Paul Wallbank – Brilliant Communications

Category: business advice

  • An age of falling margins

    An age of falling margins

    One forecast about 2015 that’s very easy to make is businesses with high costs are in for a tough time.

    As competition steps up, global forces puts pressure on prices and technological change allows new competitors into marketplaces, the companies that aren’t flexible and keeping an eye on where they are spending money are going to find 2015 will not be a happy year.

    For the tech industry the predictions for next year are easy – there will be more security beaches, governments will want more powers to access our data while proving they can’t be trusted with what they already have, a new hot social media network will appear, well known brands will collapse, the net will get faster, more devices will be connected to Internet of Things and prices will continue to fall.

    It’s the falling prices that will be what defines business in 2015 as we enter deflationary times; not the economists’ nightmare of prices falling in the face of collapsed demand – although that’s not out of the question – but in the more positive sense of business inputs being cheaper.

    Things are going to get cheaper

    A few weeks ago I wrote of futurist and academic Andrew McAfee speaking about the accelerated rate of change in business at the Gartner Gold Coast Conference. One of the immediate effects of that changing world McAfee describes is that a lot of thing are going to get cheaper.

    Part of this is driven by newer cheaper sources of energy and labour, other driving factors are increased automation in fields where wages have historically been the biggest cost and  manufacturing processes are putting pressure on prices for most goods. The commodities prices collapse may also be a key factor in 2015.

    For some industries, such as the IT industry, falling prices aren’t a new concept. Any computer superstore or local PC repairer who holds inventory gets a nasty reminder of the sector’s economics every time they do a stocktake. However many businesses operate on the assumption prices will always rise overtime, a not unfair assumption given the inflation we’ve seen over the last fifty years.

    Getting costs down

    With falling prices, it means businesses have to be more aggressive in cutting costs; whether it’s telephone or power bills through to professional services or banking fees, the onus is now on managers to squeeze as much value for the dollar as they can.

    In the technology field the targets are obvious; are your old computer preventing you from using new software? Do cloud services offer a better deal than your old server based systems? Are your service providers charging too much?

    For the wider business looking at how newer technologies affect your workflow could well prove rewarding, it may well there’s whole range of areas your company can become more efficient through adopting new systems.

    A good candidate for slashing costs and improving flexibility is transport where too many companies are still paying Cabcharge’s overpriced fees when apps like Ingogo or Uber are cheaper and better. Why have company vehicles when car sharing services like GoGet can offer more value. Do you still need an expensive Yellow Pages listing when a free Google My Business entry will get you in front of more potential customers, particularly on the all important mobile platforms?

    Then there’s the whole outsourcing question where it’s becoming easier to hire knowledge workers on an as needed basis through the various online platforms like O-Desk and Freelancer.

    Over the break, it’s worthwhile reviewing your operations and seeing where you can use technology to cut costs and become more flexible in face of a rapidly changing marketplace. One prediction is certain; those with bloated costs and inflexible management are in for a tough 2015.

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  • 3D Printing promises to change architecture and building

    3D Printing promises to change architecture and building

    One of the longest running large scale 3D printing projects is based at the UK’s Loughborough University where since 2007 researchers have been working on developing the technology’s applications to the construction industry.

    Loughborough’s technology, named Freeform, offers faster and more flexible ways of casting concrete and building structures using a computer controlled concrete pouring system. For property developers the attraction is cheaper buildings while for architects the technologies offer more innovative structures.

    In late November the team announced a venture with Swedish building company Skanska SA to develop the world’s first commercial concrete printing robot.

    The venture, which will include collaborations with companies including iconic UK architects Foster and Partners, Buchan Concrete, Scandinavian contracting giant ABB and Lafarge Tarmac, aims to have the first commercially available robot printer available by mid 2016.

    Competing with the European venture is Chinese company WinSun who earlier this year showcased its 3D printer capable of producing ten houses every 24 hours. An interesting aspect of WinSun’s project is that the printing rig was build out of existing parts and controlled by an off the shelf Computer Aided Design and Manufacturing software system.

