Category: business advice

Hanging on the telephone

Is there a digital divide appearing in customer support services.

Ever tried to call an online company about a problem? As the New York Times explains, it’s often hard to find the telephone number, let alone someone to answer your call.

The NY Times article worries a new type of digital divide is appearing between those happy to do business using email or social media and those who who demand to speak to someone.

In reality, the truth is more subtle than just generational differences – it’s about the web2.0 service-free business model where few, if any, resources are spent on customer support. The idea is the an assistance can be given out on “self service” basis through a website or, better still, crowdsourced on a user forum where the customers work together to figure out solutions themselves.

For many of the web based cloud computing and social media businesses, this model is essential to their survival. If you were to add a customer support department answering telephones, the viability of the business would collapse.

While it’s uncertain if that business model is sustainable for many of these web based companies, it’s interesting to ponder how many phone calls most businesses could avoid by having relevant information on their website.

It’s worthwhile looking at call logs and asking your staff what are the most common questions to your business. Answering those on the company web site might mean happier customers and fewer staff distractions.

For some businesses, letting customers discuss issues in an online company forum might be a way of crowdsourcing support and giving ideas for future products or service improvements.

Rather than leaving customers and staff hanging on the phone, having relevant and helpful information on the website saves everybody time and money.

Are small business owners whingers?

Too many businesses are blaming others for their problems.

People of the same trade seldom meet together, even for merriment and diversion, but the conversation sends in a conspiracy against the public, or in some contrivance to raise prices.” Adam Smith – The Wealth of Nations.

At a meeting with the state’s Small Business Commission I was once again reminded of Adam Smith’s words – that business owners will try to seek whatever opportunity they can to raise prices and whinge when they can’t.

Over the last few months I’ve heard business owners complain the government doesn’t do enough to protect the quality of their imports, give them more onstreet dining permits, stop their neighbours from having onstreet dining permits and, my favourite of all, regulating discounts offered on group buying websites.

Restauranteurs are complaining their customers don’t appreciate the cost of running a business – which is true, but it isn’t the customers problem.

A spectacular example is the anti-carbon tax propaganda where local businesses are displaying letters from a political party claiming their prices will go up and one franchise chain was dumb enough to even write down their plans to blame price rises on the new tax.

We also have the ongoing narrative that local councils – particularly those controlled by Green or Independent groups – are “anti-business” and killing commerce through unfairly enforcing parking rules and building bicycle lanes. Something that nicely fits the talking points of the Corporatist political parties that anyone who isn’t endorsed by a major party is “a dangerous radical”.

The best of all though is the ongoing campaign to eliminate the GST and import duties threshold for overseas purchases, which claims all the problems of the nation’s retailers would be solved if customers were forced to wait a week a pay a couple of hundred dollars in administrative fees.

Some of these gripes are fair – some councils are unreasonable (interestingly usually in areas where local government is seen as a stronghold a big party), the current tax rules are unfair and there are truly stupid people deeply discounting on group buying sites – but most of them are just excuses.

Business is always tough, if it wasn’t everybody would be doing it and taking it easy.

If all you can do is whinge about prices, your council, the government, your competitors, staff or your customers then maybe you should think about getting a job or at least taking a holiday.

 

Your business personalities

A business reflects the owner’s personality. Deal with it.

Eccentric Sydney restaurant Wafu made headlines a few years ago over the owner’s strict insistence that diners followed her house rules.

A few weeks ago Wafu announced it would close and owner Yukako Ichikawa gave Sydney diners a serve of abuse on the restaurant’s site (currently down due to bandwidth issues).

There’s no doubt diners at Wafu had to accept Ms Ichikawa’s rules or else. Bring your own “doggie bag” or container and don’t waste anything or else you would be in trouble.

Wafu was a reflection of the owner’s beliefs, she wasn’t just running her business to make money. As she’s quoted in the Sydney Morning Herald,

“Wafu is viable, as a business, if I continue to accept inconsiderate, greedy people.

