Grow Your Business June 2008

Dear Business Leaders,

Welcome to the June edition of the Xenex Group Newsletter. 

You have been sent this as a client or associate of Xenex Group. We regularly provided an interesting mix of articles on management, leadership and business process, for senior executives and business owners to better manage their people and resources.  We have also provided some important reminders for grants and rebate claim preparations, as well as contact details for key personnel. We hope you find these articles sufficiently stimulating for you to make a commitment to positive change within your business.

Best regards, 

Daniel O'Connor.
Consultant Principal.

June is Finalisation Month!

With the financial year drawing to a close, we will all be very busy with taxation, as well as other regulatory and compliance issues across the next few weeks. This is an ideal time to prepare all of your R&D and export-oriented expenses for an assessment prior to the end of year close-off.

Our consultants are preparing the paperwork for subsequent claims (for those clients with on-going R&D and export activities) and we will be sending out the compliance paperwork for all registered clients to complete. We anticipate that R&D approval numbers can be applied for in June for a taxation lodgement in July, for those companies which are anticipating a concession or rebate.

If this sounds like something that could be of interest to you (even if you are not currently registered with us for R&D or export activities) call today and arrange an appointment with Daniel to discuss your needs. Daniel is available on 08 9335 7724.

We are now able to confirm the levels of submission for NSW applications (163-165) have increased substantially in the past 6 weeks, resulting in additional compliance work and paperwork for approvals in that State. As a result, the cost for NSW applications (from July 1st) will be increased from $1,500 to $2,000. This is a direct reflection of the amount of additional research and paperwork that now must be prepared and lodged.

This has affected us in the past 4-6 weeks as we have struggled to define what is now required and have amended past applications (free of charge) to ensure they are approved. This additional cost is reflective of our comittment to having our 100% success rate maintained, across all States and all Subclass applications. As you provide paperwork for future 163 applications for NSW, you will be provided with additional information requests and additional statements that will need to be signed by the Applicant, in order to comply with the higher level of compliance being required.

Please take a moment to update your address book or Outlook to reflect our change of email address and contact numbers. The email address of daniel@cirs.com.au  is about to close with the shutting-down of the research website.  You can now contact Daniel on daniel@xenex.com.au, The website is now located at www.xenex.com.au and our street address is now:

Xenex Group
1^st Floor Q&A House
38 Adelaide Street
Fremantle, Perth.
Western Australia, 6160 
Ph: 08 9335 7724

Our decades in industry and market research and our report-writing capabilities provides an excellent background for our support program for registered migration agencies across Australia and around the World. We prepare your Applicants' business proposals for State sponsorship into most States in Australia. Our service takes approximately three working
days from receipt of the required information and we have had remarkable success rate in the four years we have been preparing these.

We are not registered migration agents and will only provide this service through an authorised Agent. We generally do not liaise with the Applicant directly, unless instructed to by the Agency. If you are a registered migration agency in Australia or overseas, this service is available to you at a fixed and reasonable price. Call Daniel or Julie for a verbal assessment on any pending application.

Business owners know that workers who aren’t using their time and resources effectively are costing the company money. Declining productivity means falling profits and sliding competitive position. That makes the findings from this year’s Proudfoot Productivity Report a cause of concern to employers.

The 2007 report covered businesses in the <st1:country-region w:st="on">U.S.</st1:country-region>, <st1:country-region w:st="on">Australia</st1:country-region> and <st1:place w:st="on">Europe</st1:place>. It reports a disturbing average of 18% of working time wasted among the surveyed businesses. The <st1:country-region w:st="on">U.S.</st1:country-region> came in as most efficient with ‘only’ 14.1% of working hours wasted while <st1:country-region w:st="on"><st1:place w:st="on">Australia</st1:place></st1:country-region> topped the charts at 19.4% wasted.

Analysis of contributory causes revealed that more than three-quarters of inefficient working in 2006 could be attributed to just three causes:

• Inadequate workforce supervision (31% of all wasted time)

• Poor management planning and control of work (30%)

• Poor communication (18%)

The remainder of wasted time recorded was the result of IT problems, low morale and a skills absence or mismatch.

When managers were asked to select from a range of actions they considered could increase workplace productivity the top 2 they chose were investment in workforce skills and investment in management skills. But this may be putting the cart before the horse.

The interesting thing is that all three major contributors to time waste are directly referable to internal management practices.  Wasted time may be up, but as the report recognises, the root cause for that is inadequate management supervision, disjointed planning of production processes and inadequate communication of the information employees need to work at their most productive level.

Managers can’t dodge their share of responsibility for the amount of time wasted each year by under-producing employees. When it comes to improving productivity the first area to attend to should be reforming poor management practices and getting managers up to speed in some basic skills.

Workforce Supervision

How to supervise a group of people effectively is a basic HR skill for anybody in a position of leadership or management. Managers should have at least some training in critical HR areas such as employment law, selecting people with the right workforce skills, setting compensation packages, training and developing employees and carrying out performance reviews. These HR skills underpin your ability to get the best out of your employees and improve organisational performance.

