Feb 23, 2012 | Communication, Sales, Small business
Successful stories are always greater than the sum of their parts.
Great stories engage, enlighten, inform, and inspire, so to dissect the sum to explain the parts may seem easier than selling the whole thing, but it usually does not work. Telling the big picture, the big idea, the big picture, is a key to selling.
Try describing how a frog jumps to someone who has not seen one jump by dissecting it. You can describe the long legs, musculature, power to weight ratio, but that does not help much, better to show them the frog jumping.
Jan 2, 2012 | Leadership, Personal Rant, Small business, Social Media
It is the time of year for predictions and reviews, so here is my shot. Three general predictions, and one very specific one, followed by a review of my predictions of this time last year.
- The barriers to communication are falling so quickly, that a raft of tools are emerging that will change the way we consume. Collaborative Consumption is emerging as an economic driver that will change the mechanics of many industries, and create new ones. Companies like Zipcar remove the need to own a car, particularly useful for inner city residents, Swaptree replaces the sale of Ebay with a swap, something you have but no longer need being swapped with someone with the opposite.
- Small is good!. Starting a new business has never been easier, and they are popping up all over the place, replacing and renewing all sorts of services. All that gets in the way of all this new activity is the institutional barriers in place from last century. If you need a bit of money to fund a good idea, and the family and friends, the traditional source, are wary, try Kickstarter.com, where money is pledged to good ideas.
- The wisdom of the crowd is slowly being recognised, but the pace is accelerating rapidly. This idea, first comprehensively articulated by James Suroweicki, the New Yorker columnist some years ago is gaining amazing traction in management practice as its self evident truths are incorporated into activity. The next step is to assemble this wisdom from the electronic fingerprints we all leave across the net. Scary to some from a privacy perspective, enormously productive from the factory floor to the boardroom and political forums.
- The Mad Monk , Opposition leader Tony Abbott will not make it to the end of 2012, but will be replaced by Malcolm Turnbull, who appears to be on of the few in the Parliament who actually listens to the facts, and acknowledges that ideological solutions to the complex problems we face are just too simplistic to work, but that we need a consistent philosophical foundation to the decisions that are made, rather than a response to a focus group.
At the end of 2010 I made some observations and predictions, so how did I go? Generally, the trends identified here I believe will continue, with the exception of the first one, which is now appears likely to be very wide of the mark.
- We may regret the increase in “touch” devices as we use them to replace human contact. Jury is still out, the growth of touch devices has been amazing during the year, and shows no sign of lessening, but there is little evidence that my concern about the humanity in relationships being eroded is valid. Score 2/10.
- Global retailing takes over. It seems the e-tailing revolution is really here, now you can find and buy just about everything on the net, from books and electronics to whitegoods, cars, and even love. Score 7/10. marked myself down a bit because it was so obvious.
- Net advertising will overtake traditional advertising. I have seen conflicting numbers, so who really knows, but I suspect it has happened, and when you add in the growth of “content” posted on sites like u-tube, that are not paid advertising, but have a marketing objective, there is no doubt paid advertising in “traditional” media is now behind advertising/advertorials on the net . Score 7/10.
- Social media comes of age. Got that right, the quickest growing demographic on social media is 50 plus, often connecting with scattered grandchildren, then discovering SM is a great tool for all sorts of other things. Score 9/10.
- The cloud rolled in. Again, got it right, the hype around the cloud appears to be turning into investment, not just so institutions can reduce their costs, but because change is so rapid, it is now easier to keep up on the cloud. Most are finding it is not cheaper, the money just moves from the balance sheet to the P&L, but far more flexible, and responsive to change. Score 9/10
- Data mining will gain momentum. This happened, and is still happening, but slower than I thought it would. I suspect the growth in the cloud, (5) and crowdsourcing (7) will provide significant momentum. Score 6/10
- Crowdsourcing will emerge from the shadows. This is certainly a trend that accelerated through the year, and is still gaining momentum. Everything from NPD, to project management, graphic art, sales lead identification, and customer service delivery. Score 7/10, just because it it taking a bit longer than I expected.
- Two speed Australia became accepted, even if two speed now appears to be a much more complicated mix than just 2 speeds. The added complication is the financial crisis in the Eurozone, and the knock-on impacts that could have on Australia’s economy as exports from to Europe and the US from China slow. This is a truly scary scenario. Score 7/10.
