safety of the people shall be the highest law.’

Jobs, AI and business models

I just read a really interesting article on the McKinsey’s website ‘Artificial Intelligence meets the C-suite’, where some leading business academics discuss the implications of rapidly advancing artificial intelligence on conventional organisational structures run by senior executives. http://www.mckinsey.com/Insights/Strategy/Artificial_intelligence_meets_the_C-suite?cid=mckq50-eml-alt-mkq-mck-oth-1409

Rather than review the article, instead, here are some follow-on points to consider.

  1. In a future World influenced, if not dominated by AI and hyper-competition, will the strategic goal of capturing  ‘sustainable competitive advantage’ instead become ‘maintain competitive advantage’, with advantage mostly gained by using data and cutting-edge analytical techniques?
  2. Will most future companies become more like MI5/MI6 – gathering and analysing data comprising most of the work and then acting in very specific ways, once insight is gained?
  3. With the rise of AI, will a growth job for human managers be to spend increasingly more time making judgements about whether to develop & deploy staff, versus commission AI to create/deliver products & services?
  4. Will next-generation, business process reengineering (BPR) instead become AI BPR?
  5. With the rise of AI, will ‘efficiency in limited-scope environments’ dominate over ‘inefficiency in wide-scope environments’, causing entrepreneurs to move their business models into that space? Some examples:
  • to base their business model on data expertise (and rapidly go where the data takes them), not (staff) domain expertise,
  • to simplify (value chain) negotiations,
  • to simplify the challenge of motivating & leading staff,
  • to simplify the need to gain political consensus,
  • to balance internal data analysis (on costs, internal resources & activities) with external data analysis (on markets).