Tag Archives: Business

We Need to Solve the Productivity Crisis

We Need to Solve the Productivity Crisis

GUEST POST from Greg Satell

When politicians and pundits talk about the economy, they usually do so in terms of numbers. Unemployment is too high or GDP is too low. Inflation should be at this level or at that. You get the feeling that somebody somewhere is turning knobs and flicking levers in order to get the machine humming at just the right speed.

Yet the economy is really about our well being. It is, at its core, our capacity to produce goods and services that we want and need, such as the food that sustains us, the homes that shelter us and the medicines that cure us, not to mention all of the little niceties and guilty pleasures that we love to enjoy.

Our capacity to generate these things is determined by our productive capacity. Despite all the hype about digital technology creating a “new economy,” productivity growth for the past 50 years has been tremendously sluggish. If we are going to revive it and improve our lives we need to renew our commitment to scientific capital, human capital and free markets.

Restoring Scientific Capital

In 1945, Vannevar Bush, delivered a report, Science, The Endless Frontier, that argued that the US government needed to invest in “scientific capital” and through basic research and scientific education. It would set in motion a number of programs that would set the stage for America’s technological dominance during the second half of the century.

Bush’s report led to the development of America’s scientific infrastructure, including agencies such as the National Science Foundation (NSF), National Institutes of Health (NIH) and DARPA. Others, such as the National Labs and science programs at the Department of Agriculture, also contribute significantly to our scientific capital.

The results speak for themselves and returns on public research investment have been shown to surpass those in private industry. To take just one example, it has been estimated that the $3.8 billion invested in the Human Genome Project resulted in nearly $800 billion in economic impact and created over 300,000 jobs in just the first decade.

Unfortunately, we forgot those lessons. Government investment in research as a percentage of GDP has been declining for decades, limiting our ability to produce the kinds of breakthrough discoveries that lead to exciting new industries. What passes for innovation these days displaces workers, but does not lead to significant productivity gains.

So the first step to solving the productivity puzzle would be to renew our commitment to investing in the type of scientific knowledge that, as Bush put it, can “turn the wheels of private and public enterprise.” There was a bill before congress to do exactly that, but unfortunately it got bogged down in the Senate due to infighting.

Investing In Human Capital

Innovation, at its core, is something that people do, which is why education was every bit as important to Bush’s vision as investment was. “If ability, and not the circumstance of family fortune, is made to determine who shall receive higher education in science, then we shall be assured of constantly improving quality at every level of scientific activity,” he wrote.

Programs like the GI Bill delivered on that promise. We made what is perhaps the biggest investment ever in human capital, sending millions to college and creating a new middle class. American universities, considered far behind their European counterparts earlier in the century, especially in the sciences, came to be seen as the best in the world by far.

Today, however, things have gone horribly wrong. A recent study found that about half of all college students struggle with food insecurity, which is probably why only 60% of students at 4-year institutions and even less at community colleges ever earn a degree. The ones that do graduate are saddled with decades of debt

So the bright young people who we don’t starve we are condemning to decades of what is essentially indentured servitude. That’s no way to run an entrepreneurial economy. In fact, a study done by the Federal Reserve Bank of Philadelphia found that student debt has a measurable negative impact on new business creation.

Recommitting Ourselves To Free and Competitive Markets

There is no principle more basic to capitalism than that of free markets, which provide the “invisible hand” to efficiently allocate resources. When market signals get corrupted, we get less of what we need and more of what we don’t. Without vigorous competition, firms feel less of a need to invest and innovate, and become less productive.

There is abundant evidence that is exactly what has happened. Since the late 1970s antitrust enforcement has become lax, ushering in a new gilded age. While digital technology was hyped as a democratizing force, over 75% of industries have seen a rise in concentration levels since the late 1990s, which has led to a decline in business dynamism.

The problem isn’t just monopoly power dominating consumers, either, but also monopsony, or domination of suppliers by buyers, especially in labor markets. There is increasing evidence of collusion among employers designed to keep wages low, while an astonishing abuse of non-compete agreements that have affected more than a third of the workforce.

