What Is The One Thing You Must Do To Succeed?

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Friday, 7.57pm

Sheffield, U.K.

To the extent we have been successful, it is because we concentrated on identifying one-foot hurdles that we could step over rather than because we acquired any ability to clear seven-footers. – Warren Buffett, 1989 shareholder letter

Every once in a while I have to remind myself of the basics – the things that I should have learned along the way.

Or, at least, have learned from other people.

The kind of thing you find, for example, in Warren Buffett’s shareholder letters.

The 1989 letter has a section titled Mistakes of the First Twenty-Five Years (A Condensed Version), which is where you will find the quote that starts this post.

Now, actually, the whole letter is filled with gems, so it’s probably worth just picking out a few.

..marrying for money – [is] a mistake under most circumstances, [but] insanity if one is already rich.

If you have a job or work with people you know then why would you throw everything away to start afresh somewhere else?

It’s one thing if nothing is working and you’re out of options – but in most cases, when you’ve invested time and effort building relationships you should think very carefully about changing them.

we simply don’t care what earnings we report quarterly, or even annually, just as long as the decisions leading to those earnings (or losses) were reached intelligently.

This sentence demolishes the target based approach that almost all managements use, especially those constantly watching what stock market analysts are going to say.

Targets are a waste of time.

Thinking hard and trying to make good decisions isn’t.

We only want to link up with people whom we like, admire, and trust.

The only sentence you need to remember when deciding to partner or work with someone.

what the wise do in the beginning, fools do in the end

Often a new product starts with a good idea.

Mortgage backed securities, for example, were all about giving investors exposure to the mortgage business – to the steady stream of payments and interest made by people buying houses.

That made sense and increased the number of mortgages available so more people could buy.

Until the market got out of control, issuing mortgages to anyone and selling the securities to everyone – ending with the financial crisis of 2008.

Another example – email in the beginning, spam now.

Promoters, after all, have throughout time exercised the same judgement and restraint in accepting money that alcoholics have exercised in accepting liquor.

When someone is selling something they will often say anything to get the deal through.

Very few deals are actually no-brainers.

Most of the time what’s happening is the time between the sale and the result is being stretched out – and people are hoping to make as much as possible in fees before the deals of the past catch up with them.

It’s a bit of a hollow existence, but I suppose the money they get fills the hole inside.

Time is the friend of the wonderful business, the enemy of the mediocre.

This is the antidote to the get-rich-quick potion, if you’re offered that sometime.

A business with good economics will grow over time, accumulating customers, profits and a reputation like a snowball getting larger as it rolls down a slope.

As will you, an individual, taking the time to be work on yourself and your career or business.

I suppose the example here is of the apprentice who learns a trade and then hones it over time – and in the end just cannot help becoming a master.

… in both business and investments it is usually far more profitable to simply stick with the easy and obvious than it is to resolve the difficult.

And this brings us round to the quote that starts and illustrates this post.

One kind of success is the big one – the gold medal at the Olympics or the stunning win at whatever television talent show there is on the box right now.

But, in those events there is only one winner – and they are feted because they cleared the biggest hurdles out there.

But everyone else is simply a loser.

And for those of us that will most likely end up in the latter category it’s much easier to the easy things.

The secret to success, it turns out, is not in overcoming obstacles but in getting rid of them altogether.

Take away the barriers and you will find it much easier to move forward.

And once you’re doing that, find a way to leverage the power of compounding.

That’s the final lesson of the letter – it all comes down to the rate of return you get from your investment.

Over time a series of small returns can deliver the same result as one big return – with the added bonus that the small return could very well carry on forever, while your one big chance may be the only one you have.

Perhaps the one thing to take away from this post is this sentence:

If your actions are sensible, you are certain to get good results

Cheers,

Karthik Suresh

What Is A Manager’s Real Job Anyway?

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Wednesday, 9.00pm

Sheffield, U.K.

Everybody wants to be a bodybuilder, but nobody wants to lift no heavy-ass weights. – Ronnie Coleman

When things aren’t working it’s easy to become frustrated – to get annoyed with what’s not happening the way it should.

So, who should you get annoyed with, who should you blame?

The correct answer, always, is those in power.

