Fundir ou eliminar marcas

A propósito deste artigo "Why Consolidating Brands Can Be a Strategic Mistake" que termina assim:

"The lesson for managers? Don’t confuse your sense of the company’s identity with your customers’ sense of your brands’ identities. If you do, you’ll only spread your own confusion."

Faz-me recuar no tempo:

• Modelo e Continente (2016)
• Será uma boa decisão? (2011) 
• Proposta de valor e marca (2009)
• Qual será a actual proposta de valor do Millennium BCP? (2006)

O artigo inicial chama atenção para o que a maioria esquece:

"Interestingly, companies that are expert in branding are usually comfortable with managing the brands separately. Executives at P&G, for instance, have a very strong sense of corporate identity even while they manage a huge portfolio of standalone branded businesses – and with multiple brands in each segment."

Julgo que a maioria dos decisores por fusão ou eliminação de marcas não percebem que os clientes são heterogéneos e valorizam diferentes propostas de valor. Como só pensam em reduzir custos, passam ao lado de um instrumento de marketing que podia ser utilizado de forma interessante aqui em Mongo.

“whether you can observe a thing or not depends on the theory which you use” (Parte I)

No sábado passado comecei a ler, a saborear, este artigo, "The Theory-Based View: Economic Actors as Theorists" de Teppo Felin e Todd R. Zenger, publicado por Strategy Science Vol. 2, No. 4, Dezembro 2017, pp. 258–271.

Foi uma excelente surpresa. Uma abordagem sobre a estratégia com algumas novidades e sob um prisma completamente diferente do habitual. Algumas das ideias alinham-se com algumas das nossa reflexões (como em "Para assentar ideias").

"In this paper we focus instead on economic actors’ capacity to theorize, just like scientists, and argue that the theories actors generate animate markets and reveal paths to value creation.
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To address the limitations of an omniscient and efficient view of markets, strategy scholars have postulated several alternative value-generating paths to heterogeneity. Two seem particularly salient for our purposes. First, heterogeneity may reflect a firm’s initial resource endowment that results from luck or the firm’s unique history. These initial endowments provide a source of difference and latent possibility and a vehicle for building capabilities over time. Second, heterogeneity may result from cognitive limitations and behavioral failures. The fact that the rationality of some market actors “falls short of omniscience” creates heterogeneity and opportunities. Economic actors neither act rationally nor omnisciently when purchasing assets and making economic decisions — because of cognitive bounds and the limits of human information processing — which in turn leads to heterogeneity. In short, the suboptimal decisions of some economic actors open up the possibility for creating and finding value.
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While the two above sources of heterogeneity provide useful explanations, we suggest an alternative path, one that emphasizes the human capacity to ask novel questions, frame novel problems, and compose novel theories.
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Whether in the realm of scientific discovery or economic value creation, theories guide perception and observation—they shape what we see. As simply put by Einstein, “whether you can observe a thing or not depends on the theory which you use”. In other words, without questions and theories, things in our environment—even obvious ones— often remain hidden and outside our awareness. Our physical reality and environment has a large if not infinite variety of features, characteristics, and possibilities that remain latent or dormant. However, theories provide a mechanism that allows for salience and unique observation. Novel theories, sparked by novel questions and novel problem frames, allowus to see, look for, and express that which may previously have escaped awareness. And importantly, the reinterpretation of even mundane objects, events, occurrences, or readily visible factors may take on completely new meaning and insight in light of the novel theories we possess.
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Economic theories of value, as held by entrepreneurs and managers, are no different in shaping what is observed. These theories, as animated by questions and problems, provide the underlying instruments and vehicles for identifying previously unseen sources of value. [Moi ici: Recordo aqui o caso do burel e outros] They reveal new possible uses and functions— called “affordances”—for common objects and new combinations. While traditional approaches to markets focus on prices and the informational content that price might provide, economic actors with theories and opinions—as we will discuss and illustrate—can identify sources of value in unpriced factors or identify unpriced value by identifying new uses and affordances for assets.
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Perception scholars have persuasively shown that there is no way to exhaustively capture or represent a visual scene or environment. Any visual scene has a massive number of features and characteristics that could be attended to, and thus we necessarily attend to the world in more directed and focused fashion. Organisms—humans included—attend to their surroundings not in a computational or camera-like sense but rather through the questions, problems, hypotheses, and theories that they have in mind and impose on the world. Thus salience and observation, in terms of what we are aware of, are driven by theories and questions and not by the inherent characteristics (called “natural assessments” in the literature), presence or even nature of objects. This intuition, intriguingly, was featured in some of Simon’s early work, when he argued that “a subject perceives what he is ‘ready’ to perceive in it; the more complex and ambiguous the stimulus, the more the perception is determined by what is already ‘in’ the subject and less by what is in the stimulus”.
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Essential to our theory-based view, then, is the recognition that we attend to our surroundings and environment looking for something, rather than neutrally recording or scanning its contents. This “looking for” is different from comparison or calculation. Here salience and awareness are driven by the questions that we impose on the world, and the search for specific answers.
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Perception and observation are never neutral, or some kind of pure, mind- or organism-independent recording or capturing of what is objectively there, but rather “observation comes after expectation and hypothesis”. ... Thus, the mapping is from mind-to-world rather than world-to-mind.
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In sum, we argue that perception and observation do not happen based on the actual nature or characteristics of stimuli or objects themselves but rather it happens on the basis of the questions and theories that economic actors impose on situations and environments. This leaves the world poised for constant reinterpretation and possibility, as perception is not passive or automatic, but generative, though requiring a theory and “readiness to perceive”....Thus, we see theories within the context of economics and strategy as serving the same function as they do in human and scientific contexts as well. They are the human “Suchbild”—search or seek images— that direct our attention and awareness. Theories represent instruments for making previously unobserved facets in and of the environment more salient. And theories of economic value guide our awareness toward specific observations and factors that may readily have been missed by others and reveal potentially valuable assets and opportunities others overlook."

