Tuesday, November 22. 2011Consolidation And Vertical Integration......John Linton ........business euphemisms for reduced cmpetition. I noticed that iinet had bought out Transact for whatever reasons that made sense to the two parties - presumably $60 million dollars was a sensible return for Transact and an appropriate expenditure for iinet. Whether any customer involved benefits is a irrelevancy in such transactions but there is no reason to believe that there is any customer 'down side' as presumably the customers will see no difference in any aspect of their services for some considerable time and its not as though there isn't enough competition in the ACT residential, business and government markets. I was more interested in the latest whining by a giant multinational in a completely different field: http://www.smh.com.au/business/heinz-hits-out-at-home-brands-20111121-1nr1l.html Personally I don't put tomato, or any other sort of sauce, on my food and haven't eaten many cans of baked beans since I was at boarding school in another country in another century - so whether Heinz products are available in the local super market or not is a matter of complete indifference to me. However other recent articles about bread and milk changes referenced in the article do concern me a little more - on a selfish basis (I like fresh bread) and I think the destruction of dairy farms by voracious companies like Coles and Woolworths are deplorable....but then I have a deep appreciation of farming that doesn't involve the slaughter of animals generally and a particular affinity for dairy farms. Similarly whether American multinationals (or any other multinational) have trouble competing with an Australian mega-business would usually not attract my sympathy/support - which it doesn't in these cases other than to realise that all dominant businesses are bad for the end user of their products in anything other than the very short term when they are destroying their competitors - simple business principles, and endless business school courses, have made that abundantly clear for several millennia. So why am I raising this issue in my overly cluttered mind that has far more directly relevant issues to consider? Because it is a stark reminder that in any business that is 'stagnant' the only result will be the destruction (a la Transact) of all companies that are faced with the tyranny of 'market forces' that demand ever lower prices, and therefore ever lower profit margins, that inevitably lead to ever more companies getting out of businesses - even multnationals that have dominated their marketplaces for almost 100 years....in the case of the Heinz example.....and, you would have thought, had an economy of scale that was 'competition proof'. It just goes to show how badly even the largest and long dominant companies can mis-guess their strategies.....Heinz shouldn't have continued to concentrate on canning food they should have added the distribution to the end user to their capabilities....not placed themselves in the position of allowing supermarket chains to take over all food outlets and then turn around and eliminate their suppliers. "Beans Means Heinz" was fine to destroy Cross and Blackwell (or whoever) but unfortunately it wasn't going to work against "No Heinz On The Shelves" means No Heinz. All Woolworths will do is to sell 'white label' beans at a loss until Heinz closes its factories and then they will increase the price - no big deal - Heinz have employed that basic practice for as long as they have been a dominant provider of various products. Telstra have employed the same tactic for the past three years in the ADSL and other markets in Australia. It all revolves around getting to a 'monopoly' scenario (or failing that a duopoly will work almost as well). It is not worth commenting on in the media let alone in a random rambling such as the words I am currently writing - except for the fact that such incidents will, almost inevitably, add up to a more comprehensive change, for the worse, for baked bean eaters and tomato sauce slurpers. Perhaps that's a good thing if those current users stop buying those pernicious products altogether? Perhaps Australian communications buyers would be better off returning to a Telstra only set of service choices at whatever price Telstra wants to sell them for? Copyright © Exetel Pty Ltd 2011 Monday, November 21. 2011One Final Piece Of The 'Puzzle'John Linton The last piece of the business plan for 2012 is just what part the NBNCo fibre offerings will, or can be made to play. To date there has been little take up by Exetel customers in the few areas we service and we are lucky to see one new NBNCo customer sign up a day at the moment. There are promises of a much larger deployment from now onwards but we have yet to see any sign of that happening so far. Our interest in NBNCo is, like everybody elses - subject to the Telstra separation agreement being signed which isn't showing any sign of meeting its 'before Christmas' dead line. Looking at the information provided so far there appears to be some chance of being able to use the NBNCo services in a small number of country towns that have previously been locked up by Telstra. Our interest is not in the residential customers in those towns but in the small businesses and the schools, clubs, doctors, dentists and possibly the auto dealers and pharmacists.....as well as all of the other small businesses. Part of our 'drive' into the business marketplaces is to provide a very solid and very attractive small business offering based on the NBNCo fibre services. This is partly because we regard this as an 'untapped' market (due to Telstra's monopoly to date) and partly because we think the many value add on services we can offer will be more highly regarded by small businesses than by residential customers. However the incredible slowness of th roll out means that there will not be many opportunities in 2012 which means we will have to find a substitute service until the NBN is a reality - if it ever becomes a reality. The obvious difficulties, apart from the erratic nature of the actual roll out, are the sheer uncertainty of the NBNCo's future and the unpredictability of how other NBNCo wholesale customers will approach the initial difficulties of selling the services. I am pretty sure they will show the same clumsiness and lack of imagination they have consistently shown over the past many years and, without any sort of product differentiation, they will flounder in developing viable strategies. Maybe that is a too jaundiced view and they will in fact massively change their ways and come up with a series of brilliant innovations and then execute those innovations perfectly. While that may happen I am not losing any sleep over it. I am pretty sure that the 'package' we have come up with will be more than just a little better than everything I have seen to date and it has its own inbuilt trump card that I am certain cannot be matched by any other provider. All and any planning is pointless until there is some certainty on the actual roll out which appears to be dependent on the Telstra separation agreement which is anyone's guess as things stand today. The other major problem is the appalling nature of the NBNCo qualification tools, almost entirely manual, that make it very difficult to actually determine whether or not an NBNCo service can be provided to a particular address. That problem, plus everything associated with it, will make the actual provisioning of the service far more difficult than it should be in these early stages. So it looks like it will take some time for us to put in place just how we approach the NBNCo 'opportunity' but we do need to make some sensible decisions in the next few weeks as it is becoming a more important aspect of our future business that it used to be - without the worry of a future coalition government's attitudes and actions. It seems unlikely that NBN services will play any part in next year's plans. Copyright © Exetel Pty Ltd 2011 Sunday, November 20. 