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 9, 2013 | Collaboration, Operations, Small business
We all negotiate every day, from the small mundane things in our lives to once in a decade decisions.
Two simple considerations play a key role in the outcome:
1. Controlling the environment in which the negotiation takes place, and
2. Constructing the conversation such that the other party nominates their expected outcome first.
A successful negotiation is one that has all parties leave the table happy and prepared to execute on the agreement, but consider the impact at something like location can have on the behavior.
Imagine you are negotiating a major deal, and the other party nominates a 5 star location as the venue, compared to going to their plant and conducting the negotiation in the factory lunch-room. It is likely that the differing locations will impact on your expectations?.
Anchoring is the psychological process underlying the point from which a negotiation starts, and generally dictates the region in which it finishes.
Research by Daniel Kahneman, the psychologist with a Nobel laureate in economics, displays this anchoring behaviour in experiments using a roulette wheel. He asked subjects to guess the percentage of African nations in the UN after spinning the wheel. Was the number greater or less than the number on the wheel?. Subjects who saw a low number on the wheel consistently guessed the percentage of African membership lower than those who saw a high number.
Clearly the roulette wheel has no impact on the number of African UN members, but the number at which the wheel stopped played a significant role in anchoring responses to the question.
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 20, 2012 | Marketing, Personal Rant, Small business
Yesterday in the midst of a sizeable gathering, one person was moaning about the rip-off represented by Christmas hampers, specifically one she had received the previous day. “Full of stuff I could have bought and probably cost half as much, what a wank”
Unfortunately for the moaner, the business that had given her said hamper was a client of mine, so I was aware of the thought, time, degree of personalisation, and genuine care that went into the construction of the hampers as a means of acknowledging the value they placed in the relationship. They did not have to give hampers, they wanted to. Whilst the costs incurred were important, the real importance to my client was elsewhere, a point entirely missed by the moaner.
It seems my client wasted the money they spent on that particular hamper, misjudging the total lack of grace of the receiver, but hopefully she was one of a very few who failed to recognise the intent.
I can say for sure that the mistake will not be made again with that particular person.
Merry Christmas to all my readers, I cannot send you all a hamper, but I can send you my genuine thanks for coming, commenting, and generally participating in making the writing of this blog a joy rather than a labour.
Merry Christmas.
Allen
Dec 13, 2012 | Lean, Operations, Small business
How often do we get sidetracked by several possible causes of an adverse or unexpected outcome?
In the course of doing a fair bit of process improvement work over the years, one of the really successful strategies I have used is to get people to distinguish between the real cause of an unwanted outcome, and something that has no impact. Put like that it seems pretty simple, but it is almost always more complicated, and serves as a core of the “5 Why” lean tool, always requiring hands on knowledge of the way things work, and usually some data. Ask yourself “Why” successively, up to 5 times, as in this lovely story of the Lincoln memorial and pigeons.
Is the intermittent crushing of boxes by the box erector in the factory caused by a marginal variation in the dimensions of the carton flat (prior to erection) or by the wearing of the bearings in the box erector itself, leading to sloppy operation in one of the clamps? Pretty easy to mistake which of these is the real cause of the stoppages, and waste time trying to fix something that perhaps does not need fixing, while the boxes continue to be crushed.
This is of course different from the confusion about which is cause, and which is effect. I was in the Sydney CBD last week, and saw several blind people with Labrador dogs. Does having a Labrador cause blindness?
Oct 23, 2012 | Sales, Small business
“Not now” is a response sales people receive all the time, question is, does it mean not now, or not ever?
When sales people hear the words, they have two choices:
- Ignore the brush off, and keep at it
- Asses the lead for any long term value, and if it is there, put the lead back into the lead “carpark” for review at a later date, or for when something happens to give the opportunity to reconnect with the prospect.
Taking the first option is rarely the best, it just gets annoying, but persistence in continually recycling leads, adding to the store of knowledge each time, is a bit like continuous improvement in a factory, part of an ongoing cycle that delivers performance.
Any lead is hard to find, turning that lead into a prospect is not a one-off exercise, it is a process that can have many twists and turns, that can now be significantly automated.
