Tag: business

Gift giving in China

Giving gifts in Asian cultures can be fraught with risks

A terrific little infographic from cross cultural PR firm Illuminant shows the right and wrong ways of giving gifts in China.

The first faux pas listed is giving clocks and the advice “if you happen to receive a clock from any Chinese source, get your butt to airport pronto” is marvellous.

Giving gifts in sets of six or eight is also a great little gem.

One of the cultural differences between East Asia and the west is the habit of giving small gifts of appreciation and it’s easy to get this wrong. What is acceptable in the People’s Republic of China might be a grave mistake in Korea or Thailand.

A handy little app for dealing with cross cultural misunderstandings is Hooked In Motion’s World Customs and Cultures that lets you dial up the basic protocols like not touching heads or hand gestures which should be avoided. Sadly it doesn’t cover gift giving.

Illuminant’s infographic and Hooked In Motion’s app remind us that the whole world isn’t being homogenised by the web and global communications as each culture takes today’s tools and adapts them to their own worlds.

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Squandering a reprieve

How did media companies miss the opportunities of the tech wreck?

ABC Radio National’s Background Briefing has a terrific story on the struggles of the Fairfax newspaper empire during the early days of the Internet.

One of the major themes that jumps out is how Fairfax, like many media and retail organisations, squandered the opportunity presented by the tech wreck.

The tech wreck was an opportunity for incumbents to claim their spaces in the online world, instead they saw the failure of many of the dot com boom’s over-hyped online businesses as vindication of their view the Internet was all hype.

As former Sydney Morning Herald editor Peter Fray said “In florid moments you could even think this internet webby thing would go away”.

For Fairfax the profits from the traditional print based business were compelling. According to Greg Hywood the current CEO, for every dollar earned by the company, 70c were profits – a profit margin of 233%.

The Internet threatened those “rivers of gold” and media companies, understandably, did nothing to jeopardise those returns.

Another problem for Fairfax was the massive investment in digital printing presses in the 1990s. These behemoths revolutionised the way newspapers were printed as pages could be laid out on computer screens and sent directly from the newsroom to the press itself which printed out pages in glorious colour rather than with smudgy black and white images.

Moreover these machines were fantastic for printing glossy coloured supplements and the advertising revenue from those high end inserts kept the dollars rolling in.

When the tech wreck happened, the massive investments in printing presses were vindicated as the rivers of gold continued to flow while the smart Internet kids went broke.

Fairfax’s management weren’t alone in this hubris – most media companies around the world made the same missteps while retail companies continued to build stores catering for the last echos of the 20th Century consumer boom.

In 2008, the hubris caught up with the retailers and newspapers. As the great credit boom came to an end, the wheels fell off the established business models and the cost of not experimenting with online models is costing them dearly.

Value still lies in those mastheads though as more people are reading Fairfax’s publications than ever before.

Readers still want to read these publications, one loyal reader is quoted in the story that Sydney Morning Herald should aspire to “being a serious international paper.”

That isn’t going to happen while management is focused on cutting costs to their core business instead of focusing on new revenue streams.

Somebody will find that model, had the incumbent retail and media organisations explored and invested in online businesses a decade ago they may well have found that secret sauce.

Now many of them won’t survive with their horse and buggy ways of doing business.

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Shifting to a better return

Will rewarding passionate workers solve American business’ poor return on assets.

As part of Deloitte’s Building the Lucky Country series, the consulting firm had a briefing last week from John Hagel, co-chairman of Deloitte’s Silicon Valley Centre for the Edge, to discuss how industries are responding to shifts in the workplace and their markets.

John’s thesis is that businesses can be broadly split into into three groups; infrastructure, product innovation and customer relationship business which he covers in his Shift Index that looks at how industries are being affected by digital technologies.

Infrastructure businesses are high volume, transactional services like call centres, logistics and utilities companies.

The product innovators are those who develop new products, get them to market quickly and accelerating adoption of those goods.

Customer relationship businesses focus on understanding their clients and using that knowledge to add value.

Each of these business models require different mindsets and because most large companies try to do all three, they manage to do none well.

One of the results of this is a lousy Return On Assets, which Hagel says have fallen in the United States to one-third of the levels of 1965 and he doesn’t see this improving as the ‘competitive intensity’ of US markets increases.

A big feature of this decline in overall ROA is how the best performers have travelled compared to the laggards with the ‘winners’ barely maintaining their returns while the ‘losers’ are seeing their results declining dramatically.

How Hagel sees the solution to this poor performance is through rewarding creative and passionate workers better.

Firms have untapped opportunities to reverse their declining performance by embracing pull. To accomplish this, firms must develop and encourage passionate workers at every level of the organization.

Additionally, companies must tap into knowledge flows and expand the use of powerful tools, such as social software to solve operational/product problems more efficiently and effectively as well as to discover emerging opportunities.

