All posts by Jamie MacAlister

Jamie teaches risk and strategy at Hult International Business School and the International Health Sciences University in Kampala, Uganda. He is also an executive coach, facilitator, strategist and commercial manager, having previously been Commercial Director at Ashridge. He has had over twenty years experience as a management consultant with PwC and running his own business, Blonay. He learned about marketing with Procter & Gamble, has an MBA from Wharton Business School and an MA Engineering from Cambridge University.

Strategic Pioneering in the Global Health Business

An April 2018 report by the US Researcher,  Business Insider Intelligence, states: “Digital health will take off in emerging markets, leapfrogging developed markets”

Mobile stethoscope

The idea of leapfrogging is linked to East Africa’s experience with mobile money and mobile telephony generally, where East Africans have moved from not having either bank accounts nor telephone lines, to conducting the majority of daily payment transactions using mobile phones. This innovation came about because of a confluence of different factors: 1. The extensive penetration of mobile phone usage, 2. The limited penetration of bank accounts, and 3. The increasing need to trade efficiently over distance.

The conditions for mobile health solutions in an East African country like Uganda, where I am based, are based on similar factors: 1. High mobile phone penetration once again,  2. Less legacy infrastructure in health compared to more developed countries, and 3. Greater urgency for health solutions in more remote locations,  which continue to experience a high although reducing disease burden.

The confluence of factors is often a driver of this kind of disruptive innovation. It gives businesses in Uganda an opportunity to become strategic pioneers in the global health business.  In the chapter on “Strategic Pioneering” in my book,  I refer to this idea of a confluence of factors as “Creative Juxtaposition”

EXTRACT FROM “RISKY STRATEGY”:

“I believe what is happening is a phenomenon I call Creative Juxtaposition.  It’s the idea that entities with apparently very different or even opposite polarities come together to bring creative and often positive results.  Knowledge that comes from different sources, possibly referring to different subjects, combines to form great ideas – a breakthrough in new knowledge, a great strategy or even a new sense of victory.  So much great new positive creative stuff seems to come to us in this way.

My favourite  example of this comes from the world of mathematics – the heartland of formal risk theory. It is Pythgoras’ theorem: ‘ The square on the hypothenuse is equal to the sum of the squares on the other two sides’.  It was the basis of much mathematical geometry, extended into other trigonometry, and thence into a wide range of practical science applications: wave theory in electrical engineering, or Newtonian physics as applied to mechanical and structural engineering.

Pythagorus was a Greek philosopher and mathematician, who lived around 500 BC. We speculate that he learned about triangles and right angles in Egypt, where perfect right angles would have been important, for example, in the construction of the pyramids.  It would have been impossible to have constructed them without perfectly right-angled corner stones, as the resulting structure would not have been based on a perfect square as we witness today.  He would have learned in particular that something like a papyrus reed folded into 12 exact segments, could then be folded into a triangle of sides length 3 notches, 4 notches and 5 notches, and that this would form a perfect right-angle.

Quite separately, he learned of arithmetic from Phoenicia, in which he would have learned about the properties of numbers multiplied by themselves, squares.  And the curious idea that the squares of three sequential whole numbers, 3 , 4 and 5 are related by the equation: 3 squared added to 4 squared are equal in quantity to 5 squared.  He would have recalled his lessons on papyrus and pyramid construction, and noted that the numbers representing the sides of his right angled triangle could actually be related arithmetically.  Who was it that then, I wonder, who asked: “I wonder if you would find the same numerical relationship of side dimensions in all triangles with right angles”. And through this process of combining different disciplines of knowledge,  amazing new knowledge with wide reaching usefulness is born. We have the process of Creative Juxtaposition.

I see this idea of Creative Juxtaposition at the heart of all sorts of different forms of creativity.  The atoms of hydrogen gas and oxygen gas combine to form the most unlikely and miraculous of molecules, the water molecule.  Animals of different genders combine to create new life.  Animal and plant combine in pollenisation to create new plant life and food for animals.  There’s Gilbert & Sullivan, Morecambe & Wise, Flanders & Swan,  Marks & Spencer, Procter & Gamble. In Chinese tradtion, there is the idea in Yin and Yang, that contrasting concepts,  light and dark, sunny and shady, sun and moon, combine to create a whole picture.  This book explores a number of yin and yangs that combine to create something bigger than the sum of its parts:   risk and strategy, tiger and elephant, danger and opportunity.”

