Amazon is in town. What’s your next move?

Most Australian’s first connected with Amazon as the disruptive online book retailer sometime in the early 2000s. Amazon re-wrote the standards for print media retail, rendering bricks and mortar book shops obsolete with their formidable ecommerce supply chain. Success in books enabled Amazon to spread like wildfire, infiltrating every corner of the online market place. In February 2018, Amazon’s market capitalization surpassed Microsoft, leaving it ranked number three on the US Stock Exchange behind Apple and Alphabet, A.K.A Google (Balakrishnan 2018). In late 2017, Amazon entered the Australian marketplace and many Australian retailers are no doubt asking, what does this mean for me? Gerry Harvey, chairman of Harvey Norman was quoted as saying "Amazon is the worst possible corporate citizen to have in our midst. There's not a retailer in the world, practically, that likes Amazon" (Ming 2017).

Does Gerry have a point? Does Amazon’s entry into Australia really spell apocalypse for many Australian retailers? Or will Amazon’s entry invigorate Australian retail, providing a platform for new and existing businesses to work as strategic partners? Enabling the industry to ideate, innovate and further differentiate offers for it’s customers?

How does one respond when such a formidable organisation is added to an environment? Do you make a new friend? Partner with Amazon and look for common value. Do you fight? Go head to head with Amazon, providing an equivalent product or service and hope to keep your market share? Do you entrench? Back your differentiated model and bank on the fact that your offering can grow and thrive in the Amazon world? Or do you adapt? Look at how you can change what you are doing today and re-invigorate your competitive advantage? Whilst some might be taking the approach to just wait and see, many would advise that a more proactive approach is needed. As stated by Churchill (1948), “those who fail to learn from history are doomed to repeat it”.

This article will explore the history of Amazon and the strategies it has adopted to become the success it is today. It will reflect on strategies adopted by companies in the United States and assess how these strategies performed in a world with Amazon. It will identify similar Australian entities and strategies they can adopt to remain competitive. Finally, it will explore some of Amazon’s broader objectives and how their entry into Australia is likely to play a role in delivery of these objectives.

What do we know about Amazon?

Amazon have written a completely new play book on both “the long game” and “how retail can and should be executed”. These items complement each other perfectly and empower Amazon with a unique ability to create value for customers where others cannot. When Amazon say they are not focused on profits, it’s not just talk, they truly mean it. Amazon have a focus on growing market-share with little concern for profitability. Their core customer offering has three pillars:

1.       Low prices

2.       Prompt and Reliable Delivery

3.       Vast Selection

(McGinn 2014; Magner 2017)

This genuine customer focus drives fast and sustainable growth in a manner that profit doesn’t have to be a key focus. Whilst many may think, not making profit is not viable, they should note there is a key difference between solvency and profit. Amazon’s cash flow is incredibly strong and because they keep expanding their market share, they continue to attract suppliers and investors to support and sustain their business model. The other important thing to note is Amazon are not sacrificing profit through negligence, they are opting to take these profits and re-invest in their business through activities like research and development. This re-investment ultimately drives greater opportunities to create new revenue and win market share from other competitors. When we look at Amazon’s history, they started as a book retailer and bit by bit moved into other products, then services and nowadays content and product generation. As Amazon has moved into each one of these markets it has had a ripple effect to varying degrees on all members within ecosystem. Figure 1 below illustrates an overview of Amazon’s history:

figure 1 – History of Amazon – (Sherman 2015; Hall 2018; Nasdaq 2018)

Challenges with Amazon

One thing to keep in mind is Amazon don’t necessarily use the same rule book that you do. When determining your strategic response, it will pay to be aware of some of the historic challenges other companies have experienced:

Amazon can always find a way to sell something cheaper – Stephen Herbert from X Fire Paint ball explained a situation where his business was selling on Amazon and  he experienced something he described as “Amazon did an end run around us” (When Platforms Attack 2015). After a while Amazon went to X Fires suppliers and started selling the same products on Amazon, at a lower price than X Fire. What is more concerning is that Amazon’s price was not only lower than X-Fire, it was also lower than the manufacturers minimum advertised price. This holds true to Amazon’s philosophy of putting market share before profit and demonstrates their willingness to play the long game and starve competitors of revenue.

Amazon are not ashamed to replicate your offering - A study by Feng Zhu and Qihong Liu of Harvard Business School, found that in a 10-month period 3% of products that were posted on Amazon had knock off products created by Amazon (When Platforms Attack 2015). The knock off products were not necessarily better or cheaper, but when a customer searched for products of this category, the Amazon knock off was always promoted ahead of the original items in the search results.

Not selling too Amazon, doesn’t guarantee your goods won’t be sold on Amazon - For the longest time, Nike was resisting selling their products on Amazon. However, the state of retail in America created some factors that took this decision out of Nike’s hands. Liquidation sales from a large volume of failing department stores created a channel for Nike’s goods to find their way onto Amazon. This enabled Amazon to re-sell Nike product without any arrangements with Nike themselves. The situation put pressure on Nike’s revenue and forced them to come to the table with Amazon and strike up a deal during 2017 (Stevens & Germano 2017).

When does it make sense to work with Amazon?

Negativity aside, there are plenty of reasons why partnering with Amazon can be advantageous. It simply depends on where your business sits within it’s maturity cycle and your business’ long-term goals. If you are looking to expand your customer base, selling on Amazon will provide you access to upwards of 180 million shoppers a month in a truly global marketplace. In addition to this, ecommerce is here to stay and if you are yet to establish your online platform, working with a partner like Amazon will not only be more effective, but also quicker and cheaper than going about it yourself (McDougall 2017; Breslin, 2018). For every horror story you hear about Amazon, there are likely one, five, ten or more success stories. To set the context correctly, Amazon should not be viewed as a bad corporate citizen, you simply need to understand your business model and whether Amazon is the right vehicle to help you expedite the achievement of your goals.

