brett boston

Business Trust – A transactional model

Establishing business trust is an iterative journey between two or more organizations. Each party is continuously asking and re-asking itself the following questions:

How do I feel about your stated and unstated motives?
Do I believe you are stating your true goals and intentions?
Do I believe you are seeking an outcome that benefits me?
Do I disagree with your intended or perceived gains and outcomes?

Do I believe you understand my needs?
Do I believe your stated actions coincide with achieving my goals?
Do I believe your words and actions to be for my benefit, our benefit, or your benefit?

Do I believe you have the skill and ability to do what you say you can?
Are your successes verifiable?
How do I confirm your stated competency and success?
Do I believe you will deliver on your commitments?

Can I foretell how you will respond in a given situation (positively or negatively)?
Can I easily guess what you will do in any given situation?Are you consistent in your responses and actions?
Are your reactions consistent when facing similar situations?

Do you do what you say you will?
What does your track record indicate?
How do you handle failure or non-performance?

Data shows that we do not expect 100% performance as a requirement for giving our trust. We know that there will be disappointments and can forgive. Doing what you say you will, about 8 times out of 10, is an acceptable track record for most business partners.

© Brett Boston 2022. All rights reserved.

brett boston

Innovative solutions for “encouraging” walkable cities

If you want to be a walk-able city you have to provide more information for walkers. This involves standardizing signage and providing visitor and residents a sense of the distance to the destination.

I recall being in London on a business trip with an extra day to spend.  After visiting some new sites, I deciding to go to 221 B Baker Street. This was in the 1990 (pre-smart phone for the youngsters reading this) – the “dark ages” for having up-to-date information and digital anything. Paper maps were the only form of navigation. Getting there involved reading a stylized paper city map of London.  The mapmakers had not seen fit to include 221 B Baker Street, which made for extra challenges.

After a 3-mile walk (that only appeared as inches on the paper map) I arrived at the correct street address.  Unfortunately, this was before anyone decided to erect a museum or put a plaque on the wall indicating the world-famous detective that once had a residence here. The problem, according to Wikipedia, is that the street numbers for the location of the residence were changed in the 1930s. The block of odd numbers from 215 to 229 was assigned to an Art Deco building known as Abbey House, constructed in 1932 for the Abbey Road Building Society, which the society and its successor (which subsequently became Abbey National plc) occupied until 2002. The residence of Sherlock Holmes was not recognized as such.  It is now.

So without any map application or a smart phone, and without any Internet information for the change in address, I arrived at the correct “address”, but was not at the correct “location”.  A long trek that came up short and deprived me of a visit to my favorite detective’s museum. Good exercise, but a disappointment.

Every city in the world has a similar problem for visitors.  How do city employees recognize all the locations that visitors might be interested in? Further, how do they provide signage the helps create a walk-able city? Check out this new solution for signage; one that helps walkers enjoy the visit.

Governance, Group Proces

Inter-organizational teams are the new norm in addressing complex problems.

Organizations have internally addressed the problems they can tackle alone, and are now reaching beyond their organizational structure to address problems for which they have only partial control or impact.  This means participating in inter-organization bodies with the mission to solve the problem by working collaboratively across partner organizations to create solutions.

Inter-organization problem solving creates huge problems for traditional managers and management theory.

Loss of Control
It is uncomfortable for organizations and managers to give up control and decision-making to inter-organizational bodies.  Establishing business trust is THE essential element for real progress and support for the work of inter-organizational team’s to be successfully implemented.

Prioritizing Resources
Participation on inter-organizational teams requires that resources be offered up to the team, and people’s time is only the start. Resources go beyond meeting participation and include redirecting each participating organization’s resources to the effort: information and data sharing, re-prioritization of existing effort, communication, and changes to strategy are always part of the mix.

Decision-making and Governance
Determining decision-making models, beyond pure consensus is a new area in management theory.  The key questions is: “If we can’t reach 100% consensus, then what level of agreement is necessary for you to support the solution if outvoted?”

Delegation of Authority to Representatives
Participation in inter-organizational teams requires delegation of authority to (often) lower level managers who will then have the authority to commit the resources and name of the organization to a solution.

Complexity of Communication
Communicating decisions and progress back to the organization for work that is outside the organization’s structure is not a process that now exists.  Until inter-organizational teams are formally viewed as part of the organization’s business model, they will remain in a communication gray area with their work effort not well understood by the organization.

Opinion, Scenario Planning, Strategic Thinking

Are rising gasoline prices due to lower demand?

