Transformative Innovation in Malls - Part 1

Why do shopping centers struggle with innovation so much?

Over the years I have made many proposals and floated many ideas with clients and with employers. I have had many bad ideas, but I have also had many ideas that were simply ahead of time.

Ideas have an extraordinary difficult path to adoption; what with politics, resources and risk to consider.

The diagram below illustrates the two types of innovation. Both are desirable, but only one is critically necessary. Implementing truly transformative innovations is harder by an order of magnitude. Simple, transitional innovations are necessary, but they don’t transform a business to make it sustainable in the long run. For instance, it is important to implement recycling programs, install charging stations for EVs, but these won’t help ensure your future. Transitional innovations are necessary, but not sufficient.

(c) 2017 ganador

(c) 2017 ganador


The problem, as it is with so many strategic insights, is how to actually, practically make it happen. I think I have solved that riddle for shopping centres. The framework below articulates the four key elements of the shopping centre’s success. The investors (representing the providers of capital), the actual bricks and mortar place, the shopping community (patrons) and the merchants that are the primary attractors.

Transformative innovation happens when you succeed in introducing a change that involves and benefits all four these elements of the shopping centre mix. When you integrate changes that to some extent combines and involves these four elements, then you get innovation that transform.

(c) 2017 ganador

(c) 2017 ganador

As an aside, for the sake of completeness and transparency, it should be pointed out that simply having an idea is a very small part of the process. The biggest challenge is the cultural shift that creates a climate that is receptive to innovative ideas and a structure that enables the execution of innovations are prerequisites. But this is not a book about change management per se, so I will stick to the knitting.

The list below are all ideas (some more than a decade old) that seems to me still have merit, and all of them integrates to a greater or lesser extent these elements of the mix.

1. A Fund for Fitout Contributions:

Retailers in the current climate (2017 and foreseeable future) rely heavily on landlord funded store development.

Innovation: Create a FITOUT FUND.

That is a separate fund (with a dedicated Fund Manager)  that takes equity but with a payback structure for the retailers, instead of providing lease incentives with no return. Instead of funding failing business models, invest in new concepts. Make it compulsory for a portion of the funds to be spent on professional advice (design, marketing, legal, financial, operational etc) that improves the risk profile of the fund.

2. Casual Incubator.

Casual Mall Leasing and later Pop-Up Retail has long been part of the shopping centre scene. Landlords saw this as revenue opportunities - occupying common area space and generating incremental income. It was largely a response to the luxury of high occupancy rates. Many in the industry saw this as an opportunity to ‘incubate’ future tenants. But for a variety of reasons that hardly ever materialised.

A few entrepreneurial types tried things like 100 Squared. Scentre recently launched an incubator at Chermside which I have not seen personally, but is possibly the type of innovation that could be transformative.

Innovation: Design & Create dedicated a Co-op Space

Much like Offices have become Co-working spaces where a bunch of rotating and fluctuating temporal concepts can trial themselves. The key to making it a sustainable option is to (a) support it with professional advice to incoming trial concepts (b) make it permanently available (c) prioritise the concepts that can scale for shopping centres and (d) allocate space based on potential (not first movers only) and (e) constant rotation to keep customers coming back anew.

The key feature of something like this would require the Landlord to NOT be cynical.

The shaded/blue areas are those services we specialise in over at www.yearone.solutions

The shaded/blue areas are those services we specialise in over at www.yearone.solutions

A real incubator must be applied the full lifecycle of new retail concepts - as per above diagram: Identify, source, screen, onboard, support, adapt, grow and iterate.

One can brainstorm various innovations once you have a specific stage of the cycle to focus on. Examples of innovations that could be applied to the various stages are:

Online Academy: Create a dedicated website for any business interested in opening in a centre to (a) learn how to do it (b) step them through actually doing it. It may even be a joint-initiative of multiple landlords, but the idea is that making a success in a shopping centre has its own unique requirements. It is not about teaching people how to retail (only) but how to do business and to ‘stress-test’ their ideas and give them an opportunity to bounce ideas off the facilitators (independently).

Retail Development Support Office: For the duration of every retail development, create a Retailer Academy/Forum for any business (comprising fewer than 3 stores) who is signed up to a deal. Offer the newbies guided, independent advice to help plan their business, design and configure it, finance it and launch it. A simple thing like navigating the recruitment process on intuition is fraught with danger and getting the wrong people on the wrong agreements at the start of the new retail business could easily be fatal (at worst) or just result in such a poor customer experience post launch that they are on struggle street to retail customer interest. (How often have you gone into a store for the first time, had a bad experience, and wrote that store/brand off never to return?

Screen for Success: We have created a subsidiary company - www.yearone.solutions to act as an external validation agency  in this space. Y1S can help de-risk new retailers and assignees though better, professional assessment and validation. This mitigates risk and secures any potential landlord investment. This intervention can also be geared to guide the retailer - through the business planning process - to help get them off to a better start, particularly those who are not familiar with the constraints of trading in a centre.

We conclude the two-part series in the next post.

PS: Drop your name in the subscription box to be notified when we publish the FULL version of THE BEAT OF THE MALL.

How AirBnB's business model is the blueprint for shopping malls

This was intially published to the #thinkdifferent newsletter. If you would like to get advance insights, well you need to be smart enough to know what to do...


Business Model Disruption in Real Estate

In many ways, this section goes to the heart of explaining HOW the business model of shopping centres will be disrupted. Rather than speculate or theorise about it, I looked at disruption in other industries and identified to key elements of disruption. There are many to choose from (Taxis, Media, Movies and even Retail). I considered all of them and I found a patterns of disruption that (a) conforms to the way we think as revealed in our dialectical cycles of system change and (b) it reveals a set of consistent principles.

It is worth noting that entrepreneurs who disrupt industries, rarely can articulate with foresight a list of dimensions that they aim to ‘disrupt’. It is a result of opportunistic thinking - simply doing the opposite of the incumbent’s strategy.

It is only with hindsight, once the disruption has occurred that we can sit back and see what actually happened, and more importantly what worked. We have had sufficient examples of effective , technology-led disruption in multiple industries to start seeing the patterns.

Like Uber, not like Tesla

I don’t consider, for instance, that Tesla is a ‘disruptor’. Their business model is at its core quite similar to the rest of the auto industry. Electric-powered cars are more disruptive than say the inflection that occurred when the industry went from normally-aspirated vehicles (with carburetors) to fuel-injected vehicles, but the nature of the disruption is relatively similar.  EV will fundamentally disrupt the oil exploration and fuel distribution business, but not so much the automobile manufacturing industry.

As will be explained below, one of the characteristics is that it is a case of winner-takes-all post disruption. With Tesla other manufactures can (have) follow suite and do it relatively quickly.

The Principles

The principles below are simply the key strategic elements of any business - brand, value, price etc. By comparing the industry sector before and after the disruption provides a powerful insight into what the future is for industries yet to be disrupted.

The criteria considered are:

  • Brand
  • Determinants of Supply
  • Nature of Supply Chain
  • Marketing Characteristics
  • Roles of the physical location (Real Estate
  • Nature of Service
  • Nature of Value
  • Range/Offer
  • Determining the Experience
  • Choice
  • Capacity
  • Scale
  • Pricing

The question is simply this: how did these criteria change in the NEW business models? Given the opportunistic nature of business evolution (go where the opportunity is); the hypothesis is that the disruption will occur in the direction of the opposite (from thesis to antithesis).The disruption that AirBnB brought to the holiday/short-term accommodation sector seems to be an appropriate case study as hotels function very much like shopping centres on many levels. What happened?

Brand

The idea of a ‘brand’ was traditionally used to identify the nature of the product; that is communicate essential features of the actual product. In the new model, the actual product can be anything anywhere - from a six star experience, to a tent on a farm. The brand is a platform that attracts people to it and is not determined or influenced by the actual product. No one associates AirBnB with a certain type of product, a certain type of experience. 

Supply and Demand

In the old model the winner was the brand that owned the supply. In the new model, the winner owns the demand (the market) and suppliers follow. There are challenges in creating these ‘marketplace’ business models initially, but once the tipping point is reached, it becomes self-fulfilling.

Marketing Characteristics

As much as traditional businesses claim and aim to be ‘market-led’, the reality is that they are very much in charge of their own destiny, deciding what the strategy, execution and so forth are.  Traditional marketing is top down, from the inside out. In the new format, the marketing becomes outside in and bottom up. Other than 'founder ego', there is no reason for AIrBnB to advertise - the participants advertise their participation as they wish.

Roles of the physical location (Real Estate)

At the dawn of commerce, the production of goods and the consumption of goods were co-located. In time, as distribution expanded, the importance of owning locations mattered a lot. Trade routes determined marketplaces. The one with the best real estate won. Hotels that opened prime locations on the ‘trade route’ of holiday destinations owned the real estate to differentiate themselves. This created high barriers to entry.

AirBnB owns no real estate and the barriers to entry come from owning the market, not owning the supply of rooms.

