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Good Marketing Generates Growth

This is part 2 of the SEBN (South East Business Networks) business breakfast held just before Christmas 2016. Here we have John Berenyi of Bergent Research sharing with us on how big a game changer good marketing can be. John is a registered psychologist with degrees in commerce and technology. He presented a series of ideas on good marketing and the profit improvements than can be achieved by using good marketing principles. This is an excerpt.

John Berenyi

John Berenyi

A bit of research shows this is a common presentation topic for John and one that has been requested Internationally so it is worth paying attention to what he says.

Game Changing Growth

Good Marketing delivers:

  • increased profits
  • reduced sales time
  • reduced costs

And how does this happen? By giving your buyers what they really want! Seems simple yet my experience is that this is not as simple as it sounds.

Because in our highly marketing driven environment there are fewer dollars left on the table, giving customers what they really want leads to them buying. And it also leads to a Value Monopoly.

Value Monopoly

Value Monopoly

Value Monopoly

Value Monopoly comes from:

  • Tight brand – build margin because you can sell at a premium Eg. Apple, Harvey Davidson, lego
  • Right communication – if you don’t do this you are wasting money
  • Emotional brand benefit
  • Rational brand benefit
  • Price kick
  • Real value

A good example is Harley-Davidson. They sell a Motor Bike. Or do they? Here is a quote from their head of marketing: “What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid of him.

So the comment about selling what people really want comes in here. They don’t want just a motor bike. They want a motor bike with attitude. They want benefits beyond, speed, fuel consumption and reliability. In this case, image.

And there is a formula for this.

Value Monopoly = (pQ x Eb) / (P + rT)

Value Monopoly in Detail

Value Monopoly in Detail

Where:

  • pQ = perceived quality
  • Eb = ego boost
  • P = price
  • rT = relative time to acquire

So price is important but it is a long way from being the whole game. However if you are more expensive and can’t justify it, then you have a big issue. From the above you can see that reducing price only helps if they can get it quickly or either the perceived quality or ego boost go up. When did reducing price ever increase the ego boost or perceived quality?

So this is an interesting formula. You can increase your value monopoly mostly by increasing the perceived quality, increasing the ego boost associated with the product (for the buyer type), making it quicker to get, or making the price lower. Amazon have gone with the quick to get and lower price strategy. Most of the products aren’t theirs so they are stuck with the ego boost of the market, and the same goes for the perceived quality. So they have primarily tackled the terms on the bottom line. An exception is a product like the Kindle where they also went for perceived quality. So 3 of the 4 terms.

Back to price. On price you have these 5 buyer types:

  • Budget buyer
  • Negotiator
  • Specials junkie
  • Bang for buck with every feature
  • Dream buyer (their dream, not yours)

We are all like this but which type of buyer we are depends on the product category. Studies show that budget buyers are only 10% of the market. This also applies to your customers. So again, just selling on price is a mistake unless it is that 10% you are specifically going after.

But how do you find out what type of buyer each prospect is?

Here is where the problem comes from when you try to find out what type of buyer you are dealing with:

  • They don’t know
  • They can’t tell you because they don’t have the language / concept
  • They won’t tell you because they are either embarrassed or have some other reason

Ultimately, if you understand what your customers really want and can communicate what you offer so they get it, then you will sell a lot more of the same product. But you will also need to look at understanding what they really want, and not just what they say they want.

Here is a list of recurring reasons for buying a house:

  • Make my sister really jealous
  • Prove to mum and dad that I’m responsible
  • Prove how successful we’ve become
  • Let me be popular for once
  • Make my family love me
  • Show my life’s work is worth something
  • I want to feel in control
  • Keep my marriage together
  • Prove emigration was good idea

As a real estate agent, it would be helpful understand the current buyer so you can offer them something they want. But they are unlikely to be open about it up front. And to everyone wants to be sold to the same way. We all have a disposition in how we are sold to. Not everyone wants their agent to be their best friend. Not everyone wants efficiency. Here is an example of some ways people think about the salesperson they want to deal with.

Buying Disposition

Buying Disposition

All of the above fits my concepts of good marketing. So lots of stuff to think about there. I hope you found this helpful as you are considering how best to navigate 2017.