As Amazon’s reach is massive and we have over 30 retail sectors we could discuss, for the purpose of this article, we will merely focus on fashion and electronics. Using the decision tree below a selection of varying candidates were chosen from these industries to help paint a picture of what works and what doesn’t:

During 2018 Amazon’s market share in the American fashion and apparel industry is expected to hit 28 billion USD (Peterson 2017). An impressive feat considering that they only sold their first garment in 2002. Amazon’s time in fashion has seen department stores lose significant revenue, brands like Quiksilver closing their US stores (Quiksilver in Ch. 11 2015) and companies like American Apparel and Sports Authority file for bankruptcy (Diakantonis 2016). However, amongst all this chaos there have been retailers that have gone from strength to strength. We’ll now look at why companies like Lululemon and TJ Maxx have been able thrive whilst companies like J.C. Penny have struggled to compete.

Lululemon have been able to differentiate themselves with a cult following for over 10 years now. This is a market segment where people buy a $119 pair of yoga pants to take their dog for a walk and pick up it’s business. Why you ask? Lulu have struck a chord with the health and fitness tribe. This is something that appeals to a vast amount of today’s marketplace, even those who aren’t so healthy or fit. Through high pricing and control of supply channels, Lulu have managed to keep their brand at a desired level of luxury and offer a unique customer experience when customers enter their stores. This tribe is not concerned with the low price, vast selection and fast delivery offered by Amazon. As a result, you won’t find them purchasing Amazon brand yoga pants for a quarter of the price. Lulu is our first example of how to execute the entrench strategy. Use a combination of brand affiliation and control over your supply channels and you will have a tried and tested approach to remain competitive against Amazon. Unfortunately, this level of brand loyalty is not something you build overnight, so in the event companies don’t have it today, they will likely struggle to build it in the next 12 to 24 months.

Lululemon Athletica Stock Price – (Nasdaq 2018)

Next cab of the rank is TJ Maxx who hit’s a very different demographic to Lulu. TJ follow an off-price retail model which consists of selling high quality goods at very low prices. They commonly achieve this by selling garments that are off-season or on run out. The contraction of large entities like Sears has been a benefit to TJ Maxx as it has provided a pipeline of high quality goods being sold at discount prices (Gottfried 2017).

TJX Companies Stock Price – (Nasdaq 2018)

TJ Maxx appeal to a demographic that love the thrift shop experience and this is very difficult to replicate online. Whilst you can get cheap on Amazon, you can’t get the same “hunt the racks for buried treasure” experience that some shopaholics crave in a thrift shop. For that reason, TJ Maxx remains a strong competitor in the marketplace and is a great example of how you can differentiate your customer experience and entrench against a company like Amazon

Kodak, Blackberry and the department stores all have something in common. They were big, they believed it would last forever and they were wrong. As noted by Thomas (2017) “Department stores have been tagged the laggards of retail today” and JC Penny is one of the many players in this position. Giving them the benefit of the doubt, we’ll say they had a strategy and it was to fight Amazon. It was to do exactly what Amazon was doing, but with a lower level of convenience and a less competitive price. What should also be concerning for these chains is that their constant closing of stores and liquidating of inventory plays into the hands of companies like Amazon on TJ Maxx. This gives these companies quality goods at low prices, enabling them to starve stores like JC Penny and Sears of further revenue.

J.C. Penny Stock Price – (Nasdaq 2018)

The facts are simple, market sentiment has shifted to a point where historic levels of bricks and mortar retail are not sustainable. Using this model and choosing to fight Amazon is a losing battle. Your best option is to adapt by slimming down your business and leveraging your existing capabilities coupled with new world technology to identify new revenue opportunities. Unfortunately, J.C. Penny and many other bricks and mortar fashion retailers in the United States are struggling to make this shift.

How can their Australian Counterparts Respond?

Lorna Jane (LJ), ironically another active wear company, can adopt very similar strategy to Lululemon and expect success. LJ has strong brand affiliation and manages this status by controlling it’s physical or digital retail channels. The organization is in the process of expanding it’s global footprint with stores in North America and Europe. LJ also works hard to differentiate itself by releasing “70-100 new products every month” (Fitzsimmons, 2015). As long as LJ can keep their niche market happy, the entrench strategy will be effective in the world of Amazon. A similar company that may have to assess it’s strategy is Michelle Bridge’s One Active. One Active is at a lower price point and likely doesn’t have the same level of customer brand affiliation as a LJ. Additionally, this brand is stocked at low cost shops like Big W, which limit’s One Actives control over it’s retail channels. Fighting or entrenching strategies will not work for One Active. They will need to explore either adapting their offering or partnering with Amazon as a retail channel.

When it comes to low cost fashion and apparel, Australia has a hoard of stores that will be in Amazon’s market share crosshair. Whilst fast fashion outlets like H&M and Uniqlo will weather the storm, stores like Big W, K-Mart and Target all offer a very similar and commoditised value proposition. Remove the decor and you’d be forgiven for not being able to differentiate each of the three retailers. As more Australian’s make the shift from physical to online shopping, these three chains will feel the pinch. They need to adopt an adaption strategy and they need to do it fast. An option for at least one of them could be moving into off-price retail…

The thrift market hasn’t reached it’s potential in the Australia, at least not the way TJ Maxx has managed to thrive in North America. This is likely this is why TJ Maxx has recently entered Australian shores looking to establish a bulk head with 35 Trade Secret outlets (Harris 2017). The closest other example of off-price retailers is the privately owned Direct Factory Outlets (DFO) which has a limited physical presence and no online capability. Big W, or one of the other offenders, have a great opportunity to get ahead of the game. They could start scaling back on their standard operations and converting them in to TJ Maxx style discount stores, targeting areas where DFO doesn’t have a presence. The wave of fashion and apparel liquidation is coming, so the first mover in this space could have a unique opportunity to convert some of their existing outposts in to discount resellers of off-price merchandise. This would enable them to not only maintain market share, but likely grow market share with new customer segments.

