Paul Wallbank – Brilliant Communications

Tag: business

  • Walmart pays for cutting staff

    Walmart pays for cutting staff

    Along with the carpark test, a lack of customer service is one of the best indicators that a company has lost its way.

    Unattended reception desks, closed cash registers and deserted delivery docks are reliable indicators management has focused on short term staff savings which will ultimately cost the business dearly.

    Walmart is the latest example of this with Bloomberg Businessweek reporting that US shoppers are deserting the chain because shelves are empty and stores don’t have enough staff.

    The claim stock is piling up out the back of stores is particularly concerning, the just in time inventory management of modern retail chains means there’s little room for error as outlets don’t have a lot of space whil the cash flow of the business and its suppliers is based on getting goods quickly into the hands of eager consumers.

    Some of Walmart’s pain will be spread among suppliers as the store’s contracts will push undoubtedly some of the costs of rejected deliveries back onto logistics companies, effectively creating problems through the entire supply chain.

    No doubt there’s plenty of angry suppliers and truck drivers who are grumbling about lost time and payments on Walmart contracts. That won’t be good news for the company’s buyers when contracts come up for negotiation.

    Even though Walmart’s management can throw some of their problems over the fence, the fundamental issue of losing customers can’t be missed.

    Walmart’s isn’t the only retailer who’s fallen for the short term fix of cutting store staff to give a quick profit boost as department stores and big box outlets around the world struggle with the damaging effects of not being able to serve customers.

    That Walmart, one of the industry’s global leaders, would make such a mis-step shows the pressures on managements as economies deleverage and credit wary consumers decide that don’t need more junk in their homes.

    Cutting costs isn’t going to address those bigger trends, it’s going to take original thinking and management commitment to adding real value to customers.

    Service is just the start of a long process of refocusing the retail empires.

    Image of Albany Walmart courtesy of UpstateNYer through Wikimedia

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  • Privileges and princelings

    Privileges and princelings

    A strange thing about Australian business reporting is that its often full of gossip and name dropping as any third rate scandal magazine.

    In a perverse way, treating business executives like the Kardashians gives the average mug punter – and shareholders – a glimpse into how these companies do business. Like this story in the Australian Financial Review;

    Hamish Tyrwhitt was unaware of the latest drama unfolding within the Leighton board as he relaxed in the Qantas First Class Lounge in Sydney on Friday morning.

    Indeed, the contractor’s chief executive officer was busy chatting to former Wallabies captain John Eales while waiting to board a flight to Hong Kong where he was due to close a recent deal to build the Wynn Cotai hotel resort in Macau and enjoy the Sevens rugby tournament.

    The timing was not good. Tyrwhitt had only just boarded the flight when the news broke that chairman Stephen Johns and two directors had resigned. Tyrwhitt was forced to change his plans and is expected back in Sydney for a board meeting convened this weekend.

    Nice work if you can get it.

    A few pages further in the day’s AFR is another gem;

    One July evening about four years ago, off the south coast of France between Cannes and St Tropez, two men sat in the jacuzzi on the top deck of a 116-foot Azimut motor yacht. It was about 3am and the sea was rough. The spa water was sloshing about and had given the latest round of caprioskas a distinctly bitter taste.

    Dodo boss Larry Kestelman was telling his good friend, M2 Telecommunications founder Vaughan Bowen, about the challenges of growing his internet service provider business.

    It’s tough doing business when the spa waters are choppy. One expects better from a seven million dollar boat.

    That second article raises another point that’s often overlooked, or unmentioned, when reporting Australian business matters.

    on Thursday the 14th, something unexpected happened. At 12.30pm, after no activity all morning, shares in the thinly traded Eftel started to rise sharply. By the time the market closed at 4pm, Eftel had soared 44 per cent to 39.5¢. Someone with knowledge of the deal was insider trading.

    Insider trading? On the Australian Security Exchange? Somebody had better call those super-efficient regulators who were responsible for Australia cruising through the global economic crisis of 2008.

