Business Times October 2013 by Keith Platt

business NETWORKING: Frankston | Mornington Peninsula | Dandenong

October 2013 | $4.95 (GST inc.)

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FURNITURE MAN JOHN NEWTON FOLLOWED A DREAM TO BECOME A DESIGNER AND MAKER

YES, MINISTERS CABINET POSTS FOR TWO OF THE REGION’S MPS AFTER COALITION WIN

ETHICAL INVESTING CAN A SHARIA FUND DELIVER THE GOODS, ASKS STOCK ANALYST RICHARD CAMPBELL

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Inside

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Make sure every business knows your business. For advertising, contact Marg Harrison on 0414 773 153 or marg@businesstimes.net.au

Voice in Cabinet: Frankston-based MP Bruce Billson is a voice for business.

Till rattle slows: We’re still spending, but shops miss out.

Departments News Busy Bites Networking gallery Business Directory

4, 5 6, 7 8 23

Columns

OctOber

bUSineSS

Networking: Ivan Misner Health: Mike Ellis Markets: Richard Campbell Managing: Hamish Petrie

10 18 19 22

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PRIZE T IN FIRSDS AWAR neWtOn MAn JOHn FUrnitUre A DreAM tO becOMe FOLLOWeD r AnD MAKer A DeSiGne

ISTERS YES, MIN OF tHe FOr tWO Win POStS cOALitiOn cAbinet MPS AFter reGiOn’S

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nG: Frankston netWOrKi

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ISSUE 39 / OCTOBER 2013

FRANKSTON / MORNINGTON PENINSULA / DANDENONG

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the region

It’s third time round for the shire’s keith platt Dandenong restaurateurs Toula Bradshaw and Michael Greener are expanding their operations to Hastings. The pair say the new venture will be different to the Cafe Villa, which they run in Langhorne St, Dandenong. The Hastings cafe – to be named Pelikan Societe – replaces the Waterfront Cafe, which ran for one year in part of the Mornington Peninsula Shire-owned Pelican Park Recreation Centre. The cafe is near Hastings pier and has extensive views over Western Port. Scott Elks – who was also running the Western Port Hotel - walked away from the Waterfront Cafe just one year into a 21-year lease claiming losses due to exorbitant rent. Elks was paying $96,000 a year plus extras charged for equipment and furniture. He said the shire could keep his $30,000 bond to

Pelican Pantry will be renamed Pelikan Societe and reopened with a new menu on 8 November. cover outstanding rent and expenses. The $70,000 a year lease to Ms Bradshaw and Mr Greener’s Greenshaw Nominees includes GST and the extras, although they plan to bring in new furniture. Under the terms of the latest lease they will not face a rent review for three years and then in years 7, 10, 13, 16 and 19. Ms Bradshaw and Mr Greener plan to open their Pelikan Societe (complete with

new menu) on Friday 8 November. The shire hired real estate broker Hugh Roberts, of CRE Brokers, to find new tenants after Mr Elks placed the business in receivership. The loss of such a high-priced tenant and subsequent closure of the cafe was the latest blow to the Pelican Park Recreation Centre, which has accumulated losses for the shire. The cafe, then named Pelican Pantry, was originally run by the shire as a hospitality training centre in a bid to lessen youth unemployment on the peninsula. It aimed to train each year 100 VCE Vocation Education and Training in Schools and Victorian Certificate of Applied Learning students. Shire documents show that over the period 2005-06 to 2009-10 Pelican Pantry trained a total of 115 people at a cost of $11,436 a trainee with trading losses of $1,315,195. Mr Elks said he called in receivers and

New controls target freeway buildings, signs Drivers using EastLink will be shielded from unsightly buildings and billboards under a new local planning policy being adopted by Greater Dandenong Council. Frankston City also will consider limiting visual pollution when it next reviews its Municipal District Statement. Connect East, which operates EastLink, asked councils bordering the freeway to consider planning controls to prevent the creation of an avenue of sky signs and garish building signage. Dandenong’s policy will guide its planners

to promote high quality buildings, works and signage along the freeway corridor. The policy discourages major promotional signs and sky signs that would spoil the landscape and design of the freeway corridor.

Retailer of year vote Dandenong shoppers can again vote for their favourite retailer. Dandenong Retail Traders’ Association (DRTA) is launching its 2013 Business Awards with voting starting from 1 October. DRTA chairwoman Glenys

Cooper said customer votes can be lodged on entries available from the Dandenong Journal newspaper website or by emailing details including name, contact phone number, name and address of your favourite business and in 20 words or less why you think they are the “Retailer of Year”. Emails can be sent to dandenongrta@yahoo.com.au. The top five nominees will be notified on 1 November and be invited to attend the DRTA awards night dinner and annual general meeting at Dandenong Club on 12 November.

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BusinessTimes Frankston / Mornington Peninsula / Dandenong | October 2013

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The renamed Pelikan Societe has a prime spot on Hastings foreshore.

locked up the cafe after being unable to reach agreement with the shire to reassign his lease. He said the dispute has led to the loss of four full-time jobs and six to 10 casual positions. Mr Elks said repeated pleas to council officers for a reduction in the more than $8000 a month rent had fallen

on deaf ears. He had “invested” $70,000 in the cafe, “which I don’t expect to get back”. The shire’s property and valuations officer Yasmin Woods said the shire “has, at all times, complied with its obligations under the lease agreement” [with Mr Elks].

Seaford IT company Extreme Networks has won the prestigious Acer James Eling Small Business Partner Award at a client gathering in Buenos Aires. Acer hosted the worldwide get-together of its high achiever business partners. Extreme Networks general manager Tina Eling said the award “recognises the great relationship between Acer and Extreme and the way that both companies have helped so many businesses on the Mornington Peninsula. “Acer has been a great supporter of our company’s information dinners and other activities to support Mornington Peninsula businesses. Acer’s focus on small businesses has been outstanding over the past couple of years and that is why we have partnered so closely with them.”