Management Planning

The ability to work to a business plan that sets out the broad goals to be achieved in a given period of time, organise all the inputs required to achieve the goals, coordinate the activities and monitor progress towards them are all essential managerial skills necessary to achieve business growth, yet the ability of many managers in these areas is problematic.

Inefficient practices are rarely improved by simply automating them. Introducing technology before optimising the process it is intended to improve merely results in automated inefficiency. But how many managers take the time to analyse just how efficiently their key processes, such as supply chain operations, are working? How many take the effort to develop procedure manuals to ensure employees do things in a consistent and approved manner?

Communication

Managers often have issues with formulating and delivering clear verbal instruction. This can be addressed to a large degree by having the right support resources in place: a clear organisational structure; well defined job descriptions to avoid confusion about responsibilities; policies and procedures manuals to provide a definitive answer on the approved method of doing things; and investing time in inducting and training new employees. Implementing measures like these will reap huge long term productivity benefits.

Employees do usually try to achieve what they think the job requires of them. To get them achieving the right things you need to be very clear in the instruction you provide, whether that be at the level of explaining how to perform a process or what goals the business is trying to achieve and their role in contributing to their attainment.

Poor productivity can be the result of just plain time wasting by employees but more likely it’s the result of poor planning, inefficient practices and an inability to clearly communicate what needs doing. Whether through coaching, talking to a business advisor or putting themselves through one of the many SME management short courses on offer, a manager has a responsibility to make themselves the best they can be before laying problems of poor productivity at the feet of their employees.

Let’s face it - the customer is not always right. What is always right is to treat them as if they were, because a customer will likely tell numerous people about their bad treatment at your business whereas they rarely pass on the good treatment experiences they have. After all, as customers they expect a good experience. No matter how much customer care training you conduct, some customers will end up dissatisfied with something. They may become so irate that they decide to confront you face-to-face to take the opportunity of venting their frustrations - at times rather abusively.

It’s hard to take a dressing down patiently when the customer is obviously in the wrong. But by and large that is the approach you should train yourself, and your team, to take with complaining customers. Here are six practical tips to keep in mind when talking through a complaint with a customer ­­- if you want to keep them as one.

1: Establish Exactly What The Customer Is Upset About

Listen carefully - actively - to the customer’s complaint before trying to resolve it. Never let the customer go without getting enough information to make a sound decision about how to resolve the problem - calling them for more details will annoy them even further. Allow the customer to explain the situation, then, if necessary go back to ask further questions, clarify issues, or politely disagree. This phase also allows them to let off steam and nine times out of 10, just doing that has a calming effect.

2: Accept Ownership Of The Problem

Avoid getting involved in a point–by–point debate over the rights and wrongs of the situation. Nothing is more guaranteed to enrage a customer who already feels badly done by.  Use ‘I’ language - "I will do whatever I can to help you.", "You are an important customer and I would like the opportunity to resolve this situation and make you happy." ‘I’ language shows the customer that you are taking responsibility to resolve the situation.

3: Take Complaints Professionally And Not Personally

Do not take a customer’s anger personally. Remain objective and remember that they are upset with the situation, not necessarily with you. A professional demonstrates that they value complaints as a way of assessing where things have gone wrong in customer service and as an opportunity to win back customer loyalty.

4: Maintain Open Body Language And A Helpful Attitude

Your body language will express more than your words will as to what your real feelings are. It needs to be just as reassuring to customers as what you are telling them - that you are concerned, you want to hear their grievance, and that when you have all the information, you'll try to rectify the situation.

5: Apologise Even If The Matter Is Not Your Fault

Marketing research done by major companies tells us why it is important to take the attitude that ‘the customer is always right’. A customer who has a bad experience generally tells 10 other people about it. Simply saying, "I'm sorry. What can I do to make you happy?” can stop the complainer in their tracks and prevent the spread of bad PR.

6: Be Able To Say “No” To The Customer (In A Tactful Way)

On occasion a complaint may be clearly spurious and it will not be possible to give the customer the sort of satisfaction they are seeking. If you cannot give the customer what they want, explain exactly why.  Saying “No” requires tact and diplomacy.

Ultimately, customers will assess your response to their complaint, and judge you accordingly, using three criteria: how they were treated (the politeness, empathy, effort, and honesty of the personnel who dealt with them); the process they were put through (how responsive your people were to their grievance, as well as how fast and simple the overall process was - the longer customers have to wait to get answers, the more dissatisfied they are); and the complaint outcome (has it left them feeling satisfied with the way you handled things). Curiously, a well handled complaint can be a powerful driver of customer loyalty.

Marketing wisdom has it that to develop products with good sales potential you need to first appreciate your customer’s needs and then build a product that answers those needs. Customer needs analysis is the process of unearthing information about just what it is customers would really value in a product. The activities most commonly associated with this process are running customer surveys or focus groups and undertaking market research.

One group that sometimes gets left out of the loop is the company’s employees yet these people, particularly those facing customers, aggregate a huge amount of knowledge about what customers think of a product and about how customers actually use them. A brainstorming session with employees can be a very profitable source of ideas for product innovations that will answer to real needs customers have discussed with them.