My thanks go to John Berenyi for making his slide deck available from the morning. Most of the graphics came from that.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.

Australian Manufacturing PMI

The Australian Manufacturing PMI is a measure of the manufacturing economy in Australia. A score above 50 means it is growing and a score below 50 means it is shrinking. I recently reported in the post about out new location that we had been in growth for the past 17 months but according to one data source we missed out for a couple of months during that time. For the history see:

So I thought I would double check the data. I went to the Trading Economies Australian Manufacturing PMI and looked at the trend since 2012. Here is what I saw.

Australia Manufacturing PMI 2016

Australia Manufacturing PMI 2016

So my understanding of this graph is that after the Global Financial Crisis we saw Australian Manufacturing decline but since 2012 the decline has slowed and this past year it has grown.

As a result, I continue to be encourage that Australian Manufacturing is Growing and we will continue to support that by developing modern electronics based products that are Made in Australia.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

Design Led Innovation

Traditional Product Development comes up with the product idea, does the development, gets it into production and then tries to find customers to sell it to.

Design Led Innovation tries to turn that process around so the actual needs of the customer or user become part of both the product definition and the business model development. If you haven’t already heard of it, check out the Business Model Canvas.

I get the opportunity to present on topics like Innovation to Business Groups and even MBA programs and one of the interesting statistics I use is that the number one area for Innovation in the world today is the Business Model.

How Does Design Led Innovation Work?

So how does this all work?

Design Led Innovation

Design Led Innovation Process

In Design Led Innovation, the expected outcome is that when you engage with your customer, and begin to understand their needs, then you can start to offer them something that has much higher value for them and allows you to get a better price for offering that much higher value. The outcome is the classic win:win that great business is meant to deliver. And it is a key factor in not getting caught in the classic commodity service price war with the client’s purchasing officer driving the process.

It is also a continuous process. One description is that it is like “rebuilding the plane while it is in flight”.

Sounds scary, but the results seem to show it is well worth doing.

Design Led Innovation session at SEBN

At a recent SEBN breakfast session we heard from Tricomposite about their  experience of using Design Led Innovation to revolutionise their business and not only service their existing customers better, but offer them products they didn’t even know they wanted and create a much better value offering for them than they had ever considered before. And this has opened up potential market offerings to other customers who they would never have considered they could work with.

Here are the themes they explored in finding this offering:

  • focus on designers, not buyers
  • test is time pressure leads to design mistakes
  • test is rapid full-sized final material prototypes were valuable
  • test if there was room for service level agreements
  • test if there was room for collaborative design

And the answer to 4 of these was a resounding yes. Only the service level agreement test failed. Basically, customers expect service as a given. But the rest has opened up a complete rethink of their business. In fact, they shared that it was their existing perspective on their business that proved to be their biggest limiting factor.

Business Model Canvas

Rethinking the Business Model is a key component of Design Led Innovation. But not as an end in itself. Only after understanding your customer’s real needs can you determine how to make it easier to do business with them.

I recommend getting the Business Model Canvas book and taking advantage of the free downloads at Strategyzer. Here is a example of one of their tools.

Business Model Canvas Example

Business Model Canvas Example

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

We Moved

That’s right. After 7 great years of growth and making a difference to the local manufacturing economy, we ran out of room. So it’s good bye to lovely Berwick Village and hello to Narre Warren.

Our new address is:

Suite 4, Level 1, Casey Corporate Centre, 58-60 Victor Crescent, Narre Warren VIC 3805.

And we have a new phone number: 03 9796 0365

Successful Endeavours - 58 Victor Crescent

Successful Endeavours – 58-60 Victor Crescent

Above is a shot of the front of the building. On street parking is available. A recent security upgrade means that there is no longer access to the rear of the building for guest parking.

Once you get inside the building (doors at front and rear) you take the lift to the first floor and then head along the corridor to your right and round the bend to the left. There will be signage on the front glass doors.

And here are some inside shots.

Just before the fit out was complete.

Successful Endeavours - Inside - Fit Out Nearly Complete

Successful Endeavours – Inside – Fit Out Nearly Complete

First load of furniture arrives on Saturday.