Nature of Service

Businesses choose to differentiate on the level of service they offer, usually adding services = adding value and adding margin. In the new model, there is typically only the essential services.

AirBnB does not facilitate insurance, does not help its suppliers to procure cheap soap. Not additional services.

Nature of Value

The value procured can range on a scale of tangible to intangible. (Pure product to pure service). In all major instances, the disruption has been in one direction - towards intangibility. (There is currently the emergence of the Internet-of-Things, which has a distinct tangibility to it; again the ‘antithesis of the thesis offered by the internet.)

I have spoken and written at length about ‘ephemeralization’ - the idea the the things we buy seem to be increasingly ephemeral - even for digital products. The storage disk becomes the Cloud and the CD becomes a ‘stream’.

Range/Offer

Consumers always wanted unlimited choice (but it must be easy to choose and be frictionless to transact) and so the ephemeralization has enabled that to the extent that consumers now have practically unlimited choice. In the old model, there are obvious constraints and limitations in the offer.

Curation: Determining the Experience

The brand owner determined the experience. In fact, the brand ‘promised’ the experience. The hotel operator determined the level of ‘stars’ of the experience. AirBnB has very little control over the quality of the offer, relying on consumer rating mechanisms to communicate the nature of the experience. (As aside: AirBnB is attempting to enforce social justice agenda by setting rules as to who the operator may or may not decline to host. This runs counter to the core premise, and it will be interesting see how it plays out.)

Capacity & Scale

In traditional business there is often a capacity constraint that limits the operational capacity. Only so many locations, only so many customers. In the new marketplace model, there are virtually no capacity constraints to limit growth. AirBnB is not even limited by the number of houses on Earth - they can keep adding ‘experiences’ or they could even colonise the moon.

Pricing

The old model of pricing was quite structured, with each member of a the supply chain carving out a margin that kept the whole system alive. Each stage of the chain was carefully and formally negotiated. In the AirBnB world pricing is variable. There is a ‘clip-the-ticket’ mentality that operators adopt - often taking a relatively small portion of the price, relying on scale to provide the returns by keeping resistance for newcomers low.

The Dialectical Meta-Pattern

The dialectical pattern always seems to emerge doesn’t it? When you carefully analyse all the changes articulated above (or summarised below) you will notice that there is a dialectical pattern. The full process is explained in THE BEAT OF THE MALL - so you will just have to stay tuned for more on that. 

The table below summarises how the traditional model of hotels compares to the business model of AIRBnB. Both industry sectors aggregate and sell rooms to visitors and derives a profit from the amount spent by the guest.

The key takeaway is quite simple, and quite self-evident: whatever the features are of a currently successful business model (the THESIS), the future lies in doing the opposite (the ANTITHESIS). Ovder ttime, these differences get SYNTHESISED. 

And then a NEW ANTHITESIS emerges.

THESE ARE THE QUESTIONS TO ASK:

What are you doing now?
What is the opposite?
Is that possibly the future?

How Marketing Makes a Mockery of Maslow

The ‘hierarchy of needs’  developed by Maslow must be one of the most misunderstood ideas around. It is, despite the fact that it is approaching 75 years since it was conceived, still a mainstay of modern MBAs. As a ‘business concept’ it has proven extraordinarily antifragile. But chances are you have never read any of Maslow’s original writings, instead on relying on blogs (oh, the irony) to learn what it is all about.

Why did it last? Why is it so useful? Why are Marketing MBAs taught about Maslow, and not SEO instead?

And if you are going to understand needs, you must understand wants - and again misconceptions are rife. So, strap in, this is going to be a long ride. But it is extraordinarily useful to know what it is and how it operates.


 

Firstly, the idea of a layered pyramid as the graphic representation is actually not the best way of visualising the way Maslow conceived the theory. There is one aspect of the various ‘drives’ that are hierarchical, yet that has come to dominate our understanding. It may even be useful to ignore the idea of the pyramid until you have a strong grasp of this subject matter.

Secondly, the hierarchy is not fixed, and in Maslow’s own words: “We have spoken so far as if this hierarchy were a fixed order but actually it is not nearly as rigid as we may have implied. It is true that most of the people with whom we have worked have seemed to have these basic needs in about the order that has been indicated. However, there have been a number of exceptions.”

The notes below are extracted verbatim from a paper by Maslow, and I add my commentary below most points to clarify some common misconceptions or highlight key insights.

The integrated wholeness of the organism must be one of the foundation stones of motivation theory.

There is more to humans and human motivation that the factors identified here. And the factors that motivate behaviour are integrated - that is they play out simultaneously or separately, but they influence each other. It is dangerous to simply assume a rigid, linear sequence.

Maslow explains it as follows: “There is a degree of relative satisfaction. -- There is a false impression that a need must be satisfied 100 per cent before the next need emerges. In actual fact, most members of our society who are normal, are partially satisfied in all their basic needs and partially unsatisfied in all their basic needs at the same time. A more realistic description of the hierarchy would be in terms of decreasing percentages of satisfaction as we go up the hierarchy of prepotency.”

Human needs arrange themselves in hierarchies of prepotency. That is to say, the appearance of one need usually rests on the prior satisfaction of another, more pre-potent need. Man is a perpetually wanting animal. Also no need or drive can be treated as if it were isolated or discrete; every drive is related to the state of satisfaction or dissatisfaction of other drives.

The hierarchy is about POTENCY, not a sequence of drives that happen in succession. Whilst there is a general tendency for lower level needs to be satisfied first, it is more important to understand that these needs are STRONGER motivators. (Marketers often think because they sell a sophisticated product, they must appeal to higher-order needs. This is simply put, just stupid.)

The hunger drive (or any other physiological drive) was rejected as a centering point or model for a definitive theory of motivation. Any drive that is somatically based and localizable was shown to be atypical rather than typical in human motivation.

Contrary to what many people believe the lowest level in the hierarchy is not what motivates us first and foremost. Human being are NOT typically motivated by pure physiological needs. (If we were, we’d be animals.)

In Maslow’s words: “Motivation theory is not synonymous with behavior theory. The motivations are only one class of determinants of behavior. While behavior is almost always motivated, it is also almost always biologically, culturally and situationally determined as well.

Such a theory should stress and center itself upon ultimate or basic goals rather than partial or superficial ones, upon ends rather than means to these ends. Such a stress would imply a more central place for unconscious than for conscious motivations.

At the most basic level, motives are NOT conscious. The root cause of our behaviour is psychological and unconscious. What we seem to be motivated by is often the ‘means’ and not the ‘end’ (or root cause).

There are usually available various cultural paths to the same goal. Therefore conscious, specific, local-cultural desires are not as fundamental in motivation theory as the more basic, unconscious goals.

Motivation is about ‘what drives you towards a goal’ and these drives can take various forms and is contingent on cultural and environmental factors. I.e. the ‘needs’ are moderated by environmental factors. To paraphrase Maslow: No claim is made that it is ultimate or universal for all cultures. The claim is made only that it is relatively more ultimate, more universal, more basic, than the superficial conscious desires from culture to culture, and makes a somewhat closer approach to common-human characteristics, Basic needs are more common-human than superficial desires or behaviors.

Any motivated behavior, either preparatory or consummatory, must be understood to be a channel through which many basic needs may be simultaneously expressed or satisfied. Typically an act has more than one motivation.

Not all behaviour can be said to be ‘motivated’; but this theory applies only to those behaviours that are. Multiple needs (motivational factors) manifest often in one behaviour. That is, it is not a simple matter of one need, one behaviour.

To paraphrase Maslow again: There are multiple motivations of behavior. These needs must be understood not to be exclusive or single determiners of certain kinds of behavior. E.g.  Eating may be partially for the sake of filling the stomach, and partially for the sake of comfort and amelioration of other needs.

Not all behavior is determined by the basic needs. We might even say that not all behavior is motivated. There are many determinants of behavior other than motives. Too often people think the ‘hierarchy’ explains motivation completely. Not only are there contingent factors (culture) there are also other internal factors (personality, attitude etc) that motivate certain behaviours.

Some behavior is highly motivated, other behavior is only weakly motivated. Some is not motivated at all (but all behavior is determined).

I.e. there is more to human behaviour than mere need expression.

There is a basic difference between expressive behavior and coping behavior (functional striving, purposive goal seeking). An expressive behavior does not try to do anything; it is simply a reflection of the personality. A stupid man behaves stupidly, not because he wants to, or tries to, or is motivated to, but simply because he is what he is.

I don’t think that need any further explanation.


So, in summary:

  • The hierarchy is not the complete explanation for human behaviour

  • The needs are interdependent

  • The needs are contingent

  • The needs are not exclusive

  • Some needs are more important than others in terms of ability to influence goal-directed behaviour

  • Not all behaviour is determined by needs.

So, what are needs exactly? Let’s rely on Kotler et al (p11, 2012) to describe the terms

  • Human needs are the basic human requirements. (Some people add ‘innate’ instead of basic. I prefer that.)

