Um mar de heterogeneidade (Parte I)

"Why are some companies more productive than others? And why do certain divisions within those companies perform better than others do? Research has shown that top performers tend to invest more in research and development, adopt better technology, and employ a more educated workforce. [Moi ici: Poderíamos resumir, depois do que temos lido de Felin e Zenger que "Top performers haver better theories"]
...
Nicholas A. Bloom [Moi ici: Um velho conhecido deste blogue] ... found that management practices accounted for about one-fifth of the variation in productivity among plants. Management style had the same effect as R&D spending — and twice the impact of technology spending — in explaining productivity differences.
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“There’s an overwhelmingly strong relationship between structured management and performance,” Bloom says.
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The researchers found that plants where managers carefully monitored the manufacturing process, production targets, and employee performance, and used that data to inform decisions, were more successful. Plants where leaders infrequently reviewed performance indicators and targets, and promoted employees based on tenure or connections rather than achievement, fared worse. These links remained strong after controlling for workers’ education level, the age of the plant and firm, and a wide range of other factors. Plants with more structured management performed better than other sites within the same firm, and plants that adopted more of these strategies saw their performance improve over time.
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One takeaway of the study was just how differently plants are managed, even within the same state or industry. In fact, 40% of the total difference in productivity was among plants within the same firm. [Moi ici: Algo sobre o qual escrevemos aqui há milhares de anos] That means that the attributes of a CEO, corporate governance, and company ownership can’t easily explain a large share of the differences in management practices.
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“It’s astounding,” Bloom says. “Some managers monitor huge amounts of data, and others seem to operate entirely by gut instinct.” [Moi ici: Uma classificação que quem anda no terreno nunca faria, é o pão nosso de cada dia]
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“You would think all firms would be well-managed and doing the right thing, but they’re not,” Bloom says. “I guess firms are like people — we all have our faults.” [Moi ici: Come on Bloom, esperava que já estivesses mais calejado nestas cenas]"

Trechos retirados de "How Much Does Management Matter to Productivity?"

Num mundo sem patentes

Ao longo dos anos tenho escrito aqui sobre um futuro sem patentes:

• Recordar que o sucesso da Lego continua, apesar do fim da patente - Uma estratégia que merecia ser estudada pelas PME (Março de 2016)
• Custo, preço, valor e patentes (Maio de 2015) (BTW, reconheço às farmacêuticas o poder de aplicarem o preço que entenderem aos seus produtos. Algo que pode ser compensado por uma revisão das regras de protecção por patentes, no limite acabar com elas)
• O mito das patentes (Setembro de 2014) 
• Acerca de Mongo e as patentes (Novembro de 2013)
• O que acontece num mundo sem patentes (Março de 2012)
• O que acontece num mundo sem patentes? (Novembro de 2011)

Mongo será um mundo sem patentes (não se confundam, não falo de contrafacção), "Facebook may copy your app, but Amazon will copy your shoe":

"Num mundo sem patentes... tudo é acelerado.
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A única forma de uma empresa se manter à tona é nunca parar, é estar sempre à frente da onda."

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

Parte I, parte II e parte III.

"The theory-based view has equally important implications for understanding the markets that surround organizations. While economics has traditionally focused on asymmetric information, idiosyncratic history, and bounded rationality to explain the heterogeneous outcomes that play out in markets, we anchor on divergent theories held by economic actors. ... “into the sentiments and minds of the actors” ... “a theory of people with theories”. Our assumption of an economy with a multitude of economic actors who possess potentially divergent theories of value has important implications for how we understand the economics and very nature of markets—both the markets through which theories are pursued and the markets through which theories are funded.
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there is nothing inherent to assets or objects that allows us to conclusively delineate all possible uses, though efficient markets hypotheses make precisely this assumption. Furthermore, any number of assets and objects in the world are scarcely even priced, thus simply waiting for the right theory to provide them with use, relevance, and meaning. From the perspective of the theory-based view, the idea of any form of efficiency or full rationality in the use of resources or assets in an economy is a fiction, perhaps only applicable for some cases of pure competition.
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The domain of strategy fundamentally is concerned with novel, unanticipated, and hidden sources of value, which we argue are unlocked through firm-specific theories. Naturally there might be hindrances in the emergence of novelty and heterogeneity. Humans naturally fixate on those functions and uses of objects that are common, which indeed creates discrepancies and opportunities in markets, which in turn readily allow savvy entrepreneurs with novel theories to find bargains and new uses.
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the theory-based view highlights that economic actors in markets compete for resources on the basis of the theories they possess. This competition is driven by different visions of the future, and has an important social component.
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in our interactions with entrepreneurs, executives, and firms we ask the following questions:

• What do you believe that no one else believes? Why?

