Online Retail Logistics Conference, 18-19 November, Sydney, Australia As James Burke observed in his TV show "Connections," when information spread gradually, change occurred slowly. Today the online world spreads information explosively, and change is a constant. Two business techniques are discussed to address today's rapid change: • Strategy as Simple Rules. Complex businesses need to simplify to be able to quickly adapt to changes in their marketplace. Using simple rules to describe and operate business processes lets people easily understand how to act when confronted with a new situation. • Thinking Lean. The lean startup movement focuses on helping small startup businesses use their limited resources efficiently. Small, incremental steps, accompanied by adaptive changes, to a goal are preferred over a massive project which requires immense resources. Even large businesses can apply lean principles when deciding whether to enter a new market.

1. Online Retail Logistics Conference
18-19 November 2014
Planning for Rapid Growth
and Economic Uncertainty
Charles E. Crouch
Lecturer in e-Business & Digital Marketing
Chisholm Institute
CC by 4.0

2. Several years ago science historian James Burke hosted a TV show
on the BBC, Connections, an Alternative View of Change, discussing
the history of science, invention and accompanying changes.
Images: BBC

3. For example: The invention of the stirrup in China let people sit
securely on horses. Mounted cavalry led to heavily armored
knights on massive horses with accompanying squires and
attendants. Supporting these knights required major changes to
agriculture, estates and towns, leading to centralized commerce.
Images: Wikipedia, C. Crouch
However, for centuries the rate
of change was slow.

4. In the last episode of Connections, James Burke discussed change
itself, noting that “The ease with which information can spread is
critical to the rate at which change occurs.”
But this episode was televised in 1979!
1978! 1979!
Image: BBC

5. Photos: Wikipedia, Twentieth Century Fox
This was the world in 1979:
The Apple II was a hot computer.
The Internet did not exist. Several universities
and government labs were connected by
something called the ARPANET.
Mobile phones were still a
decade away.
Social Media?
What’s that?

6. Today we are overwhelmed by change. Let’s look at a few things
you can do to address the challenge of continuous change.
Photos: Microsoft, iStockPhoto

7. Strategy as Simple Rules
Image: iStockPhoto

8. Photos: TheOldMotor.com, C. Crouch
When business was simple,
one could afford complex strategies
Now complex business needs to simplify

9. Establish Position
Leverage Resources
Simple Rules
Strategy Types
The classic view often taught
in school. A unique position is
exploited in the market.
A newer approach in which
differentiating resources are
used across separate markets
Knowing when to act, seizing
fleeting opportunities
Photos: C. Crouch
Adapted from: Kathleen Eisenhart & Donald Sull, “Strategy as Simple Rules”, Harvard Business Review, 2001

10. Simple Rules Strategy
Quickly recognize positive/
negative situations in the
marketplace.
Act accordingly.
Military forces have used a
simple rules strategy for
years by publishing clear,
brief Rules of Engagement
to tell troops how to act.

11. 3 Approaches Compared
Position Resources Simple Rules
Competitive
Advantage
Unique, valuable
position
Unique, valuable
resources
Unique, simple
rules &
processes
Works Best
Well-structured
slowly
changing
markets
Well-structured
moderately
changing,
markets
Ambiguous
rapidly changing
markets
Risk
Hard to alter
position as
markets change
Slow to build
new resources
as markets
change
Hesitant to
take promising
opportunities
Source: K. Eisenhart & D. Sull, “Strategy as Simple Rules”, Harvard Business Review, 2001

12. Establish Position
Leverage Resources
Simple Rules
TAXI
Both the Established Position and Leveraged Resources Strategies
are under attack today by nimbler, digital-based companies. But
having a Simple Rules strategy is one way to adapt.

13. Some years ago Cisco was acquiring small
companies at the rate one per week. They
used a set of simple rules to quickly decide
which companies to investigate farther.
Maximum 75
employees 1. Smaller companies
Growth phase
Cheaper
Technology skills
75% must be
engineers 2.
✔
✔

14. Quickly evaluating potential
opportunities is still a vital skill today.
In Silicon Valley, Mergers Must Meet the Toothbrush Test
By DAVID GELLES AUGUST 17, 2014 9:22 PM
Is it something you will use once or twice a day,
and does it make your life better?
When deciding whether Google
should spend millions in acquiring a
new company, Larry Page, asks
whether the acquisition passes the
toothbrush test:
http://dealbook.nytimes.com/2014/08/17/in-silicon-valley-mergers-must-meet-the-toothbrush-test

15. Tall Timber Café
Steve Rowley, co-owner of the Tall Timber Café in Melbourne,
Australia was asked by a customer for some old coffee grounds
to use as a scrub for cellulite. Did he just give the customer the
grounds…?
Source: Fiona Smith, Australian Financial Review, 25 Oct 14
Photo: Eddie Jim, goodfood.com.au

16. No, he built a product and started a business. After18 months
FrankBody.com is now selling one pack per minute and
shipping to countries around the world.

