John Linton
In the early stages of my career in the information technology industry I spent almost a decade with IBM in the 1970s - a great work, personal, developmental and totally enjoyable experience. One of the stranger aspects of working at IBM was the annual "re-organisation" and "re-focussing" (though I'm not sure that cliche was in use then) of the whole company in every country in which it operated - which was around 50 in those days if my memory serves me correctly. These "re-organisations", no matter how early in the previous year the planning for them started, never seemed to be complete before the end of March in the new sales year which meant that vital things (for sales people/managers as I was then) like quotas and territories and product sets to be sold were not firmly in place in most years until long after the new sales year had started.
No matter how dramatic the changes appeared at first sight, and they did appear to be quite comprehensive on occasions, all they seemed to achieve in Australia at the major branch level (Sydney and Melbourne) was a loss of 25% of the time available for achieving the sales targets. I was reminded of this scenario as we completed the "re-organisation" of Exetel over the past few days - not reallly a re-organisation in the real sense of the word but the moving of some people to new responsibilities, the hiring of additional personnel and the introduction of career planning and job goals for each person employed by Exetel.
Completing the review of each person's aspirations, both in their salary expectations and their job positions over the next three years, is an interesting experience - probably equally interesting for both each individual and the company that currently employs them. It is also a slightly worrying experience for the employing company in that it has to sincerely commit to the development of so many people in so many different ways and, equally concerning, work out how to grow the profitability of the business to meet the interesting amounts of additional remuneration that would be required if all of the current employee's remuneration expectations were to be met each six months moving forward.
I remembered the IBM experience because it must have been an almost impossible task in those desktopless/networkless/Excelless days to actually do the detailed planning and the many iterations that even a very small company must do to put together a sound financial and business development plan - however IBM's financial and growth track record in the 1970s is a miracle of consistency and magnitude unapproached in the world of business at that time.
In re-working the Exetel business plan for the balance of FY2008 and FY2009 one of the things that struck me (and yes, I know how mesmerisingly deceptive Excel can be) was how, in our very minor way, we had been able to meet the requirements of all our personnel in terms of regular salary increases that slightly decreased as a percentage of monthly net revenue - actually a decrease of several percentage points over the past 44 months. Of course, this was only possible because the monthly revenue increased each month over the previous month and the first three years of the Exetel business saw the constant introduction of new automated systems and processes.
Looking forward over the coming 22 months, and assuming the planning numbers are reasonably correct, this trend slows over the coming six months and then begins to increase to the point where it becomes almost the identical percentage of net revenue in July 2009 as it was in July 2004.
While planning numbers are just that, numbers in a plan, it's obvious that Exetel will begin, perhaps has already begun, to become slightly less efficient each month than it has been at any time in the past.
This is a serious concern and now needs to be looked at in different ways to the ones we have used in the past which having been so successful to date have lulled me in to a smugness that I must immediately get rid of.
It was a really bad decision to come back from holidays.