Does it take a crisis for change to occur quickly?
In general companies are slow to make a change but when faced with a crisis they were able to respond differently, quickly, decisively and achieve an outcome. Why does it take a crisis to make a change this quickly? In recent conversations on this topic with my network, many people believe that's just how it is and nothing you can do to fix it -- but I'm not convinced that is right...
Sitting around the table at Christmas everyone talked about how quickly their companies responded to Covid-19. People were shocked and surprised and impressed all at once.
In general companies are slow to make a change but when faced with a crisis they were able to respond differently, quickly, decisively and achieve an outcome. Why does it take a crisis to make a change this quickly? In recent conversations on this topic with my network, many people believe that's just how it is and nothing you can do to fix it -- but I'm not convinced that is right and would love to explore this further.
Speed is a differentiator for companies:
• Speed to market competitive advantage
• Speed on process drives efficiency and productivity
• Speed to deliver product or service
• Speed to pivot when something goes wrong
So if speed is so important why don't companies focus on what is slowing them down and focus on increasing speed. There seems like a lot of benefits of speed.
The Four Factors…
Below are 4 key factors that slow companies down. Do any of these resonate for your company?
1. Process, policies and red tape.
Companies implement processes, policies and standards to ensure consistent application of outcomes across the company. This can create barriers for speed to get things done.
2. Unclear accountabilities.
It's not clear who is responsible or accountable for the activity. Many meetings but no one takes responsibility.
3. Unclear delegation.
It's not clear who can make the decision or it needs executive approval and therefore this is a formal process that takes time (6-8 weeks).
4. Leadership team unable to make a decision.
They go around in circles on the pros and cons before making a decision - sometimes a decision is ever made. Making no decision is worse than making the wrong decisions.
I don't believe there needs to be a crisis to speed up businesses.
Survival and competitive positioning rely on speed and therefore every company needs to consider how they increase their speed. Consider what is slowing your company down and what changes are required to speed it up and the benefits.
Reflect, reset and charge -- take charge in leading your company to increase the speed across all aspects. What are you waiting for? Time is money!!
Looking to reset your own strategic priorities and make some change in your organisation? 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 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
Measure what matters
It seems simple and makes sense but many companies struggle to track and measure their financial and strategic performance. At the beginning of the year, as you reset your priorities post covid-19, it is imperative that you understand a range of metrics and measurement tools. Having a weekly scorecard that measures your top 10-15 metrics is critical.
It seems simple and makes sense but many companies struggle to track and measure their financial and strategic performance.
At the beginning of the year, as you reset your priorities post covid-19, it is imperative that you understand the following:
• Lead indicators of financial health
• Key measures that are aligned to your strategic priorities
• Targets for your key measures
• Accountabilities for the key metrics
• Investment required for each metric
• How each metric feeds into the financials of the company
Having a weekly scorecard that measures your top 10-15 metrics is critical. When metrics are off target having clear accountability for someone to build a plan to address and reset expectations and understand impact on the financials.
A very simple scorecard is a very useful tool to drive the right focus across the company. If you have too many metrics, you will lose your focus on the ones that are most critical.
Example metrics:
It is important to use a simple format that calls out variances to targets or prior comparative period. See below example.
A weekly / fortnight meeting to walk through metrics with actions and follow ups is critical to driving the right behaviour. Performance reviews and incentives should be aligned with these metrics to drive the desired strategic/financial results.
At the beginning of 2023 make sure you spend time getting this right. If you need help please reach out to us, we have a lot of experience with building metrics scorecards for companies and help drive accountability across the leadership team.
I believe driver trees are critical to determining your key metrics – please check out our recent article on driver trees here.
Change isn’t easy, our guide to successfully navigate change
Change is not easy. There are so many leadership books around change. Leading people through change, the change curve etc stories to tell people, videos to get people engaged and management courses on how to navigate it but change is a strange thing….
Change is not easy. There are so many leadership books around change. Leading people through change, the change curve etc stories to tell people, videos to get people engaged and management courses on how to navigate it but change is a strange thing…
There is a natural resistant to change – more often than not people will put up a wall in relation to change – there are so many reasons not to change, to not do thing differently but above all else change takes effort and courageous and most people don’t want to make the extra effort or be courageous enough.
This explains why 70% of organisations fail to executive change. They have the plan and strategy and it all makes sense but can’t make the change. This is a major issue, cost and reason for poor financial / commercial outcomes for businesses, so what is the secret?
Strong leadership that explains the why and takes people on the journey to deliver. A mandate to make change in the organisation is required from the senior leaders / shareholders otherwise it will fail. Having strong leaders that understand the why and how and work with the team in the trenches to drive champion celebrate and push the change.
It’s not easy - it takes tenacity and persistent to continue to make changes to the organisation. If you are doing it right there will be resistant and push back and barriers for you to keep going – you then know you are on the right track. Find some people that support the change and can help champion with you to provide support.
Looking Back…
Looking back it’s the time in my career when I have overcome and adversity and made change despite the naysayers that I am most proud of the outcome. Delivering outcomes for businesses is what I love – making a different to commercial model and financial outcomes is my number 1 passion. There is such an opportunity to make a difference for businesses especially post COVID but having the courage to do this is critical.
What are the key things you should consider when making change:
Having support at the senior level for the change
Being clear on the why and communicating this
Getting people to see the greater good of the work that needs to get done
Track and measure the outcome
Hold people to account
Looking to reset your own strategic priorities and make some change in your organisation? 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 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
Advice for resetting strategic priorities
From a recent poll on LinkedIn, 50% of people responded that resetting strategic priorities was a key focus area for 2021. It makes sense, 2020 was a very different year to what people had planned. Companies pivoted, reacted, and made decisions that were focused on survival. Survival mode was the ultimate focus; do we have enough cash in the bank?
From a recent poll on LinkedIn, 50% of people responded that resetting strategic priorities was a key focus area for 2021. It makes sense, 2020 was a very different year to what people had planned. Companies pivoted, reacted, and made decisions that were focused on survival. Survival mode was the ultimate focus; do we have enough cash in the bank? Can we manage through this period of uncertainty and upheaval and survive to see the new world?
Everyone is excited to see the back of 2020 and focus on the new 2021. We are not back to normal and never will be, but it’s a chance for a clean slate, a chance to reset and a chance for companies to transition from survival to revival. Resetting your strategic priorities is paramount and will ensure that you set your business up for success. Your employees are looking for leadership, vision, and a roadmap for the future. We have provided 5 key tips to resetting your strategic priorities.
5 Key Tips to Reset your Strategic Priorities
#1
Understand your customer and consumer behaviours
How has COVID changed the behaviour of your customer and consumers? The purpose of your business is to deliver a product or service to a customer/consumer. Understanding trends of their behaviours, expectations, wants and needs is critical. We’ve published a range of articles on the impact of Covid, from reports to industry trends and tips on how to adapt and embrace agility - to get your hands on them, simple search our Thought Leadership articles for ‘Covid’ or click here to explore.
#2
Develop a roadmap focused on targeting the customer and consumer expectations
A new product/offering
A new go-to-market model
A new pricing model
A new service model
A new operating model
Move quickly to get the best place in the market. What do your customers and consumers expect, want, and need and how are you going to pivot your model to give this to them? If you are not sure, do some tests and trials to understand the reaction to some options and what gains the most traction. Explore more here.
#3
Find money to invest
This is the time to invest. If resetting your priorities is critical to ensure your business is successful, then you need to stop other things and find the money to invest for your desired future state.
Cash has been tight for businesses so you need to reassess your priorities and review all expenditure. Just because you have always spent money on something doesn’t mean it’s a good investment. It’s time to look at all expenditure and assess what is required to run the business and what can be repurposed to invest in the future. The businesses that make this change/pivot will be the most successful. Find out more by watching our ZBB Video on YouTube or reading the Whiteark Zero Based Budgeting Guide here.
#4
Invest in your people
There are two main considerations:
Do you need additional capability in your business with your change in approach/strategy?
How do you retain your top talent with development opportunities within the business? Know your talent and maximise the value that the business gets from the talent.
There is a war on talent and it’s a good time to secure exceptional talent for your business. You need to understand your capability gaps and focus on getting the right people in the business to be the subject matter experts. It’s imperative that you focus on recruiting the right talent that you will need for the future, not just what you need today.
