Aussie Rules

(11min 43) Have you prepared your business for the economic downturn? On today’s BTalk Australia Greg Joffe from the Nous Group suggests to Phil Dobbie four areas of focus that will help a business to survive.

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• Today’s Transcript

Phil Dobbie: Hello I’m Phil Dobbie and welcome to BTalk Australia. Today, more on the economic downturn. For business is it survival of the smartest?

We’ve spoken a fair bit of late about the economic downturn. What does it really mean for your business? Well Greg Joffe leads the Strategy and Public Policy Practice of the Nous Group. He’s provided strategic planning for CEOs and boards of many private and public sector businesses. So Greg, with the downturn, what is really changing here? I mean credit we know is a lot harder to come by right now. But it’s not just the financial changes we’re experiencing. What do you think are the big changes for business this year?

Greg Joffe: Phil the two big trends are the one you’ve already identified, much less access to capital, which is putting severe financial pressure on companies that need capital to keep going. The second is actually on the operating level. So revenues have been dropping across the board, both in Australia and overseas quite dramatically in some industries. And as a result of that, many companies are now moving into dramatic cost cutting in order to try and stay profitable.

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I recently attended a seminar entitled Emotional Intelligence in the Workplace. The speaker was lively and enthusiastic and promoted the Emotional Blueprint model of Mayer-Salovey. To those unfamiliar with this model, the underlying principles are as follows:

• Emotion is information and ignoring it does not work.
• You may try to hide emotions but other people are able to pick them up.
• Decisions must incorporate emotions to be effective.

On sale during this seminar were copies of The Emotionally Intelligent Manager: HOW TO DEVELOP AND USE THE FOUR KEY EMOTIONAL SKILLS OF LEADERSHIP by David R. Caruso and Peter Salovey. I had always been meaning to read this book so I bought a copy. After reading the book I must confess I was very disappointed. I thought the examples of the emotional intelligence quotient (EQ) in action were lightweight and I was not happy with the proposed Emotional Blueprint model.

I went to Amazon.com and discovered there were 37 reviews of the book. Nineteen were favourable and gave it five stars while 14 gave it one star with comments like “utter rubbish”. Talk about manic-depressive! I don’t think I have ever seen such a bi-polar distribution of opinion. Somewhat relieved to find myself in step with half the management population, I wondered: why does the book fail?

First, while I totally agree with the underlying principles, I do disagree with the concept that there is a separate intelligence called Emotional Intelligence (EI). The theory of multiple intelligences was first proposed by Howard Gardner in 1983. While widely adopted by educators, the theory has been widely criticised by experimental psychologists who argue that the model is based on Gardner’s intuition rather than empirical data. Indeed, Gardner himself has stated there were no validating studies and he would be delighted for such evidence to accrue.

I agree with the Caruso-Salovey book title: Emotional Intelligence is a skill that can be developed through training and experience — just like learning to play golf. I disagree with the idea that EI is an innate talent. Yes, there are some people who will be born with the talent to better read and control their emotions. Nevertheless, you can improve your EI. General intelligence (known as g) is what you are born with and effectively immutable; EI is a skill that all of us can dramatically improve.

I’d be interested to hear what literature you have come across regarding Emotional Intelligence. Please feel free to leave a comment.

(10min 54) Ex-employees take a lot of knowledge away with them, but they leave as much behind. It’s sitting on their desktop computer, hidden in email messages or stored on files lost on your file servers. So what should your IT department be doing when an employee leaves to protect knowledge and ensure you are meeting your statutory obligations? Phil Dobbie talks to Adrian Briscoe, the APAC General Manager for Kroll Ontrack.

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• Today’s Transcript

Phil Dobbie: Hello I’m Phil Dobbie and welcome to BTalk Australia. Today if you have to let an employee go, what happens to all the data?

