Spark Magazine: Issue 5: October 2015 by Spark Magazine #FuelForBusiness

spark THE FUEL FOR BUSINESS

MAGAZINE

STAYING IN CONTROL AS SMES GROW

10 UNUSUAL BUSINESS RULES THAT WORKED

ISSUE NO.5 OCTOBER 2015

MAKING STRATEGY RETREATS SUCCESSFUL

spark magazine

Contents 4

Staying in Control as SMEs Grow.

10 Tips for SMEs Commissioning Market Research.

Case Studies in Market Research.

Making Strategy Retreats Successful.

10 Unusual Business Rules that Worked.

Moldova - Last Chance Before the Invasion.

Nightmare or value add?

No need to follow the pack.

Cuba like opportunities for tourists and business people.

Insel Reichenau, Bodensee, Germany.

News.

Whoâ&#x20AC;&#x2122;s running the show.

Where three great countries meet.

Lessons from commissioning research.

Real life experiences in research.

Latest developments affecting SMEs.

The articles in Spark Magazine are of a general in nature only. Always seek independent financial, investment, tax and legal advice.

issue no.5 october 2015

WELCOME TO SPARK MAGAZINE An ABC survey about the appointment of Malcolm Turnbull as Prime Minister of Australia revealed an interesting reaction – of the more than 25,000 readers who replied (now that is a big sample), the most popular word, by a four times multiple was “relief”, and the second “hope”.

Spark Magazine is “The fuel for business”. The target audience is business people, with an interest in innovation, technology and new ideas. We provide the ideas, motivation, and inspiration for success. Published online, monthly, February to December.

SMEs will be delighted a very successful business person is in charge. Many in Aussie have long converted New Zealand’s “twin” (of Turnbull), John Key. And indeed our new PM specifically referred to the quality and success of Key and the New Zealand economy in his acceptance address. The challenge for Australia, and one that the ABC survey would seem to suggest the country is up for, is to move to a less adversarial and more frank / honest economic and political agenda that takes the people along, as has been the case in New Zealand. In such circumstances, much is possible, as Aotearoa has shown, albeit it with just one house, with a sensible realignment of the tax system with the increase in GST. Most Kiwis, because of the logical and balanced arguments presented, and the manner in which they were advanced, accepted this. During last month we also saw the return of the Singapore government. Singapore is one of the best success stories in history. With nothing but human capital and thrown out of the Federation they have achieved enormous success and respect. Singapore has just been voted the number one destination for ex-pats, has a higher per capital income than Australia, is near corruption free, and its politicians always do what is best for Singapore, - not themselves. The challenge for Labor in Australia, post the appointment of a much more formidable opponent in Turnbull, is almost daily Royal Commission revelations of corruption and rorting – in one case right up to (former) National Labor President. How long will it be before Australians get to feel the same relief expressed above when Labor brakes away from the unions’ puppet strings so that they can follow the Singapore example and be guided only by what is best for all Australians? Or will they cling to the past and be consigned to the opposition benches as they have in New Zealand? Paul M Southwick CEO and Editor paul@sparkmag.com.au

MASTHEAD SPARK MAGAZINE Pow Wow Pty Ltd Level 7, 14 Martin Place, Sydney, NSW 2000, Australia

EDITORIAL Paul M Southwick paul@sparkmag.com.au (+61) 424 70 40 10

ADVERTISING Melissa Brant melissa@sparkmag.com.au (+61) 458 26 09 87

CREATIVE DESIGN MAP2 Pty Ltd katie@map2.co The information in Spark Magazine is of a general nature only and should not be relied upon for individual circumstances. In all cases take independent and professional investment, financial, tax and legal advice. Spark Magazine and all persons and entities associated therewith accept no responsibilities for loss or damage related to any inaccuracies, errors, or omissions in the magazine, or reliance on anything in the magazine. The views expressed in the magazine are those of the authors and do not imply endorsement by Spark Magazine, its controlling entity or associated persons. Similarly placement of an advertisement in the magazine does not imply endorsement by Spark Magazine its controlling entity or associated persons. In some cases journalists writing for SPARK Magazine may consult to or provide corporate writing for companies mentioned in articles. The journalists or Spark Magazine do not accept payment from companies to cover or include them. ©2015 by Pow Wow Pty Ltd. All Rights Reserved. Reproduction in whole or in part without permission is prohibited.

spark magazine business

Staying in Control as SMEs Grow r by Julie Garland McLellan

Designed byby freepik.com Designed freepik.com

issue no.5 october 2015

he Challenge When Excitement Fades

Founding a business is exciting. The possibilities seem endless; the future appears bright and exciting. Is this how Gates, Jobs and Zuckerberg felt? Most founders are, and quite rightly, confident that they have created something powerful and good that could change their world, and possibly everyone else’s worlds. But things change. As Noam Wasserman reported in a Harvard Business Review article in February 2008 “By the time the ventures were three years old, 50% of founders were no longer the CEO; in year four, only 40% were still in the corner office; and fewer than 25% led their companies’ initial public offerings.” Add to that the sad statistics of company failures in their early years, estimated by some as two out of three failures in the first five years, and it is clear that founders who create an enduring enterprise whilst retaining control are an elite group.

The Big Question What do founders and leaders of large enterprises do that sets their businesses on the path to great success and cements them in the role of business leader? Followed by the even more interesting question: Can that be copied? Fortunately the answer to the second question appears to be yes. But only if the founder

is prepared to ‘get real’ and recognise the crucial points at which hard decisions must be made.

Follow up Test Questions Here are the key questions that will help to establish if the business is a real one.

Is This a Viable Business?

The first and most crucial determination is whether there really is a strong business case. Does the business solve a need or meet a desire? If it does, can it make a profit doing so? The solutions to this question are all about getting good information about the customer. Entrepreneurs are usually very aware of the customer need that creates the rationale for their business. They often have personal experience and unique insights. If they don’t then extensive work is required to understand the issues, preferences and routes to success. Experts’ reports are not always sufficient. When BrisConnections accepted incorrect assumptions about the volumes of traffic on its toll motorway the company was doomed; BrisConnections was well managed, had an excellent board and built exactly what it had set out to build within the time-frame and budget that it had forecast. But not enough customers were willing to pay a high enough price to use its motorway. Getting the sales

assumptions right is important. Making reliable assumptions for a new business is difficult. That does not mean it can’t be done. Checking the data against similar businesses and against the business plan will verify the viability of the business. Not every business is viable. Many new businesses fail and, in Silicon Valley, a track record of failure is seen as a desirable trait as long as the entrepreneur has learned from each failure and failed honestly and decently.

Is it Globally Scalable?

Once it is clear that there is a viable business the entrepreneur must quickly decide if this business venture is ‘The One’. If it isn’t then they must either forgo the opportunity or develop the business with a view to exiting as it approaches the limits to its growth. A successful exit from a business that did not meet the global growth criterion is not a failure. But for an entrepreneur wanting to develop a world-class business, getting trapped in the running and ownership of a successful small business is a disaster. Greg Symons is the founder of Society One, a peer-topeer lending and investment marketplace that appears set for global growth. He was previously the founder of Financial Administration Services which developed its own technology to manage consumer debt, becoming New Zealand’s largest independently owned debt

spark magazine business

portfolio manager. Before that Greg set up Hopscotch Money, a disruptive consumer finance entity with a community focus on lending, which developed businesses in Australia and New Zealand.

between a business, which has its own lifespan – independent from its founder – and a practice, where the founder is intimately entwined with the business and has the knowledge that is applied to make the business work.

That is a good trajectory of increasing scope and scale, which investors will value.

Many other entrepreneurs are in love with the creative and flexible early stages of a business and quite happy, when the business grows, to pass on the helm to someone who relishes imposing structure and process and building the next stage of business. As Mark Pincus told Business Insider when he left Zynga, an online gaming company that he had founded “Managing more than 200 people, maybe 150 people, isn’t fun to me and is not my skill set”.

Is it Right for Me?

Different company founders have different definitions of personal success. These must be consistent with the defined success of the enterprise or, if they differ, a clearly defined exit must be planned. Many founders discover, as their company grows, that what most attracted them to founding a business was not the challenge of growing the company (even if they did initially relish it) but the ability to be a master of their own destiny. These businesses will never evolve into world scale dominant companies. They will be limited by their scope or their founder’s desire to be deeply, personally involved in every aspect of the enterprise. Matt Church, the successful founder of ThoughtLeaders, sums this up succinctly by differentiating

Where is the Money Coming From?

