ACCESS Family Business - September 2019 by Access News Australia (ANA)

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With David Pring Welcome o KPMG Family Business ea ure ar icles. I you would like o discuss hese ar icles or how KPMG can help wi h your business please eel ree o con ac me on 9455 9996 or davidpring@kpmg.com.au

Welcome How o S OP amily business dispu es rom ollowing you home O KING closely wi h your neares and deares is par o he appeal o a amily business, bu i also makes i very easy o ge in o he habi o ‘ alking shop’ a home. Swapping s ories over dinner isn’ necessarily a bad hing – in ac , a survey by he KPMG En erprise and Family Business Aus ralia (FBA) ound ha amilies who openly share in orma ion are beter equipped o address di cul issues as hey arise. However, here’s one hing i ’s impor an o ge ou on he able frs and ha is how dispu es will be resolved. Uni ed in business, divided in opinion Di erences o opinion are only o be expec ed when younger genera ions o he same amily s ar geting involved in business opera ions – jus ask Alex Burrell, who s ar ed en world wi h his a her, ex, in 1968, ook over around 1990, and is now Managing Direc or wi h his son, Jon, he General Manager. “My a her and I were good riends and good business par ners,” Burrell says, “we only ever disagreed over curren business issues and we could discuss hem, agree or disagree, and move on. “And i ’s he same wi h my son – we can have some s rong argumen s a imes, bu we s ick o he issues involved, we deal wi h hem and we move on.” Good communica ion and even heal hy con ic are key componen s o socioemoional weal h (SEW), a measure o he non-fnancial ‘value’ o a amily en erprise. Wi hou SEW, here is a grea er likelihood ha a business will be bough ou by non- amily members or orced o close. Bu wha happens when one or more amily members can’ “move on”?

Agreeing how to disagree Where dispu es can’ be avoided or setled be ween he people involved, Judy Choa e, Direc or a KPMG Law, says businesses ha don’ have a dispu e resolu ion ramework in place can o en skip righ pas independen media ion or arbi ra ion and head s raigh or cour , which can be cos ly, ime-consuming, and po en ially damaging o heir rela ionships. “Some businesses use amily councils, advisory boards, or amily cons i u ions o acili a e con ic - ree planning and decisionmaking,” adds KPMG En erprise Par ner Kerri eynolds, who is leading a mas er class wi h Choa e on he implemen a ion o gover-

nance s ruc ures o suppor grow h in amily business. Te s ruc ures you choose can be more or less ormal depending on your business’s unique si ua ion – or example, as he Financial Con roller o en world, Alex Burrell’s wi e Barbara has a cas ing vo e o setle paricularly challenging issues.

A fair hearing Choa e says con ic generally s ems rom people having unrealis ic expec a ions or being disappoin ed in some way, or rom he ac hey simply don’ eel heard. Te las migh explain why communicaion s yle is he leading cause o con ic or over one-f h (21.8 percen ) o u ure amily

business leaders – a much bigger issue han fnancial s ress, which was a source o con ic or only 7.3 per cen o u ure leaders. In eres ingly, incumben s said balancing he needs o he amily and business is heir

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main source o con ic a 17.3 per cen , compared o fnancial s ress a only 11.5 per cen . Good governance suppor s SEW by acili a ing ransparen communica ion around di eren amily members’ roles and responsibili ies, and by providing some basic ools and procedures or con ic - ree planning and decision-making. eynolds, who knows rom personal experience how amily business discussions can spill ou over he dinner able, says i ’s abou “raising issues and making decisions or he amily in a s ruc ured and orderly way, so you’re no having hose conversa ions over your Sunday roas .” Article first published by Smart Company.

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Te in luencer s rikes back In the past six months, almost 60 percent of people have purchased a product after a recommendation by an influencer.”

“ – Andrew Baxter.

n ANDREW BAXTER NE o he oldes adages in marke ing is ha word o mou h is he mos e ecive way o communica ing wi h your cus omers. Everyone can recall asking a good riend or a amily member or a recommenda ion on a produc or service hey’re hinking o buying: a car; a washing machine; a holiday; a pair o shoes; someone o do your ax. A s udy by Nielsen earlier his decade ound 92 percen o people believed in wordo -mou h recommenda ions above all o her orms o adver ising. Marke ers have long ried o fnd ways o have hese advoca es ell more o heir riends abou heir brand. Social media o ered a new weapon o do his. Suddenly here were brand advoca es on social media wi h housands, ens o housands and hundreds o housands o consumers ollowing hem. And he consumers had chosen o ollow hem because hey liked he images and commen s hey were pos ing. Tey were in eres ed in wha hey had o say and almos wo- hirds o hem believed wha hey were saying abou brands. Tese brand advoca es soon came o be ermed in uencers, and he in uencer marke ing indus ry ook o , rising in populari y. Big chunks o marke ing budge s were diver ed o his new channel. Bu while mos marke ers were convinced o i s e ec iveness, many CEOs and boards have been less convinced, heir measure o marke ing inves men ’s success being sales, no likes. While research shows he bes marke ing comes rom using 10 channels on average in a campaign, here is growing evidence o he re urn on inves men o in uencer marke ing.

Te challenge un il recen ly has been he abili y o he major social media channels o provide da a atribu ing i s use by consumers o heir purchase o a produc or service. In he wes ern world, Ins agram quickly became he pre erred choice o social media channel or brands and in uencers. Te da a ha was available showed ha i drove he mos engagemen per pos compared o any o her social ne work. In ac , 10 imes more han Facebook, 54 imes more han Pin eres and 84 imes more han wi er, according o a Forres er repor in 2015. Bu here was litle in orma ion on who specifcally was engaging wi h hose pos s in erms o gender, age and where hey were rom, le alone he link o sales. Ins agram moved oward providing more clari y when i launched an upda e in 2017 allowing brands o be agged in pos s. And wi h new unc ionali y launched in June 2019, brands can now see audience demographics o hose engaging wi h he pos s and can boos hose in uencer pos s ha are working or he in ended audience.