E quem manda no dono da prateleira?

Em Dezembro de 2007 neste blogue escrevia-se:

"Quem controla a prateleira, controla o acesso ao mercado, controla a relação com os clientes.
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Se uma empresa produz um produto, mas não consegue chegar aos consumidores, esse produto e essa empresa não existem!"

Em Fevereiro de 2012 neste blogue escrevia-se:

"A única forma de fazer frente ao poder do dono da prateleira é seduzir aquele que manda no dono da prateleira, o consumidor!!!"

Há dias em "The relationship with the customer" Seth Godin bate na mesma tecla:

"There are countless factories vying to sell generic products to the companies that own the customer relationship. Perhaps 90% (sometimes 100%) of the profit goes to companies that make the sale, not the ones who actually made the product.
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That’s because while they make the thing, they don’t do the work. The hard part is earning attention and trust. The hard part is helping someone make the choice. (There’s a difference between the hard part and the important part. Without the factory, there’s nothing to sell. Making it is important. But increasingly, it’s not the hard part.)
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Either you’re doing the hard part or you’re left out of the transaction."

O que é que a sua PME faz para não ser excluída da mente de quem manda no dono da prateleira?

Curiosidade do dia

"Entretidos a distribuir, estes amigos parlamentares esqueceram-se de competir e não trouxeram nada de novo (e até, como na política de saúde, proibiram o que havia de inovador) a uma economia estagnada com uma população em processo de envelhecimento rápido e irreversível. Estes amigos ignoraram que a responsabilidade política é construir o futuro, não é distribuir o passado.
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Para sair desta armadilha precisa de assumir a necessidade do regime de rendimentos crescentes, desistindo da ilusão distributiva de tirar a uns para dar a outros - porque acabaremos todos sem nada, o que é o destino final dos regimes dos rendimentos decrescentes."

Trecho retirado daqui.

Practicing the noble art of cheating (part IV)

Parte I, Parte II and Parte III.

We have a strategy map and we assigned indicators to each strategic objective. For each indicator we can measure current performance, the today's results, and we settle targets for future performance.

As we wrote before in Part III, today's organization generates today's results in a perfectly normal way. More demanding future desired results have to be generated by a different organization, the desired future's organization. So, to get that performance improvement we need to tramsform the current organization.

There is no chance. Sustainable performance improvements don't happen by accident.

Normally, we set a time frame between today's result and meeting the target. For example, we say that in the next 12 months the organization will increase its productive capacity utilization rate from 55,9 to 85%.

And I question you: Why 12 months? Why not tomorrow or next month?
And you answer: Because we are not yet the organization of the desired future, the one able to generate the desired performance.
Then I add: the strategy map is a theory, a hypothesis about how the organization will improve its performance, but the present organization is still not there.

So I ask: where are the weak spots that prevent us today from having the desired future performance? Concentrate on them, they are what restricts us, what constrains us from achieving our goals.

Let us look into the gap between today's results and desired future results as a perfectly normal and legitimate product of our current set of processes (that's how we work, how we manage, how we train, how we learn, ...)
Those current processes include within, a set of systemic structures that conspire (I use this word here because it seems perfect for what I want to communicate) so that today's results differ from desired future's results. Those systemic structures generate behavior patterns that quite naturally are behind today's results.

To eliminate the gap between today and the desired future we need to identify and eliminate the root causes behind those systemic structures through a set of action plans, strategic initiatives, which will transform today's organization into the desired future's organization and that way generate the set of processes of the future.

We will use a trick to identify the systemic structures: compare current performance with desired future performance. So, plunge into that gap and identify a negative fact. A fact is a fact. A fact cannot be denied. A fact is no theory. Everyone can see that fact. Be as specific as possible.

Gather a diverse group of people who together know the organization at several levels and from different perspectives. Ideally most of them were present when the strategy map was drawn. Remember to all the strategy map, the importance of the cause effect relationships and highlight the fact that the organization is still not the organization of the desired future, highlight the gaps in performance and give everyone a generous amount of sticky notes. Then ask them to individually and anonymously write a negative fact per sticky note and record as many negative facts as anyone can.

An example of a negative fact can be:

1. The machines have been down for a long time (x hours or y%)

When everybody finishes with the negative facts ask them to keep their facts secret and ask them to speculate. Ask them to give their opinion. Ask them to write down the causes that they think are behind each of the negative facts.
One cause per sticky note
For example:

A1. We do not perform preventive maintenance

B1. We have no critical spare parts

When everybody finishes with the causes ask them to give a final step and ask them to write down their opinion about why each negative fact is important for our strategy execution. One reason for importance per sticky note.
Example:

a1. Lost production capacity

This is what we are doing:

In this way we draw a cause-effect relationship anchored in reality, in a negative fact, something that no one can deny.

Negative facts are real but they can have no impact in the organization's strategy. 

I always use the example:

The company's last Christmas party was a failure.

Truth? Yes!

Relevant to the strategy? Most likely not!

So, we must test the importance criteria and check if they have any connection with strategy. Check if the importance criteria violates any promise from the strategy map:

In this example: Lost production capacity clearly goes against complying with prodution plans and maximizing usage capacity.

This way of working with facts, causes and importance criteria make us look into the organization at different levels of abstraction:

The following table can represent the contribution of one person:

Imagine that your team has 7 persons. 

Imagine that each person records 5 negative facts. So, you will have 35 cause effect relationships.

Imagine that 5 are similar to others. So, you will have 30 cause effect relationships.

