Peter Christo

Think about it,.. if money and the right talent was all that was required, large firms would have cornered the market on every new innovation and business opportunity,.. but they don’t. Here is why!
Must see for every entrepreneur.

I believe and deliver the following argument to anyone who is interested; however, it is not mine. The Economist published an article on this subject in the 90’s which had me sold back then. I am amazed that people still lean on the shaky notion of patriotic buying habits. I refer to the article, but have long since lost the actual document, I can’t refer you to it.

Before I continue, you should note that I am making my argument under the following assumptions:

1. The belief that real growth in our economy via an increased GDP is a good thing.
2. That a surplus budget, low interest rates and low unemployment etc are all good things.
3. I assume that competition in the marketplace is a good thing that results in a wealthy Australia.
4. The above in turn means more money available per capita into our economy and that will breed new services, innovation and products in response to cheaper imports or new offerings.
5. I assume that the above then means more taxes for our government which means better services, safety nets, education and public goods.

Ok, so my assertion is as follows:
Rather than buying Australian, when you are faced with a choice, you simply buy the best product (for your needs) for the best price (you can find).
Example:
If you had to buy a fridge, and had the choice of two identical fridges, one made here, and the other made in say in China, and the one from China was $100 less, then I say you should buy the Chinese one. Paying $100 more for the Aussie product helps no one. Not Australia, not your community and especially not you and your dependents.

Here is my rationale:

Lets say I owned the fridge business. I make the fridges here in Oz for $700 and can sell them competitively for $1000. For the argument, let’s assume that the $300 is what I make as the owner after all my costs, including labour are incurred. With that $300, (assume no personal tax in this hypothetical, to keep things simple), I can spend on living, food, cars, holidays whatever.

It is important to also understand that what I spend on my life, particularly as discretionary sense (ie; other than the necessities) has a multiplier effect. Feel free to look it up, but a simple example is:
I spend $50 getting my lawn mowed, the gardener pockets the $50 (I have what I want in the fresh cut grass), he’s left with $40 after costs and spends it on say a hair cut from his neighbour. The neighbour is left with $30 after costs and on it goes. Of course the costs are going to other businesses, and then there is a multiplier effect with them, including if he saves it, given the bank then lends it for investment and earns money on it. Anyway you get the idea, a dollar is more than just a dollar. Let’s assume for this argument that the multiplier effect here is 100. So my $300 take home profit is actually $30,000 for the economy.

Ok, so now I find out that I can make the very same fridges in China for $200. I change my business, sack my staff (in line with obligations under whatever law is in place) and now I get $800 per fridge not $300. Of course that means a greater multiplier effect of $80,000 which is more money for investment, and a better standard of living for me and my family.
What about the poor worker I hear you say… what is he or she doing?
Well I ask you this. What did you type your last letter on? A typewriter or a computer with software? What about the poor typewriter maker from 30 years ago? What about them? Shouldn’t you all be reading this on typed paper?

I feel for people who lose their jobs because the role becomes redundant but that is why we have safety nets and support to get re-engaged in the employment market. I know it’s not always a fairy tale ending but we are collectively better off. Their kids will be better off, with better education and other services in their life. Of course, this type of activity pushes the bounds of innovation, so I may be able to make my fridges here for $150 using robots or whatever, which would mean taking risks and maybe entering new markets and hiring new skills or retraining my staff.

This is a macro argument, but I think that that is what government programs are there fore. Saftey nets when the economic system loses someone through the cracks.

My personal view is that paying more for poorer quality products just because it’s got an Aussie flag on it is ludicrous.

If we all focus on looking after the best interests of our selves and families, then the benefits will come around via better economics.

Some caveats:

Fully costed – If the Chinese factory is secretly using child labour or spilling industrial waste in the river it is playing without fully realising its costs and or not fully informing the market of the social and environmental costs. You may find that if the Chinese factory fully costed its fridge business, then the Australian company would be competitive. In that case, I say buy the Aussie product.
Also, if the market knew that kids were being used and industrial waste was not being disposed off appropriately, then the demand for those particular fridges may plummet in Australia.

If the market is fully informed, and the costs have been fully realised, then on a apples for apples, or fridge for fridge situation, go for the best price and quality every time.

Dear Class,

I would like to take this opportunity to congratulate you for completing the Strategic Management course. I noted some exemplary improvements between assignment one and two and I hope that was reflected in your marks. Some of course were not great. To those of you I say stop and think about why you are doing this course and the investment you are making in time and money, and why a half effort is a bad reflection on you and the people who worked hard to get you to this stage in your life.