Bu he sales atribu ion was s ill unclear. One o he issues wi h Ins agram in his regard had been ha here wasn’ an abili y o embed links on he image or video o direc people o buy he produc online. Tis was only possible down in he cap ion area. Bu in March his year Ins agram was upda ed and consumers can now click on he image and buy he produc direc ly wi hou leaving Ins agram, closing he loop on he atribu ion o social in uencer marke ing o sales. I e ec ively also urns Ins agram in o ano her e-commerce pla orm. Te commercialisa ion o Ins agram may no si oo well wi h hose who jus love sharing pic ures and shor videos, bu i will wi h marke ers. In he pas six mon hs, almos 60 percen o people have purchased a produc a er a recommenda ion by an in uencer. Online pla orms and marke places like IBE, herigh .f and Scrunch, ha have been launched over he pas fve years o ma ch brands wi h hese in uencers, and au oma e much o he process involved, con-

inue o grow. Aus ralian brand YouFoodz recen ly u ilised one o hem o work wi h more han 1000 in uencers o crea e almos 6000 pieces o con en . In doing so hey reached 26 million cus omers, and he sales resul ed in a 12- imes re urn on heir inves men . A recen poll o marke ing pro essionals by omoson in he US ound businesses make $6.50 or every $1 spen on in uencer marke ing. And Edelman is on record as saying ha he US in uencer marke ing indus ry will be wor h $10B in 2019, and he Chinese in uencer economy is wor h more han $100B. For marke ers, he promise and populari y o in uencer marke ing is now being backed up wi h proven re urns when used well. o learn more abou KPMG’s Cus omer Brand and Marke ing Advisory prac ice, please con ac David Pring on 9455 9996 or davidpring@kpmg.com.au. Article first published by Andrew Baxter, Senior Adviser, KPMG Customer, Brand and Marketing Advisory in The Australian.

Logis ics is no an indus ry: i ’s he unc ion o movemen i sel n BRENDEN RICHARDS S I have o en s a ed, logis ics is no an indus ry – i ’s ac ually he unc ion o movemen i sel . Unders anding ha , and developing a logis ics mindse , can help businesses discover remendous opporuni ies and some imes hose oppor uni ies are he simples o hings. UPS had i s beginnings in 1907 as he American Messenger Company in Seatle, Washing on. In 1919, he company expanded o Oakland, Cali ornia and changed i s name o Uni ed Parcel Service, or he UPS we know oday. I now employs over 450,000 people and has revenues o around USD66,000 million. I ’s impressive. Bu even more impressive is some o he hinking ha go hem here. One decision ha , since he 1970’s, has saved he company millions o gallons o uel each year and avoided emissions equivalen o over 20,000 passenger cars per annum.

Wha is i ? UPS don’ urn le . Ta ’s righ , hey don’ urn le . I ’s a sys em managed by so ware ha fgures ou he mos e cien rou e or each o heir rucks bu i ac ually s ar ed decades ago – long be ore GPS and compu ers were around o fgure i ou . UPS jus had some smar people who, wi h a logis ics mindse , had an epiphany. Te US drives on he righ -hand side o he road. Every ime an American urns le hey are urning agains he ow o he ra c. No only is ha dangerous because i makes collisions ar more likely, i also was es ime and uel. Your car idles longer while i wai s o urn agains he ow o ra fc and ha chews up bo h he clock and he pe rol ank. So, in he 1970’s, UPS s ar ed avoiding le -hand urns wi h a simple me hod called ‘loop dispa ch’. Basically, hey jus worked ou deliveries based on a righ - urning loop and s ar ing wi h one side o he s ree frs . By

2008, hey had rou ing so ware calcula ing he bes possible rou e or each vehicle while avouring righ -hand urns. Las year, ha so ware managed o shave o 20.4 million miles o heir rou es while UPS delivered 350,000 more packages. Now, o course, hey haven’ banned righ hand urns. Tey jus ry o avoid hem unless hey are necessary. Here in Aus ralia, i ’s he opposi e. We drive on he le -hand side o he road, so UPS would wan o avoid urning righ . I ’s a simple idea ha would probably save every ranspor company in Aus ralia ime, uel and money no o men ion lessen he likelihood o acciden s. o pu ha las bi in perspec ive or you, a s udy by he US Na ional Highway ra c Sa e y Associa ion ound ha urning le was one o he ‘cri ical pre-crash even s’ in almos 25 percen o all acciden s and were hree imes more likely o kill pedes rians han urning righ .

UPS ake i so seriously ha hey have even developed heir own maps ha are more accura e han he commercially available ones. A er all, Google Maps will only show you he mos direc rou e o your des ina ion. I has no concep o avoiding a le -hand urn. When I alk abou having a logis ics mindse , his is exac ly he kind o hing I am re erring o. While UPS may benef rom being able o use GPS and so ware o maximise heir rou e planning now, we all need o remember ha he idea frs came rom people who unders ood ha hinking abou he unc ion o movemen is he key o unlocking oppor uni y. Please con ac David Pring davidpring@ kpmg.com.au o be connec ed o KPMG’s ranspor & Logis ics exper s. First published by Brendan Richards, National Sector Leader, Transport & Logistics, KPMG Australia on KPMG Newsroom.

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