Building a business requires investment. Some businesses can grow by reinvesting the cash generated; effectively ‘bootstrapping’ until they reach scale. For others that’s not possible and external sources of funding are required. Speed is especially important if the business model is replicable and competitors can

rapidly copy the success. Debt finance is difficult to attain for start-up businesses: Banks prefer to lend to businesses with a track record of income generation. Even when such a track record is well established there are likely to be requests for personal guarantees and the cost of the loan can be high. Equity is usually the preferred solution to a fast-growing business’ needs: Attracting it is both a science and an art.

Is There a Robust Plan?

Investors want a wellwritten business plan and good cash-flow projections. For startups the future can be wildly uncertain. Surveys by Entrepreneur Weekly and the Small Business Development Centre found the most common reason for failure in new businesses was a lack of planning. When the future is unclear a business needs more and better planning; not weaker and less. Two other common sources of failure cited in the surveys were inadequate borrowing practices and lack of financial knowledge. These are attributable to a lack of

issue no.5 october 2015

“Money is not everything. A growing business needs expertise and effort. THAT REQUIRES PEOPLE. understanding the timing of cash flows. It is not enough to make a profit at the end of an accounting period; many promising start-ups fail because they mismatched the timing of cash inflows and that of cash outflows. They became insolvent. Solvency is defined as being able to meet financial obligations (pay debts) as and when they fall due. A basic minimum requirement is a weekly cash-flow forecast showing sources of cash inflow and drivers of cash outflow. This should identify any potential issues and allow time to adjust activities and avoid disaster. Calculating sales and outgoings weekly allows easy aggregation to monthly, quarterly or annual figures that can be used in communications with lenders and equity investors. Starting from annual figures and working back the other way is a recipe for disaster. Once the cash-flow has been projected it can be extended by a best case and worst case scenario. Now the founder can plan what actions will be taken differently under each case. That will allow rapid action should circumstances change. The business plan should clearly

show capital is to be applied. More important than the numbers are the statements about what will be done to make these numbers happen. Anyone can populate a spreadsheet with increasing revenue on the top line and proportionally decreasing costs to improve the bottom line. A founder must state, clearly, what the business will do to generate sales and manage costs. A clear plan of actions will give prospective investors confidence in the numbers.

What is the Business Worth?

Cash-flow forecasts underpin valuations. A business is worth the sum of the present value of its net future profit streams. Nothing is less credible than a founder who fronts investors with a valuation and no evidence to back that up. It might make good viewing on Shark Tank and Dragon’s Den but in the real world it leads to a weak negotiation stance and the likelihood of either giving away too much equity for too little cash or not raising enough equity. While it is – in theory – possible to value a business based on

multiples of views, subscribers, channels, market-share or transactions these valuations are flimsy when compared to net present value of cash flows. When valuation is agreed the discussion can turn to assumptions underlying the projections. This is where the founder must have good evidence: A trend in the company’s own sales is best. Trends and comparisons with competitors or similar businesses will suffice. Wild guesses are never acceptable. When the value of the projected cash-flow has been established the amount of equity sought is simply calculated as a proportion of the total value to determine how much equity should be given at each stage.

Who is Running the Show?

Money is not everything. A growing business needs expertise and effort. That requires people. Most business textbooks attest the need to build a strong executive team with appropriate skills. This frees the founder to work on

spark magazine business

business rather than work in it. Staff require an investment in time and care from the founder. It is crucial that proper accountability frameworks are built and the correct people are doing the right jobs at the right times and in the right ways. An accountability framework allows the founder to see if each staff member is producing results. People who are very nice and work very hard but don’t produce measurable results cannot be carried. Tough decisions must be made. The founder is no exception to this rule. Investors usually support the founder as long as performance is satisfactory. It isn’t necessarily so, as Sandy Lerner, one of the co-founders of Cisco, discovered. Major investors can ‘decouple’ the success of the enterprise from that of its founders. As the business grows it will need a board of directors. Boards stand between the CEO and investors. They can (and do) fire founders: Even when the founder is doing a good job and results are on track. Consider OnTheHouse, where the founder was obliged to resign as CEO after legal action was taken against him on a matter that was not directly related to the running of the company. Directors must act in the best interests of the company

as a whole. When the corporate interest diverges from that of the founder they cannot sit idle. Building a board that complements the skills of the founder and has patience to mentor and guide him or her is crucial if founder and enterprise are to remain together in the long term. Too many founders simply place large investors onto the board. Directors should have skills that are relevant to the needs of the company as it grows. Board succession is a complex and fraught topic. However the founder who approaches prospective directors with a clear statement of the skills sought and the timeframe in which they will be needed (after which the board will start to look for other skills) is off to a head start when compared to those who award board seats to anyone who invests above a certain amount.

Classless Society?

Some founders attempt to build ‘artificial support’ by creating different share classes. This strategy has been used at New Corp, where the founding family have shares that carry voting rights whilst other shareholders receive only the rights to a share in the results. ESOPs or employee share plans allow founders to conserve cash

and to grant shares that, hopefully, will align staff interests with those of the company. When raising capital it is important to be very clear about the percentage of equity that has been granted and any percentage held in trust (issued but unallocated) for granting in the future. Hurdles attached to grants should be disclosed. Sometimes – especially in a ‘downround’ when equity is issued at a lower price than in prior rounds – shareholders may ask for a class of share that receives preferential treatment. Obviously if the business is in dire straits and the cash is desperately needed there is little strength to the founder’s negotiating position. However, wherever possible, it is best to negotiate price or attach options. It is important to keep shareholders appraised of the progress of the company. The earlier a founder learns to keep shareholders informed the better his or her future prospects; nothing engenders trust like honest communication. Jagonal, an office space search site, provides investors with a monthly report containing commentary and statistical data. The investment in communication creates a degree of trust and prevents shareholders from

issue no.5 october 2015

potentially overwhelming a small management team with ad hoc requests for information.

IPO Basics

The investment in developing a communication mindset will pay dividends when or if the company seeks access to larger and liquid investment markets by way of an IPO resulting in a listing on one or more stock exchanges. The IPO process is fraught with traps and it is advisable to have the board established well before embarking on the

process. Experienced and well connected advisers are critical. Operating for at least a year before starting the IPO is ideal. That allows the directors to become intimately familiar with the company and to develop sufficient bonds of trust to allow positive solutions to be sought for any problems that may arise. Disclosure does not stop at listing. Once the company has been admitted to an exchange the board must notify that exchange of any event that could reasonably be expected to have an impact on the price of the shares.

Rod Drury, founder of Xero, a cloud based accounting software company, told Fairfax Media of the pressure that comes with being a public company, “We can’t stuff up. Most private companies would have all kinds of issues and the luxury of time, but listed start-ups don’t. We had to deal with it quickly because we can’t hide from our numbers.”

ABOUT THE AUTHOR Julie Garland Mclellan is a professional company director, author, speaker, facilitator and MC.

10 spark magazine market research

1T 0 ips for SMEs Commissioning Market Research r

by Barry van Beurten

I ntroduction

arket research and SMEs. These words are not often seen in the same sentence but an owner or manager of

a SME may want to seriously consider the value of commissioning research if they want to secure or grow their business, and more especially in a slowing economic environment.

issue no.5 october 2015 11

12 spark magazine market research

Tips for Engaging a Market Research Company In business, owners and managers of SMEs usually have a (or sometimes more) burning issue something “that keeps them awake at night”. These big issues dictate or are a reflection of how their business is tracking. It is this/these issues that a manager should focus their energies and budget on. One simple way is to talk with at least two market research companies; tell them what the issue is and ask them how they would propose addressing the issue. Then the manager can decide if they would like to invest in one of those solutions. Listed below are 10 tips that make the process of getting quality research easier. They also address the main reasons SMEs are slow to commission research.

Cost Research company costs for a single project may vary by up to 300% for undertaking exactly the same job. An SME manager can either use an independent market research broker to assist them get the best research company for their project, obtain several quotes themselves, or they can ask friends and colleagues to recommend a company. If a manager is unsure about which company to approach, they can

get quotes from a large research company, a medium size one and one from a small research company. A manager could also look at research companies based interstate or overseas who have expertise in that specific project area. Some of these ‘nonlocal’ research companies can often undertake the project, and within the budget. CAUTION. Don’t choose a research company on price alone. At least meet the researcher (not just the sales rep) before deciding on which one to use. And, beware of low prices.

2 3

SME managers should set their budget. Determine how much to spend on this project and then see what research companies can do within this budget. Ask the research company for two options – a methodology and outcome based on the stated budget, and a budget based on an ‘ideal’ methodology. Sometimes the difference in cost isn’t much but the difference in outcomes may be worth the difference. Other times the difference in cost is significant, but at least there is now substantive data to make an informed decision.