“But I couldn’t do it. Wafu has always been, and will remain, more to me than simply just another business.”

People often misunderstand why someone would start a business – it isn’t always about the money. Sometimes it’s because the founder or proprietor wants to do things differently, sometimes because they don’t want to work in an office anymore and sometimes it’s because they are unemployable anywhere else.

Often it’s because the business founders are sick of dealing with jerks. The freedom to refuse to do business or work with assholes is a great liberating feeling and something that those working in a corporation or government department will never experience.

Whatever the reason, those businesses reflect the owner’s personality and they have put their money, and their livelihoods, where their mouths are.

I wonder how many corporate warriors and armchair critics of Yukako Ichikawa have ever done that in their lives?

Ranking managers

Microsoft’s problems are deeper than just a misused HR tool

Vanity Fair’s analysis of Microsoft’s lost decade focuses on an unlikely culprit – the management tool of stack ranking.

Stack ranking, or “forced distribution”, is the practice of listing staff members in order of effectiveness or placing them on a bell curve where those in the middle are satisfactory and those at the right hand of the graph are exceptional.

Those on the left of the curve or the bottom of the list are deemed to be underperformers and risk losing their bonuses or even their jobs should the company be shedding staff.

Like all business tools, stack ranking can be useful. One manager of a North American multinational who encountered this when working with an Indian outsourcer described how it was used.

“A senior manager told me how he applied it in his group. Of 300 people, everybody was given a ranking and were told that ranking and given a chance to put their case if they thought it was unfair.
Then the bottom 5% were culled. Tough but fair.”
So at the Indian outsourcer it was applied to large groups and the bottom tier were given the opportunity to put their case. There was some transparency and at least some fairness in the process.
Used poorly though, it can backfire, “using it for groups of ten is stupid and lazy” said that manager who later saw it introduced at his own corporation with catastrophic results.

The real problem at companies misusing tools like stank ranking is too much management.

Like the old saw of “too many cooks spoil the broth”, too many managers create mischief. To justify and protect their positions they build little empires and make work for themselves.

Give empire building middle managers a tool like “stack ranking ” and you have a problem where office politics and patronage become more important than technical skill or performance which is exactly what the Vanity Fair article describes at Microsoft.

Ranking employees in a mindless way is symptom of a bigger problem in an organisation. In Microsoft’s case, the problem is too many managers.

The solution to that problem is simple.

Is the Virginia storm outage bad news for cloud computing?

A disaster or an opportunity for the cloud computing industry?

On the eve of the US Independence Day holiday weekend, the last thing you need is a storm taking out your services. Unfortunately a storm across Virginia did exactly that to one of Amazon’s key data centres, taking with it popular social media sites like Instagram and Pinterest along with the Netflix movie service.

Having a key data centre going down and knocking out the services that rely on it surely exposes one of cloud computing’s greatest weakness – or does it?

Last week I spoke to Eran Feigenbaum, Director of Security for Google Apps, who made the point “not all cloud providers are created equal”. The Virginia outage illustrates this.

Netflix, Pinterest and Instagram all made choices to solely rely on one data centre for key parts of their services leaving them exposed should a storm, earthquake or tsunami affect that location.

Eran introduced me to a term I hadn’t heard before – “shared fate zones” – a good example of which would be putting all your servers in Virginia where they can be knocked out by a storm, in California or Japan where an earthquake can disable them or solely around the Indian Ocean where a tsunami like that of 2004 could know them all out.

All the major cloud providers have the facility to spread loads across the globe for exactly this situation. The services affected by the Virginia storm chose not to do this and they eventually were caught out.

Events like this aren’t just an issue with cloud computing, or even technology in general. Storms, earthquakes, fires and many other natural or man made disasters are a fact of life which can disrupt business. If an earthquake hits your town, the question is how quickly can your business and customers get back to normal.

Distributing services is actually the cloud’s strength, it means we’re not tied to one office or location so we can get back to normal a lot quicker than those who have lost everything.