  • Needs become wants when they are directed at specific objects that might satisfy that need.

  • Demands are wants for specific products backed by an ability to pay.

It is worth noting that ORGANISATIONS don’t have needs in the same way as humans. Belatedly B2B marketers are realising that the ‘buyer’ is human after all, with all the concomitant biases and personal ‘needs.’ But the typical decision-making models that explain B2B purchasing may reference ‘general need description’ but it does not mean ‘need’ in the same way.

Organisations have requirements, not needs - despite the fact that we often colloquially refer to organisational needs. But it is lazy, wrong and confusing to do so.

See the progression in that set of definitions? Consider the table below as illustration:

What does this mean for the Marketer?

Your starting point is (usually) your product. You want to sell coffee. Ultimately you need to know what the latent demand is and what the potential demand is. Because it is only when you SUPPLY the product at a price to the market that DEMANDS that product that you generate revenue.

What are the basic human NEEDS that your coffee can appeal to?

(Note the plural.) You realise that coffee can play to a range of needs.

How are these needs typically fulfilled?

Some people want instant coffee, some want takeaway espresso, some want to make their own (for example.)

How are these wants met?

You can consider the ALTERNATIVES in the market - because this is effectively going to be your direct and indirect competition.

Does that want translate into a demand for that (type of) product?

I.e. are people spending or willing to spend MONEY on fulfilling the want?

Once you have calculated (or decided to take the risk) that there is a demand for YOUR product because it will be something people WANT as an expression of an innate (combination of) NEEDS, then you have a business.

The next step is to formulate your marketing plan by recognising who your competitors are and how to best communicate to the customer how your product is what they need - or more specifically, which one of the needs you may rely on more than others.

So, if you are an (MBA) educated marketer (or just extraordinarily intuitive) you would naturally work through this progression because it determines whether there is a (real) demand for your product based on a (real) need that the consumer has.

Marketing is defined (simply) as ‘finding out what the customer wants, and giving it to them. Now you understand why the idea of needs & wants are so fundamental to the idea of marketing.

PS: Whenever and wherever you see versions of the pyramid that has added layers or different names added, then you can rest assured it is just made-up stuff.

Like this one.


Image: https://www.professionalacademy.com

Paradigms of Truth

The biggest challenge we face when trying to discern a way forward is to distinguish between signal and noise: what is true and what is distraction. Simply scroll through your newsfeed on any social media and even through the list of articles posted on your favourite news site.

  • Retail is doomed.
  • Why retail will survive.
  • Malls are dead.
  • Long live the Mall.
  • Amazon will kill your business.
  • How to survive the coming of Amazon.
  • The economy will tank.
  • Prepare for the coming boom.

If that tells us nothing else, it should tell us this:

Things are not true because many people believe it.

It is not true because you agree with it.

Things are not true because they are written down or ‘researched’.

They are not true because we want it, because it is on the news or because a smart person says so.

Things are not true because they are complicated, nor because they are simple.

Your truth is not true because it is your truth.

Things are true because they are true.

You may think that makes truth impossible to know, but on the contrary, it is easy to know.

Truth is done, not said.

We act according to that we believe to be true. Forget what people say, write, ‘like or ‘share’.

If we want to know what true is for you (i.e. what you believe) - just look at how you act.  

If we act like Amazon is going to kill our business, then that is what we believe to be true.

If we actively seek an opportunity in every diversity, then we believe the future is bright.

If we pay our staff well, we believe in the importance of people.

If we greet our customers with a smile, we believe customer service is important.

If we complain to the landlord, we believe our problem is someone else’s fault.

If we watch our staff like hawks, we believe it is true that they are nothing but human resources.

If we open the store late, we don’t believe in discipline and consistency.

If we discount our offer as a default first step in a sale, we don’t believe your product has value.

If we say we value inclusiveness, but…

If we say we are not racist, but…

If we say we are compassionate, but…

It really doesn’t matter what we say, only what we do.

Psychologists suggest that 70% to 80% of what we do every day is habitual. Check your habits if you want to find the beliefs that are so ingrained you don’t even notice. That way lies an understanding of the truth. And once you know what you really believe to be true (and not what you have been telling yourself) then you are able to reset yourself and your business on the path that will lead to success.

The fact is, strategies and solutions (for the most part) are pretty self-evident. And if not, one can buy the expertise to solve it. The challenge we face is that we actually believe is incongruent with what we say – that is why we fail in the ‘execution’.

You can call yourself a Hawks fan, but unless you are prepared to sit and watch in the rain, you are a mere spectator.

Image: www.heraldsun.com.au

The virtue of having a closed mind

I have come to realise that I rarely change my mind. At first, I was horrified at the thought.

By that I don’t mean I never reconsider things, or never decide to do something different. I am talking about changing our mind about the things we actually believe (consciously and subconsciously) deeply.

We may change our preferences: You may decide to order pizza and then change your mind to get the Burrito instead. That is not a belief, it is preference.

We may change by learning: You may think that coffee is good for you and then you learn it is not, and you will think differently because you have learned something.

Neither of those are examples of 'changing your mind' about what you believe.

Beliefs don’t have to (only) be about transcendental ideas like God or karma. If you believe Tom Cruise is a great actor, despite the occasional shocker of a movie, then you too are highly unlikely to be persuaded otherwise.

I wonder why we so rarely change our minds, and it seems to me that our mind creates these heuristics (and biases even) for very good reason:

  • We get to navigate the world effectively despite the onslaught of information
  • We minimise decisions about things already considered and filed away, so as to allow us to consider new information and new dangers instead of the familiar (and safe) stuff
  • We know the people who want to change our minds do so for their gain, not ours, so our resistance is a natural, evolutionary response to protect our turf

We may instinctively distrust ideas and concepts that (and the people who) constantly change their minds because it signifies an inherent unreliability that is best avoided.

If you search the net about ‘changing minds’, you will find a good many quotes that suggest that changing your mind is a good thing and is a sign of a healthy perspective. Being open-minded is promoted a good thing.

The consensus seems to be with George:

Progress is impossible without change, and those who cannot change their minds cannot change anything. [George Bernard Shaw].

On the other hand there are a few contrarians:

Things don't change because people change their minds. They change because they retire or die. [Douglas Crockford].

I am with Doug.

It seems to me that we want to think of ourselves as open-minded and believe that we are capable of changing our minds. You may have spotted the irony there: we believe we are open-minded, and we are unlikely to change our minds about that. I just tried and probably failed.

But we delude ourselves, because changing our mind invites into it the chaos of the world, and most of us are not very good at coping with chaos. So we don’t change our minds about the things we believe, and the people selling us all those persuasion tricks are peddling snake oil.

That’s what I believe, and I am not going to change my mind about that.

Are you just a bit Avant Garde?

Avant-garde is originally a French term, meaning in English vanguard or advance guard (the part of an army that goes forward ahead of the rest).

The advance guard of a military operation is the cannon fodder. If you have seen the opening scene of Private Ryan on Omaha Beach, you know what avant garde means - literally.

Figuratively, the term has been appropriated for any kind of front-running, ground-breaking initiative. Tate, describes the term as follows in terms of the art scene:”It first appeared with reference to art in France in the first half of the nineteenth century, and is usually credited to the influential thinker Henri de Saint-Simon, one of the forerunners of socialism. He believed in the social power of the arts and saw artists, alongside scientists and industrialists, as the leaders of a new society.”

But avant-garde is a bit more brutal and lot more fatal than dreaming up a painting or a frock that will shock people.

In the workplace, you have the avant-garde too. These are the misfits and the rebels, the troublemakers and the dreamers. They are the ones who get excited about a dream or a project and run onto the beach. They are the ones that shot down by enemy fire.

Is that you?

Sometimes, if the idea is really good, they may survive. If the reinforcements arrive and the enemy gets overrun, the beach is made safe. Then the shif can dock and the Majors and the Generals can step on to the beach and survey the scene.

Sometimes, however, you don’t survive. Well, that is the end of that, and that is that. As they say.Cannon fodder.

But sometimes you survive. But the battle is not won. The medica carry you out, or you are lucky enough to escape. Until next time.

Is that you?

Until you get obsessed with another idea, another dream another beach to conquer. But over time, people start avoiding you, blaming you. It is almost as if they sense that you are doomed to die on a beach sooner or later and the further away they are, the better.

Avant-garde sounds compelling. The Generals will talk it up. They may even give you a posthumous medal. Because they need you. They just don’t want you. Because avant-garde is a little bit reckless and a little bit hard to manage when there is no war to fight. Then, you are just trouble.

The avant-garde don’t make good Generals. Medals don’t put food on the table. But if you really are one of us, then you can’t be any other way.

The bitter, bitter irony of it is that, whilst you believe there are beaches there are worth dying on, when people google what it means to be Avant Garde, what they get is this image.

Maybe beaches worth fighting for merely illusions. Or at best, fashionable in the moment, and nothing more.

