Oct 20, 2010 | Management, Operations, Personal Rant
If you ever needed a lesson in the pitfalls of negotiating under pressure, take a look at the mess created by the agreement of the terms of the revised Mining Resources Rent Tax between the large miners, and the Federal government . If it wasn’t so serious, it would be funny.
In simple terms, the deal which set MRRT rates was with the Federal government, but the states own the resources, and already do, and will continue to levy, a royalty payment on tonnes extracted.
The miners thought the MRRT rate was inclusive of any increase by the states in Royalties, so they had a reliable ceiling on the total tax paid, the Feds say no such condition was agreed, and the states are cash strapped, and looking for revenue, where better than the miners in a boom.
All parties stuffed up royally by making assumptions in a pressure cooker negotiation, and not articulating them in the discussions, and written agreement.
This is easy to do under pressure, but these guys are supposed to be experts, so it is unbelievable that such a basic oversight occurred. The lesson is that whatever you do, take some time away from the scramble and pressure of “completing” a negotiation before an agreement is executed to ensure all the bases are covered.
Oct 19, 2010 | Customers, Leadership, Management, Marketing
The scary thing about competition is that someone always loses, even if it is only an opportunity. Many would like to believe that we should all be friends together to save the pain, but outside the public sector, it does not happen like that.
Successfully competing is down to delivering superior value to customers at a cost less than the customers best alternative. To do that in this connected world where transaction costs are disappearing the whole enterprise needs to be focused on what it is that the customer values.
Sounds pretty simple, but how rarely I see it
Oct 18, 2010 | Management
The corporate obsession with planning, appropriate in principal often becomes just an exercise in managed optimism.
Many times I have witnessed, and been party to budgeting and planning sessions that are driven by a notion that all the bad stuff that has happened this year will not happen next year, and that the stars are at last aligned to a give us a “big one”, the bad stuff is behind us. This may sometimes be right, but other bad stuff usually takes the place of last years bad stuff, but we seem to be able to often tell ourselves that it won’t.
We often spend so much unproductive time planning — read kidding ourselves, that we get nothing useful done. A mate of mine, Tony Cassone has a truism he has been shouting for as long as I have known him, “son, you get one out of 10 for talking, the other 9 is for doing”
Once again, Tom Fishburne nails this tendency to corporate rose colored glasses with his biting “waterfall planning” cartoon.
Oct 17, 2010 | Innovation, Operations
Usually discussion about innovation focuses on the new stuff, the things that have, or need to change to deliver a changed outcome.
During a discussion recently about “green electricity” in Australia, specifically solar power, it struck me that the costs of the Photo Voltaic panels was dropping rapidly, and is the focus of most of the activity, and certainly all the publicity. By contrast, all the surrounding elements of the value chain necessary to deliver the innovative technology, the processes to source parts, deliver, maintain and install the cells, and link them to the existing grid, were all going up in price, more than offsetting the benefits of the drop in price of the core technology.
Innovation is only of any value when it is delivered, when the benefits flow, and usually the “delivery” is a forgotten element of the whole process during the hype.
Oct 14, 2010 | Customers, Innovation, Marketing
Curiosity may have killed the cat, but it is the driver of everything that contributes to improvement. Doesn’t matter if it is improvement in a factory, using the “5 why” tool, or some question, the answer to which advances our knowledge of space. The driver is curiosity, and the result, the potential to be better, to know more, to deliver benefit.
For a marketer, being curious should be second nature, but how long since you sat one-on-one with a customer and sought direct feedback on how your product performs Vs the competition?, why they bought it?, how could it be improved?, what job was it really doing? And so on.
It is one thing to absorb research reports, dig through the numbers, engage in esoteric conversations about innovation, and understand at a macro level the things that contribute to success, but it is something entirely different to get down in the weeds with your customers.