Companies spend money on recruitment but don’t invest enough money on development opportunities for their people. This doesn’t mean formal training but internal development opportunities to work in different areas, work on projects and gain new experiences. It’s time to invest in your top talent to ensure you get the best out of them. Want to explore more? Read our article on The war on talent.
#5
Measure the metrics that matter
It’s true that what gets measured gets done. Take time to understand the metrics that are aligned with the company’s strategic priorities – lead indicators are critical to ensure that the company is on track. One scorecard that measures the top 10 metrics that are aligned to the strategic priorities is critical to monitoring your success. You also need to have clear ownership, roles and responsibilities for each metric. Want to explore more? Read our article on What gets measured gets done.
Resetting your Strategic priorities is critical to set your business up for success in 2021.
Take time to reflect on what is working and what needs to change. The 5 key focus areas above is a good structure to consider when updating your strategic priorities.
Looking to reset your own strategic priorities? 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 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
The New War For Talent - Get Ready in 2021
Are you ready for the new war on talent? Does your company have the capability it requires for the new post COVID world? Are you actively searching for the capability your business is missing. If not why not. Through 2020 companies have pivoting on strategy, priorities, reset targets and navigated the new uncertain environment that we now live in.
Are you ready for the new war on talent? Does your company have the capability it requires for the new post COVID world? Are you actively searching for the capability your business is missing. If not, why not?
2020 brought:
Headcount freezers
Salary reductions
Low or no bonus payments
Lack of job security
High unemployment rate
Increase in gig economy employees
Through 2020 companies have pivoting on strategy, priorities, reset targets and navigated the new uncertain environment that we now live in.
In light of these changes companies need to critically assess the capability of the business / teams to ensure that the organisation is set up for success in this new post COVID world.
As a leader making difficult people decisions is the hardest and most important part of your role. Looking at the overall capability of the team / business versus what is required to deliver on the strategy and priorities and hiring the right person / right level is critical.
If you lead a business or team have you reassessed the capability required for your new priorities and have you ensured the team is set up for success. It’s critical that you identify these areas early and ensure that you utilise a good recruitment firm that understands your business, your culture and understand what you need to be successful.
2021 is the year of the ‘new war’ on talent. There is talent in the marketplace that wouldn’t normally be there due to COVID, people are looking for new opportunities and change in priorities and it’s a really active market. Don’t miss the opportunity to get the right talent for your business.
Areas that are going to be hot in the market in 2021:
Process reengineering – being able to process improvement efficiencies across the business to drive overall reduction in costs and better customer experience
Transformation leads – to be able to help business execute changes to drive sustainable savings. These are unicorns to find people that can execute transformation and ensure savings can be realised
Data & analytics – do we really understand our customer, consumer trends and how this impacts their behaviour and using predictive analytics to drive operational and strategic decisions
Cashflow management – process, cashflow forecasting and tactical and strategic levers to maximise cashflow and minimise working capital management
Reporting – regular reporting and insights on key lead indicators to understand the performance of the company and ability to pivot where changes are required to be made
You are a leader of your organisation / team – make bold people decisions that drive the best outcome for your shareholders / members and ultimately your employees. Your decisions might not be popular but they should be strategic and focused on ensuring the organisation can maximise the outcome.
The biggest differentiator in any organisations results is the leadership team – right people, right structure and clarity on accountability between the key areas of the business. An open culture where the leaders are encouraged to challenge each other and put ideas and thoughts that focus on the strategy of the organisation. When Private Equity companies buy companies they assess the investment teams considering the strength of the management team and providing structure and incentives to drive the best behaviour. When a company is bought normally 65% of the leadership team are changed and CEO is removed in first 12 months. Private Equity companies understand the value of the right leadership team and the sooner they get this sorted the sooner they can focus on maximising the business outcomes.
Many leadership books talk about lessons learnt and many say – I shouldn’t have wasted time to make changes to the team, I should have moved earlier and wanting to be popular leader made me not want to make the changes that were required and ultimately didn’t generate the respect of the people in my team.
As a leader you have a massive responsibility to navigate and ensure the business is making the right business decisions – start with your people. If you haven’t got the right leadership team you can spend all the money in the world on transformation, system changes, processes etc but it won’t give you the outcome that is critical.
Don’t miss out on good talent that your business needs. 2021 is the year to be bold in business which means getting your leadership team right and ensuring that capability gaps are fixed with the perfect hire.
Keen to know what you think on the challenge on talent... Let us know on LinkedIn and tag us in discussions on #whiteark
2021 will bring:
New strategy
New priorities
New operating model
It’s the time to assess the capability in your own organisation. What capability does your company need? What are you missing?
Looking to capitalise on these trends and plan your own people strategy? 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 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
The 4 Rs - Reflections & considerations as the year closes out
It's been a tough year for many -- and people are limping to the finish line. It's time for a break and get yourself ready for 2021. 2021 is going to be another busy year so getting yourself refreshed and ready is critical and taking the time to relax, refresh reflect and reset is critical.
It's been a tough year for many -- and people are limping to the finish line. It's time for a break and get yourself ready for 2021.
2021 is going to be another busy year so getting yourself refreshed and ready is critical and taking the time to relax, refresh reflect and reset is critical.
Christmas is generally crazy eating, parties and a lot of people to connect with. It's fun but can leave us feeling more tired.
Relax
What makes you relax? Everyone is different. For me going for a walk, writing in my journal and doing a jigsaw puzzle all are things that help me relax.
Refresh
Taking time for yourself. Sleep, exercise and eating healthy are a good start! What's does refreshing look like for you?
Reflect
In the craziness of the year it's hard to really reflect - what worked well this year, what are my priorities for next year and what do o need to change to make this a reality?
Reset
Be bold. Make sure you make the change to ensure you achieve your priorities. It's not easy - and it's normally outside your comfort zone so be accountable to drive through outcome.
Ensuring you take the time on the 4Rs is critical to ensure you are refreshed for 2021. These 4 Rs are critical for you personally but also for your business, especially the last two.
Reflect - On key lessons learnt for the year (2020) in your business and team. What worked well? What could be improved?
Reset - What are the priorities for 2021? What changes are required to deliver these? How do we measure success across the year?
For most businesses 2020 has been a challenging year, it's imperative that they start 2021 with the following:
Alignment and clarity on what good looks like - reset priorities, measuring success and understanding the impact of changing consumer and customer trends
Transitioning the team back to the office - it's an interesting challenge
Assessing capability in the business - what is missing and focus on development and recruitment
Many organizations are organising planning sessions with leadership in new year to align. It’s an excellent idea to get this alignment underway early in the new year.
Over the Christmas break Whiteark will continue to give you podcasts, thought leadership and thought provoking polls to help you through your 4 Rs and get your head focused on returning back to the new year with a good reset.
Whiteark has extensive experience in resetting strategy, defining priorities and identifying and measuring key success metrics. If you need some help reach out to us.
Seven Days Until Christmas
2020 has been a year of change. We are often resistant to change, but during a crisis we are forced to adapt as a matter of survival, we look for opportunities, and we are more susceptible to taking risk. A crisis is a great catalyst for innovation, “if you don’t create change, change will create you”.
The countdown is on, and we’re taking a look at 2020 and the year that was…
2020 has been a year of change. We are often resistant to change, but during a crisis we are forced to adapt as a matter of survival, we look for opportunities, and we are more susceptible to taking risk.
“If you don’t create change, change will create you.”
It’s almost the end of another year, but not just any year, the year of COVID-19, one that won’t be forgotten.
2020 Snapshot
… the things no-one ever saw coming!
Disruption across the globe
Faced with uncertainty
Resilience was tested
Lockdown, face masks & hygiene front of mind
Working from home was enforced
Imposed restrictions on gatherings
Travel bans & border closures
Industries, businesses & individuals were all impacted by the Pandemic
Rising unemployment
Agility was forced
Digital acceleration
Changes to consumer behaviour, preferences & expectations
A crisis is a great catalyst for innovation, “if you don’t create change, change will create you”. Over the course of the last 6 months, Whiteark has been committed to providing you with thought leadership to assist with navigating this period of uncertainty. We look forward to sharing more content with you in 2021 as we recover from the impacts of Covid-19.
If you need a hand as you build your business back up again, get in touch with us for a no-obligation chat.
Whiteark Aspirations For 2021
For us at Whiteark we always strive to do better for our clients, followers and our bench. We focus every day on how we can make a difference. We can't wait to continue to challenge, support and encourage businesses to make positive change in 2021 to set their businesses up for success.