2011There Is No Problem So Big......John Linton .....that it can't be ignored. I completed my parts of the revised operating plan late yesterday evening after dithering for more than a week. This leaves a little over two weeks to finish the rest of the work, which is mostly just translating the changes into documentation and then issuing the various personnel change letters. I managed to complete this work, which has been stalled for some time by a lack of decision making on two major aspects of what we might do next year, by simply ignoring both decisions and completing the planning on the basis that neither decision really affects the major thrust of the business and if they are made over the coming months then that will be time enough to consider the implications and take the required actions. So it allowed me to watch the cricket and the Arsenal game with a relaxed mind. One of the things I have missed over the past year has been the involvement in people selection as we have gradually grown our business. This was deliberate on my part because it is well past the time when direct line managers should hire their own people without having 'interference' from 'senior' management. The other thing I have missed has been the close direction of the sales processes which, if I have ever had any commercial talent at all, that has been my only claim to fame. Based on the planning just completed I have basically 'written myself out' of playing any part at all in those activities in the new year which is only a few weeks away now. I need to find myself a more effective role in the ongoing development of Exetel or alternatively something outside the company that will engage my interests more than has occurred over 2011 - which I haven't enjoyed at all. Perhaps its reaching the time that Exetel needs new leadership and much better direction. Alternatively, maybe it needs different people who can motivate themselves better than the motivation and direction they are currently getting which, it appears to me, to be totally inadequate....we have very definitely lost the zest that has always been a key aspect of the company with far too many of our very limited number of people not contributing anything at all and dealing with every situation with which they are confronted by 'blaming' the inadequacy of others. That very clearly indicates that too many 'managers', and others, are simply marking time which means there is no real direction being given from the very top and then on down. Perhaps three years of unrelenting financial pressure have sucked the life out of the constant creativity we used to bring to bear on our daily thinking and therefore resultant actions. Perhaps we just need to have some time where every second of the day is not spent looking at negative scenarios or perhaps doing that year after year dulls the mind so much new ideas and new initiatives are ground into dust by the sheer dullness that surrounds every aspect of current marketplaces. Maybe it's just me - I am just not cut out to manage 'holding patterns' - especially year after year - it provides no satisfaction at all. Maybe the new year will see some positive changes? Copyright © Exetel Pty Ltd 2011 Saturday, November 19. 2011How Do You Develop Good People Managers?John Linton We held our November board meeting yesterday. It was shorter than usual because although there were two more serious than usual items to be considered the uncertainties in the current market places meant that we couldn't really consider anything operationally until we resolved those issues at some future time. We did approve the most expensive capital expenditure program for next year - required to move to the next phase of upgrading the Australian network and we also approved the expenditure required in Sri Lanka to fit out new offices to accommodate another 60 people for the proposed growth in small and medium business sales and support. So, in one way, it was the most 'expansionist, board meeting we have ever held......which was very strange given the other circumstances that we will need to address over the coming months. The build out of the Australian network, apart from being the largest expenditure we have ever contemplated will also involve, almost certainly, a pretty comprehensive change to our IP and back haul providers....in itself a seriously major change and one not undertaken lightly....I always dread network changes of any sort. Over the years of developing corporate and business sales we have added a considerable number of circuits to our network - something approaching 2,000 additional links - 'on top' of dozens of links required for the residential customer network. While this has, of course, been done gradually over time it has totally changed our network topology and, looking at the likely future growth, will require massive increasing changes in the not too distant future. While we have signed the appropriate supply agreements with Cisco to acquire the new equipment at sensible commercial prices the costs are still quite considerable. Similarly, the costs of adding 60% more space and personnel to our Sri Lankan operation are not inconsiderable and all of that expenditure has to be incurred before we can generate a single dollar of revenue - let alone profit. While office space and fit out costs are lower in Colombo's CBD than they are in North Sydney they are still considerable though they pale into insignificance when compared to the massive costs of hiring and training the additional personnel....and that continues to be the major problem we continue to confront as we look in to the future - just how well can we select, employ and train the large number of people we will need to make our 'planning' a reality? I am probably more troubled than I used to be on this issue - because I don't see the personnel management skills that the planned growth needs developing as quickly as I had expected. So the caution displayed at the board meeting, apart from a major decision not being capable of being made, was generated by a hesitation caused by this lack of personnel management skills - perhaps even desires. I do understand that no company, of any size, can grow easily when there is doubt about its personnel management skills. I just don't know how to ensure all the obvious problems are addressed let alone all the problems I just don't see. It will be necessary to make a judgement on which of our current employees can rapidly develop to make this planned growth 'happen'. I have been trying to do that over the past few months without success. Perhaps I am looking at the issues wrongly? I never seemed to have had this problem in the past - perhaps I just never noticed? Copyright © Exetel Pty Ltd 2011
