Business Rocks: Making A Bad Decision Better

Bad news for Brits. It seems that people are willing to spend more time in a queue if they’ve already been standing around for a while in the line – even if there are other better options available.

New research by US scientists has shown that humans, as well as rats, will follow through on bad decisions rather than change their approach. The desire to cling onto the hope that the effort already spent will not be wasted clouds our ability to make the right choice.

You can see this phenomenon in action in business, not just in queues. Nokia’s decline and fall, for instance, was driven in part by management’s continued focus and investment in its clunky and underperforming Symbian smartphone software when other, far better options were available. Similarly, Kodak’s demise can be linked to its continued investment in chemical film processing and its unwillingness to change its business model to the new digital reality.

What about your business? Where are you doubling down on bad decisions when, deep down, you know you should be ignoring the investment already made and making a new decision?

 

Off The Record: Hungry Heart by Bruce Springsteen

 

Got a wife and kids in Baltimore, Jack

I went out for a ride, and I never went back

Like a river that don’t know where it’s flowing

I took a wrong turn and I just kept going

 

© Stuart Cross 2018. All rights reserved.

 

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Business Rocks: The Life and Death of Relationships

This week’s riff: An international research project has found that having the same family GP cuts the risk of early death by up to 50%. The study suggests that a strong relationship with your family doctor means that you are more open to sharing your issues and concerns and also more likely to follow their advice.

Although the outcomes are not quite so stark, the same principles apply to business. Hierarchy, on its own, only leads to compliance, not commitment. It’s the strength of your web of relationships with other managers, teams and stakeholders that really determines the success of your big projects.

All projects run into issues and problems. Where the relationships are weak, barriers can quickly halt the initiative dead in its tracks. Stronger relationships, however, allow you to work through the issues together, helping you to keep the project on course and accelerating its success.

How much time and effort are you putting into building strong, effective relationships with your colleagues and peers across your business? You may find that, as with patients’ relationships with their GP, it can be a matter of life and death for your most important initiatives.

 

Off The Record: Doctor My Eyes by Jackson Browne

Doctor, my eyes

Tell me what is wrong

Was I unwise

To leave them open for so long?

 

© Stuart Cross 2018. All rights reserved.

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Business Rocks – Failure Calling?

This week’s focus: Since I launched my consulting business in 2016, I’ve had the pleasure of working with some of the biggest and best businesses in across the globe. Ten years ago, for instance, I worked with the UK arm of Avon Cosmetics, helping the leadership team to develop a strategy for growth.

I would like to say that the work we did together step-changed the performance of the business, but over the past decade Avon has struggled to compete in a rapidly-changing beauty and retail world. As a result, the company has, over the past five years, lost 90% of its market value, and its share price has collapsed by over 50% in the past year alone.

When I worked with the UK team, one thing was sacrosanct: all the sales had to be delivered through the Avon representatives. This was the most sacred of sacred cows. The entire organisation was built around serving and supporting Avon’s thousands of representatives and management were fearful of doing anything that interfered with that relationship.

The reality, however, was that shopping habits were already changing. The rise of on-line shopping, with next-day delivery, was usurping the slower, more mechanical Avon process. What’s more, finding new representatives was becoming harder, as more women were working full-time and so had less interest in working for Avon as well.

These trends have accelerated over the past decade and while the business has changed to some of these realities, it’s been a case of too little, too late. I have a saying that goes, ‘nothing fails like success’, and Avon is a classic example of a successful business model that is pursued well past its sell-by date.

The conclusion to Avon’s story is that there can be no sacred cows in modern businesses. You must question everything and be as honest and objective as possible when facing into your biggest issues and opportunities. What are the sacred cows for your business, and which of them should you be questioning and potentially killing to help you thrive and grow?

Off The Record: Nothing Lasts Forever by Echo and the Bunnymen

And I want more than I can get

Just trying to, trying to, trying to

Forget

Nothing ever lasts forever

 

© Stuart Cross 2018. All rights reserved.

