Saving our way to prosperity… Is this an Oxymoron?

4 08 2010

You can also get an audio version of this podcast here: Listen!

Have you noticed for the last few months that the phrase “Efficiency Savings” seems to crop up in whichever newspaper or magazine you read, or on any TV news show that you watch? Governments, Local Authorities, and Private Companies all seem focused on achieving savings, in some case up to 40% in certain areas. Unsurprisingly, reaction from customers and employees is a mixture of doubt and fear about what it means for them.

I guess this is understandable. The economic downturn has forced us all to reconsider what we do, and to make do with less… but sometimes the result isn’t quite what we expect.

In my wide experience as a consultant I have heard “Efficiency Savings” used many, many times, and the phrase is abused time and again. Greater efficiency means either achieving more output with the same resources, or the same output with less resources, and the latter is what is usually inferred when the phrase “Efficiency Savings” is used. But in most cases I have found that output also drops as well as input and this inevitably harms effectiveness. I call this phenomena “Saving our way to prosperity” and it constantly amazes me how many management teams believe it will work. But the reality is that this type of cost-cutting is unsustainable – short term cost saving without re-inventing the way things are done only stores up problems for the future. I’ll give you an example.

A client I worked with needed to make “efficiency savings” to satisfy shareholder demands for greater short-term profitability because they wanted to sell the business – and greater profit means higher shareholder value. So it made an assumption that if field service engineer calls were increased from 4 calls per day to 5 calls per day then this 25% improvement would allow them to make 20% reduction in headcount – simple logic – and after all it was only one extra service call per engineer per day…! So the board instructed the management team to make the savings and crack the whip harder to make sure that service engineers hit their new targets – they then sold the business for an increased price and were very happy. A great result for the exiting shareholders, but for the company the result was disaster – overworked engineers could’nt hit their new call targets without considerable overtime, and service parts stock had not been increased to reflect the additional calls so they found they could’nt fix equipment even when they got to customers sites, so re-calls needed to be added; service-call lead-time increased from 1-2 days to over 2 weeks; when challenged by customers about the delays service engineers blamed management for the issues; dissatisfied customers quickly raised complaints; customer service staff became inundated with complaints and repeat calls from customers and the firm lost key service contracts; and the predicted cost savings never materialised – overtime pay increased dramatically, cash collection took longer, whilst turnover dropped by 10% and staff turnover in the department increased to 200% per annum leading to big unexpected and unbudgeted additional recruitment and training costs. The new business owners soon found they had to re-invent the way things were done, and it took 18 months of hard work to turn around the situation and get employees and customers back on board again.

So when you look at making efficiency savings make sure that you plan for success by engaging employees and customers in co-creating the new processes that will deliver savings whilst simultaneously increasing customer satisfaction; be authentic in staying true to your core purpose; and be creative in using Design Thinking to re-invent how you do things.  The result CAN be lower costs combined with long-term sustainable growth and increased profitability – the true way to future prosperity….

I would love to hear your own examples of companies that got this either right or wrong. Leave a comment below.

If you would like to discuss how I can help you make your efficiency savings sustainable then please get in touch.

James Rock – MD and Chief Business Designer





The value of being Authentic…

14 07 2010

You can also get an audio version of this podcast here: Listen!

I had an interesting meeting with a CEO this week. Our discussion focused on his desire to develop his business Authentically but he was worried about the opinions of significant and vocal shareholders who are constantly pushing him for short-term profitability.  He felt that board meetings had recently become something of a battle zone, and despite a track record of success he felt both insecure and angry that these shareholders are taking such a short-term perspective. This isn’t a new phenomenon of course, its a well known fact in publicly quoted companies, and is often one of the key reasons for under-investment.

Our conversation reminded me of an interview I heard recently with the owner of a Japanese family business that had been trading for more than 100 years. He attributed the long term success of the business to a philosophy of “growing like an oak tree not like a water melon….” He knew that slow organic growth made for a strong business with “A Heart of Oak”. He had seen many businesses that had pushed for aggressive and acquisitive growth that had failed or been taken over and integrated into other companies. I thought it was a good lesson for sustainable business.