The upside was that I saw some real talent in the better assignments, and expect to be reading about those students in the business news papers of the world one day. I was very pleased and proud to have had the honor of teaching you.

Please remember the fundamental drivers of business you were taught, as you develop new strategies for new and established businesses. Of course some of those businesses will be your own, and others for big enterprise or government. The fundamental concepts you learned are the same, please use what you have been taught for the benefit of yourself, your family and of course your country. China heads into a glorious time now and you are the heartbeat of that. Be honest and courageous in your dealings, and do not compromise your personal values.

Of course much is still to be learned, even after your course is complete. Read with interest the media of the world in your industry, international affairs and economics. Choose your sources wisely, and contribute to the international discussion when you see fit.

Please feel free to remain in contact via linked (http://au.linkedin.com/in/christopartners) in or face book, or simply by visiting my blog (www.peterchristo.com)

Regards,
Peter Christo B.Bus (Eco/Mkt), MEI
Principal Commercialisation Consultant
Adjunct Lecturer & Mentor in Entrepreneurship.

Christo Partners & Pitch Club Pty Ltd.
ACN: 110 993 710 | ABN: 17 110 993 710

Contact us on: +61 1300 733 926 | mobile: +61 (0)412 133363 |
email: peter.christo@christopartners.com | skype: pchristo320

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MCR Looking to Partner with publisher to produce its 2011 Top 100 cage guide.

{Hi all, this is a genuine opportunity, I will respond personally to every legitimate inquiry, Peter}

Global Review Services Pty Ltd produces www.melbournecoffeereview.com (MCR). MCR commenced life as a blog and now is best described as a new media business.

In six years, MCR has gone from a simple little blog to a significant force in the coffee industry because of its reviews and its readership.  Simply, MCR is the ‘goto’ brand for coffee lovers and we influence beverage, and venue choice.

MCR incorporates a guide publication (produced 5000), a web site and mobile phone application and has approximately 62,000 users, 25,000 Unique Visits a month and is growing at between 8 and 12 percent per month. Our users are net savvy consumers, who seek regular social interaction via coffee and cafes as the medium.  What MCR does is offer them an informed choice of venues and social experiences.

MCR’s core focus is online, user generated reviews, ratings and comments of the great cafes in Melbourne and the world.  We are currently running the vote for the top cafe in Melbourne and producing the list online and in our physical publication.

The OPPORTUNITY: We see huge value in producing the physical guide but want to do it in partnership with a publisher rather than ourselves.  It takes too much time, effort and money and we would rather focus on the online aspects of what we do.

We are looking for a partner and a deal that is commercial and allows us to focus on what we are good at.  We want a collaborative relationship with a business that sees the value in what we are doing, and who has the ability to deliver as good a product if not better than we did.  (we did quite well).

Here is what we have to offer the market.

• The rights (or mast head) for the MCR Top 100 Guide annual publication.
• We sold about 3000 ourselves last year.
• We have about 12 book shops that sold the guide and want to sell next year/ed.
• We have about 500 online sales with names etc to sell the next gide to.
• Boarders has expressed written interest in exclusive (or semi exclusive) distribution through their retail network. (they think they can sell 5-10K books).
• Rights to use all the photos we didn’t use last year.
• The top 100 list (name, rating and details).
• The top 10 Fine dining restaurants, and hotels.
• The list of all the newsagents who sold well (and sold oit last year) so we can do a more targeted ’sell through’
• The rights to use the MCR Logo etc.
• Perpetual rights into  the future to produce the guide.
• Sales gateway via the web (1 million hits a month) and the iPhone +62,000 users.

Facts:

• Last year we sold about 80K worth of ads (12 ads?)
• We presold about 200 books as a standing start
• We post sold about another 700
• We sold through news agents (NDD) and via Boarders.  Boarders sold out 3 times (they sold 900 books just in one store, they are talking directly to us re next ed).
• We have all the logistics sorted (back end sales processing)
• We have the team ready to go (Leanne Tolra and Brilliant Productions)
• We have sold $30K worth of ads, but are now converting some to the iPhone.

Interested parties can contact myself, Peter Christo on 0412133363 or email peter.christo@melbournecoffeereview.com

(written in 2008)

I just returned from the ANZAC day dawn service at the Hampton RSL. This year I took with me, for the first time, my four year old daughter. I dressed casual, opting to leave my own lone medal in its case.