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October 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 5

BUSY BITES

SMALL BUSINESS COUNCIL HAILS BILLSON APPOINTMENT

Sustainability awards Greater Dandenong is considering annual sustainability awards, including an award for local businesses. Officers will report to council in November. Cr Matthew Kirwin said many councils have sustainability awards to recognise residents, community groups, schools, businesses and other organisations that make “exceptional efforts or find new ways to live more sustainably”. He said councils have found that awards increased community involvement around sustainability as well as showcasing, encouraging and celebrating excellence in sustainable living. “Whether it is a scheme to reduce food waste, an original energy saving architectural design or an innovative school education program, such awards both celebrate achievement and create role models in the community,” Cr Kirwin said.

Economic domination The latest Small Business Nation Report by McCrindle Research shows small businesses dominate the economy, with 60% of businesses not employing staff, and 9 in 10 businesses employing less than 20 workers; 29% have yearly turnovers of less than $50,000; 34.5% turn over $50,000-$200,000 each year.

IRD LYB EAR CIALS SPE

The Council of Small Business of Australia (COSBOA) has welcomed Dunkley MP Bruce Billson’s (right) appointment as Minister for Small Business in the new Abbott federal government. Peter Strong, executive director of COSBOA, said Mr Billson was a long time supporter and advocate for people who own their own businesses. “He will have to face strong opposition to make the significant changes small business people need in the areas of contract law, local retail monopolies and lack of competition in the retail supply chain and retail sector,” Mr Strong said. The first of five task forces helping the government to deliver its election promises already has been announced. Lead by David Gandolfo, from the Commercial Asset Finance Brokers’ Association of Australia (CAFBA), the Contract Taskforce will inform Mr Billson on contract processes and issues. Mr Strong said he expected the Shopping Centre Council and Franchise Council of Australia would fight to keep in place what he described as “unfair contract processes…” “Rectifying this will be a key focus of the first task force. Small business people deserve recognition not vilification, respect not dismissal and should enjoy the same right to a healthy job as any other person,” said Mr Strong. See ‘Voice in Cabinet for SMEs’ Page 14

TIPPLERS TIP TOWARD WINE Australians’ tastes may be swinging away from beer and towards wine, but we’re drinking a little less alcohol overall, according to the Australian Bureau of Statistics (ABS).

THE LONG LAZY LUNCH WITH

FEATURING The Frankston High Stage Band plus The Frankston Super Band BOOK ONLINE proudlyfrankston.com.au 6 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | October 2013

“Beer consumption is now at its lowest point in 66 years,” said Louise Gates, of ABS. While Australians are consuming less beer per person – a downwards trend that started in the 1970s – there’s been an increase in wine consumption. “In terms of pure alcohol available for consumption, beer was down 2.3 percent in 2011-12 (compared with the previous year) while wine rose 1.9 percent. “ Ready-to-drink beverages have also seen a drop and were down by 2.5 percent, while spirits have seen the largest fall, down by a full four per cent. “But the overall picture is that consumption of alcohol in Australia has fallen for a second year in a row; 2011-12 saw us drink 1.4 million litres less than we did in 2010 -11, and 2.7million litres less than in 2009-10.”

AVOIDING TELCO BILL SHOCK Apparently we go to great lengths to avoid telco bill shock by accessing free Wi-Fi, using a friend’s phone or relying on work to subsidise our personal data addiction. Research from Optus My Plan shows that 60 per cent of Australians who use their mobile phone to access the internet worry about their mobile data allowance, with one in three concerned about getting an unexpected bill for going over their limit. More than half half (55 per cent) access free Wi-Fi on their mobile phone wherever they can, with one in five admitting to switching their phone to their employer’s Wi-Fi when at work. Workers are so used to relying on their employers to save their mobile data allowance, the average employee spends five weeks every year (an average of four hours each week) using workplace internet for personal use. Three in five (59 per cent) full time workers believe that employers should let staff use the internet at work for personal use and 46 per cent think that using workplace data is nowhere near as bad as nicking stationery.

ANOTHER PROUDLY FRANKSTON EVENT

BUSINESSES EXPECT DROP IN REVENUE, CONFIDENCE

Cash flow rose to second from fourth place, equal with price margins and/or profitability, which rose from third place. Attracting new customers dropped two places to fourth, while competitive activity dropped one spot to fifth. The biggest mover of all the 13 pressures listed was interest rates, dropping from sixth to ninth place in this survey. Of all the industries, operators in agriculture, forestry and fishing felt the most pressure from fuel prices, cash flow and price margins and/or profitability. Australian Chamber of Commerce and Industry Chief Executive Peter Anderson agrees that many of the same pressures face businesses regardless of sector and location. Anderson is hoping for decisive action following the campaign ‘Small Business. Too Big to Ignore’ in the election lead-up. The campaign advocated cutting red tape, simplifying the tax system, making it easier to employ people and building better infrastructure. For the third consecutive survey the highest-ranking strategies were customer retention, customer acquisition and the number or variety of products or services offered by the business.