If Hagel is right, it’s the businesses who want to micro-manage their workers while stifling innovation, initiative and creativity in their businesses who will be the great losers in this next decade as we move to the next phase of the ‘Big Shift’ where knowledge flows improve business performance.

Starting the process of dealing with these shifts involves understand what the DNA of your business really is; if it is a transactional infrastructure business then management needs to acknowledge this and not kid itself about being in customer relationships.

There are weakness in John Hagel’s proposition – one being that businesses can be easily pigeonholed into three categories.

Apple is a good example of this where a company that is clearly product focused has also shown it can be customer orientated with the success of the Apple Stores.

There’s also the question of why are there only three categories? In the breakdown the immediate thought is that there are businesses that don’t fit in any of these boxes. Legacy airlines or struggling motor manufacturers are good examples.

Despite the criticism, John and the Center For The Edge have some good points about the future of business and it’s something we’ll explore more over the next few weeks.

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Today’s business Neanderthals

Many businesses are hopelessly ill-equipped to deal with today’s realities and are doomed to extinction

“Bringing a knife to a gunfight” describes showing up hopelessly ill-equipped for the task at hand.

Two recent conferences, the massive Dreamforce in San Francisco and the smaller, but still fascinating, Australian Xerocon in Melbourne illustrate just how radically the commercial world is changing and how many business leaders are poorly equipped for today’s times.

In July, the Melbourne Xero Convention bought together 400 Australian partners of the cloud accounting service which showed how how one New Zealand based company is building it’s business through engaging other suppliers who add features to the basic service.

Vend, a Point Of Sale cloud service provider, was one of the companies exhibiting at XeroCon. In the past POS systems have been a pain for retail businesses with most suppliers’ business models being about locking customers into expensive contracts.

With cloud services, the old vendor lock in model dies as stores can use any device they like such as a PC, tablet computer or a smartphone so a business is no longer locked into using an overpriced and often antiquated piece of equipment.

Making the cloud offering even more attractive is that Vend, and many of their competitors, also take advantage of APIs – Application Program Interfaces – built into other services so they can seamlessly change records.

So a shop can make a sale in their physical store and inventory levels will automatically change in the online stores and on services like eBay. If an item is now of stock, the websites are automatically updated to reflect this.

This business automation makes it easier and cheaper to run a business. It’s everything that computer have promised for the last thirty years and is now being delivered through cloud computing services.

At Dreamforce in San Francisco last week, Salesforce.com CEO Marc Benioff showed the 90,000 attendees how these services work on a corporate level with demonstrations from companies as diverse as General Electric, ski company Rossignol, and Australia’s own Commonwealth Bank.

What really stood out with all of these presentations was how each business had made major technology investments that in turn allowed them to deploy modern tools.

The Virgin America Dreamforce presentation was particularly telling. Having just endured a 13 hour United Airlines flight in a plane that had been barely refurbished since 1988 it was clear that the older airline simply didn’t have the hardware to compete with the upstart even if management and staff wanted to.

From both Dreamforce and XeroCon the message has been clear, those legacy managers who won’t invest in new technologies or re-organise their businesses to meet the realities of the 21st Century are simply doomed.

In Australia this sense of doom in the business community is confirmed when MYOB and Google missed their target of giving away 50,000 free business websites as part of their Getting Aussie Business Online program.

Depending on whose figures you use, between 50 and 65 percent of Australia’s 1.7 million small businesses don’t have a website – and websites are last decade’s technology.

Business has moved onto mobile and social platforms, those 800,000 businesses who are yet to move into the new century are roadkill – the competition are just going to run over them.

If you are still struggling with the idea of a website – let alone a mobile site, mobile phone app or social media strategy – then you haven’t bought a knife to a gunfight, you’ve bought a sharpened stick. It’s time to figure out whether you still want to be in business.

Disclaimer: Paul travelled to XeroCon in Melbourne courtesy of Xero and to Dreamforce in San Francisco as a guest of Salesforce.com

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Will write, play and cook your dinner for free

Playing for love is different to working for free.

From the Internets;

Craigslist Ad:
We are a small & casual restaurant in downtown Vancouver and we are looking for solo musicians to play in our restaurant to promote their work and sell their CD. This is not a daily job, but only for special events which will eventually turn into a nightly event if we get positive response. More Jazz, Rock, & smooth type music, around the world and mixed cultural music. Are you interested to promote your work? Please reply back ASAP.

A Musician’s Reply:
Happy new year! I am a musician with a big house looking for a restauranteur to come to my house to promote his/her restaurant by making dinner for me and my friends. This is not a daily job, but only for special events which will eventually turn into a nightly event if we get a positive response. More fine dining & exotic meals and mixed Ethnic Fusion cuisine. Are you interested to promote your restaurant? Please reply back ASAP.

Shamelessly lifted from the Telecaster Guitar Forum via Bob Lefsetz’s blog.