We are super excited about 2021.
The next year is going to be a very important year for companies:
To understand the new environment
To pivot strategy and business plans
To engage with their employees and transition back to the office with a new world of managing flexibility
At Whiteark our aspirations for 2021 are to:
Continue to provide support to our amazing clients to successfully navigate and maximise outcomes for 2021
To continue to build out our bench of experienced, passionate individuals to support our clients - we are always on the hunt for talent
Continue to provide relevant and insightful thought leadership to continue to challenge and make people think differently - we listen and respond through polls, surveys and through our podcast series
Launch a series of face to face events with boardroom conversations and key note speakers to support and challenge our customer and follower base to think differently in Melbourne and Sydney
Our podcast series will continue with a focus on hearing from experienced leaders on what makes them tick and key lessons they can share with us about their journey and provide you themes, lessons and easy to digest learnings and takeaways
For us it's always what is next - we always want to think ahead… stay tuned to hear about our partnership with Universities, focused on helping students get practical experience with companies and work towards securing a job during this competitive environment. Whiteark is well positioned to help students with this transition – more to come in the new year!
For us at Whiteark we always strive to do better for our clients, followers and our bench. We focus every day on how we can make a difference. We can't wait to continue to challenge, support and encourage businesses to make positive change in 2021 to set their businesses up for success.
While you're on the beach we will provide you articles, podcasts, quotes and thought-provoking polls to keep your brain ticking over -- summer holidays best time for thinking about how to reset your business for 2021 - no idea is a bad idea. We would love to help you so contact us for a no obligation conversation.
If you want to hear some insights from key leaders, listen to our podcast series The Chiefs Podcast | Leadership, Laughs and Learning — Whiteark
Psst. We share exciting content all the time, that’s useful, practical - and most of all - helpful. Sign Up Here to get yourself on the list and make sure you don’t miss a thing.
Christmas Reflections & Message from Jo
My childhood Christmas was centred around the church. My dad was an Anglican minister. Attending church services, involvement in plays and focus on supporting others who were not as lucky as us during this time. I always enjoyed the midnight service on Christmas Eve and after it we sat and ate some amazing food / gifts that were shared with us. People were very generous and great cooks.
I'm a sucker for Christmas.
Since I've been a little girl, I’ve loved Christmas - so many great childhood memories:
Fresh pine branch - cut down by my dad / brother from our front yard
Very authentic Christmas decorations that were homemade and brought out year after year including decorated pine cones
Stockings filled will lollies and wisdom for the year ahead. My dad gave us a letter every Christmas to tell us why he was proud of us and reminders for the new year. I still have those letters and they have some pearls of wisdom for the new year.
Spending time with family and friends and having a laugh, sharing some food and appreciating the simple things
Summer break was a time to reset, relax and plan for the year ahead - lessons learnt and how to make the most of the new year
My childhood Christmas was centred around the church. My dad was an Anglican minister. Attending church services, involvement in plays and focus on supporting others who were not as lucky as us during this time. I always enjoyed the midnight service on Christmas Eve and after it we sat and ate some amazing food / gifts that were shared with us. People were very generous and great cooks.
As you get older things change, life goes quickly and before you know it it's another Christmas to celebrate! It's easy to make it too hard, stressful and a challenge but it's always good to remember what matters most - spending time with people you love most and to take a break, to breathe and plan your next year - what can I do better and what will make me happy?
For me Christmas means:
1. A real Christmas tree - can't beat the smell!
2. Find a way to send a positive message to the people that I love
3. Finding time to connect with the people closest to me
4. To reflect on the year and key changes for the upcoming year
My dad always thought about others, he was known for his caring nature and being there for others. I learnt from my dad about kindness, generosity of spirit, and making the best of every opportunity.
2020 wasn't the year that anyone planned but it was a great year. So many lessons and experiences and a good chance to reassess priorities and what is important and appreciate the simple things we take for granted.
Take time this Christmas break to;
Enjoy time with family and friends
Take a break and reflection time to think on what is important for you for 2021 and how do you achieve that
Build your goals for 2021
… and remember
Smile and enjoy life – you only get to live once and leave your legacy.
“It isn’t how much time you spend somewhere that makes it memorable: it’s how you spend the time.”
Jo Hands, Whiteark Co-Founder
Public M&A Activity in Australia
Public M&A activity reduced in FY20, largely due to global uncertainty and economic impacts resulting from the coronavirus pandemic. The transactions accounted for in this document involve Australian ASX listed targets that were conducted (or announced as intended to be conducted) by way of takeover bid or scheme of arrangement in FY20.
Public M&A activity reduced in FY20, largely due to global uncertainty and economic impacts resulting from the coronavirus pandemic. The transactions accounted for in this document involve Australian ASX listed targets that were conducted (or announced as intended to be conducted) by way of takeover bid or scheme of arrangement in FY20.
Source: Australian Public M&A Report 2020, Herbert Smith Freehills
TOTAL DEAL VALUE: $13.4bn
FY19 was $45.9bn / (FY15-FY19 average: $36.1bn)
ANNOUNCED DEALS: 51
FY19 was 63 / (FY15-FY19 average: 57)
SUCCESS RATE: 63%
FY19 was 74% / (FY15-FY19 average: 71%)
MEGA DEALS >$1bn: 2
FY19 was 8 / (FY15-FY19 average: 7)
DEALS INVOLVE A PRIVATE EQUITY BIDDER: 29%
FY19 was 21% / (FY15-FY19 average: 17%)
FOREIGN BIDDERS BY VALUE: 60%
FY19 was 80% / (FY15-FY19 average: 65%)
UNSOLICITED TAKEOVER BIDS: 29%
FY19 was 62% / (FY15-FY19 average: 37%)
MEDIAN TARGET VALUE: $124m
FY19 was $109m / (FY15-FY19 average: $102.1m)
The significant reduction in total deal value ($13.4bn) relative to the number of deals (51) highlights the absence of mega deals (>$1bn), with only 2 mega deals announced - the lowest recorded in 12 years.
Private equity emerged as a keen capital provider, with the ability to look beyond the pandemic in making investment decisions.
There was a steep incline in the number of deals announced in the second half of FY20 -- prior to January 2020, 18% of deals were unsolicited and post January 2020, 43% of deals were unsolicited.
Cash has re-emerged as the preferred form of consideration, with 74% of all deals offering shareholders only cash (66%) or a choice of cash (8%) as consideration. Deals were more likely to succeed if cash was offered as a consideration.
LOCATION OF TARGETS PER STATE
VALUE OF DEALS PER SECTOR
10 LARGEST ANNOUNCED DEALS
Looking for some help with M&A? We’re your people.
Whiteark is highly experienced in providing services to Private Equity firms and has had great success at driving an improvement in returns through involvement in portfolio transition and transformation projects. 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. Contact us on whiteark@whiteark.com.au
A Comprehensive Covid Report
This in-depth 28+ page report takes a deep dive into 18 different industries, looking at how they have been impacted differently by the Covid-19 global pandemic, and what industries can do as we enter the recovery and regeneration phase. Source: IbisWorld. Note: This is based on Stage 4 Restrictions.
A closer look at how industries have been affected by the pandemic that swept the world.
Source: IbisWorld. Note: This is based on Stage 4 Restrictions.
Recently, we asked our followers what they wanted. What would be truly helpful to them in these unprecedented times, and the answer? Industry specific breakdowns.
We all know that every sector has been affected in one way or another, there's heaps of generalised statements floating around that provide helpful overviews. But what people were after was a more specific breakdown of exactly what the impact would be to their area of operations and ideas around how they could pivot, adapt and thrive as we move forward into the new world normal.
So, here it is. A comprehensive deep dive into 18 different industries - we hope you enjoy the read.
What's in the report?
Setting the Scene
Impact: How exposed is your industry?
Impact Analysis: Exposure Definitions
Industry Deep Dives
Accommodation & Food Services
Arts & Recreation Services
Education & Training
Manufacturing
Professional, Scientific & Technical Services
Retail Trade
Mining
Construction
Health Care & Social Assistance
Transport Postal & Warehousing
Administrative & Support Services
Public Administration & Safety
Agriculture, Forestry & Fishing
Wholesale Trade
Electricity, Gas, Water & Waste Services
Finance
Information Media & Telecommunications
Rental, Hiring & Real Estate Services
Bonus Article: The Importance Of Innovation
Managing Uncertainty: Three Key Strategies
Charlie Nelson, Director at foreseechange, writes about managing uncertainty - unpacking three key strategies. A recent survey by Whiteark found that people in business were more concerned about uncertainty than any other issue. This is understandable given the shocks of the past year, including extensive, tragic bushfires, the COVID-19 pandemic...
