Greetings!Hello and welcome to our April newsletter - a slightly longer gap than planned from our last edition. However we hope you will find this informative and useful nonetheless. If there is anything else you would like to see or there are comments you would like to make, then please don't hesitate to get in touch. In this series of newsletters we don't want to talk about ourselves and our achievements, but would rather try to help and inform you. We will, therefore, be looking at new ideas, or old ideas that have gained new importance (at least in our opinion). Also, if you found this useful you might enjoy keeping an eye on our new blog, where ideas and information will be posted more regularly. You can also find previous newsletters in our archive and even follow us on Twitter.If there is anything you don't like please tell us. If you enjoy it then do please forward on to anyone who might find this useful too. Good ideas are for spreading. |
The Morecambe and Previn Log - Start Using it Now!
|  There is one excellent tool we would like to recommend to you. Those who have known me a while will have probably heard me talk about it already, but the need for it seems to keep on growing. You won't encounter it on any PRINCE2 or similar course (at least not yet) and we think that's a shame. It's called the Morecambe and Previn log. It is a tool I created after repeatedly grappling with what I call the "best practice paradox".
You
might first just care to remind yourself on YouTubeof this classic sketch.
The
"best
practice paradox" is a phenomenon we regularly observe where
companies implement best practice approaches and find that things do not improve
and, paradoxically, often become even worse. A simple technique
is to look for implementations that meet the test of "all the right
notes being played, but not necessarily in the right order". In
these cases it is not a matter of throwing everything out and starting
all over - but looking for ways to rearrange the notes into the right
order.
All too often this is a governance problem and people are
focusing so much on the best practice boxes that need to be ticked that
they forget to apply common sense. In other cases systems are
implemented with such vigour and rigour that people are unable to apply
common sense or lose all motivation to try. In yet other cases
companies have tried to apply every single component of every single
process in every single part of the operation and this has led to a
complete overload on the staff and a serious outbreak of Morecambe and
Previn events.
If you would like to know more about ensuring the right notes do get played in the right order then please get in touch.
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Stakeholder Mapping - Finding your Champions
|  Previously we have looked at the generic approach to managing your stakeholders. Now we will turn our
attention to an Energy vs. Commitment matrix which is a really important tool. With this you plot the
individual stakeholders and stakeholder groups against these criteria -
their commitment to you change / programme and their natural energy for
communicating and acting - which gives us four groups: Blockers - these are ones to watch as their high energy
makes them likely to communicate widely and act vigourously. Their low
commitment to your change affects what they say and do, which makes them
likely to land up standing in your way. Champions -
why do we never seem to have enough of these? The same high energy as
your Blockers but committed to your change. Look after these
stakeholders when you find them. Preachers -
are committed to your change and also may talk a lot a lot about it, but their low
energy means they are unlikely to take much other action. Sleepers -
well the hint is in the name. They are not really committed to your
change and don't have the energy to do anything about it or talk about
it. Unless you know they are in this quadrant purely because they don't understand what is
coming (and therefore might move to another quadrant when they find out)
you don't need to exert too much time or effort looking after them. As we often say, the key to using these models is not just doing the
analysis, but actually doing something active with the results. When
you find Blockers it may be their low commitment is based on
misunderstandings or fear and uncertainty. We have found many cases
where it's possible to engage these people and turn them into
Champions. If not, it is important to find ways to counteract the
communications and actions of these people (particularly if they have
positions of power and/or influence). Stakeholder communication links back effectively to Kotter's 8 step approach- in particular, step 1 of "creating a sense of urgency"
and step 2 "building a powerful guiding coalition". And don't forget,
the earlier you start these activities the better
One final point, this is an activity that should start as early as possible and carry right on through the programme or project. Perceptions change, external events make an impact, people change roles and come and go. There is no such thing as a static stakeholder map.
If you would like to discuss any aspect of stakeholder management don't hesitate to contact us.
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EasyJet - Competing with Creative Pricing
|  At a time when EasyJet seems to be making the headlines on account of pending legal action by Stelios (Sir Stelios Haji-Ioannou - the airline's founder) it seemed a good time to look at some of the things done well by the company. While SouthWest Airlinesin the USA was the true pioneer of the low cost airline market - EasyJet is far better known in Europe. In 1987 the barriers to entry began to be removed as a 10 year EU reform process dismantled the monopoly of state flag-carrier airlines. It is worth noting that this process started in 1978 in the US.
There are so many angles we could take on this long story (starting with 2 planes in 1995) - we would like to focus on pricing though. Often neglected in comparison to creative advertising, high profile court cases and the flamboyant Stelios; but fundamental to the business model in our view. While EasyJet did a whole range of things to ensure they had much lower costs than competitors like BA they could have just followed the same old model, but done it cheaper. However EasyJet did a number of significant things differently from the traditional players.