The discussion about Amanda Palmer offering unpaid gigs for local musos on her US tour has been heated and the perspectives are interesting.

What’s missed is the difference between artist and workers – the local violin player or trombonist getting up on stage with Amanda Palmer in Poughkeepsie isn’t going onstage to make a buck, it’s because he or she loves playing and is honoured to get an opportunity to perform with a big act.

On the other hand, one of the sites that’s been critical of Palmer advertised for a “insightful, knowledgeable and talented writers to contribute to the ongoing and ever-intriguing discourse on music and film.”

For submitting three 200 word blog posts a day, the lucky writer will receive a grand payment of six dollars. That’s one cent a word. Plus a cut of advertising revenue.

Should anyone be tempted to think that revenue could amount to much, they should keep in mind the web is awash with crap content that’s worth one cent a word; there’s no reason why any half decent writer couldn’t set up their own blog and stick adwords on it for a better return.

A few decades ago when printing was expensive and distribution networks difficult to set up, indy magazines offering little but an outlet to their writers served a purpose.

Today you can setup an outlet in five minutes on Blogger or WordPress and let the web do the distribution for you.

Any business that relies on free or cheap content is doomed – we’re in a world awash with cheap, crappy content and the public don’t see much reason to pay for it.

That there is no market for crap is something our once esteemed newspapers, magazines and TV stations should keep in mind as they sack subeditors, retrench journalists and increasingly source material that was available on Twitter a day earlier.

There’s a big difference between a musician or blogger creating something for love versus a business ripping contributors off  – one needs a market to succeed, while the other just does it because they want to.

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Google tries to drive American business online

Can Google convince reluctant American businesses to move online?

Google’s quest to sign the world’s businesses up to websites stepped into the big time this week with the launch of America, Get Your Business Online.

The US program is based upon the Getting British Business Online program which was followed up with similar projects in Australia and then Texas prior to being launched nationally across the States.

An interesting aspect with the rollout of the various programs has been Google’s choice of partners — in Britain the key supporter was the incumbent telecommunication company BT.

For some reason the subsequent programs have chosen to partner with accounting software companies and small business groups. The US program is no exception.

These partnerships are interesting as the software companies involved are threatened by online cloud services — both Intuit and MYOB have their business models of selling boxed software to small businesses under siege.

While Google regularly cite the Boston Consulting Group’s survey on the importance of websites to business, it seems most small operators don’t care as about half of small businesses don’t care about an online presence most developed countries.

In Australia, the Getting Aussie Business Online fell short of its 50,000 sign up target which indicates smaller enterprises still don’t see the point.

They may be right — for the local locksmith or lawn mowing service a Google Places account may be all they need rather than a relatively high maintenance website.

Part of the problem is that small business proprietors are probably the most time poor people on the planet, so  filling in another set of forms is one of the last things they will do.

Were Google to link Google + for Business to their other services so information wasn’t being duplicated there would be a far quicker and greater take up of their services.

America, Get Your Business Online should be a useful service for some local enterprises but the real challenge for Google is to integrate their services to make it easier for smaller operations to use.

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Owning the customer

Is it possible to own the customer?

During the tech boom of the late 1990s the early wave of web developers had a business model that required locking customers into a relationship.

Having spent thousands of dollars for designing and building a website, a business then found they would have to spend hundreds of dollars every time they wanted to make even a minor change.

While that model didn’t work out for web designers as new tools appeared that made it easy for customers to look after their own sites, it’s still the ambition of many businesses to ‘own’ as much of the customer as possible.

Department store credit cards, supermarket petrol cards and airline frequent flier programs are all examples of how big businesses try to lock their customers into their ecosystem.

Possibly the dumbest, and most counterproductive all, are the media companies with policies of not linking outside their own websites. The idea is to keep readers on their sites but in reality it damages their own credibility and betrays their lack of understanding how the web works.

The airlines too have discovered the risks in trying to ‘own’ their customers as their devaluing frequent flier programs has irritated and disillusioned their most loyal clients.

Many businesses, particularly banks and telcos, try to tie you up into knots of contractual obligations with reams of terms and conditions. All of this is an attempt to make the customer a slave to their business.

Outside of having a legally protected monopoly, you can’t ‘own’ a customer – the customer has to grant the favour of doing business with them.

They’ll only do business with you if they trust that you’ll do the right thing by your promises; whether it’s delivering the cheapest product, the best service or quickest delivery. The moment their trust begins to slip, you risk losing their business.

Executives who talk of the concept of owning the customer are either working in organisations with little competition or those steeped in 1980s management practices. If you hear them talking like that, it might be best to take your business, and investments, elsewhere.

Owning customers didn’t work for the web designers of the early 2000s and it won’t work for businesses in other sectors. The only way to ensure most of your clients keep coming back is to deliver on what you’ve promised them.

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