It’s easy to blame the workers – the ones doing the job.

After all, they’re the most visible and they are the ones doing the job.

But that’s making up your mind by just looking at the surface – the things you can see.

The usual approach if you think like that is to assume things would be better if people tried harder, put the hours in – just got on with delivering.

But, as Deming wrote, if everyone does their best 95% of problems will remain.

And that’s because he knew very clearly that if 95% of the variation in the performance of a system is caused by the system itself and only 5% is caused by the people.

In his words, “A bad system will beat a good person every time.”

But these insights, although they are now decades old, are still not understood – because we still see the jobs of managers as “managing” people – allocating people to jobs and monitoring their performance.

Which is a waste of time.

An utter, complete, futile waste of time.

So, what should managers be doing?

They’re in power – they should be changing the system.

How can they do that?

First, let’s start with the customer.

The customer gets two kinds of things from you.

One is what they need.

The other is what is wrong.

Let me explain.

The only person who seems to really be talking about this is John Seddon, who wrote Freedom from Command & Control: Rethinking Management for Lean Service, and came up with the terms value demand and failure demand to describe these two things that you give your customer.

Say you’re a graphic designer.

Value demand is a design that the customer likes and wants to use.

Failure demand is you reworking the design because the client expected something different.

Both kinds of demand result in work – time spent in front of your computer doing the design – and to many managers both kinds of work look the same.

But they’re not.

The fact is that any work you do that is being done because things weren’t properly understood or a mistake was made or you didn’t ask a question is work that is being done to meet failure demand.

Once you get this concept you’ll see failure demand everywhere.

It shows up in the powerpoint presentations that have charts with axes so small you can’t read the values.

It shows up in the analysis that focuses on a metric no one cares about.

It shows up in the program that solves a problem no one needs solving.

In the diagram above you’ll see the three main actors in any project – the customer, the worker and the manager.

What’s does your worker need to do?

They need to serve the customer.

If someone tells you they’re always busy there’s a good chance that 80% of their time is taken up dealing with failure demand.

That’s not “serving” the customer really, that’s sorting out everything that is going wrong.

If you’re serving a customer, then the customer ends up happy.

That’s the only thing that matters.

But, how does the worker know what the customer needs to make them happy.

They often don’t – they’re not experienced enough.

If they were, they’d be in management.

It’s the manager’s job to appreciate what the customer needs – to really know what should happen.

Not who is filling out what timecard.

If the manager really knows what the customer needs then they can spend their time building the worker’s capacity to serve the client.

This means focusing on reducing failure demand and freeing up the worker to spend time on value demand.

How does a manager do that?

By getting involved. By coaching and training and supporting. By studying and experimenting and learning.

None of which is part of the standard management curriculum or the way people think is “normal”.

But that’s where you have an advantage.

If you get this idea of value demand and failure demand and learn how to redesign your business so that most of what you do is work on value demand then you’ll be ahead of 99% of other businesses.

Because everyone would like to have a business that gives customers what they need.

Most don’t put in the work needed to do that.

You can.

Cheers,

Karthik Suresh

Why Learning Something New Is Only The Start Of What Needs To Be Done

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Monday, 8.59pm

Sheffield, U.K.

No man ever steps in the same river twice, for it is not the same river and he is not the same man. – Heraclitus

What do you do when you learn something new – perhaps a tip in a book or a concept in a podcast?

Let’s take something like meditation, for example.

Meditation is now big business – with an app that helps you and lots of people talking about the benefits of spending time meditating.

The techniques you learn range from sitting quietly to counting your breath, from repeating a mantra to thinking thoughts of loving-kindness towards others.

But – what’s the point? Why would you engage in anything like this?

The difficulty for most people is getting to grips with the difference between methodology and method – and it’s something that takes time to wrap your head around.

Methodology can be thought of as the “principles of method” – a set of ideas that underpin an approach to a particular real-world problem situation.

For example, if you’re unhappy at work because of how much you have on and how stressed you are, then you have a problem situation.

There can be any number of reasons why you’re unhappy – some internal and some external.

In such a situation, the principles of how you might deal with the situation is by becoming more aware of how you feel inside, by recognising the signs that you are getting stressed and trying to get more control over your responses.