Market research is an investment, not a cost. A small investment in research could result in better

decisions. SMEs should change their attitude towards market research. Ways in which market research is an investment include: ›› If a company is losing money, the right research can show it can be fixed ›› If the economy is in a downturn, market research can help managers focus on those parts of their business or product (or services) mix that are likely to improve or hold steady ›› If a company is fighting for market share, market research can help its managers understand who their customers are, what those customers like about their product, what they don’t like, why they are no longer customers. This information can help a company, product or service stand out against competitors who don’t use market research.

Be aware that some entities may be able to get free or substantially reduced research. Not For Profit (NFP) organisations may qualify for 100% research grants. These are usually for smaller projects around $5,000 and which are undertaken by experienced academics. Commercial companies (small and some medium sized entities) may qualify for much larger amounts that may be subsidised, sometimes by 50%.

issue no.5 october 2015 13

››Have a clear idea of what the organisation wants to do with the results If a manager has nothing else but these two aspects clear in their head, the researcher will be able to get the answers to the manager’s needs, and in a way that is usable for them.

Be open to expert advice especially around the sample size and methodology. Remember that as long as the researcher knows what the research objectives are and what you want to do with the findings they can recommend the best way to achieve the desired outcomes. Be open and honest about any preconceived ideas you have around any methodologies as well. There are 30+ methodologies available for a researcher to select to achieve the outcomes of a market research project.

It Give Credit Where Make Easier For The It Is Due Researcher

Be clear on what is wanted from the research project. There are several key aspects of briefing a market research company that a SME manager needs to know in order to get higher quality research. Otherwise it could be a case of ‘garbage in, garbage out’. The two most important aspects of a market research brief are: ››Have a clear and SMART objective for the research, and

What other information can a SME manager provide? If a manager can provide a sample for the research company to use for their fieldwork they will save their organisation a lot of time and money. A SME manager can also provide other relevant documents or previous research they have to the researcher that will save the researcher time in getting up to speed.

Who Is In Charge?

Don’t just trust the research company. A SME manager should tell the research company that they do not want a 200 page report showing loads of tables and graphs (these could be in an appendix), but instead they want a 1-page concise and clear summary of the findings and recommendations. A manager could ask to see, in confidence, examples of other similar projects that their researcher has taken the lead on recently. A SME manager should also ask to sit in and watch the focus groups or ask for recordings of some of the phone calls so they can get a feel for the data collection. Lastly a good way to approach the report is to read it backwards. The manager should look at all the data first, then make up their mind about what the data is saying. And then the manager will see if their thoughts match the researchers’ findings and recommendations.

Consider Valueadded Services

Not all market research companies (or individuals within a company) are equal. Consider a researcher with strength in other disciplines such as strategy to help implement changes. For example there are

14 spark magazine new market

now major research companies and boutique ones too who are offering full management consultancy services, including strategic planning, market plans, market research (to inform these plans), development of brochures, websites, advertising and public relations and so on. These companies can also be cost effective because they are involved in the whole process of gathering inputs and delivering on the outputs.

How Long Does It Take? Commissioning market research doesn’t have to take a long time, especially if a SME manager uses the services of an independent market research broker. While it usually takes 10 – 15 working days from briefing the broker to receiving a short list of focussed proposals to choose from, a single market research company can be identified, briefed and preparing for their field work in as little as 24 hours.

Conclusion If a SME owner or manager has an issue that keeps them “awake at night” they should consider talking with a market research company. It could well be that research might not only identify the drivers of the issue, but a good researcher may even be able to develop a road map that will overcome the issue and help the business move forward.

What can Market Research Tell SMEs?

6. The size of each segment in their market, and how to convert those segments.

As a SME manager considers 7. What their sales channels are, commissioning market research which ones are likely to stay a list of some of the questions strong, and which ones may that market research can be at risk. Also which new answer for them is provided channels to explore. below. Market research can tell 8. A solid market analysis, the manager: including general trends in 1. Who their customers are and markets and size. what their customers’ lives 9. About their competition are like. and forces that affect their 2. Why their customers buy marketplace, and what they their product or use their can do about those forces. service. Also, what their customers like about their 10. About their brand strength, product or service, what they and their brand vs their don’t like, and how (and how competitors’ brand. It often) they like the company can tell them about their to communicate with them. brand attributes and what attributes do competitors and 3. Who their non-users / noncustomers value most, and customers are, why they how to best communicate or stopped, and how to bring overcome these. them back. 4. Who their future customers 11. Whether they are on the right track with their product are. development 5. Who their stakeholders (including key influencers) are. Market research costs money but the manager or owner of an SME should note: ›› That it may not be as much the manager thinks; ›› That market research is an investment with a return on investment; and ›› That the manager should get more than one quote.

12. How to set the price for their product or services.

ABOUT THE AUTHOR Based in Christchurch New Zealand, Barry van Beurten is the Founder of The Research Broker International, the world’s first and largest market research brokering company. He is the author of several articles on market research, and previously worked in the pharmaceutical industry and health management.

issue no.5 october 2015 15

October 2015

NEWS NEW AUSTRALIAN PRIME MINISTER BRINGS RELIEF, HOPE, AND OPPORTUNITY

CHINA FREE TRADE AGREEMENT Labor is doing its best to undermine and hold up the free trade agreement with China. Whitlam must be turning in his grave. The Kiwis who signed on with China long ago are delighted as they continue to get in and secure long-term commercial deals for their products at the expense of Australia.

The biggest news this month was the elevation of an eloquent and business savvy Malcolm Turnbull to the Australian Prime Ministership. Turnbull expressed an admiration for his “twin”, New Zealand’s John Key in his acceptance speech, and that is not a surprise to Aussies that have been following our cousins and their rise across the Tasman.

Not just SMEs but the general public can see through this one and surely Labor, despite pressure from union puppet masters, will roll over soon, as Shorten is looking more and more isolated from reality.

SME expectations of Malcolm Turnbull’s government are high. Time will tell if, despite the weight of multiple levels of government, something that is not an issue for John Key, and a short election cycle, he will be able to deliver a message that resonates with Australians.

The VW deception is the first of two very bad behaviour stories this month. The news that the world’s largest automaker has been cheating on diesel emissions is a serious blow for the environment, VW itself and also the “Made in Germany” brand.

Turnbull’s election could be a deathblow for Labor, as revelations from the Royal Commission seem to produce weekly revelationd of yet another union official on the take.

Skulduggery from car companies is not new - just this month General Motors was fined US$900m for hiding a fatal ignition-switch defect tied to at least 174 deaths. General Motors’ employees will face no criminal charges. Similarly the US$1.2 billion fine for Toyota in 2014 for failing to recall vehicles that could suddenly accelerate, - a defect that was linked to at least five deaths, has not resulted in criminal prosecutions.

Labor is in big trouble with a low ranking Shorten and will need to look seriously at the very capable deputy, Tanya Plibersek, as potential leader. She is one of the few who could give them a chance against Turnbull – who is often portrayed as a darling of the left. Her calm rational communication style, together with an engaging TV manner would be appealing to many in the Australian community.

AUTO FIRMS EXPOSED

It seems that nothing short of putting those responsible for these types of breaches in jail, rather than letting them walk away with millions in

severance, will effect behaviour change with car companies. If in any doubt about the seriousness of the VW breach consider this from the ABC: “The impact of these unauthorised extra emissions could be severe. It’s estimated that diesel-powered Volkswagens in the UK may be responsible for as many harmful emissions of NOx as all the country’s power stations put together. And the emission of nitrous oxides has been shown to cost thousands of lives ”annually.”

7 ELEVEN The 7 Eleven scandal which revealed massive underpayment of staff – to an obscene degree, has disgusted Australians who believe in “a fair go” and is the second example of terrible corporate behaviour this month. The abuse of employees, many of them vulnerable foreign students, appears to have been extensive, long lasting and well known. Telling was the comment by Alan Fells that the entire business model depends on underpaying staff. It is again an open question as to whether any of those people responsible will ever be held to account. Indeed it has been reported that some franchise owners have already abandoned their stores and fled offshore, beyond the reach of Australian justice. it was investigative journalismI at its best that uncovered this misbehaviour, not the regulatory authorities, which seem to have been asleep at the wheel, again, despite the widespread nature of the offending.

16 spark magazine market reserach

I ntroduction

or SMEs or Not For Profits (NFP) commissioning research is a challenge. Usually research, including marketing research, social research and evaluations involves â&#x20AC;&#x2DC;lumpyâ&#x20AC;&#x2122; and significant amounts. Managers therefore want to make sure they get the best value. They are mindful to ensure research will answer the key questions, and clues to the future.

