Resetting Your Customer Experience For Post Covid

We are nearing the end of 2020… the year that changed the world with months in lockdown, travel bans, restrictions on gatherings, working from home enforcements and rising unemployment. No one saw these things coming.

For vulnerable consumers and the customer teams that serve them, Covid-19 has forced companies to rethink what customer care means to ensure they are addressing their customer needs.

A customer’s interaction with a company can have an immediate and lasting effect on their sense of trust and loyalty. During a time of crisis, it is essential that businesses deliver service and experiences that meet customers new needs with empathy, care, and concern. It is important to use real-time data to understand shifts in consumer behaviour so businesses can quickly pivot innovating redesign journeys to align with constantly changing customer preferences.

Below are customer experience practices that build resilience and prepare companies for success in the days after Covid-19.

Care

People need extra information and support to navigate during these unprecedented times.

To show that you care, REACH OUT and offer genuine support, not through marketing or blatant attempts to gain competitive advantage. These experiences are important for customers in the short term, and the impact will build positive, lasting relationships.

Meet your customers where they are

Your customers’ normal patterns of life have been put on hold, and as a result there has been a shift in demand patterns - customers need digital, at-home, and low-touch options. Digitisation has accelerated because of the coronavirus pandemic and digital-led experiences will continue to grow in popularity as we recover from the crisis. Businesses that act fast and innovate in their delivery model to help consumers navigate during the pandemic safely and effectively will establish a strong advantage.

Redesign operations to support the new world

It is to be expected that consumer preferences and business models will last longer than the crisis. Once covid-19 subsides, economic challenges will remain, so it is key for companies to deliver on customer experiences that are emerging as most important, whilst realising productivity efficiencies, to remain competitive.

A keyway to simultaneously improve your customer experience and business efficiencies is to increase digital self-service and to make smarter operational trade-offs, driven by what matters most to customers. Migrating customers to digital channels is often a successful way to boost savings and satisfaction.

Agility

Sustaining a strong customer experience during a crisis requires prompt research to interpret the changing dynamics and new pain points as well as agile innovation to address them. Businesses that can master that tactic will generate value for customers in high-priority areas in an environment of intensified competition.

Customer experience has taken on a new definition and dimension in the uncertain times of Covid-19. Companies who show care towards their customers, reinvent their customer journey and anticipate how customers will change their habits, will build deeper relationships that will continue beyond the crisis.

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Looking to redesign your own customer experience? Reach out.

Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations with a focus on people and customers just as much as financial outcomes.

We understand that execution is the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au

How to proactively manage the mental health of your employees

According to The Australian newspaper, over 1 million Australians have sought mental health treatment during Covid 19.  In Victoria this is a real worry with a 30% rise in mental health cases presenting over the 4-week period from mid-September.

Mental health is a concern for businesses in normal times, but in these unpreceded times this data demonstrates the potential crisis that our society is facing.

Beyond Blue www.beyondblue.org.au shares that around one in five Australian employees are working with a mental health condition. Mental health conditions are common and don’t discriminate, the most resilient person can be affected by work stress, as well as other life challenges.

They also state that the many benefits of a mentally healthy workplace include; improving productivity, increased employee engagement, lower turnover, meeting ethical and legal obligations and employee connectedness is greater.

As a manager or leader, you can help support your team in managing their mental health.  Here are some tips to doing this. 

Listen and be flexible

Listen to your team and be as flexible as you can, understand their personal situation and be as adaptable as possible to help support their work-life balance and mental health.  Working from home for many people has created new challenges and extra stress, so offering flexibility, having realistic expectations and understanding their personal situation will help you support your team members with their individual needs.  Show your true self, sharing a personal story with your team can be very powerful, revealing that you can also be vulnerable allows others to connect with you more and see you a person, not just their manager.

Communicate regularly and share what is going on

Regularly check in with your team and ask them how they really are going is important.  Truly listen and understand what their needs are. Seek to find out if they need any extra support, again listen and keep the communication lines open.  Each person will be different and how they are feeling will change, so keep asking and adapt your style to suit the individual. Where possible share as much as you can with your team about what is going on in the business and be clear and realistic in your expectations of them.

Workplace connectedness

Research is showing that connectedness is at its greatest at the moment within many teams.  Which is fabulous, we all need human connection for our overall wellbeing. Teammates play an important role in supporting each other as well as managers.  If colleagues feel comfortable to share and check in with each other this can help to make them feel more valued and connected to their workplace.   This usually happens organically but if it doesn’t promote this in your teams.  Team activities and working on shared projects or goals can help bring these work connections together.  Having fun also helps! Chat to your team about what activities make work fun. 

Wellbeing initiatives and mental health support

Encourage your team to take up any wellbeing initiatives that your company offers.  Some employees might be interested in knowing about personal and professional development opportunities to keep them motivated.  This doesn’t have to be costly, there are lots of free webinars available at the moment.  Where possible provide access to counselling services and mental health and wellbeing support, is a key component to supporting the mental wellbeing of employees.  If you have an Employee assistance program, they usually in addition to counselling have access for employees to mental health and wellbeing education sessions, that is just as important as educating leaders and managers.

Provide ongoing training for leaders on mental health and wellbeing. Not for profit organisations like Beyond Blue and Black Dog Institute have many valuable resources that everyone can access.

Take a break

Currently in Melbourne we are unable to travel very far, so people haven’t been taking annual leaving and having a break.  Encourage your team to take a long weekend or some time off. This is really important for mental health and recharging their social and emotional wellbeing.  People are feeling burnt out which can often trigger mental health concerns. Lead by example and take a break yourself,  a refreshed manager is much more effective for their team!

Looking to unite your team? Reach out.

Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations with a focus on people just as much as financial outcomes.

We understand that execution is the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au

Article by Phoebe Reid

Finance in Australia

Industry Report

Finance in Australia

Profitability is expected to rise over the long term with less pressure on net interest margins.

The primary activities of this industry are: building society operation, financial asset investment service provision, credit union operation, banking service provision, money market dealing, and non-depository financing.

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OVERVIEW

The Finance industry has had a challenging operating environment over the past five years, due to falling interest rates and declining private capital expenditure.

Ongoing macro-economic and geopolitical changes have led to uncertainty surrounding the global economy and financial system over the past five years. Slowdowns in several economies across the globe and concerns about Chinese economic sustainability have affected Australia's economic performance.

Domestically, declining private capital expenditure has led to lower demand for credit, and a downturn in the residential property market in 2018-19 put further pressure on industry revenue. Falling interest rates have been the key reason for revenue declines. Due to the economic impact of COVID-19 revenue is forceast to drop 4.6% in 2020.

The big four banks account for c.60% of total subdivision revenue in the current year. Hence, the finance industry’s performance reflects the performance of national banks, which is linked to the cash rate and market interest rates. To stimulate the economy, the RBA has lowered the cash rate to historic lows. The RBA has made five cuts to the cash rate since June 2019, and further quantitative easing may occur as the effects of COVID-19 persist.

Demand for credit has varied across different parts of the economy. In the retail market, the large value and volume of mortgages has significantly increased industry’s assets. While the commercial market has been reluctant to make significant investments, contributing to weakened demand for credit.

The banks have started offloading divisions with lower returns, and exiting businesses abroad and streamlining operations to focus on core banking operations in Australia. Changes in the regulatory landscape, have prompted this renewed focus for the banks. These events have led to the major banks selling or seeking to exit their wealth management and life insurance divisions due to weaker returns and high regulatory costs for these businesses. The four major banks have also sought to reduce their branch numbers as banking and financial services are increasingly delivered through digital channels. This trend has led to subdivision employment numbers falling over the past five years, despite enterprise numbers increasing.

OUTLOOK 2020 - 2025

Revenue is forecast to grow by 4.3% over the five years through 2025, to $241.1B. Enterprise numbers are forecast to rise due to growth in the number of mutual organisations, neobanks and foreign banks. Foreign banks, along with the emergence of neobanks and other financial technology providers, are expected to contribute to growth in wage costs.

Profitability is anticipated to rise slightly, as lenders recover from COVID-19 related credit impairments, and pressure is reduced on net interest margins. The big four banks' strategic focus is expected to continue shifting due to potential developments across several of their key products and markets, including residential property lending, and divesting wealth management and insurance segments. The banks have streamlined their operations and focused on core banking operations. This shift in focus, and a projected rise in interest rates and lending activity post COVID-19 is expected to support recovery in the lending sector. Capital expenditure by the private sector is also anticipated to rise.

APRA has introduced a range of measures to ensure banks and other financial institutions are more resilient and compliant, with more reforms expected over the next five years. The Basel III reforms were set to come into effect in January 2022, but will be delayed due to COVID-19 as regulators relax requirements to promote credit availability and lending in the economy.

The big four banks currently hold a large portion of the residential mortgage, consumer and business lending markets, emphasizing the financial system's reliance on major banks. APRA amplified the capital requirements on residential mortgage exposure for major banks and those using the internal ratings-based approach in July 2015. Capital adequacy will likely increase further as APRA seeks to bring capital benchmarks to an indisputably strong level, while also making changes to risk weights to discourage banks from issuing higher risk loans.

Post the findings concluded by the Financial Services Royal Commission, consequences are anticipated to continue weighing on revenue growth. Lending activity and credit growth may slow due to changes to the mortgage broking landscape, while financial institutions will likely implement tighter lending standards.

Tighter lending standards are forecast to affect retail consumers through mortgage lending, and loans provided to small and medium businesses.

Source: IBISWorld | Finance in Australia, July 2020

Measuring transformation success

We know it’s cliché, but “what gets measured, gets managed”. A transformation program is undertaken to enhance an organisations performance and boost its health; it is fundamental to the success of your transformation that you measure your progress along the way.

The following checklist can be used as a guide for measuring the success of your transformation program:

Define Success

Agree on what success is for your transformation program. This is something you would have agreed early in the strategic planning phase.

KPI Scorecard

Define the key metrics that are crucial to evaluating the transformation’s success and build a scorecard. Use a combination of lead and lag indicators and qualitative and quantitative metrics.

Baseline

It is fundamental that you have a baseline for all your metrics prior to commencing your transformation program. This will allow you to understand the true impact the transformation is having on your organisation. You need to be able to see the movement on your scorecard.

Pivot

Incorporating leading indicators will help detect any challenges or risks early on and allow you to pivot in order to influence a more positive result for your transformation’s success.

Frequency

It is critical that your scorecard is refreshed at a reasonable frequency to monitor the movement relative to the effort/changes being executed.

Need to curate your own transformation checklist, specific to your business needs? Let us help.

Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations. Focused on delivering both commercial and financial outcomes. 

We understand that execution is the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au

Six tips for leading people through change

All companies undergo change, but few execute change successfully.

When leading people through change, the most effective leaders devote substantial effort in engaging everyone involved in the change, and understand that people need time to adapt to the change.

The magic six

There are six key competencies required to successfully lead people through change - communicate, collaborate, commit, support, influence and learn.

Communicate.

Communicate what the change is and the purpose and benefits of the change, this will increase buy-in.

Collaborate.

Bring people together to plan and execute change - encourage employees to break out of their silos and don’t tolerate unhealthy competition. It’s important to include employees in decision-making early on to strengthen their commitment to change.

Commit.

Display resilience, persistence, and willingness to adapt to challenges and remain positive and patient with results.

Support.

Remove barriers to employee success, including personal barriers such as wounded egos and a sense of loss, as well as professional barriers such as the time and resources necessary to carry out a change plan.

Influence.

Influence is about gaining compliance and commitment to drive change. Identify critical stakeholders and define what “buy-in” looks like from each of them to result in leading to a successful outcome. Communicate the vision for the change in a way that resonates with their value drivers.

Learn.

Never assume you have all the answers, ask questions, and gather formal and informal feedback. Input and feedback will allow you to make constant adjustments during the change.

Navigating change is not easy, hence it is critical for leaders of change to be resilient, because it helps people cope with the inherent pressure of change, uncertainty, and any setbacks.

Need to lead your team through change? Let us help.

Focused on delivering both commercial and financial outcomes, we take care of your people to ensure they remain engaged and excited. We understand that when it comes to strategy, execution is actually the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for your business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you, by emailing us on whiteark@whiteark.com.au

The importance of innovation during a pandemic

According to McKinsey, organisations that have focused on innovation during the recovery of a crisis came back 30% stronger than companies who did not. Concentrating on the long term and planning for growth rather than survival will help gain a competitive advantage during the recovery.

The COVID-19 outbreak has impacted nearly every industry; and as the government begins to ease restrictions, companies are exploring ways to recover their losses. During the onset of COVID-19 organisations innovated rapidly with a short-term focus on continuing operations and employee safety. In the recovery phase, companies will require a considerable amount of strategic innovation (growth and change) rather than reactive innovation, to explore future opportunities centered around core business models.

It is key for organisations to innovate with a purpose to increase their likelihood of success for the long term. Companies should focus on growth and gaining an advantage over their competitors. The below framework will help with explore growth strategies.

Assess changing demands and needs of consumers

The recent pandemic has fundamentally changed the way most businesses operate, particularly because of the rapid adoption of digitisation. Companies need to understand the demands and needs of consumers by analysing the new patterns of spending. Once change has been identified, analyse what it means and its impact on your industry and business.

Consider ways to respond

Now that you understand the change in consumer spending patterns, explore ways in which your organisation is equipped to respond. This requires planning for the future, think about the pain points the changing consumer behaviour reveals and task your innovative experts with creating some new products or services to address these customer pain points.

Change your business model

Organisations need to accept that the way that their business operated prior to COVID-19 is history. It is important to identify ways in which your former business model has been permanently changed and then look at ways you can transform these models into new ones to make way for future growth.

Each industry and each company have their own unique challenges and opportunities to explore, so innovation will look different for everyone. One critical enabler to strategic innovation post COVID-19 is technology. Once you identify opportunities to pivot your business model, consider what technologies can help you get there - e-commerce, artificial intelligence, virtual realities, touchless technologies etc.

When considering your innovation strategy, remember to adapt to changing consumer wants, explore new opportunities, and allocate resources towards innovation.

Need to map your way forward through Covid19 and innovate from the inside out? Let us help.

Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations. Focused on delivering both commercial and financial outcomes. We understand that execution is the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au

How to ensure your transformation is successful

Getting your transformation right is more important than ever. We are approaching the pointy end of 2020 and it’s time to think strategically and anticipate, and prepare what your business will look when the new normal emerges.

Your company may need to move in a new direction, accelerate product and service innovations, accelerate digitisation across the organisation, reduce expenses and improve efficiencies, or strengthen your competitive position. No matter what the business driver is, they will require a shift from the current state.

Planning and executing a transformation program to realise critical strategic objectives isn’t easy. It’s hard to believe that more than 70% of transformation programs do not successfully deliver what was required. Often, the plan that has been developed is right, it’s when you get into the execution phase that problems start to arise. People in the organisation then start to become cynical, “the last transformation program didn’t deliver the desired results so why would this one be any different”. Renaming the transformation program or allocating a different group of resources doesn’t usually result in the achievement of your desired outcomes.

We provide practical hands-on tips on how to ensure your transformation program is a success:

Lead from the front

Appoint a leader that is to be accountable for the program.  Be sure your leader is prepared to effectively lead people through change, be visible and drive the importance of this program. 

Be clear on what success is

Define what you are going to do, why you will do it, what the benefits of change are, and what the dangers of not changing are. Ensure you get buy-in from key stakeholders who will support the transformation.

Checklist:

• Has a clear vision of the future been articulated and widely accepted?

• Is the rationale for change sensible, clear and sound?

• Are benefits well defined?

• Does the case for change/opportunity outweigh risk?

• Has a clear roadmap been developed and shared to gain input and support?

• Have stakeholders who are critical to the transformation’s success been identified and their personal value drivers learned?

Is it clear how stakeholders will be proactively involved in making the transformation happen, to build their support and maintain their engagement?

Find your champions

Develop a champion network across the organisation to support and drive the program; ensuring key messages and impacts are well understood and accepted. Use this network to do communications, get feedback and help you create a positive momentum in the organisation / team around this program.

Importance of Change Management

Don’t underestimate change management requirements to successfully embed change in the organisation. Change management is a buzz word but the importance of it is critical to ensure the program is a success.  Work out what the team needs to support the change and provide the guidance required to ensure that the change is implemented.

Measure success

Accurately measure and track success. Ensure you are transparent where things are off track and communicate risks and challenges and appropriate mitigation plans.

This framework will guide you through your transformation, but the real power is in the effectiveness of the execution. And that’s where we come in.

Need to ensure that your own business transformation is successful? Let us help.

Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations. Focused on delivering both commercial and financial outcomes. We understand that execution is the hardest part, and we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au

Household Consumption

Covid Impact Report

Household Consumption

Covid-19 has caused household saving ratios to hit heights not seen since the early 1970s.

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OVERVIEW

Household Consumption Spending:

50% of households expect to have less income available after meeting commitments.

Disposable income expectations in a year from now:

• Increase: 17%

• Decrease: 50%

• Remain the Same: 25%

• Unsure: 8%

Household disposable income outlook…

• Employment is increasing as pandemic restrictions ease

• Population growth has slowed from 1.5% to 0.5% - less people receiving income than previously expected

• Wages growth has slowed from a low 2.2% to 1.8% and may decline further given the weak labour market

• Federal income support will be progressively reduced over the next six months

• Interest payments on savings have declined and so have share market dividends
  

Household Consumption Expenditure Outlook

• Household consumption expenditure growth will improve slowly as more spending options

  become available

• Weak income growth will constrain the rate of growth, although a build up of savings is likely

  to reduce slowly and support spending to some degree

• In annual growth terms, spending will likely still be in decline over the September, December,

  and March 2021 quarters

• Underlying growth will then settle at around 3.5% to 4%, which is similar to the growth rate

  before the pandemic

• Pessimistic estimate of underlying growth in consumer spending is 1.5% to 2% and optimistic

  estimate is 5% to 6%. The optimistic estimate is still below the pre-GFC growth rate of 5% to 9%

*Data Source: Foreseechange, Charlie Nelson

Digital Commerce

According to Gartner, five areas of digital commerce are being transformed due to the effect of Covid-19 on customer behaviours and businesses accelerating their adoption of online and digital alternatives.

1. Contact Purchasing

Contactless purchasing has become a preferred payment. Gartner predicts 80% of ordering and replenishment  will be contactless by 2024.

Customers:

Contactless payments and pickup/delivery

Operations:

Contactless business operations where companies can use robotics, artificial intelligence and computer vision to assist employees across the supply chain

2. Virtual Product Reviews

Currently the adoption of 2D and 3D product previews remains light.

Gartner predicts the uptake  will increase - software vendors offering visual configuration tools have reported a rise in business due to the pandemic.

Virtual Product Reviews may reduce the need for samples and showrooms and enable more customer self-service when buying configurable products.

3. Live Commerce Streaming Services

Live commerce involves video streaming to demonstrate products and interact with shoppers in real time to encourage purchases. Brands that have implemented livestreaming for selling or customer engagement are seeing early signs of success.

4. B2B Buying Experience

Businesses that sell B2B should think about transforming their shopping platform into one that has a more consumer-like feel to gain traction with younger professionals as they will expect a B2C like experience.

5. Enterprise Marketplaces

Enterprise marketplaces are online marketplaces operated by organizations that enable third-party sellers to sell directly to end customers.

Need to make the most of digital commerce trends?

Let us help. To learn more about how to leverage digital trends and pivot your business, contact us on whiteark@whiteark.com.au

Online Shopping in Australia

Industry Report

Online Shopping in Australia

Online retailers are forecast to increasingly expand into other sales channels over the next five years.

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OVERVIEW

Online retailing has flourished due to changing consumer attitudes over the past five years. Declining discretionary incomes has resulted in consumers fostering a bargain hunting trend, increasing the demand for online shopping.

Improvements and increases in internet connectivity has helped drive industry growth. Online retailers have attracted greater demand as consumers have become more tech savvy and computer literate. Improvements in the security and reliability of online payment systems have changed perceptions of ecommerce, transforming it into a credible shopping medium.

Online retailers allow consumers to search, compare and evaluate options from a variety of providers. Trust, reputation, warranties and add-on services increasingly influence consumers. Furthermore, offering a high standard of customer service on shopping websites is a key issue for the industry. Consumers are demanding greater transparency regarding delivery charges and enhanced information about products.

Industry operators face intense competition from traditional bricks-and-mortar retailers, department stores and international online operators.

Consumers can only undertake online shopping through devices connected to the internet, which means that digital technology is an essential aspect of the industry. The rapidly increasing use of smartphones and tablets has prompted the development of mobile-optimised websites and applications. Mobile commerce enables retailers to connect and interact with customers through social media, messaging and marketplace platforms.

OUTLOOK 2020 - 2025

Consumers seeking convenience and competitive prices are expected to drive demand for online goods and services. Industry firms are anticipated to reach broader audiences due to faster broadband speeds, rising internet penetration and increased transaction security.

The industry is projected to benefit from further technological change. Operators are anticipated to use advancements in computer programs and website design to allow consumers to virtually try on clothing, footwear and accessories. These advancements may include using cameras to take precise body measurements.

New payment platforms such as Afterpay have gained significant momentum and are forecast to continue driving sales. These new payment platforms have gained popularity among younger consumers.

Online retailers are anticipated to increasingly expand into other sales channels. Pure-play online retailers are increasingly using multiple channels to engage and connect with customers, and some are opening flagship bricks-and-mortar stores that typically act as showrooms for their products. Hybrid retail models are projected to grow in popularity, increasingly blurring the line between traditional and online retail.

Industry players are expected to continue facing external competition from department stores, traditional retailers and foreign websites.

Industry profit margins are forecast to rise as operators focus on reducing overhead costs, improving supply chain processes and inventory management, and upgrading warehouse and fulfilment distribution.

Online retailers are likely to increase their operational efficiency as they become more established in their respective markets. The nature of online retail typically allows firms to boost sales volumes as online traffic increases, without an equivalent increase in staff. However, the industry is projected to rely on highly skilled labour to retain market share in an increasingly competitive environment, increasing wage costs over the next five years.

Online enterprise numbers are projected to grow slightly over the next five years as companies increase their online operations and bricks-and-mortar retailers develop online platforms. However, firms are likely to increasingly outsource their IT operations, limiting growth in employment over the period.

Source: IBIS World | Online Shopping  in Australia, May 2020
Note: The industry does not include the sale of goods or services by agents that do not take ownership of the goods and services, or the sale of goods by individuals.

How to prepare for sale?

To maximise the value of your business on exit it’s imperative that you commence strategic planning work at least 18 months to 2 years out from sale.

Key elements that need to be considered in your strategic plan include:

Key Business Drivers

Understand the key drivers of the business. 

Identify which of the drivers will have the greatest impact on the business valuation.

Competitive Environment

How are your products or services positioned in the market?

Who are your direct and indirect competitors?

How does your pricing structure compare to the competition?

Potential Buyers

Understand potential companies that could acquire your business.

What would they consider the most important value drivers?

Global Mergers & Acquisitions

Review global activity within your industry and understand the trends and key information.

Our 6-step guide to maximising value…

Key activities to undertake when preparing your exit plan.

Revenue & Margin Analysis

Understand which customers, products and markets generate the most revenue and the have the most attractive margins. This will drive improvements in performance, making your business more profitable and appeal more attractive to buyers.

Growth Plan & Scenario Assessment

Build a financial model that considers multiple scenarios to demonstrate how further profitable growth can be achieved to maximise your future sale value.

Overheads & Profitability

Analyse overheads and reduce fixed costs to enhance profit margins and increase the value of your business.

People

Create incentives for critical employees to remain in the business post the sale, to minimise risk for the buyer and to ensure the business valuation is defensible.

Financial Governance and Reference Books & Controls

Make sure that the business’ financial statements and accounting information is accurate. This will elicit compliance, assurance in numbers and transparency. Buyers like it when business operations run smoothly and efficiently so it is important to document business processes, review controls and update systems to improve the value and desirability of your business.

Data & Documentation

Ensure documentation required for the sale process is readily accessible to allow buyers to complete the due diligence quickly and efficiently. This will reduce risk for the buyer and maximising value for you.

Pulp, Paper and Paperboard Manufacturing in Australia

Industry Report

Pulp, Paper and Paperboard Manufacturing in Australia

The Pulp, Paper and Paperboard manufacturing industry is anticipated to continue experiencing difficult trading conditions over the next five years.

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OVERVIEW

Industry revenue is influenced by demand fluctuations from domestic downstream markets in the following industries: paper product manufacturers, printing industries, paper product wholesalers, food and beverage manufacturers and publishing industries.

Demand for printed reading materials has declined over the past decade due to the availability of electronic and online alternatives, this has limited demand for major players supplying this market.

Increased awareness of environmental issues can negatively affect consumer demand for paper products. Industry operators have responded by upgrading facilities to reduce water usage, increase renewable energy usage and reduce the industry's carbon footprint. Major players Visy and Opal have embraced the use of recovered materials such as pulp and recycled paper and paperboard products to replace inputs that would otherwise be purchased from third parties. These efforts help to create a positive image for operators and the industry, supporting demand for industry products manufactured from recycled materials.

The value of the Australian dollar influences industry demand in international markets. A depreciation of the Australian dollar reduces the cost of industry products for overseas buyers, typically leading to a rise in demand for industry exports.

OUTLOOK 2020 - 2025

Slowing domestic demand and ongoing product substitution in downstream markets are projected to place further downward pressure on industry revenue. The industry’s operators are expected to increase their focus on export markets and produce higher value-add products, such as recycled paper and paperboard, to help offset declining demand.

Demand from newspaper and book publishers will continue to fall as circulation and readership continues to decline due to rising competition from digital media and ongoing pressure from electronic devices. Additionally, demand from printing services is projected to decrease as Australian offices continue to shift towards paperless operating models.

Food and beverage manufacturers represent an important downstream market and demand from this market is anticipated to increase. The construction sector is forecast to grow, boosting demand for paperboard used to produce gypsum plasterboard products and other paper-based construction materials.

Recovery from COVID-19 is anticipated to support profit margin growth, as operators can increase output in response to higher demand from downstream markets, reducing per unit costs of production. Increased investments to reduce energy consumption is also expected to support industry profit margins.

International paper manufacturing sectors are anticipated to expand, which represents both an opportunity and a threat to industry operators. Export volumes are projected to increase as China, New Zealand and the United States are anticipated to continue to generate significant demand for industry exports. A projected appreciation of the Australian dollar is forecast to support rising import penetration, challenging local players. Additionally, the quality of imported products is expected to improve over the period, as paper-producing countries upgrade their technology and increase capital investments. As a result, competition from imports is expected to rise.

The industry's major players are anticipated to upgrade facilities to increase productivity and efficiency. These developments are anticipated to deliver greater economies of scale to the firms and strengthen production output over the next five years. Furthermore, both companies have announced plans for further expansion over the period. Visy announced that it intends to invest $2.0 billion over the ten years through 2027-28 in the domestic market, creating approximately 5,000 jobs.

Source: Ibis world | pulp, paper and paper board manufacturing in Australia, June 2020

Cashflow is King

It’s not complicated, confusing or easy to manipulate, it doesn’t lie and shows the real health of a business. Even non-accountants understand cash as they all have to manage their personal cashflow – to ensure there is more inflows than outflows and managing the debt levels for the inflows in the household.

When assessing the underlying performance of a business cash is the best indicator to show how the business is performing, how healthy the business is and being able to accurately determine if your business model is viable for the long-term.

Despite the fact that cash is king, everyone understands it, and without it, a business can’t function.  Businesses don’t spend enough time understanding their cashflow to be able to proactively drive improvement in the cashflow of a business.

There are four key things to consider when managing your cashflow:

1. Understanding the past – understanding the activity that drives cash inflow and cash outflow and the timing of these elements

2. Shape your future -

   • Make changes to your business that bring cashflows in earlier (change in payment day terms, utilise credit cards for customers to pay etc)

   • Take an aggressive stance to work with customers that pay you for your services.  Pre-screen customers for credit history to ensure you are not generating revenue with no cashflow

   • Make changes on how to delay cash payments going out the door through utilising credit cards, changing payment terms, negotiating extended terms or move monthly to quarterly, delay purchasing until required

3. Daily cashflow forecasting helps you really manage tightly the cashflow of the business

4. Daily reporting on cashflow drives good discipline and an ability to make quick decisions.  This reporting can show actuals versus forecast.

Making even a small change can make a huge impact on ensuring your business is maximising its cashflow position.

If you want some more advice around maximising your cashflow reach out to Whiteark; we have experience in cashflow improvement.

COVID19 has challenged many companies specifically in how to proactively manage cashflow to be able to stay viable; some tips to consider that might help your business maximise cashflow in this period:

• Ask your customers to pay you as early as possible

• Provide other payment options for customers (credit cards, afterpay etc) so you can get your money sooner

• Negotiate payment terms with key suppliers

• Review expenditure that can be stopped / delayed or deferred

• Utilise credit cards to delay payments to be made; credit cards can be used for majority of transactions and even most suppliers take credit card as well

Need to take a closer look at your cashflow?

Let us help. To learn more about how to make cashflow king in your business, then contact us on whiteark@whiteark.com.au

Consumer patterns and implications for brands & retail

Covid Impact Report

Consumer Patterns & Implications for Brand & Retail

Covid-19 has created several new consumer segments as a result of varying attitudes and spending habits are changing.

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OVERVIEW

Consumer concerns are centred around health, the economy (including income and unemployment), and climate change which is still a prominent issue.

80% are not willing to return to life as it was.

Driven by ongoing concerns about health and finances but also as a result of rethinking and resetting priorities.

50% expect to have less disposable income.

Driven by high unemployment and the imminent reduction of government income assistance.

A high priority to build savings.

As a precaution, to buy residential property to live in, or to invest.

Only 9% feel they have discretionary funds and want to spend on discretionary items.

Consumers have adapted their shopping behaviour.

As a result of the pandemic and lockdown restrictions; consumers have adapted to online channels at the speed of lightning.

With more consumers adopting new ways of doing things, the online grocery channel has increased market share.

Convenience customers are going to drive a surge in e-commerce

Retail entrepreneur Ruslan Kogan, says the next wave of e-commerce growth in Australia will be driven by consumers interested in convenience as much as price.

Kogan predicts  e-commerce will surge from 8% to 30%.

If Kogan’s prediction is accurate, that still leaves 70% for physical shops (which may also sell online)for shoppers who prefer local, personal customer service, unique merchandise, instant gratification, or other attributes satisfied best by physical shopping.

Keeping it local…

Independent and specialty stores are benefiting from consumers shopping closer to their location and wanting to support local businesses.

Key reasons consumers are shopping locally:

• I’m supporting local businesses

• I’m shopping more at stores that are closer to my location

• I was looking for better quality products

• I was looking for products that I couldn’t find at larger retailers

• I was looking for better prices

• I always shop at this store

Shopping locally is more important for Insulated spenders.

Constrained or insulated?

As published in Nielsen’s “Reboot or Rebound – The New Normal For Australia” communication, the polarisation of consumer spending habits continues…

Insulated spenders prioritise convenience whilst Constrained spenders prioritise value. Constrained households do not necessarily correlate to lower income.

In this report we unpack how brands and retail can cater for the two types of spenders: constrained and insulated and what trends we can expect to see as the retail landscape continues to evolve and change.

*Data Source: Foreseechange, Charlie Nelson

Resetting Your Digital Strategy

COVID-19 has caused disruption for all businesses across Australia, whether it be positive or negative. One of the impacts that has been positive is that it has sparked digital acceleration for many companies and industries.

Companies have been forced to scramble, improvise, and embrace new ways of operating within weeks instead of what would normally take years. It is now clearer than ever that our future is digital. The key enabler for this acceleration in digital adoption is the increased connection to technology for businesses and consumers.

It is now time to reset your digital strategy for post COVID and explore new opportunities that a time of immense change inevitably elicits. You should review things that have worked well for you during the pandemic and avoid regressing to former ways of operating.

Below are 5 areas you should focus on when revisiting your digital strategy:

1. Priorities

2. Customer

3. Innovative Ideas

4. Digital Roadmap

5. Increasing Focus and Agility

Priorities

Have you begun to pivot your priorities to meet the demands of this digital world? Are the core objectives and assumptions that informed your strategy still relevant? Consumers have changed their media habits and purchasing behaviours with an increase in mobile usage, a surge in the percentage of consumers shopping online for groceries, and the amount of consumers now tackling home improvement projects. You need to explore the market opportunity as there are high chances there will be new markets to enter and new customers to engage; or possibly what used to be a small component of your business pre-covid, is now one of the biggest contributors. It is time to pivot and reset your goals and priorities in a way that responds to the new reality with digital channels at the core.

Customers

Your customer journeys that were relevant pre-covid are now most likely incorrect or redundant so you need to explore what matters to your customer in this new reality. You need to revisit your customers’ attitudes, needs, motivations and behaviour as it relates to your business. The more you understand your customer the better you will able to market to them, create products and services that meet their needs, gain a competitive advantage, proactively identify shifts in purchasing intent and behaviour, and increase your chances for success. Ultimately you will be more equipped to identify, understand, analyse and retain your customers as you focus on enhancing your customer experience. Companies that develop a comprehensive voice of customer research and strategy have seen significant reductions in customer service costs and have had much higher customer retention rates. Despite the financial downturn, now is the time to boost your digital customer experience since digital is now the primary channel for many.

Innovative Ideas

Mass digitisation and disruption has meant consumers and businesses are more open and willing to adopt new approaches to doing things. This is the time for businesses to pilot innovative ideas and delivery models. At a time when traditional strategies have been upended, COVID has encouraged leaders and businesses to pivot quickly and explore new things and assess new approaches, value streams and delivery models.

Digital Roadmap

When resetting your digital strategy, you need to ask yourself the question, is my digital roadmap solving the right challenges? You need to review digitisation across your entire organisation – How are you interacting with your customers? How are different departments doing their jobs now? How are you launching new products? Nurturing relationships with prospects? It is time to evaluate the approaches that are working, those that can/need to be scaled, where optimisation is required, and what requires a complete overhaul. Re-prioritise your technology investments or develop a newly inspired digital roadmap with clear priorities and fresh insights. As part of your review audit and rate your digital capabilities, infrastructure, and experience to measure how you stack up against your competitors and where urgency is greatest.

Increasing Focus and Agility

COVID has been a catalyst for change and we have seen how quickly companies can pivot during these unprecedent times. Are you able to lift your focus and agility? Your organisation could benefit from having greater clarity of focus and alignment of strategic objectives to reduce silos, empower collaboration and agility, and inspire your top talent.

As you begin to reset your digital strategy, make sure you revisit your priorities, customer journey and experience, innovative ideas, digital roadmap and increasing focus and agility.

Looking to reset your own digital strategy? 

Let us help. To learn more about how to reset your digital strategy contact us on whiteark@whiteark.com.au

Tracking the success of your strategy

A strategic plan is critical to driving alignment across your organisation; it provides clarity, direction and focus. But how do you know if your company is headed in the right direction, moving towards achieving your goals, delivering your strategic plan? The answer is… measurement.

During the process of building a strategic plan, you set strategic goals; outcomes that the company attempts to reach when crafting a strategic plan. In order to work towards achieving these goals it is important to measure key performance metrics that indicate whether you are on track to achieving your goals.

There are many options for performance metrics, and choosing the right ones can be challenging, but it’s crucial to decide carefully because these metrics will be the focus of effort in your company to help reach the most valuable goals. Tracking the wrong metrics is almost as bad as tracking nothing at all and can lead to poor decision making, along with a waste time and money collecting information that is not going to benefit the business.

When deciding on the right metrics for tracking your strategy’s success, there are a few guiding principles:

Align your metrics to your strategic objectives

Your metrics should be clearly tied to your strategic objectives and move your employees toward the actions you want. Metrics will consider all areas of the business to ensure all departments have clarity on how they impact the overall company goal.

Keep it simple

Don’t overload staff with too many KPIs to track.

Maintain up-to-date data

Be sure your measures include the latest data and are reported on regularly, as this is the key to making them a source of feedback on efforts and an early warning system for problems.

Use dashboards

Be sure to present data clearly using easy to understand visuals. Performance dashboards are an excellent tool for tracking key metrics. Your dashboard metrics should make it impossible to hide from failure.

Review metrics

You should review your metrics to discuss the progress of your strategic plan, and to ensure your choice of measures are the right ones - providing useful information and stimulating the best results.

A well-designed set of KPIs should provide a clear indication of current levels of performance and help your people make better decisions that bring the business closer to achieving its strategic objectives.

The right metrics will:

• Help you identify how your business is currently performing

• Tell you what to focus on

• Provide direction and alignment across the organisation

• Help with decision making

• Drive desired performance results

• Ultimately achieve your strategic goals

Looking to track your own success?

Let us help. To learn more about how to build your strategy contact us on whiteark@whiteark.com.au

People Working from Home

Prior to the outbreak of COVID-19, many corporate employees felt that working from home was a treat, but how are people feeling now that they have no choice but to work from home?

Are you feeling connected enough to your superiors and team members? Are you feeling more or less productive? Are your stress levels heightened as you try to balance your work and home life at the same time, in the same space?

Before COVID-19 was detected in Australia a third of the country’s population was regularly working from home but in May 2020, during the peak of Australia’s first wave of coronavirus, almost half of the population was primarily working from home and this remains in place as everyone who CAN work from home MUST work from home.

Results from a OnePoll survey that queried 1,000 office workers working from home revealed:

80% 

of respondents believe working from home will be more common post the recovery period of COVID-19.

50%

Almost 50% are working more productively during the time they would usually spend commuting to and from work.

32%

are more focused because they are less distracted by colleagues.

70%

believe they have been more productive working from home than they otherwise would have been in an office environment.

36%

feel less stressed.

35%

said they prefer traditional job roles involving working from the office five days per week.

COVID-19 is a catalyst to redesigning the future of work, and create opportunities for organisations and leaders to look at things differently. 

The working from home trend could prove to be much more enduring than the pandemic, permanently changing Australia’s working culture, as working from home is likely to become a core part of the new normal.

There’s no blueprint for what we’re currently enduring and business leaders around the globe are adapting strategies to keep up. In addition to enhancing digital skills and improving infrastructure, it is vital that leaders focus on empathy as transformation and disruptions become the new norm.

Leaders need to proactively equip their teams with not just physical resources, but skills, mindsets, behaviours and values, that are vital in establishing strong and supportive foundations for remote working. Teams need to be more adaptive and stay constantly connected. Control has to some extent given way to trust, and people are learning how to do work disparately and with far less oversight. Be patient, be understanding and offer guidance and support where possible.

Please keep safe and stay connected, it is important to be mindful of everyone’s situation during these times.

Top tips for managers and leaders to successfully lead their team through Covid 19

Covid 19 has changed the way we work and lead teams.

It is really important that managers and leaders can recognise the new challenges facing employees.

The isolation of working from home impacts individuals differently and so leadership styles need to be reflected on and adapted to this new way of working.

Communicate, communicate, communicate

• Communicate clearly, often and simply

• Provide a clear understanding of what is expected from your team,  set clear priorities and expectations of roles 

• Be available via regular catch ups individually and team – phone and zoom/Microsoft teams mix it up as people are getting Zoom /Microsoft teams’ fatigue!  Don’t cancel these unless really need to

• A robust performance appraisal process with measurable KPI’s will help with this. But these may need to be reviewed and adjusted, make sure they are realistic

• Share what you can about how the business going

• People are uber sensitive about their job security, so it is important that they have a sense of being informed and kept up to date

Stay true to your values and culture

• Core values inform and reinforce your company’s culture, strategic direction,  recruitment processes and how you interact with your customers and clients

• Acknowledge that the meaning of values might vary with these challenging times, with most people remote working

• Lead by example

• For employees to adapt they need to feel valued. This will assist in their productivity and ultimate success. 

• You want your culture to be one that is supportive, empathetic, inclusive, collaborative, proactive and encourages initiative

• Recognize and reward employees who embrace and live the values, call this out int team forums

Genuinely care about your teams’ well-being

• Check in regularly and ask how your team really are, truly listen

• Be flexible to their person circumstances

• Show that you are human too, be authentic, talk about your fears, answer questions and reassure them about work and personal issues

• Have fun – in these challenging times find ways to connect and have fun…ask the team what works for them

• Promote your company Employee Assistance Program - make sure employees know where to find information, guidance and support for mental health

• Find out from your team what in terms of wellbeing initiatives, some suggestions are 10,000 /day step challenge, 1 hour/ day to do someone that makes you feel good, exercise/cooking relaxing this helps connectedness with employees and increases morale

• Promote the wellbeing initiatives that already exist

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Need a hand building your organisations capabilities to lead through Covid-19?

Let us help. To learn more about building and executing an inclusive strategy for your employees, contact us on whiteark@whiteark.com.au

Article by Phoebe Reid

Key things to consider when resetting your strategy post COVID-19

The COVID-19 pandemic has created unprecedented disruptions for a range of industries and business that will influence the ways in which companies operate in the future. 

As businesses shift from response to recovery phase, they need to build resilience, and we believe the key things to consider when resetting your strategy are:

• Be nimble – foster an agile approach to strategy setting

• Digital transformation

• Data and Analytics – enabling smarter, data-driven decisions

• Rebalancing of activities

BE NIMBLE

Agile decision making and strategy setting during a highly disruptive environment will result in greater performance and create a lead over the competition. Companies should consider making a deliberate effort to look beyond the immediate challenges and issues that have arisen as a result of the pandemic and not only plan for the recovery period but also to renew their long-term plan for the “new normal”. There are three key phases to resetting your strategy during a disruptive environment.

Respond. During the initial phase of disruption focus immediate actions on keeping essential business functions operating.

Recover. Move focus to stabilising operations in a more organised and coordinated effort by creating a plan to restore to a scalable state and identifying capabilities that are required to strengthen, refactor, reopen, rehire, rebudget and resupply.

Renew. Shift focus to longer term strategy and durable execution by learning to conduct operations processes and workflows in new, repeatable, scalable ways and then take the learnings and patterns from prior phases to establish the new strategic plan.

Businesses should (if they haven’t already) create a minimum viable strategy and use adaptive tools and techniques to iterate as the new normal emerges. Leaders need to act now because the acceleration of trends are already underway, and businesses need to be faster, bolder, and more agile than ever before to succeed. Strategic planning should become a continual activity so businesses can respond quickly to unavoidable changes.

DIGITAL TRANSFORMATION

Prior to COVID-19 digitisation was an area of interest for a lot of companies, but the impact of the pandemic has forced companies to adopt sooner - accelerating digitisation. All industries are impacted by the evolution of technology in some way and to avoid being left behind, companies must consider digital transformation when resetting their strategic plan. Consumers and customers have begun to alter their buying patterns and shift to digital channels, products, and services. In this context, businesses need to rethink their business model and how digitisation can enhance their customer experiences, value propositions, go-to-market strategies, and operations.

The benefits of digital transformation include:  

• Simplification of business processes

• Reduce operating costs

• Business growth

• Enhance digital innovations

• Accelerate speed to market

• Enhance productivity

DATA AND ANALYTICS

The use of data and analytics should be considered when resetting your strategy, as it will become an essential navigation tool, enabling smarter, data-driven decisions in a timely manner. Those who embed artificial intelligence and analytics across the company will be in a superior position to divulge the value waiting to be unlocked. The use of data and analytics will need to be recalibrated to reflect the post-COVID-19 reality, this will involve validating models, creating new data sets, and enhancing modelling techniques.

REBALANCING OF ACTIVITIES

As part of resetting your strategy, you should also consider the rebalancing of activities between those that are performed in-house and those that are outsourced, with a focus on capitalising productivity and preventing any potential disruptions to supply chain.

Looking to build your own post-Covid strategy?

Let us help. To learn more about how to build your recovery strategy in this new landscape, contact us on whiteark@whiteark.com.au

Real Estate Services in Australia

Industry Report

Real Estate Services in Australia

The Real Estate Services industry is forecast to expand over the next five years by 2.4% to $29.7B.

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OVERVIEW

Residential housing prices are expected to rise, driving an increase in the number of housing transfers. However, forecast increases in loan rates and growing competition from digital competitors are anticipated to constrain revenue growth.

Strong consumer demand and higher sales prices will boost operators' commissions, although this increase will likely be offset by increased investment in technology to enhance their operations. Online listings are anticipated to increasingly compete with the industry's services, as they allow vendors to bypass real estate agents.

The commercial property market is anticipated to strengthen. Demand for office space is projected to increase as Australia continues to transition to a service-based economy. In addition, demand for industrial real estate is anticipated to grow marginally. Demand for retail space affiliated with food consumption, such as restaurants, cafes and bars, is likely to remain higher than demand in the wider retail property market.

Technological advancements are likely to increase the popularity of virtual property tours. Operators are also anticipated to adopt new application processes that incorporate customers' smartphones and dedicate more of their marketing budget to online initiatives.

External competition trends that have developed over the past five years, primarily relating to the digitisation of real estate services, are expected to continue. Several real estate advertising websites have caused controversy by using their increasing market power to raise advertising costs, using their data for free property valuations and approaching vendors directly to upsell advertisements. Some property operators have responded by withholding price advertisements from their websites, which has affected property valuation data. The industry's new operating environment will require firms to reassess their business models to ensure they retain a significant role in selling and managing property.

Employment is forecast to rise over the next five years, with many operators responding to rising competition by employing additional staff with greater expertise and technical knowledge to retain or win customers.