Rating entrepreneurs A willingness to take risks is the most common trait among Australian entrepreneurs. A close second is the urge to be competitive. These are the top traits out of seven revealed by organisational psychologist Kirsty Bucknell’s search for what makes an entrepreneur tick: risk taker 24%; competitor 20%; achiever’ 15%; individualist 15%; innovator 10%; learner 8%; and self-starter 8%. Bucknell found that family and parents have the biggest influence according to 38 per cent of entrepreneurs. A trait test designed by Bucknell can be found at www.commbank.com.au/ business/entrepreneurs.html

App in the jungle Choosing downloads can be confusing when there are close to one million apps covering just about every conceivable business need as well as social activities. Among the crop of apps emerging this month is one aimed at saving the lives of orphaned orangutans. The app will allow users to donate a tax deductible $10 or more to help rehabilitate orphaned orangutans in Indonesian Borneo, see pictures of baby orangutans, access video and text updates. Go to www.orangutans.com.au

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Business performance outlook and economic confidence of small to medium business operators (SMEs) has fallen in the six months to the end of August, according to a survey by software provider MYOB. However, respondents to the survey overall reported increased or stable revenue for the past financial year and more than one quarter reported more sales/work than usual in their short-term pipeline. The August 2013 MYOB Business Monitor Report surveyed 1022 SMEs a month before the federal election, the latest in a series that started in 2004. Less than one quarter of business operators expect the domestic economy to improve within 12 months (23 per cent), down from 25 per cent in the March 2013 report. The proportion expecting an improvement to take one to two years is now 35 per cent, down from 37 per cent. The proportion of business operators who think improvement will take more than two years is now 26 per cent, up from 22 per cent. The dip in economic confidence corresponds with a dip in revenue expectations for this financial year. Only a quarter of operators anticipate a revenue rise, down from 30 per cent six months ago, while 44 per cent expect revenue to remain stable (up from 42 per cent). MYOB CEO Tim Reed said: “We hope to see a boost in SME confidence now the election verdict is in, but our research suggests it will be a slow road to significant improvement in the health of our economy and our business outlook. “The financial confidence of the country’s small to medium business operators is closely linked to the health of our economy and it is telling us a clear story. They see factors at play such as recordlow interest rates and although many welcome the upside, they recognise it as a sure sign the domestic economy is experiencing slowed growth.” Fuel price was the top pressure point for SMEs, as it has been since March, 2011.

October 2013 | Frankston / Mornington Peninsula / Dandenong | BusinessTimes | 7

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After 28 years internationally and 15 years in Australia BNI is the world’s  most successful Referral Organisation.   Members in this region reported over $9 Million in generated business  from BNI last year. We build referral networks around your business and you benefit with  long  term referral partners that lead to business and profit growth.   Why not attend a meeting your local area where you can meet and  connect with other local business and see what opportunities await you  and your business.   For your nearest group see our website or call 9782 0555





 8 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | October 2013 

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1. Chantelle Waterson, director, and Sue Pritchard, both of Bendigo Bank Balnarring at the Women in Business breakfast at Mornington Golf Club on 17 September. The seminar was part of a series arranged by Monash University Peninsula Campus Business Associates. 2. Women in Business guest speaker Amanda Brook, director of Abbey Auctions and Quickspace, and Monash University’s Prof. Mike Ewing. 3. Commonwealth Bank Mornington representatives Kelsey Moore, David Anderson and Elissa MacSporran at the Monash breakfast seminar. 4. Frankston BNI met at Peninsula Country Club, Frankston, on 30 August, for a guests’ day. From left are Doris Bretherton, of CEBS Electrical Contractors, Brett Edwards, of Business Networking International (BNI) Melbourne Southern Region, and Kellie Dawson, of Fine Print Australia. 5. BNI guests Nathan Harding, of Smart Saver, Frankston, Mick Mellor, director of Southern Deck Builders; and Colin Pridhan, of A Smile Bin Hire. 6. Don McDonald, of Mornington Automotive Specialists; Peter Crawley-Boevey, Essential Story Video Production; and Ray Strongman, of Action Coach, Mornington. 7. Peninsula Pure Honey owner John Winkels with Ben Beel, director of Beel Electrical, and Linden Jackson, managing director of Agile IT. 8. Mornington BNI’s weekly breakfast at The Rocks on 12 September. Yolande Hobby, Egg Transformations coaching and training, and Tim Hibbert, Hire A Hubby franchise, Mt Martha.

9. Mornington BNI: Rachel Stent, of Gateman Automatic Gates; Peter Cracknell, of Clean With Envy; Pauline Bignell, of We Know Loans; and Barry Hodge, Peninsula Telecom. 10. Frankston Arts Centre sponsored a joint networking night that attracted more than 250 people on Tuesday, 24 September. Groups involved were Business Networking Mt Eliza, Frankston Business Chamber, Peninsula Networking and Frankston Tourism. Proudly Frankston chairman Alan Wickes with Caroline and Kevin Johnson. 11. Stewart Bell, of Bell-Campbell Auditing; Gill Thompson, business development and marketing manager of Frankston Arts Centre; and Max Coulthard, of Monash University. 12. Lisa Perry, of The Coffee Club, (centre) with Viani Roberts (left) and Edna McMinimee, of Marillac. Picture: Daryl Gordon

13. Will Bell, of Switch Now home loans,with Graham and Adele Don Paul, of SB Insurance. Picture: Daryl Gordon

14. Louise Morris, of Stable Private Clients; Tomoko Suiati, occupational therapist; and Ronda Brooks, of Brooks and Associates Bookkeeping. Picture: Daryl Gordon

15. The former Ceasars at 343 Nepean Highway, Frankston, relaunched on 17 September as Bel Sorriso with a new look interior and new furniture. Owners Stephanie and Mario Tavian at the restaurant’s relaunch. 16. Aaron Hazelton, of McClelland Gallery; Joanne Greener, of The Rocks Restaurant, Mornington; and Peter Bradie, of Airpower Heating and Cooling, at Bel Sorriso relaunch. For more photos check our

Latest Networking Galleries www.businesstimes.net.au

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BOOK your FREE 1 hour business reviver session 14 today. Valued at $495 October 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 9

