John Linton
I was jolted out of my semi-somnolent browsing of this morning's Financial Review when I was skimming an article (pp60 and 61) which used the phrase 'weak signals' in the context of finding a tiny dissonance in a large volume of information that would become the first indication of a major trend . I thought I had 'invented ' that phrase; not in any proprietary sense, but in that I had never heard it/read it before I began to use it some ten years ago to explain/justify some of my more outrageous (and let me be very honest - often incorrect) business decisions
Any one who is responsible/partly responsible for spending money in business on directional change must absorb a lot of information from disparate sources before they 'sign off' on what has to be put in place. Depending on the size of the organisation and/or the 'power' of the decision maker the amount of information researched will vary enormously. It's obviousy pretty easy to make a decision that is based on following an evident trend and equally much harder to make a decision to do something either very new, with little or no precedent, or very new to the company that will undertake the decision.
The hardest decision to make is to stop doing something that has been and is a very large part of your current business.
In a side bar to that article headed "'Understanding Complexity" the second bullet point states - "The interactions are non-lineal and minor changes can produce disproportionately major consequences".
The article, which fills two pages appears to be a distillation from a Harvard Business School seminar and, largely, contains the sorts of statements and 'insights' beloved of such pontificators. However read casually it's an interesting set ofviews and, in my case being jolted awake by the 'theft' of what I regarded as 'my property' I re-read it with more attention and it may be interesting to other people who have some interest in managing in difficult, constantly changing circumstances to get an overview of some current US thinking.
I read fairly widely about the communications industry; both in Australia and around the world and I also 'pore over' the multiplicity of data base and other reports that we have put in place at Exetel over the past four years. I also 'converse' with Exetel's users and agents via the forums we put in place a long time ago and talk with current and past colleagues about things of mutual past or current interest.
I've mentioned in these musings that I've been surprised by the change in churn away destinations by ADSL1 users from Exetel to, effectively only two other ISPs - BigPond and TPG. While the total number of churn aways remainsat the same percentage of the total ADSL1 user base it's been for at least the last 24months the change in destination is so marked it must mean something. For the previous three years the destination of choice for people churning away from Exetel was pretty evenly split between Internode, Optus, iiNet and AAPT and amounted(s) to 0.25% of the ADSL1 customer base per month. This compares to the number of people who churn to Exetel that varies significantly each month from 4 times the churn aways to over ten times.
As the percentage of churnaways has remained constant for such a long time there was no immediate reason to be concerned about what I'd come to regar as a 'fact of business life'. It was only when I began to notice the change of churn to destination that I began to look at the churn to/churnaway trends more seriously. The first thing I noticed was that churns from BigPond remained pretty constant (as a percentage) but churns to from TPG had dropped by over 70% over the past three months. I can, sort of, understand why that would be. I can, also pretty much understand why the same amount of people churn away from Exetel as have done for the past 24 months.
Because I have a 'grasshopper mind' (and I started this entry based on the phrase 'weak signals') I had re-read the email correspondence I get copied on or, occasionally get direct, from Telstra Wholesale in the context of the churn increase to BigPond. Nothing immediately 'jumped out and bit me' but in re-reading 2,000 or so emails received over the past two years I definitely got a 'resonance' (or should that be a 'dissonance'?).
So the 'weak signals' that must now play a part in Exetel's future planning is that there is no future in basing any future busines aspects on using Telstra Wholeale services with the only doubt being the timeframe over which this will occur. I think it's clear that the current BigPond actions and those of TelstraWholesale are premised on there being a steep decrease in the business a small custoer such as Exetel will be doing with them.
I've been wrong before - I'm sure I will again - but identifying 'weak signals' that are true 'early warnings' are a key part of business planning.
I really hope GURUS is delivered on time and makes it much easier to concatenate disparate information without so much manual effort.