As usual this was a sombre, relatively well organised event, and the padre’s speech was genuine, well delivered and a reminder of the sacrifices our boys made. The guard of honour reminded me of my time in PNG doing the same job in Rabaul in 1987.

As an ex member of the Australian Army, for me these ANZAC days are very moving. Aside from my memories of service, I had the privilege of visiting war cemeteries with rows and rows of young men buried there from long ago, and in many cases the head stone didn’t even read whether it was an Australian Soldier buried there or someone else. I saw these in PNG and Thailand, and of course they are sprawled across Europe, Africa and the Middle East.

These young men and in some cases boys still haunt me as my lost brothers from long ago.

On my return home recounted the experience to my still sleepy wife. I told her of the event and how well our daughter had behaved. I was left with the impression that my wife, a first generation Greek Australian like myself, believed that the ANZAC day celebration had little to do with us as Greeks.

The reality is that, Greeks owe a huge debt of gratitude to the Australian and New Zealand Soldier and therefore Australia and New Zealand as countries. In 1941, 17,125 Australian and New Zealand soldiers were sent to Greece to defend it from German aggression as they moved south. Some of them spent three years fighting there, and of course many lost their lives or were POW’s as a result. They became known as “The forgotten ANZACS” as it became a guerrilla war, something quite new back then, very familiar to our boys and girls in uniform now.

As I was growing up, I had an ongoing argument with my Dad about the quality and merit of the Greek Soldier versus the Australian soldier. He had served as a Greek conscript in the late 50’s and early 60’s and I was, at the time, a Air Force Cadet Sergeant and reserve soldier with 5/6 RVR and then 2 Commando.I would later join the regular Army and was based in Townsville.

It was many years later, when I visited Greece in my late 20’s and drove into a small town with my uncle to pick up supplies that the reality of this time was driven home to me. As we walked up to the shop, my uncle introduced me as his Australian nephew who had served in the Australian Army to a couple of old Greeks who were sipping their mud coffee, engulfed in a haze of smoke from their pipes, worry beads jangling.

One gazed at me silently for what seemed a little too long and asked “ Do you know who the best soldiers in the world are my boy?”. I was immediately filled with the same sense of passion I felt when I had endured this argument with my father so many times before, but composed myself. “No, who?” I answered “who are the best soldiers in the world?”

He said; “The Australians and the New Zealanders; and I will tell you why. Not because they are smarter, better or faster, but because those boys fought as passionately along side us, ate the same dirt, and died along side us with great courage, and it wasn’t even their country….. Greece will always owe a debt to Australia and New Zealand, which it can never repay”.

Greek Australians, like many others forget what ANZAC day is about, and dash off for the long weekend. In fact many Greek Australians do not believe it has anything to do with us. This is so not the case. Our parents were kids, and probably are ignorant of this reality, and many of us in our late 30’s and 40’s have since lost our grandparents or never really knew then given they were back in Greece.

I know not one Greek soldier who left his country, home and family to fight for Australia and is now buried here or near by in PNG, Malaysia or Thailand amongst others.

For the record, here are the facts for Australia (as far as I know):Australian losses were 594 dead, 1,001 wounded and 5,132 Prisoners of War. The facts are here.

I wonder if 1st and 2nd generation Greek Aussies knew of this sacrifice and how grateful their own grandfathers were for the ANZAC’s, would feel the same?

My kids will know, and I hope in time, more Australian Greeks wake up to this fact. Our Paouthes and Giagiathes would certainly approve.

Kali Anastasi.

Peter Christo/Panagiotis Christofilopoulos

I get regular requests for two things, a buisness plan template, which I warn people may be a poison challice, and the screening framework we use at Christo Partners. I am very selective to whom I pass on out Business Plan template, but if you would like the screening framework, here it is.

Note that the tool doesn’t work by it self; the user needs to do the thinking, ask the right questions, and change the questions to suit the situation.

Enjoy

Peter

The fundamental challenge in innovation is the underpinning framework within which we engage opportunities. It is similar to the underpinning framework of something like contract law. Contract law underpins our commercial ecosystem that allows us to manage our risk and assure ourselves of the various inputs to our business.

Similarly a corporate innovation framework needs to:

o Promote innovation

o Allow for risk to be taken in line with appetite for that risk

o Compensate the innovator and the business fairly

o Allows the business to capitalise on the opportunity at a level that is appropriate:

§ The business at large

§ In the areas and departments that stand the most to gain.