Computer networks being knocked out is nothing new, we’ve seen this plenty of times over the last fifty years as squirrels have chewed cables, technicians have pressed the wrong button or natural disasters have disabled data centres. By spreading the load, cloud computing services should make networks less prone to problems.

A lot of people will say in the next few days that Amazon’s outage illustrates the unreliability of cloud computing, it’s actually the opposite.

Deep mining business data

Big data means big opportunities for businesses prepared to look at what their customers are doing

This post originally appeared as Mining Business Data: Get ready to drill and excavate, the June 28, 2012 post on Smartcompany.

The IT industry loves buzzwords and the phrase coming into fashion is “big data”. Forget “social media” or “cloud computing”, much of what you’ll be reading about in columns like this over the next few years will be about mining the information piling into our businesses.

Big data’s power is illustrated in yesterday’s report that Mac users will pay more for hotels than those on Windows systems. So travel site Orbitz now plans to headline more expensive options to visitors using Apple computers.

While social media and cloud computing are falling out of favour, we shouldn’t discount those old-fashioned terms as they are two of the main drivers of big data. Cloud computing makes it possible to crunch data cheaply, while social media is generating even more data for people to play with.

Sydney business Roamz is a good illustration of how social media, cloud computing and big data come together. Born out of founder Jonathan Barouch’s desire to find local activities for his young child, Roamz pulls together data from Facebook, Twitter and Foursquare to build a picture of what’s interesting in your neighbourhood.

It’s no coincidence direct marketing giant Salmat has invested in Roamz, as the data being gathered allows companies to paint a comprehensive picture of what their customers like.

Another business making sense of big data is Kaggle, set up by former Reserve Bank economist Anthony Goldbloom. Kaggle is a crowdsourcing service which runs data analysis competitions on business problems through to things like HIV research, chess ratings and dark matter exploration.

Like most things in the computing industry, these services were only available to those who could afford supercomputers a few years ago, today they’re available to anyone with a credit card and internet connection.

The era of big data might help us overcome Pareto’s Principle – otherwise known as the 80/20 rule – that 80% of your profits come from 20% of your customers. We can also be sure that 80% of our problems come from a different 20% of clients.

Having the ability to crunch numbers quickly means we can identify the good payers and problem customers before we do work for them. It might also mean we beat another business truism by finally being able to identify the 50% of our advertising budget that is being wasted.

Even if you don’t think your business is ready to dive into the world of big data, it’s worthwhile at least having a look at your website analytics to see what your customers are looking at.

Who knows? Like Orbitz, you might identify those cashed up Mac users who love spending money.

Refocusing on Asia

Australian business are looking again at Asian markets.

One of the interesting things about Australian society and business in the last twenty years is how the nation seems to have turned away from Asia.

In the 1980s and early 90s, the country was focused on exporting services and building long term relationships in sectors ranging from Malaysian construction, Thai diary farming and legal services in China.

Twenty years later, Australian businesses and government seem to have given up with the consensus among industry and political leaders now being that all the nation can export is raw minerals, bulk agricultural goods with a sprinkling of third rate educational services.

Globally focused Australian businesses – particularly those in the startup sector – look to Silicon Valley for funding, inspiration and markets. Only a minority are looking North to Asia rather than across the Pacific.

ViDM – Ventures in Digital Media – is one of those businesses and CEO Willie Pang of the Sydney based advertising technology startup believes the time is to seize opportunities in growing Asian markets rather than concentrating on Silicon Valley financing and exits.

“Focus on building a great business. If you have a great business someone will buy you,” says Willie.

The opportunity ViDM sees is in advertising trading platforms bringing together publishers and advertisers across the digital, print and broadcasting channels. Willie expects this market to be worth eight billion dollars across Asia within five years.

Many of those opportunities in the Asian market are in business-to-business markets such as advertising platforms which is another difference to the largely consumer focused Silicon Valley model.

