Red Zebra Business Centre - Management Memos
April 2012 Making Measurably More For Your Business Since 1985! Page 1
How Will You Manage in the Two Speed Economy?
Max Williams, Principal Consultant

This question is not "How will you ever cope (that is 'manage') in the Two Speed Economy", it is quite literally, "What kind of management will you be exercising in the Two Speed Economy?"

For most of the last three decades the Australian economy has been fairly even. Sure, there have been hotspots in WA and Queensland, but other states have been strong too. Melbourne, for instance, has been on track to overtake Sydney as Australia's largest city.

All that has changed.

Western Australia, Northern Territory, and Queensland now combine to make a virtual powerhouse of economic growth, with minerals, iron ore, coking coal, oil, and gas.

At the other end, Tasmania with its emphasis on forest products is nobbled by conservation of the forest environment, and Victoria with its emphasis on agriculture and manufacturing is nobbled by the high Aussie dollar.

New South Wales and South Australia don't have the same sharp dependencies as Tasmania and Victoria, and reflect more accurately the Australian economy stripped of the mining stimulus.

Either way, the southern states are seriously lagging the north.

Now, for the first time in years, the right advice for one part of Australia is wrong for the other part of the country.

Soon the Australian Government will bring down its budget for 2012, and it is determined to tear 2.6% of GDP out of the economy to meet its political commitments. While there is some disagreement between economists, the majority believe there is a real risk of tipping the slower states into recession. So, what to do?

If you're in the North:

The outlook as you prepare for next year's budget process is for continued strong growth, but with higher costs than before, and somewhat slower growth.

This means that taking market share is a good first objective, closely followed by cost control measures. Costs will be increasing fairly steeply as the result of competition for scarce resources (particularly labour), and the effect of various government initiatives to bring in tax and slow growth.
A Two Speed Australia

If you're in the Middle or South:

Does it need to be said? Already rising unemployment and the pre-existing reluctance to spend, means that matching your resources to the available market will be a key business objective for most thoughtful managers.

Excess capacity means excess cost, and that's bad when there is no growth, or very limited growth, in prospect. Make al your assets earn their keep!

In addition, lower margins as a result of slow market demand will increase pressure on cost containment. In fact, cost reduction should be the order of the day.

Cost reduction is invariably hard - because the largest costs are usually labour and occupancy costs, and they're both hard to change. Nevertheless, cost reduction is the priority this year coming.

More than ever, managing a business is becoming a game of cat and mouse with costs and taxes - always supported by a  strong strategic view of where your opportunities lie. Opportunities, that is, for both sales growth, and cost reduction!

Click the link below to go to the Recruiting section of the My Red Zebra website.

Click Here My Red Zebra BizStaff

Productivity Imporvements Need Structural Change


ecruiting is a problem everywhere. In some parts of Australia and New Zealand, there is a high demand for labour, and potential recruits are scarce. In other parts, there seems to be plenty of people applying, but there is no-one that 'fits the bill'. Even if you get a good one, keeping them can be real problem!

Recruiting begins with understanding and setting out the job to be done.
Most business managers know what things need to be done. But that DOES NOT mean that they know the job that has to be done.

Take the case of a retail sales person. Everyone knows that the person has to make sales. All they need to do is sell!

Or so it seems. In fact, the person will need to know about  the returns and exchange policy, what documents need to be completed in properly handling a return or exchange, and how it is to be handled in the till.

Aside from that sales skill, the person needs to know how to handle an angry customer, what kind of service level is expected by your customers (each business is different), how delivery and installation is to be handled, and a whole raft of product knowledge regarding what you're selling. Often, the job requires fitting or installation knowledge that is unique for you, and can't be learned anywhere else.

In other words, your assertion "All they need to do is sell" is dangerously wrong. You're well on the way to a recruiting disaster!

First Assess Your Needs. Identify the Right Job!
This is actually the first thing to do, but it is often the least well considered.  You could almost write a book on the zillions of ways to get this part wrong. ‘Helen’ leaves, so we will replace ‘Helen’.  That’s a mistake, and the first step on the way to disappointment.

‘Helen’ was a particular person with a particular set of skills, and your organisation adapted around her. You cannot replace her exactly, so you need to know exactly what the new person will need to do - in complete detail.

Consider your whole organisation, the new person has to add to the team, not introduce conflicts. And consider where you are now in your growth plan, and what people you will need to take the next step. The new person must also have the capacity to meet the growing needs of a growing business, or the process is wasted!

Easy to say, and some people can do it. The first step in recruiting is ALWAYS to undertake a “Needs Assessment”.

Next, Write a Position Description.
Write a Position DescriptionOnce you've sorted the job you need to have done, write up a Position Description.

The Position Description will set out for the candidate just how the position you need to fill, will fit in to the organisation, what the responsibilities are, and what the duties are. Much more importantly, it will set out how you will assess and measure performance, what outcomes you are looking for, and how they can be sure you will be pleased by what they do. It's a powerful incentive when you know what the boss wants!

You don't have to fly blind. There is a lot more on the My Red Zebra website, and the link at the end will show you all the detail you need!

Time to Determine Who Has What It Takes - The Selection Criteria
One of the most misunderstood facets of the selection process is the creation of the Selection Criteria.

It's really quite simple. You know how you will judge the suitability of each applicant. You will look for certain skills, a  certain level of experience to show that a candidate can achieve the required goals, and you will be looking for certain personality traits. Write them down.

It's good for you - and helps you be consistent and fair. It also helps the candidates prepare their applications and prepare for an interview.

Good Workers Many applicants don’t know how to respond to a list of selection criteria, but the good ones do. You'll be amazed at how a good candidate self-selects when good Selection Criteria are in place!

Do be sure you have thought them through completely, and always write them down!

Find Good Applicants
It's easy to get people to apply for the job. Getting applicants that are really suitable is a lot harder. Sometimes there are no people who would fit the job out looking.

Your job ad has to appeal to the right kind of applicant, and filter out the time wasters. It has to attract people who "didn't know they want a change until they saw your ad".

Sometimes, you will need to run two or three different ads appealing to different groups, until you get the right kind of response. All this takes time, and it takes time away from you running your own business.

While on-line advertising is the flavour of the moment because it gets large numbers of applicants, and gets them quickly, you need to be careful.

Good selection criteria and a tight position description can limit the number of applicants to just a handful - and all of them a good fit to your needs!

Outside help is a saving here, not a cost!

Keeping The Person, Once You’ve Got Them
To be honest, your efforts to keep the new employee began when you first assessed the needs for the new position. If you have a capable person fulfilling a well understood role, job satisfaction takes root.

A good position description keeps them on track. Your regular performance appraisals will also help reinforce the good parts of their work, and correct the weaker aspects.

That augurs well a healthy long term employee relationship.

But if, as it often does, a good employee decides to leave, it is a mistake not to undertake a serous Exit Interview. More about that next issue!

"Leadership is the art of getting someone else to do something you want done because he wants to do it.” – Dwight D Eisenhower

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