Oct 21, 2013 | Communication, Governance, Lean, Operations
I had a post prepared for this morning, relating to the evolution of “local” agriculture, specifically around Sydney.
However, the events of the weekend, the burning of Sydney’s surrounding bushland, including several of the farms of those I have been talking to, seems to make everything else trivial by comparison. Getting your head around the scale of the fire disaster facing us is difficult, for most of us, most of the time, as it is no-one close to us who is affected, so can be pushed aside as we go about our business.
This morning is different.
Walk outside your comfy suburban home, and look at the sky, smell the smoke, observe the odd orange light, and you just know this is different, it is not just another Sydney summer bushfire. Hurts to wonder what may happen when summer actually gets here.
As we watch and listen to the news reports, there is a huge application of technology and human effort to managing the logistics of the fire-fighting effort, but one shot on a news report caught my attention. Behind all the activity of the control centre, the people on phones and computers, handling reports and updates, stood a big whiteboard, what appeared to be a visual record of the fires, their relative risk, resources deployed, resources expected and in reserve.
It always happens, people relate to visual material, when under pressure, a picture can immediately summarise a situation that words alone cannot, so they tend to gravitate to pictures, or a whiteboard in a large group situation, something that can be kept up to date in real time, that all people who need to see it, can see it as it evolves. The whiteboard is perhaps the best collaboration tool ever invented.
When the fires are out, the cleanup someone elses problem, and the inevitable wrangling with insurance is the news topic of the day, the lessons of visual should remain with all of us as we go about improving the way we go about achieving goals.
Our thoughts go to all those who have been impacted by the fires, ands will be over the next few days as the fires continue to ravage Sydney’s bush outskirts. Our grateful thanks for the courage, and committment of the “fireies”
Oct 10, 2013 | Change, Governance, Leadership, Marketing, Strategy
Canadian dairy processor Saputo looks set to take control of Warrnambool Cheese and Butter (WCB) with a $7 a share offer valuing the company at $370 million, which trumps an existing cash and shares offer from Bega Cheese which values WCB at 320 million.
$7 a share is a substantial premium over the Bega offer price for WCB, and appears to be a very full price on any conventional analysis. Trouble is however, that conventional analysis has some difficulty factoring in the strategic value of the business, one of only three substantial dairy businesses left in Australian hands.
WCB’s performance was woeful a few years ago, being on its knees in 2009 after a trading loss of $20 million on $441 million turnover, and having unsustainable gearing. Since then there has been improved but patchy performance, $8.8 million profit in 2010, peaking at $18.5 in 2011, down to $15.2 in 2012, and down again in 2013 to $7.5 million.
WCB has flown a bit under the radar as the dairy industry has been convulsed by take-overs and mergers in the last 25 years, and is now one of just three locally owned dairy businesses with any scale. The other two, Bega and Murray Goulburn have both tried to find a way to consolidate with WCB, and the Bega Chairman has been on the WCB board for several years, so should know the business inside out.
With 2 billion rapidly emerging middle class consumers on our doorstep in Asia, whose consumption of dairy products is rapidly increasing, the strategic value of WCB to the Australian economy is significant. However, the reality is that without a better offer, and subject to FIRB approval, (should not be a problem) WCB will be sold to Saputo.
Part of the challenge is the disconnect between the domestic market where the retail oligopoly is the price setter, and export markets where Australian dairy produce is a price taker. Inability to generate anything more than the cost of capital, at best, domestically, and subject to big fluctuations in international commodity prices and exchange rates, and not being a low cost producer, Australian returns in the industry have been very inconsistent. Now however, with the emergence of the Asian consumer, there is long term potential for value added margins. What is needed is patience, operational and business model innovation, and some really good leadership.
Pity we are no good at that
Also sitting on the desk of the new treasurer is the proposed takeover of Graincorp, by US company Archer Daniels Midland. Graincorp handles 90% of Eastern Australia’s grain exports, and roughly 75% of the crop, so is pretty central to the success of the Australian grains industry. A similarly strategic Australian asset that seems destined to be run for the benefit of others.
What do these North Americans see that we cannot?
Vale the Australian owned food processing industry.
Sep 6, 2013 | Governance, Management
How often have you been in a position of trying to get something done in the face of an illogical or bureaucratic impediment ?
It is enormously frustrating, Authority being exercised.
