Cheira a 2007...

Duas notas deste artigo, "ANA critica contas e projeções da Comissão Independente em relação ao novo aeroporto de Lisboa":

"A ANA considera ainda que a CTI foi "otimista" em relação à projeção de tráfego, tendo previsto 66 a 108 milhões de passageiros em 2050, quando "entidades internacionais altamente credenciadas", preveem entre 40 a 52 milhões de passageiros em 2050.

Adicionalmente, também considera "otimistas" os cronogramas de construção e contesta o entendimento da CTI de que a opção Montijo levaria seis anos a ser construída."

Entretanto no Twitter descobri outra:

A linha de alta velocidade Madrid - Barcelona tem 6M de passageiros. Num país com quatro vezes mais população que o nosso. Cada vez mais me convenço que não temos grande talento para estes estudos. pic.twitter.com/Qvb4GDdQan

— Moita de Deus (@Deus_outro) January 30, 2024

Como não recordar leituras já feitas... 

• em 2012 (como o tempo voa) O problema não é étnico... talvez genético, citação de "Thinking, Fast and Slow" de Daniel Kahneman:

"A 2005 study examined rail projects undertaken worldwide between 1969 and 1998. In more than 90% of the cases, the number of passengers projected to use the system was overestimated. Even though these passenger shortfalls were widely publicized, forecasts did not improve over those thirty years; on average, planners overestimated how many people would use the new rail projects by 106%, and the average cost overrun was 45%. As more evidence accumulated, the experts did not become more reliant on it"

• em 2023 li "How Big Things Get Done" de Bent Flyvbjerg e Dan Gardner. Os autores escrevem sobre a "Planning fallacy" e sobre a "The commitment fallacy":

"Research documents that the planning fallacy is pervasive, but we need only look at ourselves and the people around us to know that. You expect to get downtown on a Saturday night within twenty minutes, but it takes forty minutes instead and now you're latejust like last time and the time before that. You think you'll have your toddler asleep after fifteen minutes of bedtime stories, but it takes half an hour —as usual. You're sure you will submit your term paper a few days early this time, but you end up pulling an all-nighter and make the deadline with a minute to spare —as always.

These aren't intentional miscalculations. Much of the voluminous research on the subject involves people who are not trying to win a contract, get financing for a project, or ...

For us to be so consistently wrong, we must consistently ignore experience. And we do, for various reasons. When we think of the future, the past may simply not come to mind and we may not think to dig it up because it's the present and future we are interested in. If it does surface, we may think "This time is different" and dismiss it (an option that's always available because, in a sense, every moment in life is unique).

...

Purposes and goals are not carefully considered. Alternatives are not explored. Difficulties and risks are not investigated. Solutions are not found. Instead, shallow analysis is followed by quick lock-in to a decision that sweeps aside all the other forms the project could take. "Lock-in," as scholars refer to it, is the notion that although there may be alternatives, most people and organizations behave as if they have no choice but to push on, even past the point where they put themselves at more cost or risk than they would have accepted at the start. This is followed by action. And usually, sometime after that, by trouble; for instance, in the guise of the "break-fix cycle" mentioned in chapter 1.

I call such premature lock-in the "commitment fallacy." It is a behavioral bias on a par with the other biases identified by behavioral science. 

...

One is what I call "strategic misrepresentation," the tendency to deliberately and systematically distort or misstate information for strategic purposes. If you want to win a contract or get a project approved, superficial planning is handy because it glosses over major challenges, which keeps the estimated cost and time down, which wins contracts and gets projects approved. But as certain as the law of gravity, challenges ignored during planning will eventually boomerang back as delays and cost overruns during delivery. By then the project will be too far along to turn back. Getting to that point of no return is the real goal of strategic misrepresentation. It is politics, resulting in failure by design.

...

But as projects get bigger and decisions more consequential, the influence of money and power grows. Powerful individuals and organizations make the decisions, the number of stakeholders increases, they lobby for their specific interests, and the name of the game is politics. And the balance shifts from psychology to strategic misrepresentation."

Num cenário polarizado ...

Há muitos anos que aqui no blogue, praticamente desde a primeira hora, escrevo sobre a importância de seleccionar os clientes-alvo e trabalhar para eles. Por exemplo, em 2006 escrevia sobre o perigo de ser uma Arca de Noé:

• Deixar de ser uma Arca de Noé
• Porque não podemos ser uma Arca de Noé!

A reforçar esta mensagem de focalização nos clientes-alvo, tenho desenvolvido aqui também a metáfora de Mongo, um mundo pleno de variedade e de tribos numa paisagem enrugada:

• 1 Origem de uma metáfora
• Criatividade e Mongo
• Covid, empresas, estratégias e paisagens enrugadas

Às vezes criticam-me porque supostamente no mundo actual as empresas tanto podem servir em simultâneo gregos como troianos. No entanto, continuo na minha, ainda na semana passada li, "Why Mushroom Leather (and Other New Materials) Are Struggling to Scale":

"Compare the number of venture capital firms funding software to the number of venture firms specialising in material innovation or fashion. There are far fewer.