Successful Endeavours - Inside - First Furniture Delivery

Successful Endeavours – Inside – First Furniture Delivery

After the final load of furniture arrives and is assembled.

Successful Endeavours - Inside - Furniture Delivered

Successful Endeavours – Inside – Furniture Delivered

Monday morning we move the furniture into place and start setting up.

successful Endeavours - Inside - Up And Running

Successful Endeavours – Inside – Up And Running

And by Monday lunch time, we are operational again.

Australian Manufacturing Continues To Grow

I’m really looking forward to being able to build the team and do more product development for manufacturers in Australia. Australian manufacturing has grown every month for the past 17 months so this isn’t just us, there are lots of other businesses growing; something I am particularly pleased to be able to report. It continues the trend I wrote about in July 2016 in Australian Manufacturing is Growing.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

Digital Tomorrow is Today

The most recent Casey Cardinia Business Group breakfast heard from Chris Riddell, futurist. This is a summary of what he said.

Chris Riddell - Futurist

Chris Riddell – Futurist

The future is already here. The digital revolution has happened. So what about tomorrow?

This is the question Chris posed to the room at the start of his presentation.

Chris asserts that the technological revolution has already happened. Now it is Velocity that counts. So what does Velocity mean?
In Software Development, Velocity refers to the rate with which you are completing a project. If Velocity is too low, you will not finish on time. Ideally Velocity is above the original planned value and you will deliver ahead of schedule. At the very least, this allows you time to test comprehensively. Projects running late often compromise on test in order to save time. This tactic usually adds time in the long run.

His first example was OTTO. This is a start-up of ex Google employees who are developing self-driving track technology that can be retrofitted to existing trucks. So you don’t need to design a new vehicle, you can add their system to your existing fleet. They have early adopted product in the market (delivering beer via self-driving trucks) and hope to be fully market ready in 9 months. And uber bought OTTO. This rapid time to market is an example of the increasing Velocity available today.

OTTO self-driving truck

OTTO self-driving truck

A local example we are working with is Maintabase. This is a Melbourne based start-up that came to us 2 months ago with some “off the shelf” hardware to try and configure it as a demonstration of their asset management concept where you can monitor machine cycle and operating time automatically and identify when maintenance points will be reached. Like OTTO, this can be retrofitted to any existing machine. They were trying to use “off the shelf hardware” for good reason; low development cost. However the hardware was difficult to configure and use, not very flexible, and ultimately not what they wanted in a final product. It was never going to do what they needed and was only ever an interim measure. So we created the product they need and they are launching it at Future Assembly in the IoT Category. See Future Assembly – IoT – Maintabase for more details. So idea to launch in 8 weeks!

Maintabase

Maintabase

And then there is Tesla who have reinvented the modern passenger automobile and already offer autonomous cars.

Tesla

Tesla

And now a medical example. 23 and Me will send you a DNA kit. You provide a saliva sample in the test tube they provide. They then send you a detailed report describing your genetic ancestry, what health issues you will expect have in the future and even what kind of children you will have with your partner (you need 2 samples for that). This was banned in the USA due to concerns about how to regulate it so they moved to Europe and launched there. Now they are also able to operate in the USA. 5 years ago a service like this would have been prohibitively expensive. Now it is a very affordable tool to allow you to manage your life better.

23 and Me - Welcome to You

23 and Me – Welcome to You

We also see the huge burst of activity in Wearables that allow you to quantify things like quality of sleep, activity level and a whole range of health and other indicators. The Quantified Self requires measurement and these devices do a good deal of that already.

Lean Digital Start-Up

Computing technology is also changing so rapidly that you can do a hugely scalable start-up in a shed. This is technology going full circle. HP started in a shed. So did Google and Apple. The shed may become the new business launch model.

This allows a new class of business opportunities lumped under the banner of the Lean Start-Up. I’ve added “Digital” to the mix because there is a lot of emphasis now on being able to scale quickly. So we have the Lean Digital Start-Up. So low investment, low risk, potentially huge upside, potentially scalable. The failure rate of Lean Digital Start-Ups is unfortunately also huge. About 25 times the failure rate of conventional businesses. The risk due to failure is much lower and they can pivot rapidly. This is Agile applied to the Business Model.

