Examining Business Boundaries

Examining Business Boundaries

March 1, 2021 ·

Podcast: Examining Business Boundaries

6 Min, 36 Sec · By Derek Cheshire

Many business owners think of their business in terms of what they do on a daily basis e.g. farmers milk cows, printers print brochures and jewellers make jewellery. A better way of thinking about your business is to ask the question ‘what is it (of value) that I create and who helps me to do this?’ We should be examining business boundaries. Any other person or business that helps you in terms of creating value, and hence money for your pocket, is in fact an extension of your business.

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How Do We Value Employees?

How do we value employeesThere has been a bit of a buzz for a long time about the question ‘how do we value employees?’. The question is on what basis do we value them? After all, if we were to assign them a notional value then we risk commoditising them and succumbing to Taylor’s principles of scientific management.

So supporters of HR are forever talking about valuing employees, meaning that we must look after them. But why? Here is a story that formed part of my University MBA course. It is true but the name has probably been changed and the story embellished a little.

This is the story of Fred’s Head. This term is often used when referring to the tacit knowledge held by somebody, but here it really is the head of Fred!

Fred worked for London Underground (now known as TfL) for many years and like many workers before him, he had the customary retirement party and received a gold watch. Then he left. At that time London Underground had a fairly new line, the Victoria Line. It was unusual in that it was very shallow i.e. the tunnels carrying the trains were relatively close to street level. Because of this, the line had to twist and turn in order to go around the foundations of some buildings.

A while after Fred left, it was noticed that there was a significant increase in the wear on the rails and train wheels on this line. For a while, nobody knew why until someone connected these events with the disappearance of Fred. What had Fred actually done before he left?

Well in order to avoid wear and tear, parts of the Victoria Line had been fitted with automatic lubrication mechanisms that squirted lubricant when the trains came along.

That was an easy problem to solve then! Simply fill up the system with the right lubricant and off we go! Well, the system was filed up and many months’ worth of lubricant were ejected onto the track. Not only did Fred maintain the system, but he also calibrated and tuned it too!

Well finally they got it worked out but this story highlights a few points.

  • What tacit (implicit and uncodified) knowledge is held in the heads of employees?
  • How do we find out about this and ensure that it is retained?
  • What else do our employees know that could be useful for our business?

It is easy to fixate on knowledge itself and try to value that, but there is a much greater value to be placed on the interactions between employees that lead to the discovery and creation of new knowledge. That may not be codified but may get woven into organisational culture through storytelling.

In a way, uncodified knowledge is ideal because it is hard for competitors to copy, even when an employee does leave and work for them.

So yes our employees have value beyond their everyday work but we probably cannot put a monetary value on it other than if anything happened to our employees, how much would we need to spend to get us back into the same position (an insurance value)? But we still cannot assess the future impact.

If you want some help working out what your employees know, how to capture and store it then please get in touch.

How To Successfully Join The Dots

join the dots

Think back to your childhood. Did you ever use those Dot To Dot drawing books, those ones with hundreds of numbered black dots? Did you manage to join the dots?

The idea was that you started at number 1 and then joined them in sequence. If you completed the job correctly then you would see a picture of a unicorn, bear, or maybe a childrens’ toy.

Depending on your age, grasp of numbers or many other factors you might not have joined all of the dots in the correct sequence, and the finished drawing looked a little wonky. For some, it did not matter but others might have been scolded by their parent for ‘getting it wrong’.

Older readers might remember the classic Morecambe and Wise comedy sketch where Eric Morecambe is playing the piano. He is scolded by the famous conductor Andre Previn for playing ‘all the wrong notes’. Eric replies ‘look sunshine, I am playing all of the right notes but not necessarily in the right order’.

Situations similar to this happen in our businesses all of the time. The dots or notes are thrown at us and we are expected to rearrange or connect them in a particular order. But if this ‘order’ is expected, why bother?

Great discoveries (penicillin) and Innovations (the Post It) come about when there is no preconception about what individual components mean or how/if they should be connected at all.

This sounds a little like play and in a way it is. Is prototyping simply not play by another name?

Sticking with the dot joining metaphor, we should allow employees to play with the dots and add new ones as necessary. The trick is to know how to keep people working with a relevant set of dots and have a healthy dose of serendipity present to detect those truly ‘aha’ moments and know what action to take.

