The tragedy of ‘doing a Fairfax’

The tragedy of ‘doing a Fairfax’

Apr 7, 2017 | Leadership, rant, Strategy

The once great Fairfax media empire, once a fearless protector of our democracy, on Wednesday announced a further rationalisation in an effort to save $30 million.

This is another in a long list of ‘Adjustments’ and programs which have  become code for making editorial staff redundant.

The Fairfax announcement of 30 million in cost savings, promises to turn the Fairfax publications into  ‘genuine digital businesses with the capabilities and cost base to best operate in the current media environment’.

This is code for no more news that we should be hearing, and more mindless nonsense about footballers hammies, bar brawls, and steamy affairs with soapie stars.

How do such stories give us the intellectual depth and investigative rigour needed to keep the forces of greed, self indulgence, neglect, corruption, and sheer criminality  at bay?

From a commercial perspective, it is reasonable that a private organisation follow the market that it needs to service in order to survive, but that survival, assuming it happens in this case, comes at a long term cost to the community it serves.

Lord Beaverbrook, amongst many colourful quotes is credited with something like ‘my papers give the public what they want, which is not necessarily what they need’.  At this time, never has a truer word been said.

In 2016 Fairfax saved $15 million by cutting 120 editorial jobs, on top of the 1200 saved in 2012, which included the closure of a number of its printing operations. Saving another $30 million will see the cleaner writing the editorials.

If this was just another business going broke, and struggling for its identity and survival in a disrupted industry, it would be one thing, but this is Fairfax, a group that for 180 years has kept those who seek to govern us honest, or as honest as they can be, and has exposed the corrupt and venal amongst us to fearless scrutiny.

It has been clear for decades that people bought newspapers for the classified advertising, the cars, jobs and houses being sold turned into a ‘river of gold’ for the newspaper proprietors, who invested a bit of the river back into the public good.

Now the rivers have dried up, the public good is being left to fend for itself.

Therein lies the tragedy, it can’t without help.

In the absence of an accountable and fearless press, we are all in trouble.

Without Fairfax, and the determination and commitment of Kate McClymont and others like her, we would not have the current  Royal Commission into the Institutional abuse of our kids, and Eddie Obeid and his cronies, like Sir Lunchalot would still be running the state for their personal benefit, to our collective cost.

The lesson for the rest of us is that you ignore the tsunami of change that is coming at you at your peril, and collectively unless we find ways to replace that which is lost in some way, our children will pay a very big price indeed.

 

The 4 levels of a successful business improvement project 

The 4 levels of a successful business improvement project 

Apr 3, 2017 | Governance, Leadership, Management, Strategy

My clients are mostly small and medium sized manufacturing businesses. They usually come to me when they are in a spot of bother, as word does get around.

Over a period of over 20 years of working with these businesses, a process has evolved. It is repeatable scalable, and can be applied to any business of any size. This is not because it is a complex set of algorithms that account for every contingency, just the opposite. It is a simple way of approaching a performance improvement project, that recognises the beauty of Einstein’s quote that “everything should be made as simple as possible, no simpler’

It is not rocket science, it is common sense, first principals.

My entry point is usually strategy, marketing & sales, or as I prefer to call it, ‘Revenue Generation’. The functional distinction these days between marketing and sales is utterly redundant. It never was relevant to customers, it just made the organisation chart easier to understand.

When someone is in trouble, and that is where I usually come in, the standard call is ’get more sales’. However, 9/10 times I see other things that need fixing, so in order to do that, I go back to the foundations, to the first principals of business.

In the end, Business is pretty simple, make and sell something for more than it costs you, and ensure the value to the purchaser is greater to them than the cost, and all will be well.

An improvement project can be treated as being in four parts, or levels, and each will contain numerous sub projects and elements that need to be addressed.

However, they need to be addressed in some sort of logical order, starting with the most urgent, as well as those that will deliver some quick returns. The quick wins are not just for commercial and financial reasons, it is because any change will inevitably be disturbing and potentially disruptive, so having a few quick wins makes the pain of change go away, or at least be more palatable.

