SKUNK WORKS

Rich, B.R. and Janos, Y., Skunk Works, Little Brown and Company, New York, 1994

I have had this book in my library for quite some time and although I’ve browsed it before, I recently had the opportunity to actually read it.  Why I didn’t read it earlier, I just don’t know because it is just so full of stories and wisdom on many levels.

For those who don’t know – the Skunk Works were (are still?) a top secret Lockheed shop for the design, development and manufacture of advanced and innovative aerospace systems.  If U2, SR-71 Blackbird and stealth planes mean anything to you – then this book tells their story.

It is interspersed with small anecdotes and facts from other Skunk Works people and many aerospace, military and political luminaries who were part of history through the second half of the 20th century.  I won’t repeat it here … but the story from Colonel Barry Horne on pages 99-102 and his statement around a “sledgehammer” is priceless.

To get back to a project and engineering theme though, the principles they used – integrated teams, fast prototyping, lots of up front design and analysis, quality control and devolved decision making and problem solving and so on – are now norms of good management practice.

Ben Rich’s observations on leadership and astute management on complex projects is just so insightful as is his humour in delivering his message, is enlightening of his character (see page 335-336 on Noah’s ark).  Ben’s and Leo’s last chapter, “Drawing the Right Conclusions” is so full of wisdom as are the ten basic rules developed by Ben’s predecessor “Kelly” Johnson that guided their work practices.  Later in the book they seem to have evolved into 14 rules with a 15th – “starve rather deal with the Navy” – an unwritten one).  Examples are (see page 116):

• Engineers shall always work within a stone’s throw of the airplane being built.  The integrated team approach.  The impact on finding and fixing faults and problems must have been dramatic.
• Everything possible will be done to save time.  Schedule is king …. but not at the expense of safety and quality as we learn throughout the book.
• Any cause for delay shall be immediately reported to C.L. Johnson in writing by the person anticipating the delay.  Cut out the middle management and go straight to the top ….issues raised and managed by the people who recognise the issue.  It isn’t diluted through a hierarchy of management.

Ben’s observations on government bureaucracy and waste are also enlightening.  I am quite certain it is not limited to US bureaucracies!

I will leave you with part of the quote from the “New York Times Book Review” on the back cover:

“…..A gripping technothriller in which the technology is real”.

Lukim All

WEBSITES

I browse The Australian regularly along with a number of other sites, all of which are tabs on my internet browser.  I noticed this article the other week in their small business section.  It is on the trials and tribulations of setting up and maintaining a web site.

My experience hasn’t been too bad, but I do have a few stories.

WEB CONTENT MANAGEMENT SYSTEM (CMS)

We set up our websites originally in Drupal, an open source web content management system (CMS), thanks to Graham’s research and experience.  We got a certain mob to do the template, theme or “cascading style sheet (CSS)”.  A few issues there but they didn’t do too badly.  One of the problems we had was that we would spot a problem and they would supposedly fix it but then we found they hadn’t.  We eventually came to the conclusion that they weren’t “testing” the results of their work.  Strange but true!! 

With open source tools, the actual application is free, although you can make donations.  But you might need to pay for someone to set it all up for you and configure the system to make it suitable for what you wish to do.  The quote given the article above of $10,000 for a site seems expensive to me.  I would suggest that to setup a website in Drupal is probably 1-3 days work for a good Drupal developer.  Even at $1,000/day, this is still only $3,000.  But if you wanted a lot of features in that site such as with on-line payments, and perhaps some extended survey capability, etc ... then it might cost you more.  The CSS might also cost a bit, say $3-5K depending on how fancy you want it and whether there are moving bits to it.

Having said all that, Drupal has a whole stack of free themes as well.  You might need to tweek them, or get someone to tweak them, and perhaps they aren't unique to you alone .... but they are a great start.

TESTING THE LOOK OF YOUR WEBSITE

Now testing a template to see how it looks and works in web browser X on operating system Y or web browser D on operating system F is a challenge as there are so many different combinations of browser/operating system, including the various versions of each!  For instance you may have say a web browser of Mozilla Firefox v3.2 on Microsoft Windows XP ....and your site looks great with that combination.  But someone else may view your site using Safari v4.0 on a Macintosh operating system ....and it looks like rubbish.  So I found this site – Browser Shots, which allows you to enter your web address and it will use servers all over the place to test your web site.  And it’s free!!

DOMAIN NAME

Your domain is your web address.  For Australian web sites you can get a “xxxx.com.au” site.  But you can also get any others too such as a .com, .info, .biz and so on.

If you use MelbourneIT, they seem more expensive to me than most, and it is quite annoying.  So search around in Australia if you want a .com.au name.  If you want a .com or say a .biz site, then GoDaddy is reliable and cheap .... faaar cheaper than MelbourneIT.  I haven’t tried to get a .com.au site through them but perhaps you can.

So search around for a good deal if that is useful to you.

WEB HOSTS

You will someone to actually host your web site so it is all connected up to the rest of the web and has various mechanisms to stop spam and other malicious stuff.  Again, search around and look for price competitiveness but also service, particularly if you are maintaining your own site in something like Drupal.

