Outsourcing your future

Innovation

There’s a growing trend in organisations to outsource their future through innovation labs and innovation competitions.

I like to question the rationale behind these decisions and look at the host company more closely. After all, what is behind its decision to handle innovation from outside-in, rather than inside-out?

Reasons

Innovation Ideas
Innovation Ideas

So let’s explore. Why would an organisation decide to innovate from outside?

  1. Because directors/senior management do not believe the company holds the skills for innovation within itself
  2. Because it doesn’t actually hold the skills for innovation within itself
  3. Because it doesn’t have a culture that nurtures innovation
  4. Because it doesn’t have a financial model that permits innovation
  5. Because it wants to perform innovation theatre

Let’s look at each of those in turn and see if the innovation competition is the best approach

1. Because directors/senior management do not believe the company holds the skills for innovation within itself

This is an issue of perception and/or distance. Perception in that the skills exist but are not exposed in a way that directors know that the skills are there. Maybe those skills are hidden performing other tasks. Distance in that the directors are too remote from the sources of innovation in the company. In this case, outsourcing innovation is likely to be met with resistance internally, by those who have ideas, have an appropriate approach and behaviour but are not recognised.

2. Because it doesn’t hold the skills for innovation within itself

In this scenario, the host is attempting to outsource the provision of innovation skills. However it’s only sourcing them for the life of the innovation programme, typically an accelerator. It may have a desire to borrow innovation skills from the startups it works with, however the issues are often more fundamental than that. Leading to requiring a change in culture rather than just skills. And a change in culture may require fresh blood.

3. Because it doesn’t have a culture that nurtures innovation

By mixing its own employees with that of startups, the host organisation hopes to have some of the culture rub off on its own employees. This culture-transference is fine in principle, but only works for those that are directly engaged. The effect dissipates quickly as those that were engaged then re-encounter the culture of the host organisation, especially if that host organisation has severe governance procedures.

4. Because it doesn’t have a financial model that permits innovation

Spending money on an innovation programme is a known cost within standard parameters. The host organisation can commission the accelerator or competition under its in-house business rule policies. Whereas if the same business case authors had presented individual and separate innovations to the same approval board, they may have been rejected due to the differences between innovation accounting and more traditional financial accounting.

5. Because it wants to perform innovation theatre

I’d like to think that innovation theatre is a product of accident. In that I’d hope that no organisation sets out with the express wish, whether in terms of vision or other goal, of performing innovation theatre.

Assuming it occurs by accident, we find examples of idea generation, possibly in terms of a internal staff panel competition (think Dragon’s Den/Shark Tank), running a 12 week incubator, hosting a hackathon. How many of those innovation events result in real, lasting change of the same magnitude as predicted during the innovation session? Or do they fizzle when they encounter the host organisation?

Next

I’ve addressed this from a few different angle in a following article.

Rain versus Innovation

rain

The following tweet made me consider, initially thinking about the place of Manchester in innovation, but also the wider concept of personal transport versus climate.

It rains in Manchester. From personal experience, Manchester doesn’t feel the rainiest place in the United Kingdom, but it does have a reputation for significant rainfall. That doesn’t dampen the city’s spirits. We just do things differently (that’ the obligatory Tony Wilson reference done)

The type of personal transportation afforded by a bicycle, whether electric or not, isn’t ideal in a climate that features rain heavily on its calendar. The cyclist has to wear weatherproofs, need a change of clothes in the office, probably a shower, and then the reverse on the way home. Or they could just get wet.

That doesn’t prevent cycling in Manchester; it just makes us think more about our journeys. We can’t be as relaxed in planning them.

That creates inertia to change. Which prompted me to think about climates where single person vehicle commuting could be more suitable. Regardless of Britain’s position in the world ranking of innovation, does that mean that Britain will get overtaken by other countries with more suitable climates?