Moving into higher end fashion and apparel, our next stop is Myer. We have all been watching the demise of this Australian stalwart and unfortunately Myer still aren’t moving quickly enough to transform their 20th century retail model into something viable. Continuing in this manner will see them follow the same trajectory as Sears and J.C. Penny. As a first port of call, Myer need to scale back their retail floor space and focus solely on products that are exclusive and in demand. Myer can then use the newly vacated retail space to create new revenue streams. An option for this may be partnering with Amazon, offering them knowledge of the Australian landscape and a large bricks and mortar presence. Amazon could start utilizing Myer’s bricks and mortar space to pilot non-competing businesses like Amazon Go or Amazon Prime pickup points. A partnership with Amazon might also offer Myer valuable insights that can be applied to improve their core offering. In the event partnering with Amazon isn’t for Myer, they could look to adapt the left-over floor space, turning it into gyms, child care centres or other non-competing businesses. Whether they partner or adapt Myer need to find a solution that will generate new revenue from their existing assets, whilst not competing with their core offering. As a bonus, additional foot traffic generated by any new businesses will likely generate traffic for the heritage business.

Best Buy is our poster child when it comes to competing with Amazon in the electronics space. They have taken on somewhat of a hybrid strategy that has evolved over time. Initially Best Buy tried to fight Amazon on the price and delivery front. Whilst this had some success, they really made traction when they differentiated their customer service offering and did things that cannot be replicated by a machine (Roose 2017). Looking at Best Buy’s stock price, we see a direct correlation between their performance turnaround and when a series of newly implemented initiatives began making impact. New CEO Hubert Joly, who took over in 2012 and was the catalyst behind a number of these changes. So what can others learn from Best Buy?

Firstly, it’s better to lose money on a sale than give a customer to a competitor. If a customer was in a Best Buy store and asked them to price match Amazon, Best Buy did it. They applied the logic that the customer is here and may buy additional items, either now or in future and that purchase will offset this loss (Roose 2017). Best Buy are also doing their ecommerce well and have a strong online presence, which continues to grow in Amazon’s market place (La Monica 2017).

Best Buy Stock Price – (Nasdaq 2018)

Next, Best Buy have made a genuine investment in the happiness and well being of their staff. Some examples include perks like great discounts on stocked items. As well as keeping staff focused on the customer and not where their next paycheck is coming from by effectively managing restructuring activities. Finally, Best Buy have differentiated themselves by adding services like pre and post sales consulting on electronics purchases. This is something that Amazon see so much value in, they are trying to replicate it (Roose 2017). To summarise the Best Buy approach, they begun by fighting, then adapted parts of their business and service offerings and have now entrenched themselves in the electronics marketplace.

It’s no secret that Amazon creates a constant headache for Office Depot, in 2017 CFO Stephen Hare admitted “Amazon was stealing Business Solutions market share” (Kevin Moffitt - chief digital officer, office depot, inc 2017). Whilst Office Depot may not offer the answer for dealing with Amazon, they can offer some insight into what hasn’t worked. At this stage, Amazon may only have 10% of Office Depot’s market share, (Fitzgerald 2016) but what should concern Office Depot is that their revenue and profit have been effectively flat between 2012 and 2016. This implies that they are not growing and not lowering their operating costs.

Office Depot Stock Price – (Nasdaq 2018)

Adding to these concerns, their past cash cows of printer cartridges, paper and office basics are on the decline in an increasingly digital environment (FitzGerald 2016). It’s a given that Amazon will be able to provide Office Depots current offerings at lower cost and fast delivery, so the writing is on the wall that the flat revenue trend, will likely become a declining revenue trend. One other tactic that Office Depot tried was a failed merger with Staples. Unfortunately for both companies, US regulators blocked this merger in 2016 and Office Depots stock price has continued to fall since (McLaughlin & Harris 2016). Office Depot have applied a fight strategy which is not working for them, they need to adapt or revenues and margins will continue to drop.

How can their Australian Counterparts Respond?

JB Hi Fi (JB), a long-time performer of the Australian Electronics industry, will need to continue it’s Transformational Journey if it is to keep up with Amazon. Adaption is not new to JB who started out as a hi fi retailer and expanded into CDs, then consumer electronics, video games and white goods (JB H-Fi Limited Premium Report 2017). JB can learn a lot from the success of Best Buy and look to differentiate themselves on not only price, but also service offerings. JB should provision for a price war, doing what it takes to retain customers and market share. This will occasionally mean selling below cost, but as we observed sometimes you need to prioritise market share over profit. They also need to invest in their staff and ensure they offer the best customer experience possible. Some additional things that JB could bring to the market include partnering with local IT service providers to offer solutions like the Best Buy Geek Squad. We already see Airtasker making a play for this space, splashing their entertaining commercials on TV and simply replicating components of the Geek Squad offering. JB should be expanding into this market and offering a full end to end service for technology. Personal touches like this will also give JB a much higher probability of repeat business.

