December 2009
How would you react if I said that the entire South African mining industry is under threat?
Certainly, I have not done a complete study on the matter, so perhaps I am way out of whack, but enough is going on around us to breed serious concern.
When Eskom first fell publicly apart, the mines came in for criticism because they need considerable power to run effectively. They were instantly forced to tailor their output to the electricity available during an era of planned blackouts that few of us will ever forget.
The industry cooperated magnificently, to its own detriment.
Come the economic crisis, mines were among the first companies to adjust to far lower demand levels. Smelters were closed for refurbishment and production was reduced. Mine profits slumped accordingly.
Eskom suddenly had enough power to go round, but squealed about the lack of demand. What did it expect? Our ongoing and now thoroughly boring power crisis helped trade union, Solidarity, figure out that dangers to an industry can come from beyond it.
By which time, over 34 000 miners had lost their jobs which, in real terms, put over 34 000 families into bread lines, if only our government dealt effectively in bread lines. But Solidarity had, at least, got the message.
Mining is the industry on which this economy was built; it made South Africa a power to be reckoned with. The sector has employed countless people since 1886; feeding families, giving people of all colours and creeds honest work and earning a lousy reputation in the process. Every injury and death is challenged, even though many are caused by careless workers who don’t follow the safety rules.
Mining is dirty, dangerous work, no one denies.
But it is easy to see, from the last two years, that mining remains the kinetic force that keeps our economy moving. The present situation spells more retrenchments and more families unable to make ends meet, but it could also herald a complete change in our economy. Without mining, the cash cow for taxes, we have no obvious economic driver.
Most of our population believes that the white colonialists raped the country of precious metals. They assume that all whites were enriched in the process. They weren’t. My father worked on the mines in his youth, earning a basic salary; the extent by which he profited.
As a disabled pensioner, he again worked in the mines, though not directly for them. He was virtually always on the road (a solitary, lonely business), risking his health and life by installing his company’s product, working alone sometimes seven days a week and earning barely enough to keep a wife and three children.
He was seldom home and was always stressed and thoroughly exhausted. He lasted less than four years before his doctor told him to get out, fast, if he valued his life.
He had been installing pumps to pump underground water from the mines.
Many of those pumps stopped pumping once shafts were closed. Today, we are reaping the results of that particular unwise move, as a solution to acid mine drainage becomes urgent, before all our natural water systems are polluted and the country’s supply of potable water comes under threat.
In fact, Mining Weekly wrote recently that, should Government not implement a solution shortly, toxic water will rise to the surface and decant, contaminating groundwater, causing sinkholes and destroying eco-systems.
Mines cannot make themselves responsible for environmental liability in perpetuity. Those mines that are no longer worked (bearing in mind that many of the original mining companies no longer exist) remain the responsibility of the country. The custodian of the country, on behalf of the people, is Government. The issue must revert, at some stage, to Government. There is no other option.
That’s the sole good argument, I think, for Government to nationalise the mines…
But which of us really believes that Government could manage that state of affairs efficiently?
It’s had a rough ride lately, has Government. Wherever it pries, cookies seem to crumble: Caster and the ASA, with Winnie and Julius roaring in the foreground; but before that came HIV/Aids, SAA, ACSA, the SABC board, etc. To be honest I forget how many or the chronological order…the World Cup is taking a load of flack in the face of the starving millions…and now Armscor and the Eskom debacle, yet again: no solution and now no Godsell.
Tito Mboweni (in his day) stressed that mines will not be nationalised, no matter who frets for their incorporation into state property. He realised what many of the general public do not consider: that mine production margins are already under severe pressure; both large and small producers are considering closing shafts that are not financially viable.
Under our ground lie stashes of precious metals that are our link to the world economy, but which we can no longer afford to remove although they would speed economic growth and recovery from the recession.
If adopted, Eskom’s planned 45% increase annually for three years, would lead to another wave of retrenchments, Solidarity warned. The proposal would delay
Above ground, it seems that Eskom is revising it. By how much, I wonder…
Eskom cannot get the funding it wants because it is determined to proceed with projects that are considered less than worthy by investors.
The organisation recently lost a major long-term contract that would have made Coega viable.
Eskom itself reported that 80% of electricity users in Soweto
Eskom continually brags that it is electrifying rural and poor
I don’t decry the goodwill involved, but it is shocking that independent ratepayers and private companies are continually forced to subsidise unilateral charitable decisions that are not their own. How is anyone expected to plan a life and pay off misconceived debt?
Electricity, like piped water, has always been a paid service, not a human right! Eskom should forfeit the right to distribute largesse.
Why is there no political will to recover significant debt? Could it be because so much of that debt is owed by Government, the major shareholder? How can Eskom expect to keep its business running if no attempt to recover what is owed to them is made?
If our mining sector is forced to downsize to accommodate Eskom, Eskom should ‘downsize’ to accommodate its consumers.
This alone, spells for me, the need for Government to subsidise Eskom. As its owner, it has benefited greatly from the power utility through the ‘fat’ years. Eskom’s managers were granted large bonuses last year despite the fact that they couldn’t keep the lights on! Well, the ‘lean’ years are upon us…I think it’s time for Eskom to become a non-profit organisation!
Studio M’s bottom line: I guess few of us are in the position to make or break the economy and it’s probably just as well…but we, as a country, really do need to make some changes to aim for what is logically achievable and ethical. It’s never too soon to do that within your own sphere of influence.
Mo
November 2009
For six months, I’ve had builders and workers all over the place and my working routine has been thoroughly disrupted.
Labourers can be incredibly destructive. They also seem to feel a sense of entitlement about wherever they work.
Each new team effectively reduced the entire property to a building site cum squatter camp, with plastic bags, paper, cardboard and general rubbish flying about in the wind. When the dogs ate so many of the bones they found lying around the garden that they needed operations, I let rip.
And then there’s the rain…because they don’t work in the rain, they don’t get paid during bad weather. But how do they still manage to afford to eat meat three times every day?
Their foremen also seldom appear to plan their projects or daily tasks. Sometimes, there were at least a dozen men lounging around doing nothing or making mischief. We pulled a dozen or so dagga plants up last month, recognised by the gardener, who’s clearly more street-smart than I! I was awaiting development because their foliage was so pretty…
…and why are there so few women in the building industry? Most men simply don’t relate to the type of aesthetics that are important to women, like matching components, textures and colours.
No matter its size or industry, the most important resource any business has, is time. And time is money.
How time is used, relates directly to how much money a business makes. Back in the 80s, a boyfriend of mine used to brag to me about his hourly rate. But once he eventually finished a job, his original hourly rate had been effectively diminished by the hundreds of unquoted hours the job had actually taken.
I’ve watched umpteen painful examples of this recently: too much plaster slapped on and three days to chip most of it off again; surfaces not properly prepared before painting and the whole lot removed before they can be repainted; too much concrete mixed and everyone scurrying about digging holes to bury it!