LOGO

You would likely want a logo for your site.  I find these guys, Aussie Logos, very good value, very quick and responsive.

So ....I would back up Ed’s 10 tips in The Australian ... they are valuable. 

Lukim All

WAYNE BENNETT – DON’T DIE WITH THE MUSIC IN YOU

Bennett, W. and Crawley, S., Wayne Bennett – Don’t Die with the Music in You, ABC Books, Sydney, NSW, Australia, 2007

I have this question I ask at dinners/lunches which is “If you could have any three people as dinner guests who would you have?” with the variations of dead or alive or alive only or politicians or sports people and so on.  It can sometimes give you an insight into the person, but it always throws up surprises as often they are an obscure person.  I am shallow enough to admit that Elle McPherson is always on my list (because she is an inspirational business person … duh!!).  BUT …the other one is Wayne Bennett and I often change the third person.

Wayne has been the inspirational coach at the Brisbane Broncos Rugby League Club since their foundation in 1988.  He left for the St George Illawarra Dragons at the end of 2008 and got them a minor premiership – coming first after the regular season.  Unfortunately, they were bundled out of the finals race by the Brisbane Broncos this year!

This book is also the first “inspirational” or “leadership” book I have read.  Why haven’t I read one before?  I think the difference is Wayne is real and has been there and done that, and perhaps the others have also been there and done that …but the back cover summary of their books always seems plastic to me.  Wayne is anything but plastic.

His philosophy, if I had to capture it, is that you need to prepare the whole person not just coach the footballer.  Wayne had a reputation for making sure the right culture existed for the players to thrive, train and play.  He also felt that the accolades should go to the players and that was one of the reasons he shunned the media.

He is also a self confessed “quote collector” and the book is quite literally full of them (mostly unattributed - not that that is an issue).  In fact at times I suspect it detracted from the flow of the story.  His respect for the recently deceased master coach Jack Gibson is something that moulded Wayne’s philosophy toward football coaching and the way he treated his players.

What did I learn?  I think I got a good insight into the traits of leadership, perseverance, seeing the value in all humans (not just the stars) and respect – respect for people for who they are not the position or opinion they might hold. 

Lastly, there is the poignant story of Wayne’s children.  He has three, two disabled.  He and Trish (his wife) and his children opened up for the ABC television’s “Australian Story” series.  I remember that the ABC had to repeat the episode by popular demand.  You couldn’t help but admire them and all those that are in similar situations.  That’s why I think my third at the dinner table would be Trish.

Lukim All

INTERVIEW - BLISS GARDEN AND GIFTWARE

I had the wonderful opportunity to spend some time with Iain Eaton of Bliss Garden and Giftware out at his site in Pialligo in Canberra.   Iain is a horticulturalist and runs the business with his wife Kylie, who obviously has the expertise for the giftware side.

I started with the survey as Iain had not had the time to complete it on-line.  A couple of very interesting things came out of it.  Iain had no business management training or preparation prior to starting Bliss with Kylie.  In fact his answer to my question “10. If you could give one piece of advice to a prospective business owner – what would that be?” was “Do a management course.”  It was a theme throughout our discussion actually ... management is a big challenge when starting out in small business.  In fact in answer to “6. What do you believe are your biggest business challenges?”, Iain said “Management.  Working on the business versus working in the business, including the know how for managing.”  That issue of spending time working ON the business as opposed to working IN the business is always a huge challenge for micro and small business.

I do recall when I started my first business that I did look around for management courses or business owner courses and I couldn’t really find any.  There were some management courses conducted at say an institute of technology but they were held at nights over many months ...and I was looking for something more compact such as a few days or a week long.

Bliss has a business plan but Iain says they don’t really use it as they only put it together “because it was a requirement for the bank loan.”  That doesn’t mean they don’t have a plan in their heads that he and Kylie follow.  It is that “learning on the job” that has enabled Iain and Kylie to get the upward curve in their cash flow and to better understand what makes their business tick.  If you look at their Success and Cash Flow meters, they both start to trend upward in 2008 coming into 2009.  This is no accident “Understanding what sells during what season allowed us to invest more in inventory and stock in anticipation of the season so we have a better cash flow and better profits.”  This is an enormous insight into a retail business and one that many would struggle to understand immediately I am sure.  But you also need to take that risk in buying “I am not really a risk taker and was quite conservative in my stock buying but that has changed as I became more confident in what sells.”  The dilemma of the retailer whose sales are often linked to the seasons! 

All Bliss’ meters are interesting actually.  You can see how Motivation started very high, took a hit as things didn’t quite take off as perhaps planned and is now upward trending in correlation with Cash Flow and Success.

Contrasting that, Iain’s and Kylie’s Systemisation of their business has been an evolutionary process with a gradual upward trending line.  “It has been slow but it is mainly around knowledge transfer” Iain explained.  It is as simple as “Using signs in the office and elsewhere to reinforce habits and routines – a sort of reminder for us and the staff. We also have point-of-sale software to manage the financials and sales.”