A recent survey by Whiteark found that people in business were more concerned about uncertainty than any other issue. This is understandable given the shocks of the past year, including extensive, tragic bushfires, the COVID-19 pandemic, an economic recession, and electoral mayhem in our most important ally, USA.
When business executives are confronted by increased uncertainty, many seek to cut costs – both operational and marketing – which is usually not an optimum strategy.
We seem to experience major shocks about once a decade and there are smaller unexpected disruptions more frequently. I have listed the major such events that I can remember in Appendix 1. As in 2019-20 there are times when we have to cope with more than one disruptive factor. Other potential catastrophes and their impacts are listed in Appendix 2.
Can we predict shocks such as these, and so prepare? If not, how can we survive such shocks? Why do some companies get stronger during a period of uncertainty? Before addressing these questions, it important to consider the types of uncertainty that we may encounter.
Types of uncertainty
Reports that say there's -- that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things that we know that we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns, the ones we don't know we don't know.
Donald Rumsfeld (then US Defense Secretary) in February 2002, speaking about the lack of evidence linking the government of Iraq with the supply of weapons of mass destruction to terrorist groups.
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
It is a shame that Donald Rumsfeld was not more familiar with Mark Twain’s writing as he may have realised that there are two types of known knowns. One is true known knowns and the other is fallacious known knowns. The latter often stems from a false assumption or theory that has become a strong belief (had he known about the latter category, perhaps Rumsfeld may have referred to it as unknown knowns).
Economist Frank Knight, in 1921, defined risk as a quantity which can be measured while uncertainty is not measurable. That is, we can compute the likelihood of a risk event occurring in a given year (perhaps on the basis of past frequency of occurrence) but uncertainty does not have a known probability distribution.
There may be some factors or events which are impossible to imagine and so these are completely uncertain. This is most likely because they have never happened before. They are the “Black Swans” of Nassim Nicholas Taleb or the unknown unknowns of Donald Rumsfeld. Taleb, in his books Fooled by Randomness and The Black Swan, describes Black Swan events as having three characteristics. The first is that nothing in the past could have convincingly pointed to its possibility. Secondly, the event has an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the event – retrospectively making it appear to have been predictable even though it wasn’t predicted. Technological developments can be Black Swans when it comes to long-term forecasting – for example, it would have been very difficult for someone in 1945 to imagine that in less than 60 years there would be cheap, very small and powerful personal computers with high bandwidth links to billions of others.
There are some events which we know can happen but we don’t know where or when and how severe their impact could be. These could include extreme weather events (such as hurricane Katrina) and other natural events such as volcanic eruptions, earthquakes, tsunamis, large solar flares, collisions with large meteors or comets. Then there are disease pandemics and terrorist acts. While these are highly uncertain, we know they can happen and may be able to take some precautions – such is improving the levee banks for New Orleans, constructing resilient buildings in earthquake prone areas, developing tsunami and volcanic eruption warning systems, and developing new medicines.
Financial markets and consumer markets can also suffer from events which we know can happen, but we can’t predict their timing or likely severity.
Then there are changes which are slow moving and there is little uncertainty about their impact – and yet we take little or no precautionary action. The only uncertainty is when we will act. Examples of this type of change are provided in Appendix 3.
Can we predict shocks and so prepare for them?
Yes, we can predict some types of shock and we can have some idea of their likelihood. The following is from the editorial of The Australian Financial Review of 4 July 2011.
“Imagine this. The year is 2017 and a virulent strain of H5N1 avian flu has jumped from poultry to humans in the crowded southern Chinese city of Guangzhou. The virus quickly spreads across the porous border into Hong Kong, then sweeps rapidly through the rest of Asia. The World Health Organisation declares the outbreak a pandemic as governments around the globe break open their vaccine stockpiles in an effort to protect their citizens from the deadly virus. But the measures taken by health authorities do little to stop the spread of the virus. The pandemic ends up killing more than 50 million people around the world, transport and trade systems grind to a halt, and the global economy tips into a recession more severe than that caused by the financial crisis of 2008-10.”
The 2020 pandemic occurred three years after that posited in this scenario. It was not avian flu, but a corona virus – although it did transmit from an animal and probably started in China. As at 30 November 2020, 1.46 million people have died rather than 50 million but 63 million are known to have been infected. The current global recession is indeed more severe than that of the financial crisis of 2008-10.
The scenario cited by the Financial Review was from an OECD report at the time, which identified and described several other potential shocks.
The current pandemic has been described by some as a one in a hundred year event by reference to the so-called Spanish flu of 2018. It is not! There was a deadly flu pandemic in 1957-58 which killed more than a million people worldwide (Asian flu). The Hong Kong flu pandemic of 1968 also killed more than one million. In the past 17 years there have two earlier deadly corona viruses – SARS (severe acute respiratory syndrome) in 2003 and MERS (middle east respiratory syndrome) in 2012. They petered out, but should have served as a warning.
Despite these warnings we were unprepared for the pandemic. We did not have enough supplies of personal protective equipment and sanitiser. There had been no pandemic rehearsal for over a decade.
Managing uncertainty means that we should treat how we managed this pandemic as a dress rehearsal and learn from the experience. There will be another pandemic and it could be soon.
It was possible to predict a severe economic slowdown in 2008-09, but people in power at the time did not want to see the signals. In mid-2007, I was able to predict the slowdown in Australia and to warn my clients. I realised that three shocks could occur together in about mid-2008 and that the combined impact would be a significant slowdown. One was the sub-prime home loan boom in the USA, which was likely to slow their economy when the bubble burst. Another was the Reserve Bank of Australia’s interest rate policy. They had been lifting interest rates since 2002 in an effort to quell inflation. I knew they would go to far and so they did, lifting interest rates in August and November 2007 and in February and March 2008. By the end of 2004, the proportion of household disposable income which was consumed by interest payments exceeded the 9.7% record set on the eve of the recession of the early 1990’s. By mid-2007, the burden was 11.7% and yet the Reserve Bank piled on the misery, lifting the burden to 13.3% on the eve of the GFC! They obviously did not see it coming. The third predictable impact was associated with the Beijing Olympics in August 2008. I had visited Beijing in April 2007 and witnessed the huge construction boom as the whole city was reconstructed – not just sporting facilities. A metro with 500 underground stations, whole villages demolished and replaced with apartment towers – all built using steel made from Australia’s iron ore! It had to come to a shuddering halt before mid-2008.
The Reserve Bank of Australia did not see the GFC coming, but they were not alone in that.
Legendary US Federal Reserve Chairman Alan Greenspan said in 2008 "I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms”. He regretted his earlier opposition to regulatory curbs on financial derivatives which left banks facing billions of dollars worth of liabilities.
The danger signs for Australia were there as I have described above, but the experts in charge of monetary policy and financial regulation were oblivious to them. All it took was good general knowledge and imagination to develop the scenario. Both of these skills are important in anticipating shocks.
The 2019-20 bushfires were of unprecedented ferocity, but they were predicted long in advance (see Appendix 4). Adequate preparation was lacking, despite the predictions.
Preparing for uncertainty
We can prepare for uncertainty by using two techniques: scenarios and peripheral vision.
Scenarios are plausible futures, like those described above for a pandemic and a significant economic slowdown. They must be accompanied by plans for managing should they eventuate. Developing a set of scenarios can increase resilience. The aim is to develop plans which can succeed across a range of scenarios. We do not attach a likelihood to each scenario because we are dealing with uncertainty but we may be able to discern which scenario is most likely as time goes on, based on a range of indicators.
Peter Schwartz wrote the early guide to scenario development, “The art of the long view” (Currency Doubleday, 1991). He lists eight steps in the development of scenarios:
Identify the focal point or key decision. This will increase the relevance of the scenarios.
Identify the key factors – what will the decision makers need to know when making choices?
List the driving forces that influence the key factors.
Rank the driving forces by their levels of importance and uncertainty. This will focus the analysis on issues which are both highly important and uncertain.
Select scenario logics – a diverse set of plots spanning the range of plausible outcomes.
Fleshing out the scenarios – develop the narratives associated with each scenario.
Implications for each scenario – what are the opportunities and vulnerabilities revealed by the scenarios and how should strategy be adapted?
Selection of leading indicators and signposts – which can reveal, as time progresses, which scenario is closest to the course of events as they unfold.
The intended outcome is plans which are robust across a wide range of uncertainty. The individual scenarios should be rehearsed so that implementation of strategy adaptation is smooth and efficient.
Peripheral vision
The biggest dangers to a company are the ones you don’t see coming. Understanding these threats – and anticipating opportunities – requires strong peripheral vision.
George S Day and J. H. Schoemaker in “Scanning the Periphery”, Harvard Business Review, November 2005.
Scanning the periphery is all about answering the question “what don’t we know that might matter”. Often management reports are quite internally focused – on the business and the market in which they operate. But demographic change, technological change, regulatory change, environmental change, amongst others can cause major disruptions to a business which are not anticipated.
Peripheral vision involves scanning the broad business and social environments for weak signals of potential change and analysing the implications. This should be a continuous process. Unfortunately, this activity can be seen as “nice to know” rather than “need to know” and investment in it can be seen as discretionary. The global financial crisis which emerged in 2008 was not predicted by economists primarily because of groupthink and a failure of imagination. Perhaps they had not invested enough in scanning the periphery.
Scanning is sometimes referred to as STEEP analysis (Social, Technological, Economic, Environmental, Political) and also has other acronyms such as PESTEL.
Scanning the periphery differs from scenario analysis in an important way. Scenarios start with a focus on the key decisions to be made and then identifies and qualifies influential factors. Scanning starts with the broad business environment and then evaluates how future trends may influence the business. I recommend that both approaches be employed as they provide complementary insights, which increases preparedness.
How can we survive during a period of uncertainty?
Some organisations lapse into pessimism and crisis mode. They cut costs across the board, including marketing, and so hand market share to more optimistic competitors. If the market is shrinking this is devastating and recovery is very difficult.
A study published by Harvard Business Review in March 2010 studied business responses during the three previous recessions to identify the most successful strategies. It was found that the best performing businesses cut costs mainly by improving operational efficiency rather than by slashing the number of employees. They also invested in growth. They developed new business opportunities by making significantly greater investments than their rivals in R&D and marketing, and they invested in assets such as plant and machinery to improve productivity.
During the current pandemic and recession governments and some businesses developed near real-time data so that strategy decisions were not based on out-of-date data. Fortnightly data from the Australian Tax Office on payrolls was used to gauge employment and payrolls, banks provided data on consumer spending via debit and credit card records, the Australian Bureau of Statistics and private agencies conducted more frequent surveys to measure the mood and expectations of consumers and business managers. Health departments provided daily updates on coronavirus infections. Mobility data was provided by Google and Apple.
This is also referred to as “fast data”. It is not only near real time, it is also more granular in respect to location, type of business and consumer demographic.
This regular flow of timely data allowed government economists, health officials, and businesses to adjust forecasts and strategy frequently – to be more agile.
Fast data is essential during periods of uncertainty and our experience in developing information systems over the past year and interpreting fast data will stand us in good stead for the next shock, when it comes.
Can we get stronger during a period of uncertainty?
Harvey Norman sales soared during the pandemic, and so did profits and dividends. Gerry Harvey said it was the best sales growth he had experienced in 60 years of being in retail. “It started off with freezers and then it went to whitegoods and computers, then to televisions and then to furniture and bedding. This performance was not by design, but was a consequence of working from home and compulsory cocooning during the pandemic. Harvey Norman took advantage by strong investment in advertising from the outset.
Other retailers to prosper during the recession have been JB Hi-Fi, Bunnings, Kogan.com, and Temple & Webster.
During the global financial crisis most major brands of vehicles cut advertising investment significantly – because they were pessimistic about recent and expected future new vehicle sales. One brand kept advertising and so significantly boosted share of voice and market share. They have held on to that extra share ever since while one of the big brands then, Holden, have now exited the market. That optimistic brand was Hyundai.
Nassim Nicholas Taleb, of Black Swan fame, recently wrote a book called Antifragile. The theme is that resilience is not the opposite of fragile. Something fragile breaks under stress, while something resilient does not: but something which is antifragile gets stronger under stress. Hyundai during the global financial crisis is a good example of antifragility.
These successes reinforce the findings described in the Harvard Business Review article mentioned above. Investment in growth during an economic slowdown, while also improving operational efficiency, is the best strategy for prospering during periods of uncertainty.
Key strategies for managing uncertainty
1. Anticipate. Use scenarios to construct a set of plausible futures complete with appropriate plans for each. Rehearse the plans and use peripheral vision to be ready to respond quickly.
2. Respond. A strategy which is a mix of improving operational efficiency and investing in growth through increasing market share or creating new opportunity is needed to survive and prosper during a period of uncertainty.
3. Monitor and adapt. Develop a “fast data” capability to increase agility as uncertainty develops, peaks, and ebbs.
Article written by Charlie Nelson, Director Foreseechange
Looking to prepare and plan for uncertainty? 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 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
Appendix
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Appendix 1: disruptive shocks over the past 50 years
This list is intended to illustrate the range of shocks rather than being comprehensive.
Appendix 2: potential disruptive shocks
Every year, the World Economic Forum brings out a risks report. Prominent on the 2020 list were a cyber attack, extreme weather, natural disasters, and human-made environmental disasters.
In 2020 Australian population growth has slumped due to a fall in net migration. Could there be a significant decline in fertility to continue slow population growth? It has been speculated that fertility will fall because young adults will be reluctant to bring children into a world where COVID-19 is still a threat in the short-term and climate change is a threat in the medium-term. The recession also has the potential to cause a temporary decline in fertility due to concerns about unemployment. Australia’s fertility has been running at around 1.8 births per woman and other countries such as Italy and Japan have lower fertility of around 1.3. This topic has been researched by foreseechange and current indications are that a significant decline in fertility for an extended period is unlikely but cannot be ruled out. This research is ongoing.
Solar flares are a hazard for electronic communications. The last major disruption was the Carrington event in 1859, in the days of the telegraph. A huge solar flare followed by a large coronal mass ejection struck Earth and induced huge currents into wires causing extensive and costly damage. Lesser events struck in 1921 and in 1989, the latter causing a huge blackout in Canada. In 2012, there was an event of similar magnitude to the 1859 Carrington event which passed through Earth’s orbit – fortunately, the planet was in a different quadrant of its orbit. A repeat of the Carrington event today would severely disrupt all forms of communication, power transmission, GPS and other navigation, and damage pipelines. The recovery time has been estimated at four to 10 years and the cost at up to $2 trillion in the first year.
In 1908, a large comet or asteroid caused a major explosion over Siberia (the Tunguska event). The energy released was up to 1,000 times greater than the atomic bomb dropped on Hiroshima in 1945. Fortunately the area was sparsely populated, but such an impact on a major city would be catastrophic on an unprecedented scale.
A major volcanic eruption is capable of blocking sunlight over large areas for extended periods, creating severely cold conditions. This can reduce food production and cause illness, as well as curtailing air travel. There have been several such events in history and they may happen about once every 1,000 to 2,000 years.
Appendix 3: slow and steady disruptions
There are changes which are slow, but steady and seemingly irrevocable – because we do too little to manage the consequences and risks. This procrastination has current and future financial and human costs.
One of these is the ageing population, combined with still increasing lifespans. The baby boom of 1946 to 1964 was followed by a baby bust in the 1970’s as women became more able to control their fertility. This meant that there would be a large generation reaching the traditional retirement age around 2011, followed by a smaller generation than would have previously been expected. This future problem was evident before 1980. The predictable consequences were increased funding to pay age pensions, increased demand for health and aged care facilities, and a need to encourage people aged over 65 to keep working.
In the 1990’s a compulsory superannuation scheme was set up and every other predictable need was also put off. We have not caught up with the needed infrastructure and services yet and there are too many people over 65 who want to keep working but who cannot secure a job.
Another is climate change. The countries of the world gathered in Rio di Janeiro in 1992 and agreed to take action to reduce the risk of dangerous climate change. In the 28 years since, the concentration of carbon dioxide in the atmosphere has continued increasing at the same rate. Temperatures in Australia and much of the world continue to increase. Sea levels are increasing at a faster rate.