In this specific situation one method to become more aware of what is going on in your mind is meditation.

So, in this example the methodology is all about becoming more aware of what is causing your unhappiness while the method is to use a meditation technique.

This is something experienced practitioners realise.

For example, if a student finds it hard to sit cross legged then sit on a chair.

If meditation doesn’t help then try something else – perhaps spend the time journalling or painting or learning a skill.

There are many methods that can be used to deliver the overarching principles articulated through methodology.

The diagram above sets out this concept using the LUMAS model, following the design set out by Peter Checkland.

This is how things change in real life.

You’ve probably heard someone say something on the lines of, “Follow these steps exactly and you’ll get the results I’ve had.”

What this means is that while they’ve achieved something worth studying, they don’t really know how they got there.

Because what they’re doing is confusing their method with methodology – by taking what worked for them in one time, one situation, one set of environmental conditions and assuming that the same thing will work across all times, all situations in all conditions.

The easiest way to think about this is direct marketing.

For example, let’s say your real world problem situation (S) is that you need customers for your business.

You’re the user (U) in this situation and you look around for a methodology (M) that’s going to help you.

Looking back as far as you can you come across perhaps the Robert Collier Letter Book, which summarises the entire methodology of direct response marketing with these words, “Study your reader first – your product second. If you understand his reactions, and present those phases of your product that relate to his needs, then you cannot help but write a good letter.”

Now, in your actual situation (A) it’s 2000 and emails are just getting popular.

So, you start sending out emails, maybe millions of them.

And because they’re so new and cool people open them and you make lots of money.

You now have a new situation – an improved on.

The mass of emails yields learning – you learn that the more emails you send the more business you get and so you double down.

As do others.

And then, users drowning in a sea of spam start to tune out, things are invented to block you and now you have a new problem.

The methodology hasn’t changed – get to the user with the right message – so you try adwords and you then try social media and now whatever the latest form of advertising method happens to be.

Now, here’s the thing to take away.

When someone teaches you a method – it’s quite likely that it’s too late to use it.

It’s already been used, wrung dry, it’s old news.

What is usually longer lasting, perhaps even eternal, is methodology.

Understand your user and create a message that explains what he or she needs and wants to know.

The LUMAS cycle is never-ending – for as long as you’re in business – but the situations are always new.

The trick is to never stop learning.

Cheers,

Karthik Suresh

What’s The Right Order In Which To Do Things?

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Sunday, 8.35pm

Sheffield, U.K.

Teaching is only demonstrating that it is possible. Learning is making it possible for yourself. – Paulo Coelho, The Pilgrimage

Have you ever read an article or listened to someone about how they dealt with a problem and marvelled at just how clear and simple their approach was?

Do you think it was quite as clear and simple the first time around?

Take Zuckerberg and Facebook, for example.

Presumably the film about his story doesn’t capture all the detail but there’s enough in there to show how he worked away at an idea, something that seemed to be quite a small thing at first and which then grew and grew.

At the same time there is a line of thinking that runs unavoidably through such narratives – the idea that there was a route that he took that was planned and strategic and that you too, if you worked hard and did the same things, could travel that route.

This is the idea that you can get from one place to another by making a plan, gathering your resources and executing that plan.

An idea that is encapsulated in the phrase, “Ready, aim, fire.”

If you’re starting a business, write a business plan, raise finance and then execute.

If you want to enter into a new market write a plan, get a budget and execute.

It’s a simple, self-evident approach that works.

Or does it?

Tom Peters, in his book In search of excellence, which virtually invented the genre of business books, introduced us to concepts that seem obvious today but weren’t so a few decades ago.

He wrote about how organisations need to focus on people, customers and action introduced eight variables that we needed to appreciate.

These were:

  1. A bias for action
  2. Staying close to the customer
  3. Autonomy and entrepreneurship
  4. Productivity through people
  5. Hands-on, value driven
  6. Stick to the knitting
  7. Simple form, lean staff
  8. Simultaneous loose-tight properties

The first one, in particular, runs counter to the ready, aim, fire dogma.

The challenge in almost every business situation is that we don’t know what we need to do.

We can come up with a strategy, a plan, a vision – but it’s all often guesswork, navel gazing.