A passionate delusion

Having been told to follow our 'passion' for so long, we have come to believe that whatever we are passionate about makes it true. It's not.

Really.

Passion motivates, but it also blinds.

The passion myth is perpetuated by people who had the benefit of significant synchronicity. Upon reflection, they attempt to rationalise it and articulate it - because it is a story worth sharing.

But human nature being what it is, we struggle to be honest with ourselves when it comes to our shortcomings. We take credit for success and blame others for failures. It is called the self-serving bias.

When we need to explain our success, but can’t, we trot out the idea that it must be passion. We have read it so many times, it has to be true. Even Richard Branson said so on LinkedIN, right?

Passion may or may not precede the hard work it took if you worked hard to achieve a success. There are plenty of people who hate their jobs but are very good at it and very successful at it. Passion may or may not have been present when you lucked into an outcome that turned to be good thing.

Being motivated, working hard or even feeling a bit good about things is not what passion is about. Here is the dictionary definition:

PASSION (noun)

1.strong and barely controllable emotion.
"a man of impetuous passion"
2. the suffering and death of Jesus.
"meditations on the Passion of Christ"
synonyms: crucifixion, pain, suffering, agony, martyrdom; rare martyrization "the Passion of Christ"

So, next time, before you claim passion as the big differentiator and the final determinant of your success, think again. As in, do you really mean ‘dying-on-the-cross’ passionate? Or do you really just mean ‘I-didn’t-mind-it-most-of the-time’?

When people claim their passion as the reason for their success, I can’t help but hear the sound of someone trying to find a reason for something they don’t understand.

If this post sounds harsh and judgmental, it is with a purpose. For you (anyone) to be successful we need to start with the truth. That is the truth about the opportunity, the truth about the market, the truth of our abilities and most importantly the truth about ourselves.

It doesn't mean we become incapacitated by the challenges ahead or that we are overcome with doubt. It does not mean we can't be optimistic about something that may seem unlikely. It does not mean we can't tackle things most people believe are impossible.

And THESE are the things that are necessary for your success. Not passion.

GO for it. Even if you don't feel passionate. It's ok - they lied about it being a prerequisite for success.

Image: WhatCulture.com

The Great Leadership Fraud

 

The ability of the human mind to delude itself astounds me.

The degree to which we ignore reality, or worse, bend it to our preferences is a debilitating feature of a wholly unnatural state.

Nowhere is it more evident than when it comes to leadership.

Everywhere, and I mean absolutely everywhere you look in the reality of the environment that surrounds us — including other human beings — we notice HIERARCHY: Man — Predator — Reptile — Plant — Dust.

And within each element there is a hierarchy. Within the animal kingdom, we have the food chain as an age-old, accepted fact. Something or someone goes at the top and you work your way down the chain. Some gemstones are worth more than others. Some things are stronger, more beautiful and more precious.

We invented sport to celebrate the ranking of hierarchy. Five stars. Gold, Silver, Bronze. Miss Universe. IQ. Chairman. Dux. (My company is named after the ‘winner’ in a bull fight.)

Yet. Yet.

We promote a faux egalitarianism. We live in a democracy, where every vote counts equally. Everyone is claimed to be ‘special’. Everyone is able. Even if everyone doesn’t win, everyone CAN win.

And most importantly, everyone can learn to be a better leader.

Seems to me that this does not conform with reality.

Leadership is an evolved trait — in response to environments. That means there is a natural scale to leadership ability. The natural status of things is challenged by leadership trainers who exploit our desire to grow with seductive but ultimately false promises.

They claim they have an ability to change your ability.

But is this possible?

Can you train a possum to be a wolf?

I am thinking this may be one of the biggest cons of our times.

When I look at the actual advice that aspiring leaders is given, it seems to me that the changes consultants and trainers promote, mostly relate to superficial, environmental and inconsequential changes you must make that creates the illusion of leadership. How you need to organise your diary. Or set an agenda. Or position your body. Or dress or diet like so.

Sometimes the advice appeals to an illusory ideal: be tough, be kind or be something — anything but acceptance of what you are now, because then I would not have an ongoing consulting gig.

Leaders emerge from their environment. For the tribe in survival mode it is the alpha figure. Under other circumstances, other leaders may emerge. That usually happens as a result of some faux rationality superimposed on the environment that happens — like being elected for having perceived skills or having made promises that appealed to the group’s self-interest.

The false belief that a leader can be made is a necessary preconception required to justify the entire leadership improvement complex. It is a myth we gladly buy, because who does not want to be more leader-like?

The reality is that the hierarchy is steep, there is only one top dog in every tribe, and aspire as much as you like, you have to kill the leader in order to take the top spot.

So we go about killing them, usually through subversion, rarely though a fair fight. The environment that leaders operate in has achieved a veneer of civilisation, designed to protect the weak and unequal.

Eventually, the weak wins: a pack of hyenas shred the once-strong lion, now disabled by convention and civility.

Maybe that is why companies fail at such an alarming rate: we refuse to acknowledge the natural order and survival that depends on having actual, strong leaders who are born to lead, and instead we have the insipid pretenders who win those positions because they made a set of rules to suit them.

(Maybe Nietzsche was right?)

When you look at the political leaders we have had (post-Howard) in Australia, I think the evidence is clearly in. People who get to the top are not necessarily suited to the top.

Sometimes I don’t even like the conclusion I come to in my own arguments, but it seems to be unavoidable outcome when you can’t change the facts of the matter. And in a time in the evolution of business and society when we need strong leaders, we need to take an honest look at who is leading the pack.

It is not so much a debate about whether leaders are born or made, it is about revealing the fraud that underpins the promise that a leader could be made.

Because humans have an innate desire to grow and improve (to better survive) we have accepted the myth of the made leader at the expense of the harmony and happiness that comes from knowing your place in the natural order.

Everybody is not a leader. Everyone can’t become a leader. The evidence is everywhere you care to look. If you were honest. If you have to question if you are a leader, and if you think you need more training to become a leader; you aren’t one. At least not a good one.

 

Img: http://www.jacoglaw.com

The Antithesis of Amazon will save Australia

In Retail, it used to be about who you knew. Over the last hundred years Retail was about a guy who knows a guy who knows a guy who knows a guy.

I want to sell something, I need to know a guy who imports stuff who knows a guy who exports stuff who knows a guy who makes stuff who knows a guy who sources stuff.

Before that, when retail happened in marketplaces, it was merely being the guy, or at worst, knowing a guy who farms stuff.

Amazon’s success can be attributed to becoming the original (farmers’ market) - they need to only know the guy who makes stuff - or at worst know the guy (affiliate) who knows a guy.

With one critical difference.

In the digital landscape, they did not need to be restricted to a physical geography for many products (like books). And then they used that advantage to enter the markets for products where geography is a factor (like food.)

I am describing the idea of the supply chain: it used to be very short. Then, in an effort to introduce variety and alternatives and to reduce some friction and inefficiencies with economies of scale, the supply chain lengthened.

It lengthened to the point where it introduced sufficient variety but also serious inefficiency.  That made it attractive for people to forsake many of those benefits for the sake of a reduction in price and cost.

Think again about how Amazon got started:

What do people who buy books want? They want to:

-       Browse/sample to see if they would like it

-       Talk to a sales associate who could recommend/inform

-       Start reading (as soon as possible)

Bookstores did all of that - at a price of say $30 per book.

Amazon offered them the following:

-       You can get recommendations, not from one individual but from many people

-       You can browse exponentially more, at any time, for as long as you want

-       You can’t start reading for a few days while you wait for delivery (pre- Kindle)

BUT you pay only $15!

People liked the trade-off. Then Amazon went directly to authors. Then they introduce digital delivery (immediate). And they did not even have to reduce the price further because even though their costs declined, there is no competition to force them to charge market rates.

Retailers of course know how important the supply chain is. The major supermarkets have been accused of abusing their market power to wring efficiencies from it. That was the lazy way. The hard way would be to re-imagine what the supply chain looks like altogether, not merely accepting what is and squeezing it harder.

So, Amazon has taught the lesson we never seem to learn: change happens dialectically. That is, you have the status quo (thesis) and then someone comes along and does the opposite (antithesis). Then over time, these two positions are synthesised into a new thesis. (Amazon buying bricks and mortar, more and more warehouses is happening.)

Amazon’s strategy (and a few others) seems to be driven by megalomaniacal founders. Ego is the secret juice, not strategy. How big must the ego be if you can convince investors to accept that “In its two decades as a public company, Amazon has had a cumulative profit of $US5.7 billion? For a company with a market value of nearly $US500 billion, this is negligible. I don’t think they have ever paid dividends as far as I can tell.

Eventually, they will increase their cost base and the supply chain will lengthen and frictions will appear. Landlords. Brokers. Transportation agencies. Suppliers once and twice removed. It is going to happen. So, Amazon also has to learn to know a guy who knows a guy...

Then someone will come along and do the opposite. Just when Spotify’s market value spikes, vinyl record sales just hit a 25-year high.

