shannonsays.com

People Who Owe Hootville Money

"Small business is a complex caper made all the more complex by clients who don't pay."

Yep sure is. So what to do when when of your customers doesn't pay.  In the olden days you might think about using a Debt Collection service, or maybe sending a member of Hell's Angels around (who is usually the neighbour of a cousin of a friend), but not anymore.  Now we can use the web to try and shame them into action.

It is an idea that stems from consumer-gripe sites like notgoodenough.org as well as countless blogs and discussion boards (try googling "company x" sucks) that let people vent their spleen over such things like crappy service or faulty products (remember hunterholdensucks.com?). 

How the successful these on-line campaigns are at damaging the reputations of a company is difficult to judge.  Sometimes all hell breaks loose; just ask the Kryponite bike lock folks.  Sometimes they are just screaming rants.  And how much notice do we take of negative feedback once we have decided to buy something anyway? 

So it will be interesting to see whether Wisegirls is affected by Brett DeHoedt's (Media Mega Star and owner of Melbourne PR Company Hootville Communications) campaign to get them to cough up the $5857 dollars they owe him.  He has a page titled "People who owe Hootville Money" where he lists clients who owe him for his services.  A Shame File.

It's a great idea, classic Cluetrain stuff.  Brett is using the Internet to get people talking about Wisegirls.  And the news is bad.  But why will it work for Brett?

Check out his site..  It's not like some on-line corporate glossy brochure shtick, it is a real site, run by real people using a real human voice.  It is less formal, less professional (you know what I mean Brett!) and less anonymous that many PR company sites (it is almost as cool as Huh Corp's).  It is written for us, not him.   And that is why this will really hurt Wisegirls, it is real.

People will believe Brett.

Plus, non paying shonks like Danielle Paruit deserve to be shamed (And not just because their website is just like every other travel website; ie a bland on-line brochure).

I'd get a bank cheque written tomorrow Danielle...   

*UPDATE 28/09:*
Here is an email Danielle fired off to Brett:

Dear Brett,

"I note that you have updated your site in relation to me and Wisegirls and removed the text that was clearly abusive, including the threat of stalking me. I suspect that my fax to your solicitor dated 22 September might have had something to do with it.

I also note your invitation ( as from 23 Sep) for my comments - also a new initiative. I don't believe that this type of forum is neither appropriate nor professional for any dispute resolutions. As you know I have written to your solicitor, and am now waiting from information from you, to progress this matter.

I would appreciate the entire and unedited contents of this email being posted on your website.

Regards, Danielle"

Hmm, as Brett noted there is a paradox in Danielle's wants:  Stop using the internet to air all this stuff, but make sure you publish what I have to say, in it's unedited entirety.  Whatever.

You can follow the saga via the link above.  It promises to get better, if Brett's parting words; "(It's) time to ramp up the campaign" are anything to go by.

The Company & I

I found this post over at Oligopoly watch interesting for reasons different to  Steve (the author):

"In business writing, the problem of how to write about a company's actions and intentions leads to shortcut expressions that don't represent the truth.  Let me illustrate with a number of random quotes off the Web, often from business magazines or business sections of newspapers:

• "The company wanted to cross sell products across business unit product lines"
• "What it all comes down to is that Microsoft intends to dominate every market that it contacts."
• "Apple doesn't want music consumers to have freedom of portability."
• "At the simplest level, he says, it is because GE wants to be known as a good company,"
• "Cargill would like to control the trade in food and to make larger profits by buying cheaply from farmers."
• "Looking at this acquisition on the surface, IBM has
  always wanted a piece of the retail market."
• "Known for its thriftiness, Disney hates being made to look like a typical money-burning Hollywood studio."

In all of these quotes, companies are presented as having wills of their own. It's a shorthand, of course, pointing at the management at companies cited. We all understand that, or do we?

I don't think we do understand it, and I think that it goes further than just being shorthand.  And I reckon that is just the way big companies like it.

It is common to give companies personal traits, particularly big companies.  As consumers we hate it because it gives the people in the business something to hide behind, and the managers hiding behind it love it for the same reason.

But if we talk about the company rather than  a person, or people, it lowers the chances we have of actually talking to someone real about anything of importance.  Or being pissed off by someone real, or even being delighted by someone real.

It's a bit like being told "It's Telstra's policy to do x."  You can't actually speak to someone who owns the policy, it just belongs to "Telstra".  Or "We can't do that."  Who's the "we", exactly?  The "we" is of course the company, who isn't really anyone.  At least anyone who is generally willing to put their hand up.

"Holden wants to reduce costs, so it is sacking 1500 staff."  No it isn't.  Someone, somewhere at Holden who made the decison to cut costs by sacking people is.  But because we don't always know who that person is, he/she is largely shielded from some of the backlash.  And I bet that is the way they like it.