In a sense, this is nothing new. Adam Smith himself observed in The Wealth of Nations that “Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”

Getting Back On Track

In the final analysis, solving the productivity puzzle shouldn’t be that complicated. It seems that everything we need to do we’ve done before. We built a scientific architecture that remains unparalleled even today. We led the world in educating our people. American markets were the most competitive on the planet.

Yet somewhere we lost our way. Beginning in the early 1970s, we started reducing our investment in scientific research and public education. In the early 1980s, the Chicago school of competition law started to gain traction and antitrust enforcement began to wane. Since 2000, competitive markets in the United States have been in serious decline.

None of this was inevitable. We made choices and those choices had consequences. We can make other ones. We can choose to invest in discovering new knowledge, educate our children without impoverishing them, to demand our industries compete and hold our institutions to account. We’ve done these things before and can do so again.

All that’s left is the will and the understanding that the economy doesn’t exist in the financial press, on the floor of the stock markets or in the boardrooms of large corporations, but in our own welfare as well as in our ability to actualize our potential and realize our dreams. Our economy should be there to serve our needs, not the other way around.

— Article courtesy of the Digital Tonto blog
— Image credits: Unsplash

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No Regret Decisions: The First Steps of Leading through Hyper-Change

GUEST POST from Phil Buckley

Workplace change has never been at a higher rate or faster pace than now. Everything from consumer preferences to product sourcing models is in flux. ‘Reinvention,’ ‘transformation,’ and ‘disruption’ are popular terms to describe how private and public organizations are evolving to accommodate changing operating environments, stakeholder expectations and regulatory requirements. Leaders and their teams must enable multiple, complex changes when most organizational practices are obsolete and the future is at best uncertain.

In today’s dynamic environment, many leaders default to strategies that have worked under very different conditions. Relying on past practices to solve present challenges is often naive and highly risky. Other leaders instinctively select courses of action that feel right or appear credible based on limited or easily available data. In these cases, the speed of response and hope for simple solutions trump rigorous assessment and disciplined evaluation.

Addressing Uncertainty with No Regret Decisions

A pragmatic way to move forward through unknown conditions is to identify ‘no regret’ decisions. A no regret decision provides a net benefit under any future scenario. For example, building awareness of sanitation and hygiene good practices at the beginning of the pandemic was a no regret decision because it benefited people even if the virus didn’t spread through surface contact.

The Benefits of No Regret Decisions

There are four benefits of making no regret decisions. The first is they align stakeholders to a course of action. There is strength in agreement that leads to positive team dynamics and a foundation of success to build upon.

The second is that no regret decisions move a team from a static state to one of motion. Success in change is not about being perfect; it’s about responding to circumstances based on available information, identifying options, and selecting the best way forward. Delaying action is rarely a good strategy during change because issues amplify with time—speed of execution matters; inactivity is harmful. Taking action transitions people from being observers to participants, preparing them to address future time-bound situations and make bigger decisions. Momentum is a source of strength that ignites future efforts.

Creating a fact-base is essential to understanding the interplay of environmental factors that lead to analysis, hypotheses, and action. The third benefit is it provides opportunities to test and learn, to challenge assumptions and modify strategies to deliver the highest value.

The fourth benefit is the building of confidence of individuals and teams. They foster a belief in capabilities, decision-making process, and a high probability of success. Also, taking concrete actions minimizes the “fight, flight, or freeze” effect triggered by uncertainty. It renews people’s belief in their abilities and avoids the emotional responses of self-doubt and fear that come with unknown or vague circumstances.

No Regret Decision Examples

What decisions provide net benefits regardless of future outcomes? Capability development is an enabler of performance. The current focus on resiliency training is an example of equipping people with mindsets, tools, and behaviors, irrespective of the emerging scenarios. Critical thinking, ideation and creativity are other skills that add value when addressing all forms of hyper-change.

Simplifying and standardizing processes is another no regret decision. The decision-making process is a good example of how a consistent framework leads to shared understanding, assessment, and alignment on actions. When people use the same process, they follow the same rules and speak the same language. The symmetry of the approach leads to clarity and agreement.

Soliciting customer feedback to inform strategy development and execution offers benefits regardless of the operating environment. It is easy to skip this step of intelligence gathering when faced with multiple, complex changes requiring quick responses. The risk of doing so is that solutions don’t address client needs, risking relationships and sales.

Leaders and their teams are navigating business environments never seen before. Internal and external realities require them to rethink their operating models and pivot their strategies, initiatives, and resources to achieve their performance goals. Making no regret decisions enables them to align stakeholders on actions that lead to positive outcomes. They also provide the opportunity to test assumptions and hypotheses and refine the understanding of marketplace dynamics. The forward motion and small gains generated by no regret decisions build the confidence of individuals and teams to face challenges head-on to mitigate risks and seize opportunities.

The only regret from this type of decision is not making them. What no regret decisions can you make to help you lead through hyper-change?

Image credit: Pexels

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The Impact of Big Data on the Future of Business

The Impact of Big Data on the Future of Business

GUEST POST from Chateau G Pato

In today’s interconnected and data-driven world, the abundance of information has given rise to a powerful phenomenon known as big data. Big data refers to the large volume, velocity, and variety of data that organizations collect from various sources. This immense amount of data, if properly collected, analyzed, and utilized, has the potential to revolutionize the way businesses operate. The impact of big data on the future of business cannot be overlooked, as it has already begun reshaping industries and enhancing decision-making processes. This article will explore two case study examples that highlight the transformative power of big data.

Case Study 1: Amazon

One of the most successful examples of leveraging big data in business is Amazon. With its massive online marketplace and extensive customer base, Amazon collects an immense amount of data on customer behavior, preferences, and buying habits. This data enables them to provide personalized recommendations, targeted marketing campaigns, and a seamless customer experience.

Through advanced analytics, machine learning algorithms, and predictive modeling, Amazon can understand customer preferences and deliver tailored product recommendations. This not only improves customer satisfaction but also increases sales and revenue for the company. Additionally, Amazon uses big data analytics to optimize its supply chain, inventory management, and logistics. By analyzing large datasets in real-time, they can predict demand, reduce delivery times, and reduce costs, ensuring efficient operations and customer satisfaction.

Case Study 2: Netflix

Another case study that exemplifies the impact of big data is Netflix. As a leading streaming service with millions of subscribers worldwide, Netflix relies heavily on collecting and analyzing data to personalize content recommendations, improve user experience, and create hit shows. Using big data analytics, Netflix can analyze viewing patterns, customer preferences, and feedback to curate personalized content recommendations for individual users.

Furthermore, Netflix utilizes big data to inform its content creation decisions. By analyzing viewer data, Netflix can identify trends, popular genres, and successful storylines, resulting in the creation of original shows and movies that resonate with their target audience. This data-driven approach has allowed Netflix to have a competitive edge in the entertainment industry, attract and retain subscribers, and continuously improve its content offerings.

The Future of Big Data in Business

The case study examples of Amazon and Netflix demonstrate the substantial impact of big data on business operations, customer satisfaction, and revenue growth. However, the potential of big data goes beyond these examples. With advancements in technology, such as the Internet of Things (IoT), cloud computing, and artificial intelligence, the amount of data generated by individuals, devices, and organizations will continue to skyrocket.

Businesses that can effectively harness this data and transform it into actionable insights will reap significant benefits. Big data analytics will enable organizations to make data-driven decisions, identify patterns, forecast trends, and optimize business operations. From supply chain management and production efficiency to marketing strategies and customer relationship management, big data will be the driving force behind innovative and successful business practices.

Conclusion

The impact of big data on the future of business cannot be overlooked. The ability to collect, analyze, and utilize vast amounts of data has the power to transform industries, enhance decision-making processes, and drive business success. As demonstrated by the examples of Amazon and Netflix, big data is already reshaping business models, improving customer experiences, and driving revenue growth. As technology advances and connectivity increases, harnessing big data will become essential for businesses to stay competitive in the digital age.

Image credit: Pixabay

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The Benefits of Human-Centered Design in Business

The Benefits of Human-Centered Design in Business

GUEST POST from Chateau G Pato

Human-Centered Design (HCD) is a customer-centric approach to product design, marketing, business development and customer service that is quickly becoming an important business strategy. HCD focuses on understanding the needs and desires of customers, enabling companies to better understand the desires of their customers, develop more competitive products and services, and create more effective long-term customer relationships.

There are many benefits to the application of HCD in business, such as enhancing innovation, improving customer loyalty, and reducing development costs. HCD is also an effective tool for gaining insights into customer needs and wants, enabling companies to create better products and services that meet those needs and wants. Let’s take a look at the key advantages of applying Human-Centered Design in business, through two case studies.

Case study 1 – L.L. Bean

The US-based retail apparel brand, L.L. Bean, wanted to create an omnichannel retail experience for their customers. To achieve this, they employed human-centered design, allowing them to understand how customers shop, how they expect their shopping experience to be, and what they value from the experience. The HCD approach enabled them to develop a personalized experience that satisfied their customers’ needs and wants, and resulted in a 50% increase in their online sales within the first three months of the implementation.

Case study 2 – House of Fraser

The UK-based lifestyle retailer, House of Fraser, was facing increasing competition from online retailers such as Amazon and needed to make a competitive shift in their business. To do so, they incorporated a human-centered design process into their digital transformation plan. Through user research, interviews, and market analysis, they identified key customer needs and demands, enabling them to develop innovative products and customer service offerings that met their customers’ requirements. This resulted in increased customer loyalty and an improvement in market share.

Conclusion

Clearly, there are numerous benefits to using human-centered design in business. By allowing companies to gain insights into their customers’ needs and wants, and to create better products and services that meet those needs and wants, HCD can help businesses stand out in their competitive environment. Furthermore, by enabling companies to focus on customer satisfaction, HCD can promote consumer loyalty and increase market share. If you are a business looking to remain competitive in today’s market, then implementing Human-Centered Design could be a great strategy for you.

Image credit: Wikimedia

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The Wonderful World of Downsizing

Stikkee Situations - Downsizing Cartoon

In Stikkee Situations we’ll try to take a humorous look at a lot of different serious business topics.

In this episode we poke fun at the wonderful world of downsizing.

Employees hate workforce reductions (aka downsizing), but some CEOs (even in profitable companies) seem to love these traumatic events as a tool to save their job and to drive short-term movements in the price of a company’s stock price, often coming on the heels of a company missing their earnings estimates.

But the positive short term stock price effects of an across the board workforce reduction come with heavy consequences, several of which greatly affect the innovation capacity of the organization, including:

  1. Destruction of trust within the organization
  2. Reduction in collaboration in the organization
  3. Loss of forward momentum on project work
  4. Loss of some of your best talent as they proactively find themselves jobs elsewhere
  5. Reduction in passion, creativity, and engagement among those who remain
  6. Elimination or reduction in the organization’s commitment to innovation

Now of course sometimes workforce reductions are necessary to avoid bankruptcy or for strategic realignment (removing human resources from business areas you are exiting), and they can be potentially healthy for the organization.

But, when downsizing is done purely to please wall street and in an untargeted way, in the long run I would assert that the organization suffers more than it benefits because any reduction in forward innovation momentum is an invitation to competitors and startups to speed past you.

So, keep innovating!

Please note the following licensing terms for Stikkee Situations cartoons:

1. BLOGS – Link back to https://bradenkelley.com/category/stikkees/ and you can embed them for free
2. PRESENTATIONS, please send $25 to me on PayPal by clicking the button 3. NEWSLETTERS & WEB SITES, please send me $50 on PayPal by clicking the button
License for presentations - $25
License for newsletters and web sites - $50

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Do you support #StrikeFastFood or not?