We don’t know – we think, we assume, we hope – but we just don’t know.

So Peters introduces us to the way field artillery work.

If you’re commanding a battery you probably have a spotter and someone manning the gun.

The first thing you do is fire a round in the direction of the enemy.

The spotter looks to see where it’s landed, calls it in and asks for another shot, either increasing or decreasing the distance.

After those two shots, the spotter can work out exactly what angle of fire is needed to lock on the target for the third shot.

I was reading a quote from a military officer who said something on the lines of if you hear the whistle of the first shot going over your head and the second thumping in front of you then you’d better start running because the next one is going to land right on top of you.

This approach is referred to as the ready-fire-aim approach by Peters and the fire-ready-aim approach by others.

So, how does this work in practice?

Well, in my case I spend a certain amount of time writing – as is obvious from the fact you’re taking the time to read this.

When I started writing I didn’t know what I was going to write about – I just decided to write every day.

Eventually, I found that I was interested in learning about certain areas and writing about what I learned – and that is what you see in these posts today.

At the same time these posts are scattered, fragmented pieces of knowledge.

They are, in effect, a first draft of ideas that need to be collected and filtered to be useful.

One way of doing that, I thought, might be to write papers.

And so you find that once a week I write a paper in the articles section that is a longer form piece.

Still, these articles also feel like first drafts because their form suits a different type of analytical approach – perhaps a longer form argument – and the ideas still feel like they are muddled and need to be unravelled and straightened out.

The point I’m making is that I have no clear strategy with these posts and with my writing.

I write because it helps me understand what I read better – and because I like to write.

But I’m also thinking about how I can work through what I’ve learned and present it in a different way – perhaps as a book or a podcast – and I’m trying to learn how to do both those things.

(By the way, let me know if you’d be interested in a podcast that talks about the kinds of things I write about in these posts.)

So, I know from my own experience that I’m finding a way to a future that isn’t set out as a bright and clear vision.

Rather I’m stepping forward like a person walking in the pitch black with a feeble flashlight, trying to find a way through the darkness.

But, once I get to the end I’ll be able to recount the way I got here and it will all sound simple and clear and obvious, even though it was anything but at the time.

And that is perhaps the learning point we need to take when we listen to someone else’s story.

That is not the story we are going to live.

Those stories can inspire us, can inform us, can keep us going when everything seems to be going wrong.

But what we have to do is first do, then learn from what we have done and then do again – but better this time.

As Yoda said, Do or do not. There is no try.

Cheers,

Karthik Suresh

What Is The Real Way To Build Quality Into What You Do?

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Saturday, 9.02pm

Sheffield, U.K.

If each part of a system, considered separately, is made to operate as efficiently as possible, the system as a whole will not operate as effectively as possible. – Russell Ackoff

You have probably heard the term “no-brainer” used to describe a situation every once in a while.

Some things are obviously the right thing to do.

For example, if you want to get from one city to another on the motorway the obvious thing to do is go as fast as you’re allowed to go – maybe a tiny bit over.

Not so much that you get in trouble but just enough so you get there earlier.

But is this actually the case? Will maximising one element of your journey give you the result you want?

It turns out that doesn’t really work.

The quote by Ackoff that starts this post tells us something that is often no longer intuitive.

What should you do if you want to increase sales leads?

That’s obvious – spend more time on the phone dialling numbers.

But is that really the case?

Might you be better off spending less time on the phone and more time doing research so you call the right people in the first place?

Ackoff says that the proof of his statement is long and complex but you can work it out for yourself with a simple thought experiment.

Let’s say you want to build the best car in the world.

Get a big warehouse and collect all the cars you think are already very good.

Now, pick the one with the best engine.

Find the one with the best braking system.

And the one with the best gearbox.

Keep doing this until you have the best component from every car.

Now put all those components together to create a brand new car.

This one is going to be better than all the others.

Right?

Clearly, it won’t. You’ll be lucky if it starts and moves because many of the components won’t fit together in the first place.

The point is that you won’t get the best performance by selecting the best parts individually.

But this is a mistake we make again and again in organisations.

We focus on one element of performance and look to maximise that.

The NHS, for example, tries to push down waiting times.