• What specifically is your firm’s theory of value? How is that different from others? If your theory is so unique, then what specific assets would you say are underpriced (or even unpriced)?

• Is your theory of value novel, simple, and elegant? Is it falsifiable? Does it rule out some experiments and point toward others? Is it generalizable and generative?

• What problem is no one solving? Or put differently, what problems do you (or others) need to solve to realize your vision of the future? How will you solve these problems?

• Who do you need to convince (or incentivize) for your theory to be realized?

• What funding and governance mechanisms will best enable you to realize your theory?"

Trechos retirados de "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.

As minhas dúvidas

A SIC passa a mensagem "Tradicionais feiras de calçado têm cada vez menos visitantes". Pelas entrevistas vemos um padrão: do fabricante/marca para o consumidor (M2C).

Em 2016 escrevíamos isto ""De tão concentrado no corte dos custos"" sobre a tendência M2C.

Na semana passada vimos "Grupo de Guimarães lança plataforma para “revolucionar comercialização do calçado". Durante o mês de Agosto vimos "Why Manufacturers Will Become the Next Big E-Commerce Brands".

Sim, mas.

Este blogue é um promotor da subida na escala de valor desde quando poucos sabiam o que isso era ou significava. No entanto, este blogue não gosta de mandar inocentes para a frente de batalha para serem carne para canhão. A APICAPS fez a contabilidade em Fevereiro deste ano, "Calçado cria 238 marcas desde 2010".

Quantas marcas desapareceram desde então? Seria uma outra contabilidade interessante.
Quanto valor foi destruído desde 2010 com marcas que já morreram?

Temos vindo a apontar aqui no blogue nos últimos dias os nossos sublinhados sobre a abordagem de Teppo Felin e Todd R. Zenger em relação à estratégia. Temos ao longo dos anos referido aqui no blogue a mensagem de Ricardo Hausmann, os macacos não voam.

Onde quero chegar?
A empresa bem sucedida como fabricante é talhada e moldada num conjunto de experiências e desafios que não a prepara para as experiências e desafios do mundo das marcas. Faz-me recordar o velho engenheiro Matsumoto. O mundo fábrica é o mundo da eficiência, o mundo da marca é o mundo da eficácia.

Talvez a política oficial da APICCAPS passe por esta aposta nas marcas, mas eu, anónimo engenheiro da província, tenho as minhas dúvidas. Preferia uma aposta naquilo em que temos tradição, uma aposta na fábrica do futuro, para dar resposta à procura do futuro.

Podem bater-me à vontade, está aqui uma evolução face ao meu posicionamento de 2007.

Practicing the noble art of cheating (part V)

Part I, Part II, Part III e Part IV.

Let us go back to the last picture of Part IV ...

... and let us select the elements of the cause-effect relationship that are in red.

These elements are coded because they were written by someone individually, ideally even anonymously, so that the elements are more freely evaluated by all.
And now, with the group in front of the relationship we can ask:
- Why does A2 happen? What may be behind A2?
- Why does B2 happen? What may be behind B2?

Speculation will start to arise and we may agree on a first cause

Whe have safety accidents because staff do not know the risks.
Why staff do not know about security risks?
Staff do not know about security risks because we do not train staff.
E also have staff accidents because we have no safety protection systems in place.

Good practice is to ask "why" at least 5 times. In this way we move towards root causes, something that influences the end result and can be manipulated by us.

Successively asking why sometimes leads us back to a point already described, namely:

Do you see that? Do you see a loop there?

