Ask Dan OPS

Ask Dan OPS | Logistics Consultancy | Business Coach

Today is our first missive on looking at the top issues facing business and individuals and developing solutions to improve our position.

I am going to aim to provide you with techniques and methodologies, which you can use to defy the doom and gloom merchants and deliver success from both a business and personal aspect.

Let us begin with economic uncertainty, or if you want, just uncertainty.

In the news recently we’ve heard about two big named businesses calling in the Receivers – HMV and Blockbuster Videos.

Why would these large and previously successful companies go to the wall?  Only time will tell the full story, but we can speculate from what we know through observation.

  • They both failed to truly diversify.
  • They did not innovate to compete.  Whilst you could shop online, they did not take into account the download generation, which provides for instant gratification, although Blockbuster did…

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Strategy Masterclass: Insights on business growth from TripAdvisor

Alison CopusAlison Copus, Vice President of Marketing at TripAdvisor and Evan Davis are just two of the big names speaking at the second of our Business Perspectives events in Manchester at the Marriott Victoria and Albert Hotel on 7 February.

TripAdvisor is a pioneer in the use of user-generated content.  Since being founded in 2000, it has become the world’s largest travel website, operating in 30 countries and 23 languages.  Alison is responsible for B2B Marketing worldwide, and launched Business Listings, which now has more than 50,000 subscribers. Prior to joining TripAdvisor, Alison spent 13 years with the Virgin Group, working alongside Richard Branson to launch The Branson Centre for Entrepreneurship, and developing other philanthropic projects.

In her keynote presentation, Alison will share how TripAdvisor achieved remarkable success in a ‘winner takes all’ market, and discuss the challenges businesses face to keep in step with changes in digital media.

Additional speakers include Antoine Boatwright, Global Director of Dell, and Michael Canning, management consultant. The masterclass will be led by Thomas Lawton, Professor of Strategy and International Management at the OU Business School, and facilitated by Jo Salter, the UK’s first female fast-jet pilot, OU MBA alum and OU tutor. Participants can expect an interactive event, with opportunities to evaluate and develop the speakers’ insights and apply them to their own context.

The daytime masterclass will run from 10.00 – 17.30 and the evening event from 18.00 – 21.00. Please book your place now via our website.

Future direction for International Airlines Group

In a discussion with Professor Thomas Lawton from The Open University Business School, Willie Walsh, CEO of International Airlines Group explores the company’s present position and possible future.
This is an interview after a recording of the OU/BBC co-production The Bottom Line.

Learn more about The Bottom Line programme and make use of free learning materials on OpenLearn.

Innovation quarter summary report

Business Perspectives Innovation SummaryTo conclude the Business Perspectives innovation quarter, we have created a summary report that offers diverse ideas and insights about innovation – a snapshot of perspectives from around the globe.

We invite you to download and share the report and please send us any comments.  We will create a similar summary report following the strategy quarter, if you would like to contribute your perspective towards the strategy theme, please contact our Business Perspectives Editor using the web-form below.

Click here to download the report.

Competitive strategies for business growth

Thomas Lawton, Professor of Strategy and International Management
Thomas Lawton, Professor of Strategy and International Management

I joined the OU this past autumn and one of my first interactions with new colleagues and with OUBS alumni was at the Business Perspectives Innovation masterclass in London.  I could not have been more impressed by the professionalism of colleagues and the insights of guest speakers as well as the interest and enthusiasm of alumni, current students and other friends of the OU. Therefore, when asked to lead the next event on strategy, I realised that I would have a tough act to follow. For me, the rule of thumb when following on from a successful predecessor is to pay due respect but seek to suitably differentiate. This is what we have sought to do when designing our Competitive Strategies for Business Growth masterclass.

The intent behind this event in Manchester next month is to again reach out to our graduates, students and partners, engaging them in a dialogue around business and management ideas and improvement. It is aimed at individuals and organisations keen to learn more about strategy techniques and best practices. The intent is to help those with strategic responsibilities in the design and delivery of strategy. The event is also intended to challenge the economic doom and gloom that rests like a black cloud over the UK and beyond, and to discuss ways the world’s economies can kick-start growth.

I encourage you to sign on, turn up and get stuck in on the day. Through this blog forum, I also suggest you start to mull over and debate three questions in advance of 7 February. These are:

  • Do you need a strategy to build and sustain a successful business?
  • What will it take to be a successful strategic manager in 2013?
  • How does strategy process and practice need to change and evolve to meet the competitive challenges of the future?

I look forward to meeting you in Manchester.

 Thomas C. Lawton

Professor of Strategy and International Management

Visit our website to book your place to the masterclass.