Websites try and maximise hits.

Influencers try and maximise followers.

But, you ask, what else can you do to improve a system other than to focus on the parts that make it up?

And that’s a reasonable question – but the answer is that you don’t need to optimise the parts but optimise the system and that might mean some of the parts are not run in an optimal way – but that’s ok.

This can seem complicated.

The thing with optimising a system is that you need to start not with what a system does but what it does for.

Does versus does for. What?

Let’s look at an example.

If you’re a company delivering a service to a customer what do you think constitutes quality?

Is it on-time delivery? Is it minimal packaging? Is it the length of the guarantee?

All these are parts of the company system – elements that can be measured and monitored and improved.

But none of them constitute quality.

Quality is, instead, something that emerges from the experience the customer has – when what you give them exceeds their expectations and delights them.

In other words, what determines quality is how the customer feels about you.

So, when you work backwards from the customer instead of outwards from you something interesting happens.

Take on-time delivery, for example.

You pride yourself on how on-time your delivery is. If you say it will come in seven days it comes in seven days.

Amazon, on the other hand, promises to deliver in five days and gets it to you in two.

They exceed your expectations, get your business and destroy the competition.

Now, that’s quality.

From one point of view anyway.

The larger you get the easier it is to manage by metrics because you can measure them and manipulate them.

But the only thing that matters – if you’re trying to deliver a quality service anyway – is how you make things better for your customer.

Cheers,

Karthik Suresh

What’s Stopping You From Getting Started And Making Things Happen?

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Friday, 9.25pm

Sheffield, U.K.

If you have a dream, you can spend a lifetime studying, planning, and getting ready for it. What you should be doing is getting started. – Drew Houston

Children, you’ve probably noticed, are fearless.

If you ask a room full of young children to raise their hands if they’re good at singing or drawing, every hand will probably shoot up.

Up to the age of five or six, that is.

After that they start worrying what other people think.

By the ripe old ages of seven and eight they’ve learned about being embarrassed and not being good – they start to learn why they can’t do something.

And this is a problem that lasts, for many, the rest of their lives.

The picture above is adapted from something Robert Kiyosaki said about life being like a football game, which makes a point we would all do well to internalise.

While you’re on the field, even when you reach half-time, there’s lots of time left to go.

Even at three minutes to full time, you’ve still got a chance.

But when the game of life is over, that’s when you’re really out of time.

I’m still working my way through The four: The hidden DNA of Amazon, Apple, Facebook and Google and I’m not sure it works for me.

There must be points in there somewhere but they’re buried beneath unnecessarily coarse language and hyperbole.

Still, I’m trudging through it – well, skimming really – and in chapter 10 it starts to list success factors.

Factors like work hard, take ownership, look for equity.

A list that is rather banal – a term one of my marketing lecturers used to describe a paper I once turned in – and he was right.

Because really, if you want to be successful what you need to do is produce.

There’s a story somewhere about a pottery teacher who divided his class into two groups.

One group was told to make something every day – anything – as long as they made something for the term.

The other was told to work on their masterpiece – honing their best work for the same period of time.

At the end of the term all the pieces were collected and judged by independent experts.

The pieces that were judged the best all came from the first group – repeated practice over time had resulted in a better set of outputs.

Someone else wrote something interesting about investment.

In case you’ve noticed – I haven’t got the energy to go and research the source of these stories today…

They talked about the importance of the dividend in making your investing decisions.

Now, this is different from the way we normally think.

All too often we think about payback – how long will it be before we get our money back.

What’s more important is the payout you keep getting from that investment.

When you invest in yourself through an education you can get a lifetime of employment.

When you invest in your skills – developing and honing them by producing over time – they start paying you dividends.

As long as you keep producing you can’t help getting better over time.

And eventually the market catches up and values you fairly.

But the key to producing something is getting started – and what matters is not quality but quantity.

The things that hold us back are largely illusory, they disappear if you take a closer look.

There is only one thing that can really stop you.

And until that happens you’ve got all the time in the world.

Starting now.

Cheers,

Karthik Suresh

What Is The Right Way To Think About Growing Someone Else’s Business?

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Thursday, 8.11pm

Sheffield, U.K.

