Archive for August, 2011|Monthly archive page

Resurrecting A Struggling Industry

In General Mish-Mash on August 28, 2011 at 2:35 pm

Guess who I am (I am an industry)  …

  • I was once much loved by all – consumers, suppliers, staff, financiers, regulators, & communities.
  • I generated strong revenues, profits, & employment.
  • Questions started being asked of me. Questions about some of the products I offer.
  • New competitors emerged.
  • A defence of your market position is mounted – shifting the way business is conducted.
  • My revenue & profits start to slip, I could not re-invest in myself.
  • I start to look stale and dated.
  • Regulators impose more restrictions on how I operated. Operating costs rise, profits fall – again.
  • The questions about my products increase in both frequency & volume.
  • I have not connected with the children of those who loved me – the new generation.
  • Even my very loyal supporters are questioning their affection for me.
The questions become louder and more frequent.

The industry I am thinking of is the Circus – specifically during the dark decades for the Circus World –  the 1960’s and 70’s.

In 2011, a full circle has turned and the Circus World is much bigger than it ever was and touches more people than it ever did.

Inventiveness, innovation, authenticity, and effort were the motors of change.

In Australia, our own Circus Oz was at the forefront of change – an ensemble delivering human performances that were theatrical, artistic, entertaining, political, and physical. Even the way it was structured was uniquely egalitarian, even subversive.

Circus Oz Poster 1998 – We Laugh at Life 

Undoubtedly, though, Cirque du Soleil transported the Circus World into a different dimension.

O by Cirque du Soleil

The resurrection, and subsequent growth, of the Circus must contain lessons for other industries.

You would be forgiven if you thought the list of industry characteristics was describing the NSW Club Industry. The big question is whether that industry will succumb to its own “dark decades”  … or can it reinvent, rejuvenate, and resurrect itself to resume an esteemed and leading place in this state.

If it is to happen someone needs to be daring, bold, and strong enough to lead the way. Who will it be? How will they proceed?

That is the subject of my most recent article in Club Life (August 2011). A copy of the article can be obtained by:

  • getting hold of the magazine
  • from Clubs NSW website (if you are a club manager with a password) or
  • email me or leave a message here and I will send it to you.
  • Change The Game 

I’d be really interested in your feedback.

Pareto’s 80:20 – 02:08 s’oteraP

In General Mish-Mash, Mish-Mash of Wisdoms on August 7, 2011 at 2:46 pm

I’m numerically capable, I don’t have a problem dealing with ratios – I know how to work out a lowest common denominator, and I’m pretty good with percentages.

But there is a ratio that upsets me. Well, it’s not the ratio but the principle or law derived from it that is the problem. The principle named was named after the Italian economist Vilfredo Pareto has always had me unnerved – given me the shits, really. I had no real idea why. Had not really thought about it much, until the other day. But, I do know that I shudder just about every time I hear it quoted.

Until recently, I thought Pareto was a mathematician – which may explain why mention of the “principle” put me in a state of quiet disquiet. Had I known he was an economist I may have spoken up.

And I definitely would have moaned loudly had I known that the principle was devised not by Pareto but by a business management consultant.  He was honouring Pareto, certainly … but the principle is nothing more than a simple ratio in a social phenomena, boldly transformed into a law and applied injudiciously (maybe even promiscuously) to all manner of stuff.

The principle? Oh! – There are generally 2 names applied, often both in the same breath:

  • The Pareto Principle is the name honouring Pareto (ahem! Yes. Obvious!)
  • And the 80:20 Rule is its alternate name and most often it is
  • Pareto’s 80:20 Principle.

Pareto studied landholdings in Italy in the early 20th Century and discovered that 80% of Italian property was owned 20% of the people. Undoubtedly this was an illuminating and serious discovery and not one to be scoffed.

But declaring this ratio a principle is a big step. And it has the potential trap those who it as gospel.

For example, how often you been told that:

  • 80% of your sales revenue is generated by 20% of your products or
  • 80% of your profit comes from 20% of your effort.

Let’s look a bit more closely.

If 80% of profit comes from 20% of the effort then there is a great trade-off just waiting to happen – forgo that 20% profit, and save the 80% of your effort for something else.

Put that effort into being  creative, writing, painting, sculpting, take up the piano, or just loll about the pool sipping cocktails.

But here is the thing: – if I do forgo that 20% of profit and gain that 80% of effort, does the principle apply to what remains? It must. It is a principle, after all!! So let’s sacrifice the 20% profit again … what happens then?

I think it might be best using real measurements of time and reward.

Imagine you were working 50 hours and making $100 profit.

After your first sacrifice of profits you’d be working 1 day a week for $80 profit.

After your second exchange, you’d be at it for 2 hours for $64 profit … you could keep that going forever if you had time and money metrics that were sufficiently accurate at exceptionally micro levels.

… but assume you made just 4 such decisions, well you’d be plying your trade for around 5 minutes and raking in $41 profit.

