On being biased

I know quotes are often lame, but at the same time sometimes it is distilled wisdom of such profound insight that it begs to be shared. The art of Facebook is knowing the difference.

This falls in the latter category:

“For us humans, everything is permanent - until it changes, as we are immortal until we die” 
 Malcolm Muggeridge

It casts a light on the human propensity to (over-value) our own views and opinions and in fact have a very tenuous, if not unrealistic, grasp on reality. Much of our failure to deal with reality is now increasingly being documented by Neuroscientists who are identifying our biases.

Here is a long list of biases that contaminate the human experience, and of course given a lifetime of study (and interest) in Consumer Behaviour, we keep a close eye on developments in this space. It is particularly relevant to our work in helping organisations adopt a more customer-centric culture, as we have to constantly work around people’s inability and unwillingness to change. Two powerful biases we come across often are:

Confirmation bias: The tendency to search for, interpret, focus on and remember information in a way that confirms one’s preconceptions.

Dunning–Kruger effect: When incompetent people fail to realise they are incompetent because they lack the skill to distinguish between competence and incompetence.

The problem with good advice is...

I served my national service in South Africa. All up spent 4 years of my life in uniform. By and large those years were wasted (another story) but I have always tried to seek out those secondary benefits, and one of them has stood me in good stead.

When you train to go into battle and you are being ‘delivered’ to the site in the back of a troop carrier, you have to dismount while the vehicle is moving.

The vehicle drives in a large circle and every ten meters or so. A soldier has to dismount and take cover while the vehicle continues. The speed is probably about 20km per hour, and as you can imagine there is a lot of noise and dust and yelling of instructions. When it is your turn, you have leave your seat (really just a wooden bench) proceed down the bed of the truck and approach the tail gate at a fresh clip … and jump.

Sounds simple. And it is. If you follow one piece of advice.

The problem with a lot of good advice is that it is counter-intuitive. (Because if it was obvious, it wouldn't have been required.)

And almost without fail, on the first round, every one of us landed on our butts/backs. Your rifle gets dirty, you are not in a position to assume your position, so you can imagine that it made the sergeant very unhappy.

The advice was that when you jumped, you had to throw your weight forward. Specifically, since you were carrying a 40KG back pack, you had to use that weight to create as much momentum as possible, and fling your weight forward so that feels you are going to do a face plant. The speed of the vehicle and momentum/inertia and gravity would ensure you landed on your feet.

Despite being told what to expect and what to do, we all learned the hard way.

Two lessons I learned from that experience:

  1. If the momentum is going one way and you want to go the other way, AND you want to land on your feet, throw yourself into with all your might. Despite your fears and the apparent stupidity.
  2. If someone gives you advice based on deep experience, especially if it is counter-intuitive, it pays to listen.

(And I wonder if companies would fare better if they had a platoon sergeant to straighten out the smart-arses?)

Two of the most dangerous words in business

Complete the quiz below to test your familiarity with players in the retail market:

  • Sportsgirl is just like…
  • Bunnings is just like…
  • Zara is just like…

(Don’t skip this, because you will need your answer at the end of the post.)

The answers are… whatever you want, I won’t be able to convince you otherwise, and this post is about why I can’t.

Human being are innate pattern seekers. Our brains are wired to explain all the things we experience as quickly as possible because that best ensures our survival.

Is that brown shape in the grass a snake or stick?

The fastest way to do this is to map it to something we already know. Make one connection between the new experience and an existing, and your brain can file it away. As soon as you can say something is ‘just like’ that new thing is not new or dangerous anymore.

In the process we create stereotypes.

Some good: long, thin with uneven angles, not moving = stick.

Some bad: People who wear turbans/hijabs are evil.

Stereotypes save us a lot of time and mental energy and getting things wrong occasionally is a small price to pay for all the other times we got it right. Psychologists term this tendency to for people to favour information that confirms their preconceptions a  ‘confirmation bias’.

It works for us most of the time. Except when it doesn’t.

If that long, thin brown shape turns out to be a snake, the price is death and it is irrelevant that the previous thousand times you walked on that pat it was only a stick.

The effect of confirmation bias is to erase the new experience and to assimilate it into what we know, which creates a virtuous loop of self-fulfilling confirmations.

Eventually we only perceive that which confirms our preconceptions.

This in turn keeps drawing us to people, things and ideas which are already familiar with: we read the newspapers which share our views, the watch the movies we like, we mingle with people who are like us.

And even when it doesn’t quite fit, we ignore the bits that don’t and simply complete the picture we want to see. In the figure below you will see a square that does not exist, because you fill in the blanks to see what you want to see.

We do the same with ideas, experiences and interpretations of other people.

I am sure you have been on a holiday somewhere (Bali, France) and thought hat landscape looked ‘just like’ – Adelaide or wherever. And soon after you are thinking the bread tastes just like that deli back home and the coffee reminds you of that time you visited Melbourne… and you start wondering why you paid all that money.

The objective truth is that no two things/ experiences can be alike. When we say something is just like – we diminish the new experience and destroy what is unique for the sake of remaining in a comfort zone.

This is especially sad when we diminish people who are not like us to something that they are not, but suits our prejudice.

In the business world, we are prone to make this mistake too. Even if confirmation bias is potentially ‘fatal’ we continue to do it because that is just how we are wired.

Is there is a way to minimise the effects of confirmation bias in the workplace?

It takes a bit of work and re-training the brain, but there is. Whilst I can’t (and no one can) you can change how you process things, so consider the logic below:

When we match patterns, we match to things we know.

The easiest match is with the things we know best.

What do we know best?

Ourselves. Our environment. The familiar. Otherwise known as our comfort zone.

So the solution is simply to start training yourself to:

  • Do things outside your comfort zone.
  • Be conscious about seeking out differences rather than similarities.
  • Consciously take a different route.
  • Make an effort to catch yourself saying it is ‘just like’ and correct yourself.

Can you remember which retailer you said is ‘just like Sportsgirl’?

Now make an effort to now consider how those two are different. And there has to be at least one major (point of) difference, otherwise one of them won’t survive.

Then make that kind of thinking a habit.

That is how you discover new things, that is how you innovate and that is how you see opportunities; by focussing on differences and gaps, not on similarities.

I can speak from experience because I am a contrarian and I am acutely aware of the need for likability which precedes any relationship because I don’t always succeed in getting people to see past the contrariness. But what I miss out in warn and fuzzy relationships, I make up in edgy new experiences; and most of the time I consider that to be a fair trade.


Ganador: Solutions for Learning in the Retail Supply Chain





More discrimination please

One of the most important skills we can have – is the ability to ask questions. This ability underpins our ability to discriminate.

Discrimination has been given a bad rap: we are told not to discriminate based on age, sex, race, sexual orientation and so on. But in the process, all discrimination is tainted.

If you can’t discriminate between poisonous and non-poisonous plants, or dangerous or safe animals, you won’t survive long. If you can’t discriminate between good and bad, new and old, valuable and non-valuable you will miss all opportunities and fall victim to perfectly foreseeable disasters. (You get the idea of the picture above?)

The ability to discriminate is important – crucial even – and yet we are expected to acquire this skill by osmosis.

From a business perspective we commonly rely on questioning to discriminate. I wrote previously about the million dollar question, but this post is more about the nature of questioning and the purpose of questioning.

Steve Jobs is famous for saying (effectively) that Apple does not do research because customers don’t know what they want:

It's not about pop culture, and it's not about fooling people, and it's not about convincing people that they want something they don't. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do. So you can't go out and ask people, you know, what the next big [thing.] There's a great quote by Henry Ford, right? He said, 'If I'd have asked my customers what they wanted, they would have told me ‘A faster horse.’

Jobs knew that it is almost impossible to ask the customer the type of (right) question that will give you a valid answer when it comes to researching new products that don’t exist.

My doctoral thesis changed because a professor asked me a question I could not answer. I can’t remember what my first proposal was, but I can remember his response because I learned something powerful that day, when he asked me:


Dave Trott is a Creative Director of a London Agency. He writes an interesting blog – here is an example - and his book is titled Predatory Thinking. What predatory thinking boils down to in my mind is simply the ability to ask questions that other people don’t.

Some example of good and poor questions:

POOR: Is Facebook a good platform to advertise on?

GOOD: Why are people using Facebook?

POOR: Should I build a website or an app for that new service?

GOOD: How do customers want to engage with my business?

I won’t keep going, but you can see readily that poor questions are the ones that have binary/ closed answers. Good questions on the other hand reveal something essential about the topic.

These are legitimate answers:

·        Facebook is a good platform to advertise on.

·        We want faster horses.

·        We want faster modems.

The follow up question is: SO WHAT?

What are you going to do with that answer? How is it useful?

Simply knowing there is a lot of people on Facebook does not mean anything. Unless you can answer the question that follows: so what?










Recently I failed with a project. Want to know why?

Recently I failed with a project. Want to know why?

The strongest and most destructive force in business is resistance to change.

We know about it and we trot it out when things go against our plans, but we don’t usually recognise it when we are the resiting force. Then we think we are sensible.

It is hard to judge what change is necessary and what not. It is easy to judge what change is inevitable but it is hard respond to it.

The obvious an inevitable change become apparent because everybody is trying to deal with it and we talk about it which brings it to the surface.

The most dangerous types of change are the insidious ones. The sneak up on us and we only discover in hindsight that it has happened. Almost every man alive realises they are 20kg heavier when they are forty than when they were twenty. And the rare few succeed in turning back the clock.

The ones who avoid that inevitable, insidious change do so not because they are smarter, but usually for other reasons that had the unintended consequence of saving them from the fate of that insidious change. To continue the previous analogy, the man not overweight at 40 is either blessed with lucky genes, or for instance chose a job that required them to be vain enough to be obsess about their weight (for example) and thus avoid the curse.

We point the finger at others who are resistant, but a moment of honest reflection is all that is required to realise that ALL of us resist change when we perceive it to be dangerous or uncomfortable. And we all fail to spot creeping change that is the real killer.

Today is my birthday, so only appropriate that this is the topic of the day - even if I scheduled this post at the end of September. Happy Birthday Me. 

The promise of a pattern that lures us

People are innate pattern seekers. When we look for the secret of success we look for a path that someone else has followed. We hang on to the words of the gurus who promise a recipe.

People love to learn lesson by analogy. Lessons about leadership learned from sailing the ocean. Lessons in courage from climbing a mountain. Lessons in strategy from being a football coach. Lessons in innovation from how a squirrel or lessons in brand management from Lady Gaga.

Have you ever stopped to think: where did the pit bull or the coach or the mountaineer or Lady Gaga learn it? Who did they pattern their decisions and behaviours on?

The world IS full of patterns. Cycles everywhere. Pyramids abound. The best way to explain most things can be found in a matrix. Every mathematical formula is a pattern and even kindergarten kids have heard of algorithms.

But in a complex world filled with complex human beings operating in a dynamic, shifting landscape, we will only ever find partial patterns. It is a grave risk to extrapolate anything on a linear basis.

That Turkey being raised in the backyard will think it is living a great life for every day someone pops in and feeds it to its heart’s content. Daily, without fail, for weeks and months on end. Until, on Thanksgiving, their carer does not come with a bowl of food, but an axe. And it ALWAYS happens.

Patterns and secrets and recipes are only ever partial insights. No one know everything and nothing is ever known completely.

We don’t have to be paralysed into non-action, but instead we should always ensure we have a built in capacity to change and adapt. There is that one day a year where the Turkey would wish its wings are not merely ornamental and that they could fly. But then it is too late.

The idea of the ENSO circle or incomplete circle is that it is painted in one stroke. This icon is meant to resemble enlightenment, strength, elegance, the universe, and the void or the space that connects everything. The concept is very difficult to describe because it is not really meant to be explained, it is meant to be felt, the moment of creativity is shown by painting the circle with brush, you may only take one stroke to create the icon and cannot alter it after this one stroke. The single stroke emphasizes this creative moment of imperfect perfection.

Two forces of nature influencing your decisions

Eventually orthodoxy gets criticised.

It is harder to play an unorthodox bowler. It is harder to argue with someone coming from an unorthodox position

Eventually orthodoxy is claimed to have fallen into disrepute, is accused of being stale or irrelevant.

And sometimes some of that is true.

But often it is simply the swing of the pendulum that is forcing you to think the other way is better. The grass is greener and all that.

People who fall victim to the swing of the pendulum are victims of a force of nature (momentum) just as much as people who hang on to orthodoxy are victim of a force of nature – inertia.

The lure of unorthodoxy is its shiny new-ness; because human beings are intrepid explorers and we all suffer to some extent from neophilia. And in the new-ness you will find innovation and improvement.

But in tradition and orthodoxy, you find stability and efficiency and comfort. It is also where you have proven results.

Consultants are by definition geared to suggest change and improvement because that is what feeds their families and without realising it, that perspective will always bias their thinking and their advice. How often does a consultant tell you to keep doing what you are doing?

This is an extract from our occasional/fortnightly newsletter... why don't you get your free copy from our website?

People don't really want to learn - instead they want this

I have been blogging 8 years. You'd think I know what is popular and what will get people clicking and talking. And you'd be right in a small way, because I know a little, and this is what I know:

My most popular post of all time is THIS one. The amount of original writing is limited. The insights are arbitrary and, dare I say it, relatively shallow and somewhat cliched. But it has a killer headline that seduces people to click.

My next best post (on LinkedIn) is THIS one. It has a quarter of the views, but 10 X the number of thumbs up! It is certainly a much better post than the previous one, but it is not particularly deep - and if you read it you will immediately grasp the obvious lesson/message it contains.

THIS post is much better than any of the above. It is actually useful and contains a powerful, foundational insight that can be translated (and used) into any business challenge. It has below average views, and 2 likes.

Add to the above the following observation:
Watch and observe the follow of 'updates' on social media platforms. Whether it is Twitter or LinkedIn or whatever, the most popular posts are:

  • An image - with a (unoriginal) quote
  • A recipe that promises a quick solution in X number of steps
  • A wild promise to make someone better at (leadership, personal branding, productivity - fill in the blank)
  • A shortcut to achieving some type of superficial success (be more popular, get more followers, etc)

From what I have learned about people's online behaviours, I can say this quite unequivocally:

  1. People don't really want to learn, they want a shortcut.
  2. People don't want to think, they want to be reminded of what they know.
  3. People don't' want to work at figuring something out, wrestle with an application - but want it given to them.
  4. People don't actually grow their own purpose through self-reflection, they want to follow the crowd.
  5. People invariably mistake the obvious for the truth.
  6. Almost everybody reading this will think the above don't apply to them.

Words of Wisdom are seen as wise if everyone else previously agreed that those words are wise. Business advice is taken from people who are perceived to have been successful.

The TRUTH is that words of advice may be true or untrue irrespective of the past record of the person speaking them. The truth is the truth, no matter where it comes from. Someone who has spoken a past truth does not necessarily have a monopoly on the truth; it can come from anywhere - even from a child.

Taking advice from someone who has succeeded in business (or anything) is actually rationally not the smartest thing that you can do. They may have tried once or twice and succeeded wildly and admirably. Good for them. But that means they have not gone to school on that particular challenge.

Here is the thing though:

  • Because they have succeeded at one thing does not mean they will succeed again.
  • Because they have succeeded in their way, does not mean it is relevant to your situation.
  • Because they have succeed, does not mean they understand why they succeeded because they may actually not have the self-awareness or the understanding of the true factors of success.
  • Because they succeeded, they don't know what causes failures.

If ANYONE had the real secret or recipe, we would have no more failures. Polio may have been eradicated, but failure hasn't; because there is no antidote to failure.

This post is an extract from our previous newsletter. Explore the archives and see if you would like to get it in future direct to your inbox.

8 scientific insights about Life that are well worth learning

Here is a summary of eight insight that are - AT FIRST - surprising, but once you start thinking about it, it becomes obvious why it is so.

  1. Optimistic people are much less likely to die of heart attacks than pessimists, controlling for all known physical risk factors (Giltay et al., 2004).
  2. Women who display genuine (Duchenne) smiles to the photographer at age eighteen go on to have fewer divorces and more marital satisfaction than those who display fake smiles (Keltner et al., 1999).
  3. Positive emotion reduces at least some racial biases. For example, although people generally are better at recognising faces of their own race than faces of other races, putting people in a joyful mood reduces this discrepancy by improving memory for faces of people from other races (Johnson & Fredrickson, 2005).
  4. Externalities (e.g., weather, money, health, marriage, religion) added together account for no more than 15% of the variance in life satisfaction (Diener et al.,1999)
  5. Economically flourishing corporate teams have a ratio of at least 2.9:1 of positive statements to negative statements in business meetings, whereas stagnating teamshave a much lower ratio; flourishing marriages, however, require a ratio of at least 5:1 (Gottman & Levenson, 1999; Fredrickson & Losada, 2005).
  6. Self-discipline is twice as good a predictor of high school grades as IQ (Duckworth & Seligman, 2005).
  7. Happy teenagers go on to earn very substantially more income 15 years later than less happy teenagers, equating for income, grades and other obvious factors (Diener et al., 2002).
  8. How people celebrate good events that happen to their spouse is a better predictor of future love and commitment than how they respond to bad events (Gable et al.,2004).

The nature of the internet is such that we are exposed thousands of potential life-changing insights on any given day. The eight listed here all have that potential, but chances are that all that they get is a cursory glance.

More's a pity...

The answers to the Retail IQ quiz

Here are the answers to THIS QUIZ.



3.      OPEN TO BUY




7.      ASSETS


9.      # of TRANSACTIONS


11.   The cycle of 4 week, 5 week, 4 week months of a typical retail calendar



14.    (GP$/Sales$) x (GP$/Ave Inventory at Cost)

15.   (Current Assets/ Current Liabilities)

16.   1.5 (Nothing happens when it is less, it is just unhealthy)

17.   1.2 – 2-2

18.   12% - 18% (for some it could be double that, but 15% is somewhat of a sweet spot)

19.   FIRST



22.   DEPARTMENT STORE (although some supermarkets are not selling e.g. clothes)

23.   Product, Price, Place, Promotion, Presentation, People

24.   Trade Area Analysis (of a retail precinct)

25.   OPPOSITE (each other)


Be ruthless and honest with your scoring and multiply by 4 to get your percentage. Let me know how you went…

Do you know your Retail IQ?

I thought it may be fun to do a quiz. It does not really test IQ, and it is not a predictor of success. It simply shows how familiar you are with some of the mechanics and jargon of retailing.

  1. Stockturn is defined by dividing Net Sales by _____
  2. Buying Margin is the equivalent term for ______
  3. Complete the following Acronyms: OTB
  4. Complete the following Acronyms: UPC
  5. Complete the following Acronyms: FMCG
  6. Complete the following Acronyms: DPP
  7. Would you categorise Lay Byes as Assets or Liabilities?
  8. Does Pharmacy, Newsagency or DDS typically have the lowest GP%?
  9. The Average Sale is calculated by dividing Sales by ________
  10. What is the single biggest expense for most retailers (not service/hospitality?)
  11. What does the 4-5-4 calendar refer to?
  12. Which line item would be the single biggest impact between the first margin and final margin?
  13. What is the formula (or definition) of ‘Trading Density’.
  14. What is the formula for GMROI?
  15. What is the formula for ‘Current Ratio’?
  16. What is the bottom end of a healthy Current Ratio?
  17. What is the stockturn for a typical, independent jewellery store?
  18. What is the average/typical Occupancy Cost for a specialty stores in regional shopping centres? (you have to know what Occupancy Cost is…)
  19. On a multi-level store, which of the following floors is most productive; first floor (one above Ground) or basement (one below Ground)?
  20. What is that called (in VM) when you group/sort merchandise together by colour? (You have to know what VM is…)
  21. In VM, merchandise is often arranged in a pyramid or other shapes with lines that lead the eye to a specific point in the display. What is this ‘point’ called?
  22. Will an ensemble display be more likely found in a Department Store or a Supermarket?
  23. List the six elements of the Retail Mix?
  24. What does the Huff Model measure?
  25. On a ‘Colour Wheel’, where would you find the (perfect) complementary colour for any colour?


After completing the quiz you can get the answers IN THE NEXT POST.  Do come back and let us know how you went…

Have fun!



GANADOR: Skills. Strategies. Solutions.


There is a Silver Bullet after all

This post is inspired by a podcast I listened to where the person had a stroke that affected his brain and the process he went through the re-train his brain. During that process he learned to meditate with a female Buddhist monk, who passed this insight on to him

Our stroke victim wanted to grow in his compassion for other people and he said he thought he had a lot of compassion. The Monk gave him some advice: She said he had empathy, but not compassion. He indicated that he thought it was very similar.

And this is the insight that followed:

No, she said: ‘Compassion is Empathy with a View.’

By that she meant that empathy had to be accompanied by ‘perspective’ or a view of the world and how it works.

The perspective or view of the world IS THE SILVER BULLET that puts the things you desire in context and makes you understand how to ‘view’ that outcome and to ‘appreciate’ it for what it is.

Having a clear view/ sense of purpose or a life plan helps explain what happens and helps direct your choices towards something in a cohesive manner.

On a personal lever your ‘view’ matters: The Christian sees God’s plan, the Hedonist sees pursuit of pleasure; and both of those views will inform how you experience everything. In the one instance pain must be endured and in another it must be avoided.

The Monk understood that empathy was something the individual experienced (internally) but that compassion was something that someone else experienced (externally). Empathy is a warm and fuzzy feeling, but compassion is something that reaches out and touches people.

If you want to be able to make sense of the world or have the ability to be resilient in the face of adversity or to be focussed on a specific outcome, the silver bullet is finding your sense of purpose.

Now for the part that most people miss.

Everybody HAS a view of life. And it DOES shape how you experience life. Only, most people don’t realise what it is nor how it works. Their view of life was formed by accident instead of by disciplined reflection.

Now for the sad part of all of this.

The DEFAULT view of life for most people is their own personal survival. And under the term ‘survival’ I include psychological survival, social survival and the like. We default to do that what is in our own best interests. Or more specifically, we default to what we THINK is the best for us.

The world is a much better place for all those people who purposefully choose to serve their Country, devote time to their Community or serve God – for instance – than for all the people who simply pursue their own personal happiness.

Not only is the world a better place, those people who choose an external focus for their lives are much better equipped to deal with the trials and tribulations of life, and consequently are happier.

There are many stories of people who won Lotto who, within a few years, end up exactly where they were before. (You of course believe you will be different.) The best view of these things was summed up in a Forbes article:

Achieving major life goals, including winning the lottery, or the more basic goal of getting married, doesn’t wind up making us as happy as we expect. (A) big positive event like a lottery win can impact happiness, but its effects diminish over time Why? Because while a lottery win can make a difference, it won’t affect the other conditions of your life, like who your siblings or parents are or your basic disposition.

There are many stories of people who suffered serious setbacks – for example by becoming disable – yet went on to live full and meaningful lives. Nick Vujicic is possibly the best example of what I am trying to say here.

On a corporate/ business lever your ‘view’ matters: A company with a clear sense of purpose – with a strong ‘view’ in the Buddhist’s terms - is one that can direct itself purposefully.

Let’s say you are struggling to be a successful entrepreneur. Your ‘view’ will determine what you do and how you cope and what eventually happens.

If you see business as a game, you will adopt different tactics, maybe hire a coach or even try and bend the rules.  Or of course you may simply practice harder.

The MISSION you have for your business is the director/founder’s attempt to articulate the VIEW of the business. It is the answer to the question: “What is this (business) all about?’

To have a clear sense of mission (a ‘view’) makes the present problems and opportunities so much clearer. In fact, unless you have the lens afforded by a clear and powerful vision, you won’t SEE the opportunities when they present themselves. And you will see insurmountable obstacles instead of challenges.

I have written elsewhere about systems thinking in the post ‘Why you can’t have what you want’. In that post I explain how the pursuit of outcomes is misguided, and why we should measure and focus on the Inputs and the Processes.

Your takeaway is to contemplate the inputs and the processes that will produce the outcomes you want – and to focus on that.

Have you heard the one about Bumblebees not supposed to be able to fly?

The myth loves on...

The myth loves on...

This myth was debunked very nicely by Dr Karl; and the story goes something like this:

According to John McMasters, who back in the 'good old days' was principal engineer on the aerodynamics staff at Boeing Commercial Aeroplanes, it seems the aerodynamicist of the myth was probably an unnamed Swiss professor famous in the 1930s and 1940s for his work in supersonic gas dynamics. The aerodynamicist was having dinner with a biologist. In the idle chit-chat, the biologist noted that bees and wasps had very flimsy wings — but heavy bodies. So how could they possibly fly?

With absolutely no hard data, but a willingness to help that overcame good dinner party etiquette, the aerodynamicist made two assumptions in his back-of-envelope calculations.

The first assumption was that the bees' wings were flat plates that were mostly smooth (like aeroplane wings). The second assumption was that as air flows over an insect's wings, it would separate easily from the wing. Both of these assumptions turned out to be totally incorrect — and the origin of our myth.

The aerodynamicist's initial rough calculations 'proved' that insects could not fly. But that was not the end of the story.

Of course, being a good scientist, his sense of curiosity got him interested in this problem. Clearly, insects can fly. He then examined insect wings under a microscope and found that they had a ragged and rough surface. In other words, one of his assumptions was way off.

But by then, overzealous journalists had spread the myth he had inadvertently created. The story had flown free, even though the bumblebee supposedly couldn't.

There is a lesson in that for all of us. In fact several lessons if we really want to be honest. For instance that much of what we ‘know’ isn’t really knowledge at all. But I want to focus on one particular epistemic principle that we will be well served remembering:

Things that we know today are always overturned in the face of advancing knowledge. As time goes by, we learn things that allow us to create better explanations. But no matter how good the explanation today, there is always a better one tomorrow.

This force of advancing knowledge has a profound implication for our everyday lives and specifically for business strategy:

Everything you believe and take as fact today is changed tomorrow in the light of new evidence.

Just like we once thought the earth was flat and that the start revolved around us, we now know better. Just as Newton’s explanations were eclipsed by Einstein’s theories, everything we know today is at best found to be only partially correct tomorrow.

So how can the Truth change? Well the answer is that it hasn't. The Universe is still the same as it ever was. When a theory is said to be ``true'' it means that it agrees with all known experimental evidence. 

SIDEBAR: This is a point where both THEISTS and ATHEISTS argue their own position. Theists claim that ABSOLUTE truth exists. This is a philosophical assertion based on the notion that ‘it is just so’ – it is something we simply intuit universally. The ATHEIST must argue necessarily that everything is relative. That is, that ‘truth’ is simply that which agrees with all current experimental evidence.
Every person (consciously or not) must take a position in one of these two exclusive camps; one where TRUTH is an absolute and one where it is relative. I find it absolutely hilarious how some people can’t argue against the notion of an absolute truth, but equally firmly adopts an atheistic worldview.

But science has taught us nothing if not that there is always a better explanation around the corner. Some take great comfort from science’s commitment to constantly disprove itself as if this of itself guarantees that we are getting closer to some grand unifying theory of everything. Of course it could just as easily be just a gigantic rabbit hole down which we chase that absolute truth denied by scientists in the first place.

Whatever way you choose, when it comes to human affairs like business strategy, marketing and management and the like, clearly there are no absolutes.

What is right today is wrong tomorrow.

Whoever is best at the strategic arbitrage opportunities and can identify the shifts and changes best and soonest stands to profit most.

But more immediately and possibly more relevant to most of us mere mortals, this shifting foundation of knowledge means that we should recognise this universal truth. The more convicted you are of your opinion, the more compelling the consultant’s exposition the more certain you can be that it, whilst it may seem right now, it is bound to be proven wrong tomorrow.

If you research and study the evolution of the ‘marketing concept’ and/or the ‘evolution of retailing’ then you will notice that ‘the right way’ is always the current way of doing it – the prevailing paradigm so to speak.

Current best practice is always superseded by something better. So a healthy dose of cynicism is a prerequisite in our modern world; for the lack of it will result in us chasing down the ephemeral promises of every fad that comes along.

The bumble bee that is not supposed to fly and the frog that gets slowly cooked in the pot of boiling water are great motivating stories – but nothing more than that. The absolute truth is a bit more elusive and it takes a lifetime to pursue and, who knows, may only be discovered once we pass away.

In the meantime, question everything.

How to build a business from $2m to $5m in five steps

That is a pretty rich title because I have not done it myself. In my defense, I have looked at the price to be paid and I have decided that I don’t want to pay that price. Or at worst I have convinced myself that I don’t want to pay the price when I am really afraid to try; but I am sticking to the former.

Then again, every great coach wasn’t necessarily the greatest player – and all that is required is that you must be a great student of the ‘game’ and it helps if you’ve coached and consulted to a fair few who have done so.

This post is triggered because I recently read an article, proffering the following platitudes that were disguised as advice:

  1. Build your brand with Social Media
  2. Focus on your goals
  3. Sales and Marketing has to happen daily
  4. Build your company foundation on process
  5. Employ performing staff

(I don’t want to link to it and give any more oxygen, because I really don’t think those platitudes are helpful at all.)

I equate that type of advice to telling fat people to lose weight or telling introverts to get out there and have more fun. Of course there is an element of truth to all those statements – as attested by over hundred affirming comments.

But if you want to know the REAL truth, here goes:

Irrespective of anything you DO about your business to take it to the next level, several other things must go right over which you have no control:

  • It must be a kind of business that is capable of generating $5m. That is there must be a market for whatever it is you are selling.
  • Hope that the government does not move the goal posts
  • Pray that a competitor with deeper pockets does not decide to muscle in
  • And so forth.

That is: you need some luck. Your timing and your environment must work for you and not against you. Luck is often the loser’s excuse, but that does not mean it doesn’t play a role in the eventual outcome of a business venture.

Assuming you have some luck, you will ALSO be making a million decisions a month to take your business in the right direction. You must be very skilled or very lucky that none of the decisions you take serve to derail your business. You could easily choose one wrong supplier, choose a wrong web-host, adopt a flawed pricing strategy or implement a promotion that drains cash and delivers no return. This does not mean you are not an entrepreneur or that someone else was smarter or better than you. They simply lucked out by not making the same mistakes. These mistakes are always easily identifiable in hindsight, rarely with foresight.

Now, if you are a bit lucky and you are reasonably competent decision maker then you are in with a chance. If you are already running a $2m business, chances are that you are doing something right; so the things you must do next are the key steps that will take you to the next level:

ONE: Formulate a clear vision of the NEW business model. Let me be very clear: your $5m business is NOT more of the same, it is different in almost every imaginable way. Understanding your new business model is a prerequisite because the decisions that follow are about implementing that vision with processes and resources that align everything towards that vision. (Note: a business model is not a business plan.)

TWO: Actively articulate the new mindset that is required to take you ahead. Almost everything that you did up until this point must be thrown out the window and you need to re-think how you do everything. What needs to be done is quite specific and quite radical. You must understand yourself, your default position and actively identify what needs to change and keep that in mind as you proceed. (I wrote about ‘defaults’ here.) You must really build a new mental model in your mind. (Everything that follows presumes this has happened.)

THREE: Assuming you have the right mindset, you must:

restructure your business so that you are made redundant

reassign responsibilities and accountabilities amongst different staff members

redesign the processes that govern all business activities in such a way that it can scale to the new level – this is what we mean by saying that you work ‘on’ the business and not ‘in’ the business 

FOUR: Do the basics well. This should be easy part, but sadly it isn’t always. Sales. Marketing. Branding. Visual Merchandising. Service. All these are basic processes in the retail environment and the nature of ‘success’ is clearly understood.

FIVE: Implement like hell. Commitment. Drive. Persistence. All these words come to mind for what comes next. It is not easy. Be prepared to fail. But get up, fix it and move on. There is a price to pay: you will be pushed out of your comfort zone and be pushed out of your bed earlier and more often than you would like, but trust me, if success comes easily then it is just luck. Real success is a harsh taskmaster that demands a steep price of its seekers.

These five steps are arbitrary because you could make it more or you could make it less. The aim is that they are not platitudes, but rather spells out concrete steps that can be taken. You may need help to get there, but with a solid game plan and a bit of coaching its amazing what can be accomplished.

Just ask the Waratahs.


Ganador – architects of high performance business

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How to live an inspired and inspiring life

The truth is you can't be anything you want to be and you can't do anything you want to do.

History proves that sometimes circumstance or destiny will force us down a path that is not of our choosing .

And common sense will tell you that if you are fixated on one goal, you are likely to miss every opportunity that comes your way

Preparing for your future and achieving the things you would like to achieve must be balanced with a certain joie d'vie and living in the moment. That, dear friend is the ART of living: finding balance between the things you have to do and the things you want to do and the balance between common sense and adventure.

This is ultimately the balance between being alive and living.

This inspiring talk by Andrew Solomon is well worth 15 minutes of your time as you contemplate why you are here.

Long-time readers will know that I have never been a great fan of that whole 'set a goal - believe and achieve' glibness that permeates self-help books and new age literature. Daniel Pink wrote a book called The Adventures of Johnny Bunko: The Last Career Guide You’ll Ever Need to help young (and old) people understand the world of work. The 160-page graphic novel about a hapless office clerk, a tart-tongued sprite, and some magic chopsticks takes a whopping half-hour to read. The book’s 6 key career lessons:

1. There is no plan.

Make decisions for fundamental, not instrumental, reasons.

2. Think strengths, not weaknesses.

Do the things you do well — that give you energy rather than drain it.

3. It’s not about you.

The most successful people improve their own lives by improving others’ lives.

4. Persistence trumps talent.

There are massive returns to doggedness.

5. Make excellent mistakes.

Commit errors from which the benefits of what you’ve learned exceed the costs of what you’ve screwed up.

6. Leave an imprint.

Recognize that your life isn’t infinite and that you should use your limited time here to do something that matters.

The topic of this post may at first seem strange, but there is much to take from the underlying approach to life.

Read those six steps again and apply that to your business – and think about how your business would be different if you followed this approach to life and business instead.


PS: This post is adapted from a previous post in my fortnightly newsletter which you can get here. (And a free eBook on Visual Merchandising emailed to all who subscribe.)

Are you a leader who makes decisions like a turkey?

People crave certainty like they crave food and water – and will go to almost any lengths to create certainty where none exists.

Harvard Business Review writes as follows:

“Of all the headwinds we face as decision-makers, the power of one overshadows all others: our need for certainty. It is typically more important for us to feel right, than to be right — a difference that didn’t matter much in the lives of our ancestors, but now matters a lot.”

And it explains it as follows:

“The lockdown of our minds serves an important purpose: Generations of our ancestors wouldn’t have survived had they constantly second-guessed their conclusions. In a harsh environment characterized by straightforward challenges that demanded quick responses, an indecisive caveman was a dead one.”

And then comes to this conclusion:

“Complex decision-making requires we defer the feeling of being right, by tolerating the tension of not knowing.”

I have warned repeatedly about embracing ‘research’ as the panacea. I have warned about fads and jumping on bandwagons such as many people with ‘Neuromarketing’ after reading one popular book.

I am not alone in thinking that people who claim to know the answer (and few are more certain than scientists) really don’t know anything:

  • NN Taleb points out that turkey will have growing confidence in his master’s desire to care well for it; until the master comes visiting with a big knife on until Christmas Eve. The point being that risk is not a linear process. (Just because spreadsheets make it easy to extend rows of numbers don’t mean they have any value.)
  • Shane Parrish wrote an interesting few observations about The Dangers of Certainty.
  • Andy Grove (ex-Intel Chairman) published his take on corporate management and strategy, putting constant paranoia on the pedestal, and that means he weaves uncertainty into the fabric of the organisational culture because ‘fear’ is nothing but uncertainty.

If you are perfectly confident in your answer, you won’t listen and you won’t hear the warning signs that you are wrong.

The HBR academics don’t address HOW we can go about fighting this basic physiological response, but this is a little mental checklist that I have learned to apply in decision making:

  • Is (what I think) true fact or disguised opinion?
  • What is the opposite of what I think and why is that not true?
  • If this is so self-evident, why isn’t everyone doing it?
  • I am simply extrapolating like a turkey?

Naturally no one will actually have mental checklist; but these types of responses in any decision situation becomes a ‘mindset’ and ‘a way of looking’ at things. Initially it may be acquired by being more conscious about the process until we become adept at distinguishing between what we know for certain and what we want to know.

I am not advocating analysis-paralysis; on the contrary, I am promoting that executives become prone to action by recognising the fuzzy comfort of perceived certainty for what it is. That is exactly why ‘movements’ like ‘lean thinking’ and ‘agile development’ came to prominence.

It is really all about fine-tuning your bullsh*t detector, and being honest enough to know that it must be aimed at our own conceptions and perceptions as much as other people’s.

You will be a better decision-maker if you do this: reject the pursuit of certainty as a noxious weed growing in your garden of innovation.

And few organisations can afford to be lead by leaders who lead as if they are completely certain about everything, because certainty is a lens through which we view a world that does not exist.

PS: This LinkedIn post elaborates a bit more chaos theory.


The real art of retail is this:

Are you any good at retailing?

Ask an Orthopaedic Surgeon what ‘ortho’ means and they will know. Ask a COBOL programmer what COBOL means and they will know.

And by ‘know’ I mean know the actual definition and the roots of the word and exactly how that relates to their job.

Ask most retailers what the word retail means, and you get a blank stare or at best they might mumble something generic about ‘buying and selling’ or ‘selling to customers’ or the like.

The word retail is derived from the Old French ‘tailler’ (pronounced tai –yeah) and means ‘to cut’. It is the same origins of the word ‘tailor’.

It refers to what we today call ‘bulk-breaking’ – which means that a retailer is a ‘breaker of bulk’: we buy a pallet or crate full, break the bulk, and sell individual (tailored) units to the customer.

The theory lesson is over. What does that mean in practice?

If you want to know if you are any good as a retailer, you need to understand how well you do at breaking bulk. That stands to reason, right?

My question to you is then how do you measure this? What is the key metric of a ‘breaker of bulk’?

It is widespread practice to use the word stockturn to refer to the turnover rate of merchandise.  That it is, how many times (per year) a store turns over its stock.

There are two ways of doing this calculation.  The distinction is between using retail prices or cost prices. The norm is to use annual data, as monthly data would result in fractions, which are hard to work with and benchmarks have been recorded based on annual numbers anyway.

Either of the following two formulae can be used:

                                                                             Total Sales             

                                                            Average Inventory at Retail Prices

                                                                      Total Cost of Sales        

                                                            Average Inventory at Cost Prices

If you want to know if you are a good retailer, you should know how good your stockturn is. But there is a twist in the tale: faster is not always better.

A good retailer is not the one with the fastest turn, but the one with the optimum turn. Too high stockturns are usually indicative of being under-capitalised and results in high distribution costs, double handling and administrative inefficiencies and loss of buying buyer which all ultimately means that excessive stockturn is less profitable.

Stockturns that are too low are more commonly experienced – usually as a result of buying poorly or marketing poorly.

The good retailer is the one that can achieve the Goldilocks standard – getting it ‘just right’.

I understand that some people reading this may think that metrics are theoretical - even possibly unnecessary except of Sales and Profits. Not everyone appreciates why a consultant would want do that analysis in the first place.

Hopefully now you can appreciate that (using and understanding) metrics can go to the essence of the craft of retail – and will reveal how good we are at being a ree –tai-yeah.

Or at the very least, now you know what you really are…

Why you never win

… is because you try to win.

A few salient points to consider from the talk"

  1. When an argument starts, persuasion stops.
  2. As soon as people are confronted with information being in conflict with their worldview, the parts of the brain that handle reason and logic went dormant.
  3. When trying to win over someone whose natural allegiances are not with you, getting into an argument is a sure way to fail.
  4. “Winning” comes from, is a metaphoric struggle for life and death now and nobody wants to die.
  5. Losing an argument means you learn something.

Note: this 'post' was use as an intro to my weekly newsletter. I thought it was worth posting here since not all newsletter readers are blog readers and vice versa. If you DON'T get the weekly #thinkdifferent update, you should think about it.



Crack the whip on that retail fetish of yours

Apple has been the poster-child for every best-practice story for many consultants who don’t even know anyone who works for Apple, so I don’t want to add to that pile of verbiage.

But last week I wrote here on Inside Retailing that creating the right culture is the way to create success. But later in the week an interview with Mark Kawano, a former designer at Apple surfaced and he made a few salient comments.

Asked why Apple seemed to be able to be so successful at designing products people really wanted, he revealed that it wasn’t because they had great designers or better tools, he said:

“It's actually the engineering culture, and the way the organization is structured to appreciate and support design. Everybody there is thinking about UX and design, not just the designers. And that’s what makes everything about the product so much better . . . much more than any individual designer or design team.”

Asked about how Apple could constantly come up with those brilliant touches that defined the organisation, he said:

“There wasn’t a formalized library, because most of the time there wasn't that much that was formalized of anything that could be stolen,” Kawano says. “It was more having a small team and knowing what people had worked on, and the culture of being comfortable sharing.”

Which supports my contention that training is rarely the solution.

Many organisations have a fetish for training. It is the ‘go to’ strategy for every intractable problem and even our Governments fall back on training whenever they encounter a social issue. Domestic violence? Solve with more training. Speeding drivers? More driver education. And in business, if the customer service is poor, roll out some customer service training.

This does not mean that having smart people or great resources is not important. It does not mean that the right training is not important.

What it means is that, whatever your particular fetish is - communication, customer service, risk management, visual merchandising or whatever - that it is never that ONE thing.

There are no silver bullets. There is no single thing that you can change, for instance, to solve the problem of harmonising online and in-store prices.

It may be a cliché, but everything really is connected and the art of management relies on your ability to tweak many things in small ways to tune the business perfectly. And the way you know you are doing it right, is if your culture is healthy.

The starting point of making changes, therefore, is that you should consider the type of culture you have and the one you want to create – and to do whatever is necessary to make that happen.

Recently I was talking to a client about his desire to make the staff more accountable. Which of the following options do you think I suggested?

  1. Look at the KPIs and to evaluate how we report on those in the weekly or monthly meeting.
  2. Map out different reporting structures or we could change some policies.
  3. Incentivising the staff when they show accountable behaviour.
  4.  Re-write the job descriptions.
  5. Training

That’s a trick question because the answer is: none of the above.

My suggestion was that one message be repeated often and at every opportunity. Every time a person shows lack of accountability, repeat the message. When a person shows accountable behaviour, repeat the message. When a person comes up with an excuse repeat the message.

And the message is this:

If that attitude can be embedded in the culture, you won’t need more policies and more systems because everyone will know what is acceptable and what is expected. It is not easy to do (that is why CEOs are paid so much money) and the temptation is to take a short-cut and just tell people what to do. (Usually that short-cut will reflect your personal retail fetish.)

If you take the time to build a healthy culture, you will have a healthy business. And that is true for Apple and it is true for independent retailer on the main street of a country town.


More training is RARELY the solution

It is often said that training is the key to running a successful business. Let's take franchising as an example:

On the surface it seems logical: franchisor knows how to do X and the franchisee does not know how to do X and what they buy is the ‘know-how’. And know-how is transferred through training. Right?

At least you think this way if you are a training company. If you are a marketing company you will say it is marketing and if you are a technology company you will claim the key to success is a new system.

It is the old: ‘if the only tool you have is a hammer, every problem looks like a nail’ principle at play. So as someone who does training for a living, let me be perfectly clear about this: training is not the solution to anything.

More training is the ‘go to’ strategy for every intractable problem and even our Governments fall back on training whenever they encounter a social issue. Domestic violence? Solve with more training. Speeding drivers? More driver education. And in business, if the customer service is poor, roll out some customer service training.

Every time the going gets tough, the tough go training. What a phenomenal waste of money.

Let us consider resolving the speeding issue in society. Do you honestly believe that more driver education will fix that?

The answer is that it will help fix the problem. There are other issues to be addressed too, so let’s name a few:

  •   Authorities have to understand that motoring technology has improved and what once was a safe speeding limit is now just ridiculously slow and must be changed.
  • The quality of road surfaces and the infrastructure like lights, barriers and signage may need to be changed or adapted.
  • The incentive/punishments for driver errors (in speeding) play a role in bringing speeding down.
  • Opportunities to drive fast can be created in appropriate places that are not public roads.

I could go on but it should be clear that there is a whole eco-system of inter-connected things that must be considered if you want to address the problem of speeding.

In a past life I was a Shopping Centre Manager – and the first thing I did when I moved into a centre was to fix the Administration system. Some may consider that weird since it would surely be a higher priority to get more customers to the centre?

I did this because (a) I had to talk to many retailers and be credible, and (b) a very important metric was rental arrears (as you can imagine) and if the Administration system is dysfunctional, the monthly statement/invoice is incorrect. This gives the retailer the opportunity – indeed, the right – to query the invoice and whilst we are trawling through the rent roll, they withhold payment. And if I as a Centre Manager can not even get the rent roll right, they can rightly question how I could talk credibly about what they should be doing in their business?

However, having a solid Admin system is not the answer either. It merely illustrates the point that there are many moving parts to having an entire organisation tuned to perform well.

The same goes for the quality and viability of your franchise system.

This is even more difficult to achieve in a franchising system where relationships are influenced by competing objectives and/or constrained by legal frameworks of what can and can’t be done; not to mention the history and baggage that comes with any relationship.

Just because it is complex, does not mean that it cannot be done. The following diagram is also known as the 7-S Framework or the McKinsey Framework. It was developed in the early 80s by someone who many readers will know – Tom Peters (and Bob Waterman).

The model was used at the time to summarise their findings for the best selling book ‘In Search of Excellence’ – I have used it very effectively to think in an organised manner about all the key elements that must be in place for ANY organisation (including the not-so-excellent ones) to function.

I am happy to give away the ‘secret sauce’ of our approach to solving problems because if there is anything that I have learned in the last 30 years, it is that knowing what to do and actually doing are worlds apart.

This is not the place to get all academic on the reader, but suffice to say that the underlying research is reasonably robust and that having used it for over two decades, it goes down as a classic that cannot be improved upon. Much like the 4Ps of Marketing introduced by Kotler in the 60s, some ideas simply stand the test of time and this is one of them.

Readers can think about ANY challenge they currently face, and I guarantee that the solution (and the problem) will be a combination of one (or more) of those 7 S’s.

Just because an idea is new, does not mean it is important and just because the idea has been around for awhile, does not mean that it does not work any more.

Of course the simplicity of the framework belies the challenges of synchronising all those moving parts. And each of those elements represent an ever-changing domain.

One area I am very familiar with, is cloud-based platforms. This technology (system) can be used for something as simple as taking the Operations Manual online at low cost or to something more challenging like creating collaborative communities of practice.

Let us consider those examples briefly.

Example 1: Having a ‘living’ operations manual in the cloud has several benefits. It is relatively easy, is dynamic, track-able, and instantaneous - and at a few dollars per month per person it is more cost-effective than sending one letter/brochure a month. Yet few people are doing it, which begs the question why everyone is not doing it.

The answer is that it is because most Franchisors are smart enough to know (intuitively) that it is NOT simply about uploading a few PDFs onto some online directory or even just on Google Drive. If you do it right, you will think about who needs to use it, how they use it and how best to disaggregate the information and how it will be monitored. Then it becomes clear that all the moving parts must be in good working order to tackle a project like this.

Example 2: Having an active, collaborative franchisee community-of-practice is (in my humble opinion) the holy grail of franchisor-franchisee relationships. This is a state where the franchisees truly own the objectives, are committed to the culture and have created an environment where they freely share the wins and solve the problems collaboratively.

We can roll out the platform/technology easily, make it look pretty according to your brand but the initiative is doomed to failure. This is not a sales pitch: I am telling you NOT to do it. Unless you have all the other elements in play and properly aligned, the take-up will be at best limited and soon you have a white elephant on your hands that requires someone to allocate time and resources to ‘creating content’, when what you really need is a form of social learning that is driven from the bottom up to happen.

In order to make it work your culture must be robust, your internal communications must be honest and transparent, your people must have certain skills and your policies must be fair and so forth. Not to mention that your business model and strategy must be solid.

I could go on, but you get the idea – I am simply referencing the 7-S framework.

All of these things are doable. The benefits are amazing – from clear financial ROIs to substantial ROR (return on relationships) – but they can and should only be tackled by taking a holistic perspective of the whole franchise system.

The answer is not to roll out more training. Especially not training that has some sort of a buzzword associated with it. (Total Quality Management anyone?)

As part of the whole management mix, training has a role to play, and the right training at the right time is vital to success. But it must be part of the big picture of the total business. That is why training must be part of that big picture, driven by the founder/CEO, for delegating to an over-worked employee will turn training into a series of time-wasting events that have zero impact.


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