This technique leads us to identify a cycle that conspires in a normally dangerous way. Especially when they have the power to accelerate autocatalytically. The more accidents occur, the more potential is created for new accidents to occur in the future. Who taught me the ABC of systemic thinking, Peter Senge, places at the center of these cycles the icon of an avalanche descending through a mountainous ridge. The farther down, the more voluminous and destructive the avalanche.

We do not train staff because we have no time available for training.
Why do we have no time available for training staff? Because we lack human resources!!! So, we went back to the starting point.

The exercise should also be done by looking ahead for the future. Can any of the post-its on the board be the cause of something still to describe?

Now instead of "why" I use the expression: "And" as a way of appealing to a criterion of importance.
For example: we lack human resources. And? Why should we worry about this? What may be the consequences of this situation?

If staff is lacking, then existing staff must systematically extend their working hours.
The SME owner could comment:
- And? or "So what?" This is not a problem. I do not pay them overtime.
- OK! And what can happen because of the systematic use of overtime, paid or unpaid?

- People saturate, get tired, want to live their extra work life.
- And?

- Some say goodbye and leave the company. Others begin to fall ill and often fail to come to work. Others come to work, but without the necessary attention.
- And?

WOW! See what just happened?

We identified three more cycles that conspire to maintain and worsen the status quo. How can a company aspire to enter a virtuous cycle if, in this restricted scope alone, we find four vicious cycles. And as long as these cycles are not broken we are wearing bandages, we are making corrections, we are feeding imbalances that we will sooner or later be unable to contain, to hide, to control.

For simplification let us only use three cycles:

Now we have to identify all sticky notes that have no upstream arrows, no upstream causes, they represent root causes, they are root causes. In our example we have (see the yellow sticky notes):

Let us also identify sticky notes that include "no(t)", things we don't have or don't do:

Strategic initiatives will be projects, action plans, dedicated to surgically eliminating root causes and the various "no(t)".
Remember the figure of the monstrous earthmoving machine in part III?

I use it to get here and to highlight the specificity of what is going to be proposed, the degree of detail, as well as the authorship of these proposals, people who suffer from these problems and who are involved, challenged to give their opinion. People with tremendous motivation to perform, because it is their everyday work and they were the creators of the action plan.

Going back to the sticky notes, now of another color, we can place over each root cause or no(t), one or more elementary actions to eliminate these causes.

"Streamline staffing" (we often don't need to hire more people, we just need to transfer people from some sectors to others) to eliminate "The staff number is very restricted"
First "Update job descriptions and competence requirements", then "Train staff" to eliminate "We do not train staff"
"Allow time for training" (be creative, you don't need to do training seated in a room, on-job-training? games? films?) to eliminate "No time available for training"
"Design and implement safety protection systems" to eliminate "We have no safety accident protection systems"

If we impleent those actions what will, most likely,  happen? See the green sticky notes

But ...
If we no longer have lack of human resources... staff no longer needs to systematically extend working hours... Do you know what that means?


The chain of effects downstream no longer happens!!!

So, what do we need to do?

How to turn this into an action plan, a strategic initiative?
We have to answer the questions:

Who? When? Sequence? Time? Cost?

Et voilá!
We come to a detailed action plan arising from the strategy described in the strategy map.

Normally a team of 6 or 7 can generate 3 to 5 pages like this one:

Using the technique of sticky notes with different colors (gray is action; green is something you cannot change)

Then we list all gray sticky notes ...

... and start to make groups of gray sticky notes around a common theme. For example:

• marketing and brand
• production and efficiency
• innovation and interested parties
• marketing and influencers.

What do you think about this technique?
Would you like to try it?

Inovação e curiosidade

Muitas vezes vejo artigos sobre inovação a confundir variabilidade com variedade.

Inovação tem tudo a ver com variedade, e variedade com curiosidade e criatividade.