Friday, November 18. 2011Take A Step BackJohn Linton This time of year is always very demanding. I don't know whether late May/June or late November/December requires more 'thinking' than any other times of the year but right now I would put my money on Nov/Dec. I can't seem to get my mind around some of the issues that need to be dealt with and that, in itself, is extremely frustrating. I spent a pleasant hour or so yesterday exchanging views with someone I think knows more about this industry than anyone else but can relate to the difficulties a company of Exetel's size faces in these particular times. He also has a PA who makes great coffee and a really nice office (the size of a small football stadium with paintings, sculpture and books that most museums would envy) with stunning views and furniture that is perfect both to look at and use. I am not sure that you could actually do any work in such surroundings but what a great place to spend your working days. It was a very pleasant place to spend an hour or so and the advice is always well considered and referenced in detail....a great rarity in my personal experience. So we discussed how Exetel should proceed from here in the marketplaces that have now changed so completely they no longer bear any resemblance to what they were four years ago and looked into the near future to see what they were likely to become - as realistically as such estimates can ever be. It was not a pretty sight. So much has changed and, in my opinion, so much is going to continue to change that it is pretty difficult to 'plan' too much for the present and virtually impossible to plan anything for the 'future' - where the future is defined as a time more than three months away. However discussing a range of issues with a 'disinterested third party' was very helpful and, as I said, the coffee was the best I have had anywhere in Sydney (probably the only place that uses Blue Mountain beans freshly ground for each cup). As I drove 'home' I realised that I hadn't considered, for a very long time, what I was getting out of Exetel as a person and as a person who is reaching the end of his commercial life....one of the questions we had briefly touched on as he courteously walked me to the lift. I must give that some thought over the next few days.Whether I can actually address such a question rationally is highly problematical but it is the most important issue for me at this and all other remaining time. Certainly as we decide what we are going to change for the coming year it is going to be necessary to consider just what our new overall business objectives should be given that providing the lowest cost residential internet services at the highest level of quality and speed is no longer possible given Telstra's likely objectives over the coming year and what those objectives will mean to other providers to the residential marketplaces. How we could go about making such a significant change to our operations to manage such a major change will need some careful consideration over the remaining weeks of the 'planning period'......and will almost certainly require more objectivity than I seem to be able to muster these days. I doubt that there is enough time for any realistically 'correct' decision to be made. I am coming to the conclusion that this year we will not complete any sort of reasonable planning on time - there are just too many variables and, far too many, just plain unknowns. I need a holiday. Copyright © Exetel Pty Ltd 2011 Thursday, November 17. 2011So Many Good Ideas Never See 'Production'John Linton We had a very pleasant 'planning lunch' yesterday which could be regarded as just an excuse to take a few hours off from the slog of trying to work out how to make the required changes to the operating plan by involving other people in a discussion about some of the key issues....there were certainly elements of that. The food was as good as ever at one of our favourite restaurants and, to suit the occasion, we had some very nice wine and also had a, largely, productive discussion on two key aspects of what we need to do next year....increasing the technical expertise of our sales force and making more of the large scale opportunities we develop but don't close enough of - for a range of all the more obvious reasons. Training generally is very high up our list of issues to be addressed at the moment with hiring better people close behind - as we have to hire more people over the coming year than we have done in any previous year and by quite a large number. If we actually manage to execute our current plans we are faced with hiring 60 or so new employees (a growth of 50% over our current numbers) and of running an ongoing technical training program for 100 people throughout 2012. These are not easy tasks for companies much larger than Exetel and, for a company of our size, they are more than daunting. So yesterdays lunch was aimed at discussing these issues in a very relaxed environment to come up with the building blocks on which we could attempt these tasks. I don't think we got as far as I had hoped (but then my hopes almost always exceed realities by a fair margin). Involving new people in any process inevitably means that you have to go over a lot of background which takes time and adds nothing to where you are starting from. That takes a fair amount of time before you can realistically get to a point where 'new voices' can add different views - no problem - an inevitable process. There were some new thoughts introduced in to the discussion and some previous thinking abandoned in the light of different views expressed. So some positive outcomes. The issues, always, with any discussion (wide ranging or tightly focused) is what actually gets done as a result of the discussions. My long experience is that very little gets done as the result of most discussions unless there is someone controlling the follow up from the meeting.We will try and put in place a video based training program together with a 'white paper' covering some 50 technical topics together with an 'exam' for each topic which will trigger one on one follow up if the person doesn't 'pass' each topic. If this can be done it addresses many of the issues of constantly hiring new people across a twelve month period in two very different geographic locations. So it will be interesting to see whether the three 'new' ideas that were introduced in the last one third of the lunch are taken further by their proponents or whether they end up with so many other ideas just words that get forgotten amidst the need to concentrate on day to day issues. Whatever the case we have 15 working days to make two very big decisions and a plethora of smaller ones as well as to write and re-write a considerable amount of documentation. Though I still don't know how to ensure we can hire better than we have done to date and I'm not at all sure how to put in place the required training processes....and a whole lot of other things. Copyright © Exetel Pty Ltd 2011 Wednesday, November 16. 