May 22, 2014 | Change, Governance, Marketing, Small business
The future prediction business has so far failed to find a sustainable business model, apart from the fun stuff in the tent with the funny lady with the cards and crystal ball.
About the only serious people who still profess to be able to predict the future with any accuracy are politicians, and we all know how that usually turns out. The rest of us set about controlling what we can control, and preparing for the unexpected from the things we cannot.
By contrast, with some effort, staying on the leading edge is possible for all enterprises. Information is now so freely available, and consulting services whose stock in trade is “leading edge” whatever you want, so ubiquitous, you can stay in front of most if not all of your competition, and be aware of changes occurring so you are in the best position to leverage them.
Small and medium sized companies are best placed in this game of staying current, should they be prepared to make the commitment to do so.
Smaller companies can try stuff out, see if it adds value, and deploy in the time that their larger competitors take to organise the conference call to test if there may be a good idea in here somewhere. The only hurdle is that it does consume scarce resources, but when you see that consumption as an investment, the payoff can be huge.
In the marketing space, my hometown, the cost of testing has fallen so dramatically over the last decade that there is no longer any valid excuse not to be testing extensively.
So get on with it, apart from being strategically and competitively sensible, being at the front is where the fun is.
May 21, 2014 | Change, Governance, Leadership, Strategy
Courtesy www.theage.com.au
Years ago I worked as a junior marketing bloke for Allied Mills, which became Meadow Lea Foods, then Goodman Fielder. I returned 25 years later as a contractor running a specialist unit of the ingredients division in a pre-sale “polish-up” as they struggled to manage their assets and generate a sustainable profit.
Finally, it seems GF, the last really significant Australian FMCG business has dropped the last hospital pass, and is being sold overseas.
What a shambles, a litany of strategic bumbles and crap management over a long period. It is also a report card on the whole Australian food processing industry. The sale reflects the result of the challenges that have finally led to the demise of large, Australian owned enterprises in the food industry. One day a Phd student will document all this, and perhaps the mistakes many of us saw evolving over a long period will be articulated in the hope we learn something.
I have written about this progressive failure to retain domestic ownership a fair bit over the last few years, the fiddling, the missteps, stupid stuff by both management and regulators, and now just feel sad rather than angry as I have been before.
The undoubted opportunities for Australia to become the food basket of Asia will not go away, we will still get some of the benefits, but just those bits that multinational conglomerates give us, almost none will be because we can make the decisions that have a long term impact on the shape and nature of the enterprises. Those decisions will all be made overseas in someone else’s best interests.
Vale Australian value added food processing.
PS. May 28.
It has been announced that, as expected, Peters ice cream has been sold. to UK based R&R icecream, funded by a French private equity group. Despite a checkered ownership history in the last 25 years, Peters is a brand of my (long ago) childhood.
Sigh.
May 10, 2014 | Governance, Leadership, Personal Rant
Courtesy http://mockingwords.blogspot.com.au
As great an advocate of analytics as I am, it remains a truth that data without a context is useless.
It is in the articulation of the context that data is given meaning, and it is at this point that the context can be articulated to change the meaning of the data.
“Spin” is so common we almost do not mind any more, it is so woven into our daily media consumption, that it is normal, and each person applies their own cogitative filtering system to what they are bombarded with every day.
Spin is no more than selecting a combination of data and context to deliver an argument that suits a predetermined outcome. Question is when does the modest spin with perhaps the best of intentions become a lie based on manipulation of data and context.
I cannot wait for Tuesday nights budget, if nothing else it should be a lesson in context management.
PS. A week post budget.
Well it seems they really blew this one!
We thought the previous residents of the Lodge were too smart by half, trying to manage both the data and the context, and failing at both, but the current Prime Minister and his Treasurer have set new standards.
Irrespective of your political inclinations, and view of the logic of the budget, it is hard to argue that the sell job has been just crap, the only thing worse has been the packaging of the product.
Mr Shorten cannot believe his luck, and how quickly we forget. Perhaps our limited memory is what the PM is relying on, I wish him luck, but where is the bookie when you need him.
Mar 21, 2014 | Governance, Leadership, Strategy
Simon Sinek
For 35 years as a corporate manager and consultant I have been an advocate of, amongst other things, personal accountability, marketing ROI, extensive use of data in decision-making but without eliminating the wisdom of individuals who have “been there, done that”, socialising businesses with various digital platforms, turning your supply chains around so they become demand chains, and much more.
Many of the 1,100 odd StrategyAudit posts to date have as the core idea the notion of “doing” something rather than just accepting the status quo.
It is only in the last few years that I have come to realise that while the advocacy was based on good solid reasoning coming from domain experience, technical expertise, and common sense, it is not enough by itself.
I have spent lots of time articulating various cases for change considering the “WIFM” (What’s in it for me) question explaining why the proposal was in not only the best interests of the individual, but of the organisation, but fell short of connecting into the reasons the organisation exists, why it deserves the commitment of the individual. Lots about commercial survival, innovation being the only sustainable competitive advantage, the commercial and personal value of simplicity and transparency, but little, as I said, about the big “Why” question.
