Friday, January 6. 2012Fax - A Dead Technology.......John Linton .....I wonder if that's true? New residential ADSL orders continue to run at above 200% of order volumes of the same period in 2011 as we get into the 'real days' and we received our first corporate data order for the year yesterday which 'beat' the start of new corporate orders in 2011 by three working days. One swallow is not any indication of how the year will eventually play out but it is a nice thing to be happening for the moment - and, of course, much better than the reverse. As I commented previously it is good to know that our automated systems silently process so many revenue producing transactions in the almost total absence of living people in our North Sydney offices. We re-set our modem/router/antenna hardware prices yesterday because, unusually, our Netcomm account manager was actually at 'work' and we were able to get some minor buy price concessions. Exetel doesn't sell much hardware these days compared to our start up period - partly because there are so many low cost on line 'shops' now but mainly because the overwhelming majority of new Exetel users already have their own modems/routers. Our major reason for still offering hardware is to provide our agents with a reliable and low cost source of supply but that has become problematical as so many, literally operating out of their garage, "on line shops" sell below Exetel's buy prices. We will see what happens over the next few months but we may not continue to offer 'standard' hardware for much longer. At least we ticked it off the list of things to be done at the start of the start of the year. Part of our software re-development plans have involved our own customer and 'prospective customer' data bases. Obviously we have developed our own customer data base but we have always used a third party software package for contacting prospective new customers. That software in turn uses another third party software package to send faxes to prospective customers and for the ten plus years we have been using that software it has had ongoing problems. Over the past three months we have been re-developing our software to write our own 'CRM' and 'Prospect' data base and fully integrate the records - something we aim to complete 'real soon now'. We will test over this weekend a key part of this redevelopment - the ability to send faxes to a selection of 'prospective' customers using our own high speed fax services at a fraction of the cost of third party software and at 120 times the speed. (this new software is also able to 'wash' the customer fax numbers against the "do not call" list). Subject to this weekends testing we should be able to send 45,000 faxes in less than six hours without sending to anyone who has put their numbers on the do not call register. The total cost of doing this will be less than $500. This may not sound very impressive and, quite possibly, for larger and better managed companies than Exetel it may not be. But it will be essential for Exetel's future that we are able to sell our small business services to the, alleged 2,000,000 small businesses that operate around Australia which are the 'new' market for ADSL type services and, in their way, represent a much bigger opportunity than residential ADSL services did when Exetel was brought into being. Back in January 2004 we 'created' Exetel by sending 10,000 faxes to the IT managers of large companies in Sydney - and Exetel received, against our modest standards, a huge response - so large we just couldn't deal with it adequately. So we will try a similar approach again - some eight years later - but this time the target market places are two million rather than ten thousand. It will cost $25,000 to try and contact every small business in Australia (without breaching the 'do not call' register). Would there be any lower cost way of sending what will hopefully be a simple yet compelling 'message' to every company in that market place? Copyright © Exetel Pty Ltd 2012 Thursday, January 5. 2012Adapt Or Die........John Linton ....our planet's inviolable law....for both its inhabitants and their activities. I read this: earlier this morning and thought about how Kodak used to be an icon of the NYSE. I also, I must admit, smiled wryly at the fact that a few months ago Kodak rejected Exetel's proposal to use our data services (despite having had a 'test link' with us that had delivered 100% up time at nothing less than maximum speeds for two years) on the basis that we were not a 'tier one provider'. For Kodak, a 100 year old pioneer of photography for the masses as well as innovation and delivery of commercial and military photographic services, to face extinction is sad. I don't know how many tiny/small/medium telecommunications providers have been bought out or simply shut up shop over the past five years since Telstra decided to get out of wholesaling - but it's a pretty large number. I do understand that the number of blacksmiths in Australia and around the world fell dramatically after WW1 and the demand for typewriters has disappeared along with Smith Corona, Imperial, Olivetti etc. Similarly finding a 'cut throat razor' or a petticoat hoop maker would defy the ingenuity of almost every person in everyday life. Change is omnipresent in every aspect of life. The ubiquity and constant technical/engineering development of the mobile telephone handset and the network it uses has signaled the end of wire line telephone since it was first introduced some 30 years ago and it would be a brave pundit who predicted that any wire line calls will still be made in 20 years time....don't say "fibre will ensure fixed line telephone calls are still being made" - that is a silliness that should be left to lying morons like Stupid Stephen and Juliar Faustus. The Kodak story this morning is a reminder of the fact that when it comes to technology "size" is not any form of protection - in fact it is almost certainly the reverse. It should be a reminder to the people who bleat about 'economies of scale' and 'synergies' that there is only one economy of scale that has ever worked in commerce and that is a monopoly that prevents new technologies from being introduced that disturb the cosy current arrangements. Economy of scale in producing photographic film worked just fine until the 'invention of the digital camera and then its inclusion in a mobile telephone hand set - after that all your film making manufacturing and processing facilities and distribution outlets around the world became so much unused real estate and redundant employees. Of course, it doesn't happen overnight and it is always clearly signaled years/decades in advance. Tragedy only happens when you choose not to see the signals and blindly blunder on doing 'what always has been done'. The current obvious example of this is the Labor government's 'NBN2' business plan that is based on wire line telephone revenue to attempt to make it look viable.In case anyone hasn't noticed the ONLY reason that copper telephone lines are still in use is that they are required to make ADSL available. Will that be the case in 10 years time? Well, no - because by then even the lowest cost wire line telephone call will be made by mobile services and a fair proportion of main stream internet usage will also use mobile devices - read the GSM road map - it has been pretty exact in its predictions for 30 years. Right now most people's wire line telephone call bill (excluding the line) has shrunk from an average of almost $30.00 a month to an average of less than $12.00 a month over a period of less than ten years Telstra has compensated for that loss of revenue by continually raising the monthly rental cost of the actual telephone line. (hands up for those of us who can remember when a Telstra telephone line rental was $10.00 a month?). Just how many benighted residential customers will not be using either VoIP or mobile (or a combination of both) to make 100% of their telephone calls by 2020? I wouldn't want to be basing a residential fibre roll out on receiving too much telephone call revenue beyond this decade. Copyright © Exetel Pty Ltd 2012
