Last Friday I gave a brief presentation on scenario planning, to the research groupthat I consult to.
One of the things that came out of that all too brief session was that there is a very real lack of understanding of interdependency of nations and of industries in a globalized economy.
It is remarkable how little people who are involved in medical research, for instance, understand the potential for the results of the US election this coming week to have indirect, but highly material, impact on the funding of medical research.
Equally, researchers need to understand and appreciate the potential for there to be impact to research in Australia in the event of there being either a hung parliament in the next Australian election or in the event of a strong government that is Labour or a strong government that is Liberal.
Each of these, together with the impact of fiscal policy, will impact research funding. Similarly research funding will be impacted by the continuing rise of digital technology as it impacts universities and as online open courses erode the education / degree factory business model…
Scenarios give us at least one way of quite logically interpreting the future by taking a much keener interest in the present.
I have come to the conclusion that all of the personal coaching that I do, either through mentoring
creative people or teaching comes down to one thing: transition.
We are all in constant transition: moving from and moving to. How can we take some control over where we move to?
One key thing that I do with the students in my ARTS301 class is to get them to focus on writing a CV that captures the uniqueness of each of them. It took me years to figure out how to write a good CV, so I know that it doesn’t come easy. However, I believe that being able to develop a clear and purposeful CV is a very important discipline, just as I think being able to write a business plan is critical when starting a business. Writing things down requires that you think carefully about what it is that you want to do and how you are going to do it, and the implications that flow from your intent.Working through the problems that you encounter as you do do helps improve the way that you think and makes an investment in your business or you as an individual less risky and more appealing.
The CV is not only about crystallizing intent. It also helps you reflect on what makes you individual and special. When my students start writing their CVs they naturally tend to concentrate on putting down on paper the things that they think are important. So I see references to the description of the job that they did rather than what they learned as a result of it. I tend to see very little about the essence of them as human beings.
So at some point I ask the students to share with me and their fellow students one important fact about themselves that people would not know under normal circumstances.
At the class last Friday we conducted the exercise.
The results were remarkable. We found out about the young students who had rebuilt schools in Indonesia after the tsunami, who had helped rebuild villages in Cambodia, about a student who had been a refugee of the war in Sarajevo, about a student who had been a miracle baby, born after her mother had given up hope of successfully having a baby. It turned out that every student had done something remarkable in their lives; something transformational that showed they had depth and dimension in their character.
I try to get them to find a way to express their uniqueness in their CV, so that they understand that every experience that they have had is quite unique, and it is what they take away from the experience that is of interest to a future employer and not just the raw fact of having worked in a particular role for a period of time.
The methodology is perhaps an adaptation of appreciative inquiry – helping to identify and then celebrate good experiences and build upon them. For me this process of identifying unique experiences is a way to help people on the road to self-actualization and understanding their own authenticity.
Innovation has been a hot topic for quite a while. Recently it seems to have gone mainstream. Companies want to
innovate. Universities want to innovate. Governments want to innovate. Why? Because if you are not profitably creating new ways to solve problems, someone else is, another company, another country…. and the ownership of the knowledge of the how, of the underlying intellectual property, of the processes… these all add up to becoming economically superior and sustainable.
Over the last few years I have spent a good deal of time thinking about innovation and ways to deliver it. My take on innovation is that the critical ingredient is to encourage and motivate young graduates from university the tools of the trade of entrepreneurship, company formation, wealth creation, and more particularly how social systems work that provide wealth for investors.
This week two things happened that I found interesting and worthy of sharing. First, I went to a conference/forum focused on innovation: Innovating Innovation Australia. A small group of successful and battle hardened veterans of business – and academia – met to discuss how to generate more traction for innovation in Australia – i.e. for taking invention and ensuring that it has value to the market.
Some people at the conference suggested that we should be lobbying Tony Abbott, since clearly there is going to be a change of government in the not too distant future. One of the things that I feel passionate about in this regard is that there is utterly no point in trying to engage with any of the political leadership in Canberra at this point in time. I said publicly at this forum what I have said privately before to friends – many of whom are successful and wealthy business people: “We have a lack of leadership in this country on both sides of politics, and under those circumstances it is the responsibility of the people to act to deliver solutions and not to look for any kind of favour from Canberra”. That doesn’t mean that we should revolt in the streets or anything like that. But it means, in my view, that we should stop trying to involve government by lobbying them for assistance, and instead, we should get on with acting, and arrange our affairs in the optimum way for financial benefit. Then report to government what those actions mean to the nation. We live in a world driven by metrics. The only way that we should expect people to respond usefully, when they are in positions of power, is by showing them the numbers.