- Climate change and the political response. With the exception of Australia, with Bob Brown calling the shots in Canberra, climate change fell down the agenda in developed countries in the face of financial woes. Companies may be working slowly to adjust their activity mix, but politicians are more concerned with re-election, and are taking populist positions rather than taking the really hard decisions that will alienate large parts of electorates. Score 6/10
- The push for regulation. Got that right, often by stealth, regulation is coming back as a strategy option for governments everywhere. In Australia the most obvious is our workplace legislation. Got that right, 9/10. In December, 2011 it was announced that “Fair Work Australia” would undergo the promised review of its effectiveness, chaired by the new minister Bill Shorten, who has already announced his view that we are leading the world in workplace regulation. My bullshit meter hit overdrive when I saw the press release, as it is clear that the regulations are stifling innovation, risk taking and productivity, and are simply an acknowledgement to the “left” whichever party they belong to . There are several others, like the so called “Road safety Remuneration Bill” which is really just a government sponsored grab for power by the TWU, and promises to cost the community heaps, and put even more small transport operators out of business, but are travelling under the radar.
Overall, I give myself a pretty good pass mark.
Hope 2012 is a good one for you.
Allen
Dec 16, 2011 | Customers, Management, Small business, Strategy
Being a supplier to FMCG retailers is really, really hard. The two gorillas are demanding, unreasonable, and often just plain stupid, at least that is a suppliers assessment. If you asked the retailers, they would just be doing their jobs, maximising the revenue and margin returns from their shelf-space, minimising their costs, and competing aggressively for access to the consumers wallets.
It is just a matter of perspective, but whilst the customer is not always right, they remain the customer, and if you want to serve them, it is you, the supplier who must adapt or die.
The current pressures on SME food industry manufacturers, a high $A, the retailers push into housebrands, difficulties in funding working capital, skills shortages particularly in regional areas where many of them are situated, and promotional costs, are pushing many to the wall. The long term impact of these changes appear to be all bad for the economy, as food security, balance of payments, regional jobs and skills, and having a manufacturing base from which to innovate, are all compromised. However, there is not much joy in complaining, clearly the various governments do not care, or are more engaged in important debates like gay marriage, and spending our money on sectional interests who seem to have a few votes, so we have to address the problems ourselves.
Manufacturing, let alone food industry manufacturing no longer even warrants a seat around the cabinet table, clearly we are on our own, so we adapt or die, and many will die, the few who successfully adapt will be very good indeed.
Nov 16, 2011 | Marketing, Small business, Strategy
Woolworths and Coles price and promotion strategies are often shaped by what happens in the UK, as there is a history of successful imitation in Australia. The resurgence of Coles has taken the initiative from Woolworths, and the short term outcome has been price reductions to consumers, the flip side of course, and there is always a flip side, is a further hollowing of the production sector in Australia.
I am pretty sure that if you asked consumers which they would prefer, a price reduction today, or production security into the future, they would take the former, without understanding the probable consequences.
The Federal Court found last week in favor of Metcash in their effort to sell Franklins, saying in part that the competitive power of Woolworths and Coles served to keep prices to consumers down, solidifying the power of the status quo.
Nov 14, 2011 | Leadership, Management, Small business
The conduct of meetings, whether they be the AGM of a major company, or the committee of the local raffle group should run by the same basic set of rules, worked out over a long period to ensure that a meeting comes to a conclusion at the end of a comprehensive “due process”.
Whilst the AGM of a public company should be far more formal than the local tennis group, nevertheless, some rules should never be broken, significantly the one that states: “No-one can speak twice on a topic until all who wish to speak on the topic have done so”.
This simple rule ensures that the local opinionated motor-mouth who seems to pop up on most small committees is controlled.
It is up to the chairman to keep the discipline, but many a local meeting I have attended has failed because the basics of conducting a meeting are not enforced.
Oct 24, 2011 | Management, Personal Rant, Small business
It seems to me that the geniuses making economy wide financial decisions around the world, but particularly in the US and Europe are making the same mistake many of my SME clients make. They are failing to distinguish between the short term, tactical decision making that can reshape a P&L in any given month, whilst ignoring the long term strategic decisions that shape the balance sheet.
What is the difference between giving Woolworths a big discount to enable a deep price cut on your product, then promptly turning around and borrowing to produce more, and the so called “Quantitative Easing” being practiced by the EU & US? Giving Woolies the discount may make the P&L look better for the month, but when the discount is borrowed, all you are doing is loading the balance sheet up with more debt that needs to be repaid at some point, or you go bankrupt.
You do not have to be a brain surgeon to understand that when the credit card is full, and the debt is bigger than the income, some radical spending surgery is required, partnered with an increase in the value extracted from every dollar that is still spent. Most consumers understand this, and manage it, those who do not, have their credit card taken away.
Why is it so hard?