Britain’s transport infrastructure always feels more intensive compared to any other country I’ve travelled to. I’ve seen the quizzical expressions when explaining to US colleagues that we may have to set aside a day to travel 250 miles in the UK (it doesn’t always but it massively depends on which 250 miles you want to travel). But I’ve yet to experience Japan or similarly densely populated countries. With innovation being driven by warmer climates, especially in terms of Silicon Valley, or countries with larger infrastructure (e.g. China, Germany and again, the United States), you can imagine solutions being solved for those countries and climates, not the UK’s. To be clear, it’s no-one but the UK’s and EU’s role to alleviate transport issues in the UK, let innovation solve the problems of each country. Some will be applicable beyond the geographical boundaries in which they were developed, some won’t be. Which then creates an inequality. It’s not the inequality created by resources or the centralisation of power or empire. Instead, it’s an inequality created by provenance of ideas in relation to the location.

Which reminds me, I wonder how the doors on Tesla’s model X fare in Manchester. Our rain is usually accompanied by wind so it blows sideways, not falls down.

Pardon, which sector? – Xtech and Why I’m Fed Up with Tech part 3

Capability Components

I’ve written previously about the issues with xtech that arise from applying -tech to the end of a sector such as healthtech, fintech, etc. And I introduced (and revoked) the idea of a -value suffix. Earlier this week, a conversation earlier made me think more about this and I want to explore the concepts of Business Capability and Capability Components further.

The entrepreneur mentioned that he was in the finance sector. On questioning further, the offer was a financial app for any sector. There’s a big difference and we can explore that difference in a matrix between capabilities and sectors.

Sector Capability Matrix
Figure 1: Sector Capability Matrix

At first glance, that looks like a contender for the world’s least useful matrix. On second glance, I’d also probably agree with my first impression. Not only does every cell in the matrix have a tick in it (so there’s no differentiation), it doesn’t include a full list of Business Capabilities. Instead, there’s sufficient to explore the concept for our purposes.

Let’s take it a bit further and use it to explore an issue I see with companies, mostly those in a supply position. If you’re selling software into healthcare, then are you a tech company or a healthcare company? It helps to phrase the position in terms of the capability you provide or improve in your target sector. So in that case, you’d be providing technology into healthcare. As we can see from the possibly-useless matrix above, we’d expect all sectors to require all business capabilities.

But I find more companies are confused if they’re providing software into finance. Suddenly they’re in the financial sector. True, the selling into the financial sector, by providing services into it, but they’re still a tech company.

This becomes more obvious when the software company that originally sold to Finance sector then also repackages the product to sell into Healthcare.

This is a simplistic view of the concepts of horizontal-integration or vertical-distribution; you can provide:

  • more services into your industry vertical, e.g. provide tech and financial management into healthcare or
  • the same capability into many sectors, e.g. provide financial management into healthcare and education or expand in both directions with
  • a mix of capabilities across sectors

Another Perspective

However, it’s more complicated than that. Each of the capabilities listed in the only-slightly-useful Sector Capability Matrix features at Level 1 or Level 2 (depending on where you start counting from the top). From a standard business architecture practice, each of the capabilities can be decomposed further, for instance, within sales management, we’d expect to see sales analytics, sales commissions, sales execution (the actual doing the selling), sales performance management, etc. Different organisations have a different angle on how they decompose the lower level capabilities. The main concept to take away is that we can take a conceptual capability and split it into more granular capabilities.

Instead, we are going to decompose them in a different manner. Most of the capabilities can be viewed as mini-businesses in their own right, so we’d expect to see a microcosm of capabilities within them.

Business Components
Figure 2: Business Components

Whereas the traditional business architecture view is based on functional decomposition (in that the capabilities are decomposing into more specialist capabilities), we’re going to decompose into enabling components.

For each of those capabilities that support an organisation, there are several components that are required to turn those capabilities into reality. In the same way that the organisation requires capabilities to function, the capabilities themselves require the components to be able to deliver. These components are capabilities at the next level down, to some extent mirroring the capabilities of the organisation as whole. For instance, most capabilities require people who can do the job, people who can manage, technology, etc. Hence the concept of capabilities as mini-businesses in their own right and that’s what we see in Figure 2 above. Each capability is supported by components. Note that Figure 2 does not include all capabilities or components, just enough to give an indication of what we’re discussing here.