Here are five real life case studies that illustrate important things an SME or NFP should know when commissiong market research.

issue no.5 october 2015 17

Case Studies in Market Research or, what happens in real life. r

by Roma Hipoote MNZM

CASE STUDY 1 Does Methodology Matter? Often a manager of an SME or NFP will know several methodologies and their respective strengths, or when one is more appropriate than another. Then a market researcher will make other suggestions sometimes leaving the manager confused. But methodology is important otherwise the results and recommendations will be worthless. This first case study suggest caution when using online surveys over two other common methodologies.

A few years ago a research project was undertaken which provided the unique opportunity to observe the outcomes from asking the same questions in an online, a mail and a randomised phone survey. One of the key findings was as followsâ&#x20AC;Ś. The mail and phone surveys provided very similar results on dissatisfaction levels, but the online respondents were significantly more dissatisfied. Here, two methodologies validated each other, but in this instance online surveys gave an inaccurate assessment of dissatisfaction levels.

This comparison was also validated in a more recent research project commissioned by a council who undertook an internal analysis of the results of an online survey with a randomised phone survey.

The lesson is that marketers should be careful if using solely online research to make significant decisions as this methodology may not give you a truly representative picture.

18 spark magazine market research

CASE STUDY 2

international household name needed market research. This particular project was a specialised one involving a particular ward with the hospital setting. The client wanted to better understand this particular market and what place, if any, their products had in this technical market.

Make Sure the Research Company Helps You A recent tender involved the prioritising of spending for a government department which involved some complex ‘black box’ mathematics. Three market research companies were asked to pitch for this research project. Each of them highly respected global research companies. All three proposals came within budget, had good arguments around their proposed methodology and had a good team behind them. The decision about who would win the tender looked difficult. However in the tender document a very clever question was asked which in the end helped differentiate the companies. The research companies were asked to outline their methodology, but in addition they were asked the following question. ”Please outline the other methodologies that you had serioulsy considered, but discounted, and explain why”. Two companies suggested the same complex methodology but had not expanded on other methodologies or why they had accepted the one they recommended, and discounted others. They hadn’t read the tender document sufficiently and picked up on the government managers’ need to be satisfied on which methodology to use.

The company that won the tender said they had considered the same methodology as the other two, but discounted it for a number of reasons, and clearly laid these out. This company had responded to a key need of their client.

CASE STUDY 3 Be as Specific as You Can Don’t just select a market research company because of their national or international name. A well-known company with an

The marketing manager listed a set of “ideal attributes” that the researcher should have for the project to be a success. One of the attributes was “a researcher that had been a nurse in [this type of] ward”. There were several other attributes but this seemed to be the hardest one to meet. A research company was shortlisted that included a researcher who had been a nurse in this specialised ward previously. She was not working for one of the large global research companies, she was working with a small boutique company that did not even have a website at the time. This company won the tender and this researcher did a fabulous job for the client.

Managers should be very specific about the ideal attributes they are looking for in a company and then go out and find them.

issue no.5 october 2015 19

CASE STUDY 4 Get More Than One Quote Recently a NFP was looking to conduct health related research and approached a local company for a quote. This was a reasonably sized piece of research. The local company came back at just under $100,000. The manager of the NFP decided to get an additional quote after a chance discussion with a market research broker. This second quote came back at $63,000. A saving of nearly $40,000. This raises the question on why such a variance in price. There are several reasons including: vv Depending on the client some market research companies will look at what the research is worth to the client, and price it accordingly. vv Most market research companies have a rate sheet for all the different components of the project. They add these up, then add their margin on top. Some companies require gross margins of as much as 60% profit. Besides cost, consider the methodology. Market research is not an exact science, often referred to as an art and and a science. It is helpful if researchers suggest different methodologies and sample sizes to solve the issue. These differences carry different

costs, but discussing them can help both the manager and the researcher agree on what will give the best result for the budget available.

Getting more than one quote can save an SME or NFP money and will allow them to compare different methodologies and sample sizes to find the best fit.

CASE STUDY 5 The Three Levels of What The most common result of market research is a report that answer the “what?” question. The facts and events of the research are presneted well and objectively. This is good. Although sometimes these are drawn out in a 200 page presentation with graph after graph. Some market research companies analyse the data objectively. They then answer the “so what?” question by putting some thought into what the data is saying and analysing it a bit deeper. This is better.

A few market research companies are comfortable delving into the realm of “now what?” This is interesting as some research companies are flourishing in this space and enjoy giving their clients strategic insights and guidance. This is best.

Some of these companies have even given up their market research association membership because market research is seen to simply inform strategy or the “now what?” One research company charges their clients for talking long walks down the beach because this is where they sort the data in their mind and connect the synapses as they search for solutions to the research questions.

20 spark magazine market research

issue no.5 october 2015 21

CONCLUSION Market research is an important business tool to build or protect market share, or even to develop the next product. It is an investment and here are a few tips to ensure SMEs get value for money and the best outcome. vv Be aware that methodology is ‘horses for courses’ and that some are less suited than others in various circumstances. vv Include questions in the project brief that help differentiate between tenders, and which makes the researcher help themselves by understanding the client’s needs. vv Be specific, especially in the attributes of the ideal researcher for each project. vv Always get multiple quotes.

vv If the project is to guide strategy or a major change for the organisation, consider using market research companies that provide value-added strategic consulting services to go with their data collection and analysis.

ABOUT THE AUTHOR Based in Melbourne Roma Hippolite MNZM is the Managing Director of The Research Broker International, the world’s first and largest research broker. He previously worked in the pharmaceutical industry, sat on several boards, and served as an infantry officer in the Territorial Force Army of New Zealand.

22 spark magazine business

Making Strategy Retreats l u f s s e c c u S r by Julie Garland McLellan

www.freepik.com Designed by freepik.com

issue no.5 october 2015 23

Nightmare Workshops

ost managers have been there - the workshop from hell. Nothing destroys morale faster than a day or more wasted listening to drivel and indulging in exercises generating meaningless content that will (hopefully) never see the light of day. At best a pleasant location and some good food and drink will partially recompense the pain. At worst a headache and a long, usually late, drive home are all participants receive for their investment in time and energy. But it doesn’t have to be that way. With a little planning strategy workshops can energise and direct; creating a business that is brim full of purpose and fired up for action. Here’s how in seven simple steps.

Start With the End in Mind There are many aspects that make Before planning a strategy workshop – or any other meeting for that matter – it is important to define the desired outcome. Answer the question: “What will the business have at the end of the meeting that it didn’t before?” Too many strategy sessions are so poorly defined at the outset that there is very little even the most skilful organiser can do to achieve a good outcome.

Different objectives A facilitator will design a

completely different flow as the purpose of the meeting varies, for example: »» Discover the weaknesses in a current plan of action and develop sound contingency plans. »» Brainstorm possible areas for organic growth into a related business. »» Work out how to enter a neighbouring geographic region – alone, in partnership with an established business or through an acquisition. »» Understand the company’s brand position and improve it to facilitate staff recruitment and retention. »» Identify potential cost savings and/or assets that the company no longer needs to own.

Is a Meeting Best? Before considering this phase complete there is a secondary question to answer: “Is a meeting the best way to get the desired outcome?” If the answer is ‘No” don’t have a meeting. Go and have a team-building lunch or give staff movie tickets to go see the film of their choice. Anything! Just don’t waste time with a meeting that isn’t necessary.

Focused Agenda Once the desired outcome is clear and it is definite that only a faceto-face meeting will achieve the outcome in an effective manner it is time design the process that will lead the participants through a series of activities to reach the required decisions or insights.

This design is best done by a skilled and experienced planning »» Identify synergies and new opportunities as work methods professional aware of the options. If change following an acquisition there is no facilitator on staff or the business can’t afford to hire one as or merger. a consultant a careful application »» Examine the current of common sense will have to government policy for the suffice. industry and its likely impact Break down the outcome into upon operations over the component parts that add up to coming electoral cycle. provide the required information Everything that goes into the for making the decisions or strategy meeting should be reaching the outcome. For based upon the outcome that example, if the desired outcome is required at the end of the is to discover weaknesses in day. a current plan of action and Only by knowing the outcome develop contingency plans; a that is desired is it possible to first step is to understand the cull superfluous activities and components of the current plan discussions so as to focus on of action. This is easily achieved the most important ones. by circulating the plan or, if the

24 spark magazine business

A workshop is for people to work together; not for a few experts to take turns regaling everyone else with their expertise. Look for people who are quick thinkers, comfortable with challenge, happy to be proven wrong by a superior thought, good team players and polite considerate collaborators. Hopefully there will be a cadre of skilled and insightful people who can add value in the discussion and who have sufficient seniority to make decisions and allocate resources.

www.freepik.com

plan canâ&#x20AC;&#x2122;t be shared beforehand, by a presentation. In the second step, for each component of the plan, get the participants to work in small groups to identify what could go wrong. Spend some time debriefing to ascertain if any other potential failures are apparent before moving on to the next stage. At step three assign a number of potential failures to each small group and task the groups with identifying the earliest possible indicator that the failure will happen. Then reassign the groups the task of devising a course of action to apply in the event of each failure. Feed these proposed actions back to the plenary group and ascertain if they will work and how difficult they will be to implement. Make any changes that seem necessary. Draft a document that sets out the indicators of trouble, the likely impacts and the desired course of action in each

case. If time permits discuss how to communicate the contingency plans and when to review them. Always end with a summary of what has been achieved and agreed during together with responsibilities and timelines for the next steps in the process.