2011To Be Or Not To Be.....John Linton .......that certainly is the question of the day. I met with one of our major suppliers yesterday to progress our discussions on how we could possibly work more closely together on delivering business services next year. We have been 'planning' this 'association' for almost twelve months now and are getting closer to a go/no go situation. I still have some reservations about just how quickly we can build this concept into a practical reality but it remains pretty much on track for a February 1st 2012 'start'. The last big 'hurdle' has yet to be jumped and we will put quite some considerable effort in to clearing that last obstacle between now and Christmas - all being well we will take a deep breath and give the green light. I am not sure how much leeway we have to make a 'no go' decision on this initiative having already committed to the extra floor space and expensive fit out to house the additional sixty people required over the next few months. Something that has been considered for some time now is whether we should emulate the Danes of the dark ages and, at least metaphorically, "burn our boats" to ensure the waverers are totally committed to their new lives and have no chance to return to their old 'jobs' in our case. For some time we have been unsure as to whether we can continue to provide retail ADSL services that provide a clear advantage to our residential customers over those offered by even Telstra who seems to be able to do 'deals' that we cannot match. The latest one is offering fibre services in Point Cook that are, yet again, at below our wholesale buying cost. I think it may be the fabled "straw". There seems very little point in continuing to wholesale Telstra ASDSL services when Telstra continues to 'attack' our user base offering ADSL services at below our wholesale cost. We really should take the attitude that we have played a small part in bringing about this change in attitude by Telstra and we can serve no further purpose and should devote the largest percentage of our time and resources currently devoted to helping Telstra to some much more useful purpose. Exetel has offered residential ADSL services for almost 8 years now. We began this business on the basis that we could offer an ADSL service with more downloads for a much lower price than BigPond but still provide an equivalent or better level of speed and service than any other provider to the residential market place. That remained the case until Telstra Retail began their "win back"/"welcome home" assaults culminating last year in a marketing spend of some $A800 million to acquire new customers. Telstra's huge marketing expenditures compelled other providers to lower prices/offer inducements to protect their own customer bases (largely unsuccessfully) and certainly Exetel was forced to do the same. Irrespective of all 'emotions' - just how sensible is it for a company like Exetel to offer residential ADSL services when Telstra offers them at a lower price? Although I think I see what might well be the beginning of the end of these depredations - the churn aways to Telstra and TPG have reduced to a trickle while the churn backs from those companies have begun to slowly increase to more than the churn aways - the concern is that we have to put in far too much of our resources and time to accomplish very little in terms of either growth or profitability. That has been OK to date but now we are faced with rapidly growing a new business and the justification for devoting the amount of resources we currently do to residential ADSL is becoming harder to justify. While we may well end up making no such drastic decisions our modelling, for the first time, includes a scenario where there is no Telstra ADSL revenue or expenses.....I emphasise that is simply one scenario but the fact that is there at all means we have come a long way from the thinking that was in place in November 2003. So the current planning 'season' is more 'fraught' than usual with some, for us, very big decisions having to be addressed and, as always, the time to make such decisions is rapidly diminishing. Copyright © Exetel Pty Ltd 2011 Tuesday, November 15. 2011NBNCo Fibre And The Near FutureJohn Linton Yesterday was a deeply unsatisfying day.....and I don't feel that way very often. Nothing seemed to 'go right' and I became more and more irritated as the day progressed which is highly unusual for me as I, long ago, developed the ability of being able to totally focus on important things and ignore anything else. Not yesterday for some reason and, when I woke up this morning, I'm still feeling irritated at the various 'incidents' that ruined my day yesterday - a highly unusual situation. Perhaps the stresses and strains of the past three years are finally making their mark or perhaps I am beginning to realise that I am the wrong person for the position I currently hold. I put it down to the time of year - when so much time is spent thinking about making changes that, inevitably, you question your own abilities, and desires,to continue to participate in operating a business in continuingly tough times. However, fortunately, such days are rare and as every adult learns to do - you get over them. Most of the coming day will be spent on doing the basic 'figures' for 2012 and what exactly we will aim to achieve over the coming months that is different to what we are currently achieving. Our principal change is in how we will operate the business next year in terms of the relationships we have with our current suppliers and what new relationships we need to develop. NBNCo remains a conundrum and I was amused to get an invitation for a 'private dinner' with Tony Abbott to discuss issues of interest and concern to Exetel. I, very briefly, considered what benefits could be achieved by ponying up the $11,000 for that privilege before quickly reaching the conclusion that I could learn nothing of interest for such a very large expenditure. In fact I think Tony Abbot should pay me to give him/Malcolm Turnbull some more sensible views than they currently express on what they might do with NBNCo should they ever get elected. So what does the NBNCo mean to Exetel over the coming twelve months? It is one of the hardest 'calls' to make. I have no doubt that, in the event there is a change of Federal government, that the NBNco roll out will be halted and whatever exists at