Wake up.  We want to deal with people.  We want to have conversations with real people.  Why won't they let us?  What are they hiding from?

Cluetrain anyone?

New Research on "The Jerk at Work"

It is a universal dilemma. What to do with the "jerk" at work, the person who is so disliked by their colleagues that no-one wants to work with them?"

Well, the answer according to an article in The Economist (sub req) is to "tolerate them if they are at least half-competent – on the grounds that competent jerks can be trained to be otherwise, while much-loved bunglers cannot."

The jerk at work has become an issue because the latest issue of the Harvard Business Review publishes new research by Tiziana Casciaro and Miguel Sousa Lobo, academics at Harvard Business School and the Fuqua School of Business, that shows work partners "tend to be chosen not for ability but for likability." This is the HBR's summary:

Drawing from their study encompassing 10,000 work relationships in five organisations, the authors have classified work partners into four archetypes: the competent jerk, who knows a lot but is unpleasant; the lovable fool, who doesn't know much but is a delight; the lovable star, who's both smart and likable; and the incompetent jerk, who...well, that's self-explanatory. Of course, everybody wants to work with the lovable star, and nobody wants to work with the incompetent jerk. More interesting is that people prefer the lovable fool over the competent jerk. That has big implications for every organisation, as both of these types often represent missed opportunities. Lovable fools can bridge gaps between diverse groups that might not otherwise interact. But their networking skills are often developed at the expense of job performance, which can make these employees underappreciated and vulnerable to downsizing. To get the most out of them, managers need to protect them and put them in positions that don't waste their bridge-building talents. As for the competent jerks, many can be socialised through coaching or by being made accountable for bad behaviour.

BRW's Rich List & The Overnight Billionaire

I finally got around to having a flick through this years BRW Rich List edition.  The usual suspects are at the top: multi-billionaires like Kerry Packer, Dick Pratt and Frank Lowy.  No surprises there. 

But the entry that really caught my eye was the story of a Dutch immigrant by the name of John Van Lieshout.  Van Lieshout miraculously debuted on the Rich List with a personal worth of $1 billion. Huh?  You mean that he just dropped from the sky as Australians 21st billionaire?

Obviously the people at BRW have cocked up in previous years by forgetting to put him on their list. It seems their definitive list isn't quite as, wel,l "definitive" as they would think.

It is a big omission, and you would have thought BRW would creep the missing billionaire up the list over a few years, rather than parachuting him straight into billionaire club, and highlighting its previous omissions. If you read the entry on Lisehout, it becomes obvious that BRW has been blundering for years by not including him.  His discount Queensland furniture chain Super A-Mart is hardly an invisible business, after all.

But it wouldn't be an easy exercise to compile the Rich List, and no-one could ever get even close to accurate given the secrecy of Australia's rich and the complexity of their affairs.

But if you haven't yet got yourself a copy, grab one.

Where are all the Australian Entrepreneurs?

An excellent question is posed by Stephen Mayne in the weeks Reader, about why Australian has so few successful young companies:

"Australia is a relatively young country, so why is it that so many of our biggest and best companies are so old?  A quick look at the top 20 Australian public companies reveals lots of old incumbent players like Coles Myer, the Big Four Banks, Telstra, BHP, AMP and Foster's- all of which have been around for decades- and hardly any new ones."

That is a very true observation; Australia doesn't have any new corporate champions coming through. 

I reckon that we (Australians, our Governments and other regulators) have made it too hard for all of our budding entrepreneurs to shake off the bad smell left behind by the rouges of the 1980's like Alan Bond, Christopher Skase and Jack Elliott.    We don't like corporate risk takers in this country any more.  We are adverse to risk, and don't have a culture that readily accepts that failure is all part of the game, part of trying, part of learning.

And of course we have turned chopping down "tall poppies" into a national sport.  A sport at which we (shamefully) excel.

In the US if you go broke having "a go" you don't seem to cope the same level of condemnation as you do here in Australia.  They have a far greater tolerance for things like bankruptcy and business failure.So is it any wonder that the US has produced billionaires from booming companies like Yahoo, Google, Dell and eBay.  And we have... well, not much.  Except for a few infrastructure companies with Government contracts, Child Care centres that rely on Government subsidies and airlines and telco's that make bucks because they operate in cosy little duopolies.

Add to that the barriers for entry into many of our growth areas are too high, and the level of Government support and encouragement for our genuinely innovative risk takers and innovators is too low. 

You are better off just getting a nice, secure job with one of the big, old, unoriginal companies.

The Great Oral-B Sampling Campaign

I pick up the Herald Sun each morning on my way to work.  I toss the Indian bloke in the 7-11 a dollar coin and off I go.  But this morning he made me stop and gave me 50c back....He uttered something about a mini-tooth wiper thingy being inside. 