The reasons for the chasm are structural. Once a software solution is invented, the marginal cost to distribute the second, third and one millionth sale are close to zero. By contrast, once a new material is invented, the marginal costs for subsequent units are nearly the same. It is only with learning and scale that costs begin to decrease.

At the same time, building the capacity to produce new materials often requires considerable capital expenditure to build out infrastructure."

Entretanto, ontem li "The Myth of the Mainstream":

"Chasing the mass market is a losing proposition for marketers in a polarized culture. Allying with the subculture that loves you is the best way to drive brand success.

...

For years, McDonald's seemed to embody everything that was wrong with the American diet. The brand had become a symbol of food choices that were driving escalating rates of obesity and hypertension.

The company spent more than a decade trying to fight this perception among American consumers by targeting them with messaging about its updated menu, which offered healthier alternatives more in line with contemporary diet trends - but to no avail. Year over year, McDonald's sales declined, and its brand perception continued to spiral downward.

...

Finally, the company decided to go on the offensive. Instead of combating the opposition's hate and attempting to win over those in the middle, McDonald's decided to focus on its fans - the people who self-identify as McDonald's devotees despite the vitriol directed at the brand. 

...

In doing so, it tapped into what these devotees love about McDonald's and not only activated their collective consumption but also inspired them to spread the word on behalf of the brand. The result of this strategy was a 10.4% increase in global revenue for McDonald's from 2018 to 2021 and the return of dormant customers: more than a quarter of those who came in to buy the Travis Scott meal, for example, hadn't visited the chain in over a year. Seemingly overnight, McDonald's went from being a cautionary tale to the darling of brand marketing and a case study for advertising effectiveness.

If you want to get people to move, you must choose a side. The notion that you can win by playing to the middle is a misleading myth.

What's going on here? Conventional wisdom would tell us that in a world of increasingly polarized opinions, our best bet is to appease the middle, if only because that's where the majority of the market is. That also seems like a safe bet to many companies, as a middle-of-the-road position is less likely to alienate potential customers.

...

The middle doesn't adopt new products with any urgency. They are not the first to respond to marketing communications, nor are they likely to weigh in on a debate between advocates and detractors. They mitigate their own risk of moving out of step with what might be considered generally acceptable by stepping back and observing other people's responses first.

The red herring is that we perceive this indifference as an opportunity to persuade them to one side or the other. But the truth is, they are not typically convinced by any marketing communications. Instead, they, too, take cues from other people - sometimes those who are for you, and at other times those who are against you.

Our chances of successfully influencing behavior increases when we choose to address the people who are most likely to take action.

With this in mind, it becomes abundantly clear that in a polarized scenario, the chances of marketers getting people to move are far greater when we activate the collective of the willing as opposed to trying to convince detractors or even persuade the indifferent."

Sobre a polarização do mercado, recordo Polarização do mercado ou como David e Golias podem co-existir. 

"the way you frame things affects how you make decisions"

"Reframe Your Situation

Most people are loss-averse. Multiple studies demonstrate that the way you frame things affects how you make decisions. The research shows, for instance, that if one treatment for a new disease is described as 95% effective and another as 5% ineffective, people prefer the former even though the two are statistically identical. Every innovation, every change, every transformation—personal or professional—comes with potential upsides and downsides. And though most of us instinctively focus on the latter, it’s possible to shift that mindset and decrease our fear.

One of our favorite ways of doing this is the “infinite game” approach, developed by New York University professor James Carse. His advice is to stop seeing the rules, boundaries, and purpose of the “game” you’re playing—the job you’re after, the project you’ve been assigned, the career path you’re on—as fixed. That puts you in a win-or-lose mentality in which uncertainty heightens your anxiety. In contrast, infinite players recognize uncertainty as an essential part of the game—one that adds an element of surprise and possibility and enables them to challenge their roles and the game’s parameters.

...

Chouinard [Moi ici: Fundador da Patagonia] has learned to face uncertainty with courage—and in fact to be energized by it—because he views his role as improving the game, not just playing it. “Managers of a business that want to be around for the next 100 years had better love change,” he advises in his book. “When there [is] no crisis, the wise leader…will invent one.”"