They get so caught up keeping busy, they fail to notice just how unproductive they’re actually being. Very often the business owners rush off to quote new business and consequently fail to supervise the work adequately.
A possible referral lost every time.
Working long hours is like running on a treadmill. Regular, recurring jobs may keep you busy, but they don’t build equity. As soon as you get off the treadmill, you find yourself where you started.
Leverage time to develop tools and systems with lasting value that also build equity.
Include goals like helping customers to find you, increasing your income, becoming an expert in your field and making a difference to your customers’ lives, with marketing assets that continually build your business.
Websites that work 24/7: The Internet is one of the best ways to leverage your time as long as your website gets noticed. While professional design is worth it, using the right words will bring more potential customers to your site. Look for a package price from someone who knows more than how to make it look pretty.
Research your ideal clients: Who are they? What are their most urgent problems? What challenges do they face? You can never learn too much about your ideal clients. And only then do you know who you are really looking for. Use this information when deciding your website address.
Specialise: Even if your skills or products are general or varied, focussing on a speciality area helps your marketing efforts tremendously.
Create content: It’s probable that you have enough information and experience to write a book that addresses your potential client’s most urgent needs. If that scares you, start writing short articles for online publications, create special reports or start your own e-mail newsletter, record audio products or record a tele-class for your website.
Adding audio clips to your website adds a dimension and allows people to hear your voice, making you more real, more credible and more personable. People who relate to your style will contact you.
Develop a basic interactive presentation: You can adapt this to any audience at short notice. Once you have it, approach clients and potential clients and offer your services as a speaker at their functions.
Shift your focus: Don’t market what you do, market the results you achieve and the solutions you can offer to problems. People look for help when they have a problem. Without a problem, they don’t look. Let them know what specific problems you can help them solve.
Build relationships with others in your field: Discuss your specialty areas openly and agree to refer to each other. Learn to talk about how you can help people. Find ways to work with people already serving your ideal clients. Invite them to affiliate with you or ask them to post your articles. Offer information on your website to create links between each other and resources you can share.
Ask for referrals: Let people know what you are doing, and ask if they know anyone you can help. Ask delighted customers to put their impressions of your company into a few sentences to use as testimonials. Build a quality database.
Get help from professionals: Don’t try to figure everything out by yourself. Use the Internet to learn and obtain advice before tacking projects. Don’t expect other professionals to do things for you for nothing. They also need to make a living.
Leverage technology: Technical skills pay for themselves. Learn all you can and then learn more.
Networking meetings: If you enjoy them, by all means attend, but they are rather like OBE and we all know what that’s doing to our education system…networking meetings are limited to the average needs of the group, by the interests of its leaders and the existing understanding of the immediate network.
Studio M’s bottom line: Leveraging your time effectively is like doing homework or swotting for exams. You can’t be effective unless you give your business’ needs some undivided attention. By all means, discuss possible strategies with others, but without a certain amount of grind, you cannot tailor-make solutions. If you don’t do it for your own business, how well will you do it for others?
Mo
October 2009
In the car a few days ago, I heard part of a radio talk show about patriotism.
It quickly became clear that individual perceptions of patriotism differ according to one’s background and culture.
Last week, President Zuma’s direct line received over 2 000 calls of complaint an hour on the day it was launched, crippling the Presidency’s Telkom (are we surprised?) board.
South Africans are very clear on what we expect from Government. Some of us expect to be disappointed. Others see their duty as responding directly to those in difficulties, informally fulfilling a social welfare role. This also earns companies BBEEE points, making government expectations of business very clear.
Government reaction to those who don’t turn out in droves at Heritage Day events, or at the airport to welcome returning sport personalities, infers that our patriotism is at stake. I see neither as important, but consider conserving the petrol to and from the airport (unnecessarily) a patriotic gesture!
Many ordinary citizens deplore that criminals receive better education opportunities at taxpayer expense than underprivileged children; despair of state-owned entities that gobble our tax contributions with alacrity; detest municipalities that put money into nice-to-haves instead of basic maintenance and services and despise public departments that virtually rob individual South Africans of their fundamental existence.
Patriots zealously defend or fight for their country’s freedom or rights; the country’s, not its people’s. And just how would we react to: ‘Think not what your country can do for you, but rather what you can do for your country’?
I didn’t learn my ingrained beliefs at my parents’ knees.
In fact, theirs was a household that avoided mention of politics, religion, sex or, surprisingly, gender issues.
My father, Boet, was an underground gold miner who left South Africa
His patriotism was a foregone conclusion. We didn’t need to question his affiliations. His three children were born in the
When he returned to the land of his birth in 1959, on a disability pension, he brought his two youngest and a wife; his country became ours.
My brother remained in England Caius College , Cambridge
His public-school education made him feel strongly about giving back to those less fortunate and he continually did so. Work-wise, among other things, he set up the world’s first electronic banking system, managed a merchant bank, directed a unit to promote business in Cambridgeshire and became Director of Economic Development for the Corporation of London. He was declared a Freeman of the City in 1998.
I doubt my sister or I have ever ‘given back’ as much as my brother did. Although he never made his home here, he also considered South Africa his homeland, with virtually no parental input! He took every opportunity he could to visit this country, saw more of it than I have and was always interested in everything to do with it.
So, what does patriotism have to do with business?
In a recession, I see it as my patriotic duty to knuckle down and work really hard, whether or not my income is all I’d like it to be. Since I’ve weathered two recessions before, this has little to do with the fact that I work for myself.
During my first working recession, I was the only employee in a department of 14, who offered to do overtime. Eventually, management took pity on me and paid me a basic stipend for taking up the slack. Suddenly, doing overtime became all the rage among my peers!
During the following recession, I was retrenched and I cultivated several new and different skills by working simultaneously in a variety of different part-time jobs until I again found another niche in my own sphere. I learnt, during that period, that I’d have done almost anything to keep my son fed and healthy.
I fully appreciate the difficulty most people have making ends meet. It is more difficult for those with nothing or little, than those with a little more. But
At least a few industries made reasonable demands; most of those demands were granted.
Impala Platinum is about the only company that stood its ground in the face of high increase demands.
And with good reason; when companies have no profit, they need to cut back, not increase their expenses. If I employed people in great numbers, I’m sure I’d say: ‘Have 15%! You are welcome! But you cut the salary bill by 15%; deciding who loses their jobs that others may earn more. It seems that some unions have little understanding of their own patriotic duty.
Very few of our citizens really understand the strain many firms are under. Or the difficulties non-unionised employees face, sometimes receiving no increase for years at a time. Training subsidies will help some on short time or in danger of being retrenched. But what happens to around 20% of the population who were already unemployed before the recession hit? Who’s subsidising them through even darker hours than before?
Last week, I saw queues 200 000-strong waiting patiently over two days to apply for 300 paltry jobs in the Durban Metro. Interestingly, there was not a single white face among them. It occurred to me that the majority of our population would simply assume that all white people who want them, have jobs.
But this is not the case. White people beg at intersections and door-to-door. Others are living well below their previous standards. Many would take jobs if they could find them.
