Phones 4U: When suppliers become competitors (“Bargaining power of suppliers”)

Phones 4U collapses into administration.  PWC has been called. This certainly does not make for savoury news especially with “up to 5,000 jobs at risk” in the run up to Christmas.  A few days after the announcement, the suppliers are being touted as potential buyers of some parts of the business – shops and stock.  Phones 4U has not stopped blaming the suppliers; the suppliers (EE & Vodafone) have turned around and blamed the owners saying “they had ladened the business with debt”.  The founder has also joined in the debate, blaming the suppliers!

Whatever your view points, whichever side you stand, whether you see Phones 4U as the victim, or you see the suppliers as predators or “barbarians at the gate”,  it is simply an industry with a lot of competition and Phones 4U could no longer compete. Phones 4U was swimming in shark infested waters and she had no defence to cope with the ‘onslaught of sharks’.

From the information that is available, what seems apparent is: there had been ongoing change in the industry and the suppliers had become competitors for a while (did Phones 4U not spot that!), however, what has suddenly changed is: they have now become more ‘aggressive‘ competitors. And why not? Why do they have to share their revenues with a 3rd party when they can sell directly to the customer?

Michael Porter in his seminal work on competitive strategy, “The five competitive forces that shape strategy” discusses the “bargaining power of suppliers” as one of the factors that should influence business strategy. Certainly, when you have 2 suppliers you are indeed at their mercy; when it becomes only 1 supplier, your whole business becomes endangered. If the supplier or those suppliers become competitors and you have no competitive advantage, you are probably waiting for the onset of myocardial infarction.

Porter’s five force analysis has been in existence for quite some time, so it is indeed amazing that the owners of the business did not foresee this, more so O2 (Telefonica) had decided to ditch Phones 4U not quite long ago. One could argue that perhaps 2 suppliers walking out simultaneously hardly happens, but would having only 1 major supplier i.e. either EE or Vodafone led to a sustainable business?

If the management of Phones 4U had been sensitive to the external environment, perhaps they would have exited and sold the business (a year earlier) before being forced out of business. Unfortunately, that is the nature of the competition in the industry.  All organisms, animals (including humans) and organisations have to adapt in other to survive, and go beyond adaptability in order to thrive.

“Every morning in Africa, a gazelle wakes up, it knows it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle, or it will starve. It does not matter whether you are the lion or a gazelle – when the sun comes up, you had better be running.”

Phones 4U did not outrun the fastest lion. The suppliers did not want to starve; they ran faster than Phones 4U. Phones 4U did not adapt and she becomes another casualty of the tough competitive landscape.

Advertisements

Effective error management

The concept of error management is not new, however, the financial crisis of 2008 which can be attributed to a catalogue of persistent errors has unwittingly resurrected the interest of management researchers in this field. Professor Kathleen Sutcliffe defines error management as “the prevention of a crisis and not the prevention of errors”. It is widely acknowledged that mistakes and errors cannot be totally eliminated, however, handling those mistakes correctly when they occur may be the difference between organisations that will succeed and those that will fail.

How is your organisation handling errors? Do you panic when errors occur? Do you know the experts to defer to when errors occur? For answers to those questions and many more, read “Managing the Unexpected: Resilient Performance in an Age of Uncertainty“.

The blame culture: A silent killer of creativity

“To err is human”, so they say. So why do organisations and employees look for someone to condemn and blame whenever the actual outcome differs from the expected outcome? Why do people jump on the bandwagon of looking for the perceived “culprit” before understanding the reasons for the error? How much energy do organisations expend on understanding the issues and the reasons for the deviation in comparison to the energy expended on endless gossips even long after the event? What efforts do organisations expend on castigation of the employee involved in comparison to improving the process, the products and the people?

Whilst the purpose of the article is not to proffer solutions to the culture of blame and its impact on creativity, it is hoped that it will serve as a reminder to managers and decision makers of the impact on employees based on first-hand experience.