 

 

Professor Yunus – Strategic Pioneer in micro-finance and social entrepreneurship.

It was an honour to host Professor Muhammad Yunus at the official launch of the School of Business & Applied Technology and the university re-branding event.

Yunus 2

He challenged us as a university to inspire and develop social entrepreneurs, with a “self-less” mindset to solve social problems.    He re-inforced our own views that values and social purpose should be at the heart of our approach to business;  to counter the prevailing zeitgeist that business is driven by a “what’s in it for me?” mindset,  and the idea that “making money” is the end game, regardless of the means for achieving that.

My book Risky Strategy is  a text for what I call: “Strategic Pioneers”. Professor Yunus is a great example of one.

In the book, I refer to the research we have conducted at Hult Ashridge on corporate approaches to modern slavery,  a very real social issue which is tied into the supply chains of many global organisations.  And I ask the question:

“Is business part of the problem,  or part of the solution”

We know which answer Professor Yunus would promote.

Extract from “Risky Strategy”

Today, we are witnessing Jenga towers toppling and collapsing, towers that previously looked strong.  Others on firmer foundations remain strong.  And new towers are being built all the time.

In our research on modern slavery, we have reached a situation where businesses at the end of a complex global supply chains, primarily the big brand retailers, are in a position to impact positively on the welfare of millions of workers in and from developing countries.  Historically, these businesses have competed to offer the best deal for consumers in the developed nations.  This is the essence of the capitalist model as originally set out by Adam Smith in his 18th century book The Wealth of Nations (Smith, 1997). We have international legislation that fiercely protects this competitive principle, on the basis that it protects the ‘paying public’ from exploitation.

However, we know today that in return for this privilege, there is still exploitation of workers that contributes to delivering this consumer benefit.   We know from our research that the only reasonable ways in which the developed world’s retailers and other major corporates can change this for the better is by collaborating – to maximise the influence and impact where it matters, including with national governments.   Ironically, in the UK and other countries, the latest legislation on modern slavery is a catalyst that encourages this collaboration.  But this flies in the face of naturally competitive instincts and competition law.   Is this a time for bold leaders to challenge this paradigm?  Could this be a time for a positive Black Swan?

Indeed, is this a time for business to become part of the solution, instead of part of the problem?

Timothy Fort, Professor of Ethics at George Washington University Business School, and Director of that university’s program on ‘Peace through Commerce’ (Fort, 2007), argues that for such a time as this, business itself has a role to play in bringing ethical leadership to the world in which it has become a core element.  He develops classical ’theory of the firm’ thinking:  is the purpose of business to maximise shareholder value, which gets further translated and simplified to maximise profit, or is it fundamentally to bring about positive social change?

In Chapter 7, when I described the concept of broad framing, I listed Paul Polman’s vision for Unilever as bringing positive social benefit to the world’s consumers – the broad framing was that this would ultimately generate positive value to shareholders, even if the short-term picture was less clear.  My old company, and Unilever arch-rival, Procter & Gamble, also articulated one of their ‘Winning Aspirations’ along similar lines: “To meaningfully improve the lives of the world’s consumers” (Lafley & Martin, 2013).

 

Disruptive Innovation in Education

JackMa

At the recent World Economic Forum in Davos, Alibaba founder and Executive Chairman Jack Ma spoke about the need for radical change in our approach to education globally.  He said:

“A teacher should learn all the time; a teacher should share all the time.  Education is a big challenge now – if we do not change the way we teach,  thirty years later we will be in trouble.”

“We cannot teach our kids to compete with the machines who are smarter – we have to teach our kids something unique. In this way, 30 years later, kids will have a chance”

Disruptive Innovation in Education

Clayton Christensen, a Professor at Harvard Business School, is credited with developing the concept of disruptive innovation,  a model whereby a business, normally new to a market,  undermines the established businesses in a market through radical innovation.  In his book,  “Disrupting Class”, he talks about how to apply this model to the education sector.