§ External interests and partners

o Be transparent and accountable to the business, and deliver measurable results.

Commercialisation Management Framework Alpha.

This is a simple framework based on a project or program management office methodology (also used in software development, taught to me by Project Management Office [PMO] specialist, Steve Collard).

The framework has three simple stages, each with three sub stages. It should be noted, that while a program manager may liaise with a PMO re delivery of these projects (depending on their size), it should not be managed by the PMO. PMO’s processes would stall any innovation possibilities.

A word of caution: The following should not be read in isolation. The broader activities and issues related to innovation management should be considered when implementing this framework.

Evaluation –>Execution –>Exit.

Each stage has three sub stages, they are as follows:

Each sub stage has templates and processes but, the key is that once something enters evaluation, it may or may not move onto the execution stage until it is committed to. Commitment (stage) will be determined by the qualification details. One of the qualification factors is of course the time and cost associated with the execution phase.

Example: Someone has an idea for ‘new software’, and while their idea to just build it may be rejected for lack of research stage (at commitment stage), it could however get the ok to spend half a day researching (thus moving to execution). Originators then have to exit and start the next run through with as much of a scope and business argument to get the ‘sign off’ again. Our software developer may get the ok to review some competing software and create a function list.

Some detail about the stages:

Evaluation

Registration - Registration can take the funnel of business ideas and idea creation initiatives and database them into a simple (intranet based) database of ideas (DBI). Nothing more is required of the idea originators, however there is no real scrutiny here, except that the registration (even incomplete) is made by the originator.

The mere act of naming an idea and placing it on a database is a powerful catalyst for developing an innovation culture.

The format can be designed by the business, and should keep in mind that all layers of the organisation should be able to use it.

The registration should include an indication on whether the originator intends to move to the qualification stage in the framework. As a metric generator, this database is a great baseline for ideas bubbling up through the organisation.

Qualification

This is the most misunderstood stage of the process. This stage does not include ‘the doing’, it is not even planning the doing, this is the qualifying the undertaking with enough information so a commitment can be made to move onto the execution stage (part of which may be scoping/planning).

Qualification can be made using a template business argument, and tested against a screening tool (a series of relevant questions that are scored from 1-10). So, even a big idea would be evaluated only on the details of the next stage, rather than the viability of a fully formed business venture. The nest stage might be undertaking the research or prototyping for the business case (which would be a separate project again).

If an idea doesn’t get a Guernsey (ie moves to Qual Stage), it can stay in registration phase while the thinking develops.

The structure of a qualification template would need some thinking, and there is no one size fits all. I have a screening framework which I am happy to share, just comment on here, and ask for the Eval Screen.

Commitment

This is where the ok is given for the next stage. If the qualification has been done properly, this should be straight forward, if however the originator or the team committing to the project has confused the two stages, then it will become bogged down. The idea is to take a baby step forward, in line with the businesses appetite and enthusiasm, and of course the originators skills and resources.

Execution

Scope

This stage could take three minutes or three weeks depending on the project. It is good business practice to plan your work in any field, before you embark on building it. So a event a market research exercise needs to be planned, before it is undertake and reported on. Similarly, the building of a house needs some planning and forethought, nothing new here.

Build

Self explanatory. This is where the work is done. The trick here is not to do more than was scoped.

Deploy

This may mean presenting the report, the beta software, the business case etc. It also means collecting feedback to put into the next run through at qualification stage.

Exit

Exit/Harvest

If this was a venture, the harvest is the bit where someone buys it, or your risk is zero and reward is maximized. In smaller projects, it’s the bit where you complete the job, and have it signed off, even by yourself. Mentally this is important. Each battle won gets closer to winning the war (arguably).

Learn/Educate

The business should be able to share its learning experiences via a range of methods. Training and mentoring, knowledge bases, wiki’s, debriefs etc. Nor making the same errors in the future and accessing tacit knowledge is a powerful capability.

Archive

Drop the documented material somewhere where people can access it in the future.

What Now?

This cyclic approach will generate a venture pipeline which can be made visible against KPI’s to management. Originators need to have their efforts rewarded, and the business needs to include equity and profit sharing in their thinking.

Advice should be sought by commercialisation consultants on the pipeline projects and these should be contrast on external opportunities and synergies the business is involved in.

Good luck!

Peter Christo

Corporations are creating a new executive role as a way to foster innovation, undertake corporate venturing and create a competitive advantage for themselves as part of their operations. Say hello to the Innovation Manager!