NETWORKING

Assumptions can cost you Many of us have this built-in bias about networking with individuals outside our normal frame of reference. We make assumptions about these people that could cost us a valuable opportunity. A good friend, I’ll call her Pam, once told me an amazing story that illustrates this point perfectly. Pam ran dozens of networking groups in the Boston area. One day, she visited a group that met in a private meeting room at Fenway Park. (Fenway Park has been the home ballpark of the Boston Red Sox baseball team since it opened in 1912 and is the oldest Major League baseball stadium in use). Pam arrived a little early to the meeting and noticed an older chap setting up coffee mugs in preparation for the meeting. Pam is a consummate networker, and she also has the talent of being able to strike up an engaging and productive conversation with just about anyone. True to form, she struck up a conversation with the man while waiting for the members of the group to arrive. She was really taken by the amazing sound of his voice. She mentioned to him that he had an incredible speaking voice and asked what he did before this. He informed her that he used to be a commentator for television network CNN. He went on to say that in his later years he wanted to work in a less hectic job and also live closer to his daughter. He decided to take on the job of managing the owner’s suite at Fenway Park, because it gave him an opportunity to be close to his family while enjoying a less hectic career later in life. Pam asked him about some of the people that he met during his time in broadcast-

Dr lvan Misner*

Networking specialist

The older fellow serving the coffee turned out to be a former commentator for television network CNN. Dave had made an assumption about the man that could have cost him a career opportunity.

ing. He shared many great stories with her, including an interview with JKF a week before he was assassinated. He also talked about meeting Martin Luther King Jr. and Nelson Mandela. It was an interesting – no, a fascinating – conversation that she genuinely enjoyed.

Later, when the meeting was in full swing, one of the regular members, I’ll call him Dave, mentioned that he would really like to do a radio talk show someday and was looking for some contacts who could help him pursue this dream. He was having very little success breaking into such a tough business. After the meeting, Pam said to Dave: ”Do you see that guy over there [pointing to the ex-CNN commentator]? Have you seen him before?” “Yeah,” said Dave, “He’s the guy who sets up the coffee for our meeting.” “Did you know that he used to be a broadcaster for CNN?” “Are you kidding? No way. I had no idea,” said Dave. Pam suggested he introduce himself and learn a little about the man he had seen every week for the past several months. The man that Dave thought was “just a coffee server” may very well be able to make a connection for him in the broadcasting industry. Dave had seen the man on many occasions, but had not struck up a conversation with him because he assumed that they had little, if anything, in common. The truth is, when it comes to networking, not having a lot in common with someone may mean that they can be a connector for you to a whole world of people that you might not otherwise be able to meet. *Dr Ivan Misner is a New York Times bestselling author. He is founder and chairman of Business Networking International (BNI), the world’s largest networking organisation. Dr Misner is also senior partner for the Referral Institute, an international referral training company.

online and up to the minute Businesses have a new promotion option. along with the hard copy of our magazine, our new website offers effective and attractive advertising opportunities.

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10 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | October 2013

local government PLANNING

The environmentally sensitive Edithvale and Seaford wetlands.

Denser living mooted near shop and transport hubs BY TONY MURRELL Victorians face denser and more diverse development around public transport and shopping hubs as planning regulations change to cope with population increases.  New residential zonings devised by the state government – determining what we can build and where – must be adopted by councils before 1 July, 2014. The biggest impact in Frankston City is likely to be around Seaford train station, one of nine neighbourhoods in a new Residential Growth Zone that allows substantial changes in land use. Recognising the controversial nature of Growth Zones, council is suggesting that they be subject to a separate Planning Scheme Amendment, “not to be pursued until design guidelines are developed to inform the type and development supported in these areas”. In the meantime these areas of potential growth will be parked in the more protected General Residential Zone. An exception is the Ebdale precinct, north of central Frankston, which council already accepts is an area suitable for denser development. Council planners drafting the city’s new housing strategy have clustered the growth zones around existing commercial and retail activity areas like Carrum Downs, Skye, Langwarrin and Frankston Heights.  Seaford faces the prospect of supporting a bigger population because it is an existing commercial and retail centre serviced by a rail link to the city. The state reforms delete nine existing

zones, amend 12 zones and establish five new zones. Existing Business 1-5 Zones are replaced with the Commercial 1 and 2 Zones. Council said most feedback from residents about the new zones concerned substantial change areas Langwarrin, Seaford, Skye and Carrum Downs. Almost half of the feedback addressed housing density in Seaford and how existing services and infrastructure would cope with population growth. The impact of an increasing population on Kananook Creek and the wetlands was also questioned. In the new Neighbourhood Residential Zone a 100m buffer would be set around the entire perimeter of Seaford Wetlands. Council said it would use the new zonings to “activate the city centre and encourage more housing, leisure and retail options”. Council is recommending that: • Minimal change and limited incremental change areas identified on the Housing Framework Plan should be zoned Neighbourhood Residential;  • Incremental change areas should be zoned General Residential where minimum lot sizes will be 400sq m;  • Substantial change areas should be zoned Residential Growth; and • Land in Langwarrin and Langwarrin South zoned Low Density Residential remains in that zone.  Possibly the most controversial of proposed reforms is increasing the range of uses allowed within Melbourne’s 12 Green Wedges.

While restrictions on subdivision are retained, there will be greater flexibility in using Green Wedge land for tourism, education, group accommodation and rural uses. Other changes will allow commercial uses in residential areas within 100m of a commercial area, office space in industrial zones, and supermarkets in Industrial 3 Zones. Mornington Peninsula Shire Council and Frankston City Council made submissions against the reforms. Private planning consultant Megan Schutz, in an article for BusinessTimes in November 2012, wrote that “the planning zone reforms and the Metropolitan Planning Strategy open up the issue of what is the right balance to be struck between private rights and the public good”. “At the end of the day, we all want to maintain a certain standard of living which requires a planning system that supports economic development that is globally competitive.” State planning minister Matthew Guy said planning reforms were necessary to unblock a bureaucracy-bound system. Last year, Mornington Peninsula residents Ranald Macdonald, former managing director of The Age and Flinders Community Association member, and David Gill, former president of the Shire of Mornington, collaborated in a statement that the proposed changes meant “Melbourne’s green wedges will be despoiled, urban boundaries threatened, national parks and reserves handed over to the whims of private enterprise, and the appealing and productive Mornington Peninsula with its towns and villages of special character and charm will be turned over to developers’’. Mr Guy said that a separate Mornington Peninsula planning statement would have “state-level controls’’ to protect the area. RMIT planning expert Michael Buxton described the new planning zones as “a concerted effort by far-right lobby groups and the Liberal government to wreck planning systems and open cities and regions up to any type of development”. “It’s open slather,” Mr Buxton said, adding that changes in commercial zones threatened Melbourne’s traditional strip shopping centres by opening up development opportunities, and the proposed new residential zones that would allow more opportunity for “retail and office use’’.