Wednesday, January 4. 2012Automation - You Take It For Granted.........John Linton .......but life continues to change and move away from the scenarios on which any organisation originally based its original automated systems and more 'new' people need to introduce their own concepts and ideas and then ensure they work. The strange residential order inflow continues with yesterdays orders exceeding this date last year by over 500% and the first three days of the new year by over 400% - very, very peculiar. All other order streams are pretty much as expected at this time of year. It is still very quiet in Exetel's North Sydney offices with all but two or three sales people on leave and only a few accounting and engineering personnel at work....a situation duplicated, I would think, in almost every other business around Australia. It makes you wonder how this has come about over the years and why so many commercial entities have fallen in to the habit of assuming that 4 weeks of the year can be eliminated from the calendar in terms of 'normal' business activities. But it is the case and it has to be dealt with on the terms that have developed over the years and there is, almost, nothing that can be done about it....but you must always try to take advantage of different circumstances if you can think up ways of doing that. One of the things that most Exetel employees take for granted, including me, is that almost every process within our operations is highly automated and that we will continue to automate all new processes as they become necessary to the same very high degree. That is certainly true for almost all of the processes we have put in place to date and most, if not all, of those processes have been 're-automated' to meet changing conditions within our own and our suppliers operations - several times - over the past eight years since ADSL orders used to arrive by fax and payments used to be processed, one at a time, manually by me calling out credit card numbers and amounts to Annette who would key them into a POS device. Nothing like doing a really tedious and accuracy demanding job late at night, every night of the week, to become an enthusiastic proponent of automation. What few, if any, people realise within Exetel is that they have to play their parts in introducing new automation - it didn't just happen 'by magic'. I have noticed over the past year or so that manual processes are creeping in to our daily operations (because so few/no current employees do anything about automation as did in the past) and that there isn't the same rigour as there once was to automate all new processes and to keep re-looking at all old processes to see what manual aspects of them can be further/better automated via newer technology or just brighter ideas. Perhaps this is an inevitability of adding more and more new people in to an ever thinning management structure. Perhaps we are just hiring less able people and our original able people have lost their enthusiasm and sharp eyed ness. Whatever the reason we are in danger of eventually losing the competitive 'edges' that our very strong automation program had delivered on over the eight years of our existence. We need to do something about understanding how to re-address the ongoing automation of our repetitive processes but I am not sure how to go about that. I have thought about it over the last few days - mainly piqued by the strange increase in residential orders that the automated systems put in place so many years ago were dealing with (in the absence of almost all our residential sales and provisioning personnel) which made me realise that it has been a long time since I have reconsidered that aspect of our business - as one obvious example. A great deal of food for thought.
Tuesday, January 3. 2012'NBN2' Likely Progress In 2012......John Linton ......not very much from what I can see. Reality always eventually destroys the lies associated with all political stunts - this is again demonstrated in the performance, to date, of Krudd's attempt at face saving with his announcement of the 'NBN2' after his blatant lies about his 'NBN1' to get himself elected blew up in his face and proved him to be a complete self abuser (remember the 'NBN1'? $4.9 billion to build a national fibre network to 97% of Australia?). Cut it any way you like into as small a set of face saving pieces as the sharpest and thinnest knife you can find will allow you to do but connecting 2,315 customers to the 'NBN2' after four years and almost two billion dollars of 'investment' is one more political non event (the "education revolution" springs to mind as only the bigger waste of money deploying out of date technology in the most wasteful way possible to the least effect but the 'NBN2' is pretty close): Perhaps, as the article states, running the fibre 'past' 500,000 more premises in 2012 will dramatically increase the number of users who will take up the service - you would certainly expect that to happen if those premises have no ADSL available. Just how many customers will move from ADSL to fibre is something that should be a cause of concern to 'NBN2' and its political promoters. Exetel's own figures are far too small to be any sensible guide. However if you take the figures published in the cited article as truthful then you don't get a very positive view of what the take up by possible takeupees to date has been. That is perhaps because, at least at this time, the majority of people can't see the point in replacing a working service that addresses their current needs more than adequately with a more expensive service that won't give them any more facilities than they already have? I am pretty sure that Exetel's NBNCo's pricing is the lowest available from any provider and is certainly as low as our ADSL2 pricing at the lowest fibre speed (roughly equivalent to average ADSL speed). Although, courtesy of NBNCo, we provided a fibre service on a free trial basis we have struggled to get more than 50% of our ADSL users in the best of the initial test areas to sign up for the 'NBN2' service and we did solidly promote it by calling all possible customers as well as emailing them to ensure they knew it was available and what its advantages might be. In some areas the take up was lower than 20%. It was below my expectations (though I had no basis for seriously estimating what the take up might be). I can't extrapolate from the numbers published in the cited article