At the School of Business & Applied Technology that I am involved in setting up in Kampala, Uganda,  we seek to disrupt the established model for university education, by working in partnership with businesses to ensure students learn and apply practical skills during the education program – along the lines suggested by Jack Ma

But gaining acceptance to this approach is a challenge because it challenges the position of existing providers, and those that govern them.

In this extract from my book: “Risky Strategy” I talk about the dilemma that confronts existing suppliers when faced with this type of disruptive innovation.

“Risky Strategy” extract

This is the innovator’s dilemma as encapsulated by Clayton Christensen (Christensen, 2002).  Organisations focus on the dark side of dynamic unfamiliarity, and prefer to stay in the stagnant swamp of familiarity.  The story of Kodak is a case in point. They preferred the chemical photographic film market that they knew so well– even though it was treating them badly.  This was preferable to venturing wholeheartedly into a new market of digital photography, where of course there was always a risk that they would come badly unstuck, perhaps as an also-ran or late entrant who would struggle to catch up.

The essential point that Christensen makes about innovation is that it is often paradoxically destructive.  If you are an incumbent in a market, your own ’new’ has the potential to help destroy the ‘old’.   Being prepared to let go, in part at least, of the old is a fundamental challenge to leadership and organisational character.

I was at Procter & Gamble when liquid detergents were introduced.  Liquid detergent technology was clearly superior in performance to powdered detergents. Unilever took the lead by introducing a new brand, Wisk, which immediately started to take market share from powdered detergents.  The problem was that powdered detergents generated a huge proportion of P&G’s profits, so introducing a new superior technology was only going to eat into those profits – referred to rather graphically as cannibalisation (ie, eating your own profits!)  Unilever doing it under a new brand name helped mitigate some of that cannibalisation, but it slowed the progress as consumers needed to become aware and learn to trust a new brand name that they had never seen before.  P&G chose a different approach, and launched Tide Liquid and Ariel Liquid as international brand extensions of their existing market leading detergents, Tide and Ariel.  This was maximum cannibalisation impact – the new technology eating into its own brand franchise, as existing customers simply switched to the new technology.  But also maximum impact as P&G  took a leading share in the new liquids sector, building on the existing brand franchises.  This was an organisation that had the character to innovate destructively – the character was based on taking a significant risk, but believing it was the right risk because it was the right thing to do, to give the best technology available to their existing customers.

A similar idea, initially proposed by Joseph Schumpeter in 1942, is that organisations should embrace creative destruction, which was described as  a “process of industrial mutation that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one”.  Buytendijk talks about this in the context of massive technology changes: cars replacing horse carriages, music downloads succeeding CDs, or email obsoleting fax (Buytendijk, 2010)

Strategic Pioneering in Africa

sobat logo-3This week, I am part of a team launching a new School of Business & Applied Technology (SoBAT: www.sobat.ihsu.ac.ug), in Kampala, Uganda. I believe we are among the “first” of business schools to work in partnership with business and industry to focus on practical application of skills and developing character among students. We are proposing an apprentice-type model where this starts to happen from the beginning of the course, so that by the end, students are fully productive and already earning to fund their education.  I believe we are, in this sense, pioneers.

Sub-Saharan Africa has a tradition of pioneering – and, I believe, this tradition has not been lost!   When you put “pioneer” into the Google search engine, you get several references to the early settlers and explorers in North America, perhaps because Google along with the internet is still quite USA-centric.  But when I think of pioneering, I think of the likes of David Livingston, Henry Stanley and John Hanning Speke exploring Africa, on missions such as seeking the source of the longest river in the world, the Nile.

The origin of the word “pioneer” is the French word “pionnier” which perhaps surprisingly  means “foot soldier”.  It is one who is in front, who goes first.  One definition of pioneer is a leader, but not in the traditional sense of the one who is in charge, inspiring forward motion through great oratory or decision making, but just by virtue of being first, at the front.  Surprising as we probably think of pioneers as being a rather solitary existence, but clearly there are many foot soldiers at the front of an army battle line. We get perhaps a better sense when we consider a common root is the word “pawn”  in chess.