Appendix 4: predicting extreme bushfire conditions in 2019-20
Twelve years ago, economist Ross Garnaut made a prophecy that has devastatingly come true.
In the 2008 Garnaut Climate Change Review, which examined the scientific evidence around the impacts of climate change on Australia and its economy, he predicted that without adequate action, the nation would face a more frequent and intense fire season by 2020.
ABC News, 8 January 2020
I, too, provided warnings. In July 2011, I wrote to the Victorian water minister predicting severe drought in the period 2017 to 2022. The prediction was applicable to much of south eastern Australia. The reply, In September 2011, said that the driver of drought which I proposed was not considered by mainstream climate scientists to have a plausible mechanism. The reply said that planning processes are designed to cope with variability including severe drought.
In January 2019, I again wrote to the Victorian water minister saying that my prediction had come true and that it was time my predictions were taken seriously. I included a copy of the previous correspondence. It was a different water minister and a government of a different political party, but the reply was almost a carbon copy: the government works with Australia’s most experienced and respected researchers and planning processes are designed to cope with a wide range of climate futures including prolonged drought. Only months later the many victims of the terrible bushfires would disagree with that statement!
Twenty-three former fire and emergency leaders say they tried for months to warn Prime Minister Scott Morrison, beginning in April 2019, that Australia needed more water-bombers to tackle bigger, faster and hotter bushfires. They were not able to get a hearing.
The catastrophic bushfire conditions were caused by both extremely low rainfall and record high temperatures. This combination of conditions was unprecedented, but predicted. The charts on the following page show how severe the conditions were in the three years 2017 to 2019.
Chart 1 shows the annual rainfall in the Murray Darling Basin, along with the rolling three year average. The average over the period 2017 to 2019 was the lowest ever recorded three year period, consistent with my 2011 prediction. Chart 2 shows the mean temperature and the three year average. The three year average temperature over the period 2017 to 2019 was the highest on record by a huge margin. Even more severe conditions may be less than 20 years away!
Chart 1
Chart 2
Article written by Charlie Nelson, Director Foreseechange
A clearly defined playbook with value creation initiatives is critical for Private Equity firms
Revenue contribution to the Private Equity industry in Australia is forecast to decline 3.5% in 2020-21 due to Covid-19 disruptions, however, it is expected to grow 2.6% over the years through to 2025-26 to $725.3M. Private Equity firms need to consider the following four actions to ensure they can add value.
Revenue contribution to the Private Equity industry in Australia is forecast to decline 3.5% in 2020-21 due to Covid-19 disruptions, however, it is expected to grow 2.6% over the years through to 2025-26 to $725.3M.
Private Equity firms need to consider the following four actions to ensure they can add value to individual companies, outperform the market, and become an organisation that can confidently generate attractive returns:
Articulate a new, clear value proposition either through specialisation or economies of scale.
Achieve excellence in talent, governance, and organization.
Refine how to successfully originate and execute on deals.
Prepare for successful exits at least 18 months prior to a planned exit; allowing time for asset owners to shape a compelling equity story.
The pressure for Private Equity firms to achieve profitable returns is critical, even more so in today’s economic environment. In order to be certain they can achieve consistent returns in the fund they must focus on purchasing the investment at the right price and focusing on accelerating value creation initiatives to ensure that they can sell at a significant increase in multiple.
Private Equity firms must have a clearly defined playbook which contains value creation initiatives to support the investment thesis. This provides an advantage in knowing what to pay and the level of risk. The playbook should be refreshed and prioritised for each investment.
An asset’s full potential is realised through a holistic approach that optimising operational performance, enhancing strategic capabilities and effective capital management. The efficient use of capital is also a critical component of valuing an asset’s full potential. Capital deployment is an important foundation to support strategic and operational initiatives.
Strategic Levers
Drive Multiple
Transforms the Business Model
Mergers and acquisition
Geographic expansion
Customer segmentation
Strategic pricing
Product strategy and innovation
Aftermarket/service strategy
Distribution strategy
Digital transformation
Data strategy
Operational Levers
Drivers EBITDA Margin
Transforms Execution of the Business Model
Pricing optimisation
Sales force effectiveness
Product portfolio optimisation
Operational efficiencies through optimisation – manufacturing, distribution
Cost to serve
The business world is changing with the rapid evolution in technology, and in order for Private Equity firms to maximise the returns on their investment funds, a value creation focus in digital transformation is important.
The goal of digital transformation is disrupting existing business models, improving customer experience, and creating operational efficiency.
Strategic acquirers are more likely to pay higher multiples for successfully digitised companies, given that they are easier and faster to analyse and integrate.
Looking to create your own playbook? Let us help.
Whiteark is highly experienced in providing services to Private Equity firms and has had great success at driving an improvement in returns through involvement in portfolio transition and transformation projects. 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. Contact us on whiteark@whiteark.com.au
Transforming your B2B Sales Team
B2B buying behaviour has become even more unpredictable with COVID-19 and as a result driving customer retention challenges for many organisations who have traditionally leveraged the sales function to manage high value accounts.
B2B buying behaviour has become even more unpredictable with Covid-19 and as a result driving customer retention challenges for many organisations who have traditionally leveraged the sales function to manage high value accounts. A multinational client shared with us that their frontline sales teams were now working remotely as their ability to generate face to face meetings with their clients had become near impossible.
Whilst this trend has been disrupting field sales for many years it has almost definitely been brought to a head and compounded by the pandemic this past year.
Our data and research suggests’ that today’s buyer wants to engage with suppliers through digital channels at least initially. To meet this omnichannel experience for the buyer sales functions will need to leverage new skills and learn to execute the new technologies at their disposal.
The future of sales has been permanently transformed and as a consequence companies that want to be relevant in a sales economy tomorrow need to ensure that their sales processes are bookended and supported by a ‘digital’ engagement will all customers.
Research* suggests that B2B customers are leveraging digital channels for information and guidance prior to engaging sales representatives. In many cases respondents suggested post acquiring the knowledge they needed to make their buying decision they opted away from any engagement at all with the sales rep.
Furthermore, as buyers move more towards digital platforms to help them navigate their decision making process, they are rewarding those companies that have invested in seamless omni channel experiences, hence from a selling perspective ensuring technology is underpinning the sales process has become more critical than ever in terms of revenue protection.
Despite the enormous rhetoric around data and its importance over the last decade research* also suggests that most sales led companies fail to leverage data and AI capabilities to capture customer and buyer behaviour hence enhancing the risk at a relationship level between the sales representative and the customer.
“Sales companies that plan to succeed moving forward must move their cultures towards being the leaders of the selling process as opposed to being the leaders of sellers. ”
That requires a shift in the strategy and focus away from sales professionals as the primary and predominant channel to market and a move towards digital sales channels that are supported by personal human engagement at the appropriate moment for the buyer. In this new world sellers’ decision making will be driven by data, analytics and AI, not on intuition and experience.
A key shift for organisations seeking to transform their sales functions will be their ability to pivot to a model whereby they can be ready to engage a customer in whatever channel they are seeking to be served whilst in parallel having an ability to execute effective selling.
Sales leaders have an opportunity as we move into this next chapter of selling to help navigate their organisations by creating a roadmap that is focused on aligning to their capabilities around customer buying behaviour.
Simple considerations for transformational roadmaps might include:
Position your salesforces as the facilitators of education in the buying cycle
In a world where it’s never been harder for the sales teams to engage and influence buying decisions sales needs to be focused on helping customers feel more confident in their assessment of data and ultimately their buying decisions.
Focus on increasing the digital capability of your sales team
By focusing on up-skilling your sales teams and increasing their digital competence, you will be able to enable your sales team to sell more effectively across various digital channels and in turn be able to be more visible and present to the customer and their buying pattern.
Reconsider your GTM channels so as they embrace more digital engagement points
Moving towards a customer centric channel approach will force your organisation to stop being so focused on your own products and will allow you to leverage your customer lifecycle or value stream to determine the right time to engage a customer based on their need or problem relative to the buying cycle. This shift towards the buyer is fundamental and requires you to focus operational efforts on ensuring all commercial channels are integrated around the customer needs not yours. Taking note and acknowledging customer engagement preferences for digital, sales and self-service channels will allow you to reprogram your efforts around the customer.