what the percentage take up from other providers might be but our figures are not very 'promising'. Of course, it's very early days and a few test areas are not in any way definitive as to future performance but....... .....we do need to make some informed decisions on just how a future NBNCo offering will affect the future of small business services around the different market areas - capital city, large regional, country. Given the performance to date that is actually more difficult now than it was a year ago....at least it is for me. For instance - if only 30% of our 'normal' 1.0% of take up of Exetel services continues to occur then a target marketplace over the coming year will only see us, with a lot of effort, gain less than 2,000 NBNCo customers. Such a figure is not worth pursuing.....it would cost us far more than we could ever hope to recover. Naturally you can slice and dice the figures anyway you like to account for the myriad of uncertainties in that extrapolation but you are still not going to come up with any sort of valid commercial case to operate in the 'NBN2' market in 2012; all that is being accomplished at the moment is that Exetel and possibly other providers, are just spending money because the taxpayers are spending money on Krudd's political stunt - everyone loses at the moment. Exetel, like many other telecommunications companies does need to find a sensible 'NBN2' offering, if not for residential users, then certainly for business users. However it doesn't look like 2012 is the time to do that. Copyright © Exetel Pty Ltd 2012 Monday, January 2. 2012Just When You Think You Know Exactly What You Are Doing.....John Linton I had a longish phone conversation yesterday with someone who has expressed an interest in buying Exetel in the past and is one of the people I have known long enough to have my home telephone number. He was enquiring whether Exetel might be for sale, either in toto or in part which I advised him was not the case. We went on to talk about the Australian telecommunications market in general and how his company was faring and how he, and "his team", saw the future of residential, small business, large business and the corporate marketplaces and the companies providing telecommunications services to them. Such general conversations aren't particularly useful but it was interesting to listen to another sensible person's view. I this case with a genuinely knowledgeable person who has been around as long as I have in this always interesting industry. We discussed the ACT and Internode sales and his view was similar to mine - too much was paid for far too little and gave a better indication of the 'future' than the previous 'vanity' purchases in that iinet was almost certain to be taken over by TPG before the end of 2012. He had very different views to me about what would then happen but we both agreed that there was simply no 'room' in the Australian marketplace for iinet as either a standalone entity and that if TPG did take it over it would probably also see TPG's demise trying to assimilate the over charging/over staffed iinet in to it's strangely arranged company. Two agglomerations of diversely directed kluges would be an almost impossible commercial mix in a set of future marketplaces that Telstra and Optus are in the process of redefining in an ever shifting 'NBN2' future. I listened far more than I spoke for the best part of an hour and it was refreshing to be a 'persuaded' rather than a 'persuader' for a change. I do agree that the future is 'all about Telstra' and no other company, including Optus, will have any 'say' in shaping the post - 'NBN2' marketplaces (whatever and whenever they become clear). He disagreed with my view that the 'NBN2' would turn out to be simply a freebie for Foxtel to disseminate its 'entertainment' at a lower cost than if it had to fund the build out of its own regional network but we agreed that a change in government would see a dramatic change to the future of NBNCo and a sell off (at a giveaway price) of whatever infrastructure had been funded by the taxpayer to Telstra within the first term of a changed government. We concluded our pleasant discussion by agreeing to have lunch sometime in the near future to continue discussing the immediate future of supplying telecommunications services to non-residential customers and what impact the 100% loss of all 'wire line telephone revenues' would really have on future telecommunications providers when the federal government eventually realises that building an 'NBN2' based on subsidies from providing 'voice services' was so 20th century. When I hung up I thought about what I had heard and decided that Exetel's current plans were more sensible than those I had listened to during the conversation. Then again, I suppose that was an inevitable conclusion.
Copyright © Exetel Pty Ltd 2012
Sunday, January 1. 2012Happy New YearJohn Linton Exetel's 2011 finished with residential ADSL sales in December up 26.8% over 2010 with the days since Christmas being up 100% on the same period in 2010. It is quite a strange set of daily results for which we have no inkling of an explanation. However we would be very happy to see the current few days trend continue in to the new year. Arsenal won, both Chelsea and ManU surprisingly lost overnight and it is a bright sunny day in this part of Sydney so maybe it's a sign that 2012 will be far easier for us than dull, daily grind that 2011 has been. So we begin the new calendar year in an optimistic 'mood' and have all of our January activities already in place and one of them already underway. Our major new initiative is our partnership with AAPT to sell their business data services throughout their exchange coverage areas. In our 'test phases' over the past few months the initially selected SL sales reps have sold well over 60 new AAPT data links to a surprising array of customers and have demonstrated that they have been able to learn both the technical and commercial aspects of this quite complex process as quickly as their Australian counterparts. We have begun to develop a new way of doing the ongoing program of sales and technical training that will be required for both the current personnel and, assuming the program is successful, for the new people we plan to hire throughout 2012 and 2013. We have planned to use several of our more experienced people in developing 'videos' of key aspects of the the technical and sales aspects of the business and corporate data services with the first two of these videos now being completed as part of the 'testing' of this concept. We will use those as part of the initial training we will carry out in Colombo during the week after next and,depending on the 'reception' will make whatever changes are considered necessary for the following videos. We have yet to put in place the questionnaire processes that need to be associated with the video education and 'skills inventory' for each person but we will develop that software over the next few weeks. It is going to be a challenge to fully train a large new sales force to sell data link products and it is something I have not done/participated in for a very long time and I am really looking forward to it. The last time I did an ongoing, major training program covering sales and engineering it produced some amazing results and if I hadn't lost focus (partly because of its success, partly many other things) it may have been truly remarkable. This time the lessons of past 'mis-steps' have, hopefully, been both learned and remembered (not the same thing at all). I have always really liked technical selling and have always been able to actually do it better than anyone I have ever competed with. In developing this new training program the issue will be to ensure the required levels of technical/engineering expertise are seamlessly developed as a key part of the sales processes. I doubt that we will initially get that right. However I think with enough continuous follow up, patience and bloody mindedness we can build an exceptional sales force that will out perform every other provider's sales efforts by a considerable margin.....that's a very worthwhile, if very difficult to achieve, ambition. Copyright © Exetel Pty Ltd 2012