Invite the Right People Once the outcome and process have been determined it is time to select the participants. Consider who has the expertise in the topics to be discussed? Then consider if they are the right people to take part in the discussion and activity that has been planned. If there are great subject matter experts that have knowledge to share but who would not add much value in the proposed activities make a list of their names and potential contributions but donâ&#x20AC;&#x2122;t include them as participants.

If there are not enough of these people to host a decent workshop go back to the agenda; put HR and culture change on it. A company without insightful decision-makers will never survive. It doesnâ&#x20AC;&#x2122;t matter how good the strategy is on paper; it will just not get implemented.

Quality in, Quality Out Now is the time to think about the information that participants will need before the workshop takes place. Be ruthless; nobody will read anything if there is too much information provided beforehand. Choose only information that is needed to set the scene or support the decisions that must be made. The subject matter experts identified above are often a great source of this information. They can either attend the workshop and (briefly) present it or write a paper specifically for the workshop. Set clear rules around the length, tone and format of papers so that

issue no.5 october 2015 25

participants are not burdened with poorly structured, lengthy documents made by cutting and pasting other documents or by documents that are tangential to the decisions. As a general rule information should be: TIMELY – delivered well in advance of the workshop so participants can read and reflect. RELEVANT – specifically written to support the activity or decision required. ACCURATE – information should be checked and validated before decisions are based on it. COMPARABLE AND CONSISTENT – if, for example, the size and growth rates of target markets are quoted use demographic and economic information from the same source. IN PERSPECTIVE – don’t have a ten-page document about a $10,000 item and a three-page document about a $1,000,000 item. BRIEF – allow time to edit papers down to the essence of the information within. INTEGRATED – make sure that the papers form a coherent set, don’t have papers that contradict each other unless the workshop is designed to sort through the confusion. CLEAR – avoid technical jargon and poor grammar. Use a professional editor if necessary. Remember that, although the strategy workshop is an important

event for the company the participants all have ‘day jobs’ so make sure the information is presented with plenty of time and sufficiently clear and concise for easy reading. A good rule of thumb is that the papers should never be thicker than your thumb (not as long as your thumb!). People attending the workshop are giving up time that would normally be spent working on their day-today work so make the pre-reading as easy and interesting as possible.

Quality Facilitation It is advisable to have a professional facilitator. An expert facilitator will work with the convenor to design and develop a program of activities that will deliver insights and decisions. The facilitator should help to cut through all the suggestions and ideas to winnow out the few that will be acted upon or, at least, investigated further. This is not a negative or punitive process. It is simple resource allocation to the plan elements with the highest degree of success. Discarding an idea does not negate the worth of its contributor.

As Michael Porter once said: “The essence of planning is choosing what not to do”. Professional facilitators are also skilled at drawing together the disparate threads of discussion to a coherent summary. The best facilitators will help to craft a plan of actions arising from the workshop and be able to feed this back to the

participants before the workshop ends.

Professional facilitation is as important to workshops, as professional surgical skills are to open heart surgery. The strategy is the heart of the company’s future. Don’t leave it in amateur hands unless there is no other alternative. If there is no budget for a professional facilitator choose an internal person with sufficient stature to control the group dynamics but not so much positional authority that they dominate the discussion. Bring the chosen facilitator into the design process so that they maximise their contribution and have a thorough understanding of the challenges the business faces.

The CEO and/or Chairman/ president should never facilitate the strategy workshop; their status is so high that they will reduce debate and disagreement, even if they don’t intend to have that effect.

Feedback and Follow Up Nobody wants to have time wasted. Most people roll their eyes when invited to a strategy workshop; they have had their time wasted under the guise of strategic planning in the past. Tell them it will be different. Then make sure it is different. At the end of the workshop have the most senior person attending

26 spark magazine business

www.freepik.com

thank the participants for their time, commitment and ideas. They are valuable. Then make sure that participants are given a verbal summary of what has been achieved during the day together with a reminder of the next steps in the process.

important, especially when there has been a history of stultifying planning sessions, to encourage staff to put aside their previous experiences and start to talk about planning workshops as a highlight of the year rather than a burden that must be borne.

After the workshop take the output and create a summary of what was achieved or decided together with an action plan for any work that was agreed to be done and circulate to the participants. Include a written thank you and, if appropriate, a small token of appreciation. A book or vouchers for movie tickets might suffice. It is

Most important of all is to do whatever was agreed to be done and to report back after a period of time so that participants are reminded of their contribution and can see that it has had a lasting, hopefully positive and tangible, effect. If the planned actions failed communicate that. As Helmuth von Moltke remarked â&#x20AC;&#x153;No battle

plan ever survives contact with the enemyâ&#x20AC;?. The participants will know that saying. They will definitely not be surprised that some aspects need to be rejigged as the plan is implemented. They will possibly be surprised that they were given honest feedback. Knowing how you last plan went is useful information to feed into preparing the next one.

ABOUT THE AUTHOR Julie Garland Mclellan is a professional company director, author, speaker, facilitator and MC.

issue no.5 october 2015 27

READY TO EXIT? Engage the ready for sale experts who navigate you through the process, optimise business value and minimise owner stress. Working for you.

www.map2.co

28 spark magazine business

10 UNUSUAL Business Rules that Worked r by Peter Southwick

Background

Ten Golden Rules

ran a small professional services business in Adelaide for 15 years. It went from me and my three cats working from home to 22 professional staff, plus 10 administration / support staff during my time at the helm. Prior to starting the business I worked for a wide variety of businesses, both big and small. When it came time to start my own venture I had some very clear ideas about what I liked and did not like as an employee. I was determined to develop a culture of decent people working in harmony.

1. Employ only High Quality People.

I was never one to study resumes carefully and relied upon the “likeability” factor when employing people. My rule was, if I don’t warm towards you and feel like you could become a friend, then you were not getting the job. I was hopelessly biased in favour of finding high quality people. By this I mean that when interviewing potential staff I was primarily trying to decide; did they have character, did they have good relationships with

other people, at their core were they nice people? I was never so worried about technical ability – we could teach this, but you cannot teach honesty, character and integrity.

“I NEVER DELEGATED THE JOB OF RECRUITMENT REGARDING IT AS AN ABSOLUTE KEY TO THE BUSINESS’ SUCCESS.

issue no.5 october 2015 29

28 spark magazine business

The real key to our success was creating a culture where staff felt valued, appreciated and most of the time loved. www.freepik.com

2. Staff First, Customers Second, Profits Last The traditional business model is the other way around – Profit, customers then staff. I found that by concentrating on developing staff and making them feel loved and valued that enormous loyalty resulted. We worked in a very competitive business where there was generally more demand for professional staff than there was people to fill the positions. Over a ten year period we did not lose a single staff member to a competitor. Conversely, our support for our staff became so well known in the industry that we always had a host of potentially employees knocking on our door. Funnily enough, despite not concentrating on profits we were always a very profitable business.

3. No Misfits Despite a concentration on high quality people, every now and then someone was employed who did not fit in with the culture of the organisation.

“I ALWAYS SAID, I COULD TOLERATE MISTAKES, EVEN OCCASIONAL INCOMPETENCE, BUT THAT I COULD NOT TOLERATE ANYONE WHO WAS RUDE, SELFISH OR DID NOT GET ON WITH THE REST OF THE TEAM. WITH SMALL BUSINESSES A SINGLE ‘BAD APPLE’ CAN SPOIL THE ENTERPRISE FOR EVERYBODY.

4. No Meetings Having worked for a large Bank, a giant Insurance Company and an international Real Estate company I was appalled at how much time was wasted in endless non-productive meetings. I had

a general rule of no meetings. We did have small departmental meetings, as infrequently as possible, and generally one annual company meeting where vision was shared and employee input sought.

“SMALL BUSINESS HAS TO RUN LEAN, WITH PRODUCTION MAXIMISED AND NON-PRODUCTIVE TIME MINIMISED. BY MINIMISING, OR MOSTLY ELIMINATING MEETINGS, WE WERE ABLE TO CONCENTRATE ON PRODUCTION.