Test all those negative facts to check if they are really relevant for strategy:

Now, look into the set of 30 cause-effect relationships and see if you can find new relationships among two of them. For example:

The effect "a1.Lost production capacity" acts as the cause that generates the effect "A3.We have stock shortages". And then A3 becomes the cause that generates "3.We carry unmatured product"

Go back to the remaining 28 cause-effect relationships and see if you can find one that relates very well with this two. Normally, people find more and more relationships. After some they will start to write new sticky notes because seeing all these at a wall make them find new relationships (that is why I use a codification for each individual negative fact, the new ones have no code, they are a product of team interaction)

After some iterations we can get a picture like this:

That is why I like to use the word "conspiracy".

Can you see how many feedback loops we have acting on the system?

If we want to improve we have to break this self-reinforcing cycles.

This post is already too long, in Part V I will present my technique to go from the conspiracy cycles into a set of very focused action plans, the strategic initiatives.

Other examples of conspiracy cycles (in Portuguese) here, here and here.

"The Great Sparrow Campaign" - gente perigosa (parte II) ou Heterogeneidade dos mercados (parte III)

Esta manhã ao ler um artigo delicioso, aborda o tema da estratégia sobre uma perspectiva psicológica que nunca tinha lido, a certa altura escrevi na borda do texto digital: (cromos, galeria, Zapatero, cemitérios).

Agora acrescento "realidade aumentada" segundo esta abordagem em "Para assentar ideias". Neste texto escrevo que, tal como no artigo que ando a ler, a realidade existe, mas nós não somos capazes de ver a realidade, nós só somos capazes de ver aquilo que a nossa experiência nos preparou para ver. Por isso, quando o mundo muda, é fundamental ter gente sem mapas cognitivos castrados em posições de poder, para não estarem demasiado prisioneiros do passado. Por isso, escrevi que o melhor era Zapatero sair. Por isso, coleccionei a galeria de cromos, gente formatada numa época e incapaz de partir o molde onde foi educada. Como não recordar Napoleão:

Por isso, apontei "cemitérios" por causa de uma frase de Max Planck: "Uma nova verdade científica não triunfa convencendo seus oponentes e fazendo-os ver a luz, mas porque seus oponentes finalmente morrem e uma nova geração  que está familiarizada com ela cresce".

Em Portugal, com as mesmas caras há décadas nos cargos de poder parece que continuamos sempre a combater os desafios de hoje com a mentalidade que formatou essa mesma gente no tempo em que não havia nem internet, nem União Europeia.

Em ""The Great Sparrow Campaign" - gente perigosa" escrevi mais uma vez sobre os jogadores amadores de bilhar, um tipo de gente muito perigoso. Gente que Reich apelidaría de Zé-Ninguém, só capaz de ter um horizonte temporal entre o que almoçou e o que vai jantar.

Em Março e Dezembro de 2016 escrevia aqui que havia uns aprendizes de feiticeiro à frente da APROLEP. essa gente queria acabar com as importações de leite, esquecendo que Portugal exportava mais leite do que aquele que importava. Claro, em 2018 a brincadeira rebentou-lhes na mão, a medida que defendiam em 2016 para impedir as importações de leite, arrasou as importações de leite em Espanha, leite que era exportado por ... Portugal.

Esta semana li um texto que me fez lembrar os aprendizes de feiticeiro à frente da APROLEP, desta feita acerca das importações de carne... here we go again, "Defender a Agricultura, defender Portugal":

"A agricultura é a arte de produzir alimentos para a sociedade, [Moi ici: Estou farto de escrever aqui no blogue que a função do agricultor não é alimentar a sociedade, a função do agricultor é ganhar dinheiro através da prática da agricultura. A sociedade não quer saber dos agricultores, quer produtos agrícolas baratos nem que venham da Ucrânia. Por isso, o agricultor não deve ser trouxa e deve trabalhar para quem valoriza o fruto da sua actividade. Adiante] ocupando o território e fixando pessoas, que, através da sua actividade agrícola, mantêm os territórios limpos e ordenados, contribuindo para a manutenção da fauna e flora autóctones. [Moi ici: Sim, a começar pelos eucaliptos, não é?]
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Portugal é deficitário em carne, e nesse sentido deve apostar em equilibrar a sua balança comercial através do aumento da sua produção nacional.[Moi ici: Cuidado com a estratégia cancerosa, que destrói a joalharia]
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É com este tipo de medidas que iremos conseguir reduzir a nossa pegada carbónica, ao contrário do que nos tentam vender dizendo que a carne importada até é mais barata… e onde os custos ambientais já não são tidos em conta, como é o exemplo do recente acordo da UE com o Mercosul. A Fenapecuária é literalmente contra este acordo, considera mesmo que é um acordo desleal para com o sector e solicita a todos os partidos políticos que reflictam bem sobre o que está em causa.[Moi ici: Gente ao nível de um Nuno Melo e do seu grito contra os paquistaneses. A um produtor de carne eu aconselharia a subir na escala de valor, a fugir da concorrência pela quantidade e preço e que apostasse na joalharia]
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Os portugueses merecem saber que as condições e regras de produção não são as mesmas, os portugueses merecem saber que o sector pecuário nacional é moderno, respeita as regras ambientais, cumpre com o bem-estar animal,"[Moi ici: Indo por este caminho, alimentamos o discurso que legitima alguém na Alemanha, ou em França, dizer que a carne portuguesa é produzida em condições e regras de produção que não são as mesmas. O karma é lixado!]"

Mongo = paixão!

Em "Less Than Zero: The New Normal for Interest Rates?" leio algo que não é novidade:

"Given the number of savers desperate to lend money to someone who offers a great return, why aren’t there more start-ups, VCs or large companies investing in productive projects? Aren’t there enough projects that produce a positive rate of return? The answer to this question is a depressing no. The low growth environment we have witnessed since 2005 tells us that something else is happening on the demand side. It’s not just a global saving glut; there is also a shortage of investment at the global level.
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Companies holding record levels of cash or borrowing to fund share buybacks are both signs of a world short on good ideas and investment opportunities."

E recordo "O padrão Mongo" de Dezembro de 2015.