Saturday, December 31. 2011Finally, 2011 Will Be Over In A Few Hours.........John Linton .......and the new year's challenges will begin without the briefest of pauses. The 'old year' will finish with a very strong month with sales far greater than we expected and revenues also far stronger - for reasons that are totally unclear to me. The most surprising component is that new residential ADSL sales have increased almost 25% over December 2010 while for the previous 11 months they registered decreases of 30 - 40% per month over the previous year. I really don't know what to make of that figure. Corporate sales set a new record for December with an extraordinary increase over 2010 but that can be explained, for the most part, by the fact that we have substantially increased the size of our corporate sales force over 2011. Both those 'results' are very pleasing and are very encouraging entering a new 12 month period. If I was to look at what has been accomplished by Exetel over the past twelve months I would say that surviving as an independent company is very high on the list. There is little doubt that Telstra's continual actions over the past three plus years have made it very difficult for telecommunications companies to survive and the list of 'known' companies that have disappeared over that period is quite extensive - for the ones that were large enough to be remembered - and even larger for the ones too small to be noted, however briefly, in the 'industry media'. It seems likely that at least some of the remaining 'independent' telecommunications companies will go the same way during the new year but whether this is a good or bad thing is arguable. Is thee any 'real' case for iinet to exist when Telstra provides services at a lower cost over a better network for example? Also high on the list of Exetel's achievements over 2011 was the building of a much larger corporate sales force - almost doubling the size in terms of number of personnel and more than doubling the number of sales over the year. The development of the business and corporate sales operation in Colombo was also an amazing achievement and has progressed much faster than I had expected. 'Wielding' that new 'weapon' to its greatest effect in 2012 will be a significant challenge but also a very exciting one. With the ongoing growth of sales and engineering personnel in both North Sydney and Colombo planned for each month in 2012, Exetel may well become a quite different company over the coming year. The third, in no particular order of importance, major accomplishment over 2011 was the start of the transformation of our core network from a redundant infrastructure based on 1 gbps circuits to a triply redundant network based on 10 gbps circuits, routers and switches with the largest financial investments we have made to date (although they are 'dwarfed' by the investments planned for 2012). Over the past twelve months we have invested very heavily in both hardware and personnel to ensure that our planned residential, business and corporate sales targets are capable of being delivered. I could go on but those are the three major achievements for 2011. To still be in business, to still be growing and to have concrete plans in place to grow further in the coming year are, probably, achievements enough in the most difficult year I have personally experienced in my commercial life. May 2012, for both you and those closest to you, be the happiest and most rewarding year of your lives to date. Copyright © Exetel Pty Ltd 2011 PS: A timely reminder:
Friday, December 30. 2011.........Must Do That When I Get Back.......John Linton ....one of the saddest, stupidest and most self deluding statements in business life. It's that time of year again when the calendar year actually ends and even people who live their working lives 'second by second' like me tend to do a 'look back and review' at this time even though I know how pointless it is to do so. There is nothing so useless as looking back at past events and regretting your decisions or the way you addressed past issues - if you think you could have done things better the time to have done that was then - "the past is a foreign country, they do things differently there" (L P Hartley) and in my case they have also locked the borders and aren't issuing any more visas. Similarly looking back at the 'good' things of the past twelve months is equally pointless in terms of any thing practical but it is something that is more enjoyable than looking back at the things you regret. So I tend not to do that too. What I, and I assume most other realistic people, do is to deal with problems as they occur and try and do something about them at the time. Similarly, when 'good things' happen I try and see how to repeat whatever 'caused' the good thing to happen in the future. Boring and patently obvious but it does save the time not so sensible people put into trying to work out how to avoid past mistakes and repeat past 'triumphs'. Of course this would not work for 'media commentators' who endlessly fill in column inches or air time with stupidly pointless "annual reviews" for most of December (and early January) for their readers/viewers who presumably have the mental retention abilities of a gnat or who didn't bother to acquaint themselves with the facts at the time and some writer/commentator seems to think they would like to be acquainted with the circumstances too late for anything of value to be obtained.....other than their ability to get paid for writing such useless summaries to fill in the media space/time when nothing else is happening. The new 'business year' will start this coming Sunday and the fact is that if a commercial entity doesn't have everything fully prepared by midnight on Saturday 31st then precious time (in terms of meeting 2012's targets or the balance of the financial year's targets) is being wasted that can never be recovered. But what will most mediocre business managers be doing at midnight this coming Saturday? They will be on 'holidays' leaving the start of the new year to maundering on about how good/bad/indifferent the last twelve months have been and, if they consider their 'working lives' at all it will be to promise themselves that they must get around to doing something or other "when they get back to work" before the alcohol erases their short term memory