For Australian business, Willie doesn’t see funding as being an issue with money being available for smaller startups and mature companies.

Like in Silicon Valley the real problem lies for business in the middle stages of their development where they are too big for angels and smaller funds but not interesting for the bigger investors. That grey zone lies between two and ten million dollars.

For the companies that do raise the funds and go hunting in Asian markets, the rewards can be great. Not only do this economies have great growth rates, the diversities of Asian countries mean there are different opportunities lying in each nation or even provinces.

Right now, US businesses are focussed domestically or just on a narrow range of opportunities catering to affluent Chinese consumers in Beijing, Shanghai and Guangzhou.

Willie sees that as another opportunity, while US and European companies are distracted it’s a good time to be entering the Asian markets. But that window of opportunity won’t last forever.

“We’ll either play in that space or the Americans will do it” says Willie.

The opportunity is open to us. Will we grab it?

Connecting the data dots

The age of big data means big opportunities

One of the connected world’s weaknesses is its fragmented as various silos of data appear in the different social and cloud services.

Bringing those sources together in a way that’s useful and relevant is one big opportunity for entrepreneurs.

Sydney company Roamz is one of the businesses looking at this opportunity by bringing together a user’s Facebook, Twitter and Foursquare feeds to figure what interesting stuff is happening locally.

Roamz’s CEO and founder Jonathan Barouch has a vision to “cut out the noise” from social media services by “curating and cleaning the data”.

The idea of curation isn’t new in the online world, this is probably one of the biggest challenges for everyone on the web as we find ourselves swamped with data. To date, much of the idea of ‘curation’ has been around news sources where services like Google News try to deliver relevant current affairs to the user’s desktop.

Social media sites are particularly in need of curation, particularly given your friends in Nevada are much help when you’re looking for a good coffee shop in Melbourne.

This is the problem Roamz seeks to solve and we’re seeing this with various other services, not least the social media platforms themselves as Facebook tries to extend its reach and Google attempts to integrate their local services with the Zagat restaurant review system and Google+.

Some would dismiss these services as “first world problems”, after all who cares about twittering hipsters trying to find a single origin, fair trade soy latte in Broadmeadows?

There’s a point in that view, although there is a much bigger problem for businesses in this fragmented data world in harnessing and validating various sources of market intelligence.

For businesses that get this right, they’ll be able to target advertising and marketing much more effectively while being able being able to tap into what their customers think and want.

It’s no accident therefore that one of Roamz’s major investors is consumer communications giant Salmat, who can deliver great value to their corporate customers through supplying this data and market intelligence.

The next IT buzzphrase is “Big Data” where businesses deal with this flood of information that is swamping all of us, by being able to understand customers and their behaviour things become far more efficient and cost effective.

Bringing data together and making sense of the results is the big challenge of our times, those who can solve the problem will be among the next generation of business leaders.

Australia – the Noah’s Ark of business

Cosy duopolies leave the Australian business community exposed to a changing world.

During a week of big business news, the buyout of another boutique brewery by a big corporation was barely noticed, but Lion Nathan’s takeover of the Little Creatures brewery illustrates the duopoly problem that is crippling Australian business.

A few days after that deal was announced, rumours that Business Spectator – which the above link takes you to – would be taken over by News Limited started circulating. These turned out to be true.

In both cases, existing duopoly players bought out small competitors, a process that’s been going on since Australia decided industry duopolies were necessary to protect the nation’s managerial classes, and these takeovers kill genuine innovation and stymie new thinking.

For those duopolies the definition of success is grabbing a few percent of market share off each other while using their market powers to screw down supplier costs.

A good of example of this is the retail duopoly, the farmers and producers get screwed while the supermarket chains engage in price wars driven by truly awful advertising campaigns.

Un-imaginative, un-original and plain un-inspiring. Any smart young kid wanting to get ahead in the retail industries knows they have to look overseas for job opportunities or inspiration.