That is why I love entrepreneurs. They are so antithetical.

There is a lesson in that somewhere.

Or at least a bumper sticker.


Dennis Price: Co-Founder at WWW.YEARONE.SOLUTIONS can be reached at dennis[at]ganador.com.au

Image from: www.tutorialspoint.com

 

Have you got your copy of THE BEAT OF THE MALL yet?

What started out as a collection of blog posts is growing into a small book. The 'preview' - which IS the collection of posts, is available for free download.

The final version is going to trace the history of societal change from the Neolithic Era to today - and ultiumatley identify the real fundamental drivers of the modern marketplace - which gives us insight into how it wil evolve.

If you want a copy when the time comes, just drop your name in the box and we will let you know when it is available. That version will be more than a few blog posts.

How to persuade the world you are right

 

Dear trolls,

I shall be writing about gender, but I am not entering into a debate about gender with you or anyone about that now. I am going to write about the mechanics of swinging public debate.

I want to explore about persuading people en masse - at a societal level. How do you ‘win’ a public debate? The topics du jour are for instance abortion, climate change, homophobia and gender equality - and given the audience’s likely interest, I am focussing on the latter.

The lense that I am viewing this through is that of behavioural economics and neuroscience. I will focus on how and why the current approach fails - which is not a comment on whether the approach is true or false.

That is, I am going to criticise you for over-cooking the steak, and that does not mean I don’t like steak or that I am a vegan. My dietary preferences are irrelevant to the topic at hand.

Capiche?


How do you win an argument with half the society? How do you pitch your proposition so that your target audience buys your version of events?

The argument for and against Abortion is an example where an argument was had at a socio-cultural level. Few people will argue that abortion is today commonly accepted as a woman’s right. (Whilst I am personally anti-abortion, ‘my side’ lost the debate.)

In the 60s the era of free love heralded an era of sexual promiscuity (or sexual liberation, depending on your frame) and unwanted pregnancies increased dramatically, raising the need for abortion as the only viable post-coital solution to the problem.

For decades the debate raged within a frame of Pro-Abortion and Anti-Abortion. Progressive, secular leftists were typically pro-abortion and conservative, religious traditionalists were typically anti-abortion.

The abortion issue was resolved when the framing of the debate shifted.

WHAT IS A FRAME?

Imagine if you were given the following choices:

A. Be given $240 - guaranteed

B. Be given 25% chance to gain $1000, and 75% chance to gain nothing

Statistically and rationally, which is the best option? Which would you choose?

In the research of Tversky & Kahneman it played out as follows:

A: 84 percent

B: 16 percent

That is, even though Option A is statistically/logically the worst option, people still choose it. Why?

Because most people choose to avoid loss rather than chase the potential of gaining even more. When it comes to making many of life’s choices their default frame is that of ‘loss aversion’.

The debate about ‘diversity’  - specifically gender equality - is a case where those in favour are trying to persuade those against to pick ‘option B’. Diversity proponents think they have logic on their side and want to win the argument on that basis.

The argument for and against Abortion is an example where an argument was had at a socio-cultural level. Few people will argue that abortion is today commonly accepted as a woman’s right. (Whilst I am personally anti-abortion, ‘my side’ lost the debate.)

In the 60s the era of free love heralded an era of sexual promiscuity (or sexual liberation, depending on your frame) and unwanted pregnancies increased dramatically, raising the need for abortion as the only viable post-coital solution to the problem.

For decades the debate raged within a frame of Pro-Abortion and Anti-Abortion. Progressive, secular leftists were typically pro-abortion and conservative, religious traditionalists were typically anti-abortion.

The abortion issue was resolved when the framing of the debate shifted.

Instead of discussing the issue as a wanting to kill vs not wanting to kill an unborn baby, the debate was framed instead as one of being Pro-Choice vs (by implication) Anti-Choice.

Most people don’t think too deeply about these types of things. When such a proposition is considered, it simply sounds stupid and feels it stupid to claim you’re NOT Pro Choice.

Who in their right mind would want their ‘right to choose’ denied, right?

Not long after that the idea of abortion not being an issue of the life and death of a baby became an issue of civil liberties; the frame was ‘the freedom to choose’ as opposed to  a frame of ‘killing the unborn’.

That was how the debate was won. That is the neuroscientific insight that can be used to tackle the Gender Diversity issue.

What is the status quo?

Organisations are struggling to articulate where they stand on the issues of gender diversity, equality, human rights and sexual identity, all the while not even being sure that they should even be claiming a position on these matters.

The Guardian called 2015 the year in which companies will take a stand on social issues.

●     Some companies are leading the charge: Qantas, led by a gay CEO (in Alan Joyce) being the exemplar for affirming publicly their position on these social issues.

●     Some companies remain silent, trying to quietly get on with business.

●     Some companies are bullied into adopting a stance that ostensibly supports the popular social justice narrative. (Hello Coopers beer.)

●     Some companies are taking a stand that supports an alternative view. From the lonely baker not wanting to bake for a gay wedding to Saudi national soccer team who did not support the minute of silence in memory of the London attacks, not everyone subscribes to the popular narrative.

The battle lines are drawn and the strategies that are typically employed :

●     Appointing Diversity and Inclusion Managers

●     Launching Women-in-XYZ Industry programmes

●     Setting gender-based targets

●     Making loud public statements

●     Feminist tweet storms

●     Publishing ‘think pieces’ on popular blogs

●     Virtue-signalling Gamma males

●     Boycott and bullying tactics

These are the ‘Option A strategies’ attempting to sell the positive ‘gains’ of diversity.

None of the above initiatives will work the way they are intended, however laudable the intentions and however noble the ambitions. In fact, I argue that they actually have the opposite effect of harming the cause.

THE CURRENT PROPOSITION

Proponents of Gender Equality frames it variously as issues of:

●     Fairness

●     Diversity

●     Better Performance

●     Gain

The proposition is failing to get traction because it is framed incorrectly.

THE FIRST AXIOM: IT MUST BE TRUE

OR: Why the current strategy won’t work - counterintuitive truths and unintended consequences

Whatever you are choosing to persuade the people on must be TRUE.

You can NOT say abortion is about choice, if choice does not play a role. Having a different frame/lens does not change the ACTUALITY OF REALITY. It simply changes how you look at things.

None of the arguments proposed by proponents (of gender equality) are logical and neither are they valid. The truth is, people wear the default lense that is more concerned with loss, and what they are hearing in your argument is:

●     It is not fair. Only the men are going to sacrifice something.

●     It is not about diversity; it is about ideological conformity.

●     It is not about performance: the facts say otherwise.

●     It is not about gain, it is about loss of male privilege.

A fact is a fact, even if it is unpopular

When you want to frame the debate in a way that that does not recognise the ‘losses’ then it is likely to fail. The current debate has multiple factual and logical flaws that make it easy for sceptics to dismiss the validity of the proposition all together. Space limitations prohibit the full exploration of the supporting evidence, but the following are facts and/or reasonable conclusions. Please bear in mind that your own ‘lens’ may want you to see things differently, so just settle down and read on:

  1. There is such a thing as male privilege.

  2. The rarefied atmosphere of Blue Chip Boards is a closed shop - not only females, but even for highly competent males.

  3. The debate is dishonest. It is ostensibly about equality, but in truth it is about something else. It is rarely about underrepresentation of women in the roof tiling or profession or amongst the grave diggers. And the debate is never about getting equal representation in the prison population - which is overwhelmingly male.

  4. If the actual debate is about economic power and the concomitant freedoms, it is a legitimate debate to have.

  5. There is little benefit in giving up the male power base, so let’s not pretend diversity is about equality that has benefits for all.

  6. Men know they have to give up something, and loss aversion is a thing – and asking them to embrace it anyway is not realistic nor smart.

  7. Men are generally hardwired to be somewhat pragmatic and are typically less emotional about things. (And that is a fact.) Appeals to emotion won’t work in this case.

  8. Claims of equality are irrational. The differences between genders are obvious and the only way you can accept ‘equality of gender’ is to actually deny reality. Most men are simply not romantic enough to accept that version of reality. Mr Friedrich Nietzsche said it as follows: “Equality is a lie concocted by inferior people who arrange themselves in herds to overpower those who are naturally superior to them. The morality of 'equal rights' is a herd morality, and because it opposes the cultivation of superior individuals, it leads to the corruption of the human species.”

  9. Many men don’t really believe in these initiatives, but are acquiescing to public pressure or making these moves for personal career advancement. Sadly, some may not even recognise it in themselves. Virtue-signalling is now a thing. (The reason they don’t believe are because of the multiple erroneous/ dubious claims being made in the process of attempting to win them over.)

  10. Whilst women are underrepresented in certain roles, it is highly unlikely that it is so on the basis of overt gender-discrimination. A sceptic might ask where all these CEOs endorsing ‘diversity’ today were a mere three or five years ago. I think the truth is simple: none of them spoke up five years ago because no one thought five years ago that women were being discriminated against, because they weren’t! I have never (in three decades, across multiple organisations and on multiple continents) even heard a rumour where men conspiring to discriminate against someone because she was a woman. This is a sample of one, but it is a fact.