5. No Performance Reviews If there was one thing I hated working in “big business” it was the ridiculous six or 12 monthly performance reviews. They are generally demeaning to

issue no.5 october 2015 29

employees and little good comes out of them. They are a lever for bosses to exercise power over workers, which is usually quite unnecessary and greatly resented by those subject to them.

“IF THERE IS A PERFORMANCE ISSUE IT SHOULD BE DEALT WITH ON THE DAY IT OCCURS, NOT EVERY 6 OR 12 MONTHS. If someone is doing a great job they should be told on a regular basis.

“PERHAPS MORE IMPORTANTLY, I WELCOMED AND ENCOURAGED HELPFUL CRITICISM FROM STAFF ANY TIME THEY FELT LIKE GIVING IT.

6. Share the Profits Any employer who ponders their business success will recognise that it is almost entirely attributable to the people who work in the business. Whilst it is easy to say, “Yes, but I take all the risk and thus deserve all the profit”, this is not helpful in encouraging a real ownership in your business from those who make the money – your employees. We had a regular bonus scheme with a company share of profits to every employee every 6 months.

There was never a Christmas where we did not give a bonus to staff.

7. Your Birthday off Work I went to work on my 20th birthday and did not have a great day. As a result I never went to work on my birthday again. So, how could I run a business where I asked staff to come to work on their birthday? This was always a very well received bonus – and even if your birthday was on a weekend you could have the Monday or Friday off. This really costs a business very little but is greatly appreciated.

8. Pass on Your Life Skills and Knowledge to Young Staff One of the most fun things I ever did in running the business was to offer life skills sessions to young staff. We read motivational books and discussed them, talked about investment and wealth creation strategies, set goals, talked about the value in helping others, wrote thank you letters to people and grew together. I still get calls and emails from staff 15 years after we did this proudly reporting their progress. It is so rewarding.

9. Develop Your Staff Most owners of businesses have a depth of knowledge that younger staff do not have. It is critical that these skills be passed on and to do so is not always easy. It takes time and patience

and perseverance. We valued education and always were willing to sit down with staff and develop plans on how they could both improve their education as well as scheduling regular on the job training in one on one roles. A benefit of doing this early on in your business’s development is that those well trained staff can then become trainers themselves.

10. Lead by Example Whilst hardly a novel rule, a business owner needs to set a great example in all areas. The culture of an organisation flows down from the top. I always tried to set high standards in all areas and was often amazed at how they were followed. It was often my routine to go to work very early on Saturday mornings, often working from 5.00 am to 10.00 am. It surprised me how often other staff would turn up and work away, effectively in their own time.

Conclusion The proof was in the pudding as they say. We had a great business that by traditional measures was very successful. The rewards of having done this were immense and multidimensional. The benefits to the business far exceeded any costs involved. Most importantly, we had fun along the way.

ABOUT THE AUTHOR Peter has spent his life in the property industry, including 30 years as a property valuer in Australia and New Zealand.

30 spark magazine travel

MOLDOVA

Last Chance Before the Invasion r by Paul M Southwick

Source: www.tour-salon.pl

issue no.5 october 2015 31

Introduction

onely Planet readers voted Moldova as the second most popular off-the-beaten-path destination in the world, and for good reason. But it’s all about to change with Moldova’s pending entry into the EU. This might be your chance to see one of the last unspoilt lands before the tourist invasion, a little like Cuba before the US government’s decision to normalise relations.

The Key Stats Moldova is a small land locked Eastern European country. It’s total area is 33,846 km2, or about half the size of Tasmania. It declared independence just after the fall of the Berlin Wall and collapse of the USSR in 1990. Through history many countries have coveted Moldova’s central location, rich black soil and wonderful climate, with the Turks, Romans, Germans, Russians and Romanians all having counted it as part of their territory at one time. Moldova lies between The Ukraine and Romania, near the Black Sea. The population is about 3 million – more on that later, and the central capital is called Chisinau. The per capita income is just US$4,973 per annum (compared with US$46,980 for Germany and US$47,608 for Australia. The semi continental climate in similar to France or Germany’s but with long dry summers, and because of its more southerly

Source: http://www.worldatlas.com/webimage/countrys/europe/md.htm

location close to the Black Sea, less snow or extreme cold in winter. The official language is Moldovan, which is 99% the same as Romanian but everyone speaks Russian too. Moldovan is quite similar to Italian and many of the words will be familiar to English speakers – helped greatly by the use of ABC. English is not widely spoken but is increasing in popularity and “coolness” among younger people and business people trading with the EU. Many other languages especially Italian, German, Spanish, Turkish and French are spoken by those who have worked overseas and travel

back for the summer holidays every year. There are few non Eastern Europeans in Moldova with the Asian, Middle Eastern or American waves that have landed in other lands absent, for now. On visiting Moldovan villages or the capital, something at first seems strange. Then it clicks; there is almost no one between the ages of 23 and 53. The reason is that people in that age range are mostly overseas working because they can make much more money and send it back or save for a comfortable retirement or investment in Moldova. That’s why the “real” population, that

32 spark magazine travel

is, those in situ, is such less than official figures. In Moldova there are ancient Roman walls, the world’s largest underground wine cellar, Orthodox monasteries, high speed internet, a modern international airport, quaint old fashioned villages, fresh food markets teaming with local produce and side by side, the latest Mercedes Benz and rickety old horse pulled carts; modern shopping centres and local road side stalls. Although officially the “poorest” country in Europe, the number of children per family is low keeping life good. Massive funds are remitted back from citizens working in Europe – quoted as 30% of the economy but perhaps much higher. There are excellent and near free education and health systems. The country and people are clean, well dressed and well mannered. There is no sign of militarisation and police presence is light and non-threatening – mostly ensuring orderly and well behaved traffic flows.

Wine, Wine, Wine

The hot and dry Moldova climate is perfect for growing wine and vineyards are everywhere, from German Cars massive commercial holdings to everyone’s backyard – many in Another interesting feature of Moldova are the cars. It seem there Moldova, especially in the villages, are only two groups, the ex German grow most of their own produce. Total annual production – both red vehicles – mid and large size and white exceeds 125,000 tons Mercedes, BMWs, and Audis; and from 148,500 hectares. And yes the Russian types There does not Moldovans know how to drink it, seem to that be much in-between. very well. Unlike other former USSR Moldova is definitely where German luxury cars get exported to satellites, vodka is not the most popular drink – but it is offered and once they have hit that three-year mark. They may live their lives three consumed over the counter in the equivalent of the local dairies or or four times more over before “milk bars”. dying here.

Source: trm.md

issue no.5 october 2015 33

Getting There and Around Air Moldova flies to Chisinau from multiple European destinations including Istanbul, which makes a very quick connection coming from Australia on Singapore Airlines or Etihad. Air Moldova is a very well run airline with modern Airbus aircraft and high quality multi language service, including in English. Lufthansa is one of main airlines flying to Moldova, with regular daily services, and there are an increasing number of “low price” airlines flying into the capital. Chisinau airport has a useful website, with an English option available here: http://www.airport. md/homepage-en/ All through Moldova there are good and cheap bus and mini

bus services. The capital also features trolley buses reminiscent of Wellington. Around the city mini bus trips of any length are just two Moldova Lei or less than A$0.14, trolley bus rides are only A$0.21. All cities and towns also have taxi services but they tend to be smaller vehicles. Roads are surprisingly good – rather like Australia or New Zealand in the 1960s, many having been funded – as is much else in the country by the Germans – Angela Merkel is a regular visitor. Like the rest of Europe, Moldovians drive on the right side of the road. Rental cars are also an easy option. The international companies are all present but expensive. The many local providers will rent good quality vehicles too. For example a Kia Sorrento diesel 4WD for 25 Euro per day or a 2.5 litre petrol Toyota Camry for 27 Euro per day. Try http://4rent.md/rentacar or

http://www.rentacar.md/ but make sure you understand what you are, and are not, covered for by insurance. Drivers in Moldova are skilled but do specialise in passing on blind bends, across solid lines (no passing zones), just before the peak of hills, and against ongoing traffic. It takes a while to get used to but one can go along at one’s own pace and not be bothered. It is also necessary to develop the skill of spotting tiny red lights placed in areas of poor visibility – they tend to spring up at the most unexpected times and places, as do poorly marked pedestrian crossings. Petrol stations are everywhere with low and high-octane petrol and diesel easily available – at European prices. Petrol stations accept credit cards.

34 spark magazine travel

Source: www:m.tour-salon.pl

CRICOVA

The depth is 100 metres and there are 1.25 million bottles of rare wine, the oldest dated 1902.

