Mike Harris's Blog

I was asked recently to give my position on a number of issues facing business in 2010.

I found the questions thought provoking and so I've posted them and my answers here.

Which sectors / business models are most likely to provide the engine for growth?

VCs are looking for opportunities in e-commerce, clean energy and health care (particularly anything which reduces costs of treatment/care). VC attention is always a good indicator and all of the sectors mentioned have obvious drivers . The market for smart phone applications, particularly games seems to be growing rapidly. In addition I have never experienced a time when so many new entrepreneurs are creating SMEs ; some of this is forced entrepreneurism ie people who have been made redundant or people just entering the job market who can't find employment- some of it is the fact that web2.0 is the best ever environment for creating a new business. Historically an economic downturn has been the best time to create a new business as there is room for growth as incumbents are weakened. So perhaps this new wave of entrepreneurism will also drive economic growth. I hope so!

How can any organisation regain trust, re-build confidence and re-kindle ambition?

In a word: AUTHENTICITY. It's an overused word but in the post credit crunch world and in a world of social networks where all of an organisations'' actions and motivations are laid bare , only those companies who have a strong customer focused mission and mean it will achieve trust, confidence and re-kindle ambition.

How can you persuade a 'battoned-down' organisation to encourage innovation?

This is solely an issue of leadership. A leader has to create a context and an environment which demands innovation in a way which makes sense to the organisation. I call this a strategic rationale and it comes from an analysis of the business environment. Often an honest assessment of the risks and opportunities leads to a natural desire to create something different ie to innovate. Sometimes a leader just demands an organisation realign itself around a new mission , merely because he or she says so. As an example I've been impressed with the way British Gas have been realigning themselves around a new mission: to look after your world (ie everything in peoples' homes)

How would you characterise the impact of social networking on business?

In a word confusing. Social networking will ultimately lead to a different way of communicating and engaging with customers, a different way of segmenting them researching them, identifying them and determining their risk profile. Today companies are stumbling along the first few steps of this journey, often resented by the users who don't want companies intruding into what they see as a personal domain. On the other hand Twitter and what may follow it has the potential to be a real game changer in that it allows you to follow anybody; you don't have to be friends. Companies which have a large number of Twitter followers or about whom many people tweet are fortunate indeed, but it's easier said than done unless you are already uber-cool.

Social networks are a great leveller, they are easy and affordable for small companies to access and small companies are often better at it. Large companies who have embraced social networks have often got into trouble as the network becomes a focus for complaints. Right now social networks are occurring as a great opportunity for entrepreneurial new companies and a threat/pain in the neck for most established companies.

How can you catch or stay ahead of competition in a flat market?

This is really simple in theory and hard to implement well. It's at the heart of most of the workshops I run. To beat the competition you have to differentiate (ie a total product and service proposition which is different and better than the competition for the customer segments you are interested in) , you have to communicate that differentiation with great clarity and power and then deliver the differentiation perfectly . It is this latter part which is most difficult and where high performance environments really pay off.

Can public sector leaders learn from the private sector, and vice versa?

Having served on a cabinet sub committee and watched at close quarters attempts to bring private sector innovation and management techniques to bear in the public sector I'd say beware. Undoubtedly both sides can learn from each other but the environments and drivers are so different that the uncritical adoption of private sector wisdom into the public sector has done more harm than good in my opinion; exacerbated by the fact it is management consultants who have brought most of the private sector approaches into the public sector, advice that would be taken with a pinch of salt and a very healthy dose of scepticism in the private sector is adopted uncritically in the public sector with often perverse consequences. Don't even get me started on the way targets have been implemented!