Sadly, many have given up hope of ever receiving a position, and have stopped applying, particularly to the public service.
Deputy President Motlanthe implied that criticism is necessary to keep the ANC on its toes. Good for him! Whether this and our freedom to complain to President Zuma will affect outcomes, is yet to be seen. But I do believe that this is an apt time to convey to our citizens the absolute need to perform, in any small way, their patriotic duty, to help get the country back on its feet.
Perhaps helping employees understand what this economic climate is really all about, its causes and more importantly, its effects, would not only reward MDOs with more loyalty and dedication, but help the country recover. Many businesses are fighting for their lives.
And those healthy salary increases? In some cases, they will merely commit the recipients to higher tax bands. Their happiness in victory is severely diluted by the following pay-day.
Studio M’s bottom line: Patriotism is forged at school or among peers and in the workplace. Get your staff to pinpoint issues that threaten South Africa’s economic recovery. Help them find solutions to speed it up. Then delegate someone to ring Zuma’s hotline with the best ideas and make the suggestions. It’s really good training for job advancement and teamwork!
MoSeptember 2009
And the TV programme that wins the award for the most unsolved mysteries of all time is…Law and Order!
Despite the fact that the L&O teams virtually always get their man and generally also manage to prosecute him successfully, in my home they left little but mystery, twice weekly, for the entire recent season.
Why?
Because I inevitably fell asleep in front of the TV, long before the plot unfolded. Having kept awake until its scheduled late-night slots, my defences crumbled with the inactivity required to watch it.
So who decides the schedules?
What reams of research divined that anyone becomes medically depressed by seeing the farcical Desperate Housewives only once a week? Why was The Secret Garden (a children’s classic) shown at nearly midnight – are there kids allowed up so late? And (please God) why on earth is that teenybopper Flash tripe shown in a prime time evening slot and not well before 16:30?
In short, whether your opinions and mine coincide at all (which they well may not do), what seers at the SABC know better than the viewers what we enjoy watching and when?
Have any of us ever been asked our opinions? Mine, in case you are interested, revolve mainly around the belief that a public broadcaster should provide a regular programme schedule free of charge, at least on-screen. Why should I have to buy a newspaper to keep updated once my TV licence is paid? Especially in a country where so few people can afford to buy newspapers at all, or can’t read them…
How difficult would it be to include a research questionnaire with my licence renewal form and offer a R20 payback (discount) for every form completed and returned (by freepost, of course)? After all, in-house research is very cost-effective.
The logic (or lack of it) is confusing. That SABC decided I would like nothing better than Prison Break, Desperate Housewives and Lipstick Jungle three nights in a row, means I have been lost as a viewer on at least six out of nine nights; I can’t even bear Lipstick Jungle in the background while I do the ironing!
Have they lost you too?
It seems far more likely to me that the three-nights-a-week thing was prompted by a tight budget. I just believe there are better ways to save. Since when has the SABC been shy of repeating its favourite movies again and again, until we are all bored to death?
Pity the poor SABC because I keep castigating it; it presents such a useful example; one we all know and love or love to hate. The SABC is also presently plastered all over the news and is something all South Africans can relate to. After all, there are not many of us without an opinion of the SABC, no matter what we watch.
News leader? Then why are so many watching e-news instead? Perhaps the relationship between government (which owes the SABC R300 million for advertising) and public broadcaster (which plans to cut local content and put 80 000 in the industry out of work in order to cut costs) simply doesn’t appear healthy to us.
Believe me, I am no fan of local content. I find it generally puerile and sadly lacking in imagination. It plays on the sadness in South African society and expects me to relive, after dark, what I constantly see on our streets during the day. I use burglar guards and security alarms to keep bad elements out of my home. I also switch off my TV.
I would far rather watch something with at least one good role model; someone I can forgive for his silly, humiliating mistakes (haven’t we all been there?) Or watch a bit of genuine escapism or something historical…
I will miss Everwood sorely.
Who does the public broadcaster serve; the public, or the government?
How is it that a CEO can be suspended three times and remain on full salary for a year before the pertinent issues are addressed? How does it cost over R13 million just to get shot of him? Who performed over that period? Clearly not the SABC from a financial point of view; clearly not the CEO or any of his staff, since all proved that none could independently deliver, troubleshoot, think clearly or actually earn their salaries (rather than just take them home) and clearly not its owner, the government!
By all means, privatise this dinosaur…
No matter the business you are in, researching your target market is essential.
It’s not for you to choose who you want to sell to. It’s up to you to find out who you are selling to, in order to reach that person more effectively.
It’s up to you to find out what he wants, when, where and at what price, rather than forcing what appeals to you or fits your profile. You’d be surprised how many large retailers are totally mistaken about who their markets are? They target the wrong people…
Who is buying in this tight market? What led them to your product or service? What part of your market has fallen away (and why)? Could you reverse those departures by selling different quantities, simpler products or offering a side-by-side service?
The answers to questions like that could also have helped:
Ø Banks, who with all that additional FICA information, probably didn’t actually read it to find out more about us (Agree □ Disagree □ Strongly disagree □);
Ø Medical aids, that have priced themselves so far out of our league that the Sunday Times says even doctors are unable to afford them (so ironic – makes a huge case for a public health-care system, if only government could get its service levels up) (Agree □ Disagree □ Strongly disagree □) , or
Ø The SABC, which would have been absolutely welcome, I think, to go on strike. I need it far less than Eskom. (Agree □ Disagree □ Strongly disagree □)
Enjoy three nights in a row of Lipstick Jungle when it hits your not-so-small-any-longer screens...
Studio M’s bottom line: Very often, the businesses that fail to make any effort to understand and know their markets are the conglomerates, which we believe ignore our pleas. This could be because so few of us make valid complaints. Ask your customers directly for feedback; these are the people who pay for your products and services and most deserve to be heard. They are also the people who will most influence your bottom line.
Mo
August 2009
I have just received this sms:
‘*Legal Message* STUDIOM(MLHAARHOFF), Legal Action is Commencing on your SABC account for R2,976.30.Contact VVM Attorneys on 0878054941, Ref No 117125898 Sender +27820048640970’
Now why, I ask, would I want to make contact?
I assume that the law and lawyers still operate the same way they always have…if I am to be sued, they’ll send a letter, probably registered, explaining why. First, I’d get a little ticket in my post box to say that registered mail awaits me.
After wondering hopefully whether some poor fool had decided to send me a cheque I hadn’t earned, I would trek up to my local post office and stand in the queue for at least 30 minutes, before presenting my ID and receiving the envelope.
On opening it, I’d be desperately disappointed that there are so few poor fools out there, curse the fact that the errand was not to my benefit and be just as flabbergasted as I now am. I guess I should be thankful that the sms saved me a fruitless trip to the post office.
If I am to be summonsed, I assume it still happens the way it does on TV: a stray man will hand me an envelope and say with tremendous glee and gusto, ‘You have been served.’ I can’t remember ever having received either a registered letter threatening to sue or a summons, which is to say that at my ripe old age, I obviously haven’t yet ‘lived’.