October 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 11

COVER STORY: award for craftsmanship

guru

THE FORM & FUNCTION OF

a furniture I

remember only one business card. It was reproduced on the album cover of Jerry Jeff Walker’s 1977 album A Man Must Carry On (either Volume 1 or 2). The card read ‘Hondo Crouch: Imagineer’. What a dreamer, I thought, that’s the card for me. Hondo, an entrepreneur, folklorist and storyteller, was one of the owners and the unofficial mayor of a no account Texas hill country town called Luckenbach. With a population of three and boasting little more than a smattering of clapboard buildings, Luckenbach pinned itself to the country music map of fame in 1973 when Jerry Jeff (Mr Bojangles and LA Freeway) and the Lost Gonzo Band recorded the live album Viva Terlingua in the Luckenbach Dancehall. Fast-forward 36 years and the recollection of Hondo Crouch, Imagineer, is sparked when I read furniture maker John Newton’s card: ‘Design guru’. It turns out Newton has some form to back his chutzpah for self promotion having won awards in the 2013 Victorian and Australian furniture makers’ awards. Newton’s compass wine bar (in collaboration with Richmond retailer CLU) took out the occasional lifestyle award at both the state and national awards while he was named supplier of the year in Victoria. Using timber as a raw material for furniture can be compared to a sculptor choosing the stone from which a sculpture is chiselled and carved. Trees and rocks are things of beauty in their natural state, but in the hands of a craftsman they become works of art or furniture to be admired and used. John Newton is one of those people. He works in wood, making and designing furniture.

John Newton has won the Victorian and Australian furniture makers’ occasional

BY KEITH PLATT After 24 years designing phone network layouts for Telstra, Newton decided he wanted to work in wood. He bought tools, hired three staff, rented a factory at Dandenong and set about making furniture that would last. The sort of tables that become topics of conversation over dinner, shelving that complements the books that it holds. Furniture that lasts and becomes an integral part of a room and a house. Eighteen years later Newton and his wife Diane have eight staff and have taken up two factories in Carrum Downs for their business, Newton’s Furniture. A steady stream of built-to-order pieces are produced by hand, glued and fitted together to last. Orders come through half a dozen selected retailers who carry examples of Newton’s work as well as word of mouth from satisfied customers.

12 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | October 2013

o i t l

p c

ional furniture award for his compass wine bar (top inset) in association with Richmond retailer CLU. The piece retails for around $3000.

Interior designers and customers can wander through the showroom at Carrum Downs for set pieces or ideas. Newton provides a CD containing photos of his work. “I get inspired by all sorts of things,” Newton says. “Architects, other designers. I find Frank Lloyd Wright [the American architect, interior designer, writer and educator who would design furniture to suit specific buildings] inspirational, although my furniture is no longer like his.”

ewton also looks to Japan for ideas, giving “my customers the benefit of my knowledge” to design furniture that is practical, functional and appealing. “My first question is always ‘what is your house like?’. “Is it inner city Victorian without an extension? If it has an open plan extension with a terrace façade they may want something cutting edge, contemporary.” While being “a greenie at heart” Newton has no scruples about using timber as a resource: “Trees grow again while metals and

petrochemicals just get used. There is 680 times more energy used to produce aluminium tonne for tonne than timber.” Newton’s preferred timbers are messmate, Victorian ash, Tasmanian oak, red gum, spotted gum, blackwood and American oak. He talks about their grains, colours and markings that are “a kiss of nature, not imperfections”. While Newton’s methodology and use of hand operated machinery has not changed, his use of timber has. Newton says he was the first “local manufacturer” to start making furniture from hard timbers. Competition comes from Chinese imports and large retailers like Freedom, which sell a piece for $1000 that, if hand crafted and designed by Newton, would cost $2500. Quality makes the difference. Newton’s piece will be made and designed by the “design guru” for a particular place and from chosen timbers. It will have a history, measured against its grain. And it will be a talking point, not a pop-out from afar.

October 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 13

REINS OF POWER

Keith Platt Prime Minister elect Tony Abbott graciously accepted his election win on Saturday 7 September and was quick to declare, “Australia is open for business”. Since then, Frankston MP Bruce Billson has been confirmed as small business minister after six years in opposition “dealing with the small business community”. Now a member of the Coalition government’s inner ministry, the Cabinet, Billson will be in the best position of any previous small business minister to help an important, but often sidelined, sector of the economy. He was veterans affairs minister in the Howard government, but not in the Cabinet. This time around Billson has already been taking a higher profile, frequently seen on TV during the election campaign and last month explaining the government’s position on asylum seeker boats in the absence (for a few days) of Immigration Minister Scott Morrison. He certainly talks the talk when interviewed in his Frankston office, reeling off statistics and what he sees as impediments to the sector. One of the major drawbacks during Labor’s reign had been its concentration on “big business, big unions and big Australia”. Labor had not recognised the

Voice in Cabinet for SMEs

Small business minister Bruce Billson.

importance of small business or family enterprise. It had been insensitive over what happened to small business and home-based enterprises. “Our objective is to change that mindset,” Billson says. Facts and figures spill out as he easily slips into his electioneering spin. Under Labor, 412,000 jobs had been lost in small business. It was “the engine room of our economy with one cylinder taken out”. “You can’t say the economy is going

well and ignore the seismic shift in the national economy to big business … we now think that needs to be addressed”. He doesn’t doubt the challenges but believes “optimism and entrepreneurism” will prevail. “It will take courage and hope … business needs to feel it has the support of a supportive government. “A lot of small business people are telling me it’s never been this hard and they’re wondering when they will get an opportunity to get ahead.”