Therein lies the real problem with Australia’s duopoly business culture – it triggers a brain drain as comfortable managements block any innovative new thinking as being too hard or just unnecessary.

In the media duopoly, telecoms analyst Paul Budde illustrated the problem in his account on trying to convince Fairfax of where the media industry was heading in a connected economy.

Fairfax’s management didn’t get it and didn’t care – today they still don’t get but they care deeply as their business model crumbles.

It’s not just future managers that are looking overseas for opportunity, the customers are well.

The duopoly model that evolved in Australia over the last thirty years depended upon the tyranny of distance to act as an effective trade wall. The Internet has demolished that wall for most industries.

Almost every Australian duopoly is living on borrowed time. If, like the proprietors of Business Spectator or Little Creatures, your business plan relies on selling out to a local duopolist then you’d better move quick.

Delivering products

Focusing on delivery misses why we we are in business.

Once upon a time the local plumber got to work by bicycle, then he got a jalopy and now he shows up in a van or a hotted up ute. The plumber and his customers don’t care about the way his services are delivered.

A hundred years ago the retail industry was dominated by corner stores that customers could walk to, they received their deliveries by horse drawn carts and made deliveries on bicycles.

Then along came the motor car, which changed shopping habits and delivery methods.

Fifty years later the corner stores were a dying breed as they were replaced by supermarkets which customers could drive to and they took their deliveries by truck.

Today the retail industry is changing again, as the Internet changes shopping habits and society in ways similar to the motor car.

A similar pattern of change happened in the media sector; the evening paper died as commuters switched to cars and reading the Tribune on the tram or train home became less relevant.

Morning papers survived as people took deliveries to read over breakfast before driving to work.

At the same time radio and television became the dominant way most people got their news.

Even more the retail, the web has dramatically changed news distribution methods.

As the effects of Fairfax’s restructure sinks in, there are a group of people who don’t seem to want to accept reality – newsagents.

Mark Fletcher’s initial post about Fairfax’s restructure on his Australian Newsagency Blog attracted some harsh comments;

“Whilst the print media is arguably in decline I consider this post to be scare mongering……Fairfax will be here in print for years to come and to say or suggest that some days of the week will be or may be cut is pure conjecture at this point.”

” I am in semirural metropolitan Sydney. We have just added another 100 customers to our delivery run. Majority dont like reading their news online – old habits die hard. I hope that Fairfax dont abandon them. They like getting their newspapers in print.”

“Hi i will not pay to read online why it is all free, but will buy paper”

Focusing on print condemns those newsagents to the fate of the corner shop.

What is missed in the discussions about the future of the media is that medium is not message – people want relevant content delivered in the most convenient way.

This is true in every business. What we do is not really related to how we deliver the product, if we’re tied to one way of getting our services to a customer then we’re in trouble.

Fairfax of the Future

Can an iconic media company be saved?

The embattled board of Fairfax has announced major changes to the way they publish their newspapers. Is it too little, too late for this iconic media organisation?

As the board of Fairfax struggles with poor performance and angry demands from prominent shareholders, the company has announced a change of focus and a reduction in their printing capacity.

In a presentation given by the Chief Executive Greg Hywood, the company’s management goes through the scope and logic of their changes which are mainly around their distribution networks.

Rethinking print

The clearest message from the presentation is that readers have moved online with over three-quarters of readers now accessing the Age and Sydney Morning Herald digitally.

While there are still substantial print revenues in their metro division, around $500 million dollars a year right now, it’s clear Fairfax has to reduce printing and distribution costs.

Cutting the Chullora and Tullamarine printing plants makes sense given Fairfax has regional capacity just outside both Melbourne and Sydney.

Shrinking the SMH and Age to a “compact” size – tabloid being the word that dare not speak its name – will get shrieks of outrage from those wedded to the broadsheet concept, but really doesn’t make much difference to the online readership that represent the future.