When you physically visit a Staples, Office Depot or Officeworks, you shouldn’t be embarrassed for asking someone which store you are in. Given the similarities in the three retailers and the negative impact Amazon has had on both Staples and Office Depot, it’s a fair assumption that Officeworks will suffer a similar fate. Even their strategy “Officeworks aims to provide customer with the widest range of products and great service at the lowest prices” (Wesfarmers Annual Report 2017) reeks of everything Amazon has spent the past 20 years perfecting. Adopting a fight strategy and attempting to beat Amazon at their own game with the products sold by Officeworks is not viable. Officeworks key customers a small and microbusiness (Hatch 2018) and if they are unable to differentiate their service in some way, they will continue to lose market share to Amazon. One thing Officeworks can do is keep adapting it’s in store services to keep people coming through the doors. Offer bookable conference rooms, 3D Printing, High Volume Printing, rental of items like drones and other expensive high-tech tools. These are areas Amazon is unlikely to play in and more importantly, they keep people coming into Officeworks 165 locations.

What is next for Amazon and where does Australia fit in?

Understanding Amazon’s masterplan and where Australia fits in, will help Australian retailers choose an appropriate strategy. As referenced earlier, Amazon make a significant investment in research and development, so it’s no doubt that something big is on their horizon, but what? From a business perspective there are some obvious targets that would allow Amazon to expand both market share and control over their supply chain.

Global Logistics is a 2.1 trillion-dollar industry and key part of Amazon’s core offering. This is an area in which they are experiencing growing cost (figure 3 below) and still have external dependencies on companies like UPS and FedEx. Amazon has already dipped it’s toes into this area setting up spin off businesses like Shipping With Amazon (SWA) in America and a 240 strong van fleet in Munich. DHL reports that these Amazon vans have gobbled up one third of their market share in Munich (Haber 2017). In addition, Amazon are currently experimenting with shipping between China and North America (Camhi & Pandolph 2017) as well as contracting with airline Atlas Air for air freight (Berman 2018). It’s no coincidence Amazon selected Melbourne as it’s Australian hub as the port of Melbourne is the largest container port in Australia (Port of Melbourne 2018). This evidence builds a strong case that Amazon are making a move into logistics and Australia will likely be part of their test bed.

figure 3 –Amazon Logistics Costs – (Richter 2018)

After entering China as Joyo.com in 2004, Amazon has made little ground on the 80% market share currently held by Ali Baba (Haber 2017). China presents massive economic opportunity and if Amazon can secure a stronger presence, they will be poised to become the biggest kid on the block. Amazon’s move into Australia will strengthen their footprint in South East Asia and give them the ability to explore a few avenues to win over the Chinese Marketplace.

Finally, we should look at what is next for Amazon from a technology standpoint. Amazon are renowned as being industry leaders when it comes to technology driven business innovation. Some examples include how they reduced their warehouse operating costs by 20% as a direct result of Kiva Artificial Intelligence robots (Camhi & Pandolph 2017). Amazon also pioneered drone delivery in December 2016. A key challenge with all new technologies is the ongoing arm-wrestle with federal legislation and as a result Amazon have had challenges progressing some of their ideas. As an example, drone delivery has been significantly hampered by ongoing challenges with America’s Federal Aviation Administration (Morris 2015), meaning a place like Australia with less air traffic and potentially less regulation, could be a great test bed for Amazon’s drone technology. Moving on from drones, driverless vehicles have been in operation in Australian mines for some time. Australia may also prove a more accommodating landscape for Amazon to test driverless trucks and other vehicles.

Some Final Thoughts...

Amazon has been operating in America and other parts of the globe for just over 20 years. Some companies have gone out of business, some are struggling and others are continuing to thrive. The intent of this article has been to provide insight into not just Amazon, but what works and what doesn’t work. Here are a few closing sentiments:

Don’t enter a price war with Amazon - Amazon are happy to compromise profit to gain market share and market experts already indicate that Amazon will look to undercut Australian businesses by 30% (Magner 2017). In addition, don’t think that 30% discounts are a ceiling, when Amazon went into Whole Foods price cuts of up to 50% were seen across their stores (Valinsky 2018).

Be better, not bitter - Bagging Amazon and appealing to your customer base not to shop with them is simply providing free marketing for Amazon. Aussie Bob on the street will quickly forget that Amazon doesn't pay tax (Ming 2017) if he can get 100" TV from them at a 30% discount.

Don’t limit yourself to commodity products - Not only Amazon, but others in the market place can get a hold of your product and do exactly what you are doing. They simply need to do it for cheaper and longer than you can and you will be out of business.

Don’t put all your eggs in one basket – Whilst Amazon can offer you great opportunity, having them as your majority buyer could lead you to a situation where you lose control of your pricing. It’s simply good business practice to not have a single point of failure.

Ensure you have a point of differentiation - Offering equivalent products and services to Amazon will come down to a battle of attrition and Amazon will win. They are bigger, they are richer and they very good at what they do.

Look for the opportunity that will be created – Twain used the saying “during the gold rush it’s a good time to be in the pick and shovel business”. Review historic events, study the strategic indictors and use them to predict what future opportunities. We know that Amazon sales directly translates to things like a lot more packages being delivered, what other opportunities like this will be created for your business?

The world of retail existed before Amazon and the world of retail will exist after Amazon… Find your niche and keep your customers coming back. To quote Wylie (2018), “You’ll never beat Amazon at being Amazon, but Amazon can’t beat you at being you.”