later in the small hours. There is no virtue in not taking a holiday at the end of any given year - most people who work hard need such a break having tired their body and their brain over the previous twelve months - but all the sensible ones ensure that the work required to start the new year on 1/1/nn is done before they take their holidays. Personally I have reached an age where my body and mind are permanently tired and I take breaks much more often than each twelve months. What I observe about so many of Exetel's suppliers is that they take holidays at this time of year without either completing their essential obligations to us nor even making any sort of adequate preparations for the coming twelve months leaving us to exclude them from future planning. I find that not only stupid but also very rude. It seems strange, at least to me, that in a business such as telecommunications any sensible person could ever think there are periods when they can effectively shut their business relationships down for a month - they obviously realise that they can't shut their networks down. Maybe such people are able to get twelve month's work done in eleven months - I have never been able to do that. Copyright © Exetel Pty Ltd 2011 Thursday, December 29. 2011I Didn't Get To Watch The Cricket Yesterday......John Linton ....other issues got in the way as they usually do.....which is a pity as it would have been an interesting day's play. Maybe today.... I'm not sure whether it's Internode's sell out that has triggered some change of thinking by residential buyers generally or something else but residential ADSL sales are currently running at almost double what they were at this time last year (the days between Christmas Eve and New Years day). The usual drop off in residential ADSL orders hasn't happened this year and it looks as though we will finish December an incredible 20% higher for the complete month than last year - something very strange has happened......I have no idea what that might be. So I spent most of yesterday trying to find out what may have changed on various competitors web sites but nothing seemed to be any different to what we saw before Christmas. While it is a very pleasant change it is still desirable to see what may have caused it. Like all 'mysteries', once you begin to attempt to find out what may be causing them you get diverted bit by bit to looking at other related and the progressively unrelated things and before you realise it the day has disappeared and you didn't remember to turn on the television. However it was interesting to see what other providers are doing and its becoming apparent that the last three years have been as unkind to several other providers as they have to Exetel - at least from what I can make out. I don't play guessing games so I can't really spell out what I think I saw but it looks as though the price of an ADSL service (bundled with a real or fictional telephone line or standalone) has increased by around ten dollars a month over the past month or so. I will go back over the prices I noted down yesterday later this morning to verify that assessment but I'm pretty sure it's right. Why this is the case, if in fact it is, is the interesting question. I put Internode's recent price increases down to simply increasing the value of the sell out - identical to the process and timing that Westnet and Netspace went through. Internode's web site pricing is labyrinthine at the best of times but recently it has become almost impossible to determine how services are priced and the nonsense of "Telstra Wholesale has recently raised prices" is sheer nonsense....unless TW has singled out Internode for special punishment or has recently withdrawn some special "Internode only discounts"....possible perhaps but unlikely. Looking at the prices of Telstra and Optus is always almost as complicated as looking at Internode's pricing and in those companies cases does not reflect their outbound selling 'promotional' offers - so it isn't very productive. TPG seem to have increased their prices but they are becoming a far less significant influence on the market - unless you're iinet of course who still seems to lose a lot of customers to TPG (as well as fearing they will be bought out). Comparing current prices for the top few providers today to the prices of the same providers in early October gives the overall result I alluded to - the average price of an ADSL and real telephone line service has increased by almost exactly ten dollars in the 'mid range' ($60 has become $70) and a little less in the low range ($30 has become $37). Of course, the very foolish buyers, are still being offered bundled services in the $80 to $100 range but presumably those sort of sheep will always be shorn by the unscrupulous spivs of internet supply. So perhaps the simple explanation is that Exetel's prices are the lowest on the market and don't carry the taint of TPG/Dodo type under provisioning and dreadful 'support'. I will try and raise the enthusiasm to go through these numbers again this morning to ensure I haven't made some basic errors. Copyright © Exetel Pty Ltd 2011 Wednesday, December 28. 2011Hiring The Best People (2)John Linton The start of the fifth day of the 'Christmas break' is noticeable for the fact that I feel like I have had a break which is unusual. Perhaps the avalanche of food and deluge of alcohol over the past four days has had a numbing affect on my sensibilities in a more forceful way than in past years. A few hardy souls will return to the Exetel office today to assist the 'skeleton' staff who took no breaks at all over the last few days and dealt with the almost 200 calls yesterday that still come in from residential customers and those who must be available in case a corporate customer encounters a problem - never over the past seven years - but you can't rely on that. I intend to watch the cricket for most of the day, assuming there is some and it is worth watching while looking at (playing around with) some better ways of hiring people over 2012. It is inevitable that all orgnisations become complacent with their hiring practices no matter how 'elitist' they tend to be. "Our hiring practices must be excellent - look how well the company is doing" covers the reasons for complacency in most instances. Small companies tend to retain this attitude because the founders/directors tend to remain involved in hiring each new person in the company and how can they ever do anything better than they already do? I know I can never do any better than I already do because I am so good at it and I've done it for so long! Even if that were true, which I know it isn't, as a company grows more people become involved in the hiring process and in our case it is completely impractical for hiring in Sri Lanka to be conducted in the same ways as hiring in Australia. We currently rely on a fairly rigid set of criteria for resumes and transcripts and a set of 'interview questions' for guiding our inexperienced supervisors/managers in selecting personnel. We could say that these processes work very well - they do - but actually measured against what? We tend to keep personnel we hire for far longer than 'average' but that, in itself is not a sensible criteria - for instance in Sri Lanka we pay so much more than