In the case of Australia, where for instance, tax laws are totally out of step with those in the US, for entrepreneurs, we should be showing government as accurately as we can, how businesses that produce incredible capital growth are leaving the country. One business that I have had a close association with during the planning stages, and which is going to be funded by US based venture capital is going to be created in Singapore, for exactly this reason, with a subsidiary in Australia. This will mean that the company will avail itself of grants from the government, but the majority of the IP will be housed in Singapore, and the capital value that is created will be off shore. Ludicrous, isn’t it? That an innovation from Australia will become valuable, not to Australia but to Singapore. But this is how capital functions. Government won’t do anything about this unless they see it happening. There is no point in warning government and trying to get them to act strategically. There aren’t any votes in it.
The matter of normalization of tax laws is made even more shocking if you look at the way that Australia works with the US in the matter of intellectual property protection. Australia signed off on ACTA, the trade agreement for the protection of copyrights. That agreement is so incredibly oppressive that most Eurozone countries have rejected it. Yet, in this country, we ratified ACTA and we didn’t amend our tax laws. We have tax laws that require people who participate in company formation, to pay tax on options as if the options were real cash – unlike in the US, where there is no capital gain on an option, because it is just worthless paper until the cash is realized!
The other thing that happened this week that has bearing on this, was that I was sent a contract by the university where I do part time work. I have had contracts with the university before and have just signed off without too much thought (not a smart thing to d0, I agree!). For some reason, this time I read the agreement more carefully. I noticed a clause in the agreement that said that by signing the agreement I would be bound by the university’s IP policies. Since I have a role in a number of businesses where I assist with ideas that sometimes lead to the creation of new IP I was a bit concerned about agreeing to something that I was not in a position to deliver on. I have this rather quaint concept in my head, drummed into me by my father, when I was a teenager, that integrity is the most important thing that anyone owns. There was no specific allusion to what the IP policies were in the agreement, which I thought was strange, so, after making some inquiries, I went looking for them.
I found them, after drilling down through the website. The policies are so utterly onerous with regard to the possible and hypothetical creation of ideas that I sent a copy to an IP lawyer in Sydney who is a good friend. I asked him for his comments. I noted one clause in particular, which dealt with the methodology for dealing with the creator in the event that the university was either unsuccessful in, or disinclined to commercialise.
His informal response, in part, was as follows: “The quote you cite is indeed preposterous in its second half. The bit “provided that the Creators have been cooperative” would result in long-winded back and forth legal trench warfare, which only those with money behind them (the university) could sustain.”
My belief is that if government is to play a part in assisting in the birth of innovation, is that they should regulate that universities may not ever take a controlling position in any piece of IP that is created; that the inventor should always have the majority of control. That way the entrepreneurial spirit becomes the driver. The universities will reap their rewards from the downstream economic activity.
In the next month in Sydney there will be a lot of attention on connectivity.
First there is the XMediaLab conference and the accompanying workshops to be held at the Sydney Opera House. Then there is a much smaller event to be held at the Sydney Business School – Hyperconnected.
Both of them are working to provide a glimpse into the future of the impact of technology on media, and the impact of media on society. Hyperconnected is different in that its focus is on the importance of geography on culture, and how a true high speed broadband digital artery between the countries in the same time zones as Sydney will work together to create media. And for that media to have significant societal impact locally and then globally. Should be provocative and interesting!
One of the most difficult things to do these days is to focus.
There are so many distractions vying for our time, and while we may think that we can multitask, parallel process, and generally do everything, the reality is that we still live our lives in a linear way and to achieve great things we need to focus.
The big question gets then gets to be what to focus on.
A lot of people find it very difficult to look beyond the system itself. They see the whole and that is as far as it gets. This is a product of a lot of things – and it starts with “the complexity of everything”. The complexity of everything is what you get when you integrate digital technology into what used to be relatively simple tools and devices. The telephone was in its first incarnation an utterly magical device in terms of the difference it made to society, and yet from a technical point of view it was quite simple: a few very simple electrical circuits connected by copper wires to a network that was physical, that a relatively unskilled engineer could service and fix. Now we have smart phones that have extraordinarily complex circuitry, which you throw away when they break – they are too complex to fix and the cost would be greater than replacement.