Capability Components
Figure 3: Capability Components

This becomes significant when we consider the role of the components in a B2B context. This article started with a founder’s confusion over the sector, we then took a route through exploring capabilities. Now I want us to focus on the components.

It’s that middle column, with the red border, that we should consider when creating a new business. For B2B, we provide Capability Components to a client business.

If your client is a car dealership, they’re in the automotive sector.

The car dealership will have many Capabilities, e.g. Sales Management, HR Management, Organisational Development, etc.

If you are a company selling sales training, then your selling into two capabilities. You’re improving their Sales Management capability, but providing services into their Organisational Development capability. And that’s why it’s confusing. We have to remember, not only the sector that the client is in, but the interplay of the Capability Components we offer with the client’s Capabilities.

A further angle is that if you have sufficient capability components, you can provide the whole Capability to your client business, e.g. fully outsourced HR services.

Conclusion

We need to be careful about how we define our sector. Depending on the context, your audience will interpret the sector differently. A lot of that will also depend on what you meaning you intend to convey when you say your company is in a given sector.

The key item to remember is that the client operates in a Sector and that we offer Capability Components that interact (e.g. support, improve, provide) with the client’s Capabilities.

The Value Affix – Xtech and Why I’m Fed Up with Tech part 2

ecommerce

I wrote in the previous article that we don’t need a separate xtech for any given sector x.

Abstracting further, the focus should be on the customer, not the technology.

We see healthtech, fintech and insuretech which indicate the use of new technologies to improve existing or introduce new business models. But technology is just one factor that could be changed.

Historic changes to business models

Instead we could be changing other elements of the business model.

We’ve already seen the changes introduced during the shift from bricks-and-mortar to online. We stuck an “e-” at the beginning of everything. If it’s Apple-related, maybe an “i”.

We saw segmentation and stuck a CRM at the end of it. And I still chuckle from hearing a supplier introduce “farmerCRM” at the time. In that room, we had all misheard PharmaCRM which made more sense consider the state of the market, although nowadays farmerCRM or more formally agriCRM has enough market presence.

Sometimes we did both and added an “e” and a “CRM”, e.g. ePharmaCRM. Although that was more a proposition from one company than an industry concept.

Then organisations started to realise that not every customer type was the same, so we removed the ‘C’ out of CRM and replaced it with ‘P’ for Partner, ‘E’ for Employee, “G” for Government, etc. Fortunately that died out and we are left with CRM for any type of customer.

We looked at how the channels were being managed and ended up with B2B, B2C, P2P, G2C and so on.

Moreover, some brand names have become synonymous with the elements of the business model they’ve changed.

Think cheap, put an “easy” at the front

Think everything related in one place, put an “rUs” at the end (although at the time of writing, maybe that should be Chapter11RUs?)

And we can continue with the other elements of business models looking for the affixes that denote what’s being changed. Unfortunately, we can also use those affixes to misdirect prospects by indicating that we’ve changed but we haven’t, instead we’ve just stuck an “e” at the front because everyone else does.

Focus on the Customer

Whatever element we’re changing, the focus should always be the customer, or rather, how to deliver more value to the customer.

Based on that concept, should we also see healthvalue, finvalue, insurevalue, etc? However similar to the tech suffix mentioned in the previous article and how techtech is absurb, adding value as a suffix also sounds absurd, but for different reasons.

1) The word “value” is being hijacked

The word “value” has become a euphemism for cheap and a synonym for budget, e.g. “you’ll want our value model” meaning “cheap model” or “budget model”. The word has been hijacked by brands not wanting to admit to customers that it’s a cheaper, inferior product to what they could have bought. I remember returning a drill a few years ago because my house broke it. The clutch on the drill had not coped well with the dense bricks and so the drill had stopped working. I returned the drill to be asked “what did you expect? That’s a value drill.”

On one hand, when viewed as value=cheap. That’s just on the edge of being an acceptable response, but should be followed up with how they can help me.

On the other hand, when viewed as value=worth of good received for total cost (money, time, effort) of transaction, then it implies that every other model of drill in that shop doesn’t provide value to the customer. We can then infer, from using the word as commonly defined in the dictionary, that I had obviously bought the right one for me as it was the only one that provided value.

