Aug 10, 2010 | Communication, Management, Small business
Sitting around many board and advisory tables over the years, I have observed that those that are successful follow what I have started to call the rule of thirds. Actually, there are four rules, but the first is generic to all meetings: have an agenda, follow it, take minutes, allocate a specific time to end, and follow up. The other three relate to the manner of organization of the agenda and are:
1/3 review the financials, the past period, and coming periods, with particular emphasis on cash generation.
1/3 Consider the immediate issues, gain agreement on actions, outcomes and timetables,
1/3 Consider the longer term issues, all those things that will not impact on the immediate performance of the business, but are in the medium to long term critical for survival.
Most board meetings tend to spend considerable time on the first, a bit on the second, and little on the third, but organizing the time allocated, and being disciplined about the manner in which the time is spent will pay dividends.
Aug 9, 2010 | Change, Innovation, Marketing, Strategy
Perhaps I am dreaming, but there appears to be a “nudge” (not yet a trend) amongst the manufacturing firms I talk to towards a review of the cost/benefit of overseas sourcing of manufactured products.
At the end of the spectrum where ownership of IP, and innovation are important, firms appear to be reconsidering the value of “off-shoring” recognising that keeping the processes that create value closer to home, where they can be developed, and leveraged with a more sensitive hand over the long term is better than taking a short term cost benefit.
This is not to say that there is any real future for commodity manufacturing in a high cost environment like Australia, apart from the very few areas where we should have a natural advantage, wool processing for instance, but there is a rich future for the development of sophisticated, market sensitive, innovation led manufacturing, so long as we are able to grasp the drivers of that success.
Aug 8, 2010 | Management, Marketing
Watching the current federal election campaign from both major parties, it seems they both should go back to marketing 101, and consider what it takes to engage with those to whom you want to sell something. Both to my mind are failing badly to create a brand that has a proposition that is attractive to those who take the time to consider their “purchase” rather than just buying the same one they bought last time.
From a different perspective, I had the pleasure of meeting with a couple of NSW shadow ministers with a group of business people last week. Their problem is that although the current NSW Labor government is so on the nose that is seems inconceivable that they will be reelected, very few in the electorate know anything about the alternative, and they have great difficulty gaining any media traction, so unlike their Federal counterparts, their problem is awareness, and how do they generate it, not that the product appears to be in tatters.
Aug 5, 2010 | Communication, Social Media, Strategy
Access to information before anyone else has it is Gold, access at the same time as everybody else is just staying in the game, essential, but it will never be a winning edge.
A small advantage at some point, can be built into a substantial advantage quickly as the value of the unique information enables leveraging before it becomes common, and the access/leverage equation scales up with use.
Information is only of value when it is used, pretty obvious, but often missed, and the more it is used, the greater the value, unlike physical assets that depreciate with use.
Aug 5, 2010 | Branding, Marketing, Small business, Strategy
Many businesses are sorely tempted to drastically reduce marketing expenditure during a downturn, it is often the most visible, and usually the least understood item in the P&L.
The evidence indicates that you should be keeping spending up.
Time and time again we see businesses that keep their marketing expenditure going during a downturn are in a much better position when the cycle moves up again. A dollar spent in a tough environment (assuming it is intelligently spent) is of far more long term value than the same dollar spent in the flush.
Now we appear to be in the recovery stage of the cycle, although anecdotally all bar mining appears to be pretty flat, opportunities will emerge to leverage the better circumstances, but discipline is needed to retain the focus that usually is heightened during a downturn. Below are three of rules of thumb:
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- Have a “Sku spring-clean”. Now things are improving, it is tempting to keep that small volume Sku, the “homeless” small brand, the small subsidiary acquired by accident, better to manage out of them to free working capital and enable management focus, and now times are a bit better, the cost of exit will be reduced.
- Don’t just push growth for growths sake, because it seems possible to get some, use the freed up resources to strengthen existing business before you chase growth for the sake of it.
- Don’t take the pressure off the cost cutting initiatives, the next downturn is somewhere just ahead, and your competitors will keep reducing their costs.
The cycles of economic activity appear to be getting much quicker, and competitive activity more aggressive and reactionary, so it is becoming even more important to have a firm view of the long term positioning. Define the brand development program, set long term performance measures, and stick to them as it will now take several economic cycles to get any meaningful result. Rather than being able to invest and make the return in the one cycle as has been the case in the past, it will now take several cycles to generate any long term depth .
Aug 3, 2010 | Branding, Communication, Customers, Marketing, Sales, Social Media
Social network marketing is a fundamentally different beast to “traditional “marketing. When talking to marketers, they usually see social media as being in effect free, the challenge is to get the message spread, often by being outrageous, generating awareness for little money compared to traditional media.
To my mind, it is much more complicated than that. “Word of Mouse” on social media has to be earned, and that is really challenging, requiring intimate knowledge of the marketplace, customers, their behaviour, and what is likely to positively engage them. Traditional marketing makes it easy to gain a general level of awareness, you just have to pay for it, but like most things that are easy, the return is very low.
