Ian Mann talks business trends, business strategy and the way forward for business analysis with Joe Newbert, in business analysts the CEOs army.
Ian Mann is the founder and managing director of Gateways Business Consultants, a boutique consultancy specialising in leadership and strategy. The firm consults to large and medium-sized businesses in 14 countries.
He is the author of the best-selling book “Managing with Intent”, which focuses on strategic implementation, and of the highly acclaimed “Strategy that Works.” He holds five degrees and to keep up with the latest business thinking Ian reviews the best of the latest business books, and has been doing this every week for the past 18 years. He writes a column each week for Fin24, and has a regular slot on Radio 702’s business programme.
Can you give a quick snapshot of the current business environment, both locally and globally?
We are in a situation where business is going to become ever more complex and tougher, not only for the people practicing business and doing particularly well, but for absolutely everybody else: employees, employers, bankers, everybody. I think the tides are going to go out and we are going to be able to see very clearly who was swimming naked. South Africa is suffering from all sorts of fundamental complexities, and with the world recession and the world growth being so small I don’t think it’s going to be a great time to redress major problems – like employing more people, establishing infrastructure and growing the economy. This will be a perennial theme in South African business for a while.
Within this climate you’ve described, what must businesses do to create or maintain an edge?
Businesses are going to have to become ‘operationally excellent’. Businesses that are not really good at what they do are going to find it harder and harder to survive, and the companies that are truly excellent have the best chance of survival. I don’t think anybody’s going to thrive unless you happen by fortune and those in recession proof industries might have a better time, but for the rest I think we will be able to tell the difference between the men and the boys – the ones who’ll survive and the ones who simply won’t – or at least, if they don’t go under they’ll have a very tough time.
What influence will the added complexity of marketplaces becoming ever more accessible have?
It will expose the achilles heel of a lot of companies, even companies who have been very successful for a very long time; in fact the late Peter Drucker said “Those whom the gods wish to curse, they first give them a couple of decades of fabulous results!” The small businessman has probably got far more to teach big business, than big business has to teach small business. If you’re a big business you can make mistakes and be sloppy for a couple of years before it really comes back and hurts you; if you’re a small business you only have to have two quarters of sloppy work and you’re probably going to find yourself in serious trouble. Smart businesses are going to adapt quickly, be nimble, make intelligent decisions and realise that they have to be far more careful about keeping ego in check and thinking clearly about what it is they are doing.
In this age of abundant choice and available information, what affect does the bargaining power that customers wield have?
Today, we are now competing on very even playing fields with purchases being far smarter than they’ve ever been before. The reality is that most people when they go out to buy know exactly what they want, know exactly how much they’ll pay for it and what they would really like you to do is not tell them things that they already know, because they know it, they want you to have an angle on things and the angle is ‘because I’ve worked with this type of problem so often I am able to see things which you might not be aware of, and then I’ll add to the way you have laid out your dots and connect them in a different fashion’. Everybody knows what they need to know, to a large extent, so you’re unlikely to be able to fool somebody with something new or dazzle them with something they’ve never heard of.
Considering this rivalry among competitors, does a sustainable competitive advantage remain relevant?
Think of it this way, as soon as your nearest competitor realises you’re doing something special, something really different, something that’s making you real money that he’s not getting, what he’s going to do is he’s going to come after you as fast as he can. Sustainable competitive advantage was a product of the Industrial Era, Michael Porter was an industrial economist who wrote in the late 70s / early 80s – if we just put it into perspective: there wasn’t a fax machine when he wrote.
To talk about a sustainable competitive advantage today is to talk absolute nonsense.
They don’t exist, at very, very best you have a transitory competitive advantage. Your sustainable competitive advantage is probably as long as a new product in the financial services in London – seventy two hours. A sustainable competitive advantage does not count much, they’ re going to get you and you have to do a lot of other things to stay ahead.
Should companies focus on product, service and/or marketing to stay ahead?
The reality is that it does not really matter what you focus on as long as you win – the key is to find whatever opportunities you have to in someway better satisfy whatever the customer needs and unless you’re genuinely satisfying what the customer’s need is you will not survive. If you’re an excellent company, producing excellent products,excellence eventually becomes boring. Companies are required to change and innovate regularly and often in order to see to it that they sustain the interest and excitement of loyal clients. So, the need is to change constantly and refine and do something different, this constant innovation, and by the way innovation doesn’t have to be ‘I invent a new product’, it might just be something else, but unless there’s something new, going on all the time, do not be surprised if people are going to get bored with you.
Is ‘time to market’ also a key success factor?