Downsizing, that’s a word we’re going to hear a fair bit of this year, but what about all that employee data? All those files sitting on an ex-employee’s laptop or on a server. And that gigabyte of email attachments. What do you do with all of those? When an employee leaves, how much knowledge goes with them? Well Adrian Briscoe is the general manager APAC for Kroll Ontrack. They provide data recovery for corporate customers. Adrian, I guess the worst thing you can do is just delete the data that’s sitting on the computer of an ex-employee.

Adrian Briscoe: I think so. I’ve seen occasions where the IT department taking the computer back and recycled it very quickly and passed it on to another user just by doing a reload of the operating system. And, of course, once that reload is done, files start getting overwritten and the data from the previous owner is lost.

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There is an upside to the credit crunch. While deep downturns in the market are destructive and many people have lost their jobs and investment portfolios, now is not the time to cut resources to innovative efforts.

Research into companies who continued innovating during the Great Depression, such as DuPont, showed that they were able to weather the drop in sales by introducing new technologies.

Hewlett-Packard and Polaroid were actually entrepreneurial start-ups that came into existence during the 1930s.

Oracle and Google are hailed survivors of the dotcom crash (though there is some dispute about the timing of Google) due to their level of investment not only in technology, but in people.

I know that these are only four examples, and there are many others where companies have failed during these times. But what gets me is the number of times the “innovation team” has been disbanded in Australian organisations to “focus on core business” at the hint of a downturn.

Here are some things to consider:

• Focus on implementing new ideas (i.e. innovation) to ensure the core elements of the business are sound. For example, review major costs and see how new approaches could reduce these costs and increase productivity.
• Get input from all stakeholders. Talk to your customers, suppliers, staff on what their needs (and wants) are and see how you can differentiate your offering.
• Innovation is not just for technology companies. What new services can you offer the marketplace? Non-bank mortgage companies like Aussie Home Loans started in the mid-1990s and completely changed the marketplace.
• Groom breakthrough innovators. Sustain innovation efforts by developing future leaders who understand the nature of creativity and how to be innovative — not just replicate.

What companies do you know will be able to survive and thrive through these interesting times?

(12min 19) Last year, suffering debt problems, Brisbane Concrete Plumbing went into voluntary administration. 80 jobs were on the line. The owner called in business turnaround specialists Vantage Performance to steer the company back on track.

On today’s BTalk Australia Phil Dobbie talks to Vantage Performance’s MD Michael Fingland and Brisbane Concrete Plumbings CEO Paul Richardson. It provides a useful case study for any business facing an insecure future.

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• Today’s Transcript

Phil Dobbie: Hello, I’m Phil Dobbie and welcome to BTalk Australia. Today getting a company out of receivership.

Well, Brisbane Concrete Pumping is Queensland’s largest concrete pumping business. Their clients include the likes of Mirvac, Multiplex and Bovis. So things have been going pretty well, but then to a certain extent the credit crunch hit them. They called on business turnaround specialists Vantage Performance who we’ve spoken to previously on BTalk, but I thought it would be interesting to look at this case study in a bit more detail. Michael Fingland from Vantage Performance is on the line and so is Paul Richardson. He’s the CEO at Brisbane Concrete Pumping. Turning to you first of all Michael, what was the situation with the company? Why did they need to get some outside help?

Michael Fingland: Hi Phil. Actually the workbook that Brisbane Concrete Pumping had was quite strong and is quite strong still. It was more to do with more fundamental issues that businesses go through than actually any downturn because the business is more exposed to infrastructure work than general construction. It actually experienced typical issues that a lot of our clients experience. It was over geared, it had too much debt on its balance sheet, the utilisation of its equipment wasn’t really where it should be for the revenue base that it had. And funny enough, the finance facilities that the group had were not matched for the business. And they had actually outgrown the facilities that they had in place at the time.

Dobbie: So how did it get into that highly geared situation? Was it trying to grow too quickly?
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(8min 57) When economic times are tough there’s a tendency for people to slash their marketing budgets. On today’s BTalk Australia Michelle Gamble, a director at Marketing Angels, tells Phil Dobbie that this might be the wrong thing to do. Instead use the downturn as an opportunity to grab more market share.