As an amateur song writer and performer, I have written many songs in my life.  One of them, an attempt at a humerous song called “If I were a chess piece” contained the refrain: “if I were a chess piece, I’d be a pawn”.  The lyrics continue with the idea that pawns, unlike bishops: “don’t get stuck on the white, and don’t get stuck on the black; they keep on going forward because they cant go back…” . Rather uncomfortably, they may get sacrificed for some greater good, the gaining of a better position or a more important piece.   But most intriguingly, they are the only piece that can metamorphose into the most valuable piece on the chess board, the queen”

Its an interesting picture of pioneers… at the front, risk takers not intentionally but because of their role …  because they sometimes make sacrificial moves, , and  are occasionally part of some glorious moment in history … the discovery of the source of the Nile, or electric light,  or the first to the South Pole, or the top of Everest.  It is pioneers who are essential for progress, and ultimately achievement and positive change.

Africa has been a pioneer in the field of Mobile Banking, which has originated in Kenya with M-Pesa, and is now widely adopted across East Africa.  It has emerged out of the combination of necessity and the availability of technology.  The need was for more efficient ways of paying for services over long distance, when the majority of the population don’t have bank accounts, but do have mobile phones.  Africa are pioneers by virtue of being first.  Apple Pay might have the technological smarts to make this technology more widely available globally,  but Africa has nevertheless been the pioneer.

Pioneering is in the spirit of innovation.  The global business world grapples with the secrets of innovation, because invariably, effective innovation can lead to more profitable business. But the secrets of effective innovation are elusive;  not least, because it involves taking risk. We witness innovation as risky because it is moving into unchartered territory, and therefore the range of possible outcomes increases, ie it becomes more risky. Innovation is achieved through pioneers.  Organisations that want effective innovation need the right kind of pioneers.  This in turn, requires a certain type of organizational character, which encourages pioneers, those who would lead by being first.

In this extract from my book “Risky Strategy”  I make the case for the  type of character that leads to “strategic pioneering”:

“If we want to understand what’s behind effective innovation and positive change, we need to look at character.  Leadership is directional and involves movement; it’s not static. It’s taking people from one place to another place, to a new outcome, to a new way of seeing the world and how it works. This is innovative change, and doing this well is what marks out effective innovators from those who are less successful. And character is at the heart of this process.  Jim Collins outlined the attributes of the leaders in most successful businesses that he researched in Good to Great.  He talked of character attributes such as fortitude, humility and discipline. In Chapter 3, I described a character journey that culminated in the Blonay Profiler: Bold Creative, Empathic and Self-Disciplined. Leaders of innovation change need a blend of all three, which is hard to achieve because of the tensions between the dimensions.  Most of all, I believe the Bold Creative dimension is the one that is crucial.

I am calling those who have an extra dollop of the Bold Creative dimension ‘strategic pioneers’. They are proactive more than they are responsive, and they are intuitive more than they are analytical. They celebrate difference and diversity more than form and order, and are more likely to be found on their own than in a pack.  They are natural risk takers.

Our tigers and elephants were born in a story in our research about innovation. This was the race to a global launch of a new product in the fast growing computer games market. Elephants were needed to make sure all the right processes were in place, with the appropriate attention to detail,and to ask the difficult questions: “What if this doesn’t work as we expect? What if customers don’t like that?”.  Meanwhile, tigers were cutting corners, firing before aiming and going with their intuition. Somehow the organisation managed to hold them together, and a successful launch was the result.

It is interesting that Gerstner’s book on the transformation of IBM (Gerstner, 2002) is called Who says elephants can’t dance.   This is the story of IBM’s transformation over a decade from the early 1990s, from a computer products company to a business services firm, while Gerstner was CEO.  In this case, the elephant metaphor is clearly meant to symbolise a large organisation, which typically struggles to change very much because of the inertia of its existing expertise and culture.  What helps the elephant to dance, I would argue, is the presence of tigers, and particularly a tiger at the helm of the business.  He talks about taking two big bets: one to turn IBM into a fully integrated services business, not just the largest but the most influential.  The second was to bet that the market would move away from standalone computers to network-based solutions. He talks about it as fraught with risk,  and suggests: “There is no such thing as a toe in the water. When you take the plunge, its full body immersion.”