This sounds like hard work but really it is not. The key is to just be a little organised and realise that Innovation is a Strategy and as such will touch every part of your business. This helps in a way because it means that you do not have to worry about interfacing a separate Innovation department with your mainstream business. If you would like to see an example of how this can be done please download this case study [Download not found] and feel free to ask questions.

If you would like to know more about joining dots or you are wondering how to embed serendipity into your organisation then please get in touch.

The Innovation Whisperer

Innovation whisperer, innovation whispering

Who or what is The Innovation Whisperer and what exactly is Innovation Whispering? Put simply it is a more gentle, yet more effective way of making Innovation work for your organisation.

So the Innovation Whisperer is me, Derek Cheshire and I deliver a particular type of intervention that is less costly, less brutal yet more effective and quicker than the programmes and projects that some larger consultancy companies will sell to you.

There are some previous posts that describe some of what I try to do such as Soup, Jugaad and Chai, Organic Innovation, The Best Way Forward, and Soft Infrastructure Post Coronavirus.

But what is the aim of all this, why not simply follow the instructions contained in the ‘One minute guide to Innovation’ and all the other books that exist?

Let me go back to the term Horse Whisperer. Here is a definition that I found via Google:

Noun. horse whisperer (plural horse whisperers) A horse trainer who adopts a sympathetic view of the motives, needs, and desires of the horse, based on modern equine psychology.

So in a similar way, an Innovation Whisperer will adopt a sympathetic view of your organisation and the people within it. There will be no brutal change programme and people will want to participate. Your organisation will be transformed in an organic rather than a mechanistic way into the type of organisation that is fit for the future and able to transform itself without a heavy dependency on external (and expensive) agencies.

Some will argue that Lean is efficient but Lean systems are not easily changeable, or rather self-modifying like an organic organisation. The big disadvantage of a Lean system is that it requires an external change agent in order to adapt to changing circumstances.

Using change agents is possible but it is both slower and more costly in the long run.

But why the need for speed? Recent events should serve to remind us why speed is essential but for now, let us use this example.

Imagine that you have taken a vacation to the Mediterranean and at this moment you are swimming in the nice warm water with the sun overhead. Everything is idyllic, for now. Someone is standing at the water’s edge and in his hand, he has a 1 litre container of seawater which contains 1 billion genetically modified and rather odd bacteria.

These bacteria will not kill humans but produce a waste product that is effectively a red dye. The volume of the body of water in which you are swimming is approximately 4,390,000,000,000,000,000 litres. If the man standing with the bacteria pours the contents of his container into the water, how long would it be before you must jump out to avoid becoming dyed red? Assume that the bacteria double in number every minute.

So how long then? In our amazingly simple example, the answer is just under 62 minutes (61 minutes and 56 sec to be precise). Many people guess that it would be hours or days when asked this. Our concept of time is often flawed.

This is obviously an exponential phenomenon. So is COVID-19 when the R number is greater than 1. Other types of change can be and have been exponential such as advancing technologies or in some cases, social change.

This shows that changes tend to happen rapidly in the current world climate and often we must be avoiding trouble before we even know that it is there. This is exactly why we need a rapidly changing, self-modifying organic organisation that simply cannot be brought into existence by current mechanistic interventions. Enter The Innovation Whisperer.

The benefits of working this way are many.

  • The change begins from day one, no ‘getting to know you time’ required.
  • The relationship is close, no long lines of communication or remote project teams
  • This is fast
  • Knowledge is transferred to you so you do not have to pay for it twice
  • You have a flexible organisation
  • Intrinsic motivation is built in (check out the neuroscience) so you get a hard working yet happy, curious, and creative workforce
  • There is someone there ‘hands ready’ (not ‘hands on’ or ‘hands off’) just in case you need a little help
  • Any changes are simply measured using a simple measurement tool
  • Interventions are carried out only where needed

You may be asking how much will this cost me. Well in the past surveys of R&D spending have shown that many businesses spend at least 1% of their turnover on this item. It is possible to spend more and also a lot less, even as little as 0.1%. Many try to work it out themselves but get stuck. Instead of obtaining a return on investment for your Innovation effort, you can simply end up pouring money into a black hole. You need to avoid these Innovation Not Spots.

So if you are stuck with your Innovation project or programme or you have significant blocks to creativity (either personal or organisational) then an Innovation Whisperer may be exactly what you need.

Please get in touch either via my Contact page OR via the handy red button at the bottom of my ReThinking The Future page.