the time will be sold off to the 'separated' Telstra. If that was to happen it would make very little difference, in the shorter term, to how a company like Exetel would utilise the NBNCo fibre services. The single good thing about the NBNCo is its, current, statement that it will not charge lower prices to large wholesale customers (thus re-introducing the current lop sided scenario). If this process was to be maintained into the reasonable future then companies like Exetel would be able to operate far more profitably in the future than is remotely possible today. Why? Because we have painstakingly and painfully built the infrastructure and operating processes that allow us to deliver any given service at a lower cost, by quite a long way, than any company we compete with. So we can't ignore the NBNCo if it is going to roll out some realistic levels of infrastructure more quickly than it has so far - current scenario is really pathetic. I may be 100% wrong in my view that, at least for Exetel, the current NBNCo roll out is more useful for small business than it is (for us) for residential users. Personally I see almost no advantage of NBNCo fibre for residential users at all at this time and until there is a low cost 'entertainment' service that needs fibre speeds then I can't see any advantage to a sensible end user to pay more for fibre than they do for ADSL. I could be quite wrong - but my view of fibre is that it is of value to Exetel (because of the current pricing that ensures Exetel can compete better than it can on ADSL) I just don't see the value to today's residential user. It could have an advantage for some business users in the country and we do need to work out how to take advantage of that possible opportunity.....assuming it materialises. I hope I manage to maintain a better perspective of things generally today than I did yesterday. Copyright © Exetel Pty Ltd 2011
Monday, November 14. 2011Christmas Is Not Only Coming.....John Linton ....but that means the new year is only six days later. It's now less than six weeks to Christmas and the Christmas party invitations are in full swing with the first events already held. Exetel's Christmas party will again be held at the Star Casino complex though because of their rebuilding program our 'usual room' is unavailable (it has been knocked down) so we will be using a slightly different configuration taking over one of the smaller bars. I am not much of a fan of non-Exetel Christmas events and virtually never attend such things - I actually can't remember the last one I attended as I see zero purpose, let alone benefit, in them. However other members of Exetel's management seen to get great pleasure from them so perhaps I have reached the "Bah, Humbug!" stage of my commercial life (I must remember to cancel that office coal order). Despite living in Australia for getting on for 50 years I still associate Christmas with a totally different set of events and the consequences of cold weather that never seem to allow me to consider "Christmas" as actually occurring in Sydney - perhaps that's why I am not at all affected by it here. Having said that, it is necessary to examine what 'Christmas specials' various companies offer as December draws nearer. I have always found it a pathetic display as crassly money grabbing for venal commercial companies to try and boost their declining sales in the 'Christmas slowdown' (there is no hint of "goodwill towards men") but it is a regular occurrence. The fact that the majority of Australians take their annual holidays in the period from mid December to mid January causes a significant disruption to the 'sale' of a whole lot of products and services including basic communications services such as residential ADSL. Because of this major shut down it also means that business data services suffer "the embargo" when the major carriers will not install new business services for a period of around 4 weeks as they still cling to Telstra's dictat that so many engineering staff are on holidays in December/January that nothing can be done except maintenance. So to conform to the norm perhaps Exetel should offer a Christmas present to new users (bearing in mind that carrier discounts are only ever available for new business and never to "loyal customers") perhaps something totally vomit inducing like "A merry Christmas from Exetel - no ADSL or Telephone payments until February 1st" might conform to the crassness of insincere December offerings? Or maybe an even more insincere "unlimited downloads at no charge in December and January for the first 1,000 new customers....." or something along such lines? I wonder just how tacky an offer has to be to make a 'sales impact' over the coming few weeks? I am sure, given some time we could come up with a truly cringe inducing 'offer'. In the mean time we have to get on with trying to improve all aspects of what we do and formalise those ideas and changes in to a revised business plan for the coming new calendar year. This is made even more difficult, for me, this year by the imminent departure of our planning manager who departs to prepare for her wedding and then long honeymoon - I have become far too dependent on her 'running the numbers' for me over the past year and I failed to take account of the fact that young, attractive, females tend to have a personal life that is apparently more interesting and important than re-creating spread sheets and endlessly dissecting other companies pricing and configurations. So I have lost the 'leeway' that has always been previously available and will have to, really, complete the work by the end of the first week of December..... .....though the up side is that there will be no need to be trying to complete the planning for 2012 between Christmas and New Year's day as has always been the case in the past. Copyright © Exetel Pty Ltd 2011
Sunday, November 13. 2011The Residential ADSL Tide Shows Signs Of Turning.........John Linton ......ever so slowly but it definitely appears to be no longer receding. We introduced the second of a series of changes to our ADSL services late on Friday with 500 gb options for both Optus and AAPT based plans. We introduced a low end 20 gb option for both of those carriers towards the end of the previous week. Both of these 'innovations have seen immediate 'take up' and we will try and evaluate just what 'impact' the are having over the balance of November despite the fact that 'buying patterns' change quite considerably at this time of year. In terms of competitive actions we have noticed that very few Exetel customers move away to TPG these days while a much, much larger number of TPG ADSL residential customers churn to Exetel. Similarly significantly fewer Exetel customers succumb to Telstra Retail's blandishments while more Telstra customers than in the past two years 'return' to Exetel as their long contracts expire.....perhaps proving that Telstra aren't prepared to offer the same financial inducements to retain their customers as they were to 'win them back' two years ago. For