Now, in a homogenised, connected, and integrating world, little is more important than articulating the ‘Why” . Spend the time to watch Simon Sinek’s seminal presentation, your competitors almost certainly have.
Mar 20, 2014 | Governance, Management, Small business
Cash flow is the lifeblood of every business, from the one person micro business working out of their garage, to the largest multinational. To call it “Lifeblood” sounds like a cliché, but the thing about clichés is that generally they are true.
Working as I do with small businesses, cash is a priority, and whilst I concentrate on the strategies and marketing planning and implementation, there is no point going there unless the cash flow is robust, or in the case of start-ups, has been sufficiently considered to offer confidence.
Unfortunately, the owner/managers of most SME’s are lousy at cash flow management.
Amongst the first questions I ask after engagement, and quite often before , are:
- How do you manage your cash flow? and,
- Can I see your debtors reports?
In response to the first, I am looking for:
- The management routines, preferably daily, but at least weekly review of cash and its management, with forecasts, action points and outcomes recorded.
- A calendar that identifies the timing of expenses and expected revenue. I also want to be assured that the calendar is a part of the review process, not something wheeled out once a year during the budgeting process.
- A rigorous process of following up debtors. You do not have to be aggressive, rude, or inconsiderate of the debtors position, but it needs to be regular, informed, and be a key part of the CEO’s management agenda. It should include escalation points that reflect trading terms, after which increased pressure is applied to debtors. This may vary with the customer, for example chain supermarkets routinely do not pay inside 60 days, but generally, once a debt goes beyond about 75 days, experience tells me that they become very hard to collect without cost and significant effort.
- Clear, simple, and up to date Trading Terms that are articulated and applied consistently.
- Immediate and clear follow up processes to manage customer discounts and claims, particularly where cooperative promotional activity is present or where there is an imbalance of relationship power, as there is with chain supermarkets.
In response to the second, I like to see the debtors report, clearly broken into appropriate categories, logically, 30, 60, and 90 days, pulled off the top of the desk, or out of the “favourites” list indicating that they are a document in constant use, updated and maintained.
Cash is too important to the left to the accountants to manage alone, it needs to be a key priority for the boss, that way, everyone else knows it is important.
Mar 17, 2014 | Communication, Governance, Management
Trust is a word that keeps on coming up, everywhere.
Increasingly in a complicated world we are looking for those we can trust, to do business with, to have as friends, or just to share a cup of coffee.
I have just completed a project of chain re-engineering that did not deliver all the hoped for outcomes, but during the debrief process, the word “trust” and its foundations that in this case proved to be a bit fragile, loomed large. Similarly, a friend of mine is selling her house, retiring to the south coast, and she appointed an agent from a small number in her local area, and as it happens, one of the unsuccessful bidders was also a friend of mine, someone who I would get to sell my house, when the time is right, because I trust her.
Got me thinking about the components of trust.
It seems there are four headline components, which is good for me as a consultant, as I can conjure up a quadrant and deliver it as a deep intellectual exercise. However, the reality is that it is common sense, just like most consultants quadrants, but common sense that paints a picture, that delivers a perspective, and makes you think.
- Engagement. You do not trust those with whom you have no experience, who have not earned that trust. You may think they are trustworthy, but would you confide your pin number to them?, there is a difference. Engagement of the type that generates trust happens over time, is a two way process shared equally by both parties, and is devoid of ambiguity and hidden agendas.
- Integrity. It becomes clear over time that the positive behaviour that builds trust is not just for the benefit of the chosen few, but is based on a “personal code” of some sort that extends to those not closely engaged. The individual or enterprise concerned consistently puts the interests of those with whom it interacts above its own short term interests, and it acts the same way to everybody, irrespective of their status. They “walk the talk,” always.
- Operational excellence. This sounds business-like, but is just as applicable to individuals. Summed up it simply means that they never over-promise and under-deliver, what you get is what you saw and at least what you expected, but usually is more than you could have reasonably hoped for.
- Fit for purpose. The product or service is the right one for the purpose for which it has been delivered, and there has been an effort to ensure that the purpose has been defined sufficiently by both parties to ensure that the product was the right one for the circumstances.
Back to my chain exercise. When I look at it dispassionately, the parties had insufficient opportunity and incentive to build the trust in each other that was necessary. Individually, they trusted me, as I knew them all, spent considerable time articulating the process, and have a history with several, but they did not know each other well enough to offer the real trust we were looking for.
And to my two friends who did not do business. The house seller went with an alternative that offered an up front incentive, it seemed to reduce the cost of selling. When the process is over, her house of 30 years which is the only substantial asset she owns has been sold, I suspect she will wonder if the agent delivered her a buyer that just made his life easy, a cut price, quick and easy sale that delivered him an easy commission, in return for the added costs he incurred up front, all wrapped up in the clichés of the real estate agent. Had she trusted my agent friend, it is quite possible that she would have delivered them a buyer, just the right buyer who wanted the house because of what it was, not because the price was great, the cash benefit of which would have been to dwarf the up front saving that was made.
During the research for this post I put “trust” into several dictionaries, and the options for a definition are many and varied, according to the context. No wonder we have difficulty.