Foundation.

These are the things that no matter what else you do, absolutely need to be done.

A lot of it is ‘underground’ as most foundations are, largely unseen, nevertheless, without a solid foundation, whatever else you build will  not last.

It is also true that the foundations wear out, become depreciated, and without renewal, which is a continuous process, you will still fail.

  • Basic financials. Cash management is essential, as cash is the oxygen of business. No business should be without weekly cash flow forecasting. The Profit and Loss statement measures your trading outcomes. It is less immediate than cash management, and gives a better picture of the items that are consuming and generating cash, so they can be managed appropriately. The P&L should be done monthly, along with the relevant performance measures against expectations in whatever form they have been articulated, usually a budget. The balance sheet is a picture at a moment in time of the performance of the business in creating or consuming wealth for its owners. These three basic financial measures are a part of the statutory accounts of any registered business, but a fourth that is not, is a simple measure of the break-even point in a business. At what point in trading do you go from loss in a period to profit. Knowing your break-even point is a bit like knowing when swimming if your nose and mouth are in the water, or out of it.
  • ‘Why’. Being able to articulate the purpose of your business is a huge competitive and cultural benefit that shapes the evolution it will go through. For those who have not stumbled across the various writings of Simon Sinek, it is time to start.
  • Business model. This is the means by which you turn your product into money. The foundations of a wholesaler will be different to those of a retailer, or on line supplier of products. The way you build the foundations will similarly be different. Different business models do not easily mix in the one business. Barnes and Noble should have invented Amazon, not been put out of business by them. Similarly, Blockbuster was in the prime position to invent Netfliks, not become their victim.
  • Regulatory requirements. These are a do it or be prosecuted choice, which for most is no choice at all, but you would be surprised how many businesses I walk into that are (mostly) unknowingly breaking the law. If you are running a child care centre, better get the regulatory stuff sorted!
  • Operational capability. Setting out to run a business, you need to be able to deliver a product of reliable quality, on time, and in budget, that delivers value to the customer. Pretty simple, but I have seen many business plans that seem to think that a product will come about like manna from heaven, just because it is ordered.

The advent of digital has changed forever the manner in which you approach a number of these elements and I would contend, is continuing to change them, almost weekly. I was tempted to put digital capability as one of the Foundation elements, but digital is a bit like breathing, you do it or you are history.

 

Revenue generation.

Commonly called Marketing & Sales, but as noted the distinction is redundant.

No business survives without revenue, and it is my view that all  the processes aimed at generating that revenue, directly or indirectly, should be seen through the one lens.

Marketing is a huge topic, way too much for a single blog post, but there are some basics that should be clear.

What is the profile of your ideal customer, How do you find and engage them?

What is the value proposition, how will the customer make the choice between your product and the alternatives, How will you go about building a brand, what are your best distribution channel options, which communication channels and platforms do you use,  which customer profiling methodology, lead generation and conversion, NPD & C, customer service, Strategic key Account Management, value proposition, advertising, market research,  and so on and on and on.

I ‘bounce’ between revenue generation and the foundation activities. While you have to have the foundations in place, you also have to be generating revenue to pay for the investment, one without the other is still a ‘fail’. Therefore there is a continuous and parallel improvement in both, it is not sequential, it is a parallel journey.

One of the traps of all the digitisation that has taken place in the revenue generation space is the sudden availability of new shiny toys to play with. Each in its own way promises to deliver at least some part of the silver bullet you are seeking. The temptation to chase the newest shiny tool is overwhelming for many, but also equally daunting for many others. The right mix is somewhere in the middle, as usual.

Identify the tools that solve your problems in the manner that best suits your strategic and financial objectives and limitations,  without losing sight of the foundations of your business, and you will be OK. Being seduced by the tools is as bad as ignoring them.

 

Leverage & Scalability

This is where the fun really starts.

We all understand the concept of leverage, of doing more with less. The tools available in the revenue generation space give you leverage in your current markets. They also provide the opportunity to leverage capabilities outside your immediate markets and customers. This sort of leverage can be applied geographically, to adjacent markets and customers, in new value propositions, new technologies, and to gain a decisive advantage over competitors.