  11. If the people don’t think they have a problem, you will have a hard job fixing it. Have you ever met an executive male who will admit that HE is the problem? Or one that would give up his board seat for a woman?

  12. The fact of the matter is that there is wage disparity between genders, but most likely for several reasons that has nothing to do with male privilege. Here is an article that lists a bunch of facts which should at least indicate to an objective reader that such a sweeping statement about income disparity is not a simple, universally accepted one.

  13. The research also does NOT suggest that ‘diversity’ in Boards or Senior Management perform better. Read this piece by Wharton management professor Katherine Klein that summarizes academic research on the topic and comes to the simple conclusion: “Rigorous, peer-reviewed studies suggest that companies do not perform better when they have women on the board. Nor do they perform worse.”There is also research that shows that, in the US, unmarried women in full-time work in big metropolitan centres actually out-earn men.

  14. The proponents of diversity have not taken the time to study their opponents, taking a self-righteous approach without recognising that the utopian view is fraught with logical fallacies.

  15. Your gender does not make you a good or a bad boss. The worst boss I ever had was a woman. The best I have ever had was a woman. It is a sample of one, but it is still a fact. (And this is why the argument that you need more female bosses fails - any gender can make a good/bad boss.)

  16. Making a Board reflect an ideological commitment to diversity for the sake of diversity will fail because you are simply replacing one failed ideology (chauvinism) with another alienating ideology (feminism). It is a fact that feminism alienates most males (which is why women still do most of the house work.)

  17. If you choose gender as the basis of selection, you set up the selected people for failure. Tim Newman wrote on his blog about the Executive Team of the responsible entity for the building that went up in flames in London and gleefully pointed out how ‘diverse’ the Board is.

  18. Diversity peddlers ignore the very essence of Marketing: Punters ask themselves ‘what’s in it for me’ before they buy. In this particular debate, the honest answer is a bit of self-righteousness and not much else.

  19. Diversity activists are tackling the wrong problem: The problem with boards is not that they are filled with Old White Dudes. The problem is that they are filled with people - who happen to be OWDs - who all think and act alike. Cialdini popularised many of these factors, and in particular, the neuroscience behind ‘Liking’, ‘Social Proof’ and ‘Consistency’ are well established. And these are the factors that drive the decisions we make, including who gets the job.

  20. Evidence of under-representation of one gender does not equate to subversive discrimination against that gender. Correlation is not causation, right? There is likely to be a systemic problem, but it is not necessarily male vindictiveness.

I am convinced (so this does not qualify as a fact) that women of competence don’t want to be given roles because they are women. Was Christine Holgate appointed as CEO of Australia Post because she was a woman or because she was the best candidate? What about Julia Gillard or Gail Kelly?

Whether you agree with all of the above is irrelevant. Whether you like it is irrelevant. I am suggesting that the public (whom you are trying to persuade) believe that the above IS the reality, your frame will not succeed if runs counter to the reality.

SECOND AXIOM: PICK THE RIGHT FRAME

By reframing the debate, we re-think and we re-affirm what we mean by, teamwork, leadership, effective communication and decision-making. By focussing on these ‘frames’, people realise there is is nothing to lose, and consequently that there is nothing to fear.

By redefining what success looks like, we are establishing the new attributes we are looking for in a leader. The lazy alternative is that companies are simply saying that we need more female leaders, which will bring those ‘new attributes’ to the table.

Both approaches achieve the same outcome, except that the latter is resisted because of the implied losses for the incumbents.

What we should be doing is to stop defining the only successful leaders as being aggressive, ball-breakers, connected to some ‘network, etc.; which are typically masculine traits and few women will ever measure up.

A good communicator is not the person with the loudest voice who can make others listen.

An effective team is not one who drinks and plays golf together.

If equality is framed as ‘success looks different’, and if equality is framed as ‘everyone can be successful in a different way’, and if equality is framed as ‘it takes all kinds of people’ to make the world go around; how could anyone argue with that reality? Importantly, there is nothing to lose, male OR female.

Any man who currently feels excluded from the boys’ club, and most importantly all of society would intuitively embrace the idea of ‘different strokes for different folks’ as coherent with their view of the world.

Just like everyone feels they should have the right to choose, everyone feels that it should be good to allow for differences since they believe we are different. (The logic notwithstanding.)

In the practical world we need diversity and you need unity. When you are considering a workforce or a board, you need to accommodate both these elements.

You want unity and similarity in that everyone who is elected to the board must have a certain type of experience and must have certain level of intellectual horsepower. You may want unity in their commitment to a cause or a passion for a particular market.

You want diversity in temperament, diversity in styles. You want action-orientated people and you may want strategic long-term thinkers. You may want conservatives and you may want progressives. Sometimes you need the ball-breaker and sometimes you need the diplomat.

If you only aim for diversity, then you will create discord. If you only aim for unity, you foster groupthink. Neither one is a recipe for success.

If Women accept that ‘equality’ is to be achieved by reframing what success looks like, they have to be willing to forego the illogical insistence that there is never a valid reason why there may need to be gender-specific roles.

It has been done it before. Not so long ago, the idea of  ‘commitment’ was re-framed in organisations. People can now leave at 5:30pm or drop the kids off before work and not be branded as lacking commitment or being lazy. Commitment and your work ethic is judged on your output (a new frame) and not your hours spent at your desk (the old frame).

Focussing on gender to remedy gender diversity is fixating on the symptom, not the problem.

The women I know who are great candidates for promotion, would prefer to be picked because of their abilities and not because of their vaginas. No matter how many times you squeeze the tomato, it won’t ripen any sooner. On the contrary, you are simply ruining something great, no matter how noble your intentions.

If your ladder is leaning against the wrong wall, it doesn’t really matter how fast you are climbing it.

The ‘right’ frame is the one that minimises ‘regret’

This is the way (the new frame)works in the real world:

  • You are respected for your position, your capabilities and talent - not merely your gender.

  • If you screw up, you are judged on your failures, not your gender.

  • If you succeed, you are admired for your success, not your dress sense.

  • We admire certain traits and attributes for what they are.

  • We recognise that women and men are different, but of equal value.

  • We are willing to be surprised by people’s abilities which may not conform to preconceived expectations.

  • We believe our differences are what makes us better together.

  • You need different notes to make good music.

  • We can all learn that neither of us make decisions with our genitals, despite the popular conceptions that we do.

  • If we both accept that equality is about opportunity, fairness and mutual respect, we may be able to accept that some jobs are naturally and practically more suited to another.

THIRD AXIOM: CONGRUENCE OF BELIEF AND BEHAVIOUR

We ‘spot’ when someone is telling a lie, without even knowing how we did it. We don’t have to process things rationally to pick up a problem. Our brain simply registers the signs (behaviours like touching your lips) and the the actual words you are speaking.

That is the easiest way for our (lizard-) brains to make decisions - to be attuned to incongruence. The ‘frame’ you talk about needs to correspond what you do about it. Your WALK must match your TALK or people will notice, even when they don’t know they do.

The ‘special initiatives’ (noble as the intentions might be) reinforces the stereotypical roles of the benevolent male (we will give you certain privileges) and the weak female needing special assistance.

Affirmative action is an ACTION that is INCONGRUENT with the BELIEF and the statement that ‘women are equal’.

Danie Craven was a revered rugby coach in South Africa. He forbade his players to celebrate when they scored a try. His rationale was that scoring tries is what is expected of his team, and they should NOT act as if it is a rarity. I don’t know if that contributed to his success as a coach, but the idea is psychologically powerful: don’t celebrate your success as if you are surprised by it!

In early 2016 there was a story about a female pilot (Tracey Curtis-Taylor) who flew from Britain to Australia in a 1942 biplane. The news anchor (I forget the channel) gushed about the achievement of this brave woman who flew the plane single-handedly all this way.

Acting surprised when a woman achieves something (that wouldn’t make the evening news if you are a man) is not a smart way of spruiking the strength and bravery of females. Just do the story and let the fact that it is a woman who was brave (or whatever) speak for itself.

I have lived through Affirmative Action programs as beneficiary and as victim. Even the benefits have unintended consequences and the key disadvantage is that these programs are like a virus that infects and eventually paralyses the host. All round, it is a bad idea.

People may believe fervently in an idealised reality where things feel good and everything is just fair. Unfortunately, that is not reality. And the only way to fix this is to deal with the reality we face.

Re-distributing wealth and re-assigning Board seats are all strategies that inflict pain on one side of the ledger. People are naturally averse to this. By re-imagining and re-framing the debate to be about the gains both sexes will make, you rewrite the narrative and stand a chance of persuading them. Of course, those who don’t subscribe to the idea of parity will continue to frame the debate to be about what men (all incumbents) will lose.

CONCLUSION

To persuade the world, the successful approach requires that (1) it must be true, then that you (2) pick the right frame (that minimises regret) and finally, (3) ensure beliefs and behaviours match up so that you don’t undermine the message.

I have illustrated this approach with the gender equality debate. The same ideas work for any scenario where you want to persuade someone.

A better frame for Climate Change will be about benefits of innovation, job creation and the like; i.e. the things you will gain. The current frame is accentuating the losses. We won’t be able drive everywhere, we need to give up air conditioning. We are going to LOSE jobs. Proponents are trying to claim (with religious ferocity I might add) that we should do the right thing and ‘save the environment’. All we hear and all we think about is what it is going to cost us. In fifty years when the sh*t hits the fan, I will be dead, so that particular calamity is not particularly real. Having to give up my car, here and now, is a real pain and few people think it is worth the price.

The only aspects of the climate change debate that succeeds occasionally is when they excessively appeal to science, but articulate it in a way that makes people fear looking stupid by denying it. But that applies to only some people. Real climate change deniers actually know a little bit about climate change - at least enough to know the science is not as settled as climate apostles would want you believe.

Which brings us to the most important question: which is the best way to cook a steak?

There is a Michael Collins is all of us

I am pretty sure most literate people know the first man on the moon was Neil Armstrong.

And the majority will know that Buzz Aldrin was the second.

Few know that the third Astronaut iin that team was Michael Collins.

He was a ‘mere crewman’, and did not even get to set foot on the moon after flying all the way there with fellow astronauts Armstrong and Aldrin. (Charles P. Conrad was the third human to walk on the moon.)

People often comment about how no one remembers who came second. In fact, researchers have documented that people who win the silver medal are despondent for losing first, whereas those win bronze are happy to have medalled.

This tells us that we judge our success or failures on relative terms - compared to to other people. And that is a bad habit to fall into.

Collins did all the same training, had to meet all the same requirements and probably was paid the same. He too got to the moon. The fact that no one remembers Collins or Conrad, does not change anything. The achievement is no less for someone else having achieved more.

In business it is the same.

Jeff Bezos will soon run the first Trillion Dollar company in the world and you may run a local shoe store in a country town. Or maybe you are the Area Manager for the small retail chain. You may not have built the Harbour Bridge, but merely build shopfronts.

That does not mean you don’t have the same smarts. The same abilities. The same talents. The same persistence. The same potential.

But most importantly we all have the same worth.

We should judge ourselves or others by how well known they are.

[Image from: www.jumpintoabook.com/]

How do you ACTUALLY 10X your retail experience?

Everyone knows eCommerce is shaping what customers expect to be available in product, expediency, price and service. A physical space with real people interactions cannot compete with a virtual/digital space on many of these elements, so it is critical to find/create and then focus (relentlessly) on the differentiators.

 Everyone knows the answer to sustainable differentiation lies in delivering great retail experiences.

 Everyone talks about (the importance) experiences and even the experience economy.

 But no one seems to know how exactly to do that.

 Tell the staff to smile more? Crank up the music? Then what? Few people seem to agree or even understand what the ‘experience’ is, never mind how to go about creating it. That is why we need to find an answer that is practicable.

 (The phrase 10x - pronounced ten ex - is buzzword originating from the tech startups obsessing about rapidly scaling their growth. Young people in a hurry are not interested in incremental improvement.)

WHAT IS THE NATURE OF EXPERIENCE?

It appears that the idea of retail experience is much like the definition of pornography: I can’t define it but I know it when I see it.

 It may seem obscure to start the search for a practicable solution with a dictionary definition but you can’t create something (an experience) if you don’t know what it is you are trying to create.

That may be true, but it is unhelpful. So I looked it up.

I found that ‘experience’ comes from the late Middle English, via Old French from Latin experientia, from experiri ‘try’. (Compare with experiment and expert.)

 This does not seem to be useful in creating a practical framework for creating experiences, so I choose to define the retail (consumer) experience as -- the positive emotional consequences of value consumption.

Experience must be Positive:

Experiences may be positive and negative.

But it is obvious that negative experiences are not what we aim for when we talk retail. Positive implies that we know what positive is and what that means for the consumer, but let’s take it as a given that we know what customers need.

Experience is primarily Emotional:

Experiences may be functional and emotional.

Any experience also has a rational element, but the functional dimension of the interaction/ transaction addresses those rational needs.

Example: When you buy a loaf of bread the functional needs are addressed by receiving and consuming a loaf of bread that satisfies the hunger.

The smells, the friendly staff etc create the emotional dimension of the experience of that we seek to create.

In the context of retail experience, the functional element is addressed by virtue of the retail store enabling the transaction - people receive the food, the clothing and so forth, and that component of the interaction exists adequately. It may be improved by reducing friction, but that in itself is won’t make people flock to a store.

We really want to focus on creating and improving the emotional dimension of the experience.

Experience must have intrinsic Value:

The value of a product or a service is that which the consumer/patron is prepared to pay for/ invest in or sacrifice for.

The dollar value of the investment is merely one manifestation of value, but value could also be the time invested to acquire, the risk tolerated (for getting it wrong) and the opportunity cost.

The value of the t-shirt is not $30; it lies in the fact that it clothes me, allows me to be socially accepted, be thought of in a certain way, helps me hide the man boobs and does not require me to mortgage the house.

(Note: Value has many dimensions - there are six categories of consumption value, to be exact. The emotional dimension is a critical one and the hardest to get right.)

HOW TO CREATE EXPERIENCES

If retail experiences are about creating positive emotional consequences that have value, the next obvious question is what the drivers of those experiences might be.

Experiences are created by inanimate drivers that are found in the environment in which the value is created. The sights and sounds and textures and colours all contribute to an experience.

Experiences are created via animate drivers; the human interactions that occur in that environment and that effect and affect the transaction: People interacting with people.

It turns out that this human interaction is really the most important aspect of an experience of value. No surprise there.

There are two steps to creating the experience:

Step 1: Removing Experiential Inhibitors

There are always elements in the environment that will conspire to disrupt the positive emotional value you are trying to create.

Things like bags that break, parking spaces that are unavailable, staff who are absent and so forth are the elements that conspire to inhibit the experience.

But merely being able to find a park or having a shopping bag that doesn’t break won’t contribute to the overall (positive) experience of value, but their absence/presence will inhibit the delivery of a positive retail experience.

To create an environment that is free from experiential inhibitors requires that we identify them, evaluate them, minimise, change or remove depending on the need.

Reducing friction at POS is an example of reducing experiential inhibitors. Retailers are currently trialling technology that allows perfectly frictionless POS - where consumers will simply pick an item and leave the store.

Step 2: Creating Experiential Outcomes

The next step is the art of creating the emotional interaction between human connections.

This is how you can 10x the retail experience.

The key to success has very little to do with customer.

The key to success lies with your staff. The logic is simple: staff create the experience, so make sure they enjoy that experience.

If we ensure the creation and delivery of consumer experiences is a positive, rewarding experience for STAFF, they will in turn deliver that experience which the consumer values.

Staff will create great experiences to the exact same extent as they get a kick out of doing it.

The starting point is NOT mapping a customer experience journey.

The starting point is employee engagement. The challenge we must address is how to make the delivery of the desired experiences a positive experience for our staff.

So, how do we 10X the retail experience?

I said earlier that the dictionary definition did not appear to be very helpful, but it turns out it is. To recap: experience comes from Latin experientia, from experiri ‘try’ - compare with experiment and expert.

It seems to suggest that creating great experiences is about becoming expert at experimentation.

It is not hard because we don’t know what to do. Itis hard to do for different reasons:

One: People start at the wrong place. (Think about the customer instead of the employee.)

Two: There is no recipe, no blueprint and especially no silver bullet.

Three: To make the experience of delivering positive experiences a positive experience for the staff, and allowing and encouraging them to experiment (and fail and learn) takes courageous leadership. It requires some long-term commitment to a complex change management process with unquantifiable short-term benefits.

Start in the right place. Have courage to experiment and fail. Have the discipline to continue. Be committed in the absence of short-term gain. That is why it is hard. That is why it calls for leadership.

And that is why it will remain an important differentiator.

And that is why it is worth pursuing.

Dr. Dennis Price

Co-Founder: www.yearone.solutions and www.ganador.com.au .

Bazza & Bull is the Top Brand. Again.

Photo by Gabriel Santiago on Unsplash

One of the endearing things about Australia is the style and wit of nicknames. Some aren’t particularly imaginative (Bazza) and some are - calling the smallest bloke on the team ‘Bull’ for example.

And this perfectly illustrates the misunderstanding of the whole notion of brand.

The range of perspectives on branding is astonishing. At the one end of the scale there is that group who believe it is all wank and does not really matter, and at the other end there is the group who create the wank with jargon and buzzwords.

The long version is that your brand is all of:

  • Brand Equity
  • Brand Values
  • Brand Principles
  • Brand Essence
  • Brand Identity
  • Brand Positioning
  • Brand Image

And as many more as you can come up with.