É como aqueles tipos que vão ao Shark Tank apresentam a sua ideia e, todos os tubarões elogiam a ideia, desejam boa sorte, mas resolvem não entrar com capital porque dizem: é um negócio pequeno, não há dinheiro para eu ganhar.

O futuro não é para gigantes (empresas grandes), gigantes = suckiness! Mongo = paixão!

Heterogeneidade dos mercados (parte II)

Em "Heterogeneidade dos mercados" sublinhámos, com o exemplo da China, que se pode ser muito bom a produzir e a exportar um produto e, no entanto, precisar de importar esse produto para outra segmento de mercado.

Outro exemplo que poderia ter utilizado no texto inicial é o do mobiliário. Portugal exporta mobiliário caro, e importa mobiliário barato.

Um outro exemplo que acrescento agora é "Fast Fashion Must be High-End to Compete in China". Podemos logo relacionar o título com o exemplo do calçado. Os chineses produzem calçado barato, não precisam de importar calçado barato. Daí que o preço médio de um par de sapatos importado pela China é substancialmente superior ao preço médio do calçado importado por países como a Alemanha, França ou a Holanda:

Voltando ao artigo sobre a fast fashion na China:

"While overseas fast fashion brands were quick to enter the Chinese market, they’ve had a hard time competing with local online retailers on websites like Tmall and Taobao. Chinese tastes have also shifted toward more elevated options, which offers an opportunity to high-end, fast fashion brands but hurts entry-level fast fashion. McKinsey & Company’s research suggests that more than 75 percent of China’s urban consumers will enter the middle-class bracket by 2022.
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“Chinese consumers have easy access to a variety of home-grown and affordable fashion brands online that pose a bigger challenge to brands like H&M and Zara,” says Ray Ju, the New York-based senior consultant of the global brand consultancy Labbrand. As this consumer steps into a new bracket, they are looking for new options that they can’t already find online: clothing with an affordable price point but with higher quality and design.
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Local customers have shown waning interest in fast fashion in recent years, complaining about bad quality and uncompetitive prices compared to local brands on Taobao."

Practicing the noble art of cheating (part III)

Parte I and Parte II.

So, instead of starting to draw a strategy map based on abstract concepts such as mission and vision, we showed in Part II how we do the other way around and start with an example of organization-customer fit and do the exercise of going from the concrete to the abstract.

In this post "Opportunities are not just out there, ready to be plucked" one can read about the "Shaping Ability":

"Opportunities are not just out there, ready to be plucked. Courses of action that can be superior often require proactive efforts to shape selection criteria for their potential to be expressed."

Yesterday, during a morning walk I read "Crossing the chasm: Leadership nudges to help transition from strategy formulation to strategy implementation", from Alex Tawse, Vanessa M. Patrick, and Dusya Vera, and published by ScienceDirect. I think this article can be used as an introduction to the challenge of developing an approach to implement a strategy.

"The issue of crossing the chasm from planning to implementation is particularly germane to top managers and other business leaders who bear primary responsibility for strategy formulation and must engage in the implementation process for it to be successful.
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In this article, we argue that successful strategy implementation should stem from within the organization and needs to garner total organizational effort, including the leadership and active participation of top-level and mid-level managers."

This reminds me why I use so many times this picture to joke about implementing a strategy:

 Normally, organizations ask outsiders to prepare a paper about what needs to be done to execute the strategy: Easy! Raze everything and build from scratch!

Let me go back to high school and to Descartes.

With Kaplan and Norton I started with BSC 1.0 and BSC 2.0, but when I got there I felt some dissatisfaction.
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When I tell this story I always use this analogy: When I studied Philosophy in high school, I loved Descartes's statement "I think, therefore I am" was so powerful ... everything else could be a lie, but I existed because I am a thinking being, because I was aware of myself ...
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After this brilliant corner stone for his building we learned Descartes's justification for the existence of God ... God is a perfect idea. Man is an imperfect being. An imperfect being cannot generate a perfect idea. Therefore, God must exist a priori, cannot be a human creation.
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I didn't like this justification ... a man who had laid such a powerful foundation for his worldview ... stood for this ...
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When I was working with BSC at the beginning and coming up with BSC 2.0, a strategy map and indicators and looking at the goals:

The question soon arose:
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What should we do to meet these targets (metas in Portuguese)?
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Kaplan and Norton's advice was ...
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No, it can't be
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A brainstorming ...
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What?! After all the intellectual rigor to build the strategy map and indicators, build a set of strategic initiatives based on well-intentioned brainstorming? !!!!!!!
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I never liked this solution until I discovered William Dettmer's book, "Strategic Navigation", that operationalized the ideas of a guy called Goldratt and his Theory of Constraints, and it was based on what I learned from them that I started using these cause-effect  relationships:

as the basis for formulating strategic initiatives.

Let us start with this picture:

Thus, if the current system performance is a natural consequence of the current system functioning (today), and if the organization aspires to a different future performance then the current system must be transformed into the future (desired future) system, the only one capable of generating the desired future performance in a natural, systematic manner.

When we compare today's business with the desired future business, we find that there is a gap (the today's performance versus the targets). That gap does not happen by chance but it is the product of a system that conspires to produce today's results rather than the desired future results.

Well this introduction took me more space than I thought. In Part IV we will show how to describe the conspiring system and from there how to develop strategic initiatives capable of executing a strategy.

Heterogeneidade dos mercados

No Domingo passado falava com alguém com quase 90 anos, que não percebia porque exportamos maçãs e ao mesmo tempo importamos maçãs.

Qual o maior fabricante mundial de sapatos?

A China. (Vou usar dados de 2013 já que os tenho reunidos aqui)

Qual o preço médio de um par de sapatos exportado pela China? 3,87 USD

A China importa sapatos? Sim, claro!