Old world businesses are like huge plantations and have a specific focus and everything is about optimising that focal point. By comparison, the new business paradigm is like hacking your way through a rain forest looking for a breakthrough plant or animal that holds the cure to something incurable. The latter is a much more chaotic process and results are unpredictable.
Access to technology means that even mobile phone calls and SMS are old hat and is all about video, high speed data sharing and experience.

The Future – What Next?

BMW have just celebrated 100 years in business. That is a great achievement. If you go back 50 years, it was all about the product, the technology, the reliability. Today it is all about the experience. And they are talking about selling transportation services rather than vehicles in 10 years time.

Super Fluidity is now the norm. You can transfer data almost instantly to anywhere in the world. Today you can design a product , send the file somewhere else on the planet and have it 3D printed . You can now 3D print food. Oreos can be custom designed by you and then made for you and shipped to your address.

Why is Google self driving cars happening? Google do search and other data stuff. The answer from Google is that a driver-less car is a mechanical problem that needs an information solution. And Google are an information solution company.

Why is Lego still in business? It is a plastic block. Easy to copy and many have done it. Yet today they are the most influential toy company in the world. Everything is about the user. You can design your own kit, select the blocks, buy it and have it delivered to your door. You can build it on screen, have it 3D rendered and sent to your device to show or share with your friends.

Apple have enough cash on their books to pay out Greece’s national debt 3 times over and still run their business for a year even with no sales. And they did it by making their product easy to use and putting a full ecosystem together to support the user.

Air bnb, uber, Spotify and many other companies are leveraging great user experiences and offering great value.

We are headed into an era of no screens, augmented reality and where the world is your screen and data is your overlay.

Pretty exciting times lay ahead as we catch up with the capability the Digital Revolution already lays before us.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

Schools Today

The modern school as we know it was designed to provide workers for the expanding paradigm of the Industrial Revolution. That is, the first Industrial Revolution. We are now up to the Fourth Industrial Revolution, also known as Industry 4.0. So how well are we doing 3 Industrial Revolutions later?

Industry 4.0

Industry 4.0

First of all, lets look at the positives. Basic education has been an overwhelming success. A foundation level of literacy, numeracy and essential mathematics skills has served us really well for several generations. And it will continue to though the need for it is reducing because so much of our modern world does a lot of this for us. This is of course the developed world. We still have a third of the planet living in abject poverty and that is a challenge in itself. But the baseline education we all get at primary school works for the vast majority of people. I know there are exceptions who have both physical and intellectual challenges but it works on the whole.

So where is the issue?

Applied Learning

The real issue is when we start to get past basic education, the foundation we all benefit from, and start to move into Applied Learning or Interest Based Learning. Someone who is going to be a brilliant dancer might not benefit so much for advanced mathematics training. So we already allow for this in course selection. By VCE and the like there is a lot of selection going on. The same at University.

The issue comes back to what we are preparing students for. Funding policy drives a lot of decisions. You can’t keep a school open if the subjects you teach or how you teach them are not aligned with the funding model. You may not even get a sick bed or enough toilets (yes I know of one example of this)! And at present. we don’t seem to have governments with a strong view to to doing anything in schools except exclude faith and culture based learning and enforce the idea that alternative sexual orientations are preferred. At least this is how it looks to the community. And all this means we are not equipping students for the Jobs of the Future or the Industries of Tomorrow (or even today in many cases).

I present to Secondary Schools and Universities including MBA programs and recently to a Primary School. Schools matter. So it is time to start fixing a broken system. And it isn’t teachers and principals I am talking about here, it is funding policy.

Universities are funded based on peer reviewed papers and student numbers by class type. There is no requirement for either to be industry relevant. This has been the case for a while and we now find ourselves where this funding policy leads:

  • Australia has the lowest rate of publicly funded research commercialisation in the world
  • Australia has the lowest rate of academia to Industry engagement in the world

Put differently, the currently funding put into public research and academia structures is failing completely. The model is broken. And I’ve heard this repeatedly for the past half a decade so it isn’t just me.