Hmm.  Apparently, Gillette, which is in the process of merging with Proctor & Gamble to create the world's biggest consumer products company, came up with the idea of spending several million dollars on Australia's biggest ever single day sampling exercise by funding a halving of the cover price of papers including the Herald Sun, The Daily Telegraph, The Courier-Mail and The Advertiser.  That gives them a reach of more than 2 million people, who all got a sample an Oral B mini tooth wiper.

As Stephen Mayne at Crikey said today, "I never imagined buying a dead tree splattered with filthy ink and then taking something out of it and cleaning my teeth, but it happened this morning."  Sure did.

They are an innovative lot over at Gillette.

When they launched Mach 3 in Sydney, everyone who went through the Sydney Harbour Bridge toll for a day was paid for by Gillette, resulting in a stack of press coverage. More recently they painted a Virgin jet to look like a razor to promote the launch of a new power shaver.

Why do this?  It is a fact that internet and viral marketing is on the rise as television and newspapers decline, prompting the marketeer to try more and more crazy concepts to stay in the game with the big-spending global consumer giants.

Branson in Stabbing

A couple of weeks ago I wondered what the irrepressable Dickie Branson might get up to now that his Aussie Airline Virgin Blue is firmly under the control of Chris Corrigan and his Patrick Corp.  And there have been all sorts of conspiracy theories flying around about Corrigan's plans for Virgin Blue and Richard Branson's plans for Australia.  What will he do next?

And it all started to become clear last week; Branson plans to launch an Australian-owned airline to challenge Qantas on the highly lucrative Sydney to LA Route.  So what you say?  Big deal, it's about time someone took on Qantas' dominance.

Hmm maybe, but like with most things Branson does, nothing is ever "plain and simple."  Let's look at a few things here.

Singapore Airlines, more than any other, have been busting thier gut trying to get in on the Sydney-LA action for some time, but have been halted by our Governments stubborn unwillingness to give the rights to a carrier that has less than 51% Australian ownership. 

So in strolls Branson, stating that his airline will be majority owned by Australians, and as such the Australian Government should give his new airline the rights over Singapore Airlines.

But this is where is gets interesting.  Singapore Airlines just happen to be a shareholder (49%) in another of Bransons airlines, Virgin Pacific.

Of course such a public shirt-front ruffled some feathers with Branson's "partners" at Singapore Airlines, and are understandably absolutely furious with this announcement and assertion.

I know that Branson can be a little bit odd at times, but I don't understand why he would want to pick a fight with an important, and until now cooperative business partner?  Wouldn't it be simpler to declare that Virgin Blue is now controlled by Australian interests through Patrick Corp and should therefore be allowed to compete with Qantas on the Australian flights to LA?

But no, Dickie comes out at announces that he is going to stomp over the top of Singapore to get his airline off the ground.  Given their long and hard lobbying for the rights to the Pacific route, you would think that Branson would be supportive of his business partners efforts.

But with Branson, it always pays to "think again"

Who's to blame for Australia's "Skill Crisis"

Lots of people are discussing Australia's skills "crisis", capacity constraints, the blockages to economic growth caused by the lack of a skilled workforce and the need to boost productivity.  But who's to blame for all of this?

I was talking to someone on Thursday who thought the answer was pretty clear; "the Howard Government."   He is not alone, lots of people are  blaming the Government (sub req) and a lack of foresight:

"Since at least 1999, Australian governments, state and Commonwealth, have been aware of widespread shortages in key areas. Between 1993 and 2002 there was an overall 16 per cent decline in the training rate in the metals, building, construction, vehicle and electrical areas compared with the previous decade. This means that our national training effort has not been sufficient to replace and maintain the level of skilled workers in these vital sectors of the national economy."

This is fair enough too, PM Howard must shoulder some of the blame, and his lame defence on the ABC's Insiders doesn't help matters;

"We do have some skills shortages - I identified that, the Government identified that months ago," he said.

"It is not as if this has crept up on us and it is only something we have become aware of in the last few weeks.

"We were on the case of skill shortages months ago."

Months ago?  Oh, that's good then.  At least he is on top of it!

Of course that is ridiculous; he sounds a bit like an innocent bystander who is completely surprised by what has happened; a rabbit stunned by headlights.  It is fair to ask how come we have only just realised that we are running out of a skilled workforce?

But is it entirely the Governments fault?

For the past fourteen years we have been living in rays of fin economic sunshine; we have consistently produced budget surpluses on both state and federal levels, to the point where our Governments are flush with cash.  But what have they spent it on?  Not much.  Certainly not any major skills-encouraging infrastructure projects that's for sure.  We have demanded that our Governments produce surpluses.  It's almost as if we are happy for them to keep our money in the bank rather than spending it.  Why?  Why, when debt has been so cheap have we been so scared to go into deficit?  Too scared to borrow to build roads, dams or undertake any other major project that encourages people to learn new skills?