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Business Rocks – The Power of Simplicity

This week’s riff: Technology, globalisation and socio-political shifts are combining to create a more uncertain, complex world for businesses. Many companies respond by creating more integrated, joined up organisations, with matrix structures, a myriad of committees and shared responsibilities. They match external complexity with internal complexity.

These approaches may look good on paper but, more often than not, the result is a lack of pace, an inability to make decisions, and issues and opportunities falling through the accountability gaps. As Steve Elop complained in a memo to Nokia’s employees a few months after his appointment as CEO in 2010: “We have lacked accountability and leadership through these disruptive times. Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, the time it takes us to polish a PowerPoint presentation!

The most effective, agile and successful big businesses that I come across eschew this need for complexity. They have crystal clear, single-point accountabilities, lean and straightforward management structures and the collective discipline to deliver on their promises to each other; characteristics that you tend to find in much smaller companies. They understand the power of simplicity in a complex world.

How would you rate the simplicity of your organisation, and what steps could you take to make it simpler, faster and more effective?

 

Off The Record: The Mayor Of Simpleton by XTC

Well, I don’t know how to tell the weight of the sun

And of mathematics, well I want none

And I may be the Mayor of Simpleton

But I know one thing – and that’s I love you

When their logic grows cold and all thinking gets done

You’ll be warm in the arms of the Mayor of Simpleton

 

© Stuart Cross 2018. All rights reserved.

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Cross Shots Episode 11 – You Can’t Chase Two Hares

In this episode of Cross Shots I discuss how productive are you with your projects? Or are you chasing two hares?

 

 

You can view previous episodes of Cross Shots here

© Stuart Cross 2018. All rights reserved.

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Business Rocks: 115 to 6

This week’s focus: One of my key messages to my clients is the need to focus on their big priorities. Too many organisations get bogged down in vain attempts to move a million ‘strategic’ projects forward, rather than concentrating on the handful of initiatives that will truly help them achieve their goals. The phrase I use is a Japanese saying: You can’t chase two hares!

So, I was excited to learn that one of my clients, who has recently taken over the IT function of a major company has cut the number of IT projects from 115 to six! He explained that, largely as a result of the lack of focus, the team hasn’t been delivered a project on time or to budget in the last three years. What’s more, that the vast majority of the 115 initiatives had little relevance to either the company’s performance or its strategic ambitions.

By clearing the weeds, he is now far more confident that the team will make much rapid progress, achieve more and have a bigger impact on the business. I share his confidence and am looking forward to seeing the results.

How about your list of projects? How many are you currently ‘managing’, and how much more progress could you make if you radically reduced the number of initiatives and, instead, focused your time, money and effort exclusively on a small handful that will actually make a difference?

 

Off The Record: Busy Doing Nothing by Bing Crosby

Written by Jimmy Heusen-Van and Johnny Burke

I have to watch the river

To see that it doesn’t stop

And stick around the rosebuds

So they’ll know when to pop

And keep the crickets cheerful

They’re really a solemn bunch

Hustle, bustle

And only an hour for lunch!

 

© Stuart Cross 2018. All rights reserved.

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5 Unexpected Sources of Innovation and Growth

Managers value predictability; it gives them a sense of control over external events. In my experience, results that do not match initial expectations are not normally welcomed, and actions are quickly put in place to restore performance to expected levels.

Even results that are way above original forecasts are treated with suspicion and scepticism. Once, when I was leading a trial of a new retail format that delivered 25% sales growth, several executives bent over backwards to find reasons why the results weren’t credible and should be ignored!

Unusual events can, however, be the catalyst for innovation and growth. They represent an opportunity that should be exploited, not a random variation that should be quashed.

Spotting such opportunities requires an open, experimental organisation that is dedicated to delivering new growth, rather than simply protecting the status quo. Here are five sources of unexpected opportunities – which of them could help accelerate growth for your business?

  1. Unforeseen successes.

    No7, the skincare brand of UK drugstore retailer, Boots the Chemists, enjoyed a dramatic sales increases when one of the products in the range, Protect and Perfect, was shown on a TV documentary to actually reduce wrinkles. Boots massively ramped up production to meet the queues forming outside its stores and has since leveraged this success with further brand and range developments to drive further growth.