It’s becoming more and more meaningful, the idea that I have to wait is becoming tiresome – we want instant gratification – and speed is incredibly important, in appropriate situations. There are things I choose to wait for, like a well cooked meal, but I do not chose to wait for a book, I expect amazon to deliver the book as my credit card gets debited – and they do. In terms of new products, first to market is not necessarily an advantage: sometimes first to market is good – the first company that builds a pipeline makes all the others pipelines unnecessary; but there are times that it’s best to be second and watch the first guys make mistakes and lose the money. So we are now shrinking the amount of time everything takes to do, and we need to see our product development and supply chains are able to cater to the needs people have for the goods that they want.
Innovation has typically been viewed separately to the business’s core set of activities, will we see this come in to more mainstream play?
A huge example of this is Rank Xerox. Rank Xerox had their own innovation centre which was quite far away from the factories and so on, and in those centres they produced magnificent things such as the lan, icons and the mouse. They produced these enormous ideas yet not one of those was monetised and it had to do with the fact that innovation was too far away from where the people who were using it or could use it were seated. The idea that innovation is taken into account and is right next to the people who will produce it and use is so essential because thats the only way you’ll get buy-in and get used immediately. This distance between, whether intellectual or physical or in any other way, is not a useful thing.
How important will assessing the feasibility of ideas become in facilitating intelligent decision making?
Only the paranoid survive and when running a business or creating something new you want to be absolutely sure that you’ve done your homework. Failure is no accident, and in all cases my impression is that organisations haven’t done their homework. Had they done their homework properly, they would have seen that stuff doesn’t work or the opportunities are in the place they didn’t think they were.
That’s why business analysis comes in so, so handy – it’s because you can’t do anything well unless you’ve got a lot of data and you can make some sense of it.
When you don’t have that you’re going to guess, and the only way to avoid the guessing is to have the data.
Will a business’s future success be determined by its ability to transition strategy through tactical execution?
I’m firmly persuaded that if you had an opportunity to bet on a plan or bet on the man, you’re better off betting on the plan. If the plan is a poor plan, poorly understood, poorly researched, it probably wont work. The planning, the analysis, the strategy that you’re working on needs to be solid and very, very robust – but that’s only a starting point. You then go on to the next step, which is execution. One brilliant idea well executed is worth seven brilliant ideas that weren’t executed, and we can’t underestimate the importance of quality execution using whatever techniques are available to us to ensure that we know what’s being executed: how well, how much, how fast, how everything. Without knowing what’s going on you’re not going to be able to execute anything terribly well.
In this environment, what type of people are needed to deliver business transformation?
What’s happening is that it is becoming more and more imperative that the person is a strong and a good person. Good in the sense of being highly disciplined, in terms of execution:
Do what you say you’re going to do, do it right first time, on time and every time – at least you aspire to that.
In terms of innovation, there is absolutely no physiological evidence indicating that a highly creative person has any different brain structure than somebody who isn’t – we’ve all got the same stuff. What does matter is being exposed to lots of stuff, lots of ideas – the most creative people in the world are simply people who are surrounded by other people who know a lot of stuff. There can be absolutely no substitute in any business for widely exposing people to ideas, even bad ideas – just expose them to stuff.
How can the practice of business analysis help business realise opportunities?
In the olden days, you got your management accounts twice a year, and you just hoped they were right and they were more or less okay and you lived with it – we know that that’s no longer good enough. We need analysis on lots of different parts of business more than we’ve ever needed it before. If you’re in business there’s always a lot of information you need; a lot of things that if we only knew more about we could actually fix, hone, improve, expand. Without somebody dedicated to doing that it falls on the CEO to do, and if they do it at all it’s done on Sunday morning – with all their other commitments, we are needing specialists more than we’ve probably needed them in a long time. That’s where I think business analysis has to come in.
Business Analyst’s encounter many issues, ideas and perspectives from their interactions, how could this ‘management by walking around’ feed strategy?
It’s a question of how you communicate that type of information. The truly successful business analyst will be the analyst who’s really able to come up with qualitative data that informs the quantitative data, and is able to transmit it to the people who need to hear it. When you give people too much information, it’s like trying to make them drink from a firehouse, the challenge is to be able to see the most pertinent issues, not to you, but to the person who commissions the work and to be able to tell it to them in someway that they can absorb it, which may be drip feeding or some other way, but the typical huge document that you get from your business analyst is going to bore everybody. The key is to understand who the customer is and how they take in information so that they get the knowledge they didn’t know they desperately needed.
What could business analysis bring to the relationship to better partner with business?
I recall working with “internal auditors”, and came to the conclusion fairly rapidly the skill that the internal auditors needed more than anything else was the ability to get people to love them, as opposed to be fearful of them. The most successful consultants have realised what they really can do versus what they can’t. On a personal note, I describe myself as a strategy midwife, and the reason I use the image of midwifery is because it would be nothing short of arrogance for me to think I can go in to a company and give them a strategy. The very best I can do is help them give birth to their very best ideas. When you take that approach to working with your clients, I have personally found it to be far, far more valuable. Conjoin your expertise with with the knowledge, wisdom and experience that your clients have and together create something that you all agree could be of value to the organisation.