Some other indicators that this is the case.

According to figures published by CEDA, The Committee for Economic Development of Australia40% of currents jobs will disappear is a decade.

Digital Readiness

Yet Digital Literacy in Australia continues to decline as the rest of the world gets ready for the next round of jobs and value creation while we fall behind. Everyone agrees that this is the wave of the future. But no action. The last policy discussion was in 2008!

Some references:

The latter has this graph of our current ranking in Digital Competitiveness (we used to be known as the country of early adopters).

Australian Digital Competitiveness

Australian Digital Competitiveness

I hope you notice that the most competitive economies in the world are also the most digital ready! Check out the Global Competitiveness Report summarised on Wikipedia to see the relativities. This is also why the current destruction of the capability of the NBN, or National Broadband Network, looks like economic sabotage when you consider how it is going to limit jobs growth potential and further stifle Digital Readiness.

It isn’t like this problem is new or not understood. It seems the current policy split is between:

  • if it costs money you can’t have it because we can’t afford it
  • protecting the borders is more important than ensuring there is something worth protecting inside them
  • lets redesign our social fabric because we can

Yes I know I have shown them in extreme profile, but this is where these ideas ultimately end up. And none of them are in the interest of Australia’s long term future. I don’t think being Digital Ready for the Future is restricted to a single gender, ethnic group or demographic nor mandated or precluded by your faith background or sexual orientation or any of a large number of other factors.

Tomorrows jobs will be created by the workers, not companies“. Ray Keefe 2016.

You will see a similar quote below for primary schools. But this is the new paradigm. It is already here. This isn’t tomorrow. This is now. What is a Lean Digital Startup? It is creating your own job!

So this has been a long post already but there is one more element I want to share. And this is an initiative which I am hoping will be able to make a difference.

Tech Schools

No this is not a nostalgic return to the past, just using the same name for a very new approach.

I am pleased to announce that the Casey Tech School Strategic Charter was signed last week. I am one of 2 Industry Representatives involved in the process. Hopefully this will grow significantly once the foundations have been firmly established. And this same process is happening in other regions of Victoria.

So if they are reusing the name, what are they now using it for?

The Casey Tech School will use funding from the Victorian State Government to establish an advanced learning center to augment existing schools. This will include Digital Ready learning opportunities and will support student interest learning and not just a fixed curriculum. The details of how to get this high leverage education facility interfaced with existing school activities is still to be worked out. But the core idea is that if there isn’t enough money for every school to do this independently, then spend one lot of money and let every school take advantage of it.

Here are a couple of photos of the event.

Casey Tech School Charter Signed

Casey Tech School Charter Signed

 

Successful Endeavours Support the Casey Tech School

Successful Endeavours Support the Casey Tech School

And this isn’t the only interesting school initiative going on right now.

Primary Schools Step Up

As an example of where primary school teaching is going, I was recently involved in a Mini-Mart run by Dandenong Primary School. The Grade 5 students did a survey of the grade 3 and 4 students to determine goods they could design, build and sell to them. There were rules covering design elements, what constituted a sufficient offering and even things like Warranty. Then they made the goods, set up stalls, and in a series of waves tried selling to the same grade 3 and 4 students they had surveyed.

Brilliant.

And in between waves, they got advice on OH&S, selling and influencing techniques  from a teacher who could have been presenting to an MBA program. I had to wait another 40 years after my Primary School experience before I got training in business skills as good as this.  Needless to say, I was very impressed and it made me wonder why we aren’t doing this across the board.

Mini-market moguls

Dandenong Primary School’s Grade 5 and 6 students have explored the process of creating, producing and marketing their own products.
The students hosted a mini-market as part of their school studies, surveying students from Grade 3 and 4 to see what products would sell and then competing to see who could sell the most.

“These children are going to have to invent their own jobs…”

The result was an impressive array of fun and appealing items from bookmarks and fridge magnets to squishy balls and multi coloured slime.

The event was supported by four local employers who judged each team on their product design and quality, stall design and customer service.