A recent article in BusinessWeek, “Rising Gas Prices mot Demand-driven” makes the case that lower demand for gasoline is the culprit causing the recent price to climb. Now that is counterintuitive to all those that studied economics of supply and demand. Microeconomics teaches that when demand drops, prices should drop.

Looks like higher prices are caused by the “crack spread”, the cost for refineries to buy the oil, crack it into petroleum product, and sell it. Refineries are apparently closing down, due to the economics of the crack spread, which pinches the supply side of the equations and keeps prices high; and in fact is driving them higher. The current predictions are that the US will see $4 per gallon by May at a time we are using less. This argument implies that the economic constraints within the petroleum market are now working counter to supply and demand. Or more serious, the market economic model for petroleum is broken.

What are some implications?

A very disturbing scenario is $4 per gallon is considered by some industry watchers as the place where the national economies can stall – the price for energy reaches such a high cost that manufacturing, travel, and power production are negatively affected, reducing or reversing the recovery underway.

Another more troubling scenario is that Petroleum manufacturers are creating their own price points by restricting supply (closing refineries) and thus elevating prices. We can be sure that a case will be made that they are “artificially” keeping prices high to make sure profits remain high.

The net result of $4 gasoline is that demand will continue to drop, setting off another round of counter to supply and demand economic price increases. If energy is indeed market-driven, then we may be seeing fundamental changes occurring in the petroleum sector that will have cataclysmic and rapid changes on how the US public views and consumes energy.

The implication for broad sectors of the economy – automotive, alternative fuels, manufacturing – are clear. If these sectors follow observed historical trends when facing sharp increases in petroleum pricing, we can expect a rapid movement to high fuel mileage vehicles, demand for more domestic drilling, and growth in alternative energy production. This cyclic dance has been going on since the OPEC shockwave in the 70’s. Prices go up, people make consumption changes to reduce demand. Alternative energy sources start a mini-boom. Then prices “miraculously” go down. But if the “crack spread” has in fact shifted and the economics of refining petroleum has changed, we will not see prices below $4 as a consequence of reduced demand. Pricing will continue to rise in the face of falling US demand.

A lack of a consensus on a national energy policy, and the ongoing politicization of the issue, has prevented objective dialogue and discussion on the US supply and demand for petroleum. Cheap energy is and always has been, the main driver of the US economic miracle. Expect turmoil, rapid price increases, and gas-bag punditry on the solutions. You should be use to it by now. What you shouldn’t expect is a rational discussion or national policy aimed at keeping America competitive by transition from a petroleum-based economy to an economy that can sustain itself for another century or two.

brett boston

The Strategic Advantage of Culture

A recent article in Forbes (link below) covers a topic I discuss almost weekly with clients — the competitive advantage of culture.

Cultures like Google and Apple are renowned for creating competitive advantage through fostering creativity and great new product offerings.

One often overlooked aspect of having a fantastic culture is the value to the company of recruitment and retention. Many of my clients bemoan the fact that they cannot offer competitive salaries – particularly those in the public and non-profit sectors – and therefore lose-out on the “best” talent in the market.  Additionally, many feel that low salaries cause a high turnover rate among their best employees leading to a talent-brain-drain within the organization.

During the recent recession, lower paying companies have been able to hire extra-ordinary talent.  But they fear, with good cause, that these same people will be heading to other higher paying opportunities once the job market improves.

The competitive component that most organizations are missing out on is the quality of their culture.  Working within a fantastic culture is one of the key strategies for retention of great talent.  Articulating and carefully cultivating a great culture can help all companies hire, develop and retain an above average, talented workforce.

Facilitation, Group Process, Strategic Thinking

Are groups really able to “think” better than individuals?

A recent article in Fast Company says no, or probably not, or you decide…  Great article and thought-provoking for those of us that gather ideas from smart people and help craft tangible business strategies.

In my strategy work, I use decision support tools that allow participants to give simultaneous and anonymous comments using many-to-many networked computers.  This totally avoids the crowd-pleasing mentality that inhibits good ideas, as mentioned in the article.  Often, WHO says something is more important than the content value of the idea itself.  The “who said it” often shuts down the creativity of the group as much as critical challenges to ideas.

The jury is still out, and there are hundreds of studies that show better results for group process over individual ideas than those cited in the article below.  I firmly believe that anonymous, technology-assisted group process produces far superior outcomes than produced by people working alone, particularly when the strategy or issue is complex.  Effective group idea triggering consistently leads to superior strategies and solutions.

Reminds me of the old African proverb…. “If you want to go fast, go alone.  If you want to go far, go together.