I wanted to get an insight into Bliss’ marketing ideas.  They are located in an area known as Pialligo in Canberra.  The road (Beltana Road) has a number of nurseries, cafes and outdoor/garden places....even a winery down at the end.  So the competition to get customers into your premises is I presume, fairly tight.  “We have worked out the most cost effective marketing techniques by trial and error” Iain advised.  “I do ask customers how they heard about us and we do get overflows from the more prominent places along Beltana Road.  The signage out the front is a great help though.  We have a couple of other ways as well ..... we advertise in Canberra’s Child magazine, hold potting workshops which get the Mums out here and we have a VIP system for repeat customers.  The cafe next door, Tulips Cafe, also helps in attracting customers.”  Iain went on to say that “the staff need to be friendly and even flirt a little perhaps, because even if someone doesn’t buy anything, we like to make sure they have an enjoyable experience.”

“Would you do it all again?” I asked.  “Probably, but not the retail side, more the wholesale side which is more about growing and cultivating.  A wholesale nursery.”

Note:  To see more details about my interviews, please see my blog on “Business Interviews”.

Lukim All

INTERVIEW - CUTTHROUGH MARKETING AND ADVERTISING

It was a pleasure to chat to Bruce Mackay of Cutthrough Marketing and Advertising today.  We not only talked about business but invariably got off the track completely!  An indication of Bruce’s broad life experiences perhaps..... or was it mine .... not sure who is the older??

Bruce’s tools of trade are his telephone and computer.  “My wife and I travelled overseas recently and the business didn’t miss a beat.”  Technology has made a difference and given Bruce enormous flexibility.  “The musician I used for the Club Lime advertising campaign is in Paris and I use Skype to talk to a guy in Sydney I work with frequently but have never met in person.”

I was interested in how Bruce went about “feeding the monster”.....keeping the contracts flowing into the business to keep things ticking over.  Cutthrough is a micro business so it isn’t that hard at this stage Bruce said “I want to work well for a few clients – quality not quantity.  I have had opportunities to put on employees with potentially big assignments but have backed away from it.”  This included a government department, but working with committees wasn’t attractive to Bruce as he finds “...they can criticise but can’t create.”  What did he mean by that I asked?  “When you are building a marketing campaign you need an entrepreneurial approach to decision making ... not a committee.  A committee might be useful at the start to get across all the issues that need to be addressed, but you need an entrepreneur to make those decisions.”  Bruce used the Club Lime example again where he explained that some of the executives didn’t like the idea “they thought it was dumb actually”.  But the CEO understood and backed it.  In fact the campaign was such a success (using increased Club memberships as the metric) that “...the chief detractor said he had never been so wrong and is now a very strong backer.”

Bruce started his business in 2001 after his business partner in his previous subsidiary of a large multi-national advertising agency, decided to opt out and seek a change in location and lifestyle.  Bruce went too and started Cutthrough a few years before he thought he perhaps might have.  But he hasn’t looked back and indeed is very happy he made the change when he did.

Bruce’s answer to my survey question “10. If you could give one piece of advice to a prospective business owner – what would that be?” was “First and foremost you've got to love what you do.”  And he added later in the survey “It is not about business at all costs. I decline more assignments than I take on.”  That’s why when I got around to getting him to complete the Business Interview Matrix he said “you should have a fun meter as well” such is the importance he places on making sure you are doing what you enjoy.  When he started to complete his red lines on the graphs I was intrigued with his “Success” line.  “Why does it have a dip into the negative at the start?”  I asked “That’s because I started the business working from home and stuffed around a bit too much before I thought I had better get moving.” he replied with a sheepish sort of grin.  It’s so true ... moving from an office environment with others in your working area to a home environment on your own ... it is too easy to get distracted or to be lazy.

Cash Flow was another interesting one.  It shows a big dip but it doesn’t really do that in reality ... it sort of went up and down Bruce explained.  The real issue with cash flow though is “One of the first conversations I have with a client is billing and fees.  For some assignments where I am expending funds for film production for instance, I need say 50% up front. And don’t be afraid to talk about money and bills with your clients”  Making sure the invoices are paid in a timely manner is very important and “it needs constant management” Bruce maintains.  “I also had a bad debtor early in my business and that taught me that not everyone chooses to live up to the same standards you might try to apply to yourself.” 

Much of Bruce’s return on investment (ROI – see my blogs ROI-1 and ROI-2) is about the intangibles.  That being said, making a living is important “If you do your job well, the money side will take care of itself, external factors impacting adversely notwithstanding!!”

“So what is the takeaway here for other people and businesses?” I asked.  “Getting noticed and empathy.  Empathy is most important in advertising.  If your clients can’t empathise with you then they can’t identify with you.  They may notice you but if they have no empathy for your message ... it won’t work."

“Would you do it all again?” I wrapped up.  “Definitely yes!” was the emphatic reply “fulfilment is the measure of success but you need to make a profit of course.”  Happiness and cash flow.....I can understand that!!

Note:  To see more details about my interviews, please see my blog on “Business Interviews”.