There are very few professional roles where creativity and innovation are not required. Although in a lot of organisations, processes and procedures are often documented in order for: repeatability, standardisation, to reduce errors, optimisation etc. However, no matter the level of documentation, there will be occasions where there is a deviation in the input which may warrant an employee to be creative and innovative. Whilst it is ok to follow processes and procedures that have been utilised umpteen times to the letter, the lack of creativity and innovation on the part of the employee carrying out such processes and procedures eliminates improvement.

The attributes of organisations and the attitudes of employees (with the consequences) where there is an insidious culture of blame are discussed below:

  • Lack of openness / concealment. The employees seem to be unwilling to disclose information. They are reluctant to question the status quo. Consequently, the organisation becomes stagnant.
  • Fear of deviation from process. The employees are paralysed by fear of outcomes, and in order to ensure the blame game does not enrobe them, they stick to their guns even when they know the procedures and processes are bound to fail. A common phrase you will hear employees repeat is: “I will do it as long as a document says so, even if I know the process / procedure is wrong.” Following processes to the letter is indeed mandatory, even more so in environments where safety is paramount e.g. aviation, nuclear industries etc. However, the phrase “even if I know the process / procedure is wrong” is the real cause for concern and worry.
  • Inefficiency. The levels of inefficiency in such organisations are really astounding. The processes and procedures are never really improved; continuous improvement is not a phrase that .is used in such organisations. No one is willing to take ownership and identify areas of improvement for fear of being the culprit if there is a failure.
  • Reduced staff morale. There is a general lack of sense of accomplishment for those employees who like to challenge themselves. The employees also tend to be dissatisfied, unhappy and unmotivated.

Although the elimination of the culture of blame from human thinking and human is almost unachievable, we can reduce the impact of the insidious culture in the organisation by starting with removing all references to: who did what; who did not do what; who should have done what; who should not have done what; during the root cause diagnosis.

In conclusion, creativity and innovation come with risk; mistakes will be made and there will be failures. If you want to kill creativity & innovation in your organisation, sow the seed of a blame culture and nurture it. #Innovation #creativity

Bring your own application (BYOA): Addressing the challenges

Recent research publications do suggest there is an increase in the number of employees using their own applications for work purposes. With so many publications discussing the ‘bring your own applications’ phenomenon but with many of them lacking any new insight or substance, it is no wonder that technologists and non-technologists alike look at the industry and find it befuddling.

Whilst the antecedent of ‘BYO’ suggests that BYOA will originate from an employee, the concept is not entirely new. Business units (mainly in financial services and institutions) have always devised ways of meeting their own business requirements by creating applications e.g. MS Excel add-ins, add-ons to vendor supplied applications etc. A recent publication suggests that [1]70% of organisations already have applications brought into the enterprise by employees.  Although the publication does not provide information on the number (volume) of employee owned applications as a percentage of total number of applications deployed in enterprises, it is not uncommon to come across up to 25% of applications within organisations that are not supported by the Technology function. Such applications are owned by either the business units or the employees, and mainly installed by the employees. The scenario is commonly encountered during operating system migration projects (it is the only time the Technology function sometimes does a total and end-to-end software inventory and audit of applications in use).

With the impending growth in BYOA according to research carried out by [2]LogMeIn, organisations must think through the potential challenges BYOA will introduce and provide a governance framework and structure to manage the adoption of BYOA in their organisations.

Some of those challenges and questions that arise as a result of this phenomenon are discussed below:

  • Fragmentation and Data Integrity.  When multiple users bring their own applications to work in order to process the same set of data, how would it affect data integrity? What is the impact of multiple applications on the defined business processes? How do other users within those business units who continue to use an application provided by the business access data contained in the user owned application? Will the data be shareable?
  • Security. Despite the application being owned by the user (it does not matter if it is a vendor supplied or user created) the same security considerations and governance framework you adhere to when procuring software should be adhered to. You do not want to wait until after a security incident to find out that the user owned application is a malware.
  • Support Cost. There must be an agreement with the user on how the cost of supporting the application will be handled. Who will pay for upgrades? Is the application still supported by the vendor? Does the user have a support contract with the vendor?
  • Process Deviation. Will the introduction of the application cause a deviation in the business process? How will this deviation affect other stakeholders?
  • Licensing. Are there specific terms and conditions in the licensing agreement prohibiting the use of the application for business purposes? Is it a single user, single device license?
  • Disaster Recovery / Business Continuity. Is the source media for the application available in the organisations’ software catalogue (it might be required to be re-installed in an emergency)?
  • Criticality of Service. The criticality of the associated processes needs to be defined. All interfaces into business processes that form part of a critical service need to be known and if a user owned application is being utilised to undertake any task, it is time to re-evaluate the user and business requirement.

These trends – consumerisation and prosumerisation will not go away; in fact some say it is [3]unstoppable. The technology savvy generation (generations Y and Z) are in the workplace and technologists cannot ignore their demands. Generation Z will even be more demanding than the generation before them. Technology service providers within organisations have to be forward thinking and become value adding partners to the business. This entails proactivity; it is time we loosen the [4]shackles we impose on the business in their drive for consumerisation and prosumerisation. Technologists in organisations also have to embrace the advisory function in order to remain relevant otherwise employees will continue to bypass them when procuring services (applications).

[1] LogMeIn. 2014. Managing applications in the age of BYOA: Reclaiming IT’s strategic role. [ONLINE] Available at: http://blog.logmein.com/byoa/byoa-report. [Accessed 04 September 14].

[2] LogMeIn. 2014. Managing applications in the age of BYOA: Reclaiming IT’s strategic role. [ONLINE] Available at: http://blog.logmein.com/byoa/byoa-report. [Accessed 04 September 14].

[3] CIO. 2013. Bring your own applications. [ONLINE] Available at: http://www.cio.co.uk/insight/devices/bring-your-own-applications/. [Accessed 04 September 14].

[4] TechRadar. 2013. ‘Bring Your Own App’: risks and solutions. [ONLINE] Available at:http://www.techradar.com/news/internet/policies-protocols/-bring-your-own-app-risks-and-solutions-1162372. [Accessed 04 September 14].

Strategy consulting opportunity with a gym operator

Summary
A strategy consulting opportunity with a gym operator is available for the right candidate.

Background
My client, a gym operator is seeking to engage the services of a strategy consultant who can help the organisation on strategy formulation. The gym operator is operating in one of the most challenging industries with falling revenues, the rise of national budget operators, the rise of the pay as you go model, the rise of the health and fitness applications, various bootcamps from personal trainers, falling income, savviness of  consumers etc.

The last 3 years has indeed been very challenging for my client. My client is now seeking to review her strategy with a view to either repositioning herself in the industry or exiting the industry.

Deliverables
The right candidate will be expected to provide a strategic insight into the following:

  • Decline in membership. Is there a pattern or trend?
  • Impact of fitness and health applications on membership. How can these be harnessed in order to improve customer satisfaction? Has the influx of these applications had a “Uber” style effect on membership subscription, attendance and subscription?
  • Services / Products. What services and products can be introduced in order to arrest the decline in membership? Can we really differentiate ourselves by offering customisation? What will be the impact of customisation on our cost profile?
  • Pay as you go model. Is the pay as you go model a viable subscription model?

Candidate
This will suit a strategy consultant with retail, marketing, health or leisure industry experience. A freshly minted MBA with a strategy bias from a  top business school may also apply.

The engagement is expected to last a period of 9 weeks. Please state the cost of your services for the entire duration of the engagement.

A social media start-up (currently in stealth mode) requires an editor.

A social media start-up (currently in stealth mode) requires an editor.

The mission of the start-up is to be the number one portal in Anglophone Africa. Funding has recently been secured for a launch date of Q2 2014.