However, in the parlance of that brand, and many other brands, I’d bought a cheap, inferior product. So we’d have to question whether value is the most appropriate term.

2) It’s all just improvement

By affixing a suffix, we lose sight of what we’re trying to achieve. We allow ourselves to abstract from the domain and the problem at hand, and immediately focus on our solution to resolve that problem. That’s definitely the case for the “-tech” suffix or the ‘e’ prefix. By adding -tech, we’re implying that our solution is tech and it will resolve the issues in that sector or allow us to expand into that market. However there may be more appropriate solutions than tech, so we shouldn’t be constrained by that.  Interestingly, the “-value” suffix doesn’t constrain us in that way, so maybe it is suitable after all.

But we still must be aware that what we’re trying to do with every initiative is to improve. It’s either improve our marketshare (and investor returns), improve our efficiency (and hence profits), improve the life of our customers or some combination thereof. Even if we’re innovating or inventing to get to that point, it’s still an aim to improve the position.

Conclusion

So instead of creating yet more hyped portmanteaus, can we simply stick with the original sectors?

Instead of saying you’re in Fintech, say you’re in Finance and you’re increasing the value you provide to customers everyday. You may do that through technology or you may do that by improving the partnership relations. Or probably both. But it’s still Finance.

 

Since I started writing this article, I began to formulate a 3rd article in the series.

Partnership Map

Partnership Map 0_02

I’ve developed a Partnership Map, designed to help us think about which companies we partner with and why.

With my clients, I’ve often found workshop attendees confused (at least initially) by the term partnership. If you use other well-known tools such as the Business Model Canvas, maybe you’ve encountered similar issues.

We all use the term partnership, but rarely question what we actually mean by it. I usually revert to asking what the partnership entails. If it’s one company paying another for services, is that really partnership?

Components

There are two parts to the target

  1. The Map itself: designed so you can print it large and place your partnering companies on the map
  2. A table of the definition of the tiers. I’ll admit this is a very rough draft, but I thought it better to get it out in the world and improve with collaboration, rather than it just being the product of one person.

How to use it

  1. Work through each of your partnerships and place them according to their sector and tier.
  2. Once all partnerships are on the map, step back to look at them
  3. Evaluate whether that partnership should exist, moved tiers or become a supplier-client relationship. Think of partnerships moving from outside to inside or vice versa, or partnerships being consolidated across sectors.
  4. If a particular partnership is giving cause for concern, then consider using the Partnership Canvas for more in-depth analysis.

Status

This is a first draft; it’s my first attempt at putting down my thoughts into a picture.

There are a few tasks before I’d consider it a first release:

  • The alignment of the words to the circle isn’t spot-on. I’ll wait to see if the quadrants and sectors change first, before making it neater.
  • The definitions of the tiers and the actions need more thought
  • Validate the quadrants – I’m not comfortable with the name Business Capability; it’s a working title
  • Validate the sectors – Do these need to change, add sectors, merge sectors?

 

 

I’m happy to collaborate on it, so get in touch at @alanward and let’s talk.

The Content

Partnership Map 0_02
Partnership Map 0_02

 

Partnership Map Definition 0_02
Partnership Map Definition 0_02

Where Do I Learn? – Part 2 – Books

Books

If I’m driving, I’m listening to podcasts. If I’m travelling by train, then I’m reading.

I typically read books that don’t directly relate to my profession, but those that I hope will change my approach to how I work with clients.

For every client I go to, I end up mentoring business analysts, business architects, programme manager, project managers and other change programme staff. So I’ve kept a list of references (not just books) on Evernote and I tailor it to the person I’m mentoring at that time.

Here’s the list of books that I recommend:

1. Lean

Production Line
Production Line

1.1. Womack and Jones: Lean Thinking: Banish Waste and Create Wealth in Your Corporation

This is the book I recommend to anyone trying to understand lean for changing services and organisations. However, once you understand, you’ll start applying it to other areas of your life. There’s a lot of argument in the field about whether this is really Lean, TPS or some other methodology. At this stage, if it’s your first introduction to field, this is a great book to start with. You won’t be an expert by the end of it, but at least you’ll understand more and be able to understand some of the differences in the arguments.