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Effective Language for Consulting

Language and Consulting

There would be very few English speakers that are not familiar with the phrase “now you are speaking my language”. This phase can be an indicator of that moment when two parties are able to connect intended meaning with perceived meaning and reach alignment. Appelbaum and Steed (2005) define a consultant as being a “specially trained and qualified person who assists client organisations in an objective and independent manner to identify and analyse problems and when requested implement solutions”. They later expand on this by applying a framework that identifies the following eight tasks as key in consulting engagements:

1.       Providing Information to the Client

2.       Solving the Client’s problem

3.       Making a diagnosis, which may necessitate redefinition of the problem

4.       Making recommendations based on diagnosis

5.       Assisting with implementation of recommended actions

6.       Building consensus and commitment around a corrective action

7.       Facilitating client learning

8.       Permanently improving organizational effectiveness

Considering the opening statements surrounding language being a key facilitator of alignment, we will now explore what language is, how it is applied in organisations and how it is relevant to a consultant’s relationships and leadership approach.

Theory of Language

We all know language can take many forms including written word, verbal communication, non-verbal communication and even programmatic language between a person and a machine or machine and machine. The one thing all these applications have in common is that they act as a shared medium to communicate a thought, idea, instruction or concept from one party to another. Looking at this diagrammatically, it might look something like figure 1 below:

figure 1 - Pixshark (2018)

What’s important to understand is that intended meaning from Party A does not always equal perceived meaning of Party B. Why you ask? Pinker (2012) explains that when we look at verbal language in a bit more detail, it contains the follow the following constructs:

·       Grammar – the assembly of words

·       Semantics – the meaning of words

·       Phonology – the sound of words

·       Pragmatics – use of language in conversation

It is the reality of Party A that influences how they use these constructs to craft their language and communicate their intended meaning. Conversely it is the reality of Party B that influences how they deconstruct the language of Party A and perceive the meaning of the message. Countless factors including education, culture, environment, relationships, gender and bias all play a part in creating the reality of an individual. This directly influences the intended and perceived meanings of the language they send or receive. It’s critical that the sender of a message has the recipient in mind when deciding the language they will use to craft their message. For more detail on this, the following video from cognitive psychologist Steven Pinker is a great resource.

To dive a little deeper on the constructs above, let’s apply an example using words. When does a word become a word and have meaning? When it’s published in the Oxford Dictionary? Both Cruzan (2014) and Pinker (2012) share the view that culture creates words and publications like the dictionary are merely reactive to what culture defines as a word. This adds an interesting paradigm as culture is quite fluid and even when you look at similar cultures like Americans and Australians, you will find the semantics, phonology and pragmatics of words can differ greatly. For example, an Australian will use the word thong to describe what an American would call a flip flop. This is because in America, thong means something equivalent to G-String or Swimwear. Considering challenges like this arise with similar cultures that share a common language, you can see how even greater challenges can arise when more diverse cultures with differing languages try to translate an intended meaning into a perceived meaning. Using the Americans and the Japanese as an example, Kulkarni & Sommer (2014) observe that “yes” in Japan may mean “I understand” rather than “I will comply,” as someone from the United States may assume in a conversation. Little misunderstandings lead this can lead to larger communication breakdowns and challenges within the shared output of teams. Outside of international language, Curzan (2014) demonstrates that the meanings of words can also change over time. During her Ted Talk below, she highlights that the word “peruse” had an initial definition of “to read thoroughly”. Over time this meaning has been transformed into a brief or quick review of a document. This further supports the theory that cultures not only determine the definition of words, but can also choose evolve these definitions over time.

The summary above merely scratches the surface of some of the complexities surrounding language. Understanding the objectives of a consultant and the interdependencies between language and delivery of these objectives, we can see how having an effective language strategy is essential for success. This leads to the exploration language related challenges that consultants can encounter and some potential strategies that they can implement.

 

Language and Organisations

As reflected by Srivastava and Goldberg (2017) “Language is the core medium for cultivating relationships and sending explicit and implicit signals about one’s values and behaviour”. Successful businesses are built on effective communication and relationships, as consultants these are some key areas in which we should focus our energy to ensure the desired outputs and outcomes are achieved. Globalization of business has created further complexity in this area by increasing the volume of cultures and languages that are involved in daily business activities. As observed by Kulkarni and Sommer (2014) "the number of multinational organizations increased eightfold from 11,000 to 79,000 between 1976 and 2007, and employers continue to expatriate employees to various global locations". As identified earlier, different cultures draw different meaning out of language and as a result, these cultures will adopt an organisational language with differing meaning. As consultants who need to provide information to the client, we not only have to understand the organizational language, but also the sub-languages that are created by different cultures within the organization. Figure 2 below attempts to explain these intersections, in the centre we see the sweet spot which indicates the point in which common language can create shared meaning between all parties.

figure 2

To use an example, an Australian working for an organization might only adopt a sub section of the organisational language. It’s extremely unlikely that this subsection will completely overlap with the subsection adopted by a Malaysian employee of that same organisation. A consultant looking to convey shared meaning must use language from the common intersection point between all cultures and the organisation. As a further take away, when a consultant is diagnosing problems, they should be cognizant that problems between teams may simply exist because they are not using shared language.

Applying a business lens, Neeley & Kaplan (2014) state "unrestricted multinguism creates inefficiency in even the most dedicated and talented workforces. It can lead to friction in cross-boarder interactions and lost sales." They go on to explain "choosing a common language can dramatically improve how employees collaborate across boarders". Whilst some businesses have chosen to adopt such an approach to improve global performance, some of the perceived benefits are overshadowed by new challenging behaviours from employees that struggle to adopt the common language. Kulkarni & Sommer (2014) observe that uneven proficiency in English disrupted collaboration, information sharing, and interpersonal relationships among team members they go on to state non-native speakers (e.g., Germans) took more time to complete tasks, were often dominated in meetings, had reduced access to resource. Whilst language diversity can create some challenges when it comes to the operations of a global business, quick fixes like mandating a global language will not get to the heart of the issue. The quick fixes might address the language used to communicate a message, but they fail to account for the misalignment of realities referenced when the parties are involved are sending or receiving messages. Consultants need to understand the limitations of language and when they reach them, call upon other tools to ensure alignment can be reached between the sender and the receiver. Some tools that can complement language include diagrams, shared computer screens when collaborating virtually and whiteboards when engaging locally. Applying these additional tools will help to increase the level of comprehension no matter what the cultural divide. This in mind, they become more and more essential as the cultural divide expands.