Porter supporter

Guest blogger: 
Terry O'Sullivan Terry O’Sullivan, Senior Lecturer in Management and Head of Centre for Strategy and Marketing, Open University Business School

News just before Christmas of the bankruptcy of Monitor, the consulting firm set up by Harvard Professor Michael Porter in 1983, had many rival strategy gurus rubbing their hands in unseasonal schadenfreude. As the world’s most-cited (and highest-earning) business academic, a household name in corporations, governments and business schools since the 1980s, (and a golfer of near-professional standard to boot), you can see how he might have attracted some measure of envy over the last three decades. Explanations of the collapse of his firm abound – a failure to adjust to conditions post-2008, a reliance on methods which have outlived their relevance, even just something as simple as a lax attitude to costs in a very slow market.

But an uncomfortable question remains, in spite of all the post-hoc rationalisation – if the world’s most eminent strategist’s own business can come unstuck, what’s the point of strategy for the rest of us?

Perhaps part of the answer is to make sure we have the right expectations. Strategy can no more show us a failsafe future path than a crystal ball can. But it can help us to make more responsible decisions.

Maze Puzzle © FutUndBeidl via FlickrTake Porter’s celebrated Five Forces model, which first saw the light of day in the Harvard Business Review in 1979. It’s what sociologists call a ‘conflict theory’, depicting any given industry as a set of warring factions scrapping over available profit. Porter’s background in economics made him aware that some industries are more attractive than others in this respect, leaving himself open to the misunderstanding that all you have to do is choose the right industry and your strategy problems are solved. Even if anyone were free to abandon their current industry for something more attractive overnight, success is not so easy to come by. In fact the real (and to my mind genuine) value of the model is to help understand your own performance in whatever industry you find yourself, in such a way as to help improve decisions about your direction in the longer term.

Another Porter favourite is the ‘generic strategy’ idea, whereby he advises that there are only a limited number of ways to compete in any industry. A famous one is ‘cost leadership’ (epitomised by companies like Ryanair), where the name of the game is to do everything as cheaply as possible. Being a cost leader means that you can pass on your efficiencies to your customers as lower prices than those charged by rival firms (should you so desire). Again this is widely misinterpreted; this time as sanctioning competition as ‘a race to the bottom’, in which there are ultimately no winners. A more careful reading of Porter reveals that what he is actually advocating is not so much being the cheapest, or even the best in an industry, but being unique in some way that is valued by a sufficient number of customers to provide a viable, and sustainable business. Competitive strategy can thus allow a thousand flowers to bloom, rather than descending into a zero-sum game.

Porter himself parted company with Monitor in 2011 (the same year it made a public apology for having done business with the Gaddafi regime in Libya) and was winding down his relationship with the firm well before the economic downturn. Since then his interests have turned increasingly to social issues — for example healthcare reform and corporate citizenship. So he can hardly be held responsible for Monitor’s doldrums. On the other hand, it has also been suggested that the bankruptcy was actually a strategic move worthy of the master of positioning himself – smoothing the path for the firm’s acquisition (with most of its staff and client book intact) by another consultancy giant, Deloitte.

(This article is also published on Terry’s blog Marketing Talk.)

Business Perspectives event: Strategy Masterclass

Competitive strategies for business growth: process, practice and performance

Thursday, 7 February 2013. Marriott Victoria and Albert Hotel, Manchester

chess, strategy

Drawing on the success of the first Innovation Masterclass last quarter, we are pleased to announce the second of our Business Perspectives events. In this, we will consider how, in an environment of austerity and reduced consumer confidence, managers and leaders can configure and implement a competitive strategy to deliver sustainable growth, enhanced performance and increased profit.

The masterclass will focus on the process and practice of strategy-making and will hear from strategy creators who run their own companies, as well as external consultants and managers who sit at senior and middle-management levels. We will explore what works for each and where the challenges exist, which strategies add most value, which make most sense and, most importantly, which are implementable.

Professor of Strategy and International Management, Thomas Lawton, will lead the masterclass and he will be joined throughout the day by key business leaders and Business School academics. The complementary but separate evening event will be hosted by the Dean of the Business School, Professor Rebecca Taylor, and we will hear Evan Davis, BBC editor, presenter and OUBS Visiting Professor, speak to “Do British companies need a more dynamic, strategic approach to prevent them lagging behind in the global economy?” alongside our keynote speaker.

We really hope that you will be able to join us at this exciting event. Further details can be found on our website together with full details of costs and Alumni Early Bird discounts.

We would also like to hear your perspective on strategy and how it is implemented within your own organisation prior to the event.