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• Today’s Transcript

Phil Dobbie: Hello, I’m Phil Dobbie and welcome to BTalk Australia.  Today, marketing in an economic downturn.

When the economy is like it is, most companies are forced to cut back spending. Kevin Rudd is telling us not to layoff employees, but he still wants us to pay our company taxes, of course. So marketing is often the first to feel the might of the CFO’s red pen. But irrespective of the size of the company, is cutting back on marketing costs or cutting it out altogether the right thing to do? Well, let’s ask Michelle Gamble, she’s a director of Marketing Angels, which is a marketing consultancy firm. It’s a difficult problem, isn’t it Michelle? What do you think the answer is?

Michelle Gamble: I think rather than cut back, I think the first thing that companies need to do is actually to review what they’re currently doing. So what we find with a lot of smaller organisations, in particular, is that they tend not to be very good at tracking the effectiveness of their marketing. And I think rather than just take a red pen to the marketing budget, it’s best to look at OK, what are we doing, what’s worked, what hasn’t. And how do we need to increase our return on investment on marketing versus just cutting back.
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(10min 21) Which sectors are the best for job security in 2009. Richard Jeremiah, industry analyst at IBISWorld, looks at the best sectors to work into weather the economic storm.

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• Today’s Transcript

Phil Dobbie: Hello I’m Phil Dobbie and welcome to BTalk Australia. Today, we look at the best jobs to be in, in 2009.

Well yesterday we were joined by Richard Jeremiah from  IBISWorld. He’s an industry analyst at IBISWorld. He joins us again today. Yesterday, we were looking at the worst jobs to be in, in 2009. Let’s take a slightly more positive stance today and look at some of the better jobs. In fact, a lot of industries are fairly resilient to economic downturns — some do even better. And we still go for cosmetics and things that are going to make us look good. Maybe we’ll just choose a different brand.

Richard Jeremiah: Well, that’s correct Phil. The cosmetics you use is something that does actually do well in a recession. And this, it’s called the lipstick index. And it’s something that economists follow because once lipstick sales start going up, then things aren’t looking too good. And this is really because history has shown us that women continue to spend during a downturn but what they do, do when they spend is they transfer their spending from more expensive items, fashion items, so you’ve got shoes and handbags and those sort of things, to cheaper alternatives such as cosmetics, particularly lipstick. And this is just because they want to continue to have that purchasing experience and feel good. So they continue this out by transferring their spending and cosmetic and toiletry retails/manufacturers, feel the good effects of this. And we expect this particular industry will increase employment to around an extra 1700 jobs, which for this industry is relatively solid, as it doesn’t employ a huge number of people. And so to these guys, this is a pretty good thing.

Dobbie: Now health is another thing. It’s another have to have of course, isn’t it? So even though the job might be secure, not a good time to be asking for a pay raise, probably.

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(8min 39) Latest indicators paint a gloomy picture on the economy and most analysts now agree that Australia will face a deepening recession. So which industry sectors will suffer the most?

In today’s BTalk Australia Phil Dobbie talks to Richard Jeremiah, an industry analyst at IBISWorld, who forecasts which sectors will be hit the hardest with job losses.

Add your thoughts and experiences in the Talkback section at the end of this post.

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• Today’s Transcript

Phil Dobbie: Hello, this is Phil Dobbie and welcome to BTalk Australia. Today, we look at the worst jobs to be in, in 2009.

No surprise to anyone, economists are now saying Australia won’t escape a recession. We just might not have it as bad as some other countries. For a lot of us that could mean redundancy, falling house prices and life on a very tight budget. For others, it will mean if you save your job, it’s going to be cheaper to buy a house and there’ll be lower prices in the store. So it’s a bit of an us and them scenario and to a large extent it depends on whether you keep your job and that depends on which industry you work in. Richard Jeremiah is an industry analyst at IBISWorld. Now Richard, no surprises here; if you work in the finance sector, you’re in one of the highest risk categories for losing your job this year.