Lukim All

BUSINESS INTERVIEWS

I am about to start my business interviews with the owners of micro, small and medium business enterprises.  Generally they will be located in and around Canberra but the occasional one in other cities is also likely, as I tend to travel a bit and sometimes people visit Canberra.

But before I start to blog the interviews, I need to set the scene because I ask them to complete a very short survey and to complete a “chart” of their business’ “rhythm” over time and these need some explanation.

Here are the survey questions:

1. In what Year did you start your business?

2. What did you do to prepare yourself for starting and managing your business? [you can select more than one]

• Born into it
• Courses and Training
• Experience in Other Small Businesses
• Experience in Big Business
• Mentor
• Family
• None
• Other

3. Do you have a written business plan?

• No
• No but it is in My Head
• Yes

4. Do you follow the business plan?

• Don’t Have One
• No
• Sort Of but not Strictly
• Yes
• Yes but Don’t Really Review it Much
• Yes and Review Regularly

5. Have things turned out the way you thought they would?

• Yes
• Pretty Much
• Not Really
• Not at All

6. What do you believe are your biggest business challenges?

7. What do you believe are your biggest personal challenges?

8. In what direction do you wish grow? [you can select more than one]

• Don’t really want to
• Revenue
• Turnover
• Geographically
• Export
• Other

9. At what point do you feel you will get rid of the business? [you can select more than one]

• Never
• To Children when Ready
• Retirement
• Sale at Price Goal Achievement
• Go Public
• Sale to Business Partner
• Other

10. If you could give one piece of advice to a prospective business owner – what would that be?

My intent is to publish the graphs of consolidated results at various points in the future ...say at 10 interviews, 20 interviews and so on.  I am really quite interested to see what the responses are.

Also during the interview, I ask them to draw the “rhythm” of their business against the following four graphs:

Each of the graphs has a positive and negative vertical dimension with the years they have been in business going from left to right.  I don’t put scales on the axis as the amounts are not important.  The trends are what I seek.  They will use a big red texta to draw their rhythm.  So what do I mean with each graph:

• Success.  This is about their success from their perspective no matter what that success criteria might be – financial, satisfaction, growth or a combination of course.
• Motivation/Desire.  How has their motivation and desire for the business and working on the business been?  It will be interesting to look at this in relation to the Success graph directly above it.
• Systemisation.  Getting all your business systems in place is very important for some business types and less so for others.  I expect some variations based in the business type (retail, consulting etc) and whether they bought into a business or developed one from scratch for instance.
• Cash Flow.  No matter what your ROI is (see ROI-1 and ROI-2), you need to make money.  Cash flow is so important that I believe it deserves a graph on its own.

Over time, I hope to draw some correlations with various business issues ... what .... I am not sure yet and don’t wish to pre-empt the facts.

If you would like to participate in some way, feel free to contact me of course.

Lukim All

SMALL BUSINESS IN AUSTRALIA

I attended this presentation quite some time ago last year and blogged about it at the time.  But then my Knowing Projects site went pear shaped.  It is worth putting it up though.  Michael Schaper had some interesting facts to discuss.  So here is my original blog entry.

Along with Donna Cox of Mantra Training and Development, I attended the Canberra Business Council (CBC) (of which HolisTech® is a Corporate Member) and Australian Institute of Company Directors (AICD) luncheon.  Apart from doing a little networking (not that I am good at that), we listened to an interesting presentation by Dr Michael Schaper, the Deputy Chairperson of the Australian Competition and Consumer Commission (ACCC).  It was titled Small Business – Future Opportunities & Challenges.

Michael was kind enough to provide me with a copy of the presentation which I have posted here.

In essence he pricked a few myth bubbles about small business in Australia and a little on small business in the ACT.

From a personal perspective, when I started my first company HolisTech® Pty Ltd, there were under one million registered businesses or companies.  Now, ten years or so years later, there are over two million.  I would be interested to know why, but I would venture to say that when I set up my company there was only a need for one shareholder and office holder.  But prior to that two were needed as a minimum.  I even remember when were leasing a warehouse for a distribution business we had bought, that the landlord’s wanker lawyer gave me all sorts of strife because he thought I was doing something illegal as I was the only office holder of the company…this was 2-3 years after the law had changed – even after I pointed it out he refused to admit he was wrong.  I couldn’t believe it!  I would also say that the tax treatment of single person businesses etc has had an effect and so too the industrial relations regime where an individual can negotiate with an employer on their conditions – if I can do that then why not set up a business/company structure.  Perhaps we are just getting more entrepreneurial in Australia as well.