Depois de ler isto, recordar o que é mais comum em Portugal: resistir, chorar, chamar o papá estado, em vez de abraçar a mudança:

•  "Transforming An Obstacle Into A Design Constraint" 
• Curiosidade do dia
• Engaging emergence 

Trechos retirados de "How to Overcome Your Fear of the Unknown" 

"missed out on the opportunity"

"Lucky people tend to be more relaxed, and anxiety can keep us from grasping opportunities. In an experiment, psychologist Richard Wiseman gave people a newspaper to read, and asked how many photographs were in it. Most participants took around two minutes and counted through quickly. Some double checked. None of them noticed the headline on the second page: ‘There are forty-two pictures in this newspaper’ in large bold letters. Nobody saw it because they were so focused on the photographs. They also missed out on the opportunity to win a hundred pounds – another large advert in the newspaper read ‘Stop counting and tell the experimenter you see this and win £100’. But again, the participants were too busy looking for photographs. When Wiseman asked instead if they saw anything unusual in the paper, they looked at it differently and saw the messages immediately. By busily (over-)focusing on a particular task they missed out on the real value.

As long as we have a culture of hyper-stress in organizations, with people focusing on not losing their job or trying to get to their meetings on time, it is more likely that we will miss serendipity. (In settings of poverty, the feeling of stress and anxiety is arguably even greater, which can have a negative impact on decision-making.)

But while a healthy state of mind can be important, often discomfort and pressure can be sources of achievement – as usual, it’s the balance that counts."

Trecho retirado de "The Serendipity Mindset" de Christian Busch.

Big data e experiência dos clientes

A propósito de "Customer Experience in the Age of AI":

"brands can win by tapping a deep store of customer information to transform and personalize user experiences. From the pre-internet dawn of segment-of-one marketing to the customer journey of the digital era, personalized customer experiences have unequivocally become the basis for competitive advantage. Personalization now goes far beyond getting customers’ names right in advertising pitches, having complete data at the ready when someone calls customer service, or tailoring a web landing page with customer-relevant offers. It is the design target for every physical and virtual touch-point, and it is increasingly powered by AI.

...

We are now at the point where competitive advantage will derive from the ability to capture, analyze, and utilize personalized customer data at scale and from the use of AI to understand, shape, customize, and optimize the customer journey."

Recordei o que li em "The Data Detective" de Tim Harford:

"The algorithms that analyze big data are trained using found data that can be subtly biased.

...

One thing is certain. If algorithms are shown a skewed sample of the world, they will reach a skewed conclusion.

...

There are some overtly racist and sexist people out there—look around—but in general what we count and what we fail to count is often the result of an unexamined choice, of subtle biases and hidden assumptions that we haven’t realized are leading us astray.

...

Big found datasets can seem comprehensive, and may be enormously useful, but “N = All” is often a seductive illusion: it’s easy to make unwarranted assumptions that we have everything that matters. We must always ask who and what is missing. And this is only one reason to approach big data with caution. Big data represents a huge and underscrutinized change in the way statistics are being collected, and that is where our journey to make the world add up will take us next."

How can we use the process approach (part III a)

 Part I and part II.

In the last part, I wrote that this part would be about processes and strategy. However, let me make a small change and first address the modeling of an organization, based on the process approach, before relating processes to strategy.

4. Modelling an organization – mapping processes

ISO 9001:2015 clause 4.4.1 states that an:

Organization shall determine the processes needed for a quality management system. 

How can that be done?

We need to develop a model of how the organization works having as its building blocks what we call processes.

4.1 What is a model?

“A model is an external and explicit representation of part of reality, as seen by people who want to use the model to understand, to change, to manage and control that part of reality”

 Michael Pidd in “Tools for thinking - Modeling in Management Science” 

Remember, we don't draw a model to answer ISO 9001:2015 requirements, and please auditors. We draw them because we want to understand, to change, to manage, and control our organization's present and future.

Models are always a simplification and an approximate representation of some aspects of reality, models reduce complexity, simplify the original or the future to be built, to reduce the noise produced by reality, and thus highlight, distinguish the critical factors, for the object of study concerned. The model does not show all the attributes of the original, it only illustrates those attributes that are relevant, or suitable for the observer/creator/user of the model to manipulate. Models do not need to be accurate to be useful, models are simplifications, and their usefulness lies precisely in that approach.

The task of the observer/creator/user of the model is to collect the visions, the perceptions, even if ill-defined and implicit of reality, and to shape them in a sufficiently well-defined way to be understood and discussed by other people. A model is a representation of reality. 

With Deming I learned:

All models are wrong, some are useful!

The reality is composed of a set of objects that constitute a system, at a conceptual level we design a model capable of illustrating the system, the reality. Armed with the model as a work unit, we can perform simulations to perceive reality and influence it, the simulation uses the model to perceive and anticipate the dynamics and behavior of the system.

4.2 Modeling an organization as a set of processes

To build a model of an organization, it is necessary to have a clear definition of its purpose, now an organization exists only because there are customers, they are its raison d'être! 

An organization, the organization object of our study, is an entity, it is a system, which transforms, that converts “potential customers with needs” into “customers served”. 

4.2.1 Step 1 - Identify the different types of customers 

Customers are not all the same, it is possible to identify and isolate different types of customers, this activity is important because different types of customers may require, different processes and may mobilize different actors, may involve different inputs and different outputs. 