other employers (as a base policy) that keeping staff will always be easy - so that cannot be any judgment of hiring the best people.Similarly do we actually 'train' the people we hire to maximise/optimise their abilities and growth potential? Impossible to say with our current internal policies and practices. Certainly for the past three plus years we have been so inundated with the day to day problems of just 'staying alive' in constantly difficult and constantly changing market places that we have been grateful enough to continue to grow Exetel's revenue month on month/year on year and have had absolutely no time for such things as improving our hiring and training processes....because we believed them to be the very best we could make them and although we have grown in terms of personnel we have only grown quite slowly - at least compared to how we plan to grow in the future. So, it really is going to be necessary to re-define our hiring processes and to teach/show/explain how to do a much better job to the people who will be hiring some 100 new employees over the coming year.... ....and then re-educating the people we have already hired (and are already doing very well within the current Exetel) to do better for themselves and for Exetel in the future. I remember when, because I have been around since the late Bronze Age when sales/service/business training was 'revolutionised' by Video Arts who made 'instructional videos' using John Cleese, Hugh Lawrie and Ronnie Barker: http://www.youtube.com/watch?v=7nwg96d8g3I For several years these videos were used by companies across the English speaking world to teach in a new way the 'boring' aspects of commercial interfaces. Because the approach was different, and the people in the videos were inherently funny, these videos enlivened many a dull company teaching process - although they were mainly appreciated for the straight comedy value. I am not for a moment considering using these terribly dated concepts within Exetel but I am looking for a 'new' approach to 'training' and 'education' that will be more effective than our current processes. One of those approaches, as I previously may have mentioned, is some sort of video. We need to do this now if we intend to meet our 2012 objectives. Copyright © Exetel Pty Ltd 2011 Tuesday, December 27. 2011Exetel's Key Challenge In 2012.....John Linton .......apart from everything else. Our key challenge over the coming year is, undoubtedly, hiring up to 100 new excellent people. This, if it happens, will grow the current level of employees by 40% and most of this hiring will be done in Colombo by very young, and very inexperienced people who have very little commercial experience. I have a life long disdain for "human resources" personnel who, as far as I have observed over a very long time are particularly useless at the one key task that might justify their existence - the selection and successful acquisition of new employees. My observation, over a very long time, is that they completely fail at this simple task and their failure consigns every company that employs such people to achieving less than could be achieved by any other means. So it was with a fair amount of amusement that I read this article this morning: http://online.wsj.com/article/SB10001424052970204552304577113003705089744.html Sure it's US data about current US hiring practices but it's interesting enough as an insight in how not to try and hire really good people. Try the test questions at the end and see how you go (would you get a job at some elite US company based on your abilities to correctly answer those questions?). I spend some time each day doing a cryptic crossword and a relatively tough Sudoku - not for fun but to keep my mind 'fit'. I got 1 and 3 correct (because three is simple math and one is looking for the obvious non numeric solution because a numeric solution is not going to be possible and I had seen the answer to five a long time ago). However what such questions tell you about a young person applying for a job is not clear to me. Buried deep in the middle of the cited article, if you bother to read it, is this: "The deep, dark secret of human resources is that traditional job interviews don't work very well. In fact, there's been quite a bit of research on the topic. One example is a famous experiment that Nalini Ambady and Robert Rosenthal of Harvard did in 1992, with videotapes of traditional interviews. People who saw 10-second clips of an interview had roughly the same opinion of the interview subject as did the actual interviewer — making a strong case that job interviewers go by first appearances and are fooling themselves into believing they've gleaned additional information from everything that comes after." I almost 100% agree with this assessment with the only rider being that I believe that you can pretty much decide whether or not to hire someone based on their resume and their High School and Undergraduate transcripts meeting your criteria and simply use the first few seconds of the face to face interview to decide whether you like the candidate or not. This method has always worked for me - but then I have never been in a position where I have been involved in hiring super men/women. So our challenge is not going to be easy to address - I don't think any of the people who will be responsible for hiring can yet do the '5 second assessment". We do have a 'formula' for assessing resumes and transcripts which tends to avoid most of the obvious mistakes and we do have a brief 'set' of interview questions that are almost fool proof in ensuring that any resume assessment errors are, almost, always eliminated. What are those questions? I wouldn't want to write them here as the 'thought police' are omni-present in our nanny society but they are simple and direct and give a clear observation of any candidate. So, having read the article can we improve on our hiring processes in Sri Lanka over the coming months? Copyright © Exetel Pty Ltd 2011 PS: Goodbye to a very great man - without whose ideas he "borrowed" Steve Jobs would be unknown: Monday, December 26. 2011A Feather In The Wind?John Linton Well, another Christmas has passed and I hope you had a pleasant and enjoyable day in whatever manner you chose to spend it. I ate too much (as usual) and drank too much (as usual) but otherwise had a very enjoyable day with the few members of our family who were able to make it to Christmas dinner/lunch. Christmas day is very quiet, for all the obvious reasons, in terms of receiving orders but our automated systems don't take public holidays or 'sickies' so they processed double the orders they did last Christmas Day. The actual order volumes are so small that isn't anything like as impressive as it sounds but it is significantly better than processing 50% of last Christmas Day's volume. Perhaps it's a 'sign' that residential business has 'turned the corner' and all our efforts over the past few years will finally result in some tangible increases in the number of customers who understand that low priced services can be provided without any compromise to speed or quality....I am encouraged to think this may be the case by the fact that almost no Exetel customer moves to TPG anymore and an increasing number of customers who did churn to TPG have