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Small Business Must Smash Bureaucracy Before It Takes Hold

One of the many great things about working in a innovative, high-growth company is the lack of bureaucracy.

I’m not talking about the paperwork and paper pushing kind. I’m talking about what Gary Hamel rightly defines as:

“Strategy gets set at the top. Power trickles down. Big leaders appoint little leaders. Individuals compete for promotion. Compensation correlates with rank. Tasks are assigned. Managers assess performance. Rules tightly circumscribe discretion.

Bureaucracy “constitutes the operating system for virtually every large-scale organisation on the planet. It is the unchallenged tenets of bureaucracy that disable our organisations.”

It frankly doesn’t exist. That doesn’t mean we don’t have processes and some of the checks and balances a good company should have. What it does mean is that deep in the culture is the capacity for making, creating and doing.

Its a deeper cultural and attitudinal bent that enables a company like Xero, Vend or Simple compete successfully with large incumbents. It is nearly impossible to replicate and highly perishable. I’ve seen it ferment in large organisations only to be quashed by incoming leaders, not by direct mandate but through subtle cultural cues.

The cultural contrasts between a company where bureaucracy is minimal and one where it is maximised are clear if you have every lived and worked in both. Little things stand out. The first values individualism and the quality of work. The second values conformity and standardisation of work. The first values ideas and impact. The second values marginal and non disruptive improvement.

Companies that are creating immense value and game-changing new platforms are those who have effectively sidelined bureaucracy in favour of a new way of working.

So, how will you smash bureaucracy in 2015 and turn it to a competitive advantage?

Read:

- Why Bureaucracy Must Die – Forbes

- Bureaucracy Must Die – Gary Hamel, HBR

- The Core Incompetencies of the Corporation – Gary Hamel, HBR

- The Drucker Forum Reading List – HBR

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Lids Down

One of the downsides of working in tech isn’t just that you are surrounded by seriously distracted people, but you become one over time. Nearly every tech company I’ve worked in bears one common management practice that needs to change – the constant presence of managers distracted by devices during crucial conversations.

I’ve struggled with the notion of banning laptops from meetings. They are such a powerful tool when used well – but they rarely are. The glow of the screen has roughly the distraction power of a tub of ice cream, or, as Clay Shirky says more ominously – second-hand smoke.

I’m now convinced that any meeting can improve if computers and any other digital distraction is removed. Print the agenda before going in. Produce minutes in the 10 minutes following – bash them out. And if time doesn’t allow, allow the first five minutes of any meeting for prep, and the last ten for reviewing the minutes. Meetings with Bezos start with everyone reading the papers for the meeting ahead.

Statistically you will do better. Take the impact of banning laptops from the classroom.

We found that participants who multitasked on a laptop during a lecture scored lower on a test compared to those who did not multitask, and participants who were in direct view of a multitasking peer scored lower on a test compared to those who were not. The results demonstrate that multitasking on a laptop poses a significant distraction to both users and fellow students and can be detrimental to comprehension of lecture content.

Focus on the conversation not only increases, but how we are interacting. The presence of devices not only dulls our ability to process and contributing to the conversation – but also our ability to determine how we should best react to the conversation.

Improving the quality of decision making doesn’t require we completely banish the computer – but rather we put it to good use when and were we need it, and then recognise the conversation can’t happen with its glow present. Or at best, the quality of the conversation wont be what we want. Clay points to a brilliant analogy:

Jonathan Haidt’s metaphor of the elephant and the rider is useful here. In Haidt’s telling, the mind is like an elephant (the emotions) with a rider (the intellect) on top. The rider can see and plan ahead, but the elephant is far more powerful. Sometimes the rider and the elephant work together (the ideal in classroom settings), but if they conflict, the elephant usually wins.

So, which conversation are you going to focus on in 2015 – the one in front of you but not present, or the one in front of you and present.

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A Quote for the Age of Anxiety

A great observation and highly relevant as many contemplate the ridiculous notion of New Years resolutions:

I can only think seriously of trying to live up to an ideal, to improve myself, if I am split in two pieces. There must be a good “I” who is going to improve the bad “me.” “I,” who has the best intentions, will go to work on wayward “me,” and the tussle between the two will very much stress the difference between them. Consequently “I” will feel more separate than ever, and so merely increase the lonely and cut-off feelings which make “me” behave so badly.  Alan Watts

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Start With Replatforming

My contribution to what will be I am sure a tsunami of predictions…

Marketers need to go beyond digital as a discrete discipline and view it as the foundation of modern marketing. This first and foremost necessitates a replatforming of marketing from spreadsheets, random tools, and vendor-specific technologies to a coherent platform from which marketing can be orchestrated. Marketing workflow, assets, performance analysis, and orchestration will all need to take place in the cloud if marketers are to compete. As marketers look to returns on these crucial investments, a new generation in marketing decision support systems will provide the insight into aggregate marketing performance, breaking them free of narrow and myopic ROI analysis.

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Top 10 Retail Banking Trends

Many of these apply across the financial services spectrum. Worth a read.

The Top 10 Retail Banking Trends and Predictions for 2015 are – with my comments:

  1. Using Customer Analytics to Drive Contextual Experiences (most are doing this now but will accelerate with the deployment of marketing automation suites)
  2. Expedited Deployment of Digital Delivery (already done down-under)
  3. Mobile-First Design (for sure, and most banks will abandon their failed efforts in content rich portals and pseudo news efforts)
  4. Increasing Digital and Social Selling (will accelerate with an emphasis on Digital. Social might continue but Facebook and Twitter have to do better at meeting the needs of financial services customers – early efforts were good but they are largely poor at this now).
  5. Mass Market Acceptance of Mobile Payments (we are way past the tipping point down under – the fact the US is so far behind is crazy)
  6. Focus on Security and Authentication (and not a moment too soon)
  7. Industry Consolidation (and more acquisitions of innovators as the big banks continue to go to slow to keep pace with customer expectations)
  8. Enhanced Customer Incentivization (and a doubling down on customer loyalty programs that better use digital to drive interaction patterns)
  9. Investment in Innovation, Incubation and Uncommon Alliances (I’d suggest  tweak here… most retail banks continue to deliver innovation that is a waste of time and money – largely because they are focused on digitising what they do, not what customers want. Few have any focus on the customer’s moments of doubt, desire and disatisfaction – (MODs) – as a result they are continuing to build complex products. Rather than putting customers in control, they are largely confusing them).
  10. Increased Impact of Digital Disruptors (because of the failure in 9., they will have no choice but to accelerate efforts in this area)
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Jeff Bezos on Amazon

A terrific interview with Bezos.

His comments on innovation and strategy are hugely important. Persistence and addressing moments of customer doubt, desire and dissatisfaction (MODs) are central to the strategy. I’ve maintained for sometime now that the greatest digital businesses today – Amazon, Uber, Apple – and Xero – are all built on addressing fundamental MODs. And those that do all three, are unstoppable.

Loved his comments on managing shareholders. The learning that there isn’t a shareholder anymore than there is a customer. What businesses have to focus on is the institutions and shareholders that they seek to attract and are built to serve. It’s interesting that Amazon only meets with a few of the institutions that hold there stock, and only those that reflect the investing strategy Amazon seeks.

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