Richard Jeremiah: Yeah, the finance sector is not looking too good and in particular, banking. This sector’s already shed a lot of staff, particularly middle management as bank have looked to rationalise their hierarchy’s and also investment banks and security brokerages are also banking pretty hard. So over the course of the next two years to January 2010 IBISWorld expects around seventeen and a half thousand jobs to be lost a year across banking and also in the convention banking and security brokerage industry and this is making it pretty difficult for those involved in this industry.

Dobbie: Seventeen and a half thousand sounds like a lot. How many people roughly, are employed in that sector?

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(9min 42) Your data centre is soaking up a huge part of your electricity bill. Can you cut costs and help save the environment? In today’s BTalk Australia Jose Iglesias, Vice President of Global Solutions at Symantec, says the answers is ‘yes’. Find out how when he talks to Phil Dobbie about software solutions that will deliver efficiencies on your current hardware.

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• Today’s Transcript

Phil Dobbie: Hello, I’m Phil Dobbie and welcome to BTalk Australia. Today, green IT.

So what is green IT and how can your company be greener?  Jose Iglesias is the vice president of global solutions at Symantec. Jose, I suspect right now, being green is good but the real focus for a lot of people is the economy. So I’m sure a lot of people are saying, yes I’ll be green if it’s going to cut costs, but otherwise forget it. I suppose the two things don’t have to be mutually exclusive do they?

Jose Iglesias: No, you’re absolutely right, they’re mutually supportive. One of the things to keep in mind when you talk about green IT is the fact that energy cost is the second largest operational expense that IT has. We just concluded two weeks ago, a state of the datacentre study. This is something that we’ve done now several years in a row. And what came back from the 1600 companies that we asked was that the saving energy cost was the second most important line item that IT was handling this coming year, 2009

Dobbie: So would outdated gear, assorted equipment that’s five or ten years old, would that be contributing a lot?  If you were investing in new equipment would you find that you could save a lot?

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(14min 21) What benefits do recruitment agencies provide? With the advent of online job-sites can’t you do the job yourself and save a fortune on agency commissions.

In today’s BTalk Australia Phil Dobbie talks to Kelly McGowan, a director of recruitment site sixfigures.com.au. She says agencies still have a role to play although the shortfalls often relate to the relationship between the agency and the recruiter. Phil suggests a better way of structuring the way agencies and clients work together.

Add your thoughts and experiences in the Talkback section at the end of this post.

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• Today’s Transcript

Phil Dobbie: Hello, I’m Phil Dobbie and welcome to BTalk Australia. Today, recruitment agencies, do we really need them? They add to the cost of recruiting and do they really know what we’re looking for? To answer the question of whether we need recruitment agencies or not, let’s ask Kelly McGowan. She’s the director of sixfigures.com.au, which describes itself as a premium jobsite for executives and senior professionals. Well, first of all Kelly, tell us a little bit about the site. How long’s it been going for? And hasn’t SEEK really got the online recruitment market sewn up?

Kelly McGowan: In answer to your first question, we launched 10 months ago and we provide an alternative to a service like SEEK, which is very much a general site. We see sixfigures as a niche executive site, which is very successful overseas, in fact, and we’re just starting to see the niche sites really catch some market share in Australia. So, although SEEK is definitely a force to be reckoned with and provides a good general service, people at the level we deal with don’t necessarily relate to or look to a general site like SEEK. They want to go where the jobs are relevant and where they’re actually receiving a more professional service.

Dobbie: Now you’ve worked on both sides of the fence. You’ve worked in recruitment; now you’re running a jobsite. You’ve worked on the agency side and you’ve also worked as a recruiter, inside the corporate world. So I guess you’ve seen it from all angles. With sites like yours around, it’s easy now to get the news about a job out to the job seekers. Does that take a lot of the power of the recruitment agencies away, and the value that they add to the process?

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