Leverage your technology assets to drive customer engagement
Ensure you are using whatever levels of technology to support as much automation of the customer journey as possible. For example, using AI to execute basic sales tasks such as preparation and insights, to detect buying signals and predict business outcomes will be useful for both your sales teams and your customers will be one.
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Never in our lifetime has the importance of revenue generation and profitability been greater yet failing to accept that technology and readily available data has driven the power to the astute buyer in the old sales process.
The new era of selling means that there can be no separation between your sales teams, technology, marketing communications, data and analytics and all of the operational functions that sit in between.
It’s time to transform to the new approach to selling where every move is driven by how well you leverage AI to command the entire sales process and all of those who serve it.
With change comes opportunity and be clear the possibilities are enormous; but will only benefit those sales leaders who are bold and progressive enough take action now and transform their sales functions.
Moving towards agile workflows and channels that can engage their customers wherever they want, whenever they want will only drive a great connection to the new millennial buyer and in turn a great share of wallet for your company.
Looking to capitalise on these trends and plan your own sales strategy? 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 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
*Source: Gartner B2B Buying survey 2018
Global Trends to emerge post Covid-19
We take a closer look at the changes affecting countries across the world as we emerge from the changes caused by Covid-19. Source: Frost & Sullivan 9 Critical Trends Reshaping all Industries Post-COVID, 2020
We take a closer look at the trends affecting countries across the world as we emerge form the changes caused by Covid-19.
1. Connected Work
Connected work scenarios will drive the need for cloud everything. New subscription-based models will see growth in demand for unified communications as a service offerings.
2. ‘Lights-Out’ Operations
Autonomous “lights out” operations will drive demand for remote asset management solutions, and service providers will focus on data management strategies and data-driven business models.
3. Connected Living
An increased adoption of contactless surfaces post-pandemic will drive home automation and security markets.
4. Technology Advancements
Pandemic preparedness will speed up AI deployment and accelerate the pace of AI innovation.
5. Supply Chain Optimisation
Seamless integration of end-to-end digital supply chains will increase traceability, sustainability, and transparency within the supply chain ecosystem.
6. Human Augmentation
The adoption rate of customer behaviour analytics by enterprises will grow by 20% for the period 2019-2025.
7. Smart Cities
Increased spending on technology by smart cities will lead to a surge in the adoption of digital tools like crowd analytics, and increased focus on developing digital platforms and apps for citizens.
8. Digital Health
Digital health driven by telemedicine and robotic care will become the new standard of care delivery. Will require an increase in the number of service and technology providers.
9. Geo-Political
To protect themselves from economic fallout due to COVID, global organisations are coming together to restore geo-political and economic balance.
Looking to capitalise on these trends and ensure your business is poised for success? 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 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
SOURCE: Frost & Sullivan 9 Critical Trends Reshaping all Industries Post-COVID, 2020
Taking Care of Sales
The hot topic for 2020 has been Covid and in particular what businesses should be doing to transform to this well-articulated new normal. At Whiteark we’ve been thinking specifically about the impact this unique year has had on B2B selling and specifically what your organisation may want to be considering.
The hot topic for 2020 has been COVID and in particular what businesses should be doing to transform to this well-articulated new normal. At Whiteark we’ve been thinking specifically about the impact this unique year has had on B2B selling and specifically what your organisation may want to be considering ensuring your sales team is set up to be successful over this coming year.
“Employees come first. If you take care of your employees, they will take care of their clients.”
In a year where the conventional approach to B2B selling has been rewritten and now the new normal seems to be emails followed by zoom meetings and if you’re lucky another zoom meeting, how can we help our sales teams better serve their clients?
The B2B sales process has never needed to be more agile than it needs to be today. We are experiencing the constant introduction of new products and services in market as a result of digital software and technology that are challenging even the very best of value propositions in the marketplace.
We are hearing first-hand that even the very best sales organisations are upgrading their sales processes so as they can stay ahead of their competitors. As we move into the Christmas break many companies are planning their 2021 kick off activities with a view to energising their sales teams to meet the demands of the next cycle.
In a market where control is clearly geared towards the buyer, sales must respond to this power shift by ensuring they are able to meet the increased demands of this new process. High levels of personalisation are no longer appropriate for a select few customers who meet a given criteria, it will become a baseline expectation that every customer has some degree of account-based personalisation to meet their specific needs and problems.
Covid has driven the emergence of working from home and many buyers and decision makers will demand access to information that they will expect to be able to review and assess in their own time without a meeting face to face. They’ll use emails and video meetings to manage the selling process and only the greatest equipped salespeople will be able to match this game change.
Buyers will also be leveraging more than ever their peer groups for recommendations, referrals, and reviews of the sales proposals without any engagement or influence from the salesperson. The days where we could get by on ‘the buyer - seller’ relationship will now be tested, and we will need to help redefine the traditional sales tool kit to ensure our sales process maintains its integrity. Customers will now have access to information and will know a lot more about your company and its product, as well as your people than you might expect. They will be looking for partners that are authentic and genuine as a mere starting point before they hand over their trust.
Whilst the process might have shifted as a result of this unusual year the reality is that the sales process has always been underpinned by trust and the real focus for 2021 needs to be fuelled by continuous training and development.
In our opinion, it’s never been more important that the sales team has to be ready to change their game to win the trust and credibility of the new buyer. The bar for sales competence must be once again raised and those organisations that are able to measure and track sales skills, characteristics and abilities via specific dashboards and metrics will be able to use this data to ensure the needs of the customer are met.
Sales teams who have very clearly defined metrics will be most likely to succeed. Hence, sales management will be reliant on sales operations and support functions like never before as well as working with and ensuring their utilisation of technology is driving their sales process. Customers will want to be engaged on their terms and as such every channel will be equally critical to the success of the next sales campaign.
Whilst the sales - client relationships will still be critical, technology and use of emails, EDM, social will become critical tools in the sales communication cycle. Social selling is on the upward trend for sure, with businesses and employees following and commenting on LinkedIn about their companies and their brands. Therefore, engagement in these channels will be critical to sales outcomes and the content that your sales team is generating on this channel will need to be in alignment marketing as well as whatever was leveraged in email, SMS and whatever other channels you are engaging.
In any case as we embark on the new normal for our sales team, it is imperative to accept that everything matters. Remembering that there’s no such thing as ‘this is how we’ve always done it’ approach that will work in every situation all the time so working with the teams in an account-based methodology where ‘every’ customer matters will be critical to your 2021 sales strategy.
This coming year, the organisations that will win will be those who case best align their sales talent to their technology, broader support teams and work together as one to solve the problems of their potential buyers.
Driven by customer insight, behaviour and technology, the trend is moving towards account-based selling and digital transformation.
There’s never been a better time to take stock, conduct an honest self-assessment and to identify the elements that will lift your sales team to meet the needs of tomorrow.
Looking to capitalise on these trends and plan your own sales strategy? 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 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
Guide to Zero Based Budgeting
Browse and download the Whiteark guide to Zero Based Budgeting (ZBB). This is a method of budgeting where all expenses are justified at the beginning of each new budget cycle and all assumptions documented. We explore the benefits and challenges of ZBB and the 7 steps required to build your own.
Zero Based Budgeting (ZBB) is a method of budgeting where all expenses are justified at the beginning of each new budget cycle and all assumptions documented.
So, what exactly is Zero Based Budgeting?
Budgets are not connected to prior year spend
Funding is allocated to activities aligned to strategy
Eliminates sandbagging practices - evenly distributing expense increases/reductions across business units
Requires comprehensive understanding of activities and cost structure
Budgets are allocated to necessary business activities and based on the levels of effort required
Requires analysing and prioritising activities and expenses
The Benefits of Zero Based Budgeting
Strategic priorities and focus areas can be achieved more successfully under zero-based budgeting
Business units are forced to link their spend to focus areas/initiatives that support the organisational
objectives
The annual review ensures no initiatives continue beyond their productive life
Efficient allocation of resources, as it is based on needs and benefits
Identifies and eliminates wastage and out-of-date operations
Drives managers to design and develop cost-effective techniques for improving processes
Detects inflated budgets
Promotes questioning and challenging attitudes
Increases staff motivation because it gives them more responsibility and the ability to contribute to the
decision-making process
Increases communication and coordination within the organisation
The Challenges of Zero Based Budgeting
TIME & RESOURCES
It is time consuming having to justify each expense in order to arrive at a solid foundation to support the requirement.