Having built a stable and profitable business by solid achievement in the foundations and revenue generation stages, you will free up the time to enable the leveraging and scaling of your processes, assets,  capabilities, collaborative demand chains, and importantly spread your process improvement successes wider.

 

Sustainability.

Commercial sustainability is the rarely stated, but often considered objective of all this commitment. The best metaphor for this stage is nature. As the environment changes, the organism evolves to accommodate and leverage the changes to its benefit, and this happens without added effort. It is commercial evolution at work.

This is the vision painted by so many of those trying to get into your pockets, of the 4 hour work week, taken remotely while on an island paradise collecting magically recurrent income. It never happens, at least I have never seen it. Even those who claim to be making millions via the web selling all sorts of dreams, are doing more than they tell you. It is true that web based products, a new  commercial option still only a decade old have made a huge impact, and there are a few who have made it big, but they are as rare as those who made it big in manufacturing in the last century were. Nevertheless, having a goal of sustainability in your sights, and working towards it will see your business prosper, and you will be able to enjoy the fruits of that prosperity.

So what now?

You can only do a very small number of things at once.

Therefore where I start is with a ‘StrategyAudit’ where I go looking for the holes then prioritise them into an action plan, and gain some sort of agreement  that the plans will be followed. A realistic assessment of the current situation is an absolutely crucial first point of any improvement project that offers the genuine chance of enhanced performance.

 

10 sources of motivation you can leverage

10 sources of motivation you can leverage

Mar 31, 2017 | Governance, Leadership

It  happens that one of the regular issues emerging from conversations with those I work with is about how you develop and maintain the motivation of those in the business, particularly in the more operational roles.

Over the years I have seen a lot of operations, manufacturing and other wise. Sometimes as you walk in the door, you can just ‘feel’ the energy, other times, it is clearly a place everyone would rather avoid.

Some of the common factors in the good ones I have seen follow, and the absence of these factors is also apparent.

Motivation is contagious. A few of the right people, clearly motivated and excited to be there, and doing a job well has a huge impact on a workplace. It is even more contagious when it comes from the ‘ranks’ as everyone expects the boss to be motivated,  but not necessarily the storeman.  Seek out those people in your recruiting, and celebrate them.

Motivation builds momentum. While it is contagious, it also builds its own momentum. The hard bit is getting started, to get the ball rolling, then it tends to feed on itself, so long as the environment provides the nourishment.

Urgency creates motivation to take action. We see this every day, particularly in a sales context. ‘One day left’ ’24 hour special’ . Inside a business this urgency is used to get attention, make change, and create alignment to a course of action.

Motivation and optimism have a strong link. Having a workplace full of optimists, those who see the bright side, who feel ‘alive’ and communicate that feeling has a positive impact on the ‘motivation quotient’ in every workplace I have seen. The converse is also true. There is also a strong social component, when a few of those seen as the leaders in any place of work, and these are not necessarily those whose place in the organisation chart says they are the leaders, are optimistic and motivated, that has a clear social effect. I am sure the wallies will have a fancy name for it. I just call it the ‘social effect’, and seek it out when hiring.

Motivation is also individual. Having noted the social effect, every person is motivated by different things, and differently in different contexts. It is a very personal thing, often a choice made consciously at some point, that just becomes ingrained. it also means that an effective leader manages their relationships with each of their fellow workers in an individualised manner.

The environment creates motivation. This may often be called culture, the ‘Way things get done around here’, to quote Michael Porter. Again, it is a social component of the workplace, something that is never articulated on an organisation diagram, but which nevertheless has a profound impact on performance.

FOMO. Fear of Missing Out is a well understood and deeply research psychological factor. It is a strong motivator, way stronger than the prospect of gaining something by participating.

Coercion and manipulation are not motivation. Indeed, if anything, they are strong eroders of any intrinsic motivation felt by individuals and a group. We are very good at picking when they are being applied to us, and we resent it and react accordingly.

