Nick Hindhaugh, Director, Six Degrees Executive
 
Welcome to the first issue of Six Degrees Connected - our new, quarterly e-newsletter which has evolved from our highly successful Thought Leadership Breakfasts. Attendees at the Breakfasts were enthusiastic in their requests for more thought provoking and informative content in our key areas of recruitment specialisation; Sales, Marketing, Supply Chain and Engineering.
 
In this issue we have some interesting articles by industry leaders to help you stay positive, focussed and connected. For example, Melissa Rosenthal shares her best tips for improving both your leadership style and your team’s leadership capability whilst Chris Bulford explains how you can translate sustainability into new business opportunities.
 
With the impact of the global financial crisis now hitting Australia, it’s a good time to refocus on your business strategy and your team. We are all witnessing changes such as restructuring, downsizing and organisations applying caution when hiring new talent.
 
Despite this, there is still good reason to remain optimistic about 2009. We can take some comfort that whilst economists are tipping Australia's jobless rate is likely to rise to 7% by the end of the year, this is nowhere near as severe as it was in 1991 when unemployment figures climbed from 5.6% to 10.1%. We have witnessed a number of our key clients, particularly in the FMCG sector, experiencing positive growth over the last quarter which is certainly encouraging. Beyond this, the tight candidate market we have seen over the last few years should free up, providing excellent opportunities in 2009 to find the type of quality candidates that have been elusive for years.
 
At Six Degrees Executive we were delighted to be named “Best Executive Recruitment Company” for the second year in a row at the Seek SARA Awards 2008. We are also very pleased to have moved into new, larger premises in Bligh Street to accommodate our continued growth in the Sydney market and to complement our Melbourne operation.
 
We hope you find the first issue of Six Degrees Connected enlightening and inspiring. If you have any story ideas, general thoughts or would like to contribute an article yourself, please contact Amy Hegvold at: amy@sixdegreesexecutive.com.au

Melissa Rosenthal, a Director at South View Consulting offers a few tips to consider when assessing your own leadership style and your team’s leadership capability...

There’s no ‘silver bullet’ when it comes to designing your leadership style. Put simply, good leadership is tough.

It’s no secret that organisations across many industries are facing cost pressures. In these increasingly turbulent economic times, restructuring has become a common response to this pressure. Whilst driven by a cost imperative, restructuring can often provide an opportunity to improve your team’s capability and culture. And this opportunity will be won or lost on the strength of your leadership style.

When thinking about your leadership style and your team’s leadership capability, it’s important to consider the following:

How well do you know yourself?

Understanding your own strengths and weaknesses in the context of your team is a valuable starting point. There are techniques available that can be used individually or in combination, including 360 degree feedback, personality testing (e.g. Myers-Briggs) and executive coaching.

Design your team’s leadership capability

Good teams often have, by design, a range of leadership styles in order to cultivate flexibility and responsiveness. This may include balancing personality types and management styles and considering diversity in terms of gender, ethnicity and education.

I recall a successful team I worked with recently where each individual clearly played a different leadership role in their interactions with other internal stakeholders. There was the “strategic partner” whose expertise created demand as a virtual consultant to other business areas. There was the “bulldog” who was sent in to negotiate difficult decisions. And there was the “trusted friend” whose exceptional relationship skills formed the basis of her influence within the organisation.

Differentiate between proficiency and leadership

Don’t assume that an outstanding performer will automatically make the transition to becoming an exceptional leader. It’s important to make sure that new leaders are provided with individual leadership training and support, based on their experience and the requirements of the role.

Distinguish between the good presenter and the good leader

Recent leadership research shows that there tends to be a ‘halo effect’ associated with strong presentation skills. That is, the leadership skills of good presenters tend to be over-valued by organisations. There’s no doubt that presentation skills are an important component of leadership, but it is also important to remember that good leadership more often requires strength in one-to-one interactions.

Recognise that the introduction of a new team member changes the team

Even the most common change, like replacing a team member, can significantly alter the team dynamic, which inevitably impacts all members of that team. A good leader will acknowledge this change openly. Addressing change will ensure that the desired team culture is endorsed by everyone.

Melissa Rosenthal is a director at South View Consulting, a Melbourne-based executive coaching firm dedicated to improving business results through leadership and management development. Please send any comments or questions you have in relation to this article to: melissa@southview.com.au.