these and other reasons we are seeing the 'tide' change from ebb to flow in terms of residential ADSL business though it is still pretty much at the mid point at the moment. So we have been looking at ways that we can speed the 'flow' aspect of the tide having endured a very long ebb period. One of the reasons for a better ADSL performance has been the, very slow, increase in business ADSL services that are beginning to have an overall impact on total numbers - still very small but growing month on month. Perhaps it is the very positive take up of mobile telephone services and a noticeable, still very modest, take up of telephone line services by customers who previously only had ADSL - both those changes would definitely account for the significantly less 'churn aways' though I doubt they would play any part in attracting new customers. Following the modest successes of the new low end plans and now the possible success of the high end plans we will continue to look at what can be done in the 'mid range'. Optus are being quite aggressive in their attempts to turnaround their own 'ebb tide' and the continual fall in IP costs presents a very different scenario for Exetel than has existed over the past three years. How Optus deals in its 'retail' ADSL business with the challenges it has seemed to ignore for the past three years is something I am not privy to....but all the on the public record signs are that they will try much harder in the coming months than they have to date. Similarly I would expect Telstra Retail to re-work their 'win back/welcome home' campaigns in the immediate future as, from our tiny perspective, the current ones appear to have run out of steam. I doubt that companies such as iinet or Internode will do very much as both those models seem to have reached the limits of their 'natural' reach and they will find things much, much tougher over the coming months. Perhaps NBNCo will actually roll out some significant infrastructure from now onwards (though the ongoing delays of their agreement with Telstra indicates that might not be the case) and that will also cause the kaleidoscope to turn producing a bewildering array of new 'patterns'. It will be interesting to see just how much money, and capabilities, the major (and minor) providers have left to continue the ADSL war of attrition into a fourth, even more exhausting, year. Copyright © Exetel Pty Ltd 2011
Saturday, November 12. 2011Teaching People To SellJohn Linton ......is more difficult or more simple than most people think. 32 months ago we set out to build a 'corporate sales force' by recruiting recent graduates with no sales, or even business, experience and 'teaching' them to sell data services to medium/medium large businesses. We have done that well enough for them to have 'won' 1,500 times against virtually all other providers of data services to the business market places and 'taken' those customers away from them. For the whole of that time we have been gradually building up the number of sales people we have in Australia (now a little over 20) and from October 2010 we began a similar program in Sri Lanka where there are now a little less than 20. To date we have used a sensible program of 'mentoring' to help each new employee understand how to approach business customers and promote Exetel's data services to them. This has worked very well, in most cases, and can continue to work well in to the future. It is an excellent concept (absolutely not unique to Exetel but I think we do it better than any other company I have been associated with or am aware of) but it's limitation is that it only allows for slow growth in the actual development of new sales people - even with three North Sydney based sales teams only one new 'sales person' can be developed per month. So, as we need to develop between five and ten new sales people a month, each month, of 2012 the issue of just how we do that becomes the major obstacle - seeing it cannot be done via the mentoring program that we have used to date. Developing sales people capable of selling a semi-complex service such as data via EOC or Fibre is generally deemed (from the opinions I have heard expressed) to be lengthy and difficult - and quite expensive. Personally, I have been quite heavily involved in 'sales training' for the majority of my time in business (either receiving it or delivering it). My, personal, opinion is that 'sales training' is largely a waste of time if not a complete myth. I long ago formed the view that, literally, anybody could sell anything if they had a good mind and were given the right product backed by the right 'tools'. I think this view has been pretty much been validated by what Exetel has done over the past three years.....as it has been previously several times. So now the challenge is to go beyond what has worked for us, so well, over the past 32 months and put in place a process that, over the coming 24 months will allow us to develop (and then effectively manage) a 'sales force' of 300 people - predominantly in Sri Lanka. Not the easiest set of tasks for anyone but almost certainly capable of being accomplished if the right ways can be developed and the right people found to manage those processes; and the constant refinements that will be necessary. The issue is - what processes will produce the required results and how do you find the people to carry them out? I have seen how not to do this several times - stretching back some forty years with the most recent mega flop example around ten years ago. All of those failures illustrated the sheer folly of thinking that you can actually teach anyone to 'sell'.....and then compounded it by thinking that you could ever develop people via 'sales trainers'. Yes, I know that all over the world major corporations are running huge 'sales training' programs with mega billions of dollars spent on 'campus' training facilities and their associated personnel. So that must be the right way of doing it? Ask anyone you may know who has attended a 'sales training' course and see what value they place on what they have 'been taught'. Perhaps the answers will surprise you....but if anyone ever says they found it valuable and it will increase their ability to do their sales job better then I am wrong to hold this view and Exetel will fail in its ambitions. But then I always seem to hold different views on practically every subject to the majority and, I think, I am nearly always correct - at least on subjects on which I have significant experience and demonstrated competence. So my view of 'sales training' is that it consists of a few hours setting out the processes by which an intelligent person can self develop the processes by which they will train themselves by acquiring the information they need to make a success of a sales career. It will be an interesting challenge over the next few months to put this 'different view' in to practice on a much wider scale than we have attempted to do in the past. It is based on my observation that "sales skills" have not changed for 4,000 years and there were no "sales schools" for the first 3,900 of those years. You actually can't teach compassion for your fellow man ("man" used in its generic sense), responsiveness to other people's needs and honesty. Copyright © Exetel Pty Ltd 2011