4.2.2 Step 2 - List the inputs and outputs of the model

Distinguish the different states of the customers and identify all interactions (inputs and outputs) between the organization and its customers! How do we get in contact with potential customers? How do we collect information to develop new products and services? How do we receive orders or requests for proposals? How do we deliver our products and services? 

4.2.3 Step 3 – Determine the core, the heart of the model

Let us track the route, from inputs into outputs. Let us zoom in on the organization. Let us open the black box! 

For the purposes of this blogpost, we select a certain type of customers and then start to dive inside the organization  (for someone implementing a quality management system for certification, this could be a management system scope option)

I gather a set of people that know the organization, each from a different perspective and give them sticky notes and markers. Then, I post two sticky notes that represent the responsible for major input in the system and the receiver of the major output of the system.

I ask; what actions, what activities do you do when going from one extreme into the other? People use sticky notes to write things that they remember. I set a rule: one sticky note must have one verb and one noun like “Receive Request For Proposal”, like “Write Proposal”, like “Budget Proposal”, like “Present proposal”, like “Negotiate proposal”.

After that kind of brainstorming one can start to aggregate sticky notes that belong to a flow of activities. For example, I can replace these 5 sticky notes above by saying that they belong to the same process called “Win order”. Repeating the technique for other sticky notes we develop the central sequence of processes.

When designing the road from the inputs into the outputs, do not dive into to much detail! 

Let us look at a high level of abstraction and consider 3 to 6 entities (each entity represents a process, a set of activities) And let's number the processes sequentially! 

We can do a mental exercise: "If we were riding an order, what would we see from the reception to its delivery?" Do not register departments or functions, but state changes, the main tasks! ”

4.2.4 Step 4 – Name each process

 

Designate each entity (each process)! Start with a verb that illustrates the transformation that takes place inside! Avoid references to departments, to avoid confusion remember:

• processes are not departments, 
• the organization chart is not a process map, 
• the vertical and horizontal views of an organization are very different.

I like to designate a process by relating its name to the main output of that process. 

While certain processes seem to be clearly determined, based on a physical flow (production, logistics, distribution, transport) or a flow of information (design/development, closing accounts, invoicing, payment), certain activities of an administrative nature seem difficult to integrate into a “process” view. 

There may then be a strong temptation to group them by function analogy and to baptize these groupings as “human resource process” (in which recruitment, training, communication, payment of wages, contract management will be mixed) work, social dialogue, without the slightest logical link or the tangible outputs that characterize such a process appearing), “accounting and financial process”, etc. Performing more or less arbitrary functional groupings is of no interest from the point of view of process management, because it will be difficult to draw interesting conclusions as to the coordination and chaining modes. 

In the next part, we will continue with the modeling of the public works company as a basis for modeling an organization. 

How can we use the process approach (part II)

Part I.

3. The process approach – a quality management principle

The process approach is one of the seven quality management principles included in ISO 9000:2015. Let us see the statement of that principle:

Consistent and predictable results are achieved more effectively and efficiently when activities are understood and managed as interrelated processes that function as a coherent system.

It is easy to relate those “Consistent and predictable results” with the objectives referred to in the definition of a management system. 

And what does the same ISO 9000: 2015 say about what a process is? 

set of interrelated or interacting activities that use inputs to deliver an intended result

So, we may see an organization as a coherent system made of a set of interrelated or interacting elements called processes, and it is through those processes that an organization achieves its intended results, its objectives.

At a first glance, we have: 

The intended results may be: 

Now, let us zoom the organization to find out which processes are present and how they interrelate.

 For example, the processes may be:

 

When this organization wins a new project, they have to start ordering resources needed to provide the service. At the same time, winning a new project means developing a new service, new resources need will be determined, and service preparation may start. Then, at an agreed date the service provider may start.

Let us go back to the management system definition:

System to establish policies and objectives, and processes to achieve those objectives

Now, our system is our set of interrelated processes, and it through those processes that you try to meet intended results. Processes are like variables in a mathematical equation that we operate in order to meet our intended results: 

Let us go back again to ISO 9000:2015, clause 2.4.1.3, where we can read:

These processes interact to deliver results consistent with the organization’s objectives and cross functional boundaries. Some processes can be critical while others are not.

When we model how an organization works, we include in the model a set of processes. Those processes are needed, but not all processes have the same impact or influence in meeting each objective or intended result.

Just as an example, let us consider this matrix that relates processes and objectives:

 Processes are where the rubber meets the road. Whatever an objective the management wants an organization to achieve, it is only a dream if one or more processes of the organization are not mobilized and changed to that. In the matrix above, meeting objective “Better sales” requires working on the process “Win project”. Meeting objective “Less complaints” requires working on processes “Prepare service” and “Provide the service”. Meeting objective “More satisfied customers” requires working on processes “Develop a new service”, “Prepare service” and “Provide service”. 