    While the Chinese results are relatively crude, they show the potential for the technology. The economics of the WinSun project are enhanced by using waste building site material for the concrete which only increases the attraction of these machines to cost conscious property developers.

    The Chinese and British are not just the only countries working on these technologies, in the Netherlands the 3D Print Canal House shows how techniques and materials are being developed while in the United States the University of Southern California’s Contour Crafting project is looking at how to use large scale 3D printing in a range of construction scenarios including building space colonies.

    While using moon dust to build structures in space is some way off, both Freeform and WinSun show what will become commonplace on building sites in the near future.

    These technologies promise to radically change architecture and the building industry with ramifications for jobs and the economics of building structures.  3D printing buildings is another example of how industries and employment will be very different by the middle of this century.

    For businesses, it’s another example of how managers have to prepare for very different marketplaces.

    Builder image courtesy of thesaint through Freemimages.com

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  • Market share isn’t everything

    Market share isn’t everything

    Recode’s Walt Mossberg looks at the mobile phone industry with the observation that while Google’s Android system is dominating the market, all is not what it seems.

    While Android’s market share is impressive, Apple still has the profitable high end of the market and Google’s is increasingly finding that low end smartphone manufacturers are prepared to run with the slimmed down Android Open system rather than submit to Google’s licensing requirements.

    Just as Apple can be fairly relaxed about Google’s position in the smartphone market, Twitter’s Ev Williams dismissed concerns around his service after the news Instagram had passed the 300 million user mark.

    Fortune’s Erin Griffith reported Williams’ feisty response: “If you think about the impact Twitter has on the world versus Instagram, it’s pretty significant. It’s at least apples to oranges. Twitter is what we wanted it to be. It’s this realtime information network where everything in the world that happens on Twitter—important stuff breaks on Twitter and world leaders have conversations on Twitter. If that’s happening, I frankly don’t give a shit if Instagram has more people looking at pretty pictures.”

    As Griffith observes Wall Street doesn’t share Williams’ view and that’s an increasing problem for the company, but both Apple’s and Twitter’s view to their market position illustrates how sheer numbers don’t necessarily matter.

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  • Why websites are important to small business

    Why websites are important to small business

    Imagine you were overcharged by four dollars for a home delivered Chinese meal. Would you harrass the restaurateur and demand extra payments?  The story of Ben Edelman and Boston’s Sichuan Gardens Chinese restaurant illustrates the importance of a business having an up to date website.

    Boston.com describes the saga of when Edelman ordered a delivery of $53 worth of Chinese food, on checking the bill he found he had been charged four dollars more than the restaurant’s website indicated.

    Edelman, an associate professor at Harvard Business School, didn’t take this injustice lying down; he contacted the restaurant and when the proprietor, Ran Duan, admitted the prices on the website were out of date Edelman demanded twelve dollars — in line with the typical damages awarded against overcharging businesses under Massachusetts state law.

    Update: Since posting this, Ben Edelman has apoligised to Ran Duan and Sichuan Gardens.

    Keeping things current

    While the matter between Edelman and the Sichuan Gardens remains unresolved the dispute illustrates why it is so important for small businesses to keep their website current.

    At least Sichuan Gardens has a website as many Australian hospitality establishments don’t bother and, when they do, often neglect the basics like opening hours, location, telephone number and other contact details. It costs business as potential customers can’t find them.

    To be fair to Ben Edelman many of us who’d been overcharged four dollars would probably not bother contacting the restaurant, we’d be more likely to order from someone else next time we felt like having Chinese delivered. At least the professor let the establishment know they had a problem.

    For those restaurants and cafes who do have a website, often the menus or rates are out of date and are in formats — usually PDF documents — that can’t be indexed by Google, meaning potential customers searching the web for ‘braised fish fillets with and Napa cabbage with roasted chili’ might be missing out. Menus should be on the site as their own web page in HTML format that search engines can read.

    Once a menu is published on a website, it’s necessary to keep it up to date. Having out of date prices on menus is just as much a breach of Australian consumer laws as it is in Massachusetts, so there’s legal aspects to having current information on the site as well.