Ten things businesses should know about what innovation is and isn’t

Guest blogger:

Sarah_PlattsSarah Platts, Open University Business School MBA Alumnus, Change Consultant at FreshNetworks

innovationInnovation is a common topic of debate and strategy in most businesses (be they new or well established). In the current economic climate, and with the huge potential of the likes of social media data, brands are increasingly looking at innovation (large and small) as a way to beat the competition.

But innovation is often misunderstood. After a recent event debating the topic at the Open University Business School, I left with some insights into what the attendees thought that innovation was, and some misconceptions about what it has to be:

Five things that innovation is

  1. Inextricably linked with growth, according to the BBC’s Evan Davis. He surmised that innovation hasn’t come to a standstill in 2012, although we do have a growth problem which innovation itself will be crucial to solving.
  2. Delicate. It’s important to nurture it gently so as not to kill it off too quickly, but also carefully contain and manage it to prevent any huge financial, market, or reputational fires.
  3. More prevalent during recessions. The atmosphere of fear engendered by recession is often the trigger required to force organisations to adapt and survive (as opposed to ending up at the decline end of the sigmoid curve, such as Kodak), as well as being ideal for start-ups. Recessions tend to shake out the worst performers, and those simply coasting along with the status quo.
  4. Often within your team already. Any business is likely to have great ideas and innovators already within the team. An open and creative organisational culture and office space is crucial to finding, developing, and encouraging these employees, who will always move to another company (possibly a competitor) to innovate if they can’t do so where they are.
  5. Often the victim of resistance and sabotage. Some tactics to look out for and actively surface and manage include Peter Keen’s “lay low”, and “keep the project complex, hard to coordinate, and vaguely defined”. Plus also the wonderfully expressed “Say yes! But do nothing”.

Five things that innovation doesn’t have to be

  1. Big or complex. Sometimes the best innovation can come through a series of incremental steps which ultimately amount to something quite large, impactful and radical. Such gradual change can often be more palatable in businesses.
  2. Hugely expensive or driven forward by companies. As demonstrated by the user-led innovations of the maker movement, and also Jugaad Innovation’s more flexible, frugal, and bottom-up approach.
  3. A risky business. At least not to the innovators – who have complete faith in their idea. It’s the financial backers who are taking the risks. However, if we’re taking an incremental approach, perhaps that can help reduce the overall risk by breaking innovation up into more manageable and less intimidating or costly chunks.
  4. A driver to cut costs. As it’s enabling many companies to retain their current cost bases but stretch those resources further into more countries and ventures.
  5. About technology. Thinking and process innovations show it’s not just about technology (e.g. queuing), and service innovations prove it’s not only about products either. Nevertheless, technology is certainly vital, and SAP UK’s CTO Adrian Simpson explored how innovation is being shaped by greater mobility (e.g. increase in mobile devices), social media and networks, the cloud, and huge data sets (including social data).

Ultimately, innovation seems to depend on persistence, belief, adaptability, and relevance to customers and the market. While its success relies on people, behaviour and skills, and spotting and pursuing the opportunity before it’s too late. Undoubtedly money and resources help, but perhaps more of a barrier exists in the minds of employees and cultures of organisations?

(This article was originally published on FreshNetworks on 20th Dec 2012.)

Innovation and technology: the challenge

Guest blogger:

Professor James Fleck, Professor of Innovation Dynamics at The Open University Business School.

At the beginning of the Innovation Masterclass, I proposed to run a challenge for examples of an innovation that does not involve technology.

Definition of innovation:

“Innovation is the practical implementation of a new idea or invention for intended economic impact.”

General points:

1. There is a distinction between innovation and simple change: essentially we are considering innovation as a business and economic category.

2. Involvement of any technology: existing or old – does not have to be new; simple or basic – does not have to be complex.

3. An innovation may well be based on a natural phenomenon, but it has to include an extra element to make it into a human idea or invention.

4. There is a distinction between innovation as we have been discussing (essentially a business and economic category) and artistic or cultural innovation.

5. Innovations in process look like the most promising candidates, although most modern processes do in fact depend on ICT (information and communication technologies).

6. Innovations in policy look promising, but until they are practically implemented, usually as processes with determinable outcomes, they are not really innovations in the business sense.

There were 21 submissions in total. The best answer won a bottle of champagne. More detailed observations are noted under each suggestion.

Comments on submissions:

1) The wheel

Well, this is surely the archetypical innovation and if a wheel is not technology, what is?

2) The abolition of slavery (disappearance of the feudal system)

This certainly represents a major societal change, and is more a combination of many other changes than a singular change. But would slavery have been possible without ships, weapons and other instruments of oppression? There is an interesting thesis about feudalism which suggests that it is a society that results from the invention of the stirrup (which enabled the technology of horse-based warfare to underpin the emergence of a class of horse owning overlords).