The editor will be a key member of the senior management.  Some of the requirements of the role are detailed below:

  • The editor will assist in the overall growth of the web portal.
  • The editor will manage the contents of the portal.
  • The editor will commission columnists to write articles (send out briefs to columnists and set deadline for submission).
  • The editor will be required to generate thought-provoking questions for one of the key services.
  • Must have proven experience.
  • Must have excellent command of English Language – Written and spoken.
  • Must be an excellent communication skills.
  • Must be open-minded and recipient to all views.
  • Must be a sociable person.
  • Must have networking skills.
  • Must be a prolific writer with proven extensive writing experience.
  • Must be a wide reader.
  • Must be an unbiased editor without any political, social, religious agenda to promote.
  • A keen researcher.
  • Must have good project management skills.
  • Must be passionate about related issues.
  • Must have a strong social DNA.
  • Must have basic IT skills.

Ineffective communication will kill your change initiative

Whilst there is resounding acknowledgement of the impact of communication and its criticality in the success of change initiatives, the actual implementation of effective communication continues to be a challenge during most change initiatives. Technologist and IT practitioners are particularly well renowned not to have those soft skills associated to communication; this is not to exonerate other professionals in other functions who sometimes may be the change agents or lead change initiatives where you may also have across communication challenges. However, my background is mainly technology, therefore, my world view will be influenced by my background and experience i.e. technology, although, I am consciously aware of those views and I am able to extricate them from my articles.

Many researchers – Beer & Einstant (2000), Elving (2005),  Peng & Litteljohn (2001), Palmer, Dunford & Akin (2009), DiFonzo & Bordia (1998), Bruch, Gerber & Maier (2005), Clampitt & Berk (1996), Fox & Amichai-Hamburger (2001)whom have investigated the relationship between successful change initiatives and communication, have noted how critical and important it is to get communication right during periods of uncertainties which is an attribute of most change initiatives.

Most change agents and change sponsors also now recognise the criticality of  communication but despite the acknowledgement and recognition, why does it remain extremely difficult to effectively communicate during change programmes?Fox & Amichai-Hamburger (2001) opined that there must be recognition by the message deliverer to be aware of the emotional realms of those receiving the messages. My experience from various change initiatives really backs the aforementioned argument. The interpretation of a message by the hearer is influenced by a lot of factors. In Neuro Linguistic Programming (NLP), it is widely stated that the “meaning of your communication is the response you get“.  Whilst a “fire and forget approach” to communication may be required when broadcasting messages during change initiatives, it will hardly achieve anything.

Although, I do not have answers and no management practitioner or researcher will claim to have answers that can help you completely eliminate ineffective communication, there are ways in which you can increase the effectiveness of your communication in order to simply simplify the complexities of your change initiatives therefore removing  one of the key barriers to success.

Some of the ways in which you can achieve effective communication with references are listed below:

  1. Measure the results of communication: http://h30499.www3.hp.com/t5/Discover-Performance-Blog/Best-practices-for-effective-communication-for-organizational/ba-p/5515197#.UoipfhBFeW4
  2. Be honest even when the consequences were possibly negative –  http://www.change-management.com/tutorial-communications.htm
  3. A communication is complete only when the receiver has integrated, understood, and applied the message. – See more at: http://changeleadersnetwork.com/free-resources/six-faulty-assumptions-about-change-communications#sthash.X9xzTFS2.dpuf
  4. Collaboration is very important – http://www.mckinsey.com/insights/organization/what_successful_transformations_share_mckinsey_global_survey_results
  5. Feedback loops should not be underestimated – http://www.bcg.com/expertise_impact/Capabilities/People_Organization/Change_Management/ExpertInterview.aspx?interviewId=tcm:12-25685&personId=tcm:12-10493&pt=U2VuaW9yIFBhcnRuZXIgJiBNYW5hZ2luZyBEaXJlY3Rvcg==&practiceArea=Change%2BManagement
  6. Communication is both outbound and inbound – http://www.boozallen.com/media/file/138137.pdf.
%d bloggers like this: