leadership on a t shirt

Often the best leaders achieve success through just being themselves, acting authentically and intuitively. Some of them are compelling individuals, possessing that special combination of strength and warmth, bringing people with them on a journey.

Many others struggle, having been thrust into leadership roles from functional areas with few reference points or training. Many of them lurch instinctively towards authority and control behaviours, which undermine their leadership effectiveness. Coaching, mentoring and training are therefore important in enabling successful leaders, but beware…..

….there’s a leadership advisory industry out there, offering advice to anyone prepared to put their hands up for the challenge. It’s hard for aspiring leaders to sift through this jungle and know what really counts. Organisations like 20I20 exchange, where it’s more about asking the right questions than providing the right answers, stand out in the crowded ocean of leadership development.

Through the school of hard knocks, much reading and many conversations on leadership over forty years, I have formed a view that there are six big enablers to effective leadership. They are to:

  • LISTEN and UNDERSTAND
  • INCLUDE and EMPOWER
  • Be COURAGEOUS and DISRUPTIVE
  • Foster VISION and POSSIBILITY
  • Be INDEPENDENT and FOCUSED
  • Act with INTEGRITY and lead with WISDOM

One of the authors and experts on leadership who I enjoy reading is Dan Rockwell, also known as “The Leadership Freak”. Dan runs a blog and tweets @leadershipfreak. His twitter sphere content is prolific and incisive, so I’ve gathered 25 of his best one-liners (leadership on a t shirt) in support of my six themes. They all add colour and richness to otherwise dry headings. Thanks Dan.

1. LISTEN and UNDERSTAND

 “Your worst problem is believing you know the problem when you don’t”

“No one listens until they feel as though you’ve listened to them”

“Moving people begins when you understand them not when they understand you”

“Understand others before challenging them”

2. INCLUDE and EMPOWER

 “Everyone who’s making a big difference in the world is doing it with others”

 “Reach higher by helping others reach higher”

“If leadership is about people, why are you focused on projects?”

 “The more responsibility you expect, the more freedom you should give”

 “Those who cling to authority lose it, those who give authority gain it”

3. FIND COURAGE and DISRUPT

“Leaders who are afraid to rock the boat, eventually sink the boat”

“If you’re satisfied with the world you aren’t a leader”

“Delay makes confrontation more difficult”

 “Meaningful leadership means identifying tough problems and solving them”

4. FOSTER POSSIBILITY and VISION

“Leaders don’t let the past control the future”

 “Great leaders fuel fires. Lousy leaders drown dreams”

“Get people talking about their dreams to inspire others”

“Those who wait for the future to change repeat the present”

5. BE INDEPENDENT and FOCUSED

“Those who are uncommitted find fault. Those who are committed find a way”

“The need to fit in motivates deception and creates mediocrity”

“Indecisive leaders who need to please everyone end up pleasing no one”

 “Weak leaders constantly point out what’s wrong with others”

6. Lead with INTEGRITY and WISDOM

“Leaders who sweep issues under the table will lead stagnant inefficient organisations”

 “The core quality of leaders with wisdom is they seek wisdom”

 “Self-protection and leadership cannot live together”

“Pretending everything is ok doesn’t instil confidence in those who know it isn’t”

What resonates with you?

asking powerful questions

asking powerful questions

Everything we know in the world has emerged through people’s curiosity. In a world where any answer seems to be a Google search away, we are losing the capacity to be curious and ask questions. In the realm of big analytics, where virtually any cause and effect can be identified, the biggest constraint is the ability to pose the right question. In life generally, and in the work place particularly, we seem to pay more attention to problem solving and analysis. We tend to have a short term focus – and the pace of life tends to stifle reflective conversations.

Going a step further, if we can lift from just asking questions to asking powerful questions, we invite curiosity and possibility, which can generate energy and forward momentum. To achieve this, the settings are as important as the questions. Vogt, Brown and Isaacs, in their important paper, “the art of powerful questions” make the observation that “authentic conversation is less likely to occur in a climate of fear, mistrust and hierarchical control”.

For many leaders, it can be a stretch to encourage diverse views, explore assumptions, suspend judgement and look for connections of ideas. If they can climb this mountain and be prepared to embrace the possibilities that may flow from the conversations, amazing transformation can take place.

Mark Strom, a colleague of mine in the 20I20 exchange leadership group, presented a brilliant TED talk on asking grounded questions. If you’re genuinely interested in this topic, I suggest you allocate 16 minutes of your life to watching the You Tube clip. Mark contends that while grounded questions generate stories and conversations from which change can occur and people can shine, many things work against this happening……such as preoccupation with spreadsheets, procedures and  strategy documents. Mark shares some powerful examples of the difference between abstract and grounded questions in his talk. He explains that a grounded question often comes from the side rather than front on.

Mark makes the point that logic works well on what cannot change, grounded questions work well on what can change. Questions like “what’s wrong?” and “how do we fix it?” tend to lead to focus on problems, whereas questions like, “why did you become a teacher?” take the shackles off, liberating people to generate stories that often lead to special insights.

Vogt and Strom both give guidance about how to ask grounded questions – there are certain rules about construction, scope and assumptions (such as the power of “why” above “which” and “who”), but both come back to the most important success factor – “stand back and look at the people who you are questioning and admire them”. Grounded and powerful questions are natural and not contrived. They come from empathy and a genuine desire to want to learn the answer. In a trusting environment, the art of powerful questioning can uncover, for people and organisations, a world of possibility and deep change.

Leaders with the courage and mindsets to undertake innovation at the enterprise level, are likely to also have the capacity to incorporate a culture of grounded questioning. These will be the leaders who give as much attention to developing powerful questions as they do to problem solving – and who steer strategy evolution that engages multiple voices and perspectives in networks of conversations. Such leaders are creating the conditions that will help to future proof their organisations.

innovation at the enterprise level

innovation at the enterprise level

An innovation is something original, new, and important that breaks into a market or society. Innovation is generally considered a process that brings together better outcomes from novel ideas to make an impact on. It is not invention, which is about the idea itself; nor is it improvement, which is doing the same thing better.

Innovation is essentially a learning process. Within organisations, it demands an understanding of why we do what we do, as a starting point to looking at things differently.

Why innovate?

Novel ideas from innovation have been the hallmark of the progress of mankind for centuries. Today, in a world characterised by a collapse in timeframes and rapid reconfigurations of business models, enterprises face a harsh ultimatum – innovate or die. The factors which cause business death are almost certainly not the ones that are being currently focused on, but they can be identified by a systematic innovation process.

Companies employing effective innovation practice drive six times more revenue from new products than companies which don’t. Apart from the differentiation benefits, competitive advantage and profits from new products, innovation reinforces brand, fosters continuous improvement and future proofs an enterprise. Innovative companies also typically attract and retain better people.

How to innovate?

Effective innovation requires leaders to create the right climate and for innovation processes to become embedded in every aspect of the organisation. It requires an innovation mindset within a culture that nurtures, guides and supports innovative thinking and practices. In fact innovation potential can only be sustained if the culture of the organisation allows it.

 While an innovation mindset fosters innovation throughout an enterprise, the best case studies of systematic innovation seem to involve fully involved and endorsed innovation teams from all levels of an organisation, incorporating inputs from customers, suppliers and external experts. Success comes from the ability to deal with the uncertainty of the future and not from an orientation through pre-established objectives or organised plans.

There are no silver bullets here, but success is most likely from a process which inspires vision, creates the right environment, stimulates ideas and then tests the ideas before implementation. Success is when we take those ideas from possibility to probability.

Handbrakes on innovation

Most of the constraints come from leaders who don’t understand innovation processes or who just pay lip service to it. Not only can leaders squash innovation but they can be overconfident in their ability to nurture it. Development Dimensions International measured, in 500 companies, how successful leaders fare at promoting innovation in four major areas: inspiring curiosity, challenging current perspectives, creating freedom and driving discipline;  and found a gap of 35% between leaders and employees perceptions of what was happening. So despite what managers think, many of their employees don’t believe that their leaders actually want to challenge the status quo or hear new ideas, less still champion these ideas to senior management. Sound familiar?

Nilofer Merchant compares many innovation efforts to an “air sandwich” – that is, the top tells the bottom what to do and all the stuff in the middle – the debates, trade-offs and necessary discussions – is missing. This air sandwich is the source of most strategic failure.  The change from a closed exclusive concept of who can participate, to an open and inclusive approach is essential for effective innovation.

Traditional methods of assessing financial viability are also one of the biggest barriers to innovation. It is only by having different KPIs that organizations can understand the different elements of risk and reward in innovation and how they relate to investment levels and financial viability. There needs to be a commitment to the long term view, which is mostly not the focus of standard metrics.

Further material

If you want to dig deeper, Scott Berkun suggests five great books on the subject. There is also a good EY report and a link to an overview of disruptive innovation below:

  • “Innovation and Entrepreneurship” by Peter Drucker
  • “Thinkertoys” by Michael Michalko
  • “Dear Theo” by Vincent van Gogh
  • “They all Laughed” by Ira Flatow
  • “Brain Rules” by John Medina
  • Innovating for Growth” EY report
  • The explainer on disruptive innovation HBR

                                                     “the power of imagination makes us infinite” John Muir

the shared leadership imperative

the shared leadership imperative

Brian Cook, the Geelong Football Club CEO – who has steered three premierships at Geelong and two at West Coast – was interviewed recently on Fox Sports. He was asked what the pre-requisites are for a good coach. His response was compelling – “the two most important elements are leadership and cultural development – the ability to achieve the desired culture in the club and to lead the eight assistant coaches in a way where they operate as an effective team. The technical and tactical elements come second”.  I reflected that the most successful leaders in my experience have also focused on creating team culture and team decision making processes as their primary objective. The vision and strategies in these organisations were generally defined by, agreed to, and lived by the team.

The concept of shared rather than authoritarian leadership has been an espoused “preferred state” in most modern organisations, but has often been derailed by leaders who have problems giving up control. If only they could see the irony that the former CEO of Levi Strauss, Robert Haas articulated – “the more you share leadership and responsibility, the more you multiply your own effectiveness through the effectiveness of others…..you have to accept the fact that decisions and recommendations may be different from what you would do alone…..different but possibly better. You have to be willing to take your own ego out of it”.

Why change? Traditional leadership styles are a carry-over from the evolution of the industrial era which created centralised systems and hierarchies to support those times. Ingrained for centuries, they remained accepted as the norm. Today, they are increasingly coming under pressure to change to modes that will support the new imperatives in business and society.

Getting a sniff of the need to change, there’ve been many well intentioned attempts to introduce shared leadership, only to see them despatched to the “too hard basket”. We’ve seen as many failures as successes, because it takes commitment and then relentless determination to establish the mindsets, processes and rules to make it work.

 I was lucky enough to work with an organisation in the late 90’s where three years of hard work created a powerful team environment. Staff and managers stepped up to wear the hat of their assigned role, as well as that of leader, often “taking one for the team” and seeing the organisation as a whole. It was underpinned by agreed goals, mutual respect and strong adherence to the team norms (like not tolerating territoriality, passivity or mediocrity). People who couldn’t comply were rejected by the team – or volunteered to leave. There was less “wheel spinning” and everyone felt valued and recognised. It reminds me very much of the team culture at the Sydney Swans over recent years.

If today’s leaders (be they in community organisations, family businesses, sporting clubs or large corporations), can’t see this irony, there are some powerful forces at work that will apply the brakes to centralist, heroic and authoritarian leadership styles. The digital world demands that we share. A former boss said once, “information gives power”. Today, sharing information gives power. So does sharing leadership and responsibility.

 Social media is also helping to redefine leadership. As Michael Fauscette writes, “people have new levels of empowerment because of their on line voice, and expect experiences from organisations that mimic those in their personal life….power and communication are networked, not hierarchical and one way”. Organisation cultures must therefore change to meet these new requirements – or people will move to places where cultures have already been transformed.

In a shared leadership team, each person fulfils a clear role and all members strive for a common, agreed goal. A true team provides the right environment for the pursuit of quality, customer service, productivity or whatever is agreed, in a changing environment. Intact teams also provide strong social and emotional rewards, including self-esteem and a sense of being valued. There’s great satisfaction in being part of a high performing team where critique, learning and personal development flourish.

When a true team culture is established with its norms and behavioural expectations (often around respect, listening and personal obligations to the team), it’s hard for leaders (or anyone else) to violate the culture. It’s also a hard place to want to stay if you’re unaligned. As we move from the old industrialised world business cultures to those of the knowledge economy, some of the different imperatives can be summarised as follows:

 OLD – Hierarchical model   NEW – Social business model
  • Managing
  • Hoarding information
  • Leaders are served
  • Conformity is rewarded
  • One way communication
  • Openness discouraged
  • Top down strategy
  •  Coaching
  • Sharing information
  • Leaders serve
  • Everyone has voice and influence
  • Networked communication
  • Transparency flourishes
  • Particpatory strategy/viison work

I’d like to hear your personal experiences and thoughts. Does change depend on having a leader who believes in shared leadership, or can organisational culture be changed by the people? Do staff really want shared leadership or do some have fear of the commitment and step up needed?

Image by Omar Eduardo

pain or gain from structural change?

pain or gain from structural change?

Fanned by the hurricane that is the digital world, creeping globalisation and undeniable climate change, mature economies are undergoing huge structural change. Christopher Rollyson argues that the major driver of change is actually people placing greater value on consumer experience.  They demand better choice, access, convenience and quality at a time when consumer power has never been stronger.

The pace of change is certainly accelerating, as is the noise from many affected by job losses in industries like manufacturing, retail and traditional media. There are plenty of ostriches playing the blame game – “It’s the carbon tax!” (even before its introduction) or, “it’s Fair Work Australia” or “it’s the exchange rate”. Conditioned by a legacy of handouts and bailouts, the complaints are also generally accompanied by calls for the government “to do something”.

Fortunately, there are also business leaders who see the change towards a knowledge economy as an opportunity rather than a problem. Peter Roberts’ recent piece in The Australian Financial Review highlights how enlightened companies are finding the way to adapt and benefit. He cites companies like GE, which has identified $30 billion of near term opportunities in Australia in areas like LNG and wind power. We don’t all have the deep pockets of GE, but there are other impressive examples of adaption to a changing world, such as the gradual transition of LJ Hooker from property developer to sustainability manager. My own experience suggests organisations that embrace environmental and sustainability challenges, tend to drive costs down and foster innovation more rapidly than those that choose to treat them as an imposition.

The knowledge economy isn’t the exclusive domain of high tech and big companies. In reality, the biggest changes will come from the application of innovation and knowledge in the low to medium technology sectors, which form the bulk of the economy. These sectors include food processing, transport, the hospitality industry, and service industries in general. They provide the possibility for intelligent customer-focused business solutions that will attract consumers like magnets.

Julian Cribb has written a compelling opinion piece called Australia in 2050. He paints a picture of the biggest economic driver being knowledge (including technology and advice) and thebiggest export sector climate adaptation, where we use our own natural climate volatility experience as an intellectual springboard for creating new industries. Opportunities will span food production, water management, construction of homes and workplaces, urban design and tropical medicine.

What can governments do? The most relevant policy responses are likely to be around supporting financial pressures borne by innovative firms, and re-focusing the role of Australia’s knowledge infrastructure, particularly universities and scientific institutions. There will also need to be a much greater commitment to R&D, in the way that China has committed to spend an incredible 2.2% of GDP annually ($320 billion) on R&D in the latest five year plan. Such responses are required to diminish the debilitating brain drain from Australia to places like Silicon Valley. We need to see the level of debate about our rapidly changing economy, migrate from whingeing and blame, to insight and possibility.

image by jason hoover

penetrating the USA market

Sustainable penetration of the lucrative US market by Australian companies is uncommon. Although there may be diminished appetite for market entry by export, investment or full participation due to current exchange rates, the US is still the king of global markets. Many Australian corporates have tried, however not many have succeeded.

Much has been written about the way Yellowtail Wines created as much value organically as Fosters paid for Beringer by acquisition, and the Westfield shopping mall penetration is well known. The successful entry of the US market by listed Australian building materials company James Hardie, is another case study that offers some valuable insights to aspirants.

James Hardie initially entered the US market in 1990 with imported fibre cement roofing and it was apparent by the early 90’s that a prospective market for siding products existed. Siding is the term used for a product we might call weatherboard, and in the USA some of the engineered wood siding products were failing in the southern States. Savvy local operators led by the current Hardie CEO, Louis Gries, made the choice clear – “there is a big market opportunity here. You can have a skimming strategy or a penetration strategy, depending on price”. The right price for a penetration strategy demanded a lower cost base.

Even with the establishment of manufacturing capacity in California, the cost base, at $400 per thousand square feet, would only enable market skimming. It needed to be $200. There were those who thought the task impossible, but the Americans, particularly those from Chicago, are real “can do” people. We assembled a team of American engineers and Australian researchers, committed between 4 and 5% of sales to R&D (an amazing level for a building materials company) and 18 months later had cracked it – a volume market strategy for the biggest building materials market in the world.

What were the critical decisions made to ensure this success?

  • Having a low cost base enabled Hardiplank to be competitively priced for volume
  • Hardie committed from the outset to putting capacity into the market ahead of demand. That takes courage and commitment.
  • Hardie built plants around freight logistics to cover targeted consumer segments
  • A brilliant, hard-nosed sales force won the hearts and minds of the dealers in a classical two step distribution model (which later incorporated direct)
  • The company used customer preference to steer the ongoing R&D with winning new products hitting the mark every time.

James Hardie penetration of the US siding market became so successful that it surprised the industry. In fact, the market was sufficiently attractive that competitors entered – some of the biggest players in the world including Saint Gobain and Temple Inland. They each spent the best part of $100 million on a single plant, only to retreat after some years.

James Hardie was able to grow market share and see off competitors not only because it had driven the cost base down, but because we had also moved way up the experience curve in the process of understanding how to produce at a lower cost. We also empowered the local operation, which had a deep understanding of the market and drove distribution decisions around freight logistics. It was also about a focused corporate and operational mindset, people determined to win and who understood that there were no quick fixes or short cuts. As the architect of the strategy and CEO who started the journey, Keith Barton, used to say….”get the conditions right and the outcomes will flow”.

Today Hardie (as it is known in the USA) owns the market. The Hardie brand has become the generic for fibre cement and the US exceeds 80% of total company revenue. Products now include siding in its many variations and backer board.

The USA new housing market will take quite a while to pick up again, but when it does, watch those fibre cement machines start pumping in the ten USA plants, strategically positioned around the USA

australia's corporate blindspots

australia’s corporate blindspots

Inspiring case studies about Asian market penetration, leadership in technology and global excellence in sustainability programs, show what Australia is capable of. However, across the ASX 200 and beyond, we tend to lag in some game-changing areas. While it’s risky to generalise, I believe that corporate Australia tends to underestimate three important strategic themes:

  1. Fully understanding the impact of China on a number of fronts – as it shifts from a low cost manufacturing base to the biggest consumer market in the world; as it moves from a user of technology to a creator of technology (2.2% of GDP in the next five year plan on R&D); and as the need for primary resources (minerals and food) continues to grow. Geoff Raby, retiring Australian Ambassador to China, said that the one thing that surprised him most about his time in Beijing, was how few CEO’s and Chairs of Australian companies paid him a visit.
  2. Treating environmental and sustainable challenges as opportunities rather than impositions. There are many ASX 200 companies with lengthy annual sustainability reports, however few demonstrate genuine belief that environmental responsibility and growing profitability are not mutually exclusive. We desperately need a mindset shift from compliance and complaint, to realism and possibility.
  3. Recognising the value of leading rather than lagging in embracing digital technology-based innovation. Although there is variation in responsiveness within the sectors, media and retail are two sectors which have been caught asleep at the wheel. Is this an age related phenomenon – as older people are in positions of responsibility? How many senior executives and directors have you heard pass off Twitter as being frivolous, rather than seeing its potential as a primary source of focused information? Yet I know many savvy over 60’s behaving like digital natives. No, it’s not age per se; it’s about mindset, openness to change and awareness.

In a global context, Australia business has performed relatively well in the last decade, supported by resources based economic growth, a sound banking and legal system and excellent corporate governance. After the GFC, some observers have suggested that this same good governance has trended towards risk aversion and consequent inertia.

As the world is turned on its head by the digital revolution, major shifts in the global economic balance, and the need to resuscitate an environmentally struggling planet, there is no room for board and executive risk aversion in these areas. While being in the “late adopter” or “laggard” group may not have threatened company survival in the past, today’s environment calls for a positioning as “early adopters” at worst, and “innovators” at best.

Peter Williams, CEO of Deloitte Digital, goes even further in suggesting that any board of directors or group of managers who are not moving fast to understand and harness changes that technology is delivering – social media, cloud computing, mobile devices and data – is abrogating its responsibility to deliver leadership and governance.

Over the next ten to twenty years, the future of Australia will be fall into three main areas – primary resources (minerals and food); the service economy, and the knowledge economy. Julian Cribb believes that by 2050, our economy could be 70% knowledge based. In China last month I saw evidence of the emerging demand for our capabilities in disciplines like urban planning, agricultural science, energy, information technology, architecture, engineering, water management and medicine. We have a long way to go to understand the scope and shape of that knowledge economy, let alone create it. The building blocks exist, but success will depend on the ability of corporate (and political) Australia to gain insights and show leadership in the three areas that we underestimate.

What can we do? CEO’s need to get on the court and play – go to China and understand the market and people. Get immersed in the new technology – as ABC CEO Mark Scott does, personally sending 140 relevant tweets a week. He knows the medium and can talk the language because he has become involved. Shift from a mindset of lobbying Government about regulation, to one of understanding which way the wind is blowing and putting up the spinnaker. Get rid of dead wood on boards – people who are reluctant to change and enjoy peer group support for their scepticism. Much focus is given to gender diversity on boards – we need some mindset diversity as well! It’s not too late but we need to act quickly.

when cost cutting doesn't pay

when cost cutting doesn’t pay

February 25, 2011  |  knowledge, leadership, main blog, management  |  5 Comments

We’re finding it harder to compete in Australia! Higher costs (particularly for labour) and a strong currency are providing serious challenges in manufacturing, primary industries, tourism, and retail. A typical response to the problem is to start cost cutting, rather than seeking higher prices – because a strong and well marketed value proposition with a point of difference generally takes longer, and is harder, to achieve.

The entry of James Hardie into the US market is a great example where cost reduction made the difference between market skimming and market penetration. Working with Australian researchers, the US operators and engineers halved the cost of production of “Hardiplank” (fibre cement siding that looks like wood) to levels that had previously been seen to be impossible. Not only did they achieve a penetration strategy, but they “saw off” four new entrants – all with deep pockets who lusted after the market that had been created.

The pursuit of lean manufacturing and smarter ways of doing things in business, like the Hardie example, is widely accepted. However, cost cutting across the board can be a problem. Some CEO’s (often with accounting backgrounds), adopt unfocussed slashing across the board. Handled inappropriately and insensitively, cost cutting can trash morale and stifle creativity, as well as negate the strategies that drive top line revenue. The key to sensible cost cutting is to make decisions based on contributions to profitability, rather than total cost as such. It’s a bit like sorting out the good cholesterol and the bad cholesterol.

Under short term pressure, I’ve seen how some managers and owners have shot themselves in the foot with ill-advised cost cutting:

  • A tourism business where cost cutting in food and beverage diminished the overall customer value proposition. Total savings were relatively small in the context of the resulting loss of word of mouth and customer satisfaction – both critical mid to long term business drivers.
  • A public sector organisation where all the perceived “nice to haves” were cut – things like green plants, art work, fruit and Christmas parties. Losses in productivity from low morale outweighed any cost savings. I also found out the other day that studies have shown a 17% productivity improvement from greening an office!
  • A manufacturing business which had reduced operating costs as well as sales and marketing capacity. While the new business model was sustainable operationally, the sales pipeline dried up due to insufficient customer interface and new business development.

Some of these comments may appear obvious, particularly with the benefit of hindsight. However, too often, management teams and boards get so caught up in the short term pressures for outcomes and quick fixes, that they take actions like the three examples above. It happens!

It’s not too long ago that the four big Australian banks, in a cost cutting frenzy, lost touch with the human element, closing branches and increasing call centres. These same banks are now falling over each other to restore relationships with customers.

My advice then is to chase lower operating costs, but not at the expense of our most valuable asset – people (actually good cost reduction programs make positive motivation an integral part of the process). Nurture, develop and reward talent, and if there are pay cuts, make sure the executives take the medicine as well. Ensure that the drivers of profit and revenue (like relevant R&D and marketing) are not impacted to the extent that they will damage sustainability.

 The objective should to achieve what Catherine de Vrye advocates in her excellent book “Paperclips don’t grow on trees” and add value, not cost, to the bottom line. In tandem with this, ensure that you read how the customer is reacting at every point along the journey.

the dignity of man

It is a while since I blogged and I understand the need for regularity – so please accept my apologies. Here is the first in an eclectic series for 2011.

Occasionally, we intersect with special people in our lives. I had the privilege of working on the Board of one of the few remaining Australian manufacturing companies with such a person for four years. He has a wonderful human touch that seems to accompany respectful people who have that precious ability to listen.

There is no need for this man to be humble, but like many great leaders he is.  He ran Mitsubishi in Australia for seven years and knows more about lean manufacturing than anyone outside Japan. He received the Centenary of Federation Medal for services to the automobile industry. He also ran GNB Batteries and Pacific Dunlop in the USA and mixed it with people like Hilary Clinton and Sam Walton. Some of his stories about Sam are both instructive and amusing.

His name is Graham Spurling – a giant of a man with a unique ability to give “tough love” in the work environment and gentle love in the personal sphere. Graham was a champion of environmental and community responsibility long before they sat on board checklists. As we walked the factory floor, Graham taught us the principles of eliminating hard work, of the dignity of men (and women) in factories and the importance of evaluating change programs through the eyes of the worker. He is the only Director I have ever seen put on a pair of gloves and lift a piece of steel to check how much the workers were being asked to lift. Graham, I salute you, just as many others did when you were a respected Major in the Australian Army Reserve.

Graham, like many good scientists, engineers and leaders, showed us the value of a planned approach and of rigorous analysis to solve problems. His creativity and lateral thinking also surfaced, as they did in his recent proposal to the Government to have one car manufacturing plant in Australia. The logic was compelling (and still is), but the challenge was too hard politically, going the same way as many other value adding  mid to long term projects at State and Commonwealth level. Populism and opportunism prevail!

Today, Graham chairs the prospective junior miner, Phoenix Copper. He is also a much admired figure in his home town of Adelaide where he is tireless in making contributions to society as a mentor, visionary and philanthropist. If you are travelling in the southern Flinders Ranges near Melrose, you might find Graham at his North Star Hotel or at his Bundaleer winery, extolling the virtues of his sparkling shiraz, or discussing an issue of the day with one of the customers. Ask him about the car industry or about the dignity of man. You might get a twenty first century version of the famous fifteenth century Pico della Mirandola oration.

measuring the effectiveness of tourism promotion

measuring the effectiveness of tourism promotion

October 17, 2010  |  current affairs, knowledge, main blog, management  |  No Comments

Governments, on behalf of taxpayers, are demanding more accountability for the return on investment of public funds allocated to tourism branding and promotion of destinations and events.  Accountability requires appropriate measurement of marketing effectiveness. Globally, there are few examples of systematic approaches to measurement, or even of the alignment of objectives to measurement.

 Brand image is measured by various brand health studies at both national and state level in Australia, but it is often difficult to determine what elements have been important in determining the holistic perception of accumulated beliefs and impressions in the consumers mind.  There is a mix of functional and tangible, as well as psychological and abstract elements that can be influenced by specific destination marketing and other externalities (like political decisions or the behaviour of sporting teams)

 Observers of, and those involved in the tourism industry, continue to lack discipline when making claims about causes and effects from tourism marketing. The worst offenders are those who try and draw direct correlations between advertising campaigns in source markets and international visitor arrivals. Not that the two are unrelated, but generally there is a failure to analyse other variables and to make conclusions about timing. “Arrivals are up, the ad must be working”, they offer in ignorance.

 Visitor arrivals to international markets are determined by four key factors. These are:

 1.       A “go/no go” decision about travel based on attitude to risk and safety

2.       Economic conditions in the source market

3.       Ease and cost of access to the destination (which includes the impact of exchange rate)

4.       Consumer intent (as opposed to awareness) to visit, which is based on perception of the opportunity in the context of alternative destinations. That perception can be influenced by accumulated thoughts and ideas, as well as specific promotions/campaigns.

 In the international context, measurement should at least attempt to control the variables or pursue more complex multivariate analysis. Even then, it is difficult to assess the difference between actual visits at a point in time and subsequent visitation, which may have been influenced by the impressions made previously.

 At a domestic level, where decisions are between staying home or travelling overseas, interstate or intrastate, measurement is less complex. At an event level, factors determining attendance can be measured with more accuracy. Greater complexity arises where measurement is required of the impact of the event on the brand and perception of the destination that is hosting the event. 

 What are the solutions? It is important to have clear objectives for any marketing activity and to align measurement to them. If the objectives are around brand building, analysis needs to include holistic impressions and open ended questioning, and can include the impact of promotion of the destination and of events on the brand. Measurement of marketing activity should be systematic and rigorous, searching for cause and effect at points of decision making. Web based marketing enables a more direct and sophisticated analysis based on web metrics. It is time for the tourism industry to adopt a greater level of professionalism and degree of rigour to measuring the impact of the Government funds applied to the sector – funds which cannot hope to be guaranteed into the future.