Part 1

Origins of Traditional Techniques
 
Let me set the scene and take you back to the year 1776 and a small Pin Factory in Scotland and a man you will most likely have heard of: Adam Smith. Adam Smith was a social philosopher and a pioneer of political economy and on the 9th of March, 1776 published the book that has formed how we do business to this day ‘The Wealth of Nations’roughly 4 months before Mozart’s first ever performance of the Haffner Symphony. Adam Smith had gone into this Scottish pin factory and noticed some extraordinary things, one being that the pin factory’s productivity was largely dependent on what employee was in work on any given day. Smith looked deeper into the workings of the pin factory and created what is described as the ‘division of labour’ (and later the subdivision of labour) where individual tasks were clearly defined and each person was assigned and trained up to effectively complete their task. This revolutionized manufacture and production, he increased productivity by 2400% and his book was mentioned in the declaration of independence.
 
The Effect
          
Most of us in business now still follow what was published in ‘The Wealth of Nations’ in 1776. If you think about your organisational structure, what shape are you in? A pyramid, where the CEO is at the top and it rolls down to the guys at the front line, or in the trenches (It’s not a war by the way) This pyramid shape doesn’t physically exist it is an abstract illusion, it is however an abstract illusion that shapes and forms how we do work. Have you ever stopped to wonder where the customer is in your organisational structure? If the customer gets a mention at all they are usually shoved off to the sides and this again creates its own problems, ‘Hey! I’m in operations, look at the chart, the customer is 8 steps away from me in my value chain, I don’t deal with the customer’ The only reason that Mr Operations thinks that he doesn’t deal with the customer is because of the collective abstract illusion created by industrial age thinking being applied in today’s vastly different world. Earlier I mentioned that ‘The Wealth of Nations’ was published 4 months before Mozarts first performance of the Haffner Symphony, look at the comparison. We consider Mozart to be ‘classical’ music but do we consider the ideas born of a Scottish pin factory by Adam Smith in 1776 ‘classical’ thinking? No, not many of us do, and not many of us will for a long time. Put it this way some people didn’t accept that we lived in a Heliocentric universe (the sun being center of our solar system) until 1998.

Part 2 soon...

Whether it’s their free advertising, their ability to help your reach pretty much everyone in the world, or their ability to help your customers tell everyone in the world if you screw up or do great, whether you like it or not, Facebook has changed how we all approach business. We will have all heard about Facebook’s imminent IPO planning to raise $5 billion however what you might not have realised is Facebook is actually worth $100 billion.





This is a little section I’d like to call ‘Facebook is worth more than…’

Facebook is worth more than… 50 Naval Submarines (they cost about $2 billion each to build)

Facebook is worth more than… Brazil’s 2011 Travel and Tourism Budget ($74 billion)

Facebook is worth more than… The Gulf war (that cost $96 billion)

Facebook is worth more than… 6 years of US Breast Cancer Treatment  ($16.5 billion per year)

Facebook is worth more than… The Hurricane Katrina clean up (that was $81 billion)

Facebook is worth more than… 2 and a half Olympic games (Beijing Olympics were $40 billion)

Facebook is worth more than… Coffee (the worlds coffee industry is worth just under $100 billion)

Facebook is worth more than… 120 Eiffel Towers (about $820 million to build one in today’s market)

…and last but not least, Facebook is worth more than… Qatar (their GDP is about $98 billion)

Thanks to Mashable for the cool facts, and thanks to Bono (he owns 1.5% of Facebook)

Outside-In company McDonalds ran a Twitter campaign recently to help people get to know their local farmers better, 2% of the thousands of Tweets they received were people moaning that they became obese because they eat McDonalds every day or that they didn’t like a burger once 18 years ago and this campaign was considered a disaster. I just wanted to remind everyone of the massive success of McDonalds, not just after they turned Outside-In and coined their successful customer outcome, ‘I’m loving it’ and aligned their process towards achieving this but the lasting legacy that they have created.

Here are the facts.

McDonalds serve 1% of the world’s population every day, that’s around 68 million people…that’s more than the entire population of the UK.

McDonalds serve over 75 burgers a second, that’s about 6.5 million a day (that doesn’t count nuggets and salads)

McDonald’s $32 billion revenue makes them the 68th biggest economy in the world…just above Ecuador.

If you gathered up all of the McDonalds employees from the USA only, there would be more people than the combined population of Iceland and Luxembourg .

The Queen of England owns a McDonalds franchise.

Over the next 3 years McDonalds will be opening a new restaurant in China…EVERY DAY!

Americans alone eat 1 billion pounds (weight) of beef at McDonalds every year.

One of the questions that Outside-In companies ask themselves is ‘What business are we REALLY in?’. If you think that McDonalds is just a fast-food joint think again, McDonalds is actually the world’s largest distributor of toys…bigger than Toys ‘R’ Us, bigger than Hamleys, bigger than Schwarz, even bigger than Santa! Now who would have expected that from a fast-food joint?

So remember,  creating our successful customer outcome (SCO) and aligning everything we do towards achieving it and asking ourselves ‘What business are we REALLY in’ extends our scope, transcends the enterprise boundaries and stops us from thinking the same old way.  

 

I recently saw some stories about how Apple are planning to provide American schools with iPads so that the old, expensive, outdated, dog-eared, back breaking text books could be condenced to iBook format to make learining easier and more interactive and not to mention more cost effective.  

There was a lot of talk about this being a charitable dedication towards a nations education. This may hold some truth, however I disagree that this is the main reason for doing this. I personally think it may be one of the biggest game changing plays of the decade.

In Ouside-In companies, like Apple, we ask ourselves a number of questions to reframe how we think and drive innovative ideas. One of these is: ‘Where does the process REALLY start?’ I think that this is a brilliant stratagy to sell more Apple Macs and MacBooks and well and truly sink Windows.

So lets ask ourselves, when we buy a computer – where does the process REALLY start?

When we walk into the shop? When we browse online for reviews? When we first discover the need for a computer?  Or even further back – When we first start to use computers on a regular basis…in school.

So you may be thinking, ‘WOW, great insight James! How does this help me sell more Macs?’

Lets think this through, most school computers are on Windows so most kids get used to Windows operating systems from an early age and so when buying a computer later in life for themselves (or when their parents do) they will stay with what they know - Windows. So… if Apple can get a whole generation and generations to come hooked on Apple’s operating systems from the start, then when they make the decision to buy for themselves they will go with what they know – Apple!

On top of this there has been talk of giving every kid in America a free iPhone 3, another ploy to get the future generations hooked on Apple (they don’t make their money from phones anyway, they make it from the app store) This proves grim news for Nokia too but ill talk about this another day.

So in summary, on one hand a charitable dedication to the advancement of learning on the other hand possibly one of the biggest game changing business moves we are likley to see this decade.

What do you think?