1.2. Womack and Jones: Lean Solutions: How Companies and Customers Can Create Value and Wealth Together

The 3rd book in the series by Womack and Jones. Most useful for service industries and how to value the time of the customer more. Sometimes this is the book that makes the reader sit up and go “I get it now”, especially if they’re working in health or social care.

1.3. Womack, Jones and Roos: The Machine That Changed the World

The first book in the series. It’s the book that introduced the term Lean to the world (although the term had been in minor use before that). It’s useful if you’re interested in the history and how automobile manufacture has changed. If reading, get a later edition due the updates. The world has moved on since it was written, so usually I’d say it’s only worth reading if you’re interested in the subject and want to read about the case studies. But there’s an element of learning about some of the issues faced by companies as they implement lean for the first time.

2. Lean – More Advanced

Production
Production

2.1. David Mann: Creating a Lean Culture: Tools to Sustain Lean Conversion

This book is useful since it covers a lot of ground that is missing from the Womack and Jones books; mainly that there has to be a culture to make it happen and foster the long-term improvement. So David focusses on the role of the manager and what they need to do.

2.2. The Lean Toolbox for Service Systems

Probably the driest book in this list, it’s worth persevering with. There are some gems of ideas in there. I tend to offer it more as a reference to analysts to pick and choose from, rather than read the whole book. Note that I don’t pay that much attention to the process part of the book; but the principles are still sound in that we should choose different methods and tools at different levels of granularity and purpose.

2.3 Michael L. George: The Lean Six Sigma Pocket Toolbook

Nicely summed up by it’s streamline: “A Quick Reference Guide to 70 Tools for Improving Quality and Speed”. It’s a small book with each tool described, how to use and when to use it. Useful to have at arms-length when checking which calculations should be used, especially if you’re not conducting them every day.

2.4. Toyota Kata – Mike Rother

https://www.amazon.co.uk/Toyota-Kata-Managing-Improvement-Adaptiveness/dp/0071635238/

One of my favourite books in this list. This includes tales and case studies highlighting the real root of TPS, in terms of how mentoring and problem solving are achieved and how they are intertwined. This is a necessary complement if you’ve started out with Womack and Jones.

2.5. Lean Enterprise – Jez Humble, Joanne Molesky & Barry O’Reilly

https://www.amazon.co.uk/Lean-Enterprise-Performance-Organizations-Innovate/dp/1449368425

An interesting book that takes learning from Toyota Kata + Cost of Delay + agile and continual improvement on an enterprise scale. It provides a way for structuring your business from a prioritisation, problem solving and personal development perspective. I’d suggest starting with Toyota Kata first and then reading this one.

3. Influence and Sales

3.1 Robert Cialdini: Influence: The Psychology of Persuasion

Out of all the books I recommend to anyone I’m mentoring, this is usually at the top of the list. Partly so that we can talk about the same concepts and understand how we’re being influenced (and how we can influence others). It doesn’t matter if you don’t use it at work, you’ll find a use for it when buying your next car, watching how supermarket designers manipulate your thinking, etc. Even in the RNLI station/shop in Blackpool, I noticed 3 of the principles being used on one display stand.

3.2. Robert Jolles – Customer Centered Selling

This is easily the best book on selling that I’ve ever read. He describes a process, and while we’re all human and don’t follow always follow processes, it’s really useful to know what’s expected at what stage and what’s missing if you’ve jumped straight in.
There are a few editions of this; all out of print, but some are more available than others. And check eBay and Amazon used.

3.3. Chris Voss – Never Split the Difference

Chris’ book is close to the top of my list for books to recommend to business architects and business analysts. There’s little point doing a great job from your professional domain if you can’t influence others to accept your way of thinking. That’s not to say that you should manipulate others, instead it’s to give your work a fair chance of being heard and an opportunity to be adopted.