"Most of the breakthrough discoveries and remarkable inventions throughout history, from flints for starting a fire to self-driving cars, have something in common: They are the result of curiosity. The impulse to seek new information and experiences and explore novel possibilities is a basic human attribute. New research points to three important insights about curiosity as it relates to business. First, curiosity is much more important to an enterprise’s performance than was previously thought.
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Second, by making small changes to the design of their organizations and the ways they manage their employees, leaders can encourage curiosity—and improve their companies.
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Third, although leaders might say they treasure inquisitive minds, in fact most stifle curiosity, fearing it will increase risk and inefficiency. [Moi ici: Aumentar a eficiência passa por reduzir a variabilidade. É a cozinha do McDonald's, experiências não são permitidas - execução, execução, execução]
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My own research confirms that encouraging people to be curious generates workplace improvements.
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Twice a week for four weeks, half of them received a text message at the start of their workday that read, “What is one topic or activity you are curious about today? What is one thing you usually take for granted that you want to ask about? Please make sure you ask a few ‘Why questions’ as you engage in your work throughout the day. Please set aside a few minutes to identify how you’ll approach your work today with these questions in mind.”"

Trechos retirados de "Why Curiosity Matters"

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

Parte I e parte II.

"Better theories explain and predict more with less. For the same reason that one-to-one maps of reality are useless, valuable theories must be parsimonious and simple.
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From the perspective of cognition and perception, we know that humans similarly miss all manner of “obvious” things in their environments—including sources of value— in our immediate visual scenes, unless they are asking the right questions, or are armed with the right problem, or are operating with the right theories.
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[Moi ici: O trecho que se segue fez-me logo lembrar o truque que aprendi com Roger Martin, o de negar uma estratégia e ver se o inverso é estúpido. Este trecho também faz pensar em Porter quando este afirma que é tão importante o que uma estratégia implica não fazer como o que implica fazer. Por fim, faz lembrar também as estratégias híbridas e as puras] As Popper notes: “Every ‘good’ theory is a prohibition: it forbids certain things to happen. The more a theory forbids, the better it is.” Of course, scientists are interested in verifying and falsifying theories for the sake of advancing knowledge, but economic theorists are interested in creating value by pursuing strategic actions consistent with their theories, while avoiding those that don’t. The virtue of a falsifiable economic theory is that it provides clear prescriptions about what strategic experiments or actions are consistent with the theory and thus worth taking up and which are not."

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

Parte I.

"As with scientific theories, an economic theory commonly originates with a question or problem, either one widely recognized or one entirely unseen by others. Such problems or questions may prompt a novel hypothesis or conjecture about paths to a solution, and lead to experimentation. Through further refinements, partly informed by experimental actions, the problem becomes more fully framed, and a more well-formulated theory may emerge.
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Valuable theories—whether scientific ones or economic theories of value—perform several key sight-giving functions. By effectively framing a problem or a set of problems, a theory provides a coherent, abstract, causal representation of the world. It serves not as a (or the) representation of the world, per se, but rather as a map of what might be observed: a way of seeing things that may not be evident or obvious to others. A theory provides predictions about observations, future states, and the emergence or dynamics of the problem. A theory permits counterfactual inference, allowing an economic actor to infer what might happen in response to a given action, and it allows the interpretation of evidence obtained from that action.
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Valuable theories require a contrarian belief....
However, in the economic context, if a view or theory is commonly held by others, then it is logically unable to yield new insights about novel uses of resources, novel observations, and sources of opportunity. Thus, valuable economic theories must “go against the tide” of common opinion, facts, and wisdom, and thereby permit vision that others lack. Novel theories are essentially bets against “the market” or bets against common understandings about what might be valuable. [Moi ici: Foi aqui que escrevi a tal nota sobre a galeria de cromos, Zapatero e os cemitérios]
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A valuable economic theory, then, frames a problem and encapsulates a novel belief about a possible future in which that problem is solved. It prompts a theory-guided search for resources and solutions to then solve it and create that future. A firm with a theory, therefore, attends to its environment with a specific lens—with the aforementioned Suchbild in mind (a set of questions and problems)—for which it seeks solutions. Moreover, there is an inherent back-and-forth or toggling between beliefs or theories and questions or problems. Beliefs reveal problems, which, as they become better framed, emerge as theories and hypotheses. Alternatively, initial problems may generate conjectures, which generate new problems and questions that ultimately lead to a well-composed theory."

Trechos retirados de "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.

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.)
...
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?]
...
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]
...
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.
...
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.
...
“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.
...
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”
...
“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)".