Friday, November 11. 2011Hedgehoppers Anonymous And Zager And Evans Had It RightJohn Linton I read the SA v Aus test report earlier this morning after noticing the unbelievable 'head line' - it remained unbelievable after reading the details. Also unbelievable, at least to me, is that Standard & Poor could make a 'mistake' that affected France's borrowing abilities: http://www.telegraph.co.uk/finance/financialcrisis/8846201/Debt-crisis-live.html and, if it is to be believed, the financial stability of the planet. I don't know whether the last pair making more runs than the first nine batsmen, Michael Clarke making more runs in his first innings than the other 19 batsmen of both sides in theirs or the fact that Greece, Italy and France have been allowed to borrow so much more money than they can ever pay back bewilders me more. I think it's a nice counterpoint that the news that the Qantas pilots are going to court to overturn the "Fairwork" ruling simply sums it all up - in 2011 Qantas pilots think $500,000+ a year is inadequate payment for some pretty mundane skills - and people wonder why the world's largest countries can't pay their debts? So the sheer inconsequentiality of trying to work out how we can provide better sales training for our newer Sri Lankan employees or how we can provide higher levels of service to our Australian corporate customers makes me want to give up. It's somewhat like building a sand castle on a beach not realising there is a Tsunami coming. I am anything but a 'defeatist' but sometimes I do wonder whether events around the world will make every hour I have spent during my 'working life' completely worthless and I really should have been joining protests about the evils of capitalism with all the rent a crowds that seem to be able to put a roof over their family's head and food on the table without the necessity of having a paid job. Perhaps Rupert Murdoch is right to have closed the News of The World and is now threatening to close the Sun in the UK? Perhaps the increasing media condemnation of the two Sydney Channels 6.30 "news sensationalism" is totally correct? Perhaps the world would be a much better place without any "news" as currently presented by the world's media because, as far as I can see, the world's media - with a tiny number of exceptions can be divided in to only two categories - sensational nonsense containing no truth whatsoever or paid propaganda pushing some government or commercial agenda. Journalists? Simply people who can't get any other job who base their lives on trying to get paid more money by generating as many column inches (or their video equivalents) as possible so they can be paid more. Lets face it "news" that is based on some recent adolescent's attempts to get more money is a very, very flawed concept. As equally flawed as the hierarchy of sub-editors who work for editors who work for publishers who take money from governments and major commercial corporations to "report news" of their direction/choosing. Strange how an abject performance by a cricket team can lead to such dark thoughts. Copyright © Exetel Pty Ltd 2011 Thursday, November 10. 2011TIO Registers Record Number Of Complaints.....John Linton .......which could mean that the telecommunications industry provided even worst levels of customer complaint resolution over the past twelve months . It could also mean that the TIO increased its advertising telling all the scammers and congenital liars who use telephone/data services that they might be able to rip off their provider by telling a pack of lies. The results can be found on the TIO web site and the raw statistics can be found here: http://annualreport.tio.com.au/NewComplaintsRegisterForMembersTable.pdf If you bother to read that data you will find that, once again, Exetel has the lowest number of complaints and all complaints were resolved at the Level I level (as was the case for most other sensible suppliers) which is a pretty clear indication that all the complaints made were spurious, at best, and a pack of lies in the main. Three TIO complaints a week for Exetel and similar ratios for most other ADSL providers indicates that the TIO is completely unnecessary for competent ADSL providers. Looking at the complaints recorded against Exetel, all but a handful were just a pack of lies and demonstrably so made by the 'entitled' sections of Australia's population looking for yet another free hand out from a government department. The TIO represents the nadir of government interference and meddling in things about which it has absolutely no understanding but it pursues as yet another means of providing the unemployable with paid work for the dole and to provide sinecures to its 'friends'. The 'NBN2' and the ACMA are similar examples of keeping otherwise unemployable people in highly paid positions where no possible benefit to any tax payer can possibly accrue. On its record, I am tempted to add the ACCC to that list but although its track record over the years has been uniformly woeful there is some justification for such a "watch dog". The trouble is with the ACCC, like most watch dogs I have observed throughout my life, they spend the whole of their existence asleep except for meal times. The latest complete BS published by the TIO demonstrates the futility of such organisations - advertise for people to contact you to get money is only going to produce one result - and it isn't an improvement in the provision of telecommunications services. Qantas has to go 'over seas' to get engineers to maintain aircraft because Australia's cost of living is inflated by the provision of highly paid jobs to 'workers' at government government holiday camps (AKA the Federal Public Service) which, courtesy of that ultramaroon Whitlam, sent Australian wages (and of course the cost of living) in to the metaphorical stratosphere and ensured that, over time, ALL of the real jobs in Australia would inevitably no longer be performed by Australians in Australia. Does the current situation in Greece ring any bells? Copyright © Exetel Pty Ltd 2011
