Jan 21, 2013 | Change, Governance, Lean, Operations
The maths are simple, do more with less, and you have more left over at the end.
Productivity is not just something you aim for in the factory, the opportunities to do more with less are everywhere, in every activity undertaken.
The catch in all this is, when you identify the opportunities, free up the capacity by doing more with less, and figure out how to make the necessary changes “stick”, you have a choice to make:
- You remove the now redundant resources, and pocket the difference, or,
- You sell the added capacity that is already “paid for”, so you get the added revenue at an enhanced margin.
Sounds seductively easy, but in fact it is a tough road, littered with challenges, and nasty potholes for the unprepared.
Jan 16, 2013 | Change, Personal Rant, Social Media
As a kid, I built a series of model planes, mostly WW11 fighters, flown with 2.5 – 5 cc motors, on the end of a set of wires. Loved it.
I experimented with primitive radio controlled, built a Spitfire, and put some radio gear in it, some I had scrounged from older enthusiasts, a bit I had bought, at relatively huge expense, as the only money I had was earned refilling shelves in the local supermarket , 2 afternoons a week after school. The Spit’s first flight was a disaster, literally, and it ended as many real Spits did, as a burnt patch in the grass, ending the passion, although by that time I had started to see girls through different eyes, and the supermarket flying money suddenly had competition.
Well, a lot has changed from then, in the 60’s.
Chris Anderson, one of the great writers (Editor of Wired, writer of “The Long Tail“) and innovators, has commercialised what are now being called drones, but are really only modern versions of my Spit, with cameras onboard, and in the case of military versions, I suspect a bit of a bite. The stuff on his site, DIYdrones , is reviving the itch of a boy, but the 61 year old marketer is seeing enormous commercial and nefarious potential.
It seems to me that many familiar things from years ago are making a comeback in modern form, from the VW bug, to Malibu surfboards, and my “spit”. Only difference is the new ones outperform the old by a geometric factor.
Jan 12, 2013 | Change, Management, Small business
Below are 10 predictions I made at a meeting this week of owners of SME’s in Sydney’s inner west. It is a quick list I jotted down in the 10 minutes before the meeting, but on reflection, I actually thought they were OK, therefore I am prepared to live or die by them.
So, here goes:
- Marketing is digital and personal, mass marketing is dead! Get personal and get digital, they are complementary, not mutually exclusive.
- Social media will overtake traditional news dissemination channels. Just look at where the news about the current fires came from, those on the spot with mobiles and net connections. The rest of us get the dramatic pictures a few hours later if the cameras can get in, but the real “news” is reported by individuals on the spot using twitter et al. (Just think about that as evidence of empowerment for a moment)
- A few smart SME’s will do very well, but the rest will at best struggle, and many will fail. The scale of operations necessary for success is relative to the size of the niche occupied, and most SME’s try to be all things to all people, and fail at being relevant to enough to ensure success.
- The new “cool” for our kids is to train as a “tradie” as there are insufficient fulfilling jobs left for those with modest, non vocational degrees, to fill demand from the aforementioned graduates.
- The shortage of willing and able workers will continue, as we no longer train people to work, we train them to “expect”.
- The 40% of SME’s who do not have web sites, or have sites that act only as an electronic brochure rather than as a magnet to their target customers need to realise they are missing the opportunity to grab the lifeline. Failure to grab the lifeline, well, refer to prediction 3.
- “Big Data” the combination of traditional data bases and the behavioural and attitudinal data scavenged from social media will become the next big thing during 2013.
- Mobile will take over from fixed line, comprehensively, and across all communication channels.
- The economy will continue to slow, consumers are cautious and risk averse. We are caught between a European economy that is truly stuffed, a US economy that whilst showing some signs of life, is extremely fragile even after the dills kicked the “fiscal cliff’ down the road a bit, a Chinese economy that is still robust on paper but is turning inward to meet domestic demand rather than exporting manufactured goods, and so needs less of our commodities. These things together with the very high $A, and a determination by our “leaders” to continue to say how well we are doing while denying the caveat that we are doing well relative to the rest, who are really crap. (compared to blokes on crutches I am still a fast runner, but compared to anyone who can really run, I am nowhere near where I was 40 years ago). This is notwithstanding Bruce’s optimism, and correct assessment that his industry is a “canary in the mine” but look where the housing market has been in the last couple of years.
- Around July/August, the economy will stumble into a really nasty hole as we approach a Federal election. Never in my memory have we been “led” by two such unpopular leaders. Unpopular they may be, as have been others in the past who have in fact been successful leaders, but the flip side, respect, is not there either, and being unable to respect your leaders, even if you do not like them is a real problem.