been 'returning' to Exetel over the past year. The other noticeable 'statistic' is the almost zero churn away rate to Internode and iinet over the whole of 2011. Our statistics show the churn away rate to iinet has been almost zero since we began collecting meaningful statistics but the churnaway rate to Internode fell sharply over the past 24 months and to zero over the past few months. Churn aways to companies like Primus, Adam and Optus are practically non-existent with only Telstra dominating churn away destinations and, over the past six months, Dodo beginning to figure in the stats. However, mainly because the Telstra "win back" campaigns have moderated, churn away daily numbers have fallen by 75% over the past almost six months while churn to numbers have more than doubled. Perhaps there are deep changes beginning to affect the residential ADSL marketplaces replacing the wave after wave of unrelenting 'win back' offers by Telstra? Over the past month or so we have looked at the few 'NBN2 Wholesale' offers that are being tentatively promoted. All of them are commercially non-viable at the moment but, and this seems to contradict everything ever averred about 'NBN2' pricing, there seem to be indications of a change in the overall 'NBN2' pricing that will provide large buyers (Telstra springs to mind) to buy at preferential pricing that would allow, possibly, a true wholesale arrangement to be put in place. At the moment the wholesale offers are a non-event and offer absolutely nothing in terms of commercial viability - but that may well change assuming that Stupid Stephen, Juliar and co can handle yet another 'policy reversal' along the Carbon tax lines of - "and I promise you there will never........." To date there has been no advantages for the Exetel customers who have changed from ADSL to NBNCo and that seems likely to be the case, at least for Exetel, for some considerable time. May well be different for FoxTel of course. I am trying to finalise the Exetel small business offering over the next few days. The small business ADSL plans we are currently offering have been generating more interest each month since we began to more seriously address these market places and I am encouraged enough by the progress to date to try a bit harder than we have in the past. Part of our plans for next year are to put in place a dedicated outbound sales force and a dedicated small business support team to build our sales of ADSL small business offerings on the basis that, one day, these would be a more sensible way of using any eventual 'NBN2' services than stealing more movies/TV shows more quickly which, as far as I can see is the only residential use for NBNCo services at the moment. 'NBN2' is years away from impacting on the business marketplaces but, one day, 'NBN2' or Telstra or, outside chance, someone else will provide fibre business services that will be more usable than ADSL. If residential ADSL sales continue to improve over the coming year as they have over the past few months it would make it much easier to deal with the 'NBN' issues than seemed likely a year ago....the long time frames involved in an NBNCo fibre solution for businesses can be more than adequately addressed by ADSL2 in the meantime. Copyright © Exetel Pty Ltd 2011 Sunday, December 25. 2011A Very Merry Christmas To Every One....John Linton ....and thank you very much for your support of Exetel over the past year - Annette, Steve and I very much appreciate it. 'Traditional carols' are playing in the background bringing constant reminders of happy boyhood Christmases far away with more than one old favourite bringing a few tears every now and then. The aroma of cooking is beginning to spread through our house as it must be doing in the majority of dwellings all around Australia at this time despite the 'unseasonality' for cooked food in summer as the grouches may observe and I, like most people I imagine, are looking forward to a very enjoyable day. I checked Exetel's 'progress' earlier this morning and even on a Christmas Eve Saturday orders for many residential services were at relatively high levels and there were even two corporate data orders submitted - something that has never happened before. With seven 'dead' days to go we have exceeded all of our December targets and look like finishing the month more than 20% higher than in December 2010. So a great month's results to end the best revenue year Exetel has ever enjoyed....profit?.....we will have to wait to see if 2012 can make that grow to something more consistent with the huge efforts we put in to supplying services...there is no hurry. I am continually surprised, and humbled, by the number of customers who have supported Exetel for so long - some since our first month in business. These are the percentages from our first year: 2004 - 02.5% 2005 - 05.5% 2006 - 09.0% 2007 - 10.0% 2008 - 12.0% 2009 - 17.0% 2010 - 21.0% 2011 - 23.0% So, to all of us who have allowed Exetel to make it through 2011 - mainly our customers but also our personnel and our suppliers (apologies to Tiny Tim who had far more reason to say it) - God bless us every one. Copyright © Exetel Pty Ltd 2011 PPS:http://blogs.telegraph.co.uk/news/tomchiversscience/100126056/in-praise-of-jesus-christ/ Saturday, December 24. 2011The 'End' Of Another Year.......John Linton .........undoubtedly the toughest year since Exetel has been in business and one I will personally be very happy to see the back of. It must be Christmas because breakfast this morning was the first cut of the Christmas ham on toast and there were only two overnight emails to answer. It has yet to get out of Autumn weather mode with the morning starting quite cold and although the temperature is only now just warming up in this part of Sydney there are an increasing number of very dark clouds that have just 'extinguished 'the sun. Annette assures me that all the Christmas shopping is done and all that remains is for her to spend some eight hours in the kitchen this afternoon and from the crack of dawn tomorrow to prepare the food to feed the dwindling number of family attendees at Christmas lunch while the rest of make half-hearted offers of help which we are glad to see refused.. While the 'business year' has been truly burdensome in the worst possible ways it has also been the most successful year of Exetel's short existence with record revenues, fantastic growth in our business services and the highest level of investments in our network infrastructure by more than double of any previous year. We also now have 150 employees, 30% more office space than we started the year with and a new partnership on which to build our very ambitious ongoing developments in the coming year. So, perhaps, 2011 should be regarded as a necessary evil in a transition to a more interesting, and hopefully more pleasant, future - although it is hard to forget just how truly horrible it has been. The horribleness of 2011 has been underlined by the late in the year sell offs of Transact and now Internode to the omnivorous iinet which illustrate just how difficult it is for many people to see a positive future in the Australian telecommunications industry for the people who are still in it (a number less than 10% of the total of 6 - 7 years ago). This is not a bad thing of itself