17. Business Processes
Photo: C. Crouch
Companies can apply this same
idea of Simple Rules to their
internal business processes.

18. Social Media?
Photo: C. Crouch
For example, social media is a
common marketing tool today,
but many companies make
mistakes using it.

19. Social Media
Policy
To provide guidance, many organizations prepare a social media
policy (probably because their lawyers or HR told them to). They
instruct everyone to read the policy, but how many people
actually use it?
Could “simple rules” make this easier?

20. Source: Air Force Public Affairs Agency, Emerging Technology Division, 2009
Respond to online blogs
Flow chart
Easy to use
The US Air Force has a one-page
policy/flow chart showing how
to respond to online blogs.

21. Which makes more sense? A
heavy document no one reads or
a light page everyone can use?

22. Think Lean
Photo: AngMoKoi, Wikipedia
The Lean Startup movement is
popular now as entrepreneurs
around the world start their
own businesses.

23. Feedback
Feedback
Feedback
Build Test
Gather
Require-cents
Release
to
Market
Customers
Customer Development
Lean startup began in the software industry where the classic
model involved customers at the start, but then ignored them until
the final product was delivered. Steve Blank popularized “customer
development” which involved customer feedback at all stages in
the software development process.

24. Eric Ries combined Steve Blank’s customer development ideas
with agile software development and Toyota’s lean production
into the Lean Startup
Lean: efficient resource use
Especially Time
‣ Blank’s Customer Development
‣ Agile Software processes
‣ Toyota Lean Production
Agile development uses collaboration
and continuous improvement to
evolve requirements and solutions.
Lean production focuses on reducing
waste to improve customer value.

25. Business Idea Development
Frontload
Time
Classic
Lean
Classic development loads lots
of resources at the front end
of a project.
Lean methods run many small
trials to continually improve as
the project progresses

26. The Lean Startup idea has
proved so useful that a whole
ecosystem has evolved.

27. Thinking Lean
Determine best plan
Identify riskiest parts
Test these first
Small experiments
Build Something
No One Wants
You can use lean startup
methods in your own
organization. The biggest risk is
building something no one
wants or uses, so find this out
early, rather than at the end.
Photo: iStockPhoto

28. Staff at Marriott hotels noticed
people wandering through their
lobbies, looking for places to meet
and work for short periods. Also,
Marriott had loads of underused
conference rooms.
Source: Botsman, R. “Sharing’s Not Just for Startups” Boss Magazine, Oct 2014

29. Meeting Space: by the hour
They decided to test a new
service, renting conference
rooms by the hour. One risk
was the expense of building a
room reservation system.
Another was no one would
want to use the service.
Photo: Marriott

30. To reduce these risks they partnered
with LiquidSpace to run the booking
system and had a trial run at hotels in
Washington DC and San Francisco,
places where people were used to
working remotely.

31. http://www.workspaces.marriott.com
The test was successful and todayWork[Space] on Demand is
operating at over 400 hotels and reaching a new customer
base of local lawyers, consultants and independents.

32. StyleRocks is an online Australian
company offering customized jewelry.
The owner started StyleRocks when she
was home with children and frustrated
she could not get out to shop.
Pascale Helyar-Moray
I wanted to be able to
create jewelry exactly
as I wanted it.

33. The company provides different
options to customize each piece.
They offer a free resizing service
for rings but noticed many
people still got this wrong.

34. The website offered a sizing
guide which had to be printed,
cut, pulled to fit and measured.

35. 3D Ring Printing
Check sizing
Credit on purchase
More committed
Alternatively, customers can order
a test ring made on a 3D printer.

36. This program has recently
launched as a test to see how
the market reacts.
The design files for the rings were already
at hand, and an outside service prints the
3D rings, reducing the cost of this trial.

37. Takeaways
Photo: C. Crouch

38. Today we live in a whack-a-mole world
where new products, competitors, services
and customers pop up at any time.
Video: YouTube

39. Can you simplify your
own rules and processes
to make them easier to
use when conditions
change - and they will!
Simple Rules
Photo: ad:tech/dmg events

40. Think Lean
Experiment with new ideas,
see what works for you,
then do more of them.
Photo: C. Crouch

41. Assignment
1. What complex process
can I replace with a
simple rule?
2. That new idea I have .
How can I tr y simple
experiments to test it?
I am a teacher.
Now it’s your turn.
Here is your assignment.

42. Other Presentations
on SlideShare
Photo: C. Crouch

43. Questions?
Charles E. Crouch
charles.crouch@mac.com
+61 447 413 070
CharlesECrouch
Photo: iStockPhoto

44. Online Retail Logistics Conference
18-19 November 2014
Planning for Rapid Growth
and Economic Uncertainty
Charles E. Crouch
Lecturer in e-Business & Digital Marketing
Chisholm Institute
CC by 4.0
END