There’s no doubt the hot topic of 2008 was sustainability. This was the year business went green. Sustainability was on the front page of national newspapers almost daily – Kyoto, green miles, green-washing, carbon footprint, carbon pollution reduction schemes – it was enough to make even the hardiest environmentalist feel overwhelmed. But as Chris Bulford, Managing Director of Circ Consulting points out, with a little insight and planning, sustainability needn’t be a problem for good marketers in 2009…

In response to the greener world we now live in, businesses and brands have been in a rush to be seen to be doing the right thing. Not only are companies offering staff rewards for turning off lights and printing on both sides of the paper, there is now a host of green products on the market, from carbon neutral beer and insurance to forest-friendly toilet paper. 

Increasingly however, the race to be seen to be green approach is back-firing. In their haste, some companies have been entering the market with incomplete or ill-founded claims that are failing to gain traction with consumers. 

CHOICE, the Australian Consumers Association magazine, recently surveyed supermarket products and found as many as 630 environmental claims on 185 products. What is concerning  about the increasing number of environmental claims made by companies is that, according to a recent  survey by research company Mobium Group, a massive 88% of consumers now describe themselves as ‘sceptical’ about the claims.

So what should marketers do? 

Just as a marketer would assess the influence that, say, a focus on health and wellbeing might have on consumers, so too they must carefully consider the impact that a trend towards sustainability might have on the thoughts and behaviours of their customers.

Good marketers will research the market to learn more about consumer sentiment, and then develop a strategy to respond. 

Questions you might ask are:

What impact has sustainability had on my customers, both current and potential? 

Is sustainability top of mind or not even an after-thought for my customers?

Are my customers part of the growing ‘lifestyle of health and sustainability’ segment, or do they oppose it? 

Importantly, there is no ‘one-size-fits-all’ green strategy, but different shades of green. The appropriate response will depend on your overall business strategy, existing brand proposition and capabilities.

For the brand, you will have to ask other key questions, such as:

Should sustainability impact my brand’s essence, its values, and attributes?
What opportunities might exist to develop my brand?

Consider Toyota, Origin and Bluescope Water for example – all these companies have defined new segments for positive brand benefits but they also understand how these segments fit with their existing business.

Good marketers understand differentiation. The challenge is to steer away from the generic and search for the opportunities. Those that do so successfully will translate sustainability into new business opportunities and enhanced brand equity.

Chris Bulford is Managing Director of Circ Consulting, a company which advises clients on how to grow sustainable value in today’s complex business world. Please send any comments or questions you have in relation to this article to: chris.bulford@circconsulting.com.au.

Once upon a time sponsorship didn’t need to be accountable – it was all about hospitality, tickets and signage. Sponsorship of sport evolved in the 1960’s and was more about awareness than engagement or solid business thinking. Today, the dollars have grown exponentially. Sponsorship represents almost one third of all revenue globally in the sports industry (with media rights and ticketing) but until now has been the least professional in terms of sophistication, process or decision-making.  But the growth of other forms of entertainment sponsorships (music, film, video-gaming) has put pressure on sports sponsorships which don’t deliver, and as Ben Crowe (co-founder of Gemba) reports the tough economic times have fast-tracked the reality that sponsorships that don’t perform will be the low hanging fruit in the inevitable budget-cutting process.

Today, successful sponsorship portfolios are treated like any other marketing tool – they need to have clear and measurable key performance indicators that are linked to the core business and brand objectives of the sponsoring company.  The sponsorship department is no longer an ‘island on it’s own’ but an integrated part of the marketing division with similar accountabilities.

The first step is evaluating how a particular sponsorship can achieve its objectives more effectively than other forms of media. Coca Cola is a great example of a company that applies a strategic, purpose-driven approach to review its sponsorship portfolio. Sponsorships that aren’t delivering results for the brand or business are divested and those with a clear strategic brand role are leveraged robustly.

Sponsorship can be a particularly powerful marketing tool when a more direct or intimate relationship with your target audience is required. Sponsorships that evoke a passionate response will have a positive flow-on effect for your brand if the sponsor can offer something that not only enhances your customers’ experience but also tells a story about your brand. Red Bull is an irreverent brand but it’s marketing principles are extremely disciplined – and its sponsorships are always subservient to its brand positioning. When Red Bull could not find a sport to sponsor that complemented it’s brand positioning (Red Bull gives you wings), it created it’s own - the Red Bull Air Race. What better way to communicate that Red Bull gives you wings.