    Losing customers

    Probably the biggest risk for most restaurants and cafes though is lost business because those potential customers can’t find you. Wasting hours arguing with angry customers like Ben Edelman is also a genuine cost to the business as well.

    With most proprietors and managers in the hospitality industry being chronically short of time, it’s essential websites are easy for staff to access and update; the days of complex updating tools or paying your web guy a couple of hundred dollars every time you want to change a page are long gone. Systems like WordPress, Blogger or Wix offer free services which are adequate for getting the basics up on line quickly.

    Social media listing are important too, with most customers searching on their smartphones for venues; having a basic Google My Business page and a Facebook listing are the least you can do to help your customers find your establishment.

    Ultimately none of us want fights with our customers, so letting them know who you and what you charge is plain good business sense. With so many other businesses not having a basic web presence also gives you the advantage over the competition.

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  • PR lessons from Uber

    PR lessons from Uber

    The debacle of Uber’s management proposing to threaten journalists drags on and is becoming a classic case of what not to do during a public relations crisis as the company and its supporters continue to make matter worse for themselves.

    What’s notable about the hole Uber finds itself in is that it didn’t need to be there; a bit of maturity and commonsense, not to mention knowing when to shut up, would have helped avoid this self inflicted wound to the business.

    Much of the damage done by the story could have been avoided by following a few simple steps.

    Stop digging

    One of life’s key rules is when you find yourself in a hole then the first step to getting out is to stop digging. When the critics are loud, shut up and take a breather. Instead of exacerbating problems, step back, have a think and, if necessary, get some professional help.

    Have some perspective

    The most fundamental attribute for managers and owners is not to take criticism too seriously; there are always critics and letting them consume your daily lives is counterproductive and ultimately destructive as Richard Nixon would attest.

    Usually in business the critics aren’t diminishing you as a person, in most cases they are making observations about your company’s economic model or its actions in the marketplace. If you’re taking criticism too personally, it might be time for a holiday.

    Just because someone is criticising you, it doesn’t mean they are in the pay of your competitors or part of the socialist-masonic-jewish-illumaniti conspiracy to get you, they may actually your best friends and even have a point.

    Your business priorities

    How do these criticisms affect your ambitions for your business? If Sarah Lacy thinks you’re a bunch of misogynist scumballs, does it matter? Often the critics don’t matter to your business as they are a different group to your customers, investors or staff.

    Is there merit?

    A key question when confronted with criticism should be ‘is there merit to this?’ Before threatening to smear or sue those pointing out your business’ shortcoming it’s good to have a look to see if the critics do have a point about what you’re doing wrong.

    Fix the problem

    Should it turn out the critics do have a problem, then fix it. Should it turn out your business has a toxic bro’ culture then fire a few of the toxic bros and hire some people with the backbone to fix the problem.

    Be open about things

    If the criticisms are legitimate, then acknowledge them and be open about how you’re going to fix them. Some critics won’t be satisfied but that’s part of life, you won’t keep everyone happy.

    For those critics who will be happy, admitting you’ve made mistakes and are working on fixing the problems will win more fans and supporters. People love a bit of humility and it probably doesn’t hurt for managers to be a bit humble.

    On the other hand, it might be that some of your critics do genuinely hate you, are in the pay of your competitors or part of the Illuminati conspiracy. In which case, use facts and stand your ground. In the battle for public opinion, having the facts on your side always gives you the advantage.

    Personally attacking your critics though is always a mistake and, as Nixon found, smearing them turns out to be a mistake. Life is too short and time in running a growing business too scarce to be consumed by hate. Get over it and move on.

    Get professional help

    In Uber’s case it appears their managers have been frantically calling their buddies to help out — this hasn’t helped and has probably exacerbated an already heated environment. A good professional PR adviser or reputation management company will know how to at least ease the pressure if not completely defuse the situation.

    Regardless of how good the PR adviser are though, ultimately a business’ good name comes from its management and how the company behaves. This where Uber has to take more care as it becomes a global giant.

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