There you go, my 10 predictions.
Hold me to them as we progress through the year, it may make for some lively debate at some point.
Jan 2, 2013 | Branding, Change, Marketing, retail, Small business
This is the first post of the new year, so it seemed appropriate to hop on a hobby-horse, the indiscriminate use of the word “iconic”, in all sorts of situations.
My beef today is specific to the food industry.
The call to receivers to sort out “Rosella” has created a lot of noise, of the “another “Iconic” Australian food business goes to the wall” type.
Whilst it is true that the Rosella brand has been around for a long time, it has not been owned by an Australian company in my memory in the food industry, which is disturbingly long. Rosella was owned by the British/Dutch multinational Unilever for many years, who sold it to the Dutch trader Stuart Alexander probably 15 years ago. They failed to give it the breath of life, and on-sold it to the South African group that ultimately owned Gourmet Food Holdings, as their vehicle to assemble food brands. They also owned Aristocrat, which in my memory was owned by an Australian family who actually cared about their products. Problem was they had a factory in Chatswood in Sydney, now prime real estate, and insufficient marketing grunt to maintain retail real estate,
So, what makes an “Iconic Australian business”?
I might be persuaded that “Rosella” was an Australian brand, as you could not buy it anywhere else, but certainly not that it was an iconic Australian brand, or Australian business, which is the other epithet often used.
To me “iconic” has a number of dimensions:
Longevity.
Market share, but more importantly than share, the potential to shift markets due to consumer trust and loyalty.
Consistent delivery of value to customers/consumers.
Over time, it has managed to evolve so that it accurately reflects the core proposition of the brand in a manner relevant to the customers/consumers of each of those times.
On all but the first of these parameters, Rosella fails the test. Ask yourself “who will miss Rosella?” and the real answer is very few.
So why the hand-wringing?
Simple. The demise of Rosella in another example of the decimation of the Australian food manufacturing industry, particularly the small manufacturers. Here we are, in a geographically enviable location close to the burgeoning Asian markets, with advanced R&D, skilled workforce, high and transparent standards, able to produce commodities at world competitive costs, but we are failing to feed our own people from our own resources, huge amounts of manufactured food is now imported, (more than $10 billion last year) and the trend is accelerating.
We have White papers dealing with the Asian century and our place in it delivering cliches, and task forces examining the woes of the food manufacturing industry, and making grand recommendations, but not much activity that is useful, so I guess we have to kid ourselves to feel better.
Happy new year, I hope it is “iconic” for you.
Dec 18, 2012 | Change, Governance, Management, Social Media, Strategy
Like most newspaper groups, Fairfax has failed to evolve to accommodate the depredations of the digital revolution. Their business model is broken, and the way forward is unclear.
The one spot of light in a gloomy future was the NZ auction site “Trade Me” which Fairfax bought for $700 million in 2006, then floated 34% onto the ASX, and a further 15% last year, raising $422 million, leaving them with a 51%, share which they are now selling for $616 million. The proceeds of the sale, are being used to pay down the debt accumulated to keep a redundant business model alive, offering an opportunity for it to change before being terminal.
Trade me was delivering profitability, superior return on funds, and an important toe in the digital water, but is being sacrificed to keep the legacy business afloat while it tries to adjust. In addition, Trade Me, along with Fairfax’s other less prominent digital assets offer the opportunity to experiment, test, to learn how to survive and compete in the digital environment.
The lesson in all this is that if you do not cannibalise yourself, somebody else will accommodate, and the pain of chewing your fingers will pale into insignificance against the pain of being chomped around the waist by a white pointer. The irony however is that the only digitally sustainable asset in the house has to be sold to buy some time, but leaves the business without any significant cash generator in the digital space. At least Fairfax shares rose yesterday, so directors are probably happy this morning.
Dec 11, 2012 | Change, Innovation, Leadership, Marketing
Web based A/B testing goes a long way towards eliminating dumb mistakes, making the best choice, creating a discipline around innovative activity, and encouraging change, and has been made far easier in a whole range of areas by the data collection capabilities of the net.
But what happens when you cannot test, when you are doing something so completely new that the frame of reference necessary for good test results does not exist?
Try testing the Model T in 1890, only a few would have seen the possibilities because the horse was the frame of reference, the early cubic paintings of Picasso, art that so broke the rules as to be outrageous, or the calculations of Copernicus demonstrating the earth was not the centre of the universe, something catholic church felt pretty strongly about.
At some point testing becomes a redundant tool, you simply cannot test everything, and you have to rely on the guts, instinct, and insight of the few outliers who see things differently to make meaningful change