Sights to See There are lot of great places to see in Moldova, perhaps not as one would expect in first world destinations but nevertheless very well worth a look. Here are some suggestions:

CRICOVA Cricova is both a town and winery 15km north of the capital. It is one of Moldova’s most popular tourist attractions. It has the second largest wine cellar in Moldova, after Milestii Mici - largest in the world and 120 kilometres of underground roadways and tunnels, versus MM’s 200 kilometres.

The depth is 100 metres and there are 1.25 million bottles of rare wine, the oldest dated 1902. Tasting facilities and tours are available to tourists. Famous visitors have included Vladimir Putin and Yuri Gagarin. During the Nazi invasion of the Soviet Union in WWII Jews were hidden here in wine barrels. Sadly hundreds of thousands of Moldovan Jews were forced to flee the Germans in WWII and the majority of those who did not lost their lives either by summary execution or deportment to death camps.

ORHEI

(The Mini Grand Canyon) This is an historic and interesting valley 40 km drive north east of Chisinau carved out by the Raut River, a tributary of the Dniester. A very historic area with traces of civilisation back to before the birth of Christ. Stone walls in which monks carved homes and used to live – visitors can tour them, and a beautiful and prominent church on the hill surround the area. No wonder the scenery earns this spot the nickname “the mini Grand Canyon”.

issue no.5 october 2015 35

THE CAPRIANA MONASTERY This monetary first mentioned in 1429 is both beautiful and welcoming. People come from all over Europe to visit the monastery. There are many other large and inviting monasteries through Moldova – a very large one is The Hâncu Monastery founded in 1678. It has a lot of fresh water springs, one of them mineralised. THE CHISINAU CHURCHES

Source: www.happytellus.com

Source: www.besttourism.com

THE CHISINAU CHURCHES Chisinau is renowned for its beautiful orthodox churches. Most famous is The Cathedral of Christ’s Nativity in the city centre near parliament. It was constructed in 1830, bombed during WWII, and its bell tower destroyed by the communists in the sixties before being reconstructed to its former glory in 1997. Attached to the church is a popular shop selling books, crosses and other religious items. Source: www.amazingmoldova.com

In every town there is at least one church. Leova, a small town

36 spark magazine travel

on the Prut River border with Romania that included a bridge crossing pre WWII, has a recently completed church with internal roof painting reflecting the popular style depicting the life and miracles for Christ, plus other famous Bible scenes. Priest Ion Christea says the painting took about 12 months to complete by a specialist from Romania.

VICTORY MEMORIAL AND ETERNAL FLAME This monument to those who died in multiple wars is guarded 24 hours a day and features plaques and the names of all those – soldiers and partisans who won the nation’s highest bravery award - the “Hero of the Soviet Union”, and a central, always lighted, monument. It’s quite reflective (along with Afghanistan Park) just how many locals die in recent wars – just like ANZACS – and often fighting the same enemy.

Source: www.allfun.md/article/41839 and www.dbbrinzan.com

issue no.5 october 2015 37

AFGHANISTAN WAR VETERANS MEMORIAL PARK This beautiful park in the relatively wealthy suburb of Riscani commemorates the many young Moldovian men who were called by “Mother Russia” to fight in the 1980’s war in Afghanistan. Interestingly the United States boycotted the 1980 Olympics as a result of the Soviet invasion and put pressure on its allies to do so too but many years later was itself to invade – with similar loss of life and lack of success. This park really comes alive at night with mini train rides for children, icecream sales and multiple street vendors.

Source: www. wikimapia.org

THE WATER WORLDS The Goa is a multi pool and restaurant complex on the banks of the beautiful Ghidighici Reservoir also known as Chisinau Sea. It’s located about twenty minutes drive north of Chisinau and you will need a GPS to get there. Entry price is about A$20.

Aqua Magic, just ten minutes drove west of Chisinau, is as good as any for children and adults alike and features a great variety of water slides. There are also multiple pools of different depths with shallow pools for children.

Both are perfect in the long hot dry Moldova summer that goes on forever. Even in September temperatures are in the thirties and clear blue skies are common. The sun does not burn like down under and a good tan can be had.

38 spark magazine travel

SHOPPING IN CENTRAL CHISINAU – SHOPPING CENTRES OR MARKETS Shopping in Chisinau central is good with lots of bargains to be had. Once can chose between name brand items or cheap Chinese products exactly the same as found worldwide. The central market or “Piata Centrala” which opened in 1825 is the best place for bargains, especially shoes, handbags and cloths. Its ownership is tightly controlled but some degree of bargaining is ok. Be careful though that it is not the employed low wage staff member who has to give away the discount instead of the owner. The market is also famous for fresh food especially fruit, vegetables and fish. There are some delightful little pastry treats available from kiosks that would make a French or German deli proud. Electronics in Moldova – with the exception of mobile phone talk time or Internet access are expensive compared with elsewhere, but food is cheap. If you want to buy a car there are very good ex German BMWs, Mercedes and Audis easily available – most in excellent condition having been recently imported after the Germans decide to upgrade after two or three years. Because of the tough roads and need for long life only the German cars really cut it here. Due to the snow in winter the Toyota RAV4 and Honda CRV as also quite popular.

THE RIVERS Moldova is flanked by the Prut to the west – which flows into the Donau at the southern end of Moldova and the Dniester in the east. Both eventually flow into the Black Sea. The Prut is fast flowing and borders Romania. It is not much good for swimming but holds very large fish that are great eating, as do the many lakes that dot the Moldova countryside. The Dniester is bigger and has some popular topless landings or beaches and associated “resorts” about 30 minutes drive from Chisinau.

Source: www.nationsencyclopedia.com

issue no.5 october 2015 39

THE CHISINAU BOTANICAL GARDENS The Bavarians love to tell you that the Englischer Garten in Munich is the largest in Europe, and it certainly is a wonderful spot. Its little sister must have left home and married a Moldovan prince. With a small entry price of just $A1 this massive expanse of gardens, lawns, flower plots, trees, lakes and teaming wildlife like

woodpeckers, squirrels, fish, frogs and native birds is not only popular for weddings but families and teenagers alike. Conveniently located on the main road in from the airport it is very well worth a visit. You can also, like many Moldova destinations, rent a small “day chalet” for a BBQ or lunch with friends.

Things You Need to Know This parliamentary democracy is safe. In six, one to three month visits over seven years the author has never encountered or witnessed a single incident of any concern This is a peaceful country of cheerful people who love to enjoy life. You do not need a visa coming from New Zealand or Australia.

German or French so you will recognise many words.

The official currency is the Moldova Lei but the Euro (especially) and US$ are also used. There are exchange places on every corner and all seem to be legitimate – unlike other countries, credit cards – mostly VISA and Bankcard are quite English is not widely spoken but widely accepted in supermarkets, most young people and those main shops and restaurants but in restaurants have enough of a cash is also widely used. There grasp to get you by. Romanian is are automatic bank machines not that dissimilar to English, Italian, everywhere so it is easy to

40 spark magazine travel

withdraw Moldova currency with your debit or credit card. There are some good hotels to stay at, and for young people plenty of bars, pubs and discos. The locals are friendly.

Conclusion If you have been everywhere and are a seeking one more enjoyable destination before it gets spoilt Moldova is for you. You might be: a young and adventurous type as per Lonely Planet; a Europhile who wants to visit the least known (and poorest) European country; keen to see the land of the every popular Eurovision Song Contest entrant; looking for a “tag on” for a main European holiday or simply interested in bragging rights having been somewhere that friends haven’t;. And lastly you may be a clever businessperson or property investor wanting to make a shrewd investment and ride the Euro membership wave to come. Moldova is generating significant “smart money” business interest - Lufthansa and Turkish Air (plus more) fly there every day now and there is a good reason for that. It is not like doing business in Australasia and there are still ruminants of the corrupt communist period, but the times, they are a changing.

VIDEO AND INTERNET Check out this video for a little more insight: http://www.moldova.org/ moldova-promotes-tourismthough-video-clip And here is a great multi language tourist site all about Moldova and its attractions: http://www.moldovaholiday. travel

issue no.5 october 2015 41

42 spark magazine travel

INSEL REICHENAU

Bodensee, Germany r

Great Things in Common The many lakes in Germany, especially in the south, have much in common. First they are clean, with no pollution – be it environmental or noise. Second building of any type around them is tightly limited so that their natural beauty is maintained, and third snowcapped mountains often surround them. The lakes, be they in the north around Berlin, or in the South in Bavaria, are popular with both local and overseas visitors, drawn not just to their natural beauty but the quality human made additions like “Ferienwohnungen” or holiday apartments, high quality fish-

by Paul M Southwick

serving restaurants, five star hotels, camping grounds, bike or walking tracks and ferry boat rides. Germany is a land of lakes and rivers. The 1,230km Rhine that flows from the Swiss Alps out to the North Sea is the best known, but the 2,860 km Donau – which flows from the Black Forest in Germany through ten countries, all the way to the Black Sea, via Moldova and the Ukraine, in the east, is significant as are the many smaller tributaries to these superstars like the Isar, that flows gracefully through Munich – with its pebbled beaches, surf and sun bathing spots.