Qual o preço médio de um par de sapatos importado pela China? 29,93 USD

Produzir barato é a especialidade chinesa, e quando se pretende algo mais?

Isto fez-me recordar um texto que me enviaram na semana passada "2018 International: German Luxury Car Sales Worldwide and in China"

A China é um grande produtor mundial de carros.

A China importa carros. Que tipo de carros importa a China?

"In 2018, German car brands Volkswagen, BMW, Mercedes-Benz and Porsche had record sales worldwide and in China. Audi sales were lower. German luxury and premium car brands mostly outperformed the broader market."

Curiosidade do dia e uma galeria de cromos

Em "”Temos de aumentar o nível de competitividade” da economia, defende João Duque" pode ler-se:

"João Duque considera ainda que o euro teve um papel “muito significativo e positivo na economia”
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“Além disso obrigou as empresas a procurar a competitividade através dos drivers do produto e não através de desvalorizações facilmente copiáveis por economias concorrentes. Ora, uma vez que Portugal só “pulou” verdadeiramente no peso das exportações em ambiente do euro e a entrada no mesmo não as prejudicou, parece-me muito errado atribuir ao euro algum insucesso na competitividade das empresas”, remata."

Saúda-se a evolução do académico desde Novembro de 2010 em "É desesperante":

"João Duque defende que em alguns sectores da actividade económica a redução dos salários vai aumentar a competitividade."

Recomendo folhear a galeria de 25 cromos, da esquerda à direita, todos socialistas, que passam nos media como craques da economia "Aprenda a duvidar dos media (parte XXV)".

"Opportunities are not just out there, ready to be plucked"

Part I.

"Behavioral failures are impediments to firms’ abilities to compete for opportunities. Such failures are behavioral insofar as these impediments are mental in origin. Behavioral failures can be viewed in terms of limits to strategic leaders’ abilities to manage and overcome such mental impediments.
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These failures revolve around three key dimensions: rationality, plasticity, and shaping ability.
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Rationality. Strategic opportunities must reflect asymmetries between prices and the rent-generating potential of some of their constituent elements. The first necessary condition for eliminating such discrepancies is that competing economic agents have the ability to spot all undervalued courses of action. This condition requires that competing agents can identify all possible courses of action and accurately evaluate them. If this condition is not met, untapped opportunities can remain ignored by firms, even if competition is intense. Because of the resulting lack of competition for these opportunities, the market prices for some of their constituent elements will not converge to their true values.
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economic agents are generally myopic; they are more reliable and effective at identifying and predicting the outcomes of courses of action that lie in the neighborhood of their firm’s current activities than they are at finding and estimating outcomes of more distant ones.
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distant foresight is not impossible, but it involves mental processes that are more difficult to perform reliably.
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Plasticity. Full rationality is necessary but not sufficient to negate opportunities. Competing firms might be fully rational and know where superior opportunities lie, but they might also be inert and thus unable to act on and compete for such opportunities. In landscape terms, agents could know the entire landscape and decide to act on a specific opportunity, but their firm might unexpectedly get stuck on its way to the peak because of bounded plasticity, with dire effects on its survival prospects. In this case, when identifying a superior opportunity does not translate or translates only partially into competitive behavior, the discrepancies between elements’ current and true values would remain or be eliminated only after major time lags. The theoretical condition for superior opportunities to be absent must therefore also encompass a lack of bounds in firms’ plasticity.
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It was argued that most local opportunities are noticed. Even if inertial forces prevent some firms from acting on such opportunities, the fact that many profitseeking players spot and decide to pursue the same or similar opportunities attenuates, in the aggregate, these forces’ impact on competition for them. This conclusion is strengthened by the fact that incremental changes typically face less resistance than long jumps do. Consequently, existing opportunities tend to be distant.
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Accordingly, if valuable opportunities are hard to find within firms’ current basins of attraction, firms will have to adopt novel representations in order to pursue them. To the extent that the strategic representation is well established and central to the firm’s identity, that firm’s pursuit of the novel opportunity will likely violate some elements of its own identity. This pursuit is problematic. Identity-violating changes are typically destabilizing and associated with high mortality rates because they generally trigger cultural opposition or asperity, especially when central identity codes are infused with moral value, have an emotional component,
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“If a leader tries to march toward strange destinations, the organization is likely to deflect the effort.”
Here, “strange” can be interpreted as violating taken-for granted identity codes.
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In addition, identity violations imply complex changes. Firms’ strategic representations are at the core of what firms do. Violating them usually sets off cascades of changes that generally require firms both to acquire new capabilities at the subsystem level, which is difficult, and to change the architecture governing said subsystems, which poses more challenges.
...
Shaping Ability. Full rationality and full plasticity together are still not sufficient to negate the existence of opportunities. Competing firms might be fully rational and fully plastic but substantially bounded in their ability to legitimize new courses of action. Even if the identification of a superior opportunity translates into competitive behavior, firms’ inability to legitimize it means that discrepancies between some of the current values of its elements and their potential values are preserved.
...
Opportunities are not just out there, ready to be plucked. Courses of action that can be superior often require proactive efforts to shape selection criteria for their potential to be expressed.
...
To meet the condition of unbounded shaping ability, a firm must have unbounded ability to shape the sociocognitive processes that persuade multiple parties (which are only partially known) that a particular conception or course of action is viable. It is implausible that this requirement is met fully, particularly if the new course of action is significantly cognitively distant from the status quo, and it is thus more likely to challenge beliefs about what is legitimate in a given context. There is strong evidence that institutional actors such as financial analysts tend to delegitimize courses of action that are especially distant from the cognitive status quo, and firms that meet such resistance tend to shy away from their intent to implement these initiatives. Stated differently, when the pursuit of cognitively distant opportunities is at stake, the average firm fails to persuade external audiences."

Trechos retirados de "Toward a Behavioral Theory of Strategy" de Giovanni Gavetti, publicado por Organization Science - Vol. 23, No. 1, January–February 2012, pp. 267–285

Practicing the noble art of cheating (part II)

Parte I.