3.4. Roger Fisher: Getting to Yes: Negotiating an agreement without giving in

Based on the Harvard model of negotiation, including Best Alternative to Negotiated Agreement. It concentrates on creating the framework first before discussing points. So agree how you’re going to agree before you start talking the specifics of the deals.

3.5. Dan Roam: Back of the Napkin: Solving problems and selling ideas with pictures

Can’t draw, have difficulty communicating ideas? Then have a look at this book for understanding the simplest type of diagram to draw for any situation. It’s here on this list because many of the pivotal moments when you’re describing your ideas can be accelerated by use of the appropriate diagram. Pay particular attention to the SQVID.

3.5. Joe Navarro – What Every BODY is Saying: An Ex-FBI Agent’s Guide to Speed-Reading People

The best book I’ve read on non-verbal communication and body language. There’s a simple theme running throughout the book; you can’t tell what someone is thinking, but you can tell if there’s a disconnect between their non-verbal communication and their communication.

4. Education

4.1. Josh Kaufman: The Personal MBA: A World-Class Business Education in a Single Volume

I’m often mentoring change professionals who, while they may be great at their chosen profession, don’t understand accounting practices or how decisions are made. So I direct them to these two books. This is the shorter one; quicker to read and digest.

4.2. Steven Silbiger: The 10-day MBA: A step-by-step guide to mastering the skills taught in top business schools

The second of the two general business books I recommend. This has more detail than the Personal MBA but also may require guidance due to the complexity.

5. Entrepreneurship/Innovation

innovation
innovation

5.1. Eric Ries: The Lean Startup: How constant innovation creates radically successful business

I find that this book can change the reader’s approach to large-scale programmes. It makes them think more about incremental change based experiments. I also find that I still have to remind mentees about the purpose of experiments, i.e. to validate learning. But if they’ve read the book, it’s absorbed easier with that gentle nudge.

5.2. The Startup Owner’s Manual: The Step-by-Step Guide for Building a Great Company – Steve Blank and Bob Dorf

Kindle is usually significantly cheaper than the paperback/hardback.
The Startup Owner’s Manual deserves more fame than it has. It’s unfortunate that it’s been somewhat eclipsed by the Lean Startup, since it has significantly more usable material in it. That hightlights the differences; the Lean Startup is a book that promotes the culture and activities, whereas the Startup Owner’s Manual is a guide to the activities that you have to follow. Admittedly, it can be a bit daunting to read at first, since it comes across more as a reference guide that you can dip in and out of. This is the book to read to understand the concept of Customer Development.

5.3. The Lean Entrepreneur: How Visionaries Create Products, Innovate with New Ventures, and Disrupt Markets

If I know you’re an entrepreneur or a startup founder, then I recommend this book above all else. It takes the learnings from a lot of other sources and puts them into one practical book. So expect to see references to the Lean Startup, Customer Development and Business Model Canvas as well as tables that you use to record and plan your own progress.
Pay attention to the reverse planning process; it’s important to know where you want to get to and then work back from there.

5.4. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers

Alex Osterwalder has started a movement and initiated a number of more domain-specific spinoffs. If you have a problem you can probably find a canvas for it now. This is the book that brought canvases to us, taking a simplistic view of business architecture and making it accessible to all.

5.5. The Mom Test – Rob Fitzpatrick

A short book, but it doesn’t miss anything out. If you’re conducting user/customer interviews, you should read this book first. Ideal for users researchers in service design/design thinking and for startup founders. Don’t be fooled into believing what your customers say; they have other motives, so it takes a different approach to obtain the information you require.

6. Business Strategy

Chess
Chess

6.1. Richard Rumelt – Good Strategy/Bad Strategy: The difference and why it matters

This includes so many case studies regarding how to set strategy. It’s a fascinating read. Main point to take away is that a good strategy includes 3 parts:
  1. An analysis of the current situation
  2. A vision of the future
  3. A plan to achieve that vision

6.2. Michael E. Gerber: E-myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It

At the other end of the scale from Good Strategy/Bad Strategy, Michael discusses small business strategy by using a small bakery as a example throughout the book. It does focus on franchising as a solution in the second half. It’s a useful book for small business owners, helping them think about the processes and systems they need to have in place.