My time, as they say, has obviously come!
I was unaware that I had an account with the SABC other than for my TV licence. For that, I received an invoice last month, saying I owe the princely sum of R225.00, my annual subscription, which falls due, so the invoice states, 31/7/2009 (which is exactly when I planned to pay it). No balance from previous years is outstanding on the invoice and I have never received an account for the R2 976.30 the sms says I owe.
I also hold a similar invoice for each of the last five years, which I keep in case the nice people from SARS find they’ve added up incorrectly and choose to present a query.
The interesting part of this little exercise, though, is that I seldom offer any service providers other than the bank, my cell phone number, due entirely to the fact, everyone supposes, that I choose to hibernate in the Middle Ages.
Well, not exactly… the fact is that I live in a dip between two hills and our reception is utterly rotten. The signal hops from hill to hill and leaves everyone who lives beneath it, in our little road, either hanging halfway out of windows or rushing up twenty or so stairs to the street, to carry on conversations.
One of my neighbours, a doctor, actually sat in his car for half of one incredibly hot summer, with two young children, helplessly praying for a call offering him a job in a public hospital. He’d just bought the house next door; had no land line and couldn’t put his children in nursery school until he had a salary coming in. (I didn’t notice him being picky about the size of that salary, back then…)
I am well past rushing up and down stairs a dozen times a day and I prefer to deal with business at my ground-floor desk, so very boringly, I tell everyone to use the land line number or to sms me, rather than phone me on my cell.
I can only assume that when I left Johannesburg
No wonder the SABC accounting system is in a hopeless shambles…
I can’t quite decide whether to feel pity for its accounts department or empathy for the utter inadequacy of VVM Attorneys, who are clearly being taken for a huge ride, but are also totally failing to do any cross-checking. No wonder they’ve resorted to suing by sms. And yes. I finally gave into curiosity and rang the number. If you have five minutes, do try it. It’s a scream…collection via recorded message! I got as far as option 6: ‘If you have left the country…’ before giving up, so failed to find out whether option 132 is ‘If you have moved at all in the last 40 years…’
I can well imagine the jubilation VVM Attorneys felt on winning the tender to collect SABC licence debt; I wonder how they feel now they’ve realised that nothing is quite the way the SABC saw it. And come on: to my knowledge, administration, filing and data capture are not yet scarce skills. Or are they? It’s pedantic, exacting work that needs trusted perfectionists to produce good results.
It’s easy to allow business accounts to fall into disarray. It only takes a key person to take unexpected and unplanned leave for a few days, to delay finely tuned processes and send all topsy-turvy, as happened to me late last year, when I was ill and forgot to send out my monthly invoices. When I was due to pay suppliers, the money had not yet come in!
But a firm’s accounting system, believe it or not, is its first line of public relations and it is essential to get it back into line immediately. Otherwise, look to the SABC and several other state-owned entities for what happens…
Studio M’s bottom line: The fast way to lose total credibility with existing clients and suppliers is to allow your accounting system to go to the dogs! It’s the backbone of every business.
Mo
July 2009
Here’s a story as tantalising as the aroma of freshly-baked bread.
Pioneer Foods stands accused of belonging to a bread price-fixing cartel, but denies collusion. It only raised prices because costs had risen, it maintains; coincidentally on the same day as its alleged partners in crime: Premier Foods, Tiger Brands and Foodcorp, who all admitted their guilt and paid fines to the Competition Commission.
They have testified to meetings where price increases were discussed and agreed with dates of implementation agreed. The group also agreed not to poach each others’ agents, Sapa reported. Pioneer was reportedly present at some of the cartel meetings, including the one where decisions were finalised.
A point of law was broken and something smells, to me, fishy, although not in a ‘loaves and fishes’ way.
In Gugulethu, Somali shopkeepers received letters telling them to leave the area, pointing to possible xenophobia.
They reported the matter to the police and a meeting, according to Sapa, between local, South African shopkeepers and the Somalis, took place. Agreement was reached: Somali shopkeepers will raise their bread prices to match those of their South Africans counterparts. Race was not an issue; loss of business was.
Fishy? Seems like price-fixing to me. Those queuing for the bread will gain no benefit and afford no fish! Business exists to please customers, not to please itself!
Some laws appear to have no-one’s interests at heart.
The first time I heard him on radio, a few years ago, I was fascinated and sorry to have missed his introduction. A middle-aged, clearly Afrikaans woman rang the station minutes later and said: ‘That man can have my vote for President any day!’ I wanted to cheer…he has the same effect on me!
His name is Moeletsi Mbeki and he is brother to Thabo, our former president. He’s a political commentator, entrepreneur and journalist. In a recent Reuters interview he said that BEE entrenches economic inequalities, cronyism, entitlement and corruption and has lawmakers reportedly rigging tenders to benefit buddies. Deputy President Kgalema Motlanthe, by the way, agrees, complaining that government corruption is far worse than anyone imagines and is found at every level across the country.
Black empowerment, Mbeki stated baldly, has failed and he questions what will collapse first: Broad-based Economic Empowerment (BEE), the economy or the country? Affirmative action, he believes, entrenches the rich-poor divide rather than offsetting past racism and creating an ambitious black middle class, as government argues. He thinks it should be scrapped and replaced with a broader skills development drive.
He also suggests that quotas for black ownership, employment and procurement, stifle growth and spur corruption; tell blacks they don't have to build their own businesses or take personal risk as long as whites are around to hand out jobs and their company shares. Rampant levels of crime and last year's attacks on foreigners in the townships are warning signs, he said.
So much for employment quotas…
Another chap who was against quotas is Dr. W. Edwards Deming.
He helped the United States improve the quality of its WWII war materials and later helped Japan shift world perception that Japanese goods were shoddy imitations.
The challenge is to apply his philosophy meaningfully toward ongoing improvement and transformation:
1. Be consistent: plan to become competitive, stay in business and provide jobs. Allocate resources for long-range needs, not short-term profitability.
2. Adopt a new philosophy: where delays, mistakes, defective materials and poor workmanship are unacceptable. Transform management styles accordingly.
3. Don’t depend on mass inspection: build quality into the product and monitor the buying and manufacturing functions for statistical evidence of quality.
4. Don’t be driven by price: eliminate suppliers who cannot produce statistical and tangible quality assurances. Minimise total cost (not initial cost) by reducing variation. Build long-term relationships with fewer suppliers.
5. Continually improve: planning, production, product and service processes. Every company activity should aim to decrease costs, innovate and improve design, materials, machinery, maintenance, supervision, training and retraining. Management’s job is to improve the systems.
6. Train on the job: on-the-job training, for everyone (including management) makes better use of every employee and promotes better understanding of varied functions. Direct new skills and changes to materials, methods, product and service design, techniques, machinery and service.
7. Institute enabling leadership: it’s there to help staff do a better job. Quality is more important than quotas; quality improvement automatically improves productivity. Act immediately on reports of inherited defects, maintenance needs, bad tools, fuzzy instructions and definitions.