Ray Keefe from Successful Endeavours was joined by Anthony Di Battista from Hilton Manufacturing, Marcus Barber from Looking Up Feeling Good and Chelsie Dickson from Cirque Design.

“These children are going to have to invent their own jobs so it’s great they’re thinking about this very important challenge now,” Mr Keefe said.

Dandenong Primary School looks set to produce some impressive entrepreneurs of the future if the
success of this project is anything to go by.

Community News – The City – November 2016

 

Jobs of the Future

Jobs of the Future

And if you want a really interesting view of what this could be like 10 years from now, I recommend readings Rainbow’s End by Vernor Vinge. Enjoy. Its not just the education component, its the whole idea that jobs just wont exist any more!

Rainbows End - Vernor Vinge

Rainbows End – Vernor Vinge

Rainbow End : Fair use

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

Passion Matters

Because we design other people’s products for them, we get to meet a lot of people who want success. There is nothing wrong with that. Some want to Make a Difference and are pursuing a cause they are passionate about. And I get the most satisfaction from helping them to succeed at doing that.

Stephanie Alexander

Stephanie Alexander cooking at home

At the most recent Casey Cardinia Business Group breakfast session I had the chance to hear Stephanie Alexander share her journey. And it was an inspiring reminder that passion does indeed Make a Difference.

Casey Cardinia Business Group

Casey Cardinia Business Group

Stephanie grew up in a family that believed in the value of education, discussed topics of interest, and ate home cooked food. Her Mum not only liked to cook tasty meals but was also interested in the meaning of food and it’s social context.

Following her graduation she traveled to Europe and in France discovered a love of food that has stayed with her for the rest of her life.

Although her first commercial efforts weren’t successful, she persevered and was able to use her systematic organisational skills developed in teaching and library work to run a successful restaurant. She also discovered a passion for educating people about food, cooking with confidence and enjoying the taste and texture of well cooked, fresh, seasonal produce. This led to writing books and developing the Kitchen Garden Foundation program to teach primary school children the benefits and joy of growing fresh vegetables and cooking them.

The success of the books bankrolled some of the other activities and their success attracted philanthropic investment as well as government grants.

She didn’t start with the intent of being a leader. It was her desire to influence people’s view of food and their choice of what to eat that led to it as an emerging position and allowed her to make the difference she has been able to make.

Influencing the coming generations and how they perceive food will affect many modern issues including climate change and obesity. Stephanie believes that obesity solved by calorie management and powdered food. She believes it will be easier to overcome once we rediscover the joy of growing and cooking great produce as an alternative to convenient food that really doesn’t have the same taste, texture and quality of nourishment.

The Cook’s Companion was intended as a complete education in produce, cooking and having confidence in being able to do that. And it has been a huge success in helping cos achieve just that. It wasn’t written to make money. It was written to help people. That it had also been a commercial success shows the value of doing something good to help others and doing it very well.

Success Lessons

Her story parallels many others I am familiar with. And they all seem to share the some common characteristics:

  • trying to do something to Make a Difference, not just to make money
  • having to push through initial failures and learn from them
  • building a team around you and energising them with your passion
  • having a message big enough to capture the attention of the world around you

In my case, it is making it possible for Australian Electronics Manufacturers to be both locally and globally competitive.

In the case of Stephanie Alexander, it is awaking the value of good food grown and prepared well to an upcoming generation who are mostly being fed the message of convenience.

The Cook's Companion

The Cook’s Companion by Stephanie Alexander

Last night I broke out our copy of The Cook’s Companion and thoroughly enjoyed preparing a good meal.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

CEDA and Australia’s Innovation Challenge

CEDA, or the Committee for Economic Development of Australia, run regular industry sessions to discuss topics of national economic importance. The latest was a lunchtime session covering the benefits of Innovation and also some of the challenges we need to overcome to take advantage of Innovation in Australia.

Committee for Economic Development of Australia

Committee for Economic Development of Australia

Here are videos of the panel discussion which raise a lot of excellent points. They are split into 2 due to their length.

 

Below I cover my take on some of the areas covered both before and during the panel discussion.

Innovation in Job Hunting

Job hunting, or seeking, is a 2 way problem. Potential employees want a good job and potential employers want good employees. Should be simple, right?