A lot of manpower is required to successfully build a ZBB.
BIAS TOWARDS SHORT-TERM PLANNING
ZBB can reward short term thinking.
Can limit investment in growth because short-term benefits may take precedence over long-term planning.
DETAILED KNOWLEDGE
It is necessary to train managers well as they are ultimately responsible for the management, decision-making and the communication of the entire process.
Difficulties associated with ranking functions that are qualitative in nature mean there is a risk of cutting non-core costs that support a customer’s or consumer’s experience. This ultimately puts into jeopardy brand value in the long-term.
AWARENESS FOR DETAILS
As the volume of the required data & forms is very large, no one is capable of knowing every detail of its content and decisions.
There is a risk to compressing information and details because this might remove critically important data.
BIAS TOWARDS SHORT-TERM PLANNING
Honesty and consistency of the managers must be reliable and uniform.
There could be possible manipulation by managers to get more resources into their department.
How to build a Zero Based Budget in 7 Steps
Determine Group Strategic Goals/ Priorities
Align investment and initiatives to Group Strategy
Communicate budget process, timeline and expectations
Provide key assumptions and templates for each P+L item
Create templates for CAPEX, Balance Sheet, Cash Flow, Treasury
Document all assumptions and supporting data to refer to during budget reviews
Be courageous and curious when reviewing business unit budgets
Need help to build your own Zero Based Budget? 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
What are the key considerations for successfully transitioning your staff back to the office?
Phoebe Reid writes about us moving towards the new working landscape. As we start to move towards Covid normal, businesses are starting to plan for their employees to return to the office. Here are some things to consider and action from a people perspective.
As we start to move towards Covid normal, businesses are starting to plan for their employees to return to the office. Here are some things to consider and action from a people perspective.
Flexibility
A company that embraces flexibility around work location is here to stay. If they haven’t already, every organisation should start working on a plan that details what this looks like for their business.
Ideally the plan should be developed with HR, managers and employees. We suggest that it considers areas such as technology set up and support at home, learning and development opportunities, engaging the team in multiple locations, the risk management impacts on the business and having a robust performance review process to support employee performance.
Staggered start times, a roster for when employees are in the office with workforce bubbles, and working from home days, are all considerations. In most workplaces a hybrid model will need to be agreed. Businesses need to be also able to flex back to working from home as required until we have a vaccine, so flexibility really is key.
Health, Safety and Policies
The health and safety of employees is a critical consideration. It is important that you consult www.coronavirus.vic.gov.au or your equivalent state site to create your Covid Safe Plan.
Some items to consider;
Do you have the right policies?
Do you have a policy and process if an employee be required to self-isolate?
How will you keep confidentiality and privacy in dealing with employees who have suspected or confirmed COVID-19?
Do you have a policy for employees that have travelled to another country and need to quarantine?
Does your working from home policy needs updating?
Some other thing that you need to plan for are; your office layout, signs for meeting rooms, making sanitiser and masks available, cleaning schedules, a register of who is in the office.
Communication
Communication is critical to the success to any change, but especially relating to people.
Start planning;
How you communicate key messages about social distancing, personal hygiene and associated policies
Using www.coronavirus.vic.gov.au posters and hand outs to communicate the key message
Where possible have meetings by phone or online instead of face to face
Your mental health plan to be proactive in supporting employees who are struggling
Employee wellbeing
For many people, especially those with an existing mental health issue, returning to the workplace can bring up a range of feelings including fear and anxiety. If you have one, promote your Employee Asisstance Program (EAP) to help support your team’s wellbeing. These organisations will also have support materials that you can share with the team. If you don’t have one, consider partnering with a provider.
Beyond Blue have some great tips to help manage mental health as employees transition back into the physical workplace. They are;
Prioritise self-care by maintaining positive habits
Manage your information intake
Understand what constitutes a mentally healthy workplace
Celebrate the opportunity to reconnect
Send out a short pulse survey to employees to get a feel for how people are feeling about returning and what would make the transition as smooth and positive as possible. As always employee feedback is key to the success of any change. Book in one on ones, check in to see how people are feeling and plan some fun Covid safe team activities.
Focus on recognition
According to the Achievers Workforce Institute, 2020 Culture Report, recognition is the number one request from employees in the postCOVID world.
When employees were asked “how organisations could better support them through the COVID-19 pandemic”, one-third said they wanted more recognition.
To be effective it is important that recognition is; timely, specific and ideally values based. If recognition aligns to your company values, you are constantly reinforcing the values and the behaviours that ultimately under pin your culture.
Looking for a harmonious transition? 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
Technical & Vocational Education and Training in Australia
The restrictions on travel imposed by the federal government in response to Covid-19 is expected to result in a sharp drop in international students in the current year, and adversely affect revenue growth. The industry consists of registered training organisations that offer…
Industry Report
Technical & Vocational Education and Training in Australia
The restrictions on travel imposed by the federal government in response to Covid-19 is expected to result in a sharp drop in international students in the current year, and adversely affect revenue growth. The industry consists of registered training organisations that offer technical and vocational education and training, including TAFE institutes, dual-sector institutions and other private and community providers.
OVERVIEW
Major players in the industry are: Department of Education and Training (19%), TAFE NSW (16%), TAFE Queensland (6%), Other 59%). There is medium level of concentration.
The increase in government funding reduced financial barriers for students seeking to access vocational education and increased the number of private vocational education providers entering the market. The depreciation of the Australian dollar increased international student enrolments, and the increasing casualisation of the Australian workforce encouraged many students to enrol in VET courses to boost employment prospects. However, course quality concerns and budgetary constraints led to changes to industry funding, which significantly constrained student demand.
The number of students accessing VET FEE-HELP rose from about 55k ($323M in loans outstanding) in 2012 to more than 272k ($2.9B in loans outstanding). This dramatic increase in loans raised concerns about the conduct of some industry operators. In 2015, the Government implemented new reforms to reduce unethical marketing and limit the amount of revenue received by each provider. The government took further action in January 2017, cancelling the VET FEE-HELP scheme entirely. The replacement scheme, VET Student Loans, aims to protect students from taking unnecessary loans and to ensure educational services are of a high quality by introducing stricter eligibility conditions. The scheme has significantly reduced the number of courses eligible for loans, and requires current private and community VET FEE-HELP providers to apply for provisional approval to maintain registered training organisation status.
Many VET providers have reduced expenses by steadily increasing online course delivery, which has reduced operational expenses. Overall, industry profit margins have increased over the past five years. Industry employment has contracted over the period, as larger VET providers have reduced their workforce to control costs in an increasingly competitive market.
OUTLOOK 2020 - 2025
Changes to the regulation and funding of vocational education are anticipated to influence the Technical and Vocational Education and Training industry's performance over the next five years. The introduction of the VET Student Loans scheme has reduced the number of government-funded courses and is likely to limit increases in the number of student enrolments. While the Australian dollar is projected to appreciate over the next five years, it will likely remain weak, and is expected to boost demand from international students.
Government funding regulation is projected to intensify over the next five years. Continued concern about the conduct of private providers in the industry has led to various inquiries and changes to industry legislation. The VET Student Loans scheme is forecast to continue to affecting industry revenue by reducing the funding available for industry operators.
Regulatory requirements regarding loans will likely affect the industry's structure. The percentage of industry revenue generated by large public institutions is anticipated to increase over the period. More students are forecast to enrol in industry courses as the industry adapts to the new funding model and regulations and offers higher quality courses. New regulations that require more trade and technical workers to have formal VET qualifications are also anticipated to boost industry enrolments.
Tighter regulations in the construction and healthcare sectors are forecast to make practical work experience through apprenticeships and other placements more important for employment in these sectors over the next five years. The need for experience will likely increase the popularity of vocational qualifications, supporting enrolment numbers and industry revenue over the period.
The new User Choice program, under which the state and territory governments provide funding to registered training organisations to reduce the cost of placements and apprenticeships to students and employers, is anticipated to further this trend over the next five years.
Industry employment is anticipated to decline as operators seek to reduce operating costs, and further their focus on online methods of course delivery. Industry profitability is anticipated to fall slightly over the next five years, as some private for-profit providers exit due to more difficult operating conditions.
Source: IBISWorld | Technical & Vocational Education & Training in Australia, April 2020
Resetting Your Customer Experience For Post Covid
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.
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.
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