  2. Unexpected failures.

    Failures as well as successes can be a source for new growth opportunities. Despite favourable market research, sales of Coke declined when Coca-Cola introduced ‘New Coke’ in 1985. The company, however, re-introduced the old recipe, telling customers it had listened to them and re-emphasised the qualities of the original product. As a result, the company delivered significant sales uplifts.

  3. Small victories within bigger defeats

    When Lou Gerstener joined IBM in the mid-1990s, he led a company that was making record corporate losses. Within the core computer hardware business, however, he realised that the technical support teams were highly valued by IBM’s customers. Gerstener used his consulting background to turn this cost centre into a new business unit and, within 10 years of its launch, IBM Global Serviceswas delivering 35% of the group’s profits.

  4. Unexpected side-effects.

    3M, perhaps the avatar innovative company, only became successful when it moved into abrasives in the early twentieth century. This move was driven by a desperate desire to do something with the minerals and grit the company had on its hands from its failed mining business (3M’s name comes from its original title – Minnesota Mining and Minerals Company).

  5. Unforeseen external events.

    Economic shocks, technology breakthroughs, political changes and shifts in customer tastes can all dramatically affect product and service markets. Instead of bemoaning your fate, your focus should be in identifying what opportunity these changes create. Waitrose, the high-end UK grocer, for example, responded to the 2008 economic crisis by creating and launching its lower-priced Waitrose Essentials range which accounted for 15% of its total sales within a year, attracted new customers to its stores, and increased the number of items purchased by shoppers on each visit.

So, how do you turn unexpected events into innovation and growth? Here are three steps you can take tomorrow:

  1. Review your business and your markets for each of the five sources of opportunities. Identify both where you have made progress and where you haven’t seized the initiative, and agree specific plans for missed opportunities.
  2. For those areas where you haven’t identified new opportunities for growth, review and identify possible new business ideas and select those with the greatest potential for further development.
  3. In the face of unexpected events, create a mindset and approach that looks for the growth opportunity rather than one that merely seeks to minimise the risks.

 

© Stuart Cross 2018. All rights reserved.

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Business Rocks – Clear As Brexit

This week’s focus: What is the UK’s vision for Brexit? I’m not trying to make a political comment but, two years on from the referendum, I genuinely don’t know what either HM Government (Conservatives) or HM Loyal Opposition (Labour) want to achieve in terms of their relationship with the European Union. In terms of this week’s discussions on the Customs Union, for instance, the Brexit Sub-Committee doesn’t seem to be able to rule anything in or out, and Labour front bench politicians seem equally undecided.

For all I know, this uncertainty and confusion might simply be a brilliant British negotiating strategy aimed at keeping the EU – and everyone else – guessing. More likely, though, is that the delicate politics of the situation is preventing the development and communication of a clear vision for the future.

Without a clear idea of your destination, however, you’ll never settle on the best route to reaching it. Once you know where you’re going, however you will instantly become creative and relentless in getting there. As Jeff Bezos, the founder of Amazon, once said, “We’re fixed on the vision, but flexible on the journey!

The only companies I know that deliver real, rapid growth are those that have a clear sense of where they’re going. Like Amazon, the entire organisation is focused on reaching that shared destination. Everybody’s time and energy is centred on delivering the strategy, rather than continuously trying to determine and agree what it actually is.

How about your business? Do you have a clear and compelling strategic vision that drives the daily decisions and actions of your teams, or are you stuck in a Brexit-style Groundhog Day, where you are perpetually trying to work out the real objective of your organisation?

 

Off The Record: Theme From Mahogany by Diana Ross

Written by Michael Masser and Gerald Goffin

Do you know where you’re going to?

Do you like the things that life is showing you?

Where are you going to?

Do you know?

 

© Stuart Cross 2018. All rights reserved.

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Business Rocks – Spaces and Gaps

This week’s focus: I coach a talented Under 12 football team. When I say coach, what I mean is that, during training sessions, I put cones out (and collect them again), distribute bibs (and collect them again) and sort out any issues with boots. I call myself the team’s Head of Laces! The real coach is Nick, who has done a truly excellent job of developing the boys’ skills and abilities. So much so, in fact, that they now play in a national league, as well as against professional academies.

One of the things that Nick has been able to educate the boys about has been the importance of finding and exploiting spaces and gaps. When you’re on the ball, he will tell the lads, you shouldn’t be focused on beating your man, as that will lead you to moving the ball into a high-traffic area where everything becomes a struggle and a scrum (or scrimmage for my US friends!).  Instead, you should be focused on moving the ball into the available spaces and gaps, whether that is through dribbling or passing, so that you can more easily create goal-scoring opportunities.

It’s the same in other ball sports, including rugby, hockey, NFL, basketball and tennis. The key to success in all these games is an ability to find and exploit the spaces and gaps that become available on the pitch or court.

It’s also the same in business. The most successful companies are those that are able to identify and exploit the spaces in their markets where new opportunities can be found. The problem is that too many businesses and too many business leaders are solely focused on the equivalent of ‘beating their man’ – doing a bit better than their competitors – where they are inevitably slowed down in these high-traffic areas and are unable to see the spaces where new opportunities are possible.

What about you and your organisation? Are you focusing on the high-traffic areas where your competitors are playing, to the exclusion of all other activities, or are you also working hard to spot and exploit the spaces and gaps in your market and developing new growth opportunities?

 

Off The Record: Give Him a Ball (And a Yard of Grass) by Sultans of Ping FC

The lyrics of this punk band’s great song are based on the words of the legendary Nottingham Forest football manager, Brian Clough, and his description of his match-winning winger, John Robertson.

Give him a ball and a yard of grass

He’ll give you a move and a perfect pass

Give him a ball and a yard of space

He’ll give you a move with Godly grace

 

© Stuart Cross 2018. All rights reserved.

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Making Innovation A Way Of Life

In my experience, 70% or more of the attention of most senior executives is devoted to problem-solving, and up to 40-50% of it is on ‘fire-fighting’, resolving big, urgent issues as they arise.

If you wish to gain a stronger position in your market, however, you cannot simply be fixing problems.  Instead, you must devote a bigger share of your time and effort to systematic innovation, raise the bar on performance and create an organisation where innovation is a habit and way of life, rather than a strategic initiative.

A systematic focus on innovation requires these five steps:

  1. Make innovation your #1 priority.

    As a leader of your business, innovation must be your #1 priority, driving your company’s future growth. If you only give it ad hocfocus, your organisation will not believe that you are serious and will not give it the commitment you are after.

  2. Align your innovation focus with your strategy.

    What is the thrust of your strategic direction, and what kind of company are you seeking to create? For many years, for instance, Amazon focused its innovation efforts on three strategic priorities – providing customers with greater choice, lowering prices and increasing delivery speed.

  3. Engage and empower the whole organisation.

    Systematic, rapid innovation cannot be achieved by relying on a small team of R&D specialists; it requires the focus and commitment of the entire organisation and beyond (suppliers, partners, customers) if you want to create sustainable growth.

  4. Avoid bureaucracy.

    Innovation does not respond well to rigid process management. Err on the side of chaos if you want to create breakthrough growth opportunities for your business.

  5. Commit to action.

    There is no innovation without action. You will trip and fail along the way, but the fastest way to success is to avoid seeking perfection. Instead, you should take rapid action, learn fast and adapt your way to growth.

And, if you want to make instant improvements to your level of innovation, here are three initial actions you can make today:

  1. Critically review your time and identify the % spent on systematically driving and delivering innovation. Identify practical ways in which you can significantly increase this time.
  2. Reward, promote and recruit those people that embody the principles and skills required for innovation.
  3. Continuously find ways to involve individuals, teams and organisations – from both within and outside your business – in your innovation processes and projects, maximising the impact of their expertise on your future growth.

Innovation is no longer a strategic option but is a strategic necessity. How many of the steps laid out in this post could your organisation follow to make innovation a way of life for your business?

 

© Stuart Cross 2018. All rights reserved.

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