Toyota is another great example. The Toyota Legendary Moments campaign was born out of the insight that footy fans love celebrating heroes of the past. Footy fans have enthusiastically endorsed the campaign and the Toyota brand. The AFL sponsorship has greatly assisted Toyota in building a strong, well-trusted and well-liked brand, particularly in Victoria. 

Although not everything that counts can be measured, measurement has become a critical tool in the process of developing a successful sponsorship portfolio. Accordingly, the more sophisticated sponsors are using research to measure the impact of sponsorship.

There is a new research tool in the market* which goes way beyond tracking sponsor awareness. Tracking people’s passion for sports and entertainment is important, since highly passionate fans are three times more likely to remember a sponsor’s brand. Tracking measures such as viewership, attendance, participation, impact on brand image attributes, purchase intention and sales are some of the other metrics that the best sponsors are using to measure sponsorship properties and the impact that sponsorships are having on their business.

* See: Gemba Sports & Entertainment Report. For more information visit www.gemba.com.au.

Ben Crowe is a Director of Gemba, a top-tier sports and entertainment consultancy that delivers business, brand and sponsorship solutions. Please send any comments or questions you have in relation to this article to ben@gemba.com.au.

Business failures are often attributed to such things as external market pressures, increased competition or lowered efficiency. While these factors can be killers of business success in their own right, as Ross Kennedy of CTPM Australasia explains, often complexity is the root cause of suboptimal business performance...

What is complexity?

Organisational complexity is when your company is performing a high number of low value activities, which add little or no value to the customer or the bottom line.

These low value activities have a disproportionate cost/value relationship. That is, they represent a high proportion of your company’s overheads or cost structure but generate little or no profit.

How do you know if complexity is at work in your organisation?

Consider the following early warning signs: 

• Employee morale and enthusiasm is low, people are too busy “sweating  the small stuff” to attend to the real issues
• Productivity is low
• The breakeven point of your company is increasing
• Salaried workforce levels have increased at a greater rate than production employees – staff have forgotten who adds value to the customer
• Inventory as a percentage of sales is growing
• Operating income as a percentage of sales has declined
• Sales of high-volume “bread and butter products” are under increasing pressure from competitors
• Customers are complaining about delivery performance
• Product quality levels are not meeting company or industry standards
• Product proliferation
• Low-volume products represent an increasing percentage of sales
• New systems have been introduced to rectify the problems of the “current” system
• Many problems are recurring as employees do not have time to perform root cause problem solving.

The 50/5 rule

The 50/5 rule is one of the most obvious signs that complexity is killing your company.

The 50/5 rule says that if 50% of a company’s customers, products, suppliers and manufactured parts account for less than 5% of the organisation’s value-added contribution, the presence of these low value-added activities is one of the driving forces of operational inefficiencies and excess cost.

In addition to peoples’ time, these products require floor space, tooling, inventory and planning, yet contribute little to profitability.

What can be done if complexity is killing your organisation?

A complexity reduction program is a major profit opportunity. In addition to the direct benefits, employees will have more time to concentrate on the big issues in the organisation, rather than “sweating the small stuff”. 

Things you can do to reduce complexity include:

1. Eliminate

The first priority should be to eliminate as many low value items as possible. There is a common misconception that eliminating items will stunt company growth, when in fact, the opposite is true.

By reducing overhead and structure costs, and focusing on truly significant products, organisations can take full advantage of their competitive edge in design or manufacturing capability, with the added benefit of increasing capacity with no capital investment.

2. Prevent part proliferation

Evaluate new products to be introduced, and establish a volume estimate for every item being added to the product line.

3. Consolidate

Make a commitment to an aggressive supplier consolidation programme. Target a 50% reduction in the number of suppliers each year for three years.

4. Understand value adding and non-value adding

For the products that make up 50% of your sales (typically around 6% of your total product offering), identify all value adding and non-value adding activities, in terms of labour activity, equipment performance and process design. Aggressively eliminate non-value adding activity and create flow for these products.

At the frontline, it is important employees understand the ratio of value-adding time to the total time spent at work. Your target for employees should be 85%. That is, the ratio of value adding time to the total time spent at work, excluding breaks, should be 85%.  

Ross Kennedy is President and Managing Director of CTPM Australasia, a membership-based organisation assisting companies to develop and unleash the full potential of their people, equipment and processes. Please send any comments or questions you have in relation to this article to: ross.kennedy@ctpm.org.au