Unpredictability
When I moved to Gertrude St, Fitzroy, almost 20 years ago, people asked, “Why on earth would you want to live there?”. Today, it’s one of Melbourne’s hippest coffee, eating and fashion streets and my 19th century shopfront home and warehouse office get different comments: “How on earth did you get your hands on those?”
Many say that this gentrification was inevitable. But, while many other slices of the inner city were yuppified in the 80s and 90s, Gertrude St remained resolutely down-at-heel well into this millennium (think rooming houses, not baristas).
If you think about it, most disruption is just like this. It’s not if, it’s when. “Timing is everything” as the saying goes, and understanding the drivers of change, not just the change itself, is where we need skill and insight.
For instance, I’ve predicted for decades the rise of video conferencing (I don’t believe I was alone). But it took just one driver (a pandemic) to make it commonplace1. And, since my own university days in the 80s, I’ve imagined an approach to education that is user-centric, customisable and endlessly varied (my experience was none of these). Today, though, we do have the right combination of drivers in place that, I predict, will make universities obsolete (at least in their current form).
Why? And, why now?
Here are three data points:
Google, Apple, IBM, Penguin Random House and others have thrown out university degree requirements in their recruitment processes, instead emphasizing worker skills.
In the US, college enrolments are falling, with nearly 750,000 fewer students than previously (yes, high fees are part of this, as are student realisations that 40% of university degrees aren’t what employers want).
Credible providers of online education are booming. One of my clients, the Australian Institute of Company Directors reported a record year in 2020, as has Harvard Business School Online whose enrolments are up 650% from 2019, and Coursera with 500%+ increase in student numbers.
What are the drivers of this?
Here are just five: market freedom (loose regulation coupled with almost zero platform costs), technology agility (everyone can play, when it suits), micro-purchasing (you can buy a very narrow slice), niching (anything you want is taught by someone), and the democratisation of ‘thought leadership’ (anyone who knows something others don’t can monetise this via platforms as basic as Youtube).
This e-learning market globally is estimated to exceed $350b this year and shows no sign of stopping soon, so disruption to bricks and mortar incumbents is rife.
Question: How do you identify (and adapt to) the drivers that will disrupt your sector?
17-minute strategy
Strategy is over-complicated by many (including consultants), so I’m fond of defining it very simply for my clients: “Strategy is a set of insights from which you build a framework that guides future decisions”.
My record for developing high-level strategy with a client was 17 minutes. I asked them six questions, and they answered them. I distilled what they said, we wrote them up on a whiteboard, took a photo, and synthesised it into a polished piece that everyone agreed was on the money.
So, what did we spend our 17 minutes developing insights on? Here are the six questions I asked:
Purpose: “Why do you exist?”, or, “For whom do you create what difference?”
Role: “What do you do? What don’t you do?” or, “What can you do better than others?”
Scale: “How big do you have to be to become truly effective?”
Goals: “What are the 2 - 4 investments of time, effort & money that will propel you forward the most?”
Results: “What does success look like?” or, “What 5 - 6 things will you measure relentlessly?”
Values: “What beliefs, when shared by your people, will predict your success?”
It’s true that (a) they had the answers, (b) they all agreed, and (c) we were deliberately speeding this through and didn’t pause to explore nuances. If you want more nuance, and you want much more detail on these six questions, you can download a copy of my book, “From Impossible to Possible”, with my compliments here.
Question: Could you easily articulate answers to these questions (in 17 minutes)?
Judgement or process?
Above I wrote about the gentrification of our little suburb and a few years ago we decided to join the fun. So we went to our bank for a renovation loan and after filling in a blizzard of papers, someone offshore decided that ‘commercial property in Melbourne is risky’ and therefore our bank wouldn’t lend to us.
If our ‘house’ was conventionally residential, no problem, but we’re in a strip of inner city shops. I was astonished our bank outsources its lending decisions to another country whose people don’t understand anything about local conditions, but simply push applications through an algorithm.
We argued that our property isn’t commercial, it’s residential (we live there, and have, for years!). Sorry Sir, no.
We argued that there hasn’t been a single instance of a Gertrude St shopfront that hasn’t sold at auction, well above reserve, for 15 years. No, it cannot be done.
We argued that property prices in our street have increased 50% in just the past 3 years, evidenced by sales of properties very similar to ours. Our decision is final and I cannot change our lending policies.
This was a case where process had been substituted for judgement.
I sometimes notice my clients making the same mistake, by substituting processes for human decision making. However, I much more often notice the opposite: using judgement when process would suffice.
I’m working with two organisations right now, where every investment decision goes to their board. Given their complex operating environments, this means that every month, the boards might consider two, three or more opportunities. What these organisations need are filtering systems (or algorithms) that their managers can run, ensuring that only the most promising opportunities go to the board for approval or for future business case development.
Question: Are you creating the right balance between judgement and process?
Thanks for all the ‘likes’ and comments last week, both public and private. It certainly means a lot when you reach out like that, so please take an extra second to click the ‘heart’ link to say you’ve enjoyed reading.
I hope you use good process to heighten your judgement on something this weekend — and I’ll see you next Friday.
Andrew
Do you ever wonder what our current pandemic would have been like in the pre-internet 1980s?
I’m most impressed that your client could answer those questions in 17 minutes AND that their answers made enough sense that you could move forward with them. My experience — different industry and country — is that most can not answer and those who can merely quote them by rote while not actually running the business consistent with those responses.
Andrew your insights are always thought provoking and make the difficult feel achievable. Where does on access your book ?