Because we'd vote out a Government that did to us, that's why.

I also think that Australia's corporate leaders should tread carefully when it comes to pointing the finger at the Government, because they aren't entirely guilt free in all of this either.

Listed Australian companies have just produced their biggest profit margins since the heady days of the late 1980's; but none of them seem to understand that sustainable earnings means investing on a range of activities (like training and R&D) that take a while to kick into the bottom line.  I read recently that fewer that 25% of Australian companies provide training that leads to qualifications. 

Take BHP Billiton for example.  They would rather spend $9billion to take over WMC and it's "ready to go" Olympic Dam mine, rather than spend even half of that employing some people and doing some of it's own exploration.  That isn't the Government's fault.  Nor is the fact that WMC seems to think that increasing its apprentice numbers from 35 last year to 45 this year makes it a good corporate citizen.  For a mining giant the size of WMC  (which will make in excess of $1billion this year) to only employ 45 apprentices is pathetic.

So whilst the Government needs to do its bit the re-equip our workforce with in demand skills, Big Business and Big Bosses with even Bigger salaries need to do their bit as well.

The "Walmart-isation" of Australian Supermarkets

uYesterday I talked about Chris Corrigans arrival of an airline dupololist, and no doubt he'll make a stack of cash out of controlling most of Australia's transport systems (now that he controls the Virgin Blue airline).  But, in other "duopoly news"; Australia's two biggest retailers (Coles Myer and Woolworths) are on the verge of a huge profit bonanza.  Coles Myer announced it's half yearly profit last Thursday, and at $403.8million, it is nearly twice what it was in 2001.  And Woolworths will probably do even better than that.

Cleaning up like this has been achieved through some clever productivity gains as well as increased volume through lower prices.  Of course, all of this is great for consumers, terrific for keeping inflation and interest rates down, but it ain't that grand for many smaller food suppliers and manufacturers.

The Aussie giants have learned much from US Monolith Walmart in the art of putting the squeeze on their suppliers.  Almost to the point of suffocation.  And sometimes beyond that.  Many suppliers in Australia are learning that they must either play by the new rules, or risk having to pull the shutters down forever.  Of course, on the flip side, their are opportunities abound for those companies that can and do fall into line.

Further adding to their woes is Coles Supermarkets new 3-tiered Housebrand strategy, which is expected to contribute up to 30% of turnover by 2007.  This means that the No 4 brand by market share will become a sitting duck, and No 3 might even find itself in strife.  The producers of these brands will have few choices; they can move into supplying the housebrands and succumb to the whims of the big chains, or launch massively expensive marketing campaigns to eek back some market share.  Either way it will hurt short term profits, and potentially longer terms ones as well.

But if they can prove to be reliable, and low cost, smaller food manufacturers can use the housebrands to get in on all the action.  Up until now they would have found it almost impossible to get shelf-space.

Just more Big getting Bigger by swallowing up all the small fish.

Gotcha! Chris Corrigans airline duoploly becomes reality

Chris Corrigan has beaten Sir Richard Branson to seize control of Aussie Airline Virgin Blue, after a hostile $1.1billion  on Friday tipped the holding of his company Patrick Corp to 50.26%

So what does that mean?

Basically it means that Corrigan is now in a cosy airline duopoly with Qantas; so two things are certain; 1, airfares will go up and, 2, services to some "unprofitable" routes will be canned.  Corrigan has already signaled that he is not a fan of price wars with rival Jetstar, and he wants to stop the cost-cutting and concentrate on flying the most profitable routes. 

And if Virgin opts out of it's price war with Qantas, it won't be long till (the Qantas owned) Jetstar starts lifting its prices too.

So, he  can get now get busy rebuilding the glory days of Qantas vs. Ansett....Remember?   When it cost $300 to fly to Sydney rather than $100.  And airline proprietors were making big fat profits...

But more than that, the takeover also means that his company, Patrick Corp, have an unparalleled transport empire encompassing land, sea and and now air (see an earlier post here).  So if businesses want to transport goods around Australia, Corrigan will get to clip the ticket at least once.

One the face of it his strategy is sound enough-a "wharf to door" distribution strategy; but do we want a monopolist in charge of the whole shebang?  Or, as I said in February, does it matter to the small Australian marketplace that is dominated by monopolists, duopolists and oligopolists if another industry is yanked away from a competitive marketplace?

And what does this mean for Richard Branson?  Dunno yet.  He might sell his remaining 25% into Patricks existing takeover bid (which he described as too low), or he might jump into bed with Paul Stoddarts Ozjet (thanks Greg!).  Or he might just piss off all together.  Here's hoping.