8. Drive out fear: fearful staff is neither effective nor productive. Encourage two-way communication; build confidence and trust.
9. Break down barriers: departmental barriers are self-defeating. Team up people from different areas to improve products and services.
10. Eliminate demands without explanation: slogans, posters and zero-defect demands lacking the information to achieve results, create adversarial relationships. Bad systems cannot be rectified by the workforce.
11. Eliminate arbitrary quotas: prescribed quotas or numerical goals detract from ongoing quality and productivity improvement. Encourage quality rather than quantity.
12. Encourage pride in workmanship: remove barriers to pride in workmanship, such as annual performance appraisals and management by objective. They set minimum levels and limit individual best performance.
13. Encourage education: organisations need more than good people, they need aspiring, improving people. Encourage self-improvement and a vigorous education programme for all.
14. Commit top management to action: Top management must commit to transformation and know what they commit to and how to achieve it. They must act daily to implement it as well as supporting staff.
If sustained peak performance is achieved, an organisation becomes:
Ø A supplier of choice;
Ø An employer of choice;
Ø The stock of choice, for shareholders;
Ø The customer of choice and
Ø The company of choice within the community; which assures long-term profitability to all its stakeholders.
Studio M’s bottom line: Initiating programmes to reach peak performance levels can be daunting, but many consultants and business advisors help organisations to do exactly that. Their objectivity and experience also helps companies to analyse their existing ability.
Mo
June 2009
The headlines screamed ‘Give it back’. New Transport Minister S’bu Ndebele eventually did just that.
But then the S500 Mercedes Benz was offered to one of his relations. Ndebele again declined. If that’s an end to the matter, I’ll be surprised. It’s far more likely to be the start…
In the minister’s position, I think I would have kept the car (and other sundry gifts) and given the job back. The entire incident has opened a wriggling can of worms which will doubtless be used to fish into the most private corners of his lifestyle for at least the next five years.
Does returning the gift un-sully a previously good name? How can the man be sure he had a good name to lose? Even I’ve heard enough gossip about Minister Ndebele’s KZN exploits to make me cringe. As one DoT employee sadly said: ‘Trust us to get the one new minister who couldn’t stay scandal-free for even a fortnight!’
And how do contractors recoup the value of a second-hand car that plunged as it left the showroom floor? Auctioning it to Ndebele admirers might work best…
Minister Ndebele is convinced the gift does not create a conflict of interest. It does.
No one in any public position can afford to become too friendly with anyone from the private sector, especially if help to win contracts (does no-one smell a rat there?) has been given. The moment the sundry collection of gifts was presented, Ndebele’s reputation was tarnished. Acceptance is not the issue.
The KwaZulu-Natal government’s Vukuzakhe programme to help emerging contractors should not depend on any person or personality. In fact, government should not have involved itself beyond funding the programme. Help would have been better given by independent contractors or consultants.
Sapa reported that the contractors won nearly ZAR 10bn in government contracts. Since they are now able to distribute largesse with such alacrity, they have clearly profited immensely.
But the real point is that the new Transport Minister should certainly not continue dealing with any in the group. A nod, a friendly wink, an ebullient hug of greeting or even one of the ANC’s complicated handshakes is likely to be misread. The minister’s relationship with those contractors is now too close for the country’s comfort.
So what are the ethics? The only way to keep everything above board is for him to go, or all of them.
Transparency is not all it’s cracked up to be. It’s there to keep us honest, not to right wrongs already concluded. Kris Dobie, of the Ethics Institute of South Africa, was quoted as saying that accepting the gift would affect public trust.
But my trust was betrayed the moment those contractors considered giving a gift; any gift.
DA MP, Stuart Farrow, believes that Ndebele should show that he is not beholden to the contractors. But why did the contractors feel beholden to Ndebele? Musa Zondi, from the IFP also wonders. If contracts were fairly won, why was excessive gratitude necessary?
What matters is where it begins and why…
How we interact with others tells a lot about our personal ethics. Whether or not you run your own business, you can affect how the organisation operates and improve its ethics.
When we take less than honest culture with us into the workplace, we often assume that we deserve far more from our employers than the salary for which we contract to work. Despite what most workers assume, many businesses, especially small and medium enterprises, struggle to stay afloat, pay crippling interest on loans, high VAT and tax bills and are held to ransom by staff who deliver far less than their best, but expect generous salaries.
Since most South Africans appear to believe they are underpaid, it follows that they probably assume that they are entitled to more than they receive. Employees who filch stationery, take long lunches or fiddle their expenses are actually fraudulent and detrimental to the company. The term ‘shrinkage’ should not need to be part of general workplace vocabulary, but is nowadays calculated into budgets and pricing as though an acceptable expense.
Business owners often trip up on the percentage of gross profit they earn. Is it market-related, set at whatever the business thinks customers will pay, or set according to reasonable profits on expenses and labour incurred?
Price fixing is something we all abhor, because it affects us, the general public. Bread, milk and even oil companies have lately been fined for price fixing. What happens to the fines once in authority coffers? It goes back into the fiscal, perhaps not returning to those who suffered most.
Companies should be required to distribute the offending products free, into the relevant industry, until the fine is paid. Agriculture, for instance, could benefit greatly from a R250.7mn fertiliser injection from Sasol, at present. Just a little something to make farmers feel appreciated…
A code of ethics is essential to any organisation and consists of four basic fundamentals:
Ø Core operating values
No more than ten core operating values should relate to staff behaviour and customer interaction and be posted as constant reminders to CEO/MDO and staff. They could cover complete honesty in customer dealings, acknowledge customer importance, state minimum staff behaviour and accountability, giving back to the community, etc.
Ø Policy statement
Create a statement that defines management’s philosophy on ethical business conduct. Include operating values and require all staff to uphold them on a daily basis.
Ø Staff training
Review the values expected of staff in their business dealings. Discuss performance levels that meet the core values and talk about how to handle challenging situations.
Ø Evaluation
Does all company documentation and promotional material reflect company values? Are quotations, charges and policies transparent, clear and concise? Procedures for hiring, disciplining and firing employees, working with suppliers and hiring contractors should reflect the company’s code of ethics.
Once created, employer, employees, vendors, subcontractors, suppliers and consultants should be held accountable to the code of ethics. Further training, guidance or disciplinary action could be expected when behaviour detracts from it. Behaviour upholding it should be recognised and applauded.
Organisations with strong, living, breathing codes of ethics often attract exceptional employees and appear less likely to foster fraud and corruption. Perhaps that’s a good tip for government departments…
Studio M’s bottom line: An exemplary code of ethics balances the quest for profit and expansion with fair, honest treatment and outstanding customer service. Practised openly, on an ongoing basis, it encourages all staff members to strive to deliver their best and consider the consequences of their actions.
Mo
May 2009
Success, for most of us, is not measured by our public persona; fame or notoriety. Only a few, after all, are recognised by the vast majority during their lifetime. But each one of the vast majority can contribute significantly to change and improvement. An independent voice is only that, until it acts in concert.