Although you will see it in the attached presentation, here is a summary of a few bits:

• Slide 3.  This is a list of why we need a strong small business sector.  Small and micro-businesses are good for innovation, competition and provide support to big business.  Interesting that he didn’t say “support to Government”….perhaps small business supports big business in supporting government!  In fact one of the questions from the audience was how governments can make their purchasing choices and processes more sympathetic to small business.
• Slide 6.  The pyramid of business size.  Big business (200+ staff) only comprises 0.3% of businesses, whilst micro-businesses (0-4 staff) comprise 84.5%.  Small firms (5-19 staff) comprise a further 11.3%.   Now we are talking about businesses with an active ABN here …not defunct or “parked” businesses. 
• Slide 8 and 9.  Michael compares the small business sector in Australia with those in other parts of the world.  It is around the same in proportion terms.  Two thirds of small firms are home based and most entrepreneurs are over 30 and most are men.  About 10% of business owners have more than one enterprise – interesting.  That seems pretty high to me but reflects my own experience that as I have become more comfortable with risk, how to manage cash flow and being more entrepreneurial, I commenced other ventures or bought into other businesses.  So I guess once you understand and become comfortable with business, you can juggle a few of them (in my case it is a real delicate balance and some of the ventures don’t get the attention they need). 
• Slide 12.  Have a look at this one because it gives the facts about business failure in the small business sector.  There are many myths around this …but they are dispelled (or confirmed perhaps for some) with these facts.
• Part #2.  This part is about trade practices and the TPA.  One thing I have learnt when dealing with large businesses (less so governments), they have anti-competitive practices in their agreements.  For instance, one large multi-national firm that sought us out as sub-contractors had clauses in their contract stating we couldn’t do business with their competitors or clients unless we got their permission first!!!  When I questioned this and said it was against the TPA, they said “it was our lawyers that had written it up”!  So I advised them that for me to comply, I needed a list of all their clients and all their competitors….strangely, they weren’t forthcoming and we ended up doing all the work without a written contract actually.

Ultimately, Michael delivered a great message …small business is very important and the ACCC is there to ensure it gets a fair go …although this has it limits within the Governmental legislative framework.

Lukim All

ROSEMARY (NIGELLA) BYRNE

OK ...OK... I have a declared interest here – Rosemary is one of the few good things about my brother!  He sent me the link below from the Courier Mail under the same heading I have used for this blog entry:

Machine is Cooking Miracle Maker

It’s the story of the product Rosemary sells in her micro business.  And a great product it is too!  Being Italian, I expect her to get it make pasta dishes for when I am visiting!

I am about to commence a series of interviews/chats with small and micro business owners which I hope to become a regular feature of this site... so I must include Rosemary as one of my subjects next time I am in Brisbane.


Lukim All

HAPPY 10TH BIRTHDAY SENSORY7

I was privileged the other night to attend the 10th birthday celebrations of Sensory7 – a small business based in Canberra and owned by Suzette Bailey.  It was held on the premises and training room of Mantra Training and Development in Gungahlin.

Sensory7 is a small business success story in the enterprise content management space and Jon Stanhope, the Chief Minister for the ACT, explained that Sensory7 was the sort of company that was contributing to Canberra’s core business of IT and related services.

They have a great capability in Microsoft SharePoint and in TRIM.
Here are a few pics of the evening.

Jon Stanhope, Chief Minister ACT, congratulating Sensory7 and Suzette

Donna Cox of Mantra Training and Development Pty Ltd congratulating Suzette

Well done Suzette and Sensory7 and happy birthday!!

Lukim All

MANIPULATING ROI - 02

In Manipulating ROI – 01, I spoke about some of the broad levers that a business owner can use to manipulate ROI.  However, it was quite brief.  I want to go deeper into some examples to provide a better understanding of how some of these levers might be used.

So let me look at some more detailed examples of how we can use some of this understanding to increase ROI.  I have reproduced my ROI equation below as a reminder.

 

Expenses Focus.  If you feel you need to reduce expenses because you have a taken a revenue hit [in this GFC (financial crisis) or NQAR (not quite a recession) this might be the case] or just as a regular six month exercise, then you might want to go through your expenses line by line to reduce or eliminate future expenses.  If you do this, you need to be prepared to question everything you do to incur the expense.

• Do we need to incur the expense at all?
• Is it a one off or a series of one-offs?
• If we need to incur this expense, can we do the same thing but more cheaply?  Better value elsewhere.
• If we need to incur this expense, can we achieve the same thing but doing it differently and hence opening up more options and hopefully cheaper options?  Better value with another way or method or system.
• Can we defer the expense to another time period without affecting anything else?
• If you have a product or service, it might be worth having a look at every facet to see how you can make the product more cheaply or deliver the service more cheaply.  If it is a product, then you probably need to go through a process called value engineering.  Value engineering a system or product is achieved by: 1) first taking the system or product design and identifying and then removing or modifying redundant functionality; and 2) an additional process of analysing the way the product is manufactured and assembled is also investigated to identify cheaper, but no less effective alternatives.  I facilitate value engineering and you can find out more about the whole concept here at Wikipedia.  it is a great exercise and most satisfying.  I have never facilitated a service value engineering effort .... and perhaps it is called business process re-engineering .... but I suspect I could easily use the same concepts to do the same to a service.
• If you have staff can you reduce their time to say part time as opposed to full time.  Can you turn them into sub-contractors (just be careful of the employment laws here – it may not actually change anything).  These sorts of decisions are not taken lightly as they affect more than just you ... there are other people and families involved including relationships and friendships.  But....they are options!
• Leasing a new premises or a new piece of equipment or plant.  This is as opposed to buying the same item, if that is the case then look down at the Investment part of the equation.  Does the equipment need to be new or will second hand be good enough?  Do you need to do up your premises or will a coat of paint and new flooring be good enough?  And so on ....image doesn’t equate to new!!
• Just remember, some expenses are good expenses ... you need to incur them to increase or maintain revenue flows.  It is always a trade-off so don’t cut off your nose to spite your face!