Now, look into the process “Maintain equipment”. It must exist but does not contribute directly to any overall objective. These processes are tricky. If you are excellent in these kinds of processes, they will be expensive but will not contribute to customer satisfaction, but if you make a mistake in these processes, they can contribute to customer un-satisfaction. 

No one says: we are very satisfied with our electrical power supplier because at the end of the day there were no power failures. We say, it is the minimum someone can expect, no failures 

Next: Process and strategy

"pitching a win-win-win “story”

Três ideias fundamentais retiradas do primeiro capítulo do livro SMASH: Using Market Shaping to Design New Strategies for Innovation, Value Creation, and Growth de Kaj Storbacka e Suvi Nenonen. 

Os mercados são mais do que para trocar valor, também servem para co-criar valor:

"The Function of a Market System Is Exchange, for the Purpose of Value Creation 

Specifically, markets are CASs of exchange, for the creation of value. And we do need to be very specific about that. Common definitions which include exchange but omit use-value and the value creation aspect sound curiously zero-sum, as though the same resource is simply being shuffled around the system in a grand version of the children’s birthday game pass-the-parcel.

...

Just as markets divide into supply and demand, so does value divide into exchange value to the supplier and use value to the customer/user. In a firm-focused, production-centric view such as the traditional business strategy approach, value too easily comes to mean what is really only exchange value - the value to the producer or seller - or, worse still, the price.

…

A user will willingly pay a higher price if she can get more use value out of the product. So use value should be integral to the firm’s market view, and any way to increase use value offers potential gains in exchange value right back. This is where co-creation comes in. The firm’s product is only one component in the customer’s use value."

Os mercados não são um dado, são uma variável:

"Markets Are Socially Constructed, so You Can Reconstruct Them, too

Markets are social systems.

…

The key point for us is that, being socially constructed, markets can be consciously reconstructed. Because humans can be persuaded, incentivized or, where laws or sheer market power are involved, coerced by other humans, the firm has a means of influencing the human agents and their creations. This is how you can turn social reconstruction to your advantage. Fundamentally, viewing markets as shapeable systems suggests that opportunities are not precursors of strategy; rather they are outcomes of deliberate efforts to shape markets. ... We should not make strategy for a company - we should make strategy for the system. [Moi ici: Isto é tão bom!!! Urdir um ecossistema. Daqui: "

Uma empresa que trabalha com o BSC começa por determinar quem são os clientes-alvo! Uma empresa que trabalha com o BSC e comigo, para além dos clientes-alvo tem também de determinar qual é o ecossistema da procura."] Furthermore, strategy ought not to be viewed as winning a zero-sum game; nor ought the focus to be on competing. On the contrary, it should clarify how the company can engage in collaborative activities with market actors (suppliers, customers, and partners) in order to improve the creation of the use value. Companies that can promise improved value creation for several actors simultaneously are the ones most likely to be successful in shaping their respective markets.

The job of the market leader is not to increase own market share at the expense of others, but rather about creating a positive sum game where many market actors grow the market together.[Moi ici: Maximizar o valor para todos os que estão no ecossistema]

…

The pay-off to all the theory above is that it enables you to become a market shaper.

...

“What is this market shaping that you are so worked up about?”

…

Changing the definition of markets from mere exchange mechanisms to a system fostering value creation is not just semantics or purely academic debate. Think about the implications. We’re claiming that, like any other human-made systems, market systems can be changed by companies, governments, and even singular individuals" 

 

Os mercados podem ser trabalhados e manuseados:

"Building on the theoretical insight that, unlike poets, markets are not only born but also made, this strategy takes a new product or service and aims to consciously attract or build the elements of a fully functioning market around it.

…

What are the main ingredients for shaping markets? This is a question that it takes the rest of the book to answer fully. There is no single formula and no linear progression of steps. It’s about a continuous cycle. And there’s a degree of art to it as well as science. Broadly though, market shaping begins with re-focusing your business definition, which also acts as your frame on the market, so that you can see the rich reality of your market system and training it on the slice of the universe of possible markets which you want to start with. You then need to envisage a new shape for that market system that would benefit your firm more, by capturing a share of extra use value you’ll help create (in other words, co-create) for customers. Whichever other players it requires to effect the change, you’ll need to appeal to them by offering a share in the value creation as well. This involves pitching a win-win-win “story” or narrative about your proposed new shape. [Moi ici: Há anos que prego isto. Por exemplo: "Ganhar-ganhar-ganhar porque passa por orquestrar uma relação que traga vantagens não só à clássica interacção diádica, cliente-fornecedor, mas também a outras combinações"] And you’ll need to time the whole intervention to strike when the market is “hot” and malleable.