Let us consider the case of a for profit organization.

What do we want for our organization?
We want our organization to be successful.
What will be the consequences of being a succsseful organization?
We will get good financial results.

Where do these financial results come from?
Saving money is not the same as earning money. The money earned will come from the customers pocket. Of course, this statement is increasingly simplistic these days. And as you can see in the third video in this series, to be published in October, it is becoming increasingly relevant to work with stakeholders, not just customers.

An organization may receive money from a customer while considering and acting with other interested parties as the real target of the business. So we get into the logic of the strategy map of a balanced scorecard:

Financial results come from satisfied customers.
Satisfied customers are the result of critical processes excellently operated. Beware of using the word excellent. We are not talking about whole excellent companies, we are talking about critically operated critical processes. Whole excellent organizations are very expensive and customers don't want to pay that cost.
Superbly operated critical processes require aligned resources and infrastructure. As I exemplified in Part I, it makes no sense to choose to work with customers who want flexibility and then to have a super efficient, single-product, rigid production structure.

Choosing strategic goals from a financial perspective, I risk writing, is the easiest, it's a matter of looking inward and understanding how to best measure the statement: sell more and spend less (sales and productivity).

When we come into the customer perspective I propose to think of three aspects: an organization needs to gain new customers; an organization needs to satisfy its customers; and an organization needs to maintain and/or develop relationships with current customers.

Why do I separate each of these aspects?
Because each of these results requires specific actions.
Winning a new customer implies making the company and the offer known, enticing seducing that potential customer with a promise that meets what he or she seeks and values. It also means working to know and minimize their fears and concerns, which can create friction and prevent them from trying the new option and sticking to the current solution.

Now, let's go to the whiteboard and look into the name of the best customer (the one mentioned on Part I) and fill the figure:

Try putting on this client's shoes, remember the conversations with him, remember the problems with him ...

Why can a potential customer who has never worked with your organization take a risk and work with you?

What could help developing the relationship with this customer X?

So, the big picture is:

Your organization's satisfied customers with their word of mouth help you win new customers. Satisfied customers have the potencial to become loyal customers.

Can you now unzoom and instead of customer X, characterize the segment where it belongs?

They are international brands of medium-high quality with quantities between A and B units per season. Most likely they are based on German or Nordic markets.

The ideal scenario will be having  3-4 anchor customers and complement production with emerging, growth potential brands requiring between C and D units per model and 1-2 models per season.

You know who are your target customers, you know what they want and expect.
Now, you need to know what does the organization have to focus on and be excellent at.

Each outcome in your clients' lives must be a perfectly normal product of the organization's work. The figure above speculates which internal work objectives are crucial to being able to aspire to succeed. An organization, any organization, has a lot of things to do but the most critical are the ones that contribute to win, satisfy and retain target customers.

For a full strategy map what is still missing is the resources and infrastructure perspective (yes, I don't follow the standard name of "Learning and growth").

In this particular case with the development of the strategy map so far we already had a good idea about what to include in the resources and infrastructure perspective: some investments in machines and some investments and changes with people.

A way of developing the strategy without theory and abstractions, just focus on a particular client.

Stay with me for the part III of this series to see how we develop the strategic initiatives and how I normally, develop the resources and infrastructure perspective.

Estados Unidos terra do liberalismo?

Há sempre uma forma rápida, simples e ... errada de encarar os Estados Unidos.

Entretanto, na terra da saúde totalmente privada entregue à eficiência do mercado das seguradoras, onde os cidadãos têm a "liberdade de escolha" que os liberais prometem, há manifs por causa de insulina. Estranho, não é? https://t.co/RIjjQ6Q4Ev

— Vega9000 (@Vega9000) September 15, 2019

Uma dessas formas é a de os tratar como o paradigma do liberalismo.

Já ligaram para a CMTV ou para outro canal de televisão e apanharam com 2 ou 3 anúncios de aparelhos para melhorar a audição? E já viram desses anúncios nas DICAs do LIDL?

E nos Estados Unidos?
Os Estados Unidos são o "paraíso" das empresas grandes. As empresas grandes não gostam da concorrência, ou antes, não gostam da concorrência livre, gostam da concorrência que podem controlar ou, sobretudo, se o campo estiver inclinado a seu favor.

Quem é que tem o poder para inclinar o campo a favor de um interveniente?

Ou os clientes, ou o poder do estado.

Por isso, é que as empresas grandes gostam sempre de ter o poder do estado do seu lado. Por isso, é que as empresas grandes gostam de estados com muito poder. E quando um político é eleito com uma agenda que não interessa às empresas grandes, não há problema para elas. Um goa'uld entra dentro desse político e, passada uma legislatura é o candidato apoiado pelas empresas grandes.

Voltemos aos Estados Unidos e ao negócio dos aparelhos para melhorar a audição:

“For starters, hearing aids are expensive. In 2017, the New York Times reported prices ranging from $1,500 to $2,000 or more per ear. Medicare does not cover hearing aids. Barbara Kelley, executive director of the Hearing Loss Association of America, reports that “the number one complaint we get in phone calls every day is, ‘I need help, I can’t afford hearing aids.’
...
But that isn’t the only problem. The traditional hearing aid business is regulated by the US Food and Drug Administration (FDA), and access to the technology is tightly controlled by incumbents. Audiologists, their lobbying associations, and the few (six—actually, soon to be five) companies that manufacture hearing aids have strictly limited the options available to patients. The incumbents insist that what all patients want is the “gold standard.” As one observer described it, this involves buying a hearing aid only after a thorough diagnostic evaluation that includes otoscopy and bone conduction testing, speech-in-noise testing, real-ear measurement/speech mapping, aural rehabilitation, and hands-on hearing aid fitting. Even if they have the means, for many people this seems like overkill."