7. Change

Butterfly
Butterfly

7.1. Richard Wiseman – 59 Seconds: Think a little, change a lot

Change yourself in less than a minute. That’s the main concept behind the book. Richard takes us through a journey, referencing many studies across the last few decades and how we can learn from them to influence our own lives.

7.2. Richard Wiseman – Rip It Up: Forget positive thinking, it’s time for positive action

The follow-up to 59 seconds. It’s actually the more practical book out of the two, but it makes sense to read 59 seconds first.

8. Facilitation

Session
Session

8.1.Understanding Facilitation – Christine Hogan

https://www.amazon.co.uk/Understanding-Facilitation-Theory-Principles-Principle/dp/0749438266

Christine covers a lot of ground in this book. She educates about the history of facilitation, different forms of it and how it has progressed. This is a must-read for facilitators.

8.2. Practical Facilitation – Christine Hogan

https://www.amazon.co.uk/Practical-Facilitation-Techniques-Christine-HOGAN/dp/0749438274

In the second book I recommend from Christine Hogan, she introduces tools and techniques for facilitating. This is a good read and worth keeping to hand as a reference guide when you’re starting out in your facilitation experience.

8.3. Sue Knight : NLP At Work

I wondered whether to include this since I don’t actually believe in NLP. There just wasn’t enough scientific evidence at the time I looked into it to prove it worked. However there have been times with facilitators who have had difficulties with some of their customers that I’ve recommended certain parts of this book. Critically, the concept of reframing has helped numerous analysts continue working with customers rather than going home stressed at the end of the day. It’s helped them realise where the problem could lie and, more importantly, that it doesn’t lie with any of the people.

Be a Startup, not a Zombie

Zombie Hands
Zombie Hands
Zombie Hands

I’m just catching up on an episode of The Salesman Podcast hosted by Will Barron. The episode is about being the first sales person in a new company.

While I agree with everything Vinnie has said, one thing came to mind. If you’re the first salesperson and you’re conducting product-market fit conversations, then you’re working for a zombie, not a startup; it’s dead, but doesn’t know it.

I can’t think of a more suitable activity for the founders before hiring anyone than to conduct those conversations themselves. The only exception I can think of is where the founders have zero business sense (think of the traditional, out-dated view of scientists) and need to hire to make a business.

Think back to Steve Blank’s Customer Development concepts and subsequently, Eric Ries’ Lean Startup, checking whether the market wants your concept and whether the product you have in mind fits that market need are two fundamental tasks to complete before you build the product or first iteration of the product.

 

 

 

 

 

4 box model for deciding on the future – part 2

Revised Revenue Vs Confidence 4 box model

I finished the previous part of this article with a four box model that had two quadrants with the same outcome.

Revenue Vs Confidence 4 box model
Revenue Vs Confidence 4 box model

With that article, I’d stated that the outcome you may want to choose would probably depend on the lifestyle you want to lead.

That still applies, but I want to show what I do with similar four-box models

The issue

I don’t like when four-box models show opposite quadrants with the same outcome. The reason is that the quadrants are an approximation so we’ve blurred what we do with data points that fall around the centre (like around a bullseye) of the model. Imagine a point of x=49 and y=51, why should that be treated different to x=51 and y=51? or x=49 and y=49?

How to interpret

What we recognise is that if the diagonally-opposite quadrants are more a diagonal stripe. Depending on how we want to approach the corners, this could be a straight swipe or arcs. I tend to find arcs better reflect the decisions being made.

Revised Revenue Vs Confidence 4 box model
Revised Revenue Vs Confidence 4 box model

 

4 box model for deciding on the future – part 1

RevenueVsConfidence

I regular make decisions about where I’m going to spend most of my working effort.

A few years ago, I was sharing my ideas and potential options with a few friends and ex-colleagues. I used an extension to the typical four-box models. This simplified the thinking and forced me to recognise a few major questions that I’d been skirting around.