Stikkee Situations FightFor15

Today is the big day for the #StrikeFastFood movement (aka #FightFor15), during which fast food workers will walk off the job in search of a living wage – in this case they are hoping for $15 an hour.

What do you think of this movement?

Do you support it, or do you think the market should decide?

And do you think they’re foolish for changing the hashtag for their movement in the last 48hrs from #FightFor15 to #StrikeFastFood?

(You might notice the title for the cartoon is #FightFor15 because I created it yesterday)

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Announcing Stikkee Situations

Stikkee Situations Number 1

I am proud to announce the launch of my business cartoon series called Stikkee Situations. I will try and do at least one business cartoon a week on the themes of innovation, marketing, management, leadership, strategy, culture, human resources, entrepreneurship, and the occasional political cartoon just for fun.

You may notice changes over time as I take a rapid prototype, Lean Startup type approach to the creation and evolution of this strip.

Please send me your topic ideas if there is a particular cartoon you’d like to see (or leave a comment) and give me your feedback and be part of its hopeful growth and improvement over time!

Please note the following licensing terms for Stikkee Situations cartoons:

1. BLOGS – Link back to https://bradenkelley.com/category/stikkees/ and you can embed them for free
2. PRESENTATIONS, please send $25 to me on PayPal by clicking the button 3. NEWSLETTERS & WEB SITES, please send me $50 on PayPal by clicking the button
License for presentations - $25
License for newsletters and web sites - $50

I hope you enjoy the ‘toons!

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For Sale – Innovative Business Idea

For Sale - Innovative Business IdeaA few years ago I looked around the corporate and consulting landscapes and I noticed that there was a talent gap in both places. There are many occasions when consulting firms look to their bench and don’t have the talent they need there to fulfill a client need right away and so sometimes they lose business to their competition. And on the corporate side, there are many occasions when a manager or director has more work than they can possibly do themselves and what they really need is not a consultant but a smart, flexible resource that can parachute in and get up to speed helping them very fast. Having been called in to fill both of these kinds of gaps from time to time alerted me to the existence of these two market needs, and so I started to create extendedbench.com.

There is definitely a need for an ‘extended bench’ or a ‘talent stable’. Unfortunately I don’t have time to build out this business and in an effort to simplify my life, I thought I would put the web site and the associated domains and collateral, pitch decks, etc. that I’ve started up for sale to someone who has a passion for realizing the idea – probably someone from a staffing or recruiting background.

The following domains are included in the sale:

  • extendedbench.com
  • talentstable.com

Have a look at the web site, decide what these assets are worth to you to accelerate your entrepreneurial pursuit, and make an offer (no offer too low).

And if you think the idea is terrible, sound off in the comments about why.

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Free Innovation Keynote May 1st in Tacoma

Come Join Me May 1st in TacomaOn May 1st I will be the keynote innovation speaker for the Invista Performance Solutions launch event in Tacoma, WA. Invista is a partnership of Northwest Colleges dedicated to providing high quality workforce training to meet and exceed client expectations. Formed in July 2011, Invista has a strategic mission: To help companies gain a competitive advantage in the global economy by increasing the skills of their workforce.

I will be speaking about the attributes of highly innovative companies amongst many other innovation topics. Praveen Gupta will also be speaking, so two great speakers for the price of one, and that price is one that you can’t refuse – FREE.

If you live in the Seattle/Tacoma area, come join me on May 1st.

Register Now

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Innovation Quotes of the Day – April 19, 2012


“Opportunity is missed by most people because it is dressed in overalls and looks like work.”

– Thomas Edison


“Growth and innovation are driven by customer insights discovered through customer observation and conversation.”

– Braden Kelley


“The hardest part of ending, is beginning again.”

– Linkin Park


What are some of your favorite innovation quotes?

Add one or more to the comments, listing the quote and who said it, and I’ll share the best of the submissions as future innovation quotes of the day!

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