Recomendo a 1ª Lei de Arroja e a 1ª Lei de Pereira da Cruz - A minha primeira lei sobre a concorrência?

Trechos retirados de “Seeing Around Corners” de Rita McGrath.

"Overcoming focal behavioral failures" (parte I)

"to identify the behavioral drivers of superior performance systematically, it is useful to reason against the benchmark of market efficiency. When markets are efficient, opportunities for superior performance (also called superior courses of action or strategic opportunities) do not exist, or, if they do, they are short-lived because they are competed away by many rival firms. Therefore, establishing what causes violations of market efficiency shows what causes opportunities to exist. Following this logic, the behavioral roots of superior opportunities can be understood in terms of behavioral factors that hinder efficiency. The theory proposed in this paper seeks to isolate such factors by identifying systematic behavioral bounds or impediments to competition. These bounds are behavioral in that they reflect limitations in strategic leaders’ ability to manage mental processes. They will be called behavioral failures, short for behavioral market failures. Such failures ensure that opportunities whose pursuit requires leaders to manage very hard-tomanage mental processes are not competed away, even if competition is intense. Hence, superior performance rests in part on a strategic leader’s superior ability to overcome focal behavioral failures.
...
Superior opportunities tend to be cognitively distant, and critical sources of superior performance lie in strategic leaders’ superior ability to overcome the behavioral bounds that make it hard for the average firm to pursue them. This proposition does not imply that local opportunities do not exist or that “persistent performance differentials among seemingly similar enterprises” do not exist or are negligible.
...
The proposition does, however, affirm that cognitively distant opportunities are likely to be less contested than more proximate ones are and are therefore potentially more rewarding. For this reason, the strategic leader’s role should be regarded as more expansive than is commonly acknowledged, provided that what is entailed to exercise it reliably can be understood.
...
Thus, in heavily competitive environments, existing superior opportunities tend to be those that most firms have an especially hard time pursuing. The difficulty of pursuing them therefore isolates them from competition. It will be shown that central to this limitation are behavioral failures: mental processes that the average strategic leader has a hard time managing. On the one hand, these failures play an important role to the existence of superior opportunities; on the other hand, a superior ability to counter them results in superior performance."

Trechos retirados de "Toward a Behavioral Theory of Strategy" de Giovanni Gavetti, publicado por Organization Science - Vol. 23, No. 1, January–February 2012, pp. 267–285

Contexto

Um conjunto de textos sobre o sector do retalho (nos Estados Unidos) e sobre a moda (na Europa). Talvez seja útil para as análises de contexto que as PME são convidadas a fazer no âmbito da certificação da qualidade:

• De los ecosistemas a las ‘joyas’ regionales: los cinco modelos para el retail del futuro

"El retail, a por nuevos modelos de negocio. El 30% de los retailers de Estados Unidos están llamados, según la consultora Bain&Co., a desaparecer o ser absorbidos a corto plazo. [Moi ici: Apesar dos exageros americanos na construção de lojas, acredito que esta tendência também acabará por chegar à Europa, talvez de forma não tão pronunciada] El sector debe competir en un contexto desafiante y cambiante, en el que aparecen nuevos modelos de negocio y los viejos se adaptan a contrarreloj. ¿Cuáles son las claves para sobrevivir en este entorno?
.
La consultora estadounidense ha definido cinco modelos de negocio para adaptarse a este nuevo escenario y competir en el retail del futuro: jugadores del ecosistema, guerreros de la escala, campeones del valor, el polizón y las joyas regionales."

• La fábrica de Europa: Turquía, Italia y Rumanía copan el 66% del empleo en confección

"Turquía, Rumanía e Italia, las fábricas de Europa. Estos son los tres países que lideran el empleo en la confección en el sector de la moda en la región, el 65,7% del total, según los últimos datos de la agencia estadística Eurostat.
.
Aunque en los últimos años algunas compañías internacionales del sector han acercado su producción a Europa, el número de empleados en la confección todavía se sitúa a gran distancia de los datos de 2009, cuando la industria empleaba a 1,5 millones de trabajadores. En 2018 en Europa, alrededor de 1,07 millones de personas se dedican a la confección, un 41,6% menos que en 2009." 

• Estrategia de aprovisionamiento de la moda 4.0

"Saber a dónde se quiere ir y cómo llegar es crucial para las marcas de la moda. En su búsqueda de una cadena de abastecimiento según demanda, las empresas del sector deben modelar diferentes escenarios económicos y financieros que les permitan desarrollar una base de datos cuantificada para utilizarla como guía hacia una óptima estrategia de aprovisionamiento.
.
Este modelo consta de tres fundamentos que están interrelacionados: velocidad de llegada al mercado, valor del tiempo y equilibrio entre neorelocalización y orígenes asiáticos."

• La producción textil continúa a la baja: desciende un 5% en mayo

"La producción textil mantiene la tendencia bajista. El Índice de Producción Industria (IPI) del sector volvió a caer en mayo con un descenso del 5% en relación al mismo mes del año anterior. Con este retroceso, el sector encadena siete meses consecutivos de caídas." 

"Moments that shape our life"

Em menos de uma semana li “The Power of Moments” de Chip e Dan Heath.

Um excelente livro que recomendo a quem quer trabalhar o mundo das experiências.

“Defining moments shape our lives, but we don’t have to wait for them to happen. We can be the authors of them. What if a teacher could design a lesson that students were still reflecting on years later? What if a manager knew exactly how to turn an employee’s moment of failure into a moment of growth? What if you had a better sense of how to create lasting memories for your kids?
...
When people assess an experience, they tend to forget or ignore its length—a phenomenon called “duration neglect.” Instead, they seem to rate the experience based on two key moments: (1) the best or worst moment, known as the “peak”; and (2) the ending. Psychologists call it the “peak-end rule.
...
What’s indisputable is that when we assess our experiences, we don’t average our minute-by-minute sensations. Rather, we tend to remember flagship moments: the peaks, the pits, and the transitions.
This is a critical lesson for anyone in service businesses—from restaurants to medical clinics to call centers to spas—where success hinges on the customer experience.
...
to please customers, you need not obsess over every detail."