I wasn’t short of ideas for businesses; some proven, some not. But I recognised I didn’t have enough time to do everything, nor enough available funding to pay others to do everything. Importantly, I didn’t have sufficient time or energy to chase funding to make all the ideas happen (and chasing too many would disqualify the ideas from most potential funders).

Horizontal axis – annual revenue forecast

I didn’t initially approach this in a mercenary way, but after trying a few variables, I found that using predicted revenue as the horizontal axis opened up a number of questions. While I wasn’t focussed on the money, it did make me evaluate how much effort I’d want to put into a venture in order to gain that revenue.

Vertical Axis – Confidence

For the vertical axis, I plotted my confidence in being able to achieve the revenue I’d stated. For the 3 or 4 revenue targets per business idea, I also evaluated my confidence in that target. Obviously, something being earned in the current year is 100%. And most ramped down towards the right as I my confidence decreased, the higher the revenue. The difference is that some business ideas had a steeper slope than others.

Analysis

RevenueVsConfidence
Revenue Vs Confidence

I picked the most likely ideas I had at the time and plotted them on the chart. It was obvious that there were some with a good chance of high, recurring revenue, but that they bored me senseless. And unfortunately, the one I was most interested in, had a significant dependency on me and had no way of recruiting others to make it work. I chose to progress with one that interested me and had a decent chance of high revenue, with my consultancy as a backup.

Other variables

Since it was important to me to realise what was important to me, I had planned to use “passion” or “interest” for the vertical axis. However, when I did this, it was quickly evident to me how I felt about the idea in question. I didn’t need to have that value on a graph; I could feel it when I discussed the ideas.

For the horizontal access, I also considered:

  1. effort required to achieve that revenue
  2. familiarity with the domain in question

I also considered using the inverse of the effort required as a variable for the size of the data point, with easier ideas being bigger than more difficult ideas.

Further analysis

You’ll notice that in the Excel chart, I’ve also put the dividing lines for half of the max revenue and at 50% confidence so that we can start to see a four box model.

That leaves us with the first interpretation.

Revenue Vs Confidence 4 box model
Revenue Vs Confidence 4 box model

The bottom left of low-confidence and low-revenue is easy to understand. It’s not the area to concentrate on.

The top right of high-confidence and high-revenue looks like the holy grail, but these usually require intense effort and significant funding and resources.

That leaves the top-left and bottom-right of high confidence, low revenue and low confidence and high revenue. The choice here is more on of lifestyle. What type of lifestyle are you after? Then choose the most appropriate box. This is where effort may have been a more useful axis than confidence.

Read Part 2 here.

Business Architect for Free*

Idea Post-its

I’ve got some time in between clients where I’d like to contribute back or pay-it-forward. I’d like to donate my time for free and raise a bit for charity while I’m doing it.

Idea Post-its
Idea Post-its

What’s the offer?

You get a Business Architect for free*

*What does free mean? You don’t pay for my time. Instead, you pay expenses (we can agree up front and they could end up being zero) + you make a donation to a registered charity (I’ll leave the amount up to you).

You’ll get me for up to a day, plus time beforehand over email/messenger to discuss how to use that time.

Alternatively, if you just want a chat in person/over Skype, I’m happy to get involved.

This is open until Fri 25th August 2017 to one more company or organisation initially. I have one already booked in, so there’s one more space.

Next steps

Get in touch via @alanward.

What could we do?

Business Architecture is an odd profession. The common route in is through strategic application of many different business analysis methods, but it is possible to come in through other routes. Which means that no two Business Architects have the same skills, experience or expertise.

I specialise in three areas:

  1. Innovation: specifically bringing activities more commonly related to startups into larger organisations, kick-starting innovation if you’re just starting, have stalled or hit a brick-wall
  2. Customer  Focus + Lean: evaluation of your current operations, plus how to transform them into something more efficient and relevant to what your customers require
  3. Motivation: specifically Business Motivation rather than individual motivation, although the two are closely related.

The trick would be finding something that we could achieve in one day. I’m up for that challenge. Are you?

The future

If this works out well, then there’s a good chance that I’ll do this on a regular basis. So please, get in touch. Even if we don’t meet this next time, I’ll remember you for the next round.