When a person with money meets a person with experience, the person with the experience gets the money and the person with the money ends up with the experience – Various

You come across many businesses that offer a service to other businesses – so when should the latter take the former up on their offer, and under what terms?

For example, let’s say you are a marketing agency looking to grow your client base – why and how should someone work with you?

I was rummaging through my files and came across an adaptation of the Outsourcing Decision Matrix shown in the picture above.

This is from Maurice Greaver’s 1999 book Strategic outsourcing and in the introduction Greaver writes that “the essence of capitalism is the free flow of resources to those who can most effectively manage those resources.”

This is an interesting model because it gives you a way to think about what’s the best way to do something – but at the same time see how such ideas can conflict with the fears and hopes of the people involved.

Take our marketing company, for example.

How important, would you say, is marketing to an organisation?

In strategic terms, that is.

If you go with Peter Drucker’s perspective the only things that add value in a business are marketing and innovation – everything else is a cost.

So, looking at the matrix you’d rank marketing as having high strategic impact.

Looking at the other axis, what’s the operational impact of marketing?

From one point of view marketing exists on the periphery of the business – it’s only purpose being to drive “leads” to where they can be corralled and filtered and sorted and nagged until they press the button marked “buy”.

From another point of view marketing is everything the business does operationally – every contact a customer has with the business – every “touchpoint” is a marketing opportunity.

The way you’re treated by the people who serve you sets your view of the company – the view that marketing is trying to influence.

If you’re a business that thinks from the first point of view then it makes sense for you to partner with someone for whom marketing is the core of what they do.

If you think from the other point of view, then marketing has a high operational impact on your business and you should retain and enhance your in-house capability to do what is needed.

The point is that you may not have the skills and experience needed in-house and so you have to spend time and money recruiting and building a team and be willing to see low or no returns and ongoing costs until the team starts producing.

And people don’t like doing that in some businesses – they can’t get their heads around doing anything that doesn’t pay off immediately or meet their return on investment criteria.

Such businesses have a problem and should remember the saying, “If you’re sitting in the shade of a tree right now, it’s because someone else, a long time ago, planted a seed.”

If you don’t invest in your future it will probably end sooner than you expect.

Many organisations, because they don’t want to spend up-front money, go down the partnership route.

This can make a lot of sense, especially when there are good agreements in place but it will only work as long as the partners are roughly equal in power.

Otherwise you could end up in the embrace of an anaconda, as companies that trusted their marketing to Amazon and Google and Apple have found out.

Do you remember those connectors iPhones used to have – the big, flat ones?

They were made by a company that I can’t remember the name of, but I looked into its stock because the price had crashed off so much – and it turned out that was because Apple had decided to stop using those connectors and build these smaller ones instead.

That was the end of that business…

The thing to remember is that when you work with someone else you need to have a fundamentally sound model – because legals won’t protect you.

There are two other boxes in the matrix that we haven’t talked about.

At the bottom left are things that have low strategic value and have little impact operationally.

Stop doing them.

And at the bottom right you have things that have a high operational impact but low strategic value.

This category includes pretty much everything that is a support service – from buying stationery to buying energy and insurance.

Get someone else to do that for you and simply make sure you’re getting the most cost-effective advice.

Back to our marketing firm – so how should you sell to a company that should really do this themselves?

Why not try two things.

Either create an open-source version of what you do – tell your customer that they’ll get all the tools and methods and processes to do this themselves if they want to – but while they don’t they can pay you to do it for them.

And if you part company they’ve still got everything they need to go forward.

Or offer to partner with them using a structure that means they can buy you out.

You might build and recruit a team and capability dedicated to that organisation – one that you will set up for them and that they can buy off you at some point.

The thing with these two approaches is that you’re playing in the top half of the matrix – because you don’t really want to be in the bottom half.

Unless what you do doesn’t matter too much – and then it’s the right place to be.

Whatever you do stay away from the bottom left.

And keep your eye on what’s best for your customer.

Cheers,

Karthik Suresh

What Are The Crucial Things You Need To Create A Business Now?

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Wednesday, 9.22pm

Sheffield, U.K.