 

 

The Eclipse and Creative Juxtaposition

“In Chinese tradition, there is the idea in Yin and Yang, that contrasting concepts, light and dark, sunny and shady, sun and moon, combine to create a whole picture”

Eclipse

The light shines in the darkness, and the darkness has not overcome it” John 1:5

Roger Martin, author of the leadership book “The Opposable Mind”and the strategy book “Play to Win” talks of a similar concept, “creative synthesis”,   in a recent Harvard Business Review:

“Research in cognitive science has demonstrated that the core engine of creative synthesis is “associative fluency”—the mental ability to connect two concepts that are not usually linked and to forge them into a new idea. The more diverse the concepts, the more powerful the creative association and the more novel the new idea.

With a new metaphor, you compare two things that aren’t usually connected. For instance, when Hamlet says to Rosencrantz, “Denmark’s a prison,” he is associating two elements in an unusual way. Rosencrantz knows what “Denmark” means, and he knows what “a prison” is. However, Hamlet presents a new concept to him that is neither the Denmark he knows nor the prisons he knows. This third element is the novel idea or creative synthesis produced by the unusual combination.

When people link unrelated concepts, product innovations often result. Samuel Colt developed the revolving bullet chamber for his famous pistol after working on a ship as a young man and becoming fascinated by the vessel’s wheel and the way it could spin or be locked by means of a clutch. A Swiss engineer was inspired to create the hook-and-loop model of Velcro after walking in the mountains and noticing the extraordinary adhesive qualities of burrs that stuck to his clothing.

Metaphor also aids the adoption of an innovation by helping consumers understand and relate to it. The automobile, for instance, was initially described as “a horseless carriage,” the motorcycle as “a bicycle with a motor.” The snowboard was simply “a skateboard for the snow.” The very first step in the evolution that has made the smartphone a ubiquitous and essential device was the launch in 1999 of Research in Motion’s BlackBerry 850. It was sold as a pager that could also receive and send e-mails—a comforting metaphor for initial users.”

(From the Sept-Oct issue of Harvard Business Review, an article by Roger Martin and Tony Golsby-Smith entitled: “Management is Much More than a Science”)

Extract from the book “Risky Strategy” by Jamie MacAlister http://amzn.to/2rrTLvo

We understand that a passion for winning creates both an appetite and a need for some risk. But what happens when working in collaboration becomes a more useful paradigm for positive social change than beating competition? How do we bridge the tension between competition and collaboration, and what does it do for our readiness to make risky choices?

When we look at the exploits of apparently successful leaders, we notice a strange dichotomy between risk taking and risk avoidance, an ability to embrace both, keep both in tension, to be able to find those right risks to take and avoid the others. We enquire of those who appear to have risked all to achieve significant victories, and hear that they are preoccupied with avoiding risk wherever possible.

What is happening here?

I believe what is happening is a phenomenon I call Creative Juxtaposition. It’s the idea that entities with apparently very different or even opposite polarities come together to bring creative and often positive results. Knowledge that comes from different sources, possibly referring to different subjects, combines to form great ideas – a breakthrough in new knowledge, a great strategy or even a new sense of victory. So much great new positive creative stuff seems to come to us in this way.

The origin of our tigers and elephants story sets the scene for this idea. A fast and effective global launch of an electronic games product was achieved through the combination of methodical elephants and impetuous tigers somehow managing to work together to achieve business victory.

…. I see this idea of Creative Juxtaposition at the heart of all sorts of different forms of creativity. The atoms of hydrogen gas and oxygen gas combine to form the most unlikely and miraculous of molecules, the water molecule. Animals of different genders combine to create new life. Animal and plant combine in pollenization to create new plant life and food for animals. There’s Gilbert & Sullivan, Morecambe & Wise, Flanders & Swan, Marks & Spencer, Procter & Gamble. In Chinese tradition, there is the idea in Yin and Yang, that contrasting concepts, light and dark, sunny and shady, sun and moon, combine to create a whole picture. This book explores a number of yin and yangs that combine to create something bigger than the sum of its parts: risk and strategy, tiger and elephant, danger and opportunity.

 

Key to effective teamwork: feeling safe enough to take risks

Google just published some research on effective teamwork.  http://on.inc.com/2u73ZQ1    They highlight 5 factors, and state that the key factor is feeling safe enough to take risks with others.

“We’ve all been in meetings and, due to the fear of seeming incompetent, have held back questions or ideas. I get it. It’s unnerving to feel like you’re in an environment where everything you do or say is under a microscope.