Virtually everything that is digital is really complex.
People are becoming used to this and now not only do they assume that they will never understand what goes on inside the “black b0x” but they also form the view that everything is complicated, and therefore they don’t need to know how things work. Someone else will do that.
But what this leads to is that people don’t take the time to think about how systems function. Because they don’t think about this they don’t realize that to build anything of value you have to be able to construct the system architecture at the outset, and if you want to understand why systems go wrong, you have to be able to de-construct that same architecture in order to understand where what I might call “the fulcrum of understanding” exists. By this I mean the key idea in the system – the concept that is the reason for the device’s existence.
This is often not what you might think when you look at the device or the system from the outside. Sometimes in today’s complex management systems the rationale for existence lies a fair way distant from what we see from the outside. Take Google as an example: Google indexes the world’s information. But it has to make money to afford to do so. It does that by selling access to words. That is a long way from me searching for some inspiration for a lecture that I am going to give…
In establishing businesses and in identifying how to fix businesses that are broken, the investigation of the system architecture of the business is a key ingredient to solving the big problems. It takes a lot of skill and a lot of time and often a variety of skills. It requires an ability to reframe problems too.
The key to this is to understand that to deliver an outcome often you have to focus not on the end goal but on the tactical goal that is the entry point of solving the problem and in getting to that point you find that you discover a lot more about the end goal and how to get there than where you started. I work with students who forget that to get hired first you have to figure out how to get interviewed. Equally I work with CEO’s of companies who forget that in order to raise capital you first have to get an understanding of what your investor is going to want to see you present….
And the more that the devices that we use become complex, the more difficult it is for people to appreciate the need to identify where the fulcrum of understanding lies. Finding it is the key part of developing strategy.
Google is a transformative technology, of that there is no doubt. However its ability to effect change are creating some unforeseen business impact.
I was talking to someone on the weekend who has some keen insights into the ecosystem of grass… Yes that’s right – that cash crop that everyone knows is at the heart of many economies but which no one will admit any personal knowledge of.
He was telling me that supply is drying up because of the improved resolution of Google Maps which is aiding the police in improving their productivity. Apparently the improved resolution means that the police can use Google to search a landscape looking for pattern changes in rural growing areas that are indicated by: irrigation systems, changes to game paths through bushland, etc. Once identified, they send in choppers with thermal imaging capabilities…
It shouldn’t be remarkable that disruptive technologies not only disrupt legitimate businesses such as P2P disrupting the music business, but also disrupt established supply chains in illicit businesses! However I thought it was an interesting twist.
I was at a conference yesterday in the nearby town of Nowra.
It was put on by and for local business people. As the
organizer, Linda, said to me, its the kind of event that when times are tough, small business people should participate in and attend.
I talked about disruptive technologies and how they could change for the better and for the worse those people and businesses – that either embraced them or ignored them…
One of the questions to the panel from a local lawyer who is a mover and a shaker in the town was what of these new technologies could help generate interest from the 25-39 year olds to visit and to move in to the town. (f you don’t know Nowra you might want to know that this is a town that has been hollowed out economically for a long time. But it has a naval base, part of the UOW campus, and a substantial amount of light industry in it). So you would have to think that with these ingredients there would be the basis for real economic growth.
My immediate suggestion was for the town to install free wi-fi. A bit lateral perhaps and as it happens this is about to happen!I figure that with free wi-fi you have a platform for local business to advertise to people who log on, you get to capture a whole lot of information about customers, and you create a reason for people to spend time in the town centre too. While they are walking around they are going to start shopping.
My second suggestion was that they need to create a new industrial hub in the town and it has to be one that is “smart”. My suggestion is that the town should create an incentive for a technology business in the health sector to come to town. The incentive could be a long peppercorn rent on industrial premises for instance. A company that requires highly skilled workers who have degrees brings in people who want good schools, good services, good shopping and products, and have disposable income. It will help change every sector of the local economy as well as requiring unskilled labour for the basics. The more highly skilled jobs you create in a town the more you drive all sectors of the economy.
But it does need incentive and that means that the local council will have to understand that a commitment is required.
Isn’t it amazing that in a world in which so many things are so obvious, so many people keep on ignoring the signs.