Innovation Managers come from everywhere, inside and out of the organisation, from HR, Marketing, Sales and even operations and supply chain management. But, who are these people? And how do they add value to the organisation?

Of course we can all see the world is changing, and it is doing so at an accelerating rate. This is happening in all aspects of our lives, from politics, to personal values to economics, climate and, consequently, in businesses who produce products and services. The innovation manager is (in part at least) a result of firms looking for that competitive edge in this new landscape. However, the approach to corporate innovation in most western businesses has a way to go before it can be effective in delivering true, measurable and accountable value to the organisation.

The ‘current state’ of corporate innovation being implemented is mainly through a range of training programs and workshops. While training is a necessary part of achieving desired outcomes, currently measurable positive outcomes are random at best. The Innovation & Commercialisation function needs to justify its existence and be as accountable as any other department otherwise it will never be taken seriously by the rest of the organisation.

The issue rests with the fact that there are little or no frameworks developed that are suited to the task, in fact, any that do exist, misunderstand the task. The issues are many, but part of the problem rests in frameworks that don’t foster innovation, in fact stifle it. What I call the ‘One No!’ problem, where just one ‘No’ from a manager kills the idea in its tracks.

If there is any doubt regarding my claim, ask yourself why innovative businesses continue to appear and compete with the established players, when these established businesses are already in the market and have all the money needed to invest in new innovations to release new products and services? Innovations mainly occur outside the enterprise (like Google’s slaying of Microsoft’s dominance and Aussie Yellow Pages inability to respond to the new business landscape, but to name a few)!

Until now, it’s very rare to find real innovation occurring inside large businesses. I suggest that there are new, educated and progressive innovation managers that are poised to change this, if they can grasp and respond to the challenges.

If you are the innovation manager for your organisation and want to help your business create a proactive and professional culture and engagement with the business on an operational and strategic level, consider the following recommendations;

1. Agree on where and how the innovation role fits into the organisation, and how it contributes to the goals of the business. This should be documented and endorsed by management. You should also include a statement of purpose not only for your role, but the activity of ‘corporate venturing’ within which innovation falls.

2. Take a portfolio and investment view of the ventures your business gets behind, taking into account yield, risk and exit and other factors relevant to the business strategy. A portfolio view means that you as the innovation manager need to be working with the strategy manager (unless you have that role too) to gauge the appetite of the business (directors) for risk.

3. Work with the Marketing department to get visibility on the changing landscape of the market and customer (ie: research). Your role needs to morph into both educator and seller of ventures that have bubbled up through your department.

4. The business needs to determine the investment amount that it has earmarked for innovation and corporate ventures. This should be separate to the operational expenditure associated with running the innovation team. There needs to be no doubt that money is available and allocated for this activity.

5. Learn to Pitch. As the innovation manager, you will need to both scrutinise opportunities for the business and Pitch them to the top table. If you can’t get excited, you need to ask yourself what your motivation for the job is.

6. Look both inside and outside the corporation for ideas and opportunities. Think head hunters, but for innovations and opportunities. Have your spy’s out there looking for you. This can be done formally and informally. Think about working with the top table to determine what constitutes a good opportunity for the business; you’ll be surprised to see that not all the directors agree.

7. The nature of corporations is to manage, control and measure rather than accepting that innovation needs time to experiment, morph, gestate and learning to occur. Your program needs to be multi dimensional, where you instil an innovation culture, skills, and KPI’s to deliver results.

8. Innovation programs need to be tied into programs that dovetail into a broader framework that rewards all stages of the process, that allows for experimentation, and can utilise the internal market forces of the business to get its opportunity ‘up’. Even the corporate suggestion box is a source of inspiration.

9. In many cases there is confusion between what is a prospective innovation (that is a commercial opportunity for the business), and what is incremental improvement, and part of business as usual BAU. Set some guidelines and clear this up with management. Don’t confuse the two.

10. Consider managers (your peers) middle to senior, are trained to minimise risk, not seek it. Also remember that one persons appetite for risk should not determine the future of an opportunity. Your innovation framework should cater for this (Say No to ‘One-No’).

11. Innovation (ie generating or identifying ideas that lead to products, services and business models that are commercialised by the corporation), is in many cases confused with R&D. If you have an R&D department, work with them as a service, not for them. If anything, the R&D department should report to the Innovation manager.

12. Finally, get some training either formal or informal. The body of knowledge in corporate innovation, entrepreneurship and innovation is evolving and interesting things are happening in academia and other firms. You should be across that as part of your role.