1. TWO-SPEED ECONOMY
In that concise three-word phrase, property developer Ross Neumann dissected, probed and provided, over lunch, a detailed diagnosis and prognosis of the prevailing global, national and local marketplaces.
The seeming mysteries and complexities of contradictory public statements and contentions dissolved in an instant.
Acceptance of the explanation will be relatively easy, and – quick to comprehend and accept.
Applying and benefiting from appropriate actions will be quite another matter.
Achieving, sustaining and enjoying the fruits of better health for individual businesses will require specialist insights, treatment, and attention.
Similar to defibrillation of the heart, in which, one of the two chambers can be racing, while the other is slow, without treatment the condition can be fatal.
Input from a qualified, experienced and astute cardiologist will typically involve an electrocardiogram. Self-help, self-diagnosis and referral to an electrician by the patient is not recommended.
Sadly, this scenario has close parallels to the circumstances of many in commerce, particularly among small-business owners.
Well intentioned, preference for low-skilled business coaches has consequences.
It can be heart-stopping.
Objective analysis, a willingness to take counsel and maintaining the prescribed routine are important ingredients for good business health.
Treatments – strategies, tactics and, yes, philosophies – will necessarily differ.
Clearly the new-home construction, real estate and retail sectors find themselves in strikingly different hues of economic health from mining, health-care and aged-accommodation.
Exceptionally rosy complexions are being enjoyed by those blessed to be in employment with the various state government Departments of Premier and Cabinet.
One hopes that the relevant affected members get out and return to interacting with the ‘real world’.
Some politicians and their select coterie of advisors are remote from realities of a complex two-speed economy.
2. DIGITAL AND SOCIAL MEDIA FATIGUE
We got the message.
Unfortunately, many consumers and clients haven’t, – and aren’t getting the message.
The virtues, advantages, cost-savings and lure of vast numbers have been well canvassed.
Digital and social media have huge, mouth-watering potential.
BY WHAT MEASURE?
Sadly, both channels and concepts consistently stumble on one measure.
The enthusiasm for, and returns from both wane quickly when business leaders recognise it’s difficult, if not impossible to measure, and more importantly, quantify or monetise the virtues, responses and returns.
A recent national survey of business enterprises found that marginally more than 85% that had implemented digital and social media strategy, with the substantial attendant costs and infrastructure, were unable to accurately define, monitor and quantify customer/client responses, revenues and general returns.
Home builders and real estate agencies in particular have “de-invested” their in-house digital marketing departments, cut-back budgets, reallocated significant expenditure to mass media channels and reacquainted themselves with external advertising and marketing consultancies.
TWO KEY DEFICIENCIES
Over a very short period of time, an increasing number of marketers have come to conclude that the investment and outlays for capacity were not matched by the deployment of capabilities.
Shades of: what gets measured gets done.
A long-standing management truism remains current in the contemporary digital world.
All too often the lessons have centered on the statement: What can’t be measured doesn’t get done
That’s costly, in the immediate and longer terms.
Digital and social media are, and will remain important, strategic components of multi-channel marketing.
They have the capacity to open doors.
Total retreat and withdrawal from them is not recommended.
However, a more measured and balanced investment, complementing, and integrated with, the established mass media channels of television, radio, print and outdoor enhances prospects for effective communications and greater, more consistent responses and business generation.
Indeed, each typically accelerates the impact and efficiency of the others in a comprehensive suite of marketing platforms.
Telephone contacts and face-to-face interactions should not be overlooked.
Both are, in relative terms, labour-intensive.
But they remain the best mediums for sales conversions and sales closures.
Footnote: Some things never change – they simply get modified, repackaged and
Long before the birth of the digital and social media eras, a common, respected and resilient mantra was foremost in the minds of business
Nothing happens in business until a sale is concluded.
Sign me up.
3. “NEPHEW” – DRIVEN UNDER-PERFORMANCE
Among small to medium sized businesses everyone, it seems, has a nephew.
They are typically profiled as being tech-smart, pointy-heads who spend endless hours on-line.
Little wonder, they can’t get full-time jobs.
Part-time and casual employment provides countless hours each day to indulge in the social and digital media.
The said “nephews” don’t seem to be able to overly impress prospective employers.
But they do enjoy the endorsement of their Uncles and Aunties, who own struggling and challenged enterprises.
And besides, they are cheap and can’t do much harm.
This is an all-too-common, disturbing scenario which regularly confronts professional, qualified, experienced and creative consultants and business councillors.
They understand that family ties do bind.
Sadly, often they strangle.
Business owners should not be in pursuit of nurturing the family tree, or endeavouring to save money.
The primary intent is to make money, accumulate wealth and to share the benefits – particularly with team members, suppliers, associates and clients.
Personal ignorance and inability of all-things internet are not reason enough or justification to abrogate responsibility for the formulation, implementation and operation of strategically important on-line channels to well-intentioned “nephews”.
A lack of capacity to monitor, measure and monetise digital and social activities highlights a need, and; it does not provide a basic rationalisation.
Young “nephews” are often found to be transparently under-skilled, under-resourced and two-dimensional.
Yes, they can be, and often are “shallow”, a fact that reflects the performance levels of “nephew-dependent” digital and social media strategy.
They (“nephews”) and it (performance) tend to reflect poorly on business owners, operations and family-influenced decisions.
The implications and ramifications are not limited to any one discipline.
Indeed, many “young nephews” lack discipline and structure.
Disbelief permeates the true disciples of public relations, advertising and marketing, who tend to despair in silence.