But imagine a different setting. A situation in which everyone is safe to take risks, voice their opinions, and ask judgment-free questions. A culture where managers provide air cover and create safe zones so employees can let down their guard. That’s psychological safety.”

This resonates with the research I did with colleagues at Ashridge a few years ago.  Positive change and innovation in organisations tends to correlate with cultures which help staff to feel safe with taking risks.  I covered this idea in my book “Risky Strategy”

feeling safe on a girder

EXTRACT FROM “RISKY STRATEGY”

Available from Amazon on: http://amzn.to/2rrTLvo

So in handling this paradox of safety with risk, our approach to risk will of course therefore be determined by where or how you experience safety. We tend to experience safety where we can truly place our faith.

I am reminded of the exploits of the Niagara Falls tight rope walker in the mid nineteenth century known as “The Great Blondin”, whose real name was Jean Francois Gravelet.  He repeated the stunt of crossing the falls on many occasions, sometimes using other props, like bicycles and wheelbarrows.  On one occasion he is reputed to have taunted the crowd with the question: “How much do you believe in me?” and getting loud affirmation.  He then asked who in the crowd who said they believed in him would get on his back as he crossed the falls.  No one was prepared to do that – no one had that much faith in him

Did conversation just get more risky? So what did Trump say in that conversation?

Trump & ComeyI am noticing that the pivotal factor in the last two bits of negative publicity about Donald Trump both relate to conversations.  He apparently gave away classified secrets relating to intelligence about ISIS  in a conversation with the Russian Foreign Minister – according to  US newspapers.  And following what appeared to be a private dinner conversation with the sacked Head of the FBI,  James Comey, Trump had apparently asked inappropriately for his loyalty and for the enquiry into Russian intervention in the election to be stopped – something Trump denies.

Whatever the truth and motivations were relating to these conversations, in retrospect at least, they clearly turned out to be for Donald Trump at least, somewhat risky!

Most of the time, conversation is not particularly risky.  We talk about practical matters, talk about our views and feelings at a fairly superficial level,  talk about generalities in vague terms, perhaps we make jokes – but generally only “politically correct” ones.

But often it appears that being able to make progress involves taking risks in conversations.  One of my colleagues at Ashridge has recently published research on “speaking truth to power”.   The idea is that this is often key to unlocking unhelpful “stuck” behaviours in organisations. Careers in business can be adversely affected.  For many, that’s a risk too far.

When a team I was involved in at Ashridge researched how leaders work with risk,  one of the lessons that emerged was the need for organisations  that want to work effectively with risk to encourage risky conversations .

Extract from Risky Strategy by Jamie MacAlister- chapter 13 D

Risky Conversations

It seems that somehow at the heart of how organisations work with risk is the types of conversations that happen between its members.  My Organisation Development consulting colleagues at Ashridge tell me that culture change happens one conversation at a time.  I am very impressed by this concept, and have witnessed it playing out both with clients with whom we work and in the extensive change we have seen at Ashridge over the past four years.

I was working recently with a global services client. There were over a hundred of them, from the top team downwards, and they had all come from different parts of the world to a classy conference centre in west London.  The day started with a strategy presentation, and then the result of a culture assessment exercise. We had proposed and agreed with the top team that they would have a better chance of succeeding with the strategy if they were able to change their culture. There were many aspects to it, but a couple of key ones were a move from one that prioritises individual technical performance at the expense of relationship with colleagues, to one which places more emphasis on relationship and behavioural factors;  to one that values being ‘heard’ above the one that currently puts a greater value on being ‘right’.  Then we asked them to sit in groups, made up of mixed levels of management. We observed and facilitated.

Initially, most of the voices in the groups were those of the most senior managers expressing their views on technical solutions associated with the strategy. By the end of the day, we were hearing some of the lower levels of management expressing views about human behavioural issues, sometimes even critical of current practices.

We asked them to reflect on what had happened in the room.  Initially, they talked about the technical solutions they had come up with. Then, with a bit of coaxing, they started to notice how the conversations had changed in the groups. People were taking risks in conversations: senior managers inviting their more junior colleagues to be open with their views;  more junior managers making non-technical points, even being critical of leadership behaviours.