First Among Equals

At 571 km2, Bodensee, or Lake Constance as it is known in English, is by far the largest lake in Germany – being four times larger than any other. The Rhine River flows in and out - via the captivating rushing water falls at Schaffhausen, and is bordered by three countries - Germany, Switzerland and Austria with their stunning, jagged, white mountains. Inhabitants of the German State of Baden-Wurttemberg whose shores make up the largest portion of the German side are not too keen to be told that the lake also borders the state of Bavaria. Bavaria is famous for at least four other lakes – Chiemsee on the A8 to

issue no.5 october 2015 43

Salzburg, the uber reich shored Starnberg near Munich, the nearby sister lake Amersee which is so good for swimming, and the home of so many current and past Munich based CEOs, Tegernsee.

History Not surprisingly a place as nice as Bodensee has been inhabited for a very long time. Who wouldn’t want to live there? The German city of Konstanz, after which the lake gets it German name, is one of those places that straddles two countries with the Swiss town of Kreuzlingen being simply an extension of the same road and railroad. This was great for

German residents in WWII as Konstanz was one of the very few places not to be bombed by the Allies for fear the explosives might go astray and hit the “neutral” bankers.

establishments – many of which have plaques of the high water mark – above their front door step.

Konstanz, a busy and obviously wealthy university and tourist town, with a population of 80,000, traces life all the way backs to the Stone Age. It was the site of the only Roman Catholic conclave ever held north of the Alps, in 1417, when Pope Martin V was elected.

The great natural beauty of Bodensee is matched by the number of family friendly things to – many of them outdoors in the warm, blue-sky summers running from June to September. The Internet teams with sites offering up all the attractions and visit ideas. For example: http://www. constance-lake-constance. com/ or http://www.constancelake-constance.com/ or http:// wheel2wheelholidays.com/ pages/lake-constance-cyclingholidays

Bodensee rarely freezes over, the last time being 1963 – and before that in the 1880s. It also rarely floods, the last time being in 1999 when it rose over two metres flooding local

Multiple Family Activities

44 spark magazine travel

Here are some of the best attractions: The Airship museum at Friedrichshafen, from which tourists can take a ride in a modern airship; the ferry trip from historic Meersburg across to Konstanz – necessary when driving from Munich; The “flower island” of Mainau – a must see – refer here http://www.mainau.de/home.html cycle tours around the whole lake, and the smaller but historical island of Lindau off the Bavarian “coast line”.

Insel Reichenau – the Jewel of Bodensee The historic, UNESCO World Heritage site (since 2000) and fresh, green, glittering island, of Reichenau is the shinning jewel of Bodensee. It lies just 15 minutes

drive from Konstanz – there is narrow causeway across from the mainland, built in 1838, and has a Mediterranean like climate. This 4.3 km2 island has a permanent population of just 3,300 that swells by tens of thousands over summer – rather like Mt Maunganui or Wanaka in New Zealand or Sorrento or Noosa in Australia. Total tourist bed nights per annum are over 220,000, but it is not nearly as crowed as the aforementioned down under holiday spots. It is famous for its three historic churches –and the establishment of The Benedictine Abbey of Reichenau, in 724, by Saint Permin. Although “invaded” by tourists in the summer and those with

weekend homes during the vacations, its main role is growing vegetables, fruit and grapes that find their way throughout Germany and Europe. The annual production of vegetables is 14,000 tonnes – that’s a lot of lettuce. There are also 20 professional fisherman netting plentiful whitefish, kretzer, pike and trout

Getting There The options are all very easy and scenic. First one needs to get close. This could be by one of the many regular from anywhere flights into Munich, Friedrichshafen or Zurich, train to Konstanz, or by car down the autobahn from Munich or Stuttgart – an experience in itself. Then it is a quick drive, ferry or taxi from Konstanz to the island. Once

issue no.5 october 2015 45

on the island cars can be used but much more popular are bikes which can be rented everywhere for ten euros per day. All providers have a good range of wellmaintained bikes and child seats. But helmets tend to be frowned upon in Germany (strangely undemocratic and against personal freedoms), so bring them with you for yourself and family, or, well, be daring and do as the locals do, after all it is “Ferienzeit” or holiday time. There are many useful tourist tips here: www.reichenau.de

Accommodation For a small island there are multiple accommodation options of all types. There is a large camping ground right on the water, multiple holiday apartments – either attached to locals’ homes or separate, and several hotels. By far the best is the five star Hotel Strandhotel Löchnerhaus right on the water at Reichenau where the ferries come and go all day. Even the address sounds good. It’s “An der Schiffslände 12” Not only is this the best place to stay but it is also the best place to eat with magnificent views across the Lake to Switzerland. It is the destination of many romantic weekends, a place, for sure, of

much “conception”. There is also a cross between hotels and holiday apartment that are based around a central area with meals, activities and great opportunities to mix with other holidaymakers – many of which will be Germans.

Churches Three well preserved medieval churches in the style of the 9th to the 12th century – St George, St. Mary and St Mark, and St. Peter and Paul are popular with tourists – visitors can walk, bike or drive to them and have a look inside. There are few signs in English but the murals, monuments and architecture – both internal and external, speak for themselves. Standing inside the churches t is

46 spark magazine travel

very hard not to imagine being on the island way back in 1400. It surely was just as beautiful then.

Ferry Rides Beautifully maintained wooden ferries with names like “Reichenau” and “Schaffhausen” come and go all day. They can be used either to get to another place on the lake - there are so many wonderful spots, for example Radolfzell (a must to time the return trip at sunset), or as is often the case, for a leisurely trip on the lake with tea and cakes. For the lovers of green energy there is even a small solar powered and silent ferry that travels back and forth to the small Swiss town of Mannenbach where tourists can go for lunch. Like all ferries here it also takes cycles and is very reasonably priced.

Swimming If there is one thing Germans love and do often it’s swimming in the

lakes. And Insel Reichenau is one of the best places to do that. In summer the water is warm, clean and clear. There are lovely little mini beaches with pebbles or sand and even better, unlike Australia or New Zealand, no crocodiles or sharks to eat you. The water is crystal clear and the slope gentle. There are of course no waves but being able to lie back and look at the snow capped mountains or grape covered hills makes up for that. Because of the calm warm waters in summer sailing, paddle boarding, canoeing and similar water sports are very popular and perfect for the whole family. Again it is easy to rent this vessels around the lake and yes, life jackets are provided. The beauty of being on this island is the sunsets at the end of long sunny days. At this romantic time many locals emerge for a swim or walk hand in hand. Early morning is also very popular for swimming.

Out and About At 4.5 km long and no more than 1.5km at its widest point, a walk around the entire island is easily achieved in half a day - even with kids, and there are many great places to stop for a rest – the churches, camping ground, boat

issue no.5 october 2015 47

harbour, central shops, cafes or any number of beautiful bays. One of the best places for a walk is to the highest point on the island the “Hochwart” – at just 45m above the lake, from which visitors can take photos of the surrounding winery, lake - in all its parts, as well as the green hills and snowy mountains of Germany, Switzerland and Austria. Visitors to this point often linger and find it very hard to tear themselves away. Some say “we have got to find a way to buy a place here” – it’s that type of island. It is also possible to tour the island for free on a double decker bus that has a great commentary. A favourite and recommended stop is the excellent museum in the centre that highlights the interesting history and teaming wildlife of the area. Entry is free - as for the buses with your hotel check in confirmation.

Day Trips There are many great days trip tourists can do by rental car or public transport from the island. The most recommended would be: To the massive Rhine Falls (Rheinfall in German) the largest

plain waterfall in Europe where the mighty Rhine exits the lake – they are 50 m wide and 23 m high with average flow in summer of 700 m3/s. The water rushes so fast between the rocks, like Huka falls near Taupo in New Zealand, that no fish, except rock hugging eels can climb them; to Zurich in Switzerland to buy a Rolex watch, Louis Vuitton handbag or similar classy item; to the Airship Museum in Friedrichshafen; to Stuttgart or Munich for the day (longer trips); or perhaps into the nearby town of Konstanz for some shopping, sight seeing or dinner. Don’t worry you will get by fine with English. There are also trips into Austria for cable car rides to mountaintops.

Conclusion Easy to get, clean and green, with beautiful blue skies, historic, and perhaps the most beautiful place in Germany, Insel Reichenau is the perfect destination for a great family holiday. Make sure you stay at least a week. Even if you do you will be left wanting more and booking to return next year.