Language and Relationships

In the last section, we briefly mentioned the association between language, relationships and the communication of one’s values. Pinker (2007) observes during his Ted Talk below that language is often used to broker relationships. A key driver for this brokerage is that most people choose to avoid failure and rejection. As it’s not possible to know what another person may be thinking or how they may react to a certain proposal, language is often used as a mechanism to test or probe if a certain thought or idea may be palatable. I’m sure we have all heard or used the expression, “why don’t they just say what they mean”, this very expression is a great example of the difference between literal and implicated meanings in language. It is the fact that literal and implied meaning do not always match that creates this grey area in which people can broker relationships. A good example of this may be when someone offers a bribe. A person may hold out a handful or cash and say, “buy your kids some sweets”. Whilst this literal meaning seems like an innocent and genuine offer, the implied meaning will be something to the effect of “take this money and ensure I’m awarded the contract”. The relationship brokering occurs because the sender of the message does not know if the recipient will accept their bribe, so separating the literal and implied meaning can afford the message sender plausible deniability in the event of rejection.

Whilst bribery is hopefully something you won’t encounter in your consulting practise, there are far more subtle instances of language brokering relationships that will occur throughout your professional practice. As observed by Srivastava & Goldberg (2017) “Individuals may adopt the linguistic codes of their organization while privately holding views that conflict with culture. At work they may conceal their true beliefs as they try to sound the same as their colleagues”. Being aware of this and actively having it on your radar when conversing with clients will help you unpack existing or potential problems. These problems may exist with people not being matched to team members or organizational goals. People can choose language which has a literal meaning in support of a direction, decision or colleague on the surface to avoid conflict. However, unpacking the language and looking for non-committal words like would, could, should and an absence of depth and / or time bound commitments can be cues for a different implied meaning. Often getting people outside of the office environment can trigger changes in the language they choose to use and enable a consultant to uncover implied meanings. Practical examples of this include taking someone for a coffee, a beer or a run and observing how a different environment will influence their language choices.

Language for Leading

In leadership positions it is critical that consultants not only know how to choose the appropriate language for leadership, but know how to coach their clients on the appropriate language for leading. Mayfield & Mayfield (2017) observe that “motivating language, especially when used in a creativity supportive environment, can invigorate this fulfilling process.” When leading teams it’s important to ensure you use language that is both consumable and specific. Consumable refers to choosing language that is easy for everyone to understand, not just those who are closely aligned with our personal reality. Something that really helps contextualize this point is a computer performing speech to text recognition. Pinker (2012) observed that when people speak, there is no logical break in the sound, like you would see white spaces between words on paper. This was a key challenge in the development of speech recognition software as the computer couldn’t tell when one word finishes and another begins. When two parties communicate sharing a common language, their understanding of the language is what allows them to break out individual words and construct sentences. You can see how this will create comprehension challenges for people who are less familiar with the language and have a limited vocabulary. To make language more consumable, especially to people with differing accents and / or primary languages, simplify your word choices and ensure you don’t rush your word delivery. Pauses are also important, not just for yourself, but also to give your audience a logical break.

As a leader it’s good to be aware that whilst freedom and empowerment of your team is great, there is always balance. Sometimes being a little more specific with language empowers a subordinate to achieve the best results. For example, Mayfield & Mayfield (2017) state that "telling someone be creative for a party idea can be overwhelming, but asking someone to help come up with ideas for a Wizard of Oz themed anniversary party can light a spark." Whilst some people revel at the thought of creative freedom, others become completely overwhelmed and the example above provides great insight into how language that gives a directive statement more focus. This ultimately assists the intended recipient in creating an outcome aligned with the sender’s intent.

Final Thought on Language

Most consulting assignments will see consultants enter organisations with limited knowledge. An understanding of how to effectively craft language and communicate with both the client and associated stakeholders will enable them to build confidence and effectively deliver tasks within the consulting framework. When the consultant is on the receiving end of language, it’s important for them to understand the intricacies of language and how people use language in different ways to achieve a range of different outcomes. A consultant is most effective when they understand their audience and tailor their language in a way that creates the desired meaning for the recipients. When on the receiving side, the consultant needs to understand both the person and the implied meanings behind the choices of words and language. Like all skills, the more you practice, the more effective you will become at using language in your consulting engagements.

