Ring Out the Old, Ring In the New – Content in Context checks out for the holidays

In honour of the festive season, Content in Context this week takes the form of a short instrumental that I have composed for Melbourne’s Federation Bells.

Normal service will be resumed after the holidays, but in the meantime, I’d like to express my sincere thanks to everyone who has taken the time to visit this blog, especially those who have seen fit to “Like” and leave their valuable comments. Particular appreciation goes to those individuals who have offered specific feedback and encouragement (both online and in person), and those who have shared this blog with their own audiences on Twitter, LinkedIn, Facebook and via other social media platforms and networks.

“Theme for Saturnalia” refers to the Roman festival, usually held from December 17 – December 23, and from which it is thought, Christmas derives many of its customs such as feasting and giving gifts. And while I do not adhere to any particular religious creed or spiritual beliefs, it would be churlish of me not to acknowledge the significance of the season. So, as 2013 draws to a close, and as we brace ourselves for whatever 2014 will throw at us, I would like to close the inaugural year of Content in Context by quoting the Irish comedian, Dave Allen, who ended his TV shows with the immortal words, “Goodnight, thank you and may your God go with you”.

Product Development 101: What we learned at Start-Up School

Lean Model 001

Another large turn-out last Monday evening for Melbourne Lean Start-Up’s monthly event, hosted by Inspire9 and supported by SmartStartCity, Kussowski Brothers, Blue Chilli and AlphaStation.

This month’s theme was “Validated Learning – what to do before you launch your start-up” or as I like to call it, “Product Development 101”.

The evening kicked off with a lightning talk video presentation by Ash Maurya discussing his lean canvas 1-page business model. Well worth investigating before you even start writing a single line of code!

Next up, Tweaky offered some insights on the value of using PPC (Pay Per Click) pre-launch analysis targeting Search Intent (Google) and Demographic Intent (Facebook) to generate interest in your new product.

GetViable followed up with a discussion of the old-age conundrum for any new product or business: “Have you built a solution in search of a problem?” And even if you have correctly identified the problem, is it actually worth solving? The bottom line was, talk to your customers, listen and learn about their problems, then figure out whether they are willing to pay for your solution (and how much).

Then Flippa talked about the value of “observing your customers in the wild” – to gain insights and identify opportunities. Again, talking to and engaging with customers is critical to the product development process.

Finally, Envato presented some models and processes for collaborative design, essentially taking a look at user-centred design within a lean start-up context.

It’s very easy to lose sight of fundamental product development principles in any business start-up, especially for tech-based projects. But what each presenter stressed was the need to do your homework, to apply a coherent and sequential methodology to your new product development, and to adopt a continuous feedback loop to capture market insights and embed customer learning into the process.

To summarise, here is a tried-and-tested Product Development Cycle I have used for many years:

  • Idea
  • Market Research
  • Design Specification
  • Business Case
  • Build
  • Pre-sell
  • Production
  • Launch
  • Evaluation

Repeat ad infinitum.

Disclosure: The author does not have any connection to or commercial relationship with the presenters or sponsors mentioned in this blog. He did manage to grab a couple of free beers.

Winter blues

I think I may be suffering the early onset of SAD (seasonally adjusted disorder). Even though the Australian winter only started at the beginning of June, I am already feeling the cold and the despondency. My condition is not helped by the knowledge we don’t have another public holiday until early November. Or maybe it’s a symptom of the current national mood, which suggests that although we are highly likely to vote for a change of government in the forthcoming federal election, we don’t exactly relish the prospect.

According to the latest opinion poll, most of us would actually prefer to see a former leader of both the two main political parties lead their respective sides into the election, rather than the present incumbents. Given our compulsory voting law, the preferential voting methodology, and the parliamentary system for choosing party leaders, the electorate is basically denied the opportunity to vote for its preferred Prime Ministerial candidate.

The general election campaign is taking place against the backdrop of an extraordinary period of critical self-analysis about the type of society we live in. For various reasons, our politicians, the media and the chattering classes have been debating the notion of whether or not Australia is a classless society, a racist society, or a sexist society. (To which questions the answer would probably be: “Possibly, but not all the time, and not everywhere.”)

Much of the surface debate has been prompted by behaviour and language generally deemed offensive, and by arguments about whether people actually meant (or understood) what they said or did, whether they appreciated the impact of their deeds, or whether they simply didn’t know any better. While everyone should be held accountable for their individual behaviour, this is not just about semantics, or different moral standards or conflicting social attitudes; after all, Australia is ostensibly an egalitarian, pluralistic and secular country, founded on the notion of “a fair go for all”.

