start ups

What purpose does the BBC programme ‘The Apprentice’ serve?

Yesterday, I watched episode four in the latest series of the BBC TV show ‘The Apprentice’.  At the end of it, Alan Sugar fired all three of the poorest performers (Ella Jade Bitton, Sarah Dales & Steven Ugoalah). But not before they lost all professional and personal dignity, squabbling in the board room, with the project manager of the losing team (Ella Jade), pleading repeatedly with Lord Sugar to be given another chance.

A triple elimination in one week, along with post-dismissal pleading was a new low point for the series. Is the underlying quality of the applications really that bad, is the screening process to allow them to participate in the series the problem, or is it just the nature of the task that creates a race for bottom place? On a related note, if the CV’s of the Apprentice wannabes really are as great as they claim, why do so few of them step up to lead an ‘all stars’ team in any given episode?

I know one of the purposes of the series is entertainment and that Lord Sugar donates his sizeable series fee to charity. However, the viewer cannot help but wonder, why are the end results of each task so mediocre, whether creating their own video channels to go on the World’s largest video-sharing site, or simply selling market stall products (with TV cameras rolling that in themselves, attract curious punters)?

For any of the wannabe apprentices, especially in the early episodes of the series, doesn’t it occur to them that their best chance of not appearing in the bottom three for elimination is to put maximum effort into effective teamwork?

Arguably, for Lord Sugar to go into business with the winner, two qualities will stand out – one is very clever business ideas, executed well. And the second is stunning leadership qualities. Perhaps if the ‘prize money’ was quadrupled to £1M, it might attract a superior group of wannabe apprentices and reveal in the tasks, a far more stunning range of ideas, delivery and leadership in action. From Lord Sugar’s perspective, does he want to go into business with someone with amazing potential for a mere £1M investment, or go into business with someone who believes their own hype, for a very expensive investment of £250,000?

Personally, I’d far rather watch a version of The Apprentice, with:

  • less tantrums and loss of human dignity in the boardroom,
  • less smarmy sales pitches to very savvy and seasoned business buyers (even after 3 prior episodes, some project managers still seem to think you can sell complete lemon products, solely by baffling the buyer with youthful sales charm),
  • less editorial emphasis on the backchat between prima-donna contestants during the task,
  • more coverage during the task of heroic teamwork to problem solve,
  • most importantly of all, FAR more design-brainstorming time spent at the front end of the task – none of the wannabes seem to realise that time spent doing that well will pay off massively in the final Boardroom analysis.

As well as delivering far better end results, a change in emphasis might restore some viewers’ beliefs in business activity (and Lord Sugar’s TV series emphasis) as a positive economic force.

http://www.bbc.co.uk/iplayer/episode/b04n9pcd/the-apprentice-series-10-4-online-video-channel

http://www.independent.co.uk/arts-entertainment/tv/news/the-apprentice-2014-alan-sugar-gets-rid-of-the-nohopers-with-triple-elimination-9826264.html

Lastly, a real business innovation contrast with the above process. Two Imperial College of London computing graduates Ashley Brown and Simon Overell recently launched an online fraud-busting start up company (spider.io) which was then acquired by Google. Granted it was at least a year of intensive effort to create the end result (not two days as for The Apprentice tasks). My question is, would university graduates of the calibre of Mr Brown and Mr Overell have been attracted to join a series like The Apprentice, or is the instant loss of 50% control and the incentive money just too small to be worth bothering about?

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.

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).

Transformation of the Silicon Roundabout

I recently read an interesting Guardian article ‘The slow death of Silicon Roundabout’ by journalist Cory Doctorow. http://www.theguardian.com/cities/2014/mar/10/slow-death-of-silicon-roundabout

The article and some follow-on comments, neatly highlight some issues tech start-ups and wannabe start-ups face in large urban cities. In spite of central government desire for tech SME’s to proliferate, create jobs, boost overseas earnings and boost the tax receipts flowing back to government, at the local government level (below city level), the priorities are different.

Local government (below city level) might argue that, as its funding from central government diminishes, it’s forced to turn to large property developers to build new, high-density property, to replace near derelict properties in its jurisdiction.  Urban renewal, particularly if on brownfield sites, is desirable and helps cities rejuvenate. Likewise increasing the supply of inner city space helps to offset rental price rises (eventually). However, in my view, there’s an important role for local government to ensure that replacement property plans allow flexible use and include park space to offset higher-density effects.

On the park space point, Central Park in New York is a good example of consolidated park space co-existing with high rise, in (relatively) close proximity. London’s approach on park space has been to scatter large parks all around the city, which also works well. In the London of the future, is there scope to create elongated ‘strip’ parks in Eastern London, to offset future high-rise while incorporating cycleways, to separate cycle lanes from existing road users?

Returning to the Silicon Roundabout/Tech City article, a final thought. If the local government institution (Hackney Council in this case), want long-term occupants (workers, property renters and live-in property owners) occupying as much of its jurisdiction as possible, to contribute Council taxes and reduce the social costs (crime, fly tipping etc) associated with derelict areas, then why encourage purpose-built student accommodation development at the expense of tech city accommodation? As the journalist quite rightly points out, tech city is a diverse community of start-up services and organisations. Encourage a critical mass and it will spawn ongoing replacement (successful start ups move on and are replace by new ones starting out), in a similar way to market traders. In contrast, in allowing developers to build (overseas) student accommodation en masse in the inner city, the Council risks putting too many eggs in one basket, if the educational institution occupants aren’t themselves of top quality and since education institutions don’t appear to benefit from clustering together physically* (Eton & Harrow, Oxford & Cambridge, the US Ivy Leagues, excepting MIT & Harvard).

Best case, if elite higher education institutions move in and then attract successful companies to relocate alongside them, the Council plan will pay off handsomely. However, worst case, the Council will find itself surrounded by empty new build space, purpose-built for the education sector, vacated by non viable education institutions. And therefore reliant on other educational institutions to move to the area.

*In contrast, there are mutual advantages for commercial organisations locating physically next to research-led higher education institutions.

The golden age of innovation

Automation isn’t labour-saving, it’s creative time-releasing.

With the rise of the machines, doing clever design keeps our skin in the game.

As desktop engineering lands on our worktops, our design expertise, not our production time, will (hopefully) pay for the lifestyle we want.

Being a designer and an innovator isn’t a special talent. It’s a fundamental part of what makes us human.

How do we turn Council Estates/Projects into Cottage Industries and Intellectual Properties?

Invest money in Design houses not Designer houses.

Start Ups & labour-intensive processes – land of the free ideas and home of the brave investors.

Work-life balance becomes a balance of bank-balance probabilities.