Revenue Focus.  This is an avenue of increasing ROI that looks at how you can increase revenue by a combination of actions.

• Increase marketing.  This might also incur an expense, but so long as you know that the marketing will generate more revenue than you incur in costs, then it should be OK.  You need to keep an eye on this though.  It is useful to be able to see how you will collect that evidence before you incur the expense.  In other words have a plan on how you are going to identify where new customers come from or why old customers are repeat buyers.  The type of marketing you use will be determined by what you are trying to seel and the market you are trying to access.  Personal visits might be the best option.  But your primary expense in this case is revenue forgone as you visit people....just remember that.  This sort of marketing is something I have never been good at as I am not the type of personality to “network” and cold calling is not my forte either.  But there are alternatives and perhaps spending some time with a marketing and/or sales guru might be an option.  This blog is in fact a marketing tool – both deliberate and also as simply an outlet to refine ideas and in my case experiment with some of the contents of a future book.  But this sort of marketing isn’t for everyone of course and some areas just aren’t suited to it I am sure.
• Improve your service or product uniqueness or differentiate it in some way from others in the market.  If you have something truly unique, you are probably not a small or micro business!  How you do this will be an interesting challenge, but you will need to look at every angle!  No tips from me as it depends on your product and service.
• Have a sale!  Now this may not actually increase ROI as you might be cutting margins below what you might get back in return for increased product sales.  It is of course a balance.  On top of that you also have the issue of making sure you don’t have too much money on the shelves ... tied up in inventory.  Getting turnover and throughput might be a useful way of increasing ROI and is certainly a consideration if you have too much old stock.  If you are a product sales business or retail, then this is a relatively common approach.  For a service business though ... I don’t see it that often ... indeed it is relatively uncommon.  Certainly, I have had to reduce my rates for my services in this GFC / NQAR, but it isn’t quite the same as a sale.  Reducing rates will probably reduce your ROI but a temporary reduction for a sale, probably won’t and indeed should perhaps aim to increase ROI.

Investment Focus.   This is comes down to making a decision on your longer term investments.  Do we really need that extra office space or new equipment (if you are buying – if you lease – throw that decision up into the expense category)?.  I would encourage you to do your sums on these commitments – to investigate not only the options for the investment but the options for your source of funds as well.  The cost of money is definitely a consideration in these decisions.  If the investment is expected to have a direct affect on your expenses and/or revenue, you should also look at ways of measuring what the affect is so that you can tweak the decision or even add more of the same if that is an option.  Just remember, an investment should have the effect of reducing expenses or increasing revenue or increasing revenue in excess of the extra expenses that might be incurred.

Intangibles Focus.  Your intangibles can sometimes come at a significant negative impact on all your ROI.  For instance if you choose to open a business in a much nicer environment (for me somewhere warm and by the coast!!), then your expenses may increase and your revenue may take a hit .... but your intangibles will increase....you will be happier with your lifestyle.  The trick I think is to make sure you don’t kill off your positive ROI completely by overloading the intangibles.

Lukim All

TRUST IN TEAMS AND BUSINESS

I want to talk about trust in this blog.  I have had my trust betrayed on a number of occasions in both business and within projects.  I have also had it tested and have been shown great trust by business colleagues and friends.

A very good friend of mine, Graham Durant-Law, has a great saying about trust that is just so true:

trust is easily given, trust is easily removed,
but trust is very very hard to earn back

To my mind being part of a team whether that is a project team, an infantry platoon, a small business, or a footy team is all about building relationships and trust.  For any group to work together, particularly where the stakes are high, then trust is essential. 

Now in my book the following equation is true:

Plainly decreasing anything on the right decreases TRUST.  Just as increasing it, increases TRUST.

In a new or established business or team TRUST needs to be developed/maintained because:

• Although HONESTY is generally a given at the start of a new relationship, it has not been proven at the commencement of any endeavour.  This is particularly so if the team members are new to each other.  HONESTY is something we find out about each other over time, unless of course there is some criminal record upon which we can rely.
• CREDIBILITY can be researched through due diligence on those who are team members.  But CREDIBILITY is also built over time by “doing what you say you are going to do” (delivering what you say you are going to deliver) and making sure others do the same.  Making sure others deliver on their promises may not seem such a big thing.  But it really can impact upon your credibility.  If you never or rarely check on whether something has been done or completed, then eventually, unethical or lazy people will think they can get away with not doing it or not delivering it.  You consequently lose credibility in their eyes and with the others in the team who are doing the right thing.
• TRANSPARENCY must be in all dealings.  This can be achieved by open communications, briefings, seeking input, etc.  Graham and I for instance started doing business together with an explicit contract.  From then on (and over many years) we didn’t need one because we built up that trust through transparency.
• SHARED EXPERIENCE will come but is not pre-existing.  It will test the other three elements.  A difficult shared experience, if it doesn’t destroy a relationship, will make it stronger.  This is so true in many endeavours, particularly where danger or hard physical times are shared such as in a football team or a military unit.

