Paul Wallbank – Brilliant Communications

Tag: reputation management

  • Don’t follow the normal route

    Don’t follow the normal route

    Two years ago I interviewed Technology One founder and CEO Adrian DiMarco about his company’s pivot to the cloud and the gold rush among consultants and services providers looking at making money out of cloud computing services.

    DiMarco’s founded Technology One in 1987 to compete in the enterprise software space with the likes of SAS and Oracle. At the peak of the dot com boom in 1999, DiMarco listed the company on the Australian stock exchange where it is one of the few genuine tech stocks on the nation’s finance and mining dominated bourse.

    Given the focus on listed companies at the moment, DiMarco’s views are worth noting. “if I were to do it again, I’d don’t think I’d go that path,” he says about listing the business. “I have a real issue with how public companies run in Australia.”

    DiMarco’s view is at odds with Netsuite’s Zach Nelson who told Decoding the New Economy last month how being on the stock exchange forces management to focus. “Managing a public company is a great discipline and in some ways gives us an advantage over non-public company who don’t have to have discipline and make good investments,” Nelson said.

    In DiMarco’s opinion, the regulatory and ‘box ticketing’ requirements of a listed company don’t reflect the true performance of a corporation’s management. “There are mediocre CEOs walking away with millions,” he says.

    While listing made sense for Technology One in 1999 those looking at starting a business today shouldn’t necessarily follow his path warns DiMarco, “tor startups these days, don’t follow up normal route.,” he says.

    “I think the world’s your oyster to do want you want. Don’t let anyone talk you out of anything,” DiMarco says. “When we started out we were told ‘don’t build enterprise software’. We did and we succeeded.”

    “Don’t be scared,” he advices. “It really is a great time to startup a business. The technology is redefining business. It’s a good time.”

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  • Tough times for startup staffers

    Tough times for startup staffers

    One of the frequently reported things about tech startups is how well they treat their staff. The truth is not always so rosy.

    At Yelp staff get free meals, drinks and snacks but many of them barely earn enough to pay the rent. A now fired staffer wrote an open letter to the company’s CEO describing how tough she found working their call centre on a wage that left her destitute.

    Similarly Buzzfeed reports working conditions at Zenefits, last year’s hottest startup, are more akin to a boiler room than the nice, relaxed offices of places like Google.

     

    While we often portray tech companies as being enlightened workplaces, the truth is they can be as harsh as any other employer. The big question for those working for tech startups though is how long their benefits and jobs will survive as the current funding crunch bites.

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  • Door to door blues

    Door to door blues

    The news that energy companies have decided to drop direct door to door selling in the face of prosecution is the latest example of poor thought out performance metrics and managers unsuccessfully trying to shift risks out of their business.

    Electricity and gas distributors Energy Australia and AGL embarked on a door-to-door sales campaign to gain more customers. Like most modern corporations, they don’t do this stuff themselves and engaged outsourcing companies who in turn took on commission salespeople to do the ground level selling selling.

    It didn’t work well and in face of complaints, both companies had to back away from their campaigns after suffering legal and reputational damage.

    The sad thing this has happened before, at the time of telecoms deregulation in the 1990s telcos did the same thing to grow their market share. Door to door sales teams fanned out across the suburbs to sign households up to telephone plans.

    In one example, a company hired dozens of backpackers, bussed them to outlying suburbs and sent them out on the streets to sign up as many households as possible.

    Initially the campaigns were a success with providers reporting increased signups, greater market share, fat executive bonuses and happy commission earning salespeople.

    Then the complaints began.

    Customers discovered they’d been lied to, or in some cases falsely signed up, as hungry salespeople did everything they could to get a commission.

    At first the telcos thought they could throw the problem over the fence so they blamed the contractors. Eventually the damage became so great the telcos had to back down on their door to door selling as problems multiplied and consumer protection agencies expressed their irritation.

    At the heart of the problems with this type of door to door selling is the mismatch of incentives – for managers, contractors and the teams going door to door in the suburbs.

    Door to Door Blues

    At the coalface are the salesteams trudging around suburbs. In the 1990s telco boom they were largely made up of backpackers whose interests were to sign up as many customers as possible in order to fund the next stage of their travels.

    Often, the telco or its contractor would only discover a sign up was the family dog or toddler long after the traveller was sunning themselves at Koh Phi Phi.

    Using Indian students as the energy contractors were doing largely fixed some of the worst excesses of the 1990s but it didn’t address all of the problems

    Management misalignment

    Driving the rush for sign ups are usually poorly designed  management Key Perfomance Indicators – a dumb set of executive benchmarks rewards poor  behaviour and creates unforeseen risks. Particularly when those KPIs are focused on short term metrics.

    Very quickly the risks in the short term focus become apparent and managers back off from these programs.

    In this case it appears Energy Australia’s managers heeded the early warnings and backed off before the problem became too great, unlike the telcos who let the sales teams run rampant before reigning them.

    What’s saddening about Energy Australia’s and AGL’s problems is they were totally forseeable and those who warned of the risks in a door-to-door customers acquisition strategy – and there were almost certainly some in these organisations – were overuled by enthusiastic executives aiming to bust their sales and market share metrics.

    Sometimes we are condemned to repeat history repeatedly in business.

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