…

Which firms could practice market shaping? … You don’t need market power in the traditional sense of monopolies and oligopolies. In fact, being big can hinder creative thinking of the kind a new strategy requires if the great idea gets tangled up in the red tape of internal processes. However, you need a good idea _ a vision about how to shape your market into a better re-incarnation of that market - because market shaping works only if you are truly able to improve the market. And remember, “improving” means improvement to others as well, not just to you."

"Risk is failure of a projected narrative"

A ISO 9001 aborda a abordagem baseada no risco. 

“The Oxford Dictionary defines risk as ‘the possibility that something unpleasant or unwelcome will happen’,

…

Risk in its ordinary meaning concerns unfavourable events, not beneficial ones.

.

Risk is asymmetric. We do not hear people say ‘there is a risk that I might win the lottery’ because winning the lottery is not something they would describe as a risk. They do not even say ‘there is a risk I might not win the lottery’ because they do not realistically expect to win the lottery. The everyday meaning of risk refers to an adverse event which jeopardises the realistic expectations of the individual household or institution. And so the meaning of risk is a product of the plans and expectations of that household or institution. Risk is necessarily particular. It does not mean the same thing to J. P. Morgan as it does to a paraglider or mountain climber, or to a household saving for retirement or the children’s education.

…

Very often, the risks that concern us are not risks to the status quo, but risks to our plans to change that status quo.

…

We believe the best way to understand attitudes to risk is through the concept of a reference narrative, a story which is an expression of our realistic expectations. For J. P. Morgan, the overarching reference narrative is one in which the bank continues profitable growth. A large corporation will have many strategies for achieving that overarching objective in particular areas of its business and there will be a reference narrative relating to each business unit. Some of these business unit reference narratives may be very risky, but the corporation may tolerate such risks provided they do not endanger the reference narrative of the organisation as a whole.

…

And since different people start with different reference narratives, the same risk may be assessed by different people in different ways. Risk may not be the same for those who work in an organisation as it is for the shareholders of that organisation.

…

Risk is failure of a projected narrative, derived from realistic expectations, to unfold as envisaged. The happy father anticipating his daughter’s wedding has in mind a reference narrative in which events go ahead as planned. He recognises a variety of risks – the prospective bridegroom has cold feet, a torrential downpour drenches the guests. There is an implied measure of risk in such assessment – an outcome can fall short of expectations by a narrow margin or a wide one. The scale of that risk may or may not be quantifiable, before or after the event. But this interpretation is very different to the view that has come to dominate quantitative finance and much of economics and decision theory: that risk can be equated to the volatility of outcomes.”

Trechos retirados de “Radical Uncertainty” de John Kay e Mervyn King 

"You aren’t going to out-Amazon Amazon"

Em vez de retalho físico pensemos em imprensa, pensemos em empresas stuck-in-the-middle

"As scarcity disappears across so many areas, as the pace of change accelerates, and as newly empowered customers flex their muscles, the definition of boring has changed, in many cases radically. The bar for good enough has been raised. Not only do customers today know when they could do far better, it’s increasingly easy for them to demand what they want. And they can find many new and innovative brands willing and ready to respond. Today, even very good often doesn’t make the sale.

...

Yet even if you have a product or service that is unique, highly customer relevant, and not the least bit boring, getting noticed and commanding attention is increasingly difficult.

In this age of digital disruption we are drowning in a tsunami of information and deluged by all manner of distractions. The exploding world of choice that the internet and smartphones offer has delivered great benefits, but it has also created a tremendous amount of clutter.

...

What it takes to get noticed, to command attention, to be remarkable enough that whatever product, service, or idea we are selling gets adopted and spread, requires us to boost today’s signal many times more than would have worked in the recent past. Anything else risks not getting heard or seen, much less acted on, in our ever-noisier world.

...

what so many get wrong is believing that merely being better gets the job done. Better is not always the same as good. Far too often what is touted as innovation is providing a slightly better version of mediocre. Slowing the rate of descent is, in some sense, progress, but without a major change in direction, eventually we still crash.

...

You aren’t going to out-Amazon Amazon. Maybe Walmart, Target, or a very short list of other well-resourced retailers can in certain instances.

...

Ask yourself: how can retailers with higher costs than Amazon possibly win a price war? How is offering free shipping or BOPIS going to counter Amazon’s dominance in product assortment and delivery convenience? Any strategy like that is based on a hope that Amazon will follow the same profit and investment calculations that “normal” retailers do. How do you know, even if some of these efforts manage to gain some traction, that Amazon won’t respond even more aggressively or find some other way to make your life miserable?

...

Matching Amazon on prices and/or delivery times may seem like a good move, until you actually have to bear the cost of doing it. You are starting a race to the bottom that you can’t possibly win.

So what can be done? For most retailers, particularly those that lack the resources and capabilities that the mega-brands have, the only decision is to double down on (or lean into) those improvements that make your brand more customer relevant, more unique and sustainable over the long term.

...

