Friday, 20 January 2012

On Change, 3: time to mention investment

I've been astonished at the response to and the page views of this week's posts. Thank you to everyone who has been taking an interest and for the comments which have been coming in via Twitter and email rather than in the "comments" function here. I suspect there's a lesson I should learn from that, but right now I'm not sure what it is. It's Friday, it's late and I have been travelling for much of the day. So I'm going to wrap up this week with my fifth and final brief point about change. Next week I'll move onto the final section of my keynote, which focused in on and explored the implications of my observations very much from a supply chain perspective.

Observation 5: change requires investment
Change doesn’t just happen. It requires decisions and investment in those decisions. Alexander Graham Bell didn't just happen to invent the a mechanism for transmitting speech and sound. He spent years exploring sound and hearing - an intentional activity culminating in his eventually being awarded the first US patent on a telephone. In the modern supply chain, change always requires an investment in software (be it a new system or ongoing improvements to an existing one) and follow-on investment in training. Distribution is underpinned by data, and databases cost money (lots of money). Improving and upgrading databases costs even more money. Mining, exploring and exploiting the meaning and value of data from those databases costs even more more money. 

Our industry started off well in pioneering change in the form of isbns and bar codes, but failed capitalise on its advantage by not following up swiftly enough with EDI initiatives, more and better metadata, RFID and so on. We relied on point of sale data collated only from bricks and mortar bookstores long after they were no longer the only game in town (or more precisely in our homes via the web). Despite the sterling work of people like Peter Kilborn at BIC (and his counterparts at BISG) pushing for the standards that came to facilitate the transactional basis of our businesses - we failed to understand how investing in systems and databases is key to our future success. We let disruptive technologies and technologists steal our advantage.

Of course change is not only technological: it’s cultural. Systems are only as good as the people who specify them and the people who use them – and unless those people are educated, trained and buy into what you are trying to achieve, it will all be money wasted. Or as my I.T. manager said to me last week: if you think training is expensive, try ignorance... And in business, cultural change can be expensive because it can mean re-organising work flow, work forces, and business models. Particularly in Europe, making structural changes in work forces can be costly in terms of HR resource, cash and management time. But in highly process-driven environments where there can be a focus on what "the system" requires as opposed to what the customer or the future of the company needs, change that puts the customer and the future of the company - not the process - first must be made if there is to be any chance of success.

Change requires intentional investment in systems and people.
Next week: suggestions for what this all means for books and the supply chain...

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