On the other hand when faced with complexity, ambiguity, or technology beyond our knowledge and understanding, sensible people seek advice from an authority, someone who knows more than us, and can clarify and explain.
This person often has no authority, but is an authority.
So often these two things get tangled up. Someone “in authority” exercises that authority as would “an authority”, and the outcome is usually rubbish.
As management of our institutions has become flatter, more collaborative and individually accountable, this distinction has become more important as those with the authority are less and less likely to also be an authority on any given topic.
Failure to recognise the distinction is a huge burden on productivity.
Sep 3, 2013 | Governance, Innovation, Marketing, Operations, Strategy
I have just been a part of a post investment review with a client, looking at what a significant investment in capital equipment has delivered, compared to the planned outcomes, that underpinned the Capex.
Not a pretty sight, and now they have to learn the lessons to avoid repeating the mistakes.
Over the course of the exercise, the marketing manager consistently blathered about the accountability of the engineering staff in the process, but when cornered on marketing accountability to the product and market specifications against which the investment was made, and the effectiveness of the launch, and post launch activity, he had nothing.
Marketers have cried forever that the money spent on marketing is an investment, not an expense, but often this has a hint of self preservation about it.
However, if we are fair dinkum (Aussie for honest with ourselves) we should also be prepared to undergo a rigorous process to measure the effectiveness of our marketing investment.
Marketing however, has substantial elements of the “qualitative” about it. Creativity, being different, a better approach, all of which are best measured in hindsight.
Having measured, and with the benefit of hindsight seen a better way, surely the gap could be termed a “Marketing Debt”, the amount pissed away because the idea, execution, CVP, or something else was not up to scratch.
If we figure out how to keep a running score, weighted by hindsight and the continuous improvement enabled by the analytics and A/B testing now possible, we might even convince the beanies that marketing really is an investment.
Aug 29, 2013 | Collaboration, Governance, Leadership, Management, Strategy
Everyone knows herding cats is impossible, right?
Quite often this is a metaphor used to apply to NGO’s and voluntary organisations, bureaucracies, particularly local government, farmers, and children. Getting them to one place, at one time, in an organised and disciplined manner seems impossible.
I have used it plenty of times, not always kindly.
However, a recent experience has led me to a different conclusion, cats are actually pretty easy to herd, it just requires a bit of good management.
- Make sure they are hungry
- Show them a feed.
Done, herded.
It is the same with any of the metaphorical cats. Make sure they are hungry for what you have, can deliver, or represent, then demonstrate how to get to the prize.
Mostly people are motivated by things other than money and rules that dictate their behavior, offering responsibility and accountability for their actions, and a reason why things need to happen in a particular way goes a long way towards herding them. However, it is not really herding, as you need to be out in front persuading the “cats” by one means or another, to follow.
It is simply called “leadership”, and leaders are not always the ones at the top of the now almost redundant, formal, old fashioned management pyramid. Now they are those that care, put themselves out beyond their comfort zone, confront scared cows and take a photo of the elephant in the rooom and throw darts at it.
Aug 21, 2013 | Governance, Marketing
Spending marketing resources to build a brand all about you when nobody will really care, is about the ultimate in narcissistic behavior.
Narcissism “noun. Excessive interest in, or admiration of oneself and ones physical appearance” Oxford.
Branding professional know that brands are built by behavior, how a product performs, solves problems and delivers value, not by the way it looks. Good looks and advertising weight may get you one initial purchase, after that, you are on the tick to perform.
Our current election campaign, if it can be dignified by such a label, is the ultimate exercise in building the “personal brand” of the two protagonists, and that is all. Lots of photos with babies, attractive people looking interested, carefully staged and edited shopping mall and factory floor walks, the whole sham.
If after all this effort we still think they are both wankers, and only vote for one of them (despite really voting for the local member, not the leader, but lets not be too fussy) because it is compulsory, how much resource has been wasted?.
What they seem not to understand is that self branding is an oxymoron (perhaps appropriate in the circumstances). Branding only evolves as a result of behavior, your brand comes to reflect what you do, and the manner in which you do it, and has little to do with what you say unless it is absolutely consistent with what you do . In effect, those that watch you, bestow on you the characteristics of a brand based on what they see you do.
In the case of our pollies, we see a couple of ponies flitting through shopping centers kissing babies and telling blatant porkies and throwing mud at the other one.
And they wonder why we all are sick and tired of the whole lot of them,.
