What’s your sperm count?

Reading about Gary Hamel here, I came across this wonderful analogy.

“Getting pregnant is considered a big success despite the millions of wasted sperm – so what’s your corporate sperm count?”


The question that Gary is asking is how open you are to failure and trying new things in order to achieve innovation. The key is that nature has worked that out. It has created a system where there are millions of sperms at a cheap cost to overcome the challenge.

That’s what we need for innovation – a culture of failure, an ability and system to start innovation prototypes efficiently and to weed out the failures.

The key for service work especially in social stuff is the efficiency of prototypes. You can’t model it in clay for example. That will be the key in the long run to be able to be successful in innovation.

So, what’s your sperm count?

R&D/Innovation requires risk money

From SF Gate on Water.org:

“When you’re trying to innovate, you have to experiment. But traditional sources of funding require statistics and data, illustrating impact. Yet, in R&D that’s not possible,” Birch said. “That’s why I was keen to support some of these ideas that have long-term impact but are high-risk investments, perhaps, in the short term.”

At my employer, The Australian Centre for Social Innovation (TACSI), we are trying to do the same thing but on a more deeper scale. We develop the solutions and fund the initial R&D and then would like to scale it up with a partner. The big key question is getting large funding to support R&D.

Second Road

From Second Road Consultancy:

The Western world, from Aristotle onwards, has sought truth and direction along two different paths:

  • a first road represented by the principles of logic – the engine room of analysis and analytic inquiry
  • a second road constituted by the principles of rhetoric – intent, invention, persuasive argument and socialisation.

Aristotle believed the first road is most suitable for answering questions of science and nature, the second for managing human nature and civic affairs.

Both roads are powerful. Both yield insights. Both are necessary.

Business today is not what it was a century, or even a decade ago. Interconnectedness, velocity, volatile change and the critical importance of people make it impossible to simply ‘make a plan and stick to it’. Logic and analysis alone are not enough to prepare an organization for a future in a shifting, global environment.

Leaders need the second road (the path of invention and design) to envision compelling yet flexible strategy, create common purpose and mobilise people into action. They need new skills derived from the arts of language and design.

Second Road is at the forefront of the ‘second road’ today.

Education, skills and India’s demographic dividend

From Equitymaster:

While there are several macroeconomic issues plaguing the Indian economy, there is one very pressing concern that needs to be attended to with utmost urgency. Or else the long term ramifications would be disastrous for the country. We are referring to nothing but education and skill training. The statistics will tell you why we cannot afford to ignore this sector. Of India’s 1.2 bn population, 65% is under the age of 35 years. And in fact, 54% of the population is under the age of 25 years. It must be noted that in both- absolute and percentage terms- these numbers are the highest. In other words, India is set to have the highest working population in the coming times. A huge work force bodes well for the economy. But only if it is educated and skilled!

Though India’s enrolment rate is robust at 96% for entering primary schools, the story then on is not very encouraging. Only 20% of the population tends to complete primary education. The number for secondary and tertiary education dives down to 1.3% and 3.1%, respectively. The gross enrolment rate of 13.5% for higher education is among the lowest in the world. This means that a huge chunk of young populations enters the workforce with poor education and skill sets. How can such an unskilled workforce translate into a democratic dividend? It is because of these reasons that in recent years, policymakers have started laying great emphasis on education and skill development. The National Skill Development Mission (NSDC) has set a target of skilling 500 million people by 2022. This is indeed a mammoth task and will require public-private partnerships. Due to the large-scale poverty in the country the government has made education free, a constitutional right. Thou gh the government spends about Rs 5,000-6,000 per student for 10 years or more, an additional amount needs be spent on skill development. This could help make many unemployed youth employable.

JC Penny – Integrated Strategy

 

This piece of video is gold from Fortune Brainstorm Tech. 
 
Its less than 5 minutes but shows the thinking behind the integrated strategy that Ron Johnson is carving out at JC Penny.
 
For a bit of a background. Ron Johnson worked at Target and was picked by Steve Jobs to lead the retail strategy for Apple. In 10 years he made Apple Stores the most profitable and the highest sales per square foot stores for any retail operation beating even many premium brands.
 
Ron moves to JC Penny, a discount retailer in the US as the CEO. The first step he takes is to remove all kinds of promotions from the shop, 540 a year and move to a everyday low price strategy. The rest of the stuff he talks on the video connects to that core pricing strategy.

The Empty Chair

Forbes has a good story on Jeff Bezos of Amazon.com. The one theme which came out strongly was Bezos’s focus on the customer. And he uses a fantastic strategy in my opinion for that.

Field Of Empty Chairs

Jeff Bezos’ managers at Amazon find him formidable enough. But the figure that overwhelms their lives goes by the internal nickname “the empty chair.” Bezos periodically leaves one seat open at a conference table and informs all attendees that they should consider that seat occupied by their customer, “the most important person in the room.”

If the empty chair is the ultimate boss at Amazon, then Bezos is its billionaire enforcer, the guardian of what he calls the “culture of metrics” that tries to give that inanimate object a loud, clear voice. Amazon tracks its performance against about 500 measurable goals. Nearly 80% relate to customer objectives. Some Amazonians try to reduce out-of-stock merchandise. Others race to build a bigger library of downloadable movies. Intricate algorithms turn one group of shoppers’ past habits into custom recommendations for new customers. Hourly bestseller lists identify what’s hot. Weekly reviews keep track of who is on course—and where corrective attention is needed.

I this is an extremely powerful metaphor to use and a very good one to use too. As Drucker reminded us, “the business of a company is to create a customer” and to do that you need to know how you are performing for the customer.

I think this is even more important in the social sector. If you are working for families or children or aged people or disabled or inner city youth or homeless or anything else to be able to leave a empty chair in meetings as a metaphor and continue to focus on that is quite important. In the myriad number of decisions that we make everyday and the effect of the now and urgent on our thinking its so easy to forget whom we are trying to make a difference for and our mission.

The empty chair is a good metaphor for that.

Social Entrepreneurship needs good management like anything else

Akula launched SKS Microfinance in my home city of Hyderabad, India and grew it into one of the biggest lenders. In recent time SKS came under the microscope for aggressive debt collection techniques which lead to farmer’s suicides.

I always viewed micro finance with skepticism in the sense that not every poor person can become an entrepreneur with a micro loan and make money to get out of poverty.  Every single developed country and developing countries like China and previously Korea etc moved their citizens out of poverty through jobs and mainly manufacturing jobs. History tells us that especially for the size of populations in India, Bangladesh or African countries that is the only way out.

Akula talks here about his learnings and wants to help social entrepreneurs.

Other than the first round of 3Cs I propounded earlier for microfinance and social entrepreneurship – access to capital, dealing with capacities and costs, the new 3Cs are vital for social enterprises,” Akula said. Asked by audience members on what were the key mistakes he made at SKS, he skirted a direct answer, saying, “I just did not focus on the three Cs: did not focus on culture, code of conduct and control.”

Well, the main thing is that as he said he cannot be naive and run a large organisation. Any organisation whether it be government, not for profit, social enterprise or the private sector need good management. Ask Drucker.

Infact, as Drucker argued that for organisations in the social sector which do not have a bottom line like for profit companies they need more management and not less. Akula should start reading Drucker and others and learn from the history of the last 100 hundred years like all other people who work in the social sector.