3) Gay marriage

Not sure that this is a new idea, and don’t think any economic impact was intended. It’s more of a cultural change. Also see general points 5 & 6 above.

4) A choral work, performed for money

An interesting one, but more of an artistic/cultural change. Also, unless purely voice, without any musical instrumental support, then technology certainly is involved (musical instruments are technology).

5) Organised religion

Not sure what the specific idea is that is being practically implemented; not sure what the intended economic impact is, and not sure that it is in any way new. This is more of a cultural change – see general point 5 above.

6) Innovation in dementia care (a “feelings-based” approach involving quality interactions instead of task completion)

Not sure what is new about this. Surely more a reversion to what historically has been the essence of good family-based care. Perhaps the industrialised “task completion” approach, dependent on the technology of time-keeping and efficient division of labour, was the innovation?

7) The introduction of “total football” by the Dutch in the 1974 World Cup (where each player shared a posting on the field)

An interesting one – an example perhaps of a process innovation (see general point 5 above). But what about the pitch and the stadium, the football, specialist boots, TV and all the other technologies that make the modern World Cup what it is? Also, sport perhaps is more part of the artistic and cultural domain in its essence as a game. And increasingly, modern innovations in sport are in fact based on technology (goal line technology for instance).

8) The behavioural management of safety

This is very cryptic and not sure what the key innovation is. Appropriate behaviour has always been an important ingredient in safety. In its modern manifestation, I think it does depend on technology, that of monitoring and recording as well as a range of training tools to impart correct safety behaviour (I am thinking here of the programmed instruction about computer work that I have to undergo as an academic).

9) A new technique in knitting transferred from grandmother to mother

But knitting needles are technology, albeit a very simple and basic one.

10) Having children (Adam and Eve)

Mmmm. An entirely natural process. No new ideas or inventions (well…) (In the robotics literature there is a joke about how human beings are the only robots made by unskilled labour).

11) In nature where mutations occur which result in increased longevity of that species

Another natural process. No new idea and no practical implementation. But once there is practical implementation for intended economic outcomes, then perhaps you do have an innovation. Artificial selection for breeding?

12) Free entry to museums about 10 years ago leading to a massive increase in visitors and attendant cultural benefits

A clear example of a policy innovation (see general point 6 above). Not sure how new this was as museums were always free when I was a boy. Also not clear what the economic impact has been.

13) Sigmund Freud

Not sure where the practical implementation is. And perhaps there is a distinction between factually based new ideas and imaginative new ideas? Clearly an artistic/cultural example (see general point 4 above).

14) Money

Another very interesting example. Originally money emerged as a universal barter commodity, such as salt. But the real innovation when money became money in the modern sense, was the invention of coinage with symbolic value indicated on its face. And this of course depended on the technologies of metallurgy and minting. Even with salt and other barter goods, some means of measuring or weighing the quantity of the goods was required.

15) “Kissing it better” innovation in child and health care

As with example 6 above, not sure there is anything new in this. This is rather a reversion to ancient family based approaches.

16) Fire

Is this in itself an innovation? The effective control and harnessing of fire surely is the basis for innovations, and these all constitute technologies such as design of hearths, furnaces, chimneys etc.

17) Change from counter-service to self-service in shopping

I think this does necessarily involve a range of technologies, from effective tagging systems for the goods purchased, scanning systems for the checkout points and the design of the checkouts themselves so they are easy to use by a range of customers.

18) Agile methodologies

A good example of a process innovation (see general point 5 above) but rather generic and difficult to consider in the abstract. And surely it intrinsically involves technology especially in its practical implementation? As I understand it, it is a software development methodology, and is software not a technology? Moreover, various other supporting software technologies are required for monitoring and managing the overall process.

19) Microcredit

An interesting example, but one which necessarily ultimately depends on all the technologies involved in the modern financial system, even though the front end might be a very low technology of local paper records.

20) The way in which we now queue in one line rather than many, thus avoiding choosing the wrong line

21) The post office queue from many lines to one, saving frustration

These two suggestions (20 & 21) both capture a key idea arising from the formal mathematics of queuing theory, namely that one queue feeding many servers is far more efficient than many queues each feeding their own server. In essence it requires no technology as it could be implemented in any situation although to be purist, usually various technologies are involved (barriers to direct the lines; checkout technology in the servers etc).

Nevertheless, this impressed me as the best example of an innovation that does not involve a technology, and so the two people proposing this example shared the bottle of champagne. (And very kindly, they offered me a glass as well!)