When there is so much momentum for change so many people keep thinking “same”.
Steve Jobs had a great instinct for the signals of change and the way that one mans infrastructure in a digital age could become everyone’s…. and that uncanny ability to understand what the customer would want and to deliver it was what made Apple so valuable as a company.
We have all witnessed the changes in the distribution of music and movies. When digital technology was launched thirty years or so ago, it delivered huge benefits to the music industry. It enabled improved recordings to be made. It delivered new effects in the studio. It meant that the discs that could be created using scalable manufacturing would be less expensive per unit in raw manufacturing terms; they would be lighter in weight taking up less space which meant cheaper shipping costs; and as a windfall surprise, it led to consumers totally replacing their music collections. So the whole catalogue got sold twice! But music companies thought that it was their smarts that brought them the fabulous hockey stick growth that they suddenly experienced, not consumer choice.
As the digital wheel turned it and tools became easier to build along came the mp3 and then Napster and digital disruption broke loose. The consumers took charge….
The music companies resisted change – and quite aggressively as we all know. They still do. The new reality is that the music companies are almost totally beholden to Apple for their revenues. They don’t like it, but they have had to adapt. But Apple and perhaps Steve Jobs in particular, knew how to both anticipate and to manage consumer expectations from technology.
In retail there are a few emergent people globally who have Jobs-like vision for retail. Steve Bezos has to be one of them. What he and others like him will do next will be interesting to see. What is clear though is that retail in Australia is starting to go through the same evolution as music. Big retailers have been enjoying the margins from selling big box, big ticket items, but China’s manufacturing output means that supply is constantly looking for demand and the player that delivers big consumer price benefit while not reducing quality has to become the winner. As a result companies like Harvey Norman are experiencing the same sort of pain that the big music labels went through… And while they haven’t died yet, the game is far from being over.
Now it may be useful to consider this: In the UK a year ago research was undertaken at one of the leading universities into crime statistics. It seemed to the researcher interesting that the ‘breaking and entering’ statistics kept going down, while at the same time there was continuing speculation in the media about the need for more police. The research established that indeed breaking and entering had almost disappeared, and the conclusions that were established after interviews with traditional criminals associated with this kind of crime were quite revealing. They said that because of the advent of cheap Chinese white goods in the high street stores the price differential for selling “hot” stolen items was too small to make the risk of being caught worth while!
Thievery was stopped by Chinese manufacturing. (Reported street crime went up with the main things being stolen being iPhones and other portable technology).
Retail is going through a similar wrench as the music industry and it seems to be difficult for the people in charge to come to terms with the concept that they are going to have to utterly throw away their pre-conceptions of their business structure in order to survive. They are now past the peak of the profit curve. You can read data that has recently been published that suggests that Australian online retail still only accounts for around 1o% or less of total retail sales and think that this is not a big deal. But the macro numbers are not the issue, just as with the music business. Its the micro numbers and how they add up. Online sales are being seriously disruptive.
Bricks and mortar retailers have a totally different cost structure to the online sellers. We all know that. What is not generally understood is they also have legacy systems that they have spent fortunes on that are just not efficient enough to meet the dynamic requirements of markets now. Now retailers have to have real time knowledge of inventory, not daily reports that require batch processing of data. Ironically, the bigger the retailer, the less in touch they are with the true numbers. And the accountants don’t want to have to invest in new systems. And the systems integrators don’t want their big clients to switch. So the charade continues just as it did in the music business. Those who are in the legacy supply chain try to maintain it… because they are fearful that the alternative may be digital anarchy with the customer knowing too much and systems being able to be hacked by the crims. Its a unenviable position.
And we are about to head into an even braver new world with the advent of Additive Manufacturing. (By the way I am putting on a conference on additive fabrication on April 23rd. You can find out about it here.)
With additive manufacturing you can print three dimensional things. Its pretty amazing and is in the process of going mainstream, and it too will over the next few years utterly alter the landscape for product manufacture, for retail, and for the consumer.
What it will do first though is to provide inventors and product developers with the ability to manufacture prototypes quickly and inexpensively and then manufacture those products in the least expensive manufacturing geography. Disruption traveling up the supply chain as well as down!
There is only one place to be in this digitally disrupted world, and that is on the side of the customer. And those who understand how to apply their knowledge of how infrastructure functions and who can think laterally about the applications are going to be very seriously in demand.