But the Oak Tree metaphor didn’t really help my client… he could see the long term benefits, but he needed help to convince his shareholders that adopting an authentic approach can deliver increased shareholder value in the short-term too.  So we sat down and brainstormed just some of the benefits, which include:-

Increased Sales

  • increasingly customers seek to do business with sustainable companies, and with those that fulfill a social need;
  • customers of authentic businesses tend to tell their family and friends and these word-of-mouth recommendations results in more business; and
  • happy customers keep returning – so customer retention is higher.

Reduced Operating Costs

  • a true sense of purpose helps everyone focus on core competence, and reducing distracting activities;
  • marketing spend is lower since word-of-mouth overtakes advertising and special offers as the principal source of acquiring new customers;
  • staff turnover is reduced – resulting in lower recruitment and training costs;
  • staff feel more rewarded – since money isn’t their key motivator – resulting in greater productivity; and
  • suppliers are more helpful since the respect you show earns their loyalty – they go that extra mile to deliver on time, help develop new products, and find joint ways to reduce total costs.

Improved Shareholder Value

  • sustainable growth and steady contracts leads to increased P/E ratios;
  • increased profitability is multiplied by the higher P/E ratios to deliver higher shareholder value; and
  • business success attracts more potential buyers – increasing competitiveness in the buy cycle.

The above benefits now need to be quantified, but the CEO feels reassured that he can justify investing in developing an Authentic business strategy, and adopting Authentic leadership across the organisation… Is this an opportunity for you too?

Why not get in touch for an exploratory chat about the benefits that your organisation could get from Authenticity…

James Rock

Chief Business Designer – CULTIVAR Consulting

Partner – AUTHENTICIS Consulting Network





The Art of Business Design 2.0

1 04 2010

I recently published a free eBook on the subject covering my philosophy of Authentic Design Thinking.

This covers Design Thinking and Authenticity, and how I believe that these are both crucial important elements in designing and/or redesigning business models that cope with the miriad of challenges of today, and position businesses to be the leading companies of tomorrow.

You can view and download your FREE copy of this book from Slideshare.net – just follow this link:-

The Art of Business Design 2.0

Don’t forget to share your comments about this subject below.

If you would like to discuss it in more detail and how it can apply to your business then contact me…

James Rock, Chief Business Designer – CULTIVAR Consulting





Inspired Thinking

29 03 2010

You can also get an audio version of this podcast here: LISTEN

If design schools are being hailed as the new business schools then perhaps we should be taking our inspiration from great designers instead of business gurus.

I was given a fantastic book for my recent birthday – its called DESIGN NOW! and is published by that great publisher of art books Taschen. I recommend it strongly…

DESIGN NOW! by TASCHEN Books

The book contains short biographies of todays top contemporary designers – global leaders in the field of cutting edge design, and covers some of their very best work.  Reading it is an inspiration, and some quotes from the top designers are worth reference – so here are my top 10 quotes that I think will inspire your Design Thinking :-

1. Werner Aisslinger – “design is creating the life of tomorrow – for me the most exciting profession”

2. Ronan and Erwan Bouroullec – “our work frequently starts with an encounter”

3. Continuum – “we believe that design creates a relationship – the point of contact is an experience”

4. Stefan Diez – “one part of our job is making decisions between options – finding out what these are is the other part”

5. Tom Dixon – “I like to try to approach each project as a naive outsider… I work better when I am not encumbered by preconceptions”

6. James Dyson – “good design is about making something better than anything else that has gone before it”

7. Danny Venlet – “design is more than form and function, its a way of life”

8. Jonathan Ive – “we try to design and develop simple solutions for extremely complex problems”

9. Suntae Kim – “things communicate with us. I listen to, observe, and rearrange them”

10. Karim Rashid – “design is no longer a word or profession, it is a philosophy – a doctrine – a way of living – a modus operandi – a way of being – and will one day be seamless with existence”

I suggest you refer to these quotations as a source of inspiration when you are re-thinking about your business, its purpose, and how you can get more from it – in other words – think laterally…

For more information about The Art of Business Design, Authenticity, and Design Thinking contact me: CULTIVAR Consulting





Design Thinking and The Art of Business Design

3 03 2010

You can also get an audio version of this blogpost here: – Listen!

I have heard it said over the last year or so that Design Schools are the new Business Schools. Protagonists argue that this is because old school businesses are out-of-date, which is consistent with the “Rethink, Redesign, Rebuild” message coming from global business leaders at this years WEF Annual Meeting in Davos.