References

Appelbaum, S & Steed, A  2005, 'The critical success factors in the client-consulting relationship', The Journal of Management Development, vol. 24, pp. 68-72

Pixshark 2018, Communication Flow, diagram, accessed March 2018, <http://pixshark.com/communication-process-sender-receiver.htm>

Pinker, S  2012, ‘Steven Pinker: Linguistics as a Window to Understanding the Brain’, YouTube, 6 October 2012, Big Think, viewed 19 March 2018, < https://www.youtube.com/watch?v=Q-B_ONJIEcE>

Curzan, A  2014, ‘Anne Curzan: What makes a word "real"?’, YouTube, 17 June 2014, TED, viewed 19 March 2018, <https://www.youtube.com/watch?v=F6NU0DMjv0Y >

Kulkarni, M & Sommer, K  2014 'Language-based exclusion and prosocial behaviours in organizations', Human Resource Management, vol. 54, pp. 637-652

Srivastava S & Goldberg, A  2017 'Language as a window into culture?', California Management Review, Vol 60, pp. 56-69

Neeley, T & Kaplan, R  2014 'What’s your language strategy?', Harvard Business Review, September 2014, pp. 70-76

Pinker, S  2007, ‘Steven Pinker: What our language habits reveal’, YouTube, 11 September 2007, TED, viewed 19 March 2018, < https://www.youtube.com/watch?v=LjQM8PzCEY0>

Mayfield, M & Mayfield, J  2017 'Leader Talk and the Creative Spark: A Research Note on How Leader Motivating Language Use Influences Follower Creative Environment Perception', International Journal of Business Communication, Vol 54, pp. 210-225

Beware, these archetypes can negatively impact your ability to deliver

It’s never an open and shut case when it comes to people. This blog looks at a couple of archetypes I have observed whilst working on projects that if left unmanaged can seriously impact your ability to deliver. I should caveat, that people meeting these archetypes are almost always well intentioned. In most cases, they simply have an inability to connect the dots surrounding how their behaviours are negatively impacting overall project health.

The Scope Creeper

This is the person that you sit down and reach an agreement surrounding a given outcome or course of action. Then, at the eleventh hour, they present you with an additional “must have” requirement. Out of good faith, and presumably because the business justification adds up, you scramble to try and accommodate this addition. Once you heroic efforts have delivered, this individual will then present you with yet another must have requirement. Ladies and Gentlemen, we have a Scope Creeper… This is an individual motivated solely by quality with no regard for time or cost. These people are not as common in your direct project teams, but often exist in the wider project stakeholder network. They are commonly pushing to get your project to solve an operational issue that they have been failing to solve due to lack of resourcing or some other root cause. Look out, because whilst they may be trying to do something good for the business, it will regularly not be something that is intended to be delivered by your project.

The Too Busy

This person is can often be identified with a quick Q and A. Start by asking them how they are going and if they will give you a stock response like, “flat out”, follow on by asking them questions like “what’s keeping you so busy and why?” When they respond in a frustrated manner with something like “so and so changed his mind again and told me blah” you could be dealing with a Too Busy. These poor souls have great commitment, but little ability to plan and/or challenge the status quo. It is for this reason that they just keep accepting work and setting an unrealistic expectation that they have the capacity to deliver. This ultimately this results in a number of crushing failures as they continue to over promise and under deliver. These people often work some of the longest hours of anyone in your team and can often be the first to arrive and the last to leave every day. Sadly they often operate at a fraction of the efficiency of their counterparts that tackle their work day in a structured manner. It’s important to identify these people early and keep a close eye on how they are progressing with project tasks. It’s likely they will not be proactive in advising you when things are getting out of hand. Another big risk with Too Busy’s is their over commitment can drive them to skip steps in order to keep up with their workload, which will ultimately lead to low quality outcomes.

The Anti-Decisionist

Wouldn’t you love to never be wrong? Well I’ve got the answer, never make a decision. The unfortunate side effect of this behaviour is that you’ll also never be right. Mistakes, failure, embarrassment are all key to change and achievement. If you aren’t experiencing them, learning from them and improvement from them, it’s likely you are on a treadmill and going nowhere. Anti-decisionists fear failure and as a result will not make a decision out of a fear of being wrong. You can commonly identify these individuals by tying them down to yes / no or true / false decisions, they become very uncomfortable in these situations and will offer up a litany of reasons why it’s not that simple... To be fair, some things do need time and consideration, but when a person can’t provide you with a clear course of action and follow up date, it’s likely you are dealing with an anti-decisionist.

This is by no means a definitive list of archetypes, it is merely a few that I commonly encounter. These people are rarely malicious, and a lot of the time they don’t even realise what they are doing is negative. For this reason, it’s important that when you identify these behaviours you work the people to make the necessary changes. Often a little bit of coaching in a secure environment will lead to positive outcomes, not only your project, but the also the person and the wider business.

It’s not about the project, it’s about the people…

There is a significant investment made into the false belief that words will materialise into action. I participate in a range of professional interactions from meetings, to workshops, to teleconferences where I constantly observe a phenomenon I call “talk with no commitment to walk”. As a project manager you are responsible for the successful delivery of a business change imperative. You can’t be successful in delivery if you make the foolish assumption that anyone else, but yourself and “hopefully the person or group paying your invoices” gives a rat’s arse if the project is delivered.

This is why I say, it’s not about the project it’s about the people. You can have all the GANTT charts, budgets and PM Methodologies in the world, but if you can’t capture the hearts and minds of the people who aid you in delivery of this piece of work, they are nothing more than wasted bits and bytes on laptop. Having a detailed understanding of your entire stakeholder group and what motivates them to walk, as opposed to just talk, is the only way you can be successful in project delivery.

So how do I do this?

1.       I accept that everyone is different

A real eye opener for me was when I got exposed to personality profiling a few years back. Since this time I’ve explored a number of techniques including Myers Briggs (ref 1), Insights (ref 2) and Competing Values Framework (ref 3). Whilst all these will give you a slightly different take on what and how, the why remains the same. And the why is that every personality type views the world differently. This directly impacts what they value and what motivates them. The penny dropped for me that I was struggling to motivate people by erroneously applying my value system and not tapping into a why that connected with them. Often these people would have a differing value system and couldn’t care less about my motivations. It was at this point I realised to be effective in motivating others, I don’t need to worry about my value system, I need to worry about their value system…

2.       I find out what makes people tick

PM Methodologies often put Stakeholder Management Activities like Identifying Stakeholders in the initiation phase of a project, I personally take these activities a few steps further. Don’t stop at identifying, you also need to understand, engage and connect with stakeholders. Use this time to get to know the types of people you are working with and understand their strengths, weaknesses, history, education, experience and bias. All these variables give you clues as to who they are and why they may behave the way they do.