as, when you look at the scenario rationally neither Transact nor Internode nor the hundreds of other companies that have disappeared over the past five plus years actually provided very much to their customers that wasn't already being provided by some other supplier....which, no matter how you wish it wasn't the case, is the actual fact of the matter. The current 'NBN2' adventurism (blamed by Internode for their decision to quit - although that obviously wasn't the case) starkly illustrates how even billions of dollars invested with no possible hope of a return cannot actually deliver anything of any value to Australian society generally and also cannot even change the time frames for any value to be delivered by any other means. Since the Internode sale I have been asked when Exetel will be sold off by a number of sensible people. These people observe that there appears to be no place for companies of Exetel's size in "today's" telecommunications marketplaces and cite Internode as an "excellent company" that couldn't survive in the coming 'new telecommunications world'. Of course they may well be right and based on the past three years of personal stress and immense strain it is not difficult to see their viewpoints. But the companies that have given up whatever ambitions and reasons they may have had for being in the Australian telecommunications business clearly saw no reason to continue to be in this very difficult and very unrewarding business - they took the money that became available from their long and hard years of efforts and went off to do something else. A sensible personal view and one which no-one would see any problem with. If I had any ambitions relating to money then now would be a good time to look for a buyer for our small company. But I don't. I also have no ambitions for 'Australian market domination' that, apparently, are at least part of the rationale for some people; those with no understanding of commercial or any other history. We had a modest ambition when we started Exetel which we probably never got close to achieving but, in any event, Telstra rendered largely if not completely redundant some three years ago. However on the way to not achieving that ambition we did build the necessary infrastructures to allow us to aspire to another, quite possibly much more important contribution to Australian society (as well as fulfilling our own personal modest aspirations as individuals and as a company). So, perhaps unusually, in 2011 - Exetel's reasons for remaining in business are still as brightly self evident as they always have been and allow all of us to have a sensible reason for going to work each day other than to make our shareholders wealthier. So, until my personal lifestyle finally breaks the robust health that an accident of birth endowed me with I have a very good reason to continue to contribute to the ongoing well being of my adopted country which has been so kind to me - I also cannot imagine (perhaps I lack imagination) a more interesting way of spending my waking hours......it's a long time since I felt the need to have any sort of hobby. Copyright © Exetel Pty Ltd 2011 Friday, December 23. 2011It's Cold And Lonely In The Deep Dark Night.....John Linton ........and I very much doubt Internode selling out to iinet was for the 'public' reasons stated....it was simply money.....as always; that and the slight fear for the future of residential services and the sheer burden of running an ISP these days....after 18 years of easy times with the last three being an increasing pressure. Exetel had another truly excellent sales day yesterday with a flood of business data orders and residential orders for most services showing no sign that it's practically Christmas. So more Exetel people say goodbye to take their Christmas break and the office is progressively emptier. It really has been a remarkable December so far and, it may be 'crowned' today with our, by far, largest ever sale of business data services made by one of our "silly young girls" as one of the drones at Macquarie Telecom refer to Exetel's corporate sales force. They are predominantly young but both their degree transcripts and their performance in their jobs makes them anything but "silly". 113 more wins for the "silly young girls" so far in December - 113 more losses for the competition's 'sales forces'. Just who is "silly"? I read about the Internode sell out to iinet yesterday afternoon although what little 'explanation' there was made no sense to me....but then I am not too bright when it comes to these sorts of things. I thought it went beyond naivete to suggest that "Internode would continue to operate as a separate entity" and that "no changes would be made at Internode" - if that were the case why pony up $105 million? To more than naievely suggest that "look at Westnet" - still operating independently after almost 4 years" is just a laughable lie - as any Westnet employee or customer would attest to. Not that it matters - no-one shells out money to pay for something they don't intend to change and there is no need to say such a thing. It was obvious, at least to me, that the steep increase in Internode customers churning to Exetel over the last two months or so as Internode raised its residential ADSL prices was eerily reminiscent of Westnet's similar exercise as they boosted the ARPU of their customer base prior to selling it as was the recent wholesale firing of high priced employees to boost the profit per month. Does it actually mean anything? I can't see anything changing in the 'industry'. The reality is that Internode was/is a high priced residential ADSL provider with perhaps 3% of the residential marketplace being bought by another high priced supplier with perhaps 10% of of the residential marketplace. What changes? Nothing at all. The mumblings about "protecting iinet from being taken over by TPG" are nonsensical - it can't possibly affect such a scenario if in fact it exists. Why TPG is buying up iinet shares suggests that TPG is interested in acquiring iinet but that scenario, if it is correct, has a long way to go and would be of no interest to anyone other than the iinet directors/senior management who would lose their toys and have to find new jobs. The other nonsense talked about the "NBN making it imperative to be very large to compete in the future" is equally the sheerest nonsense. Apart from the fact that there is currently no NBN and its anyone's guess as to how many years it will take before there is any sort of NBN and what change(s) will take place when/if there is one? Will Telstra be anything other than a lesser threat if the NBN ever gets built? Of course not.... it will disappear as the threat it is today and is unlikely to ever be as 'threatful' as it has been in the past. Irrespective of what conjecture, passing for insight, suggests - if there ever is an NBN, Telstra will never dominate the Australian telecommunications market in the future as it has in the past....Foxtel might become the major provider to the residential marketplaces with better management....but not Telstra. The relevance of Internode being bought out by iinet? Nothing at all to anyone other than to the personnel within the two companies who will be made redundant.
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