Somehow the managers in this room had become more convinced that they all had similar ’skin in the game’, and therefore it was worth taking personal risks to speak out. This was a step towards a more anti-fragile organisation. Weick and Sutcliffe wrote a book on Highly Resilient Organisations (HROs) (Weick & Sutcliffe, 2007), and unpicks some of their characteristics – what works and what doesn’t work in terms of making them more or less resilient. These are organisations that are regularly dealing with crisis or the potential for crisis (eg, emergency service or the military). Many factors can impact resilience, but the one stand-out factor seems to be the ability to be open with failure, to talk about it, to consider its possibility, to be honest about its occurrence, and to consider how it could be avoided or managed if and when it happens.

 

Aduna pioneers African healthy tree product exports

I’ve just had an excellent presentation from a guest speaker to my Global Strategy students at Hult Business School.  Nick Salter is one of the founders of Aduna, a London-based venture that creates demand through clever marketing for African super foods – products with remarkable health benefits from trees growing in Africa .  They currently import, add value to and market Baobab fruit, Moringa leaves and a special healthy form of Cacao.   They are the main marketer of these products in outlets like Holland and Barret, and remarkably for a small company, re-export their products to 18 other countries in Europe, the Middle East and Far East

Adunapresent

His heartfelt belief is that the key to lifting Sub-Saharan  Africa out of poverty is “trade not aid”.  At least not aid the way it is generally configured.  Alot of aid to agricultural projects fails to deliver sustainable benefits to the targeted economies because it fails to generate demand for the produce, and because they are project-based (ie time limited), when the money runs out,  the development unwinds – eg trees are felled or abandoned.  Much better, he argues, for aid to be directed at creating demand in developed economies for these products.  This is what Aduna spend significant amounts of their investors’ money on.   And they are seeing significant social impact as a result.

I am with him on this. I have been visiting Uganda for the past ten years,  with a combined education and business development mission.   Dependency on aid is a real issue – made worse by the lack of transparency of what happens to the aid funds.  The real opportunity in a highly fertile country like Uganda is to create value-added (ie processed) exportable agricultural produce from the millions of acres of un-used but suitable land.   But “exportable” is the key!  Demand, which is satisfied with the right quality of product.

This is pioneering work.  It means breaking existing models and mindsets – changing not only how consumers in developed countries perceive these health products, but the business models and supply chains that deliver them.  It means challenging and possibly disrupting the way that “aid” works.  In marketing these kinds of health products, which by definition cannot be patented, it may at the same time mean challenging the way the health sector  delivers health solutions. This level of change means risk.

In my book, “Risky Strategy”, I have a chapter on “Strategic Pioneering”. I state in it that as well as a winning aspiration and an understanding of the key variables, the right risks are often those based on an opportunity to innovate or a need for change.  As we deliberately step into new territory, we know less about that territory, so the variability of possible outcomes is that much bigger, ie, it’s more risky.  We know that innovation and risk are inextricably linked.  Innovation means change and change inevitably feels risky.

Part of my exploration looks at how innovators feel safe with this kind of risk.  I will watch closely to see how this plays out with Aduna.

 

The start of a journey

I write this as my wife and I are about to start a new journey, moving to Uganda to help set up a new business education venture.

Nile journey

It seems appropriate to post a picture of the so-called “Source of the Nile” at Jinja in Uganda, at the point where the river flows out of Lake Victoria.  It was the mission of nineteenth century pioneers like Speke to try and find the source of the longest river in the world, and the water heart of early Egyptian civilisation.  We are intrigued by the question as to whether this “Pearl of Africa” ( a phrase coined by Winston Churchill to describe Uganda),  can still realise its potential to be the source of fruitful enterprise.

This new journey is the sequel to my previous one, to write “Risky Strategy”, and is perhaps an echo of that pioneering theme.  In the opening chapter I wrote:

“I also need to tell you that this book is a journey, for me and I hope for you, the reader.  It’s a journey that begins here, but I’m afraid doesn’t end within the confines of this book. If you are looking for a book that gives you the answers to all your questions about risk and strategy, then I would suggest you stop here, for you will be disappointed.  My hope is that this book asks a number of good questions that may help you think differently about how you approach strategic decision-making.”

Exxon CEO as US Secretary of State! Is business the problem or the solution?