No thief, however skillful, can rob one of knowledge, and that is why knowledge is the best and safest treasure to acquire. – L. Frank Baum, The Lost Princess of Oz

You have probably heard of The wealth of nations, one of the earliest books on what has become known as economics.

Three hundred years of economic theory have been built on it as a foundation, but is all that being swept away by the changes of the last decade or so?

David Warsh argues in his book, Knowledge and the wealth of nations, that the world has changed since then – but some of us just haven’t quite noticed yet.

You have to squint a little to see exactly when the change took place.

Consider the world of business, in particular, manufacturing.

The manufacturing industry is a creation of the old business model. You need land where you can build your factory, labour to work in it and capital to finance the whole project.

The businesses we see all around us have been created as a result of that model.

And some of them are not doing too well.

On the one hand, that’s just natural – new businesses replace old ones.

The Dow Jones Industrial Average, for example, was created in 1896, with twelve companies of the largest companies in the USA.

Of those, only General Electric, Thomas Edison’s firm, is still there.

The thing about old business is that it treats people as labour, as interchangeable, anonymous parts.

What matters is having money and land, and if you have those two you can buy labour.

And the point of such a business is that if you have more you can make more.

But what is it that such businesses make?

They make products that are “rival” goods.

An example of a rival good is an ice cream.

Once you make it and a customer buys it then that bit of ice cream is gone – it’s consumed.

Restaurants make rival goods and so how big they can become is limited to the number of covers they can serve in the space they occupy.

New business, on the other hand, increasingly makes “nonrival” goods.

An example of a non-rival good is a recipe – something that once created can be used and shared by lots of people without running out.

An example of a nonrival good is the output of a YouTube food and exercise star.

Such a person creates content and recipes and shares them – and there is no limit to who can view and benefit from the product that has been created.

In such businesses what matters is the recipe, the knowledge of what needs to be done – and what’s enabling them is the digital transformation taking place around us.

Warsh summarises the difference by saying that rival goods are objects and non-rival goods are ideas – ‘atoms’ and ‘bits’

What this creates is a different economic model – one that moves from an idea of scarcity to one of abundance.

And it should make you think differently about how you create your business.

After all, if you never run out of something even if you give it away to everyone who asks, what does that mean for what you do?

The things that matter, according to Warsh, become people, ideas and things – supplanting the old business basics of land, labour and capital.

Hiring and working with the right people becomes more important because what you’re after is the knowledge they have rather than the labour they provide.

The thing that differentiates your business is the ideas you have – how you use knowledge that’s available in new ways to create useful things – things that add value to customers.

Previously, you might build a product and then find customers you could sell it to.

Now, you find a need and create a thing to fill that need.

This formulation of people, ideas and things is still not well understood, Warsh writes in 2006, which is not that long ago.

You are still at the very early stages of a new economic model – and there is still lots of time to find your place in there.

And you can do that – as long as you let go of the ideas that built the past.

Especially ideas like you need money to make things happen.

Because you don’t.

Cheers,

Karthik Suresh

How To Structure A Presentation For Busy People

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Tuesday, 9.16pm

Sheffield, U.K.

A good teacher, like a good entertainer first must hold his audience’s attention, then he can teach his lesson. – John Henrik Clarke

People in general, and busy people in particular, are only interested in one thing – what does this mean for me?

When you structure a presentation for such folk you need to focus on what they want and need to know – and expand from there.

This is quite different from the way most people plan their presentations.

We’re taught to think through stuff sequentially – first we did this and then we tried that and this is the result.

That’s ok if you’re explaining your reasoning to someone who is trying to see if you’re doing things right – but that’s not usually the kind of person in your audience.

This other, busy person wants to know what the result is that you reached in the end – not the details of the wrong turns you took on the way.

There are a few ways to construct a story that works – and one of them is shown in the picture above.

The What? So What? Now What? model is a useful way to think through your message.

For example, let’s say you’re looking at a client’s portfolio and have found a number of ways in which you can help them.

Are you going to start by talking about all the work you’ve done or by showing them the size of the opportunity you’ve uncovered?

The second point will get you more attention.

“I can save you a hundred thousand pounds” will get you more time than “we started by asking for all your paperwork”.

The first gets attention – the other causes people to start fiddling with their phones.