Doug Blue of SEEK shared some changes in the jobs market. SEEK used to just place job advertisements on a Web site. Now they have moved to employment fulfillment with up to 70% of job placements being through their services. This is typical of the shift in value creation that is happening all over the world.
A recent survey in Australia shows that 76% of people do not like their current job.

Innovation in Governance

Glenys Beauchamp PSM, of the Department of Industry, Innovation and Science, shared statistics and perspectives on the local economy. This is a summary of what was a very comprehensive and competent presentation.

Glenys Beauchamp

Glenys Beauchamp

The OECD statistics show that up to 50% of new jobs are due to Innovation. So this is an important topic for national growth. And to add more weight to the argument, 60% of productivity gains are due to Innovation.

Australia’s GDP growth has remained flat since 2011 and if this continues then our standard of living will start to fall.

Innovative businesses grow faster, have a more diverse range of market offerings, and create more jobs in them and around them than businesses which are not Innovation focused.

Drivers for Innovation:

  • High proportion of tertiary qualified young adults
  • High standard of research capability

And a few challenges:

  • Low rates of disruptive Innovation
  • Reducing investment for Innovation
  • Low levels of venture and early stage investment
  • Lowest level of Collaboration with universities and publicly funded research organisations in the OECD
  • Low Collaboration in general

The Australian Government is looking at all options to improve this including funding schemes not based on grants, big science infrastructure, tax incentives, entrepreneurs programs and simplifying engagement between business and publicly funded organisations.

Innovation Panel

Lunch was followed by a panel session. The panel was:

  • Glenys Beauchamp PSM – Department of Industry, Innovation and Science
  • Geoff Culbert – GE Australia, NZ, Papua New Guinea
  • Andrew Smith – Shell Australia
  • Andy Vessey – AGL

This is a summary of the discussion.

Innovation can’t just be about improving core business output, it also has to have spread and it has to be able to cross organisational and industry boundaries.

One big challenge is moving to a net zero emissions while increasing energy availability. So clean energy generation is a key and Australia is well placed to be exploring that.

Consumers of tomorrow will be making informed choices so those businesses that don’t educate and inform their customers will lose them to businesses that do. Many traditional businesses and industries are ripe for digital disruption.

GE see software as key to their digital industrial product range. IoT, or the Internet of Things,  is key to the adding of more value.

Shell are looking sideways at every industry they can to identify technologies they can harness in their industry. And they find Australia has many excellent researchers and businesses that can be tapped for solutions to problems that they don’t yet have a satisfactory answer for.

There is a role for Government to get the macro economic conditions right to encourage businesses to act through appropriate incentives. But Government also needs to change its own behaviour to be able to be a part of the future rather than living in a bureaucratic past.

Australia was outraged that we came 10th in the medals tally at the Olympic Games yet there is no outrage about our abysmally low Collaboration and business ratings! How do we get the bigger conversation going at the citizen level?

It is about investment level and investment focus. We value sporting success so we invest. To do better we have to either invest more or invest smarter. It is the same with Innovation and Collaboration. The real issue is where will the funding come from, and exactly how will it be applied. No-one seems to be addressing the lack of funding in a serious way.

Intellectual Property is no longer the main game, nor is data. It is the insights you get from data that is more important. GE have made their IoT operating system, Predix, open source because it is the leverage you get from it that is valuable, not just owning it. And it could also allow others to design devices that can readily fit into the GE ecosystem.

Innovation Summary

For me, the key points that keep coming up are:

  • Low Collaboration is holding us back. And this is a cultural issue. So no amount of money can fix that. We have to address the culture itself.
  • Everyone agrees a lot more money is needed and should be invested. No-one agrees to offer it.
  • Business models are still the biggest area for Innovation and we should keep pushing the boundaries on business models

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

SEBN Session on Modern Business

South East Business Networks

South East Business Networks

Modern business structures and minimum sustainable business essential components

Richard Caro presented this session to a SEBN audience.

Richard Caro

Richard Caro

What if the world changed and yesterday’s game plan no longer applied?

Buggy whips – the market shifted to automobiles and most buggy whip companies went out of business. Are you aware of how your market is shifting?

What if they redefined themselves as motion management,  horse handling solutions or great leather products?

Long term sustainability requires more that a tactical approach such as “how to sell more buggy whips”?

Current trends are global competition and dis-aggregation. How does this affect your business?

Global customers are possible and global competitors are likely. What does this mean for you?

Dis aggregation means anyone can be part of a global supply chain.

Automation is replacing existing jobs and suppliers and they could now be placed anywhere in the world.

Many businesses may not be in touch with the final end customers.

Do I communicate with a real end customer at least weekly?

Business models

Factory -> getting the word out -> Customer is the normal process. What is wrong with this picture?

Need to add customer discovery feedback to the process!

Business Strength Inventory

Fit each of the 3 areas of factory, getting the word out and customer discovery:

  • Who is responsible?
  • What clout / authority do they have?
  • What budget do they have?
  • Is 80% of their time devoted to this area?

My question was whether it was possible to consider that level of devotion if you are still a small business?

Customer discovery

The lean startup movement has popularised books like:

  • The startup owners manual
  • Value proposition design
  • Business model generation
  • What customers want

The key is to “get out of the building” – Steve Blank.

Steve Blank

Steve Blank

So what should I discuss with the people I meet when I am out of the building?

  • How do they do stuff today?
  •  in detail!
  • Follow them around and become an expert
  • Then find  the best in the world and follow them around
  • What are there unmet needs?
  • Where are the passion points?
  • Or pressure points?
  • Listen a lot!
  • Frame a hypothesis in the form of ” I think people like xxx have a problem doing yyy

The next step is to fund 20-50 people like xxx and interview them asking open ended questions and listen carefully to how they do yyy, including whether they have a problem and if the hypothesis has any merit. Be prepared to refine.  Eg Rinse.  Repeat. As Steve Blank says.

So who should you talk to?

  • Interview 100, not 5
  • It is industry specific – Who is the real customer?
  • Who are the deciders,  influencers, users,  beneficiaries
  • Who are the adjacent customers?
  • Who is in your zone of customer knowledge?
  • They could be unexpected – they emerge from the problem discover

I asked this question so I was particularly interested in this answer.

If the person with the money is different with the person with the need,  you have to develop a business model that means it works for the person with the money.  Otherwise,  there are scenarios where there isn’t a business case that is possible?

Interesting!

So for now, my conclusion is that there are many possible opportunities present and if you look at customer discovery, you might just discover some.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

Australian Manufacturing Grows

This month we have the interesting statistic that Australian Manufacturing has grown every single month for the past 12 months. That is a whole year of positive growth. Australian Manufacturing Expansion is a good in my opinion. I know we have been led to believe that Australian Manufacturing is gone with the exit of the car assemblers being the final straw, but the truth is very different. The Automotive Sector only accounts for 5% of Australia’s Manufacturing.

Innovation, technology and business expert

Professor Goran Roos

In my post on Modern Economies Need Manufacturing I cited some of the work by Professor Goran Roos who has both academic and business experience in making Innovation, Technology and Business work together. Hi Scandinavian background also means he is familiar with the benefits of collaboration and partnering for commercialisation, something we desperately need to do better here.

So Manufacturing Growth is a very good thing. It creates more jobs around it than an other industry and creates that fundamental value the service industry need to lever off. Let’s face it, someone has to do it.

Australian Exports Expand

And in addition, Australia has 300 More Exporters. That right, more companies are exporting now that a year ago. The lower Australian Dollar is responsible for some of this, and the better rhetoric at the Federal politics level has certainly helped.

AIG

AIG

Here is the Australian Industry Group report on Leading Performance Indicators: AiG-PMI-2016.

The average Australian Manufacturing PMI performance over the past 12 months is 52.3 where 50 = staying the same and more than 50 = growing. So measurably growing. You can get a more detailed report on just Australia is doing from Trading Economics Australian Manufacturing PMI.

Australian Manufacturing PMI June 2016

Australian Manufacturing PMI June 2016

So another good month for Australian Manufacturing. And a good thing that is.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

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