Tip knock back a headache for waste management group The knock back by the Environment Protection Authority of a rubbish tip in an old Pioneer quarry on the side of Arthurs Seat at Dromana is likely to be an added headache for the Mornington Peninsula Region Waste Management Group. As the sole member of the group, Mornington Peninsula Shire is already being eyed by the state government which wants to cut the state’s 12 regional waste groups to six. The peninsula group seems destined to be forced to join the Melbourne metro group. The government wants municipal waste hubs where rubbish can be sorted into recyclables and green waste to reduce the amount going to tips, or landfills. Nepean MP Martin Dixon, whose electorate covers the tip site, said the EPA had based its “decision on recent changes” to state government policy.

“Under new landfill guidelines we recently introduced, the EPA has ruled there is now no need for a further landfill in this area.” Flinders MP and federal environment minister Greg Hunt was “pleased that community concerns about the need for a tip at Arthurs Seat have been heeded”. “Taking a regional approach to landfill means waste can be consolidated at the most appropriate location, regardless of municipal boundaries [and] we can achieve the best environmental outcomes possible.” Peninsula Waste Management chairman Ian Vaughan said the EPA had rejected a “practical, lowest-cost solution … in favour of an as yet unidentified solution”. He said building a waste Without the quarry “waste will have to be transported long distances and there will have to be a

14 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | October 2013

transfer station on the peninsula would cost $10-15 million and predicted peninsula residents would be paying more than $60 a tonne extra to take rubbish to landfill once the Hampton Park landfill closed. However, the shire has no provision in its budget for its rubbish contingency plan – to create more space at Rye tip – as set out in the 2009 waste strategy. The strategy saw an expanded tip at Rye as providing “the capacity to continue to dispose of waste to the Rye landfill until approximately 2030”. The Mornington Peninsula Regional Waste Management Plan 2010-2015, by Mornington Peninsula Region Waste Management Group, said taking waste to Werribee was an alternative to Rye. The plan provided figures to show Werribee was cheaper than trucking waste to Hallam.

Coming up would be a review of red tape, including culling unnecessary regulations among the 21,000 added by Labor in the past six years. “Some were justified, but others were overreach.” However, Billson admits to there being “work to be done”, such as juggling the effects of internet shopping on retailers which has obvious money-saving rewards for shoppers. “I’m up for it, to turn it around,” Billson says. “I’ve been on call [as opposition spokesman on small business] for six years and seen off six small business ministers, which didn’t build confidence or competence. “Small business needs a game-changer and our micro-economy agenda will be a game-changer.” Government promises for small business: • Abolish the carbon tax. • Cut $1 billion in red and green tape costs every year. • Reduce company tax rate by 1.5 per

cent to 28.5 per cent. • Independent ‘root and branch’ review of the competition framework. • Extend unfair contract protections for small business. • Defer by two years the increase in employer-funded superannuation. • A new paid parental leave scheme. • Remove the requirement to administer the government’s paid parental leave scheme. • Protect the rights of independent contractors and the self-employed. • Improve small business access to government contracts. • Ensure government agencies pay all small business bills within 30 days. • Provide small business with a voice on economic bodies. • New Small Business Ombudsman – and specifically work on improving big business “fair commercial conduct”. • Work with the financial sector to improve access to small business finance. • Refine the national Franchising Code.

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Billson wants to “re-instill” the optimism that had previously seen small businesses passed on to sons and daughters “rather than [as they do now] concluding salaried positions are more attractive”. To this end, Billson wants small business considered when industrial policy decisions are made “not kept in the background”. He backed moving the small business portfolio from industry to the Treasury department. Billson says the first “significant” benefits for small business will flow from the abolition of the carbon tax, which sent power bills soaring unevenly across small business. “[Its effects] landed differently on different business,” he says, citing high power costs to a small cafe “which I was told were sizeable”. A “change in optimism” had already occurred in car sales with the government’s pledge to ditch the previous government’s proposed changes to fringe benefits tax.

October 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 15

Less cash in retailers’ tills

We’re here ...

TONY MURRELL Australians are still spending, but less cash is finding its way into the tills of traditional bricks and mortar retailers. The list of reasons is growing: higher utility and petrol prices, elevated concerns about job security, online shopping and increasing consumer restraint. The latter reflects a fundamental change in households’ allocation of resources. Retail spending today is about 31 per cent of household consumption compared with 20 years ago when that percentage was up in the 40s. Much of that seismic shift can be explained, at least partly, by higher costs associated with health care, education, utility bills and telecommunications. Last month new research uncovered further evidence to explain why retail spending is flagging despite official interest rates sitting at 60-year lows. The Reserve Bank found that home-owners have put between 50 and 90 per cent of savings from two years of interest rate cuts towards paying off mortgage debt ahead of schedule. It’s another pointer to why many retailers are finding conditions so tough despite the central bank’s attempts to stimulate the economy by cutting interest rates 2.25 per cent since 2011. When rates are cut, most borrowers have the option of cutting their monthly repayment to free up cash or keeping repayments constant and paying back the bank more quickly. Research from the Reserve Bank, published in mid September, suggested most people were choosing to create a “mortgage buffer”. The reserve previously reported that half of all borrowers were ahead of their mortgage commitments. The research points to why retail has failed to experience a bounce from low rates: the savings are going toward mortgage reduction instead of increased spending. Concerns about job security may be driving this behaviour – a behaviour that could be reinforced by the reinvigorated debate about penalty rates and other employment conditions in the wake of the Coalition’s election victory. Retailers also face problems associated with unsustainable rent pressures, according to Antony Resnick, a principal at insolvency and advisory firm BRI Ferrier. He has worked on a number of retail collapses this year including Mothercare and House of Knives. The Age reported him saying: “The average rent for many shops is too high as a per cent of sales or turnover, and some have in excess of 20 per cent [rents as a proportion of sales] and that makes it hard to be profitable.’’