Trouble is, traditional brainstorming sessions based on throwing up any and all suggestions for consideration often create more hot air than good ideas. In the real world of business not all ideas are good ideas. One reason is that many blue sky ideas are simply not feasible given the practical constraints imposed by the business’ capabilities. A brainstorming session that ends up with several hundred ideas on the butchers paper may be considered successful in terms of quantity but there’s no guarantee of any quality. Searching through this grab bag of ideas, how can you determine which of them really do address an unmet customer need?

A lot more useful ideas are likely to come up if the thinking is focussed in some way so as to keep it within the zone of what customers need. One way to create this sort of focus is to work to a set of preplanned questions that work off your employee’s knowledge of actual customer needs (or behaviour) rather than to ask for off-the-top-of-the-head thoughts. A set of good questions will restrain thinking to sensible product modifications, or even new versions of a product, that could represent valuable innovations.

There’s no such thing as THE list of right questions to ask and you’ll want to develop your own related to your individual business, its capabilities and its area of operations. However, some generic examples will give you an idea of how this approach works and provide a start for your next brainstorming session.

·       What modifications have customers asked us about? Customers will often discuss the features of a product that would be just right for them. If it would be just right for a group of customers, then it could be worth developing.

• Are some customers using our product in a way or for a purpose we never expected or intended them to? For example, iPods are being used as flight data recorders in light aircraft.
• Do any customers invest significantly in modifying your product to get it to do just what they want it to? The most zealous windsurfers who get new boards first and modify them, the most advanced builders experimenting with new materials like stressed-skin panels often suggest or even create useful innovations that manufacturers subsequently adopt.
• What minor modifications do customers regularly make to the product? Do left-handers have to modify it to suit their handedness?
• Is there one modification that would open this product up to a new customer segment such as providing instructions in another language or in braille or developing a ‘green’ version?
• Do customers report a consistent difficulty with using a product? Employees are often well situated to hear about, or even anticipate, customer problems with a product.

Using known unmet needs to guide brainstorming removes the unrestrained speculation that leads to impractical suggestions to meet unproven customer needs. Rather, it allows for creative suggestions on how to devise valued solutions that meet real needs. This approach can be a powerful way of coming up with new ideas ranging from minor product modifications to an entirely new product.

Paying on phony invoices is an occupational risk for small businesses. They are regularly the target of scammers hoping to take advantage of sloppy bookkeeping, inattention on the part of employees and poor communications between the people in the firm ordering goods, those receiving them and those approving payment. All too often they are paid unwittingly along with a number of other routine bills.

Scammers have fake invoice production for such things as stationery or cleaning services, down to a fine art. Their invoice will include names (perhaps established by a prior phone call to the business for some innocuous seeming information), figures, and other details that add up to an authentic looking invoice. And they have a range of scams other than fake invoices - solicitations for the purchase of goods or services carefully designed to look like invoices for items already received; payment for listing in a directory of some sort you never agreed to; asserting that there is a government requirement for the services offered when no such requirement exists, and phony advertising to renew an ad allegedly placed ‘last year’ ... to cite just a few. Scammers are business smart in other ways and will often send bogus invoices in the summer when many permanent employees are away and temporary personnel are covering operations.

The best protection against invoice scammers is knowledge and vigilance.  Your company's accounting department, or the individuals responsible for paying accounts, should be made aware of the different types of scams and how they work and you need to have a set of internal controls in place that will pick up fake invoices before payment is made. These include:

• ·Not placing orders over the telephone unless there is no doubt that the firm you are dealing with is reputable
• Always ask for a phone order to be followed up with the offer in writing
• Check your records to confirm claims of previous business dealings
• Channel all invoices through one department
• Read your mail carefully. Warn employees to be on the alert for any unusual invoices.
• Use pre-numbered purchase orders for every order placed
• Check all invoices against purchase orders and against goods or services received
• Verify all invoices with the person who gave written or verbal authorisation for purchase
• Limit the number of people who can pay invoices to just one or two
• Never give out or clarify any information about your business unless you know what the information will be used for

In many cases the amount of the invoice is just small enough to slip by the cheque writer's attention. Invoice scammers build up considerable experience in calculating the most effective amount to place on the invoice, depending on variables such as the size of the firm and the control it seems to have over its management system. Thousands of mass-mailed invoices, each for a small sum, may prove more lucrative for the con artist than several large invoices. It is believed that invoice scammers succeed in collecting a significant percentage of all the bills they mail. While it’s impossible to put an exact figure on it, business bureaus speculate that scam invoices cost the SME sector millions each year.

The important thing to recognise is that it takes a team, and the team ought to get credit for the wins and the losses. Successes have many fathers, failures have none - Philip Caldwell

Be sure to read each article with the mindset "How could this apply to our business." Thinking of it that way will guarantee that you get value. Better yet, take notes as you read and commit to having the ideas implemented by the time the next edition arrives. Also, make copies for each team member. To really make sure something positive happens, work with your Xenex business development specialist to talk your team through the ideas and how to set a schedule for getting them implemented. We're here to help you get started.

While every effort has been made to provide valuable, useful information in this publication, Xenex Group and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.