The power of change rests with each individual.
Take our elections…it’s a crying shame, I think, that several voting stations ran out of ballot papers and I’m somewhat surprised that more fuss wasn’t made about that. But everyone who did get their cross down on paper shifted the balance of power to an extent that will make South Africa
I’m a great believer in ‘power corrupts and absolute power corrupts absolutely’, as so disturbingly portrayed in, for instance, George Orwell’s Animal Farm and Shakespeare’s Macbeth. And by the way, I back President Motlanthe’s plea for electronic voting; in that way, even overseas votes (and their counting) would be a piece of old ‘takkie’.
But there have been other significant outcomes of individual behaviour affecting the whole, over the past year. When electricity usage became the new, hot topic, rolling blackouts made far more impression than paid advertising and media threats of soaring tariffs. In our home, a third generation now understands what the World War II blackouts were about!
South Africans learned that the behaviour of individuals can make a difference. Power usage dropped so much that Eskom must borrow to fund its capital expenditure programme; at a time when the global credit crunch and a lack of emerging-market credibility makes loans an expensive option.
Unfortunately, it is always the population that pays the price, as Eskom begs another stiff rate hike but, hopefully, it’s a small further step to everyone understanding why illegal connections are so unfair to those in the immediate vicinity!
When fuel prices eased, extra fuel taxes were announced before we’d all managed to breathe a sigh of relief. My jawed dropped last time I filled my tank. The price had bounced back virtually to last year’s high level, despite oil now hovering around only $50 a barrel.
I’d guess that the next big issues are water and climate change.
If you read at all, neither of these issues is new to you. Before I reached my teens I had learnt to brush my teeth with half a tumbler of water. At boarding school, our bath time was exactly ten minutes; from the time we entered the door until the time we exited again, with the bath emptied and cleaned.
My mother continually bleated about the amount of bath water allowed in the UK
Drought is a fairly regular occurrence in this country. Responsible people in vulnerable societies need to understand that each individual can make a difference to natural, but uncomfortable situations. Every home can capture water during heavy rainfall and irrigate with washing water. To what extent, without facilities, remains the question?
Can you believe that I have close friends who believe that climate change is a fallacy of modern invention?
I wouldn’t go that far, but that we don’t have woolly mammoth running around our streets means to me, it’s nothing new; a matter more of logic than discovery, invention or scientific strides! Global warming has been with us longer than man himself! Else why the Ice Age?
A cheap, electric vehicle could have been invented a decade or more ago, but while the market kept buying, the motor industry saw no reason to change. Now that the sector is in flux and jobs are on the line, the cries are for Government to subsidise the shorter working hours rather than for the auto industry to drastically change its products.
Half-a-dozen brilliant designers could probably reinvent the industry in a month. Of course, how to dump all the extra, unsold vehicles world-wide, would need another brilliant solution and oil refineries would need to make an uncomfortable decision: modify and upgrade their facilities to Euro-4 levels by 2012 (as planned) or allow several facilities to die a natural death?
But the horrific consequences of global warming have become obviously apparent with the onset of previously unnatural weather patterns. Poverty, intensified by disease and mismanagement of money, land and people (all in their own way, resources) is becoming endemic. Change in our thought patterns is essential if we hope to conquer the natural changes around us.
Whenever life is threatened, genius emerges. Visionaries act. And what the rest of us do makes a difference.
Now is the time, I believe, that more environmentally aware businesses should flourish. Professional people can, one by one, become catalysts for change; responsible leaders can encourage each one of us to make a positive contribution, even children and yes, even street children!
What could you do? And I’m not talking about sorting your rubbish for re-cycling or donating to the needy. Setting a good example to your children, parents and family would mostly be enough. Think of the person you most admired and respected as a child and emulate that person’s better qualities.
Of course, it doesn’t work if your hero was a gang leader and a drug lord! But many can see past financial rewards to admit that better values could make us happier. Visualise the life you want; understand where your fulfilment really originates (a happy, healthy family?), open your mind to new ideas, back your home and work ethics into that space and make an impact by preaching that gospel.
Robert Middleton, whom I really admire, says that if the polar ice cap melts significantly in the next few years and the oceans rise by 20 feet, nobody's going to be buying his professional services anymore. For him, that’s bad. For me, the same thing means Durban
Studio M’s bottom line: How can you contribute? Ultimately, you do make a difference, even if only in your own small world. If you are able to empower others in the process, you will have made a great contribution to the world.
Mo
April 2009
Exactly what a creditor does about a receivable at a specific age depends on the nature of his business and the depth of his comfort zone.
It generally follows that, the higher the mark-up, the better the cash flow and the less stock held; the more leisurely any collection effort. These things improve a creditor’s ability to survive without his customers’ money and often allow receivables to thrive for months.
However, companies with low mark-ups, tight cash flow, low stock turnover, a small fortune tied up in stock or high expenses find it less easy to survive without good cash flow. They usually start work sooner and smarter to collect it.
Receivables are considered a tangible asset: generally a company’s largest and most important, single current asset. They appear on the profit and loss sheet; can be used as loan collateral; can be sold at a slight discount or they can be received…in due time!
How much is an account actually worth?
Tangible means ‘touchable’. Consider how many of your accounts receivable are, only by the barest fraction, out of reach. If you don’t know the answer, find out! Current means ‘as of now’. How many of your accounts are you confident you could collect by tomorrow?
The words we use and phrases we coin, often serve to fool only ourselves. If you began a crash campaign tomorrow morning and ran it for two weeks, aiming to collect every cent possible off your debtors’ book, what percentage would you actually be able to get in?
Based on this, your debtors’ book could currently be worth far less than you imagined…If you undertook, today, to revalue all your receivables to their actual worth, how many thousands, or hundreds of thousands rand would be lost to the company? And could your company withstand the shock of that write down?
So: a receivable is only worth the amount that can be collected, less the cost of collection and less the cost of financing that credit. Many businesses actually reflect a false amount on their accounts receivable.
Accounts receivable depreciate faster with age and far more quickly than any other asset.
Answer these five questions:
- What is a current account worth? [Almost 100%].
- Once it has reached 30 days? [?]
- By 90 days? [?]
- At 180 days? [?]
- After a year or more? [?]
Then calculate the finite cost to the company of collecting accounts. Credit, which gives birth to receivables, is only a selling tool. The cost of using it determines the true value of the receivables it creates.
Take into account other factors affecting the true value. Can you rely on payment for all your accounts receivable? Do you exclude items reasonably known to be uncollectible? Do you make provision for bad debts, goods returned, customer deductions, discounts or any special allowances? Are you selling to only top-rated companies or do you maintain, as most companies do, a percentage of marginal accounts?
Were your business cash-based, how many of your staff would be redundant? Do their salaries feature on your expenses list? With this sort of analysis, it becomes clear that receivables are seldom the asset we assume. Not only are they costly to collect, but if no properly-supervised system for handling collections exists within your company, results could be haphazard.