I think this national malaise stems from a collective failure of leadership, which in turn leads to disrespect for our leaders and disregard for the institutions they represent. This failure of leadership is especially acute among institutions that were primarily designed to promote, serve, protect and cater to the interests of the working population. Too often in recent years have leaders, office holders and key figures within political parties, trade unions, religious orders, the armed forces, the media and even major sporting codes been found wanting in upholding a culture of robust ethical behaviour and acceptable moral standards. Quite rightly, people feel angry, demoralised and almost disenfranchised because they have been let down by the very establishments they believe were designed to be there to support and represent them.

It’s not surprising, therefore, that much of the population is tuning out of the election debate (such as it is) because they have little faith in our political leaders in particular, and in public institutions as a whole. Cynicism, even despair, prevails. Hence the mid-winter chill….

Corporate Governance – exercising a “duty of awareness” in the age of social media

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Do we need a new theory of Corporate Governance? Is it time to look at a new model that reflects the current environment in which businesses operate, an era characterised by:

  • social media,
  • corporate and social responsibility,
  • shareholder and consumer activism,
  • increased market connectivity, and
  • rapid generational change?

Has the law fallen behind in being able to regulate and oversee contemporary corporate behaviour – where compliance with and adherence to the letter of the law may no longer be enough to meet community standards or satisfy shareholder expectations?

The question arose during a roundtable discussion I attended recently, comprising non-executive directors, entrepreneurs, corporate advisers and governance experts. Some of the issues we kicked around included:

  • the efficacy of running more frequent board interaction via the use of technology (as opposed to the standard face-to-face monthly board meeting);
  • the ethics of minimising cross-border taxation by multinational companies (even though it may be legal under international tax law);
  • the imperative to develop more inclusive and diversified boards (including networking into broader stakeholder groups);
  • the perils of ill-considered public comments made by CEOs (and the resulting social media backlash); and
  • the risk of harking back to some “golden age” of corporate behaviour (assuming such an era actually existed)

Our current perspectives on Corporate Governance largely derive from the late 1980s and early 1990s when a series of authoritative studies and reports led to new Codes of Practice and updated corporations laws – I’m referring to the work done by and in the name of Tricker, Carver, Monks, Cadbury, Greenbury, Hilmer and Hempel. And while in recent years we have seen increased scrutiny on CSR, directors’ remuneration and financial oversight by boards (plus Sarbanes-Oxley, Dodd-Frank and IFRS), the reality is that most of the earlier Corporate Governance reforms were introduced just as the internet went public and just as financial markets were being deregulated. So it could be argued that the reforms were ill-equipped for, or could not have anticipated, the changes to come – witness for example, the SEC’s recent approval of social media as an appropriate platform for corporate disclosure.

In Australia, Corporate Governance is described simply as “good decisions being made by the right person”, and the obligations of company directors are summarised as follows:

  • your primary duty is to the shareholders;
  • you must act with appropriate due care and diligence;
  • you must not allow the company to trade while insolvent;
  • you must exercise your powers in good faith and in the best interests of the company;
  • you must not improperly use your position of (or information obtained as) a director to benefit yourself or another person, or to cause detriment to the company.

On one level, the test of whether an organization has exercised good judgement in making a decision is, “would you be embarrassed if this was reported on the front page of tomorrow’s newspaper?” At another, Corporate Governance is reduced to a compliance checklist of risk mitigation measures.

The Australian courts (in the OneTel and Centro cases) have expanded and reinforced the duty of care (particularly in relation to the business judgement rule) to place greater accountability on individual directors to consider what a reasonable person would do in exercising their duty of care and diligence:

  • To understand the fundamentals of the business
  • To keep themselves informed of the company’s activities
  • To monitor the company’s activities (e.g., through active questioning)

The question we should be addressing is: “Does imposing a broad duty of care and specific fiduciary obligations ensure an appropriate level of Corporate Governance?” I would argue that in light of a rapidly changing operating environment, we would be well-advised to exercise a “duty of awareness” in respect of our Corporate Governance standards. In my view, directors need to take a wider perspective in understanding and monitoring the business fundamentals and the company’s activities. Some may argue that this is not a new duty, it has simply been forgotten in recent times – and in the era of social media, when it is far easier to “get caught out”, it would be prudent to have more regard for the broader context.

A “duty of awareness” offers an appropriate counter-balance to the numerous areas of self-regulation by industry sectors and by individual companies. It provides an objective test for assessing “if not, why not” explanations required under both voluntary and mandatory Codes of Practice – i.e., did the respondent take into account all relevant factors, and did the respondent adopt a sufficient level of awareness in evaluating its options under a chosen course of action?

The “duty of awareness” means that at an individual level, directors would be obliged to reflect on their contribution to and participation in board decisions; boards would need to consider the likely impact of their decisions on the company’s performance and on wider stakeholders; and companies would be expected to have regard to their standing as a good corporate citizen, not merely a compliant one.

Acknowledgements: I am grateful to Andrew Donovan of Thoughtpost Governance and Dale Simpson of Bravo Consulting Group for their invaluable contributions to this article.