If you are familiar with Simon Sinek (ref 4) and he’s thoughts on why, he explains don’t tell people what to do or how to do something, but tell them why something needs to happen. Work with them to understand how they can do it effectively and the task will often look after itself. If it doesn’t, it’s likely you have a person who can’t or won’t complete that given task and when this arises, apply the maxim that if you can’t change the people, change the people.

3.       I make regular engagement mandatory

Some of you may be thinking, I don’t have time for this touchy-feely stuff, I have a project to deliver. Well here’s the news flash, ignore the people and you won’t deliver anything.

Setup regular meetings with your key team members and stakeholders in environments where people are at ease to communicate openly and honestly. During these meetings gain the required commitment surrounding how they will complete project tasks and deliverables and how they will keep you informed of progress. Obviously, it’s not all on their terms, you need to negotiate with them how their delivery approach will meet relevant project constraints (ref 5), however when an individual is bought in and motivated they will openly accept and work with realistic project constraints. It’s when you let them own the what and how that you not only empower your team, but also remove the possibility of excuses for non-delivery as it’s their plan, not someone else’s.

In summary, if you want to be a leader and deliver complex projects and portfolios, this is all part of the territory. You have to put the work in and make time for this touchy-feely stuff whilst you are delivering. Like all skills, the more time you spend with it, the more hacks you will learn which will enable you to expedite some of these exercises. That said, nothing of value comes easy and if it did, everyone would do it or have it and it would no longer be considered valuable.

In some later posts I will explore some of the hacks that have helped me to expedite on-boarding people within a project.

In Text References – To help expand on some of the in text references, the links below will provide some more information:

(ref 1) - http://www.myersbriggs.org/

(ref 2) - https://www.insights.com/

(ref 3)-  https://www.youtube.com/watch?v=45veR-Se-rI

(ref 4) - https://www.youtube.com/watch?v=u4ZoJKF_VuA

(ref 5) - https://4squareviews.com/2013/01/10/5th-edition-pmbok-guide-chapter-1-project-constraints/

A few reasons why an MBA adds value

For a bit of background, my undergraduate was in Computer Science which is a deductive logic problem solving course. The computer science angle is that you are taught a series of programming tools and techniques which you then apply to solve various problems. Whilst I thoroughly enjoyed my undergraduate it wasn’t until I started my MBA that I realised my undergraduate only taught me the what and how, but not why.

The following are four key areas in which an MBA has added value for me:

1.       Learning how to ask why and explain why effectively

When you do an MBA, or any Master study based on my discussions, reflections become a staple assessment in the majority of subjects. This is because the course is trying to not only make you think about why something should be done in a certain way, but also why you personally would do it in that way and what has influenced you to think in that way.

The value of understanding why is a much longer discussion, but the point I’m trying to make is that subjects in an MBA don’t just teach you tools and techniques, they teach you the fundamentals of why they are important. And once you have these fundamentals you are armed with a strong foundation to constructively justify or challenge a point of view. This is still of great value in today’s business world and I can’t see it losing value any time soon.

It is ultimately the “why” that motivates people and teams.

2.       Re-framing the way in which you approach and solve problems

To date, my most mind-bending subject has been Design Thinking. Not because the content was hard, but because the content forced me to question the way I looked at the world and ultimately a number of my key values and thought processes. Our lecturer did an amazing job of removing ego from our class so everyone worked as unit and shared / constructively challenged ideas. This helped me make a shift from being an extrovert that would simply yell out what I thought was the best answer to drive a quick result, to shutting up and listening to a number of less vocal members of the class before voicing opinions. I realised this approach worked for not only the whole class, but also for myself as it forced me to explore other opinions and perspectives before jumping to my default, results driven, conclusions. It was after this that our lecturer dropped the bomb on us that conventional schooling is based on deductive logic, hence why the majority of people we engage in the workforce know no other way to approach problem solving. This doesn’t say deductive logic shouldn’t be used, it is simply suggesting that there are other ways to solve a problem and if you ignore these other avenues, you are greatly limiting your potential solutions. Like the old adage states, if your only tool is a hammer, you will only see nails.

3.       Connecting the dots surrounding and knowing when things don’t add up

There have been so many times through-out my professional career where I have thought, “that’s a strange decision…” However, after some polite back and forth I’ve trusted my leadership are making the right decision. Well the facts are simple, sometimes my leadership was right and sometimes my leadership was way off, but sadly I didn’t know any better, so I had to trust them. The MBA provides you with a best practise surrounding how business should be run, so in the event something doesn’t add up, you have a framework to constructively challenge and ensure your management and leadership are moving in the right direction.

4.       Networking

Finally, and likely most importantly, choosing the right MBA at the right institution is a great opportunity for you to expand your professional network. The bulk of people I have worked with throughout my MBA have been smart, motivated and practical individuals who not only help you to get the best out of your coursework, but also create opportunities for you outside of the lecture hall. Furthermore, this network expansion isn’t just limited to students as lecturers, industry partners and guest speakers are all made available as part of your course work to expand and likely rejuvenate your professional network.

These are only a few ways in which my MBA has added value for me, there are many more. In the event you are feeling a bit stagnate in your career and some of points made above have resonated, an MBA or masters study, may be something that will add value for you.