Scarcity creates motivation. Scarcity, just like urgency, acts to motivate action now. ‘Only 2 left’ is a common tactic. Now emerging often is the non recording of webinars, so if you do  not catch it live, there is in backup.

Risk creates motivation: for some. Every now and again, we watch someone who takes risks, and do not understand why they do it. When asked, the answer is usually some version of  ‘because we can’, or ‘because it is there’. Just as most of us would not consider trying to ride a wave as clearly dangerous as the one in the header photo, chances are the bloke in the photo went out again, after recovering from the impending huge wipeout. It is intrinsic to the individual

Finally, money is a lousy motivator. People want to be valued and acknowledged, on top of having a pleasant and productive workspace, able to shape the way they spend their days. When that is in place, money is secondary, but in the absence of those things, money becomes the only motivator and when it happens, you are in deep trouble.

 

Photo credit: Mobilqajmd via Flikr

 

How to understand the answer to a question.

How to understand the answer to a question.

Mar 22, 2017 | Governance, Leadership, Management

I ask questions for a living.

No, I  am not a policeman, journalist, or a head-hunter, all of whom need good questioning skills, but in some regards I am a detective.

My job is to see what can be done to improve the performance of businesses, and to do that effectively I need to understand with clarity what is holding  the current performance back. Therefore I need to be able to analyse and understand the current performance through an independent  lens, a perspective  that is different to that of those who are paying me, and which leverages the experience and domain knowledge I bring to the table.

As a consultant, especially one that works in a space usually over-filled with clichés, emotion, personal prejudices and views presented as facts, the real skill is in asking the right questions, and knowing when it has been answered satisfactorily, then following up with the next one that further opens the oyster.

Asking the right question is a matter of experience, domain and technical knowledge. Knowing when it has been answered is all about being a good listener, and entirely different set of skills.

As I listen, I try and break down more than what is being said, and why it is being said, it is just as important to see what is not being said, and to be able to follow up with the question that gets to the area of discomfort, that is best left unsaid, in their minds.

So here are the things that in one way or another I do when listening, apart from observing the old adage that evolution gave us two ears and one mouth for a reason.

What is being left out. Where are the gaps, the inconsistencies, and the evasions, as they will tell you a lot about the person. An HR manager I once worked with used to spend what I initially thought was an inordinate amount of time on the sequence and timing of stated jobs in an applicants resume.   Then I realised he was just looking for the gaps, and he almost always found a few, which usually told us more about the person than they had included.

Where are the contradictions? As with gaps, contradictions can be well hidden, and are often unconscious. They are not just contradictions about timing and  ‘things’ that matter, it is more about contradictions about their personality. I had a product manager working for me a long time ago who  told anyone who was listening that his personal credo was honesty and transparency, but then took staplers and pens home from the office supplies cupboard. A little  thing perhaps, but a contradiction that told me something about him that proved useful.

Why are they telling me this, and not that? People can go on and on about ‘stuff,’ the words fill a hole in the conversation, stuff that really does not matter. Wondering why they are telling you this ‘stuff’ and not something useful or that adds to the ‘picture’ you are developing can be enlightening.  This is particularly so when you know of something that perhaps they are unaware you know, but is relevant to the conversation. I recall the lawyers adage of never asking a question of someone giving evidence without knowing the answer in advance.

What about this makes it relevant to the question? People like to talk, usually because they like to be listened to, and so can go on and on about things of limited or no relevance to the question, simply because they have the floor. Generally we are polite, so do not interrupt the flow, but it can be useful sometimes, particularly pointing out the irrelevance of the tsunami of words that just emerged.

What are the facts? There is a huge difference between facts, things that are demonstrably true, and opinion, suppositions, and the outcomes of ‘managed’ data. The last of these is often the most tricky to tell from the real story, as they purport to be facts, as evidenced by the data. It is just the data or the interpretation of the data that is dodgy.