    Somebody obviously wanted their own 116ft luxury yacht or corporate box at the Hong Kong Sevens.

    Both of these stories illustrate the hubris and privileges of corporate Australia and its regulators.

    One wonders how well equipped these organisations are for an economic reversal when their leaders are more worried about caprioskas and their spots in the first class lounge.

    We may yet find out.

    First class airline seat images courtesy of Pyonko on Flickr and Wikimedia.

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  • Recruiting big data

    Recruiting big data

    One of the predictions for 2020 is that decade’s business successes will be those who use big data well.

    A good example of a big data tool is recruitment software Evolv that helps businesses predict not only the best person to hire but also who is likely to leave the organisation.

    For employee retention, Evolv looks at a range of variables which can include anything from gas prices and social media usage to local unemployment rates then pulls these together to predict which staff are most likely to leave.

    “It’s hard to understand why it’s radically predictive, but it’s radically predictive,” Venture Beat quotes Jim Meyerle, Evolv’s cofounder.

    There are some downsides in such software though – as some of the comments to the VentureBeat story point out – a blind faith in an alogrithm can destroy company morale and much more.

    Recruiters as an industry haven’t a good track record in using data well, while they’ve had candidate databases for two decades and stories abound of poor use of keyword searches carried out by lazy or incompetent headhunters. The same is now happening with agencies trawling LinkedIn for candidates.

    Using these tools and data correctly going to separate successful recruitment agencies and HR departments from the also-rans.

    It’s the same in most businesses – the tools are available and knowing them how to use them properly will be a key skill for this decade.

    Job classifieds image courtesy of Markinpool through SXC.HU

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  • On being a good Internet citizen

    On being a good Internet citizen

    I grabbed a quick coffee with Zendesk founder CEO Mikkel Svane and his Australian manager Michael Hansen in Sydney yesterday where they told me about the company’s story to date.

    While I’ll be writing in the interview up in depth in the next few days one thing that stood out was Mikkel’s comment about Zendesk being a good internet citizen.

    Those traits of being a good online corporate citizen include open APIs, a transparent culture and giving customers full access to their data.

    Online companies have to embrace those principles if they are going to succeed and it’s the key to the fast growth of businesses like Zendesk and other cloud based services.

    These principles have been the underpinning of the success of companies like Twitter, Facebook and Google.

    What’s interesting with those companies is how they’ve moved away from those principles as they’ve grown and the pressures to ‘monetize’ have increased.

    Abandoning those principles opens opportunities for many new players to disrupt the businesses of what have become the market incumbents.

    With the pace of business accelerating, the assumption that companies like Google, Facebook and Twitter will retain their positions might be tested as the market moves to providers they can trust.

    Those principles of being a good internet citizen may prove to be more important to online businesses than many of their managers and investors believe.

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  • A business lesson from the Catholic Church

    A business lesson from the Catholic Church

    The Catholic church may be a two thousand year old institution with medieval beliefs and beset with scandal, but the clerics know how to handle business succession well.

    Pope Benedict’s resignation was not only unexpected but also almost unprecedented with it being six hundred years since a pontiff quit before dying on the job.

    In many organisations such an unexpected and rare event – dare one use the ‘black swan’ line – would create havoc, or at least paralysis. Instead the clerics handled the process smoothly.

    This contrasts with the succession planning in many companies. In larger business even when the CEOs handover is planned, there’s a period of write downs and blood letting as the new leader stamps their authority.

    Sometimes it gets very ugly indeed, particularly if the former CEO has been kicked upstairs onto the board.

    In smaller businesses, there’s no succession planning at all. Many businesses die when the owner retires if there’s no buyer for the operation.

    That shortage of buyers is a major problem for smaller business owners. Many baby boomers have planned their retirements around getting a good sale price for their businesses.

    If they can’t get the sale price, the boomer small business owners work until they drop.

    Which is what popes usually do.

    It’s often said the Catholic Church is the biggest corporation on the planet. Given how smoothly their bureaucracy deals with succession planning, that’s not surprising.

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