So you need to be careful where you don’t have these elements at the start of an endeavour or a project.  Beware if you have suspicions on one or more elements of the equation. 

I did have suspicions in one of my business endeavours, but didn’t act on them.  I doubted their transparency and hence their honesty even though the Directors had businesses themselves and even held academic positions.  It turned out I was correct.  They were saying one thing but doing another.  In the end, they simply lied about the whole interaction and threw me out of a venture I started.  I was left to either take them to court or to accept the situation.........(it is yet to play out completely, so I can’t say too much here).

So as part of a team or any business or project, I tend to follow those principles.  I also have three other “sayings” that work together, that I often quote:

1)    deal in the facts not agendas,
2)    bad news does not get better with time, and
3)    ......... beware arseholes who don’t have ethics!

Lukim All

GOVERNMENT 2.0 TASK FORCE TERMS OF REFERENCE

I was browsing the other night and again came across some comments on the Government 2.0 Task Force.  It is an interesting initiative and I am uncertain as to how much it will achieve to be very honest.  But nonetheless, it is inevitable in a democratic society and with the more on-line “savviness” of the younger generations.

I added my comments to the short article by Lisa Harvey on “What about the rest of us?”.  I provided similar feedback on the Taskforce’s Terms of Reference to a public company I was chatting to a while back. 

So here is my view of the Terms of Reference.

The Government 2.0 Taskforce (‘Taskforce’) will advise and assist the Government to:

1.    make government information more accessible and usable — to establish a pro-disclosure culture around non-sensitive public sector information; The only thing that Web 2.0 adds to this is the “usable” part and perhaps the “accessible” part – but that is more in the context of “cheaply accessible”. Governments have always had the choice to make information available and accessible. Why they feel they need a “pro-disclosure culture” now should have nothing to do with Web 2.0.

2.    make government more consultative, participatory and transparent — to maximise the extent to which government utilises the views, knowledge and resources of the general community; Again, this has always been possible. Web 2.0 should make it more efficient to do so.

3.    build a culture of online innovation within Government — to ensure that government is receptive to the possibilities created by new collaborative technologies and uses them to advance its ambition to continually improve the way it operates;  Now that is a valid aim perhaps directly related to Web 2.0. The issue is “innovation”. Governments have not often been innovative, which often involves risk of some sort. The difference in this case might be the push to make it happen regardless of the cost ...only governments can really do that ....the NBN for instance.

4.    promote collaboration across agencies with respect to online and information initiatives — to ensure that efficiencies, innovations, knowledge and enthusiasm are shared on a platform of open standards; and   This is a BIG call and desire. There are at least two issues at play here a) Where is the platform(s) available? My experience is that government agencies tend to not know what is available to them internal to a department let alone in another department. It will require a significant amount of internal to government marketing. b) we are an aging population and the public service reflects that demographic. What is easy and familiar to a <30 year old is certainly not familiar to someone say 40+ in some instances. My experience is that many many public servants find it difficult to use the features of Microsoft Word properly, let alone to use a wiki, twitter (if they are allowed), forums etc. Some government departments don’t even permit WWW access!

5.    identify and/or trial initiatives that may achieve or demonstrate how to accomplish the above objectives.  Interesting. Where will they trial it and among who? I suspect they will only trial it among those that want to use it (hence they will seek volunteers)....not the ones who don’t ...a sort of self fulfilling experiment that will provide a way improving what they do for those that want to use it ....but for those that don’t ...what do they do? More of this below I hope.

The Taskforce will advise Government on structural barriers that prevent, and policies to promote, greater information disclosure, digital innovation and online engagement including the division of responsibilities for, and overall coordination of, these issues within government.  This is a government cultural change that needs to occur. The public doesn’t need encouragement to have government become more open. I think some of this may have to do with governance.
 
The Taskforce will work with the public, private, cultural and not for profit sectors to fund and develop seed projects that demonstrate the potential of proactive information disclosure and digital engagement for government. More information can be found on the Taskforce’s Project Fund page.  Not sure how the “public, private, etc sectors” can help “proactive information disclosure” ..I presume within government. The government has to do this with its policies and public servants. Those sectors can help with digital engagements though.
 
In particular the Taskforce will also identify policies and frameworks to assist the Information Commissioner and other agencies in:

1.    developing and managing a whole of government information publication scheme to encourage greater disclosure of public sector information;  Not related to Web 2.0 though!