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news & contributions

making a profit or, worse, causing the business to fail. If you don’t have anyone who can take care of this work, you end up having to cram it into your already busy day. Outsourcing may be one way you can relieve yourself of the pressure and reclaim some precious time. Making a decision about outsourcing really comes down to a question about how much you value your time. Outsourcing is not just a time-management issue: a whole lot of money can be saved, too. Barb Scott, is director of Admin Angels, www. admin-angels.com.au

new to hypnotherapy clinic

POLL SAPS CONFIDENCE The confidence and mobility of Australian jobseekers dropped significantly in the third quarter of 2013, according to Workmonitor, a regular survey by global employment agency Randstad.

The findings were a complete about turn on the second quarter survey and reflected uncertainty and caution leading up to the 7 September federal election. Ranstad group director Steve Shepherd. said there were indications that sentiment was now rising and some industry sectors were experiencing a new level of buoyancy. Shepherd says that while the overall third quarter trend pointed to a level of cautiousness and uncertainty, the economy and labour market are expected to experience increased and renewed optimism in the fourth quarter.

lane recalls moysey family Part of Dandenong central’s Robinson Street, altered during the city’s revitalisation program, will be renamed Moysey Lane. The lane runs north-south between George St and Halpin Way. The name recognises Susannah Brown Moysey (1825-1895) whose efforts contributed to construction of a weatherboard church that stood on the site from 1904 to 2009.

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John Vye and Mark Oddie have brought more than 30 years of hypnotherapy and counselling experience to The Hypnotherapy Clinic, Frankston. Clinic CEO Jodi Clarke said John Vye has more than three decades of practising

experience specialising in all aspects of hypnotherapy. “Having performed as a principal dancer at the highest level, John brings a special passion for performing arts therapy and has unique talents in past life regression therapy,” Ms Clarke said. “Mark’s vast life experiences and his thirst for knowledge has given him a deep understanding of our life issues. “His many unique qualifications, including Ego State Therapy, make him a very effective and wonderful therapist. “Both bring unique and specialised fields of counselling, alternative therapies and hypnotherapy to the clinic, strengthening and broadening the services we offer to clients,” Ms Clarke said

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October 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 17

HEALTH

Watching the AFL Grand Final, I couldn’t help being struck by the amount of choking going on. Michael Ellis*

Chinese Herbalist

(Choking is not the same as panicking, by the way, which also comes into play in sport but is the opposite phenomenon as it involves too little thinking – not enough leftbrain activity.) Psychologist Dr Sian Beilock, writing in her book Choke, says attempts by players under pressure to focus on their techniques invite failure because they over-think the skill (like kicking a football straight). Research shows that the critical thought to avoid is: “All I have to do is perform this one skill and we’ll win...” Your brain is about to let you down. The higher the stakes, the more likely you will choke in this circumstance. Beilock cites the performance pressure posed by having a supportive audience (think of those school concert nerves) when the more you think about not messing up, the more likely you are to do so. Once you start looking for choking in sport, you see it everywhere and it ranges from barely perceptible miskicks to dramatic Jana Novotna-style Wimbledon capitulations. Individuals and entire teams suffer from it. Leading by four goals at half time in a Grand Final is the perfect choking scenario, because the leading team has the “All we have to do is…” thought, while the trailing team is lifting its desperation to maximum levels. My reason for raising this – apart from trying to understand the

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You couldn’t miss the shanked kicks at goal and dropped marks of Fremantle’s normally reliable forward Hayden Ballantyne – and he wasn’t alone. Hawthorn, however, learnt from its mass choke of a year earlier, and its consequent loss aversion was greater than the Dockers’. So much of sport is decided by this psychology. Choking is normal and common in sport (and many other areas of life). Psychologists in this field like to study golf, because the fluidity of a golf swing is easily disturbed. It takes only an incremental increase in perceived pressure, or one stray thought, to bring a golf putt undone and induce a case of the yips. What is choking exactly? In a nutshell, it is over-thinking an automatic skill. “Over-thinking appears to heighten the yips,” says Jurgen Beckmann, chair of the Institute of Sports Psychology in Munich. “Concentrating too intently overshadows other important factors such as balance and timing.” The problem is in the dual hemispheres of our brain. Our left hemisphere is responsible for analytical thinking, our right hemisphere for co-ordination. Beckmann cites research that shows golfers who putt poorly under pressure exhibit heightened activity in the left hemispheres of their brains and diminished activity in the right hemispheres. The more your left hemisphere lights up, the more your right switches off. The more thoughts enter your mind, the less fluently and competently you are able to perform an automated skill.

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dynamics of football matches, which is very important (!) – is that Chinese medicine has a lot to say about over-thinking. We think of it as an emotion, and an unhealthy one at that. We understand that each of the various human emotions has an impact on particular organs. This one, over-thinking, particularly undoes our digestive system, binding up the flow of food and undermining our ability to absorb nutrients. It knots up our gut. Feeling mentally overwhelmed, or trying to digest a pile of complex information, has an identical impact on our digestion as eating a big, rich, indigestible meal. Chewing over the same thoughts, day and night, without resolution is almost always an aspect of depression. (Which incidentally is why talking about the causes of your depression rarely helps – going over and over that unresolvable issue simply regenerates it.) These days most of us “live in our heads”. That is, we could imagine ourselves as being walking heads, brimming over with thoughts, metaphorically disconnected from our bodies. Most of us need to “get out of our heads” – to let go of persistent negative thoughts, and to balance mental activity with more physical activity. The over-thinking discussion applies to men of course, but possibly even more to women. Researchers at the University of Michigan spent years studying how women deal with negative emotions. They found that women were far more likely to ruminate about the disappointments and stresses in their lives. However, such rumination, if it continues, undoes your digestion and undermines your energy. As the ancient Chinese sage Lao Zi put it: “Stop thinking and end your problems.”