That is what many people think a brand is.

The reality is different.

Your brand is ACTUALLY whatever the customer thinks of it.

You may think you are Barry Special, but if everyone else thinks you are Bazza, you’re Bazza. But I am guessing most brands are more Bull than Bazza.

The 7 Immutable Truths of Prosperous Shopping Centres

Bal Harbour Shops is the most lucrative, most productive, and most profitable shopping area in the world. Located in Miami, Florida, the mall is renowned for being the hotspot for individuals who belong in the high-end market with money to burn on extremely expensive products. (Image from http://www.therichest.com/

Bal Harbour Shops is the most lucrative, most productive, and most profitable shopping area in the world. Located in Miami, Florida, the mall is renowned for being the hotspot for individuals who belong in the high-end market with money to burn on extremely expensive products. (Image from http://www.therichest.com/

Not all malls will survive, not all malls will die. The question is what to do to ensure your mall is winner?

In the coming evolution of malls, there are a few (IMHO) self-evident truths to be considered.

Truth 1: The Offer

The offer (retail mix) will change, possibly unrecognisably so. At one point the malls have become the go-to place for any shopping, primarily offering convenience. The mainstay of the mall became the easy shopping for functional comparison goods like fashion.

In the last decade or so the trend has been towards more experiential forms of retailing, but to be honest ‘experiential’ meant adding food - ala ‘eat street’. This was a relatively one-dimensional view of ‘experience’.

Recently the emphasis has widened to include services (healthcare, libraries, gyms).

The two obstacles that prevent malls from evolving sooner and better are:

Lack of retailer-led innovation.

Mall owners can only facilitate the infrastructure needed to retail; they are not retailers or even in the retail business. Too many retailers are acting like deer caught in the headlights of e-Commerce (or the B-Double called Amazon.) And, very importantly, ‘retail experience’ has become a buzzword and few people seem to be able to articulate.

The other obstacle is the lack of flexibility.

Some of that is caused by local government planning regulations. And some of that is self-inflicted, as investors demand rigid lease structures (to minimise risk and differentiate from other investment classes) but these structures do not facilitate agile retail and innovation.

Truth 2: Time Horizon and Lag

The malls that will survive have owners who play the long game. The current system has considerable inefficiencies caused by the (a) different investment and performance profiles of landlords vs tenants, and (b) the resultant friction costs caused by the lag in relative fortunes.

The solution is to adopt an ‘agile’ lease structure. I will address this in another post.

Truth 3: Balance of Power

The balance of power between landlord and tenant will oscillate during the transition, even if it now favours the retailer in most instances.

Truth 4: eCommerce

The nature of eCommerce will influence the format of the new mall.

It is shaping what customers expect to be available, both in product, expediency, price and service. Responding to this challenge requires two tactical responses:

Attack by differentiating:

A physical space with real people interactions cannot compete with a virtual/digital space on many of these elements, so it is critical to find/create and then focus (relentlessly) on the differentiators.

Defend by Seamless Integration:

This is what the commentariat mean by ‘multi-channel’ retail. Ensure the customer can seamlessly move between channels, irrespective of  the specific stage of the purchase journey.

This will eventually determine the retail mix of the mall in very specific ways. (Keep reading Inside Retail and I’ll share those thoughts in future article.)

Truth 5: Technology

Technology will play a key part in the functionality and features of the new mall.There was a short segment on the Today Show (The Future of Shopping). The crux of the message was frictionless payment (true) and walk-in-walk-out shopping (not so true).

True:

In Psychology, there are two types of stress: one is called eustress and then the old fashioned distress. Point-of-sale causes distress. That is why tap-and-go payment resulted in higher frequency of purchase. Trütsch  found (2014) that “contactless credit and debit card adopters undertake statistically significantly more transactions by their corresponding payment cards compared to non-adopters while this also holds true for overall card services payments.”

Not so True:

Walk in, walk out shopping (WIWO) with no interaction at all will be adopted to some extent by certain consumers for certain types of experience. WIWO shopping behaviour is adopted where less friction is desired, but less friction is not required in all elements of shopping.

If there is no friction there is no interaction, if there is no interaction, there can’t be a (pleasurable) experience. (Ahem.)

Truth 6: Fundamentals

The malls that survive will do so because they address the core values that underpin all consumption. An important consumption value is “the experience”. But there are five additional patronage values.

The more complete (and strategic) the Landlord is about responding to these values, the more prosperous the future. Strategies like ‘community engagement’ and ‘placemaking’ are tentative steps in the right direction of tapping into some of these other consumption values.

Truth 7: No one knows

No one knows for sure the exact nature and details of what that looks like specifically. But on aggregate, the mall owners can and will figure out what works.

If you are an owner or investor, I hope it is you.

As always, many of these truths must be addressed by spending money. The challenge is to do so when the return on investment is over the horizon, or maybe even unquantifiable. Ultimately, this will be the real differentiator for shopping centre landlords: a commitment to investing in a future with uncertain returns.

I didn’t say it would be easy, or that it wouldn’t require courage; just that it is possible.

Dennis Price: Co-Founder at www.yearone.solutions

Is Elon Musk the Emperor with no clothes?

Like everyone else, I harboured a general admiration for Elon Musk of Tesla fame. A successful, focussed, visionary person who has achieved great success, right.

 I didn’t quite feel the same towards Jeff Bezos - Amazon’s lack of profitability concerns me.

 Then I read this article. (Read in full - well worth it.) Here is a sample:

The key for Amazon making it all these years was to keep people focused on everything but their financials. This is not an exception. Faceberg will never have earnings to justify its share price. In fact, it will never have user rates to justify its ad revenue. It’s not unreasonable to think that everything about the business is fraudulent. That should trigger large scale audits and investigations into its business practices, but Facebook is on the side of angels in the cultural revolution, so its all good.

Probably the best example of our carny-barker economy is Tesla. To his credit, Musk has built a real factory that builds real cars. No one is going to say the Tesla is a work of art or even a practical car, but it is a car and the technology is impressive. The trouble is the company does not exist to make cars. It operates as a tax sink, where government subsidies flow into it and some portion of those subsidies turn into payments to the principles in the form of stock repurchases, debt service and compensation.

This only works if people think the venture will either one day turn a profit or the technology that it creates will result in something good down the road. To that end, Musk is regularly out doing his Lyle Lanley act, making all the beautiful people feel righteous by backing his ventures. He’s also telling Wall Street that he will soon be making and selling enough cars to turn a healthy profit, even without massive tax subsidies. The trouble is, that’s probably never happening, at least not with current management.

And then there was another article I read soon after - this time with the more usual glowing perspective.

Tesla has safety issues.

Elon Musk’s response to the issue is hailed as exemplary.

Then I thought about it, and I think Elon’s approach sucks.

At it’s core; here is his plan:

“Going forward, I've asked that every injury be reported directly to me, without exception. I'm meeting with the safety team every week and would like to meet every injured person as soon as they are well, so that I can understand from them exactly what we need to do to make it better. I will then go down to the production line and perform the same task that they perform.”

So in essence:

1. Knowing about the individual injury is very important to me as the CEO.

2. I will invest a significant portion of my team in a meeting discussion this.

So far, so good.

3. I am going to meet injured people personally. After you have been injured.

4. I am going to take your incident (sample of 1) and make sure that such an incident don’t happen again.

5. Then I am going to invest even more time by showing you I will get my hands dirty on the do the same job.

Items 3-5 are really problematic for me.

I appreciate that it (a) plays well for the layperson and casual observer, as well as (b) being likely to make the individual feel good and (c) may even mitigate the potential future claims. I get that.

But, here is the thing.

I think a CEO should be more proactive than this. It is great at managing feelings, but I am not sure it will fix the problem proactively.

There is no indication that by fixing everything on a case by case basis will actually ever address the systemic issues.

His approach does not scale.

If a workplace injury has the (pleasant, albeit unintended) consequence of getting the CEOs attention in addition to the time off and the compensation; I wonder if workers will really take the safety issue as seriously as they should?

If you get kissed by a pretty nurse every time you hit your thumb with a hammer, I reckon a few blokes may well be prepared to be a little bit more careless than they otherwise would be.

Safety is fixed on two levels:

  • Processes and systems  (that produce safe work)
  • A culture of taking responsibility, being diligent and looking out for yourself and your mates.

I am not sure that the path Elon is adopting is the quickest way to get any of that fixed.

This article is not so much about Elon. After all, how much can you know about a person from two articles. The more salient take out for readers are this:

There is always another perspective.

Read and learn constantly - things always change.

An open mind is not one that is easily persuaded; but one that is open to consider the facts, and to change a view based on new facts.

Don’t believe everything you read.

Be prepared to go against the popular narrative.

Changing your view is often as a result of the cognitive dissonance, which is not a pleasant experience. But if the Emperor has no clothes on, the Emperor is naked; and that will be a fact and should be called as such.

(Image from https://www.businessinsider.com.au/