For retailers that still garner most of their sales from their physical stores, that means appreciating and nurturing the unique advantages of brick-and-mortar locations: personal service, compelling visual merchandising, unique products, well-curated assortments, social experiences, instant gratification, and the like. You can complement that in-store experience with a well-harmonized e-commerce offering. Mostly you can embrace the choice to be remarkable on retail elements that Amazon can’t match.”

Trechos retirados do capítulo 10 “An Especially Bad Time to Be Boring” do livro “Remarkable Retail”

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.

How does the strategic direction of your organization influence or frame your quality management system? (Part I)

ISO 9001:2015 mentions "strategic direction" in clauses 4.1, 5.1.1b), 5.2.1 a) and 9.3.1.

How does the strategic direction of your organization influence or frame your quality management system?

ISO 9000:2015 defines strategy as "plan to achieve a long-term or overall objective". Also, ISO 9000:2015 defines policy as "intentions and direction of an organization as formally expressed by its top management".

Not very helpful.

If we think on an abstract ladder we will get:

How does the strategic direction of your organization influence or frame your quality management system?

What is an organization?
An organization can be viewed as a set of interrelated processes:

Where C's are customers at different stages of their relationship with an organization as set of interrelated processes (P).

If we choose an economic sector and compare performance among organizations we will see a lot of variability. There is more variability among organization within the same economic sector than between economic sectors:

So, same economic sector, same country, same rules, same people, ... what is different?

Something inside the organizations: strategy.

Let us make a comparison with sports.
When I was a small boy I watched in TV the Olympics at Munich in 1972. I remember this champion, Vasily Alexeyev:

Look into his body, a system prepared to compete and win.

Then came the 80's and there was a champion in athletics, Carl Lewis:

Look into his body, a system prepared to compete and win. A system very different from Vasily's.

Each sport requires a different set of skills, requires a different kind of body. Even in the same sport, like running, 100 m champions are different from 10 000 m champions.

What happens when an athlete wants to be good at everything?
Let us go again to the Olympics and to Montreal 1976.

Bruce Jenner won the gold medal in the decathlon, setting a world record. Bruce was a generalist among generalists and that year he was the best. For example:

• He run the 100 m in 10.94 seconds
• He pushed the shot in shot put at 15.35 m
• He threw the javelin at 68.52 m

When you're a generalist competing with other generalist the competition works at a certain level.

In the same Olympics there were specialists running 100 m, pushing the shot or throwing the javelin and the gold medalists had this performance

• Hasely Crawford  run the 100 m in 10.06 seconds
• Udo Bayer pushed the shot in shot put at 21.05 m
• Miklós Némete threw the javelin at 94.58 m

Bruce Jenner, a champion among generalists wouldn't had a chance against the specialists (Valery Borzov was bronze medal at 100 m with 10.14 seconds)

I believe that in every economic sector we are seeing more and more specialists, salami slicers. Organizations that don't pretend to win, to serve all kinds of customers. They pick one niche, one tribe and they become specialists in serving them, generalists have no chance.

Picking a strategic direction is deciding to be a specialist, is deciding whom and where to serve. It makes no sense speaking about process benchmarking in general. Will an organization compare its processes with another organization that serves different customers from a different segment and with different priorities and expectations?

According to your organization's strategic direction the quality management system can be like Vasily Alexeyev or Carl Lewis or ... 

Part II will be about different kinds of customers.

Part III will be about interested parties and ecosystems.

"Never quote a price before..."

"So, when it comes to pricing, here's the most essential rule--the pricing rule that always produces both the most sales and the most profit:
.
Never quote a price before the customer fully understands the benefit of buying.
...
"The specific price varies depending on exactly what you order, how you pay for it, and so forth. I'm sure we can make an arrangement that will work for both of us, but in similar situations, companies like yours spend in the range of [low price] to [high price.]"
...
The client goes "Whoa! That's way more than we can afford!" You win, because now you know this isn't a prospective client, so you can end the conversation without wasting more of your valuable time.
.
Or the client nods and says something like, "Why such a large difference in price?" You continue with "it depends on exactly what you want to accomplish..." and segue back to talking about the benefits."

Trechos retirados de "The Single Most Essential Rule About Pricing"

Sinais de Mongo por todo o lado

Sinais de Mongo por todo o lado.

Desta feita a explosão de marcas, a ascensão das marcas das empresas pequenas, o triunfo do numerador sobre o denominador.