Single price- traditional airlines typically use various classes to support various prices (based on dangerous assumptions like "business travellers are price-insensitive"). EasyJet has a single class (which also means one seat size and one cabin crew team for all). At any point in time all seats are priced equally and also priced one-way. There are also no other factors such as a Saturday night stay to influence the price.
Charging for frills - traditional airlines bundle all sorts of extras within the price to support and justify what is being charged. The EasyJet model starts with a low price and makes a charge for almost any additional activity (early boarding, food, drinks, checking in bags, booking on the phone instead of online, using your credit card etc.). In fact it is this charging and its profit contribution that appears to be key in the court case mentioned.
No last minute deals- traditional airlines would sell of high price tickets first and then, having gauged demand, decide how to discount the remaining tickets. EasyJet start with the cheap tickets early and the price goes up nearer the time and as the planes fill up. With direct control over its sales (internet and call centre but no travel agents) EasyJet can monitor and modify its pricing extremely rapidly to reflect demand for tickets. Actually we slightly over-simplify the picture as traditional airlines would also offer advance booking discounts - but doing away with the last minute deals creates a sense of urgency early on for the price sensitive.
One really important theory around this is that of "marginal cost pricing". The traditional view for an airline was to look at (and try to charge) the average and acceptable cost per passenger (the assumption of business passengers being price-insensitive as a key point to acceptability). Research indicates that under the traditional model planes flew at about 55% load factor (%age of available sits filled). With a marginal cost pricing model, once you are beyond a certain load factor the extra (or marginal) cost of 1 more passenger can be very low (particularly when they are paying for their food, drink and baggage handling) and a profit can be made on a £15 fare. Unthinkable in the old model. So a double whammy to EasyJet, their low costs mean they hit break-even at a lower load factor, but their efficiency means they tend to fly at a higher load factor than their traditional competitors. Albeit the game has change somewhat and the traditional players do not lag behind so far in load factor terms.
So look to your own market - can you use marginal cost pricing to your benefit? Do your competitors have a pricing scheme that really benefits them rather than their customers? Have your competitors made false assumptions about the price sensitivity of their customers?
We hope you found this story inspiring, informative and enjoyable. We will carry some more in the future, if you know of a good story or even have one involving your own organisation that could help our readers then do get in contact.
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Thanks for your time and we hope you have enjoyed reading this edition. If you have found it useful please tell your friends, if you have not, or would like to see anything else discussed then please tell us. Please keep an eye on our blog and get involved in the discussions!! Until the next time....... Yours Sincerely, 
Peter Stansbury
Managing Director
Stansburys Ltd
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Working with Wicked Problems
|  | Horst Rittel andMelving Webber appear to have coined the phrase in the 60's and this view on problem definition and problem solving has been developed by Keith Grint amongst others. Looking at the uncertainty and need for collaboration there are three problem types:
1. Critical Problems
Low
levels of uncertainty, little need for collaboration but swift action
required. Typically suited to command and control approaches.
2. Tame problems
Mid
levels of uncertainty and collaborative approaches need. These
tend to be amenable to planning and probably form the majority of
problems addressed through classic project management.
3. Wicked problems High levels
of uncertainty and high levels of collaboration needed. Further
learning and distributed leadership are required to resolve. Large
business transformations would often fall in here.
Laurence Peter (of Peter Principle fame) gives a valuable viewpoint:
"Some problems are so complex that you have to be highly intelligent and well informed just to be undecided about them."
Focusing on the Wicked there is another view that gives 10 factors that define a Wicked Problem:
- There is no definitive formulation of a wicked problem.
- Wicked problems have no stopping rule.
- Solutions to wicked problems are not true-or-false, but better or worse.
- There is no immediate and no ultimate test of a solution to a wicked problem.
- Every solution to a wicked problem is a "one-shot operation";
because there is no opportunity to learn by trial-and-error, every
attempt counts significantly.
- Wicked problems do not have an enumerable (or an exhaustively
describable) set of potential solutions, nor is there a well-described
set of permissible operations that may be incorporated into the plan.
- Every wicked problem is essentially unique.
- Every wicked problem can be considered to be a symptom of another problem.
- The existence of a discrepancy representing a wicked problem can be
explained in numerous ways. The choice of explanation determines the
nature of the problem's resolution.
- The planner has no right to be wrong (planners are liable for the consequences of the actions they generate).
Critical Problems often need a command and control approach with quick decision making.
At
the other extreme your Wicked Problems need leadership and
teams who can work with the level of complexity and ambiguity.
It is rare to find people who can operate really effectively in these different areas.
To find out more about dealing with Wicked Problems don't hesitate to contact us.
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