This trend will lead towards the growing application of Design Thinking in business design. This is a process for practical, creative resolution of problems or issues that looks for an improved future result. In organization and management theory, design thinking forms part of the Architecture/Design/Anthropology (A/D/A) paradigm, which characterizes innovative, human-centered enterprises. This paradigm also focuses on a collaborative and iterative style of work and an abductive mode of thinking, compared to practices associated with the more traditional Mathematics/Economics/Psychology (M/E/P) management paradigm.

These principles are consistent with the adoption of Authenticity as a fundamental philosophy and culture around which a business can be designed in pursuit of its declared purpose. And by combining Design Thinking with Authenticity I believe we are seeing the rise of The Art of Business Design – creating the Avant Garde businesses of today, and most probably the successful ones of tomorrow.

However, businesses also need an architecture to provide structure and form, but by their very nature this architecture also need to be amorphous to a degree – allowing flexibility to bend to changing economic conditions, competition, emergence of new technologies, etc. So I advocate designing businesses and organisations using the “Authentic Business Architecture” – shown below: –

Copyright : Cultivar Consulting 2010

This Amoeba like architecture contains the essential elements of structure that are needed for a business to operate, but it recognises that when a business changes shape, then the constituent elements will all be affected to some degree, and need to flex accordingly.

So Business Design needs to be holistic, authentic, and abductive if it seeks to be creative and innovative in delivering its purpose effectively.

For more information about The Art of Business Design, Authenticity, and Design Thinking contact me : Cultivar Consulting





Stuff We Believe In – Howies philosophy for business…

1 02 2010

You can also get an audio version of this blogpost here: – Listen!

Dave Hieatt - Co-founder of Howies | photo courtesy of Mike Lusmore see: http://www.mikelusmore.com

Being Authentic means having a greater purpose than making money. This is what drove Dave Hieatt, founder of Howies clothing, to give up a career in advertising and set up in business doing something he was passionate about. His desire? To make people think about the world we live in. Profits come second – or should that be third, after mountain-biking

I purchased a tee shirt from Howies recently and found a tag which tells customers about their business – I like the  statement below which convinced me to buy more of their products in future – I really empathise with these values :-

Stuff We Believe In…

  • We believe in making stuff that lasts.
  • We believe in good old fashioned service.
  • We believe in sport. We believe in play. We believe in having fun.
  • We believe the environment needs more friends.
  • We believe in making people think.
  • We believe the glass is always half-full.
  • We believe higher quality means lower impact.
  • And we believe tea should always be made in a pot.

It seems to be working – the company grows from strength to strength – 90% of their business is done via their website and catalogue and with minimal advertising – customers keep coming back, and referring family and friends – so Howies must be doing something right.

What do you believe in? Are you doing something that you are truly passionate about? Is the company you work for as Authentic as Howies? If not then why not? You can always talk to me about how myself and my colleagues from Authenticis can help transform your work into something truly motivational.

James Rock – Cultivar Consulting

For more about Howies visit their website : Howies





Being an Authentic Business

10 12 2009

Being an Authentic Business...

Do you know what an Authentic Business is? Have you, like me, found that this is a term increasingly being used in the aftermath of the banking crisis?

I wondered what “Authentic” meant in the context of business and resolved to research it in more detail. I found that there is an increasingly large body of reference work related to Authenticity – and its popularity stems from a return to “real” values and behaviours that people want to see in companies they do business with.

Perhaps the best definition I found was in a book by Neil Crofts, who describes the key principles as: –

  • A purpose beyond profit
  • A purpose that is profoundly held
  • A purpose that is socially and/or environmentally positive
  • Integrity between communication and action
  • Respect for others
  • Sensibility to exploitation of resources and customers
  • A distinct and unique business personality

You can get Neil’s book here:-

Authentic Business – How to create and run your perfect business

You can see Neil talking about Authentic Business in this short video: –



Businesses that operate by these principles seem to be thriving, even through the economic downturn. They are benefiting hugely from growth generated by customers who become fans, keep returning to buy again, and who become brand ambassadors – happy and keen to tell their family, friends and networks about these favourite suppliers. In todays world of word-of-mouth marketing via social media this means that they gain customers without huge marketing expense.

Do you know any of these Authentic Businesses? What do they do that inspires you to keep returning as a customer? How do you tell your family and friends about them? Please let me know by responding to this post so that I can include them in my future research..

many thanks

James Rock

http://www.cultivar.co.uk