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MARKETS

The ethics of ethical investing When a fund manager acquaintance recently launched a new sharia fund, I wished him well but was a tad sceptical. Richard Campbell* Stock Analyst

avoidance of harm to oneself or others is not a bad basis for stock selection. Fundamentally, the issue is what offers more likely sustainable profit: things that are basically good for people, or things that are less good or harmful? These considerations were not fixed; mining is ethical for the good it brings, but not when the damage to the earth is irremediable. Fair enough. This is refreshingly practical. We moved on to the tricky one – banking. In Australia banks are 20 per cent of the market, how do you replace this big chunk? He put it this way: let’s start with the positive, the Western system lends one dollar 10 times and so creates something out of nothing. This produces growth and activity, but when things go pear-shaped – as they periodically do – there may be many claims on that one dollar. Sharia banking approaches the use of the depositor’s funds more as a safe-keeping exercise with fees charged and interest replaced with rent and more certainty. He had a point. European style banks using “fractional reserve deposits” literally do have a licence to print money, but periodically abuse the privilege as the New York banks did from 2004-2008 and also the French, Irish, British and Italian banks, not to mention the Greeks who cooked the national debt figures into the bargain. Five years on the US Reserve is still printing

* Richard Campbell is Executive Director of Peninsula Capital Management, Tel. 9642 0545. rcampbell@peninsulacapitalmanagement.com.au

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Sure sharia is all about not doing harm, but wasn’t it a bit inflexible? A case of investing with one arm tied behind one’s back? Sharia prohibits fixed interest, rejects defence for its tendency to become offence and is down on Western style banking. By long tradition Islamic banking involves the mutuality of risk sharing, not relationships in which one side has all the power and takes little of the risk. Gambling stocks are out for obvious reasons and also tobacco. (It seems the ancient scholars of the “way” were ahead of Western medicine). But after these exclusions, what was left? Well, actually quite a lot as the balance includes property, transport, food, housing, communication, energy, health, mining, education, travel, infrastructure and more. And as it happens the tobacco stocks have almost been taxed out of existence while alcohol stocks have, in any event, been acquired by offshore interests. One remaining company with some alcohol is Coca Cola Amatil, but perhaps even it should be questioned on a hard-headed utilitarian basis. If each Coke can contains the equivalent of eight to nine teaspoons of sugar the diabetes epidemic to follow will be very costly. Obesity is helping to drown the US health budget. OK, so these exclusions are not large and in the case of the listing of the brothel Daily Planet ... well, it was a total dud from the start. But if sin and sloth are out, surely the free market needs a bit of freedom? Of course, was the reply, but

$85 billion a month amid general fear that it may reduce this by $10 billion a month. Can it ever stop? It is no comfort to know that the GFC is just one of many bank collapses. The US Federal Reserve owes its existence to the Knickerbocker Bank collapse of 1907 which came within hours of spreading across the entire country. Come to think of it, China is doing the same but on a much larger scale. Provincial “lending vehicles” are issuing 80 to 90 per cent of the credit through bank credit, land sales, municipal bonds and “wealth products”. Some of this is simply Ponzi scheme activity as new investors pay the interest owing to old investors. Credit outstanding has jumped to around 200 per cent of GDP. We are all relieved that China’s GDP is expanding but forget that this is simply more empty cities and apartments, more lavish urban rail systems and marble floored airports all paid for with pay later loans. As a result, the bad debt of the LVs may be far in excess of 20 per cent. This is not a new experience for China. In the late 90s China’s non-performing loans ran at 40 to 50 per cent. The bad debt of just two large banks consumed 10 per cent of reserves. Now credit is up 140 per cent in five years to over $20 trillion, so just a 10 per cent write-off would consume two thirds of far larger reserves. Since the many billions of accumulating losses are plain embezzlement, the ethics of Chinese banking takes on a whole new meaning.

October 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 19

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Port expansion warming up Mike Hast Expansion of the Port of Hastings is warming up, with consultants being hired for geotechnical and geophysical surveys and $150 million being spent on the existing Esso fractionation plant. Esso’s money will pay for maintenance and rebuilding, including upgrading two of three gas fractionation “trains” that produce ethane, propane and butane as well as installing a system to remove mercury from water in Bass Strait gas and oil. Construction at its Long Island site will start mid-2014 and take about a year. “We are looking at quite a long future for gas processing,” plant manager Steve Williams last month told the company’s annual community and stakeholder dinner. The plant could operate for 20, 30 or 40 more years. “We’re here for the long term and will be investing money to keep going. We want to keep the plant in best condition for future generations,” he said. Mr Williams said the proposed works would not increase noise, air or water emissions; generate additional waste; or increase water and energy consumption. Water discharged from Esso’s water treatment plant would continue to be done in accordance with the Environment Protection Authority’s licence to discharge. Mr Williams said there would be extra traffic on roads surrounding the storage tank farm where the green coloured crude oil tanks would undergo refurbishment. A portable village for field work would be built. Esso is a subsidiary of ExxonMobil Australia and its recently appointed chairman, Australian Richard Owen, told dinner guests the company had been producing gas and oil from Bass Strait for 44 years. Mr Owen said the Kipper field would produce enough gas for a city of one million people for 35 years.

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NEWS & CONTRIBUTIONS

PRIVATE HOSPITAL EXPANSION Peninsula Private Hospital, Langwarrin, is about to get approval to build stage one of a $25 million expansion. The state government seems set to allow rezoning of land on