Did they answer the question directly.  Listen to any politician talking on any night, and you will most likely hear them answer a question in a manner that bears little or no resemblance to the information being sought. Unfortunately it seems to be the standard state of public office, but in a commercial environment, I dismiss it with the contempt it deserves. To be fair, politics gets played pretty hard in many commercial environments, and so is sadly, little different.

Tone of voice. Body language and tone of voice also delivers a message. Just think of the myriad of meanings the word ‘bastard’ has in Australian vernacular, all are conveyed by the same word, with entirely different meanings dictated by tone of voice and body language.

At the end of an answer to a question, I often repeat what I have heard and understood from the answer to offer the opportunity to correct and modify my understanding as necessary. It is also a good tactic when  seeking to assess the truth of an answer.

 

 

Does ‘Know, Like, & Trust’ still hold?

Does ‘Know, Like, & Trust’ still hold?

Feb 27, 2017 | Leadership, Marketing, Sales

The only way businesses survive is to generate revenue in excess of their costs, consistently.

Common sense.

One of the oldest adages in revenue generation is that people do business with those they know like and trust.

It was correct, and to an extent it still is, but with a huge, game-changing wrinkle.

Most of us by now have done some sort of transaction electronically.

You have most likely moved to that transaction without ever meeting the person on the other side, so you certainly do not know them, and have no idea if you would like them, but you trust them to complete their side of the transaction.

One out of three now seems to be good enough?

Not really when you think about it.

In most cases there has been some interaction that you as the purchaser have undertaken that the seller knows nothing about.

You have looked at their website for technical specifications, prices, service promises, you may have downloaded some of the free stuff from their site, often to a junk email address so you do not get bothered with the following auto-marketing.  Depending on the product you may also have checked out the various product forums, and review sites, and you have compared all this to the competitive offerings.

The summary of all this is that when you get to the point of initiating a transaction, you have come to value and trust those you do not know, sufficiently to decide to do business with them.

Value and trust. Key words.

Trust is mutual and earned by performance over time, value is delivered.

The challenge now in revenue generation is therefore to reach out to those who do not know you, but who may have some problem you can solve, some irritation you can remove, and demonstrate your value to the point where they trust you sufficiently to do business with you.

A complete turnaround from the days where you did business with people you got to know like and trust while walking the golf course.

What does ‘Priority’ mean to you?

What does ‘Priority’ mean to you?

Feb 20, 2017 | Change, Leadership, Strategy

Most of us would say in answer to that question “the one most important thing”.

The thing that we just have to do first, in preference to all others.

Priority is singular.

However, in most cases I see the word used as a plural, ‘Priorities’. It seems this is a new word, spawned perhaps by our instinct to cover our bets and our management arses.

We all get what ‘Priority’ means, but how do we separate the ‘Priority’ from the ‘Priorities’.

In most management situations, we do not do that separation job adequately. We end up trying to do too much, compromising the outcomes of everything in front of us.

Pick one priority, and when done, move on.

In 1997 when Steve Jobs (don’t you get sick of examples from Apple and Jobs?) returned from involuntary exile back to Apple, the company he started was on the verge of insolvency, having just lost over a billion dollars. A year later, Apple turned a $309 million profit.

How did he do it?

He focused Apple on the priority: selling the core range of two products, the PowerMac 3 and PowerBook 3.

Most of the huge range of products were discontinued, revenue did drop, but overheads dropped even further, so they made money, and were able to reinvest in the follow up innovations that changed the world.

Italian mathematician Vilfredo Pareto coined what has become known as the 80:20 rule by observing a wide range of totally unrelated situations where 80% of something was generated by 20% of the generators. The truth of this principal was observed by pioneer management consultant Joseph Juran who popularised it as the Pareto Principal.

In 22 years of consulting and contracting, mainly to medium sized manufacturing businesses, I have only ever seen evidence that the Pareto principal holds. In some cases, it is more like 90:10, so the challenge is the same one faced by Steve Jobs.

Which 80% of what you are currently doing do you no longer do?

Never an easy question, there are always reasons for everything that is being done, but survival is often about establishing the priority, and doing just that one thing better than anyone else.