Digital first

Fairfax’s “digital first” strategy where online publication take precedence over the print editions will be detailed in a few weeks, this tis a change that should have happened years ago.

Despite the wringing of ink stained hands by journalists who grew up in the era of hot metal printing presses, the news industry has been digital for over a quarter century. In fact the two printing plants now being closed were the digital successors to the old presses on Sydney’s Broadway and Melbourne’s Spencer Street.

That Fairfax’s management is only realising newspapers are just another distribution medium illustrates how late they are to understanding the changes which have happened in the last twenty years.

Using terms like “Digital First” only indicates an obsession with distribution methods rather than the product itself.

Content above all

Fairfax’s product is the news content which is still a valuable commodity – almost everything driving the Australian news cycle comes out of the metropolitan print media.

What appears in the Sydney Morning Herald, Age, Daily Telegraph or Herald Sun drives most of the day’s radio, television and social media coverage in their cities. It shouldn’t be under estimated how powerful both publications are and it is why Gina Rinehart wants a stake in Fairfax.

That value could see paywalls work for Fairfax, but content has to be worth paying for if readers are going to reluctantly open their wallets.

A product worth paying for?

Having a product worth paying for is where the real challenge lies for Fairfax.

Right now much of the content sucks – there’s too much syndication which can be sourced elsewhere, for instance most of the technology section has article that appeared two days earlier on Techmeme or Mashable.

In domestic sections like politics and property the bulk of the “journalism” is repeating other peoples’ agendas rather than reporting facts or driving debate. Much of what Fairfax’s Canberra correspondents report are anonymous briefings from “party figures” while the property section regurgitates the latest spin from real estate agents and property developers.

Over in travel and food, those sections now largely consist of barely rehashed media releases and it’s no accident readers are fleeing those sections to more relevant, and honest, food and travel blogs.

All of these sections have to be revamped if Fairfax is to survive. This will need new editors and probably wholesale staff changes.

A relevant future

The future for Fairfax is being relevant to the communities it serves. Already newspapers are irrelevant and increasingly 1970s style journalism is being ignored.

Late last week the Prime Minister met with a group a bloggers in an attempt to soften her image with key women’s groups.

Despite the sneering of the Fairfax Canberra correspondents, that meeting at Kirribilli House illustrates how media is changing – to politicians, readers and advertisers the old newspapers and their journalists are no longer relevant.

Hopefully Fairfax’s board can ensure the company stays relevant and survives – the Australian media sector is dominated by too few voices as it is and losing one of the biggest players would be a disaster.

Transparent falsehoods

Openness is more than a buzzword and organisations have to do more than shutting down bloggers.

Transparency, openness, innovation and entrepreneurialism are all popular buzzwords, but do organisations really value these attributes?

At a cloud computing conference this week I sat in on an innovation presentation. Almost everyone in the room was wearing a dark suit.

Despite their dress, most of those folk desperately wanted to be ‘innovative’ and almost all of them worked in organisations that would really benefit with a dash of genuine creative thinking.

I thought of that conference when reading of the attempted shutting down of a primary school student’s food blog by her local education authority.

The saga of the Never Seconds food blog illustrated the classic responses of managers when faced with something they can’t control – shut it down on whatever grounds you can find.

In the case of Never Seconds it was because the food service staff feared they would lose their jobs. Bless the council for caring so much about their staff.

As always in these situations, it was an opportunity missed to promote the school district and improve the services they provide.

Never Seconds is also a great place where other school students shared their school lunches. It is a great idea to promote healthy eating for kids.

Thankfully the Argyll and Bute Council relented on their ban and the Never Seconds blog is back for lunch.

Educators around the world talk about promoting children’s curiosity and creativity yet when a child expresses them in a way that threatens staff or bureaucrat power, they are quickly slapped down.

The same happens in the workplace, most organisations will treat truly innovative and original thinkers like the naughty children they probably were.

For too many organisations – businesses, political parties and even schools – words like innovation, creativity, openness and transparency are just empty buzzwords.