And just one more sacrifice would see your profit drop to $32.77, but you’d get that with less than a minute’s worth effort.

In summary:

  • Starting Point:  50 hrs effort gets $100 profit.
  • Pareto Sacrifice 1: 10 hrs effort, $80 profit.
  • Pareto Sacrifice 2: 2 hrs effort, $64 profit
  • Pareto Sacrifice 3: 24 mins effort, $51.20 profit
  • Pareto Sacrifice 4: 4 mins 48 secs effort,  $40.96 profit.
  • Pareto Sacrifice 5: 57.6 seconds effort for $31.77 profit.

This is not quite reductio ad absurdum but it is getting close.  I don’t think anyone would seriously mis-use the principle in such an obvious way. But …

How does this principle influence the decision-making framework in businesses … or anywhere for that matter?

I suspect, it has been responsible for helping frame some, ostensibly, very sensible decisions … and decision processes that have iterated and reiterated until …

Someone wakes up, looks around and realises they have gradually, but effectively, Pareto’d themselves out of value and quality … they have lost the spark that ignited them, lost their point of difference, their beauty, and lost what was amazing about them.

Anyway, what brought on this bit of mish-mash? It was a talk given by software developer Mike Lee. I was recommended to have a listen to it by my good mate Minski. Minski is an irreverent, iconoclastic, card playing, straight shooting computer geek.

Mike Lee’s take on the Pareto ratio, in a nutshell, is that we should shift it about 80:20 – and focus on The Second 80%.

The quality, the art, the beauty, the uniqueness, the thing that makes something amazing emerges by using that second 80% to its limit. This is where you get that spark, the cred and coolness, the characteristics that cannot be replicated by some set of dodgy operators wanting to make a quick buck.

If you want to produce stuff that people will pimp for you, then you need to produce stuff that provokes comments like:

“Hey, check this out, it is sooo cool!”

This means using up the whole Second 80%.

You know we might  take an even simpler approach. And this one comes from designer Giles Kershaw. My interpretation of one of Giles’ principles is pretty simple – do what it takes to get it 100% right. Now, that is an elegantly designed solution that applies to many problems/opportunities… just add the 80 and the 20 together, and voila!!

Pareto Principle? Pfft! Kershaw’s Lemma Rulz!!

Hey, if you want to have a listen to Mike Lee’s talk – called Pimp My App – I’m sure you’ll get plenty out of it. The link is below. But BE CAUTIONED –  the first bit (2’30”) is dedicated to a vulgar joke that has minimal relevance. If you want to avoid the joke (it is about a bear violating a hunter), skip to around that 2’30” mark.

Here is the link to Pimp My App.

The entire talk is about 47’40” but  … sighing, shoulders shrugging.

Damn that Pareto!

The real crux of the talk is the 9 or 10 minutes starting from the 4’40”. That’s, roughly, 20% of the talk. Damn that Pareto Principle – it just pops up everywhere, don’t it?

The Art of Engagement – 3 Worlds Collide!!!

In General Mish-Mash, Mish-Mash of Books on August 4, 2011 at 10:30 am

The Art of Engagement - Lally, Eng, & Anderson

Is it possible for commercial, creative, and community interests to be in complete alignment? What happens when they are?

A new publication hits the bookstores this week. This publication has great relevance for me – it documents a project that occupied my attention for some time.

The C3 West project.

In brief, this project calls up the potential power existing in territory defined by the intersection of 3 categories of endeavour – Commerce, Creativity, & Community. The geographical focus was Western Sydney. Hence C3 West.

These areas of human effort seem to meet infrequently – and when they do it is all too often about employment rather than engagement. It is driven by more by transaction or exchange rather than by collaboration.

  • A business commissions a piece of art or offers patronage/sponsorship to a local gallery,
  • A company makes charitable contributions to community initiatives,
  • An artist is driven to articulate some expression about a community issue,
  • A community canvasses designs to enhance a public space.

The value of these connections, and others like them, are vital. Their importance should never, ever be underestimated. Nevertheless, they are exchanges that provide a momentary bridge between disparate disciplines.

What if? What if … at some time, in some space, under some conditions the drive within these 3 areas was in unison. What if the imperatives of commerce, creativity, and community were treading the same path, in the same direction, towards the same goal.  What a potent time and space that could/would be.

Could we consciously create that condition, that space, that time? Wouldn’t that be interesting and, perhaps, rewarding!

It certainly was both interesting and rewarding for me.

It is a great project. The project was, and is, being followed and documented by:

  • Elaine Lally, Associate Professor, Faculty of Arts & Social Science, UTS
  • Ien Ang, Professor of Cultural Studies, Director of Centre for Cultural Research, UWS
  • Kay Anderson, Professor of Cultural Research, UWS

They have co-authored this publication:
The Art of Engagement: Culture, Collaboration, Innovation.

Click on the cover picture above or here to get more information about the book.

Click here and you can have a look at some extracts from the book, including the Foreword by the fabulous Liz Ann Macgregor, Director of the Museum of Contemporary Art, Sydney.