Que acaba assim:

“Once you realize how important moments can be, it’s easy to spot opportunities to shape them.
...
That’s how we imagine you using the ideas in this book. Target a specific moment and then challenge yourself: How can I elevate it? Spark insight? Boost the sense of connection? ”

Practicing the noble art of cheating (part I)

Yesterday, during a night walk, almost tropical, I was surprised to discover 4 geckos in Vila Nova de Gaia where I live

Along the same walk I read "Method for Strategic Objectives in Strategy Maps" by Luis E. Quezada, Felisa M. Cordova, Pedro Palominos, Katherine Godoy and Jocelyn Ross, published by Int. J. Production Economics 122 (2009) 492–500.

I'm a big fan of the balanced scorecard and even more of strategy maps.

"The BSC establishes cause–effect relationships among strategic objectives, even though they do not state the way to establish and quantify those relationships. The relationships are represented  in what the authors called strategy map, which is the main subject in this work.
...
The objective of this paper is to present a simple tool for identifying strategic objectives in order to build a strategy map. A strategy map is a component of a balanced scorecard that represents the cause–effect relationships among strategic objectives. Performance measurements are defined for each strategic objective."

This figure shows an example of a strategy map:

The authors studied 12 companies and describe 3 methods used to develop strategy maps:

"Method 1 carries out a strategic process, including the definition of a vision and mission, internal and external analysis from which a SWOT (strengths, weaknesses, opportunities, threats) analysis is undertaken. The strategic objectives are defined from the SWOT analysis. Fig. 2 depicts the process."

"Method 2 is similar to method 1, but the difference is that two types of objectives are defined: global and specific. Global objectives are defined directly from the vision and mission, while specific objectives are defined from the SWOT analysis. This method has an advantage over method 1; it translates the vision and mission into general objectives, helping the organisation to identify the strategic directions within the strategy map.
...
Method 3 identifies strategic themes from the organisation's vision and mission, which are the basis for defining the strategic objectives."

Then, the authors present their own method described by this figure:

When I saw using the SWOT analysis to develop a strategy map I smiled.
What is a strategy map?
A strategy map is a diagram that shows an organization's strategy as a chain of cause-efect relationships on a single page. And someone uses a SWOT analysis before getting the strategy? Come on!
Nothing is intrinsically a strength or a weakness, an opportunity or a threat independently of the strategy. I believe that only after formulating a strategy one can use the SWOT analysis. I can state that our organization has a tremendous strength: we have a very efficient high throughput production machine. But if our strategy is to work for customers that want small amounts, that want flexibility, that want customization... then that machine is not a strength. Most likely it is a weakness.

I smiled even more when I saw that the four methods started with "Vision and Mission". I smiled and while smiling I began to repeat Paul's words to the Corinthians: When I was a child (child-consultant) reading management books I also believed in these childish-scenes and I was amazed and said yes...

Then I started to work with SME's and I realized that it is a lot of BS.

Management books present this kind of method:

I learned long time ago that the order must be almost completly changed, and in October 2015 I wrote the blog post "From concrete to abstract and not the other way around" (in Portuguese).

A typical SME in Portugal cannot start with a blank sheet, and start from scratch in a rational strategy development exercise.
.
Stay with me and try to put on shoes of a SME in need of developing a strategy. Why do they need to do that? Normally, for one of two possible reasons:

• to seize an opportunity that it inadvertently discovered; or
• to stop a competitive bleeding that is weakening it, and find a way to recover.

SME have no money, no culture, no resources to be free and go after the next big hit. They have to start with what they have at hand.

To avoid daydreaming and to motivate participation I start the strategic thinking with the result of a competitive advantage: one or more sustainable satisfied customers.

My approach is based on their clients. Please tell me the name of one or two good clients you have. Those clients are your best clients, or the clients with whom you have the best margins or make more money. Give me a name.

And I put that name on the whiteboard.

Now, look at that client as a person, look into their eyes and answer me: customers are selfish, they only think about themselves. Why on earth do these customers think it's best for them to work with you? What do they get in their life for working with you? Why do they continue to choose your organization?

I don't care about vision or mission, at least for now. I just want a safe rock on which to lay the foundation of their competitive advantage. And they have to have a competitive advantage, the proof is that customer satisfaction and loyalty.

So, we reverse the order:

• Satisfied customers with whom we make good money;
• What is our competitive advantage behind working with them?

Knowing the competitive advantage one can start climbing the abstract ladder and go from the specific and concrete into the more abstract to develop rules and to practice the noble art of cheating. I call it cheating when an organization realizes what make customers satisfied and start to do that in a systematic way, not just hoping for the luck.

I will continue this post showing how to go from a specific customer into a strategy map.

"start with a specific customer example"

"Although strategy is about the big picture, strategic thinking often starts in the weeds. To think about strategy, start with a specific customer example (a “use case”) and ask: How can we make money from this customer? Now change an assumption and see whether the answer changes. This is what good thinking involves: evaluating hypotheticals and pivoting from one hypothetical to another. At this stage, you are not looking for the best solution. What you are looking for are the boundaries that identify where your company can compete effectively (and where it cannot)."

Este trecho saltou-me logo aos olhos...

Por um lado, é o começar do particular, do concreto para o abstracto. Por outro lado, é o fugir da miudagem, é o fugir dos fantasmas estatísticos e dos substantivos colectivos, e olhar na menina-do-olho.

Trecho retirado de "The Lost Art of Thinking in Large Organizations" de Duncan Simester, publicado no Verão de 2016 pela MIT Sloan Management Review.