Monday, October 18, 2010

Price, Choice and Cost

Its national “Get On Line week” and it is aimed at encouraging the 9 million UK people who don't have access to the internet and so are “missing out” on public services at lower cost. We even have The Archers being harnessed for Big Brothers propaganda. Such tosh and a monumental con, and I say this as someone who is a fan of the online world. It is another example of the obsession with price whilst ignorant of cost. We see this approach increasingly, I recall someone trying to walk into a Job Centre and look for work to be told they could only do that if they first registered and that you could only register by phone. Absurd. Taking services away from Sub Post Offices to purely online modes erodes the viability of these social hubs which have an impact on the integrity of communities.

Its slightly ironic when today we have a “revelatory” announcement that Cyber Terrorism ranks as a major threat to National Security.

But its not just the public sector. Supermarkets tell us they are giving us “choice” and “meeting customer need” by providing self service checkouts. The reality is that manned check-outs close, choice is reduced and most importantly someone loses at job all for what? The illusory benefit of lower prices at the ignorance of the greater longer term cost.

I recall working in a Public Library in London many years ago. It was striking that so many people came to the library as a social event, away of meeting people, the chance of some human interaction, the reason for a walk. Borrowing or returning books was entirely secondary to this group, but the service we provided was absolutely essential.

Doing things online to the exclusion of other means, and self service everything, is a progressive attack on personal interaction and a mechanism of introducing exclusion and reducing choice. The end result is that we have to put up with fatuous initiatives such as “Get On Line Week” to try to twist the arm of many who simply do not want, and should not need, to.

We must never under estimate the value of social, and I mean face to face, interaction. The very simple solution to the concerns of bureaucrats behind “Get On line Week” is to ensure that ALL public services are available at the same cost in off line mode to everyone.

Wednesday, October 13, 2010

Knowledge Aware Management

I have had the good fortune to read 'Farmers – Your Store for 100 years' (ISBN 9781869507633) which is Ian Hunters book on the Farmers stores in New Zealand. Ian’s team at The University of Auckland’s Business School were commissioned to write the history of Farmers to celebrate the 100 years of trading since its founding in 1909, and whilst this might sound a little dry it is in fact a terrific read.

What is particularly striking is how the store grew rapidly through its adoption of what was then a very innovative retailing approach, and that is the catalogue based retailing model. It has many parallels with the online retailing phenomenon in that customers are remote, select items from a brochure and it is then despatched directly to them from a central store. The impact was as profound then as it has been in more recent times and Farmers grew to be a major retailer in New Zealand. It has gone through a number of incarnations and suffered through some poor strategic decisions in the late eighties which saw its ownership shift between groups that were often not New Zealand based. I have little doubt that much of the poor decision making would have come about from flawed thinking on the part of professional service firms happily advising that the firm follow management trends without ever thinking through the implications for the social capital and intangible knowledge based assets in the organisation, and basing judgement purely on balance sheet based rationales. Happily the firm is back in New Zealand ownership and under the guidance of David and Anne Norman and with 4000 staff and over 50 stores it is clearly on the up again.

What I found particularly striking and particularly encouraging were the words of these entrepreneurial owners. I quote from the book

“Over the past three or so decades, Anne and I have been fortunate to participate in the recovery of several iconic brands....In almost every situation we have found that the heritage within these organisation has produced a pool of talent that for some reason has been ignored by the previous owners who had tried to fix an organisation that was far from broken! What has been achieved in our short ownership period has not so much been through our own efforts but through empowering existing people within the organisation.”

If anyone wants to know what knowledge aware management is – that is a definition of it in practise.