In examples like these the first two points almost run into each other.

We analysed your portfolio (what?) and found a big bunch of opportunities (so what?).

The third follows closely behind.

Now we’d like to implement them for you (now what?)

In other situations the three points stand out more distinctly.

  • The economy is slowing down (what?)
  • As a freight provider, you’re going to lose money (so what?)
  • We can help you cut costs and reduce the impact (now what?)

The smallest presentation you can have to communicate a complex message is probably four slides.

In the first one you tell them what matters to them – what result you’re going to provide.

We’ve found a way to save you a hundred thousand pounds.

That gets their attention.

And then you explain what’s going on, what it means for them and what happens next using the what, so what and now what model.

The point is that people are really not interested in all the background work you did.

They want to know what it means for them.

So, just tell them that.

Cheers,

Karthik Suresh

How Do You Respond When Something Goes Wrong?

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Monday, 8.08pm

Sheffield, U.K.

Being responsible sometimes means pissing people off. – General Colin Powell

I think when a lot of us say we want more responsibility when what we really mean is we want to be paid more for doing the same job – or better still, less of it.

Okay, that’s a little cynical perhaps.

Or is it?

The one thing every one of us have experienced is something going wrong – and how we react in such situations is something I started thinking about recently.

Our approach starts right from childhood.

We don’t want to do the wrong thing, to get in trouble but it must often seem to children that they can barely move through the day without doing one wrong thing after another.

Running, jumping, screaming, throwing, shouting, wrestling – everything remotely fun seems to make a grown-up appear and tell you off.

We must grow up with a healthy sense of not wanting to be in trouble.

Unless, of course, we give up trying and just accept that’s what’s going to happen – or we think through the worst case and decide we can live with that.

If you stop for a minute and think you’ll see that there are lots of directions you could go in when something goes wrong.

As the picture shows, it ranges from putting the blame on someone else to running away.

But there are a few times when we should stop and think before we act.

Specifically, in a work related situation what should you do when something goes wrong?

The way that probably will not work is the one where you try and shift responsibility onto someone else.

We all see these programmes where someone gets fired because they do something wrong.

For a start, the person firing you is probably doing you a favour by releasing you from a toxic environment.

That’s because the only people who manage to remain are the ones that hide what’s going wrong – and that doesn’t usually end well.

The other thing that you should be careful of is taking all the blame yourself.

In most situations you know a lot about what is going on and so, when something goes wrong, it seems like everything is out in the open and you’ll be seen as a failure.

In reality, very few people care about how things are going as long as they’re getting done sort of on time and on schedule.

There are two more approaches that don’t really help.

The first is trying to avoid doing anything that could be seen as wrong in the first place – hiding behind legal clauses for example, or just not getting into the situation in the first place.

That’s because if you do something wrong the legal defence won’t help your reputation, and if you don’t take a risk every once in a while life gets a loss less interesting.

The second is getting too analytical over the whole thing and working through complex chains of cause and effect.

You see this happen all the time on the news as journalists try and trip up politicians by asking them hypothetical questions – what would you do if this happened and that came to pass, for example.

The politicians, sensibly, refuse to speculate unless they want to and make up a possible future that they would like to happen.

There are two questions that you should ask and that can help.

The first is “what does this mean from the customer’s point of view.”

The fact is that the problem will affect someone – and what matters is just how much that is.

Does this mean a day’s delay, a week, a month, a year?

Have you missed your chance altogether or can you rearrange?

Are they facing a yawning chasm or is it a slightly bigger step than they were expecting?

The second question is “what’s the next action.”

The thing we have to really really get is that we can’t change the past or influence the future.

We can only act in the now – and that means thinking of the next thing that needs to be done to make the situation better.

Finally, there are two things to keep in mind that may help.

The first is to always think of the worst case situation – what is really going to happen if things go wrong?

In the world of work this is usually something you can live with and come back from.

The other thing is to expect that people won’t deliver – so set your expectations accordingly and have a backup plan.

That way when they do deliver everything they promised you can be happy to be proved wrong.

And if they don’t, you can deliver what you need to do anyway.

Because what really matters when you’re responsible is that you deliver.

Eventually.

Cheers.

Karthik Suresh