So this week we hear that Trump has announced that his Secretary of State will be Rex Tillerson,  CEO of Exxon Mobil, the world’s largest private oil company.   Apart from all the additional jitters this creates around the environmental sustainability agenda, with one of the most powerful people in the oil industry becoming one of the most powerful global political leaders,  this is part of a bigger more significant statement – another business leader in a top political job.

As a business professional myself, now a professor teaching business leadership,  I must declare a bias towards the idea that business leaders could make particularly good political leaders.  There are  some reasons why I think this:

  1. Business leaders are familiar with the need to deliver sound economic results to achieve and retain their role as leaders. And economics continues to be a major driver of political success
  2. Business leaders of large organisations have had to operate effectively in a global arena. This means having to navigate the complex cultural differences around the world.  Political leaders increasingly need to be able to do this.
  3. Business leaders are pragmatic. They succeed by doing what it takes to get things done. Witness the Trump response to the question posed to him by a journalist after his election victory:  “Do you regret any of the things that you said during your campaign?” To which he apparently replied:  “Why would I?  I won, didn’t I?”
  4. Business leaders understand how to work effectively with risk. The business marketplace like the political landscape is a wild place. One minute you have a dominant position in an industry – the next minute, a disruptive digital technology is changing everything and your ship is sinking fast. He need to act fast – you need to make tough decisions regarding an uncertain future.  You need to be a strategic risk taker or you fail – as has happened to many organisations that failed to take the right strategic risks.

The interesting question for business leaders is the extent to which we, the “people”, trust them to work for our best interests.   Some would say this can never happen. Business leaders are primarily interested in personal wealth, and to achieve this, generally have to do whatever they can to maximise the profits of the organisations that they lead, and this tends to be in conflict with the interests of others who might be impacted by the organisation.  Others would argue that effective business leaders are only effective because they take account of the interests of all those impacted by a business organisation; so-called “stakeholders” who include customers, suppliers, employed staff and indeed the public at large.  This is a debate that has bubbled away for some time, and to some extent, polarises opinion on the purpose of business.

Over the past couple of years, I have been part of a team at Hult International Business School researching the business response to the issue of “Modern Slavery”.  [ http://bit.ly/2eWSm66  ]  This is the idea that certain extremely exploitative labour practices exist in the global supply chains of many leading business organisations.  It has been thrown into the spotlight in the UK by the passing of the Modern Slavery Act in October 2015, which requires UK-based business organisation to report on what they are doing to discover and address the issue.

Small Risky Strategy cover

EXTRACT FROM “Risky Strategy”

 

Today, we are witnessing Jenga towers toppling and collapsing, towers that previously looked strong.  Others on firmer foundations remain strong.  And new towers are being built all the time.

In our research on modern slavery, we have reached a situation where businesses at the end of a complex global supply chains, primarily the big brand retailers, are in a position to impact positively on the welfare of millions of workers in and from developing countries.  Historically, these businesses have competed to offer the best deal for consumers in the developed nations.  This is the essence of the capitalist model as originally set out by Adam Smith in his 18th century book The Wealth of Nations (Smith, 1997). We have international legislation that fiercely protects this competitive principle, on the basis that it protects the ‘paying public’ from exploitation.

However, we know today that in return for this privilege, there is still exploitation of workers that contributes to delivering this consumer benefit.   We know from our research that the only reasonable ways in which the developed world’s retailers and other major corporates can change this for the better is by collaborating – to maximise the influence and impact where it matters, including with national governments.   Ironically, in the UK and other countries, the latest legislation on modern slavery is a catalyst that encourages this collaboration.  But this flies in the face of naturally competitive instincts and competition law.   Is this a time for bold leaders to challenge this paradigm?  Could this be a time for a positive Black Swan?

Indeed, is this a time for business to become part of the solution, instead of part of the problem?

Timothy Fort, Professor of Ethics at George Washington University Business School, and Director of that university’s program on ‘Peace through Commerce’ (Fort, 2007), argues that for such a time as this, business itself has a role to play in bringing ethical leadership to the world in which it has become a core element.  He develops classical ’theory of the firm’ thinking:  is the purpose of business to maximise shareholder value, which gets further translated and simplified to maximise profit, or is it fundamentally to bring about positive social change?