"The fast-moving-consumer-goods industry has a long history of generating reliable growth through mass brands. But the model that fueled industry success now faces great pressure as consumer behaviors shift and the channel landscape changes. To win in the coming decades, FMCGs need to reduce their reliance on mass brands and offline mass channels and embrace an agile operating model focused on brand relevance rather than synergies.
...
Consumers under 35 differ fundamentally from older generations in ways that make mass brands and channels ill suited to them. They tend to prefer new brands, especially in food products. According to recent McKinsey research, millennials are almost four times more likely than baby boomers to avoid buying products from “the big food companies.”
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And while millennials are obsessed with research, they resist brand-owned marketing and look instead to learn about brands from each other. They also tend to believe that newer brands are better or more innovative, and they prefer not to shop in mass channels.
...
Explosion of small brandsMany small consumer-goods companies are capitalizing on millennial preferences and digital marketing to grow very fast. These brands can be hard to spot because they are often sold online or in channels not covered by the syndicated data that the industry has historically relied on heavily.
...
Retailers have also taken notice of these small brands. According to The Nielsen Company, US retailers are giving small brands double their fair share of new listings. The reason is twofold: retailers want small brands to differentiate their proposition and to drive their margins, as these small brands tend to be premium and rarely promote. As a consequence, small brands are capturing two to three times their fair share of growth while the largest brands remain flat or in slight decline"

Trechos retirados de "The new model for consumer goods"

"The problem with priorities"

“Of course, strategy is usually about market domination, not erudition. It’s about where to play and how to win. But in an Evolutionary Organization it can be hard to tell the difference between doing something because it’s strategic and doing something because it’s the right thing to do.
...
When purpose is paramount, anything that serves the purpose is strategic, even if it’s not overtly commercial.
...
Regardless of your values, strategy is about identifying that which is critical—the factors that will make the difference—and determining how to leverage what is at your disposal to maximize your chances of success.
...
The problem with priorities is that we have too many. The word “priority” didn’t even have a plural form until the 1900s; before that it meant “the very first thing.” Unfortunately, when you prioritize everything, you prioritize nothing. Just because you want absolute low cost and absolute quality doesn’t mean you can have both in equal measure. When push comes to shove, something’s gotta give. The “Agile Manifesto” used “over” statements such as “responding to change over following a plan” to make trade-offs explicit in service of better software.
...
Your purpose is clear. Your essential intent is well defined and regularly tuned. Using these beacons, people are “voting with their feet” and energizing the projects that matter most. Your even over statements are shaping a thousand smaller decisions. It’s fair to ask, Do we even need a plan? Yes, but not a plan that says what must happen, a plan that says what might happen. Scenario planning has the potential to open us up to possibilities that we might otherwise not consider."

Trechos retirados de “Brave New Work” de Aaron Dignan

"You don’t win by focusing on your competition"

"Most of us work in mature industries that are overcrowded, where we are perceived as commodities (even when we are not), and where competition is ferocious. We work in industries where growth requires capturing market share from our competitors, and in many cases requires that we take their clients from them while they attempt to take our clients from us. How else do you grow by 12 percent in an industry that is growing by 2.7 percent annually?...
Your company goes out into the market to win new clients. You believe that what you sell—and how you sell it—is better than what your competitors sell. Your intention is to better serve those companies and customers that are not getting what they really want or need.
...
You don’t win by focusing on your competition. What makes you a dangerous competitor is how you play the game. Let’s start by eliminating the things that your competitors routinely do in an attempt to cause you problems and take your business, the things that make them weak competitors.
Some of your competitors compete on price alone, offering a poorer service than you do at a lower price point, while falsely promising the same results you can offer. They will win the most price-sensitive customers in the market, many of whom will live with their shortcomings for much longer than you might imagine. While these competitors usually win clients who perceive only the lowest price as value, they will occasionally win good clients, clients who will stick with them until you find a way to displace them. Know that you cannot do anything about a competitor with an irrational pricing structure. It doesn’t change your pricing model or strategy, so your only response should be to compete in a way that allows you to win with a higher price."

Trechos retirados de “Eat Their Lunch” de Anthony Iannarino.

Falhar espectacularmente bem o cumprimento das metas!

“OKRs push us far beyond our comfort zones. They lead us to achievements on the border between abilities and dreams. They unearth fresh capacity, hatch more creative solutions, revolutionize business models. For companies seeking to live long and prosper, stretching to new heights is compulsory. As Bill Campbell liked to say: If companies “don’t continue to innovate, they’re going to die—and I didn’t say iterate , I said innovate .” Conservative goal setting stymies innovation. And innovation is like oxygen: You cannot win without it
...
[T]he harder the goal the higher the level of performance. . . . Although subjects with very hard goals reached their goals far less often than subjects with very easy goals, the former consistently performed at a higher level than the latter.” The studies found that “stretched” workers were not only more productive, but more motivated and engaged: “ Setting specific challenging goals is also a means of enhancing task interest and of helping people to discover the pleasurable aspects of an activity.”

Conheço algumas empresas portuguesas assim. Quando se compara o desempenho deste ano com a meta, parece que o ano foi mau. No entanto, quando se compara o desempenho do ano com o desempenho do ano anterior constatamos que o ano foi muito positivo. Claro que tem de ser uma cultura de empresa que não cobra por não se atingirem metas exigentes.

Excerto de: Doerr, John. “Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs”.