Divisions between marketing, sales and the credit department are to be expected.
Marketing advertises stock and services that may not be available when the reps are out selling; a sale is ancient history by the time the credit department tries to collect and the credit manager is forced to soft-pedal on collections that he/she was coerced into initially granting...
Accept that each department has a different personality with totally opposing functions and find ways to bridge the gaps. While credit-controllers may feel underrated and often are, they can initiate systems to nip problems in the bud and collect the information necessary for any collection process.
You can’t collect from customers with valid complaints!
Educate your staff by explaining that a credit sale is no sale until the account has been collected. (This is easily understood by people working on a basic plus commission basis). Ask every staff member with client contact to enter details of queries regarding deliveries, incorrect orders or known client dissatisfaction, on an authorised form.
Pass the form to the relevant departments to correct problems and for sign-off, once sorted out. All forms should then return to the credit department for filing. Whether this is a hard-copy or Intranet exercise is immaterial, but forms should travel between departments until the customer is satisfied.
Each company recipient lists the relevant action taken and the date. By the time it reaches the filing system, a complete history of contact reports on problem accounts exists. If no sale is invoiced until the buyer is happy, collecting payment becomes far easier.
Now any phone call to a customer allows you to:
Ø State the facts ‘I believe that on order number…’
Ø Check the facts. ‘It was attended to, by…on…’
Ø Check that all problems have been resolved. ‘And then all was satisfactory?’
Ø And finally, ask for immediate settlement. ‘So, we can expect your payment by…?’
This is far easier than trying to verify customer inventiveness after an initial phone call. Rest assured, in case you are sceptical; this works! Advertising and PR agencies use a virtually identical system to confirm and report every client contact and action. The client then receives a copy of this status report regularly.
Keep copies of your form/report at the phone and, with all your ducks in a row, your customer finds the effort it takes to prevaricate, just too much. He buckles fast!
Keep the system you choose simple, accurate and cost-effective.
How do you determine the effectiveness of your collection procedures? Or do you?
You should! Find out what percentage reaction you get from your first letter or call and how many letters or calls each collection takes. How many calls can you make in an hour? How do you handle a promise to pay and which collection method brings in the most money? Lastly, what is the cost to company per R1 000 collected?
If you can’t answer those questions, you can’t know how effective you are. Know what your system costs your business, what you want it to accomplish and what is actually being accomplished.
To detail this more clearly:
1. Hours worked per day (less lunch and breaks).
2. Real working days annually (less public holidays, leave and sick leave).
3. Hours x days = hours worked per year.
4. Gross salary plus car, medical aid, group life insurance, pension, 13th cheque, sundry expenses (e.g. tea, coffee, stationery, washroom goods, etc.).
5. Real (total) cost of employee investment.
6. Real cost per hour = (5. divided by 3.).
Like everything else, you are only as good as your target achieved and there is always more you could do to get money in. Don’t habitually collect at random. Set aside time when it is easiest to get hold of people and stick to it regularly. Never neglect calculated risks accounts.
Don’t allow a promise to pay become history. A promise not kept must be followed up if you want to maintain credibility.
Studio M’s bottom line: What does your credit system cost you? Can the company afford it? Is your credit-control department efficient?
Mo
March 2009
Beware the professional debtor.
Every company has an individual debtors’ accounting cycle. In large companies, accounts are usually staggered, allowing customers to expect their statements at a similar time every month.
Once they figure this out, customers don’t need a high IQ to elude perfunctory collection efforts. While the professional debtor (Mr PD) determines his position in your accounting cycle, he also estimates his monthly needs and starts timing his orders for a day or two after his statement is raised.
His current account can then have a lapse of 30 days that you may not consider in your age analysis and Mr PD has achieved an entire month’s extra credit at no cost. In 30 days, these sales will appear on his invoice as current purchases.
The only way to avoid this extra aging of accounts is to raise invoices on the day of each order and statements 15 days later, well worth the extra effort in a tight economy.
Some companies only take their first concrete step towards collection at 90 days. Check which of your accounts have already had 119 days grace without any follow up? However you handle your accounts, accept that most customers know that they can take you to the first 119 days with virtually no reaction.
Design your first attempts at collection to preserve your debtor’s goodwill.
Mr PD knows the routine. He may even hold back payment to see just how far he can push before you react. When you eventually make the contact that evokes part or complete payment, note the date. Mr PD has now worked out what tolerance he can enjoy as a matter of course, with no personal risk.
After your 120-day contact, most firms automatically allow more time for the customer’s payment to reach them. Mr PD has just received one-third of a year’s free credit; free of interest and four months’ inflation.
‘It’s in the system. The bookkeeper is ill/on leave/incompetent.’
As long as you accept excuses like this, it is more profitable for your debtors to buy from you, than for you to sell to them. Credit managers know that these customers have insufficient funds to meet their obligations.
Whoever handles collection phone calls or the sequence of letters you choose to use, must be trained and have the authority to do so. The scripts or letters must be professional, yet always leave room for deviation.
Sequence and timing are essential to any satisfactory collection process. Filling the last hour of boring Friday afternoons doing collections, invites failure. Contact dodgers regularly when they are most likely available.
Once customers know that your accounts are regularly given business-like attention, they often start acting accordingly. The higher the standard you set, the more they generally deliver.
Educate customers (without saying it aloud): ‘I demand a lot of myself; I deliver my best and I expect you to do exactly the same. It hasn’t crossed my mind that you would try to duck this call or stall your payment.’
We all try to avoid unpleasant situations and if a customer is short of funds, he could well prefer to avoid your calls by fair means, rather than foul. Ask for your money firmly and often. You have every right to your money. Each demand should be firmer than the last. Work out a strategy to make this clearly evident to your debtor.
Telephone contact plus an immediate fax/e-mail of confirmation, often works most effectively.
The call establishes a direct relationship, but a fax or e-mail provides excellent, traceable back-up. Follow any agreement to pay with written confirmation and diarise for follow-up. Remind a customer that he has promised a payment by ‘noon today’, offer to pick up a cheque or request proof of electronic payment.
Any method applied correctly and rigorously, has merit. Never follow a ‘strong’ with a ‘weak’ contact. To make action easier:
DO:
Ø Know all the facts. Date of sale, last payment and amount, missed payments, total due…
Ø Let the customer know he is expected to meet his obligations.
Ø Work out the detail of any arrangement: dates, amounts and payment method. If you collect P/D cheques for the total amount, require your customer to write on the reverse of every one: ‘One of a series of PDC’s accepted. If one item is unpaid, the entire debt owing becomes due and payable.’
Ø Keep it short and businesslike.
DON’T:
Ø Apologise. The money is yours by right.
Ø Offer the customer an excuse: ‘Perhaps it’s just an oversight…’
Ø Suggest a possible mistake on your side (by this time you should have checked and double-checked).
Ø Be the first to mention an arrangement. If you can, lead the conversation to: ‘How much can you presently afford?’