Under-performance, decline and, ultimately, failure among small businesses can be, and often is, a relative outcome.
To identify a key cause, look no further than the “young nephew”.
4. THE SAME OLD STORY – A DRAG ON THE FUTURE
It’s an all-too-familiar tale.
Mass retrenchments, closure of premises, product withdrawals, corporate restructures and, yes, mergers, acquisitions and liquidations.
The increasing trend and pace of shortening life-cycles for businesses, products and services reflect growing intrusion, impact and consequences of rapid change, disruption and innovation.
A recent public announcement by Telstra, Australia’s largest telecommunication corporation, grabbed international media headlines.
It was to retrench some 8,000 staff members (around 25% of its workforce) and would split its structure.
That caught the attention of millions and carried explicit and implicit messages to business leaders and owners – no-one or thing is immune to the evolving forces of the future.
SYMPTOMATIC CASE STUDY
Telstra’s circumstances should not be reviewed in isolation.
They are symptoms of encroaching realities for many sectors, professions and entities.
Disturbingly, the manifestations, consequences and ubiquitous presence of dynamic change are not being recognised, respected and planned for.
Public references to “shock”, “unforeseen” and “unexpected” are sad indictments of inadequacies of the visions and analyses of both internal and external leaders and experts.
Ongoing, periodic objective assessments, audits and forensic strategic analyses should be mandatory and programmed.
They will not avoid the challenges of change, but will provide time for allocation of resources and priorities to address and redress their direct, indirect and cascading impacts.
Many supposed business and strategic plans have an orientation or sole focus on the future.
Some detail contemporary, comparative analyses.
Often overlooked is the past, and the genesis of the entity, its product/service range and that of the sector in which it operates, and to those to whom it seeks to serve.
Therein lie many questions and countless answers.
THE ROOTS OF THE MATTER
Beyond the narrow focus of Telstra is a telling story.
Telstra in its own right is worthy of contemplation.
It has lost its dominating and monopolizing presence.
Selling off, and losing control of one’s supply chain is fraught with danger and has intermediate to long-term adverse consequences.
The “cash-rush” from the sale of its copper-based network to NBN (National Broadband Network) was not reflected in enhanced dividend payments to shareholders, or in the share price.
Indeed, the share value and, thus, the market capitalization of the corporation have more than halved during the two years to June 2018.
Telstra, which was consistently ranked (by capital-worth) in the top eight publicly listed companies on the ASX (Australian Stock Exchange) is no longer among the top 10.
Disposal of the former large revenue and profit generating Yellow Pages, appeared to have little impact on operations or value.
The roots of the Telstra family-tree appear to run deep.
A landline telephone network, copper wires, “Yellow Pages” and, yes, call-centres.
Each is reflective, and tied to the past.
The prospects for growth, resilience and reasserted competitive advantage for Telstra appear to centre on new and substantial pillars, being:
- The corporation’s substantial shareholding in the on-line channels of Foxtel provides scope for penetration and access, making the categorization of being a telecommunications company somewhat redundant.
- The leverage point of its Foxtel investment will inevitably be the rich rewards possible with the content that is produced and transmitted, rather than the transmission channels themselves: like Netflix
- It is conceivable, and reasonable, to forecast that the embracement and utilization of 5G technology will, to some considerable extent, make the NBN network obsolete, inadequate and relatively inefficient and expensive.
So much for the projected investment of around $30 billion (currently $58 billion, and still counting) without the advantage and evaluations of a cost/benefit analysis by a Labor Party Senator and party powerbroker.
It seems the political party power was misplaced and poorly applied, and the numbers weren’t counted.
The lessons learnt from the Telstra scenario have widespread relevance, with significant structural and societal implications.
Look no further than the six largest corporations by market capitalization listed on the ASX.
Four are banks.
In 2017 Westpac celebrated its 200th year of continuous trade.
BHP, the recently rebranded “The Big Australian” is there.
So too is CSL, the former government-operated Commonwealth Serum Laboratory, which is the youngest, at 102 years old!
It is also the best performing and has been the fastest growing of the six, since its public listing in 1996.
Collective ageless beauty?
I think not.
It’s a cause for concern.
The contrast with the six largest public listed USA corporations is striking: Microsoft, Amazon, Apple, Facebook, Twitter and Google.
None were operating in 1985.
Four had not been established in the year 2000, and each has in recent times stated they do not need banks or banking to transact business.
They have their own payment systems.
And then there is Alibaba from China, which has similar attitudes and capabilities.
THE MESSAGE IS…
The restructuring, downsizing and thinning of Telstra is, it seems, a frontrunner for what will happen to the big four banks in Australia.
BHP is on the front-foot.
It is rapidly embracing technology, artificial intelligence and automation.
Shareholders will be gladdened with the prospects for increases in production, reductions in staff numbers, enhanced revenues, margins, profits, dividends and share prices.
Who’s looking back to the past?
Hopefully, no one, other than to appreciate the path taken.
Casual or heightened interest in the Telstra, banking and mining industry case studies are insufficient for many public and private, big and small corporations, firms, partnerships and networks.
Detached observations need to be upgraded with disciplined, structured, committed and well-resourced engagement.
In recent times I have enjoyed the challenges, insights and positive outcomes from facilitating detailed strategic analyses and business development workshops for lawyers, accountants, dentists, pharmacists, engineers and veterinary surgeons.
A new dawn is awakening for each discipline.
The future has arrived and it’s spelled: Digital
It’s time for all commerce to extract the digit.
Barry Urquhart of Marketing Focus is an internationally respected business strategist, consumer behaviour analyst and conference keynote speaker.