2.    extending opportunities for the reuse of government information, and considering the terms of that use, to maximise the beneficial flow of that information and facilitate productive applications of government information to the greatest possible extent;  A few motherhoods here and laudable aims. It will mean “sharing” of information which I suspect in many cases would be problematic with privacy issues. But there are lots of bits of information that could be shared without those constraints ...contracting, tendering, projects ....etc. So targeting what to share I think is the best start for this one.

3.    encouraging effective online innovation, consultation and engagement by government, including by drawing on the lessons of the Government’s online consultation trials and any initiatives undertaken by the Taskforce.  OK ...”effective” is the operative word here.

There are three general challenges as I see it:

1. I suspect much of what they wish to do has nothing to do with Web 2.0 as a government has always been able to make information available – it has simply been their choice of how much.  Accordingly, the only real assistance Web 2.0 will provide is to make the accessibility and manipulation of what is made available more efficient and widespread (you don’t have to come to Canberra to access a hard copy file for instance – you can do it over the web). 
2. The issue of more sharing and so on between government agencies will be interesting.  The challenges are many and not related to the “ease of sharing” that Web 2.0 may provide = silos, legislative issues, discomfort with software, the huge training bill ultimately .....to name a few off the top of my head.
3. Using tools to share information or to collaborate is going to favour certain types of people ...and that is perhaps the younger generation.  Australian demographics say we are an aging population, so the likelihood of the older generation having unbalanced representation due to the lack of Web 2.0 skills is a real issue ...the legislation will be slanted toward those that participate not those that DO NOT participate.  I found this quote from Kate Lundy very interesting:

I think it is fair to say it represents the wisdom of the crowd that participated in this Public Sphere topic. This was quite a crowd too. In addition to the 35 speakers, there were 170 attendees, 400 watching the live video stream and over 1500 watching the live wall (Twitter, Flickr and liveblogging feeds). These people and others constituted 41 blog commenters, over 20 bloggers, 300 people tweeting and 22 wiki contributors.

It may have represented the wisdom of the crowd that participated .....but that is the actual point ....it represents those that participated....not those that did not (which is probably about 99.99999% of the population).  I suspect this is how the “trials” will go too ....and everything will be positive no doubt because of it.

However.....having said all that ...it has to happen and it has to start somewhere.....and this is a good start.  I hope a lot of positives come from it.

Lukim All

STARTING A NEW SEAFOOD RESTAURANT

I intend to watch this blog about starting a new seafood restaurant.  It would seem to make for amusing reading if nothing else.

It also it seems to me about following a passion rather than to make a huge return on investment.  More about the intangibles than than the money.

I wish him luck!!

Lukim All

FEDERAL STIMULUS FOR SCHOOLS AND INFLEXIBLE PROCESSES

This is yet another article in The Australian newspaper on the problems and issues around the Federal Government’s schools and education stimulus package.  Assuming the facts are right, and I have no reason to believe otherwise, the waste is just incredible.  Good on the parents and staff to say they will hand the money back as it is just replacing a perfectly functioning building with another building serving the same purpose....on top of all the disruption that it will cause. 

Not knowing the full story I need to caveat this by saying that I really don’t know the facts...nonetheless, I am still astounded!

It is truly just bizarre and indicates an extreme lack of flexibility and a complete lack of management expertise in how to manage a program.  The article says that the NSW State Government claims it is too late to change anything.  I presume this means that once a project like this starts they can’t stop it or change its direction.  That is just plain silly!

This is a configuration management issue in many ways.  You start out with a stick in the sand saying we are buying/building XXX.  Circumstances change and you realise that XXX is no longer suitable for the changed environment and that you are better off with XYX or XYZ even.  If you were the NSW State Government, you would say ...”nup ... they’re going to get XXX whether they like it or not”. 

Now to change the requirement at the beginning of the process (and this is supposedly at the design stage) is not that hard even under time constraints as they claim.  But to throw good money after bad and continue the process even if you KNOW it is the wrong thing to do .... is ...well the only word for this is “stupid”... really really stupid.

There is also an old but still relevant management dictum that you make decisions (particularly financial investment ones) based upon the present and future trajectory not the past. 

This is just so wrong on so many levels.

Lukim All

LEVERAGING WEB 2.0 – A BRIEF

A while back, I was asked by a business colleague to assist in providing an insight into how an organisation could handle their knowledge asset better and how they could weave a network of advisors and small/medium enterprises.

After a couple of coffees and a long chat, he asked if I could encapsulate our discussion in a short brief. I gave him the brief from my one hour executive briefing I (through HolisTech Pty Ltd) provide to executives in Government agencies on leveraging Web 2.0.

In the introduction I give this quick insight:

If Web 1.0 is the broadcast web ("here I am and this is what I do" - it is read only - static) then Web 2.0 is the collaborative web ("here I am and we can do this together" - it is read/write and interactive - a far richer experience).

Web 2.0 offers many opportunities to enhance government and business service delivery via the tools that Web 2.0 offers coupled with the self reinforcing and evolving philosophical foundations and metaphors.

Ultimately, Web 2.0 permits people to leverage the knowledge of others in a trust network to enhance their business, function, service, product or some other value driven endeavour.

You are most welcome to access the brief here.  

Lukim All