In a phone call, there are four things you need to establish:
Ø IDENTIFICATION: get hold of the correct person before identifying yourself.
Ø PURPOSE: state why you are calling.
Ø AGREEMENT: establish in detail, how, where, and when payment will be made. Will a cheque be left in reception or in Sally’s bottom drawer under her make-up bag, if the customer is out?
Ø CONCLUSION: repeat the arrangement clearly and break contact.
Lastly, CONFIRM in writing and send by fax or e-mail.
Delays in reporting delinquencies, costly mistakes in handling debtor accounts and general demoralisation and loss from uncollected debt can shake your personal reputation. More about this in your next Top-up.
The most effective way to get your money is also the most time-consuming and costly.
A personal visit, though, says much about any business. Does it appear to be efficiently managed? A face-to-face visit can, in fact, categorise a situation as organised chaos, relative efficiency or way too laid back for anyone’s good.
The aim of a personal visit is to:
Ø CONFRONT the customer and get him to
Ø AGREE to a firm promise, but preferably to walk away
Ø WITH a cheque or proof of electronic payment.
If you arrange a personal visit, suggest that you go through his paperwork together. If he can’t find it, you at least know where you are on his list of priorities.
In the right-hand column of your standard computer printout, labelled 120 days, your 120-plus accounts can easily be overlooked.
There comes a point in the aging cycle where standard accounting procedures no longer permit receivables to be carried forward as current assets. By then, the amounts actually cost more to collect than to write off. Keep tabs on them.
If you threaten to hand over, do it!
Now that you’ve finally delivered the ultimate threat and you are thoroughly irritated, follow up!
Break contact. If your customer contacts you, put him in touch with the collection agency or lawyer of your choice. Refuse to be drawn into discussion or negotiation. This helps whoever you have chosen to be more effective. Your customer is now out of his comfort zone and doesn’t know quite what to expect: good!
A credible credit information/collection agency is probably your best option by now; is cheaper, should have access to better information than the average lawyer and the clout of blacklisting. If it cannot get payment from your client, it should recommend, within an agreed time, whether you should proceed legally or not.
An agency is impartial and not emotionally involved. It looks at the facts, finds out whether your debtor can pay or not and bases its recommendation on what it thinks is best for you, its client. No matter how much you would like to see a defaulting customer eat dirt, it can cost less to rely on a higher judgement than is available on this earth.
Studio M’s bottom line:
With debt collection, consistency is all! Time spent setting up an effective system will never be wasted, even if used infrequently. Never be embarrassed about collecting your due if your contribution has added value to your customer.
Mo
February 2009
Local takes on the global credit crunch and how it will affect us, are fascinating.
Early last year, one of our clients died a long, slow, grinding death, having already subcontracted the work to a corporate which subsequently delivered bad service. Their client broke the contract. I’d probably have done the same…
A dozen of us felt the pain. By the time the global credit crunch invaded, our belts were considerably tightened.
I follow African economic and business news more carefully than many, for another client. The last year has been a roller coaster that makes it clear that all emerging markets teeter too close to the edge, too often. Most were convinced the price of food was their worst nightmare. Then, the credit crunch fallout…
Last week, when Trevor Manuel delivered what could be his last annual budget for Treasury, I was vaguely surprised that he was so chipper. I supposed he was just trying not to induce panic, but then several analysts voiced concerns about his optimistic prognosis for the local economy.
I wonder whether we really ‘get’ it.
When the banks all pulled back last year, none of their staff appeared to understand why their tea and coffee rations had been cut. They assumed it was all to do with FICA; 70% of homeowners were in repayment arrears before the media even found out!
One friend, by then in dire need, contracted to do telesales for a bank. He finally withdrew four months later, having sold zip and owing the bank R48 000. (‘Sorry, Team, it wasn’t a salary or a basic, just a loan, but aren’t you lucky we’re letting you out of your 2-year contracts?’).
My teenage son recently complained that the quality of the food at his ‘bed, board and minimum salary’ job had dropped significantly. It took Mum to explain exactly what has happened to the price of groceries over the last twelve months and suggest he buy himself the odd bag of apples…
Meanwhile, my neighbour, a university lecturer, is striking for a better salary, along with his colleagues. Have these academics not yet worked out that many parents may need to reconsider the affordability of a tertiary education for their kids? If academia has not realised it’s a bad time to make unreasonable demands or go on strike, who has?
But when the university cancelled its teambuilding sessions with my son’s company (because everyone was ‘out’) the lights flashed on in his far less academic mind and he realised that one neighbour’s strike could end in his own retrenchment.
A real eye-opener!
The mortgage crisis was caused by greed and while we all point our fingers at the banks, investment houses and sundry other players, you and I, as consumers, are equally to blame. We bought into the notion that we all deserve ‘it’ all; many of us borrowed on home equity to pay off other debt, supposing that equity would grow at the rate we chose to spend…until interest rates soared.
We know better now. Unfortunately, some will still lose their jobs sometime this year and have the agony ahead. Without a job, payback is not about redefining need against desire, it becomes about dire circumstances for many families.
For your company, there are options: you can fear so much and pull back so tightly, that you cripple your company, or you can continue visualising the abundant economic growth we’ve become used to, where adversity was merely a disguised opportunity and we ‘got’ creative to avoid any setbacks.
There is only so much you can pull back though and seeing too much abundance in the near future takes us back to the greed that got us into this mess. Think about it…all this goal-setting, targeting and visualising of all the money we would make (and what we’d spend it on, before we’d made it) although a strong driver, is exactly the trap we’re already struggling to get out of.
And all we have left is a lot of stuff that we fear to lose, but don’t really need.
Perhaps a middle path and more balanced approach is sensible; one where we honestly provide value. Instead of doing it only for what’s in it for us, we can offer services and products which help our clients build solid skills they can use for a lifetime.
It’s not sexy and it takes dedication, hard work, trial and error (the more solid preparation, the less trial and error). But it is deeply fulfilling and highly satisfying. It also makes a difference. Instead of a path to instant riches, it’s a means of building strong foundations, without taking needless risks or living beyond our means.
If you are fearful about the future of your company, understand that anyone who knows anything is scared. We are caught in a spiral of possible loss (our jobs, our homes, our savings and pensions) where fear could easily overcome us.
Don’t let it! It is impossible to concentrate on anything else, when consumed by fear!
Avoid dwelling on negative issues with no direct connection to your company but do remain informed and be prepared. We may have no control over the economy, but we do have some control over our thoughts. Examine your situation carefully and discover whether your fear is really pivotal. If it could be better redirected, don’t let it stop you in your tracks; instead, act positively.
Positive business exercises help staff members feel useful and become involved. They also allow you to observe the economy dispassionately before getting back to making your own, valuable contribution.
Studio M’s bottom line:
The economy will do its own thing, independently. Examine the real cause of your fear: your thoughts. Get past the fear and take advantage of opportunities that are right in front of you. Be neither too negative nor too positive, but prepare yourself. Choose to contribute and add value!
Mo
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