Wednesday, November 9. 2011Growing An 'Established' Business.....John Linton .....how hard can it be? We have done some of the review work required to begin thinking about what changes need to be made to the current year's financial plan and therefore what changes we need to make to our operations by January 1st 2012. It is a hard slog that requires a lot of thought and some sort of ability to 'read' what, if anything, is changing in the market places in which we operate and in each of our people's desires and abilities to deal positively with those changes - a much more difficult thing to do despite the much closer ability to observe what is happening - assuming you bother to take the time. Changes in the market are not easy to read because even the acutest observer can only see the results of actions taken by competitors well after any changes have been made. Similarly changes in personnel attitudes towards their jobs and their employer can only be seen by their immediate manager and inexperienced managers seldom have the abilities, or often the inclination, to do that. The quality and dedication of the people employed in any commercial enterprise is always what determines the success or failure of any company. Almost all small companies succeed because of the dedication of the founder(s) of that company and the close knit nature of the working relationships between the early employees and the founder(s) as the company grows. It is inevitable that as any company grows that early dedication to 'group' success is gradually eroded and 'group success' is slowly replaced by personal success/reward which is an entirely different situation which needs entirely different motivations and management. Few small companies ever develop the abilities to grow throw that phase of commercial life.......they never have the extended management capabilities to make the change. Personally, I have never been able to understand very much at all about the planning processes that ensure the delivery of the optimum results achievable by a diverse group of people in constantly changing markets although I have been directly involved in those processes for almost three decades and observationally involved in them for another. Like any semi intelligent person I can understand that future performance is somewhat directly related to past performance and that all future forecasts have to take in to account the actions and ambitions of current and future competitors and that all future performance will depend on the individual desires and abilities of the people within any group at the various times in the future planning period - but that's about as far as I can go. I understand, better than most, that is not really an adequate level of understanding to actually produce an optimum 'plan'. So, I always dread these processes which, of necessity, I spend a significant period of my life being involved in. Apart from the huge responsibilities involved, the sheer volume of data that needs to be looked at, and if possible at least partially understood, is massively tiring - especially to an aging brain - or what remains of it. When changes are as constant as they have been for quite a while now i n the communications industry the task of making sense out of what is happening, and therefore what any company should do, sometimes appears to be impossible. I wonder how other people manage to make sense of all the information they need to digest and come up with the ongoing plans they obviously continue to do. There is only one, depressing, conclusion you can reach to that question. However ..... My current conclusions are that Exetel will need to grow at a faster rate than we have achieved, on average, over the past three years and that for that to happen we will need to operate very differently to the way we operate currently. That is the end result of almost two weeks 'thinking' - or more exactly - the latest two weeks of thinking in a chain of such sessions over the past three years. Just how to bring that about is not immediately apparent at the moment, at least to me, but it needs to be 'worked out' over the coming month. Shouldn't be that hard. Copyright © Exetel Pty Ltd 2011 Tuesday, November 8. 2011Language - The Difference Between The Human Race......John Linton .....and every other living thing on the planet.....and every other human being when you come to think of it. I don't know whether you take any notice of languages or the effect they have on you when you hear different languages spoken.....I do and have always done so for as long as I can remember. When Annette and I were in France for a few days earlier this year I was, again, reminded how much nicer spoken French sounds and even how much nicer English spoken with a French accent sounds than my Australianised rendition of English. I think the most beautiful sounding language is Italian followed by Spanish and then Portugese - each of those languages sounds, at least to me, so much more 'melodious' than spoken English - even of the type spoken by the great English stage actors. Our harsh and brutal germanic origin words with their crude pronunciations are pretty awful in the country of their origin and even worse in the Australian versions. Leaving aside the education problems of the last 50 or so years which means that I have difficulty understanding the vocabulary now used in some large parts of Sydney the actual pronunciation of words I do understand often means I have to struggle to work out what is being said outside my own home and 'Anglo Saxon' working environment. Australia's pursuit of multi-culturism over several decades has made it very difficult to fully and completely understand what a growing percentage of people in this country say when they speak their version of Australian English. Anyone who has worked in a call centre would know that a growing percentage of callers are very, very difficult to understand - some are just impossible.....all claim that it is the call centre's employees that are the problem - not them. There is a small, but growing, number of people who 'demand' to speak to a Chinese or other language speaking CSR. 'Regular' Australians seem to have a particular difficulty with "Indian" accents. I have previously commented that even the most meticulously spoken English by highly educated people whose first language is from the sub continent (and by general ignorant extension Sri Lanka) is deemed 'difficult' to understand, not because of vocabulary or syntax or grammar, but because of cadence/rhythm and syllable emphasis. I was particularly aware of how this was a problem by spending those few days in France and being reminded that the French cadence when applied to English dramatically improved the sound of the same words spoken by someone who had never known any other language other than 'English'. This lead to me discussing the issue when I went to Sri Lanka recently with the new General Manager and we met with three different English language 'school' representatives. She subsequently selected a fourth English language trainer. Of the original three, one of them fully understood the issue (of cadence) I raised and had a 'standard' course that addressed that exact issue - obviously it is a known issue - not just casually observed by me. So yesterday we held the first training session in an ongoing program of improving, not the quality of the "English" spoken by our Colombo employees, but how it sounds to Australian English speakers. How successful will this program be? I don't know - when I think of the spectrum of "English" spoken in Australia it would be impossible to under estimate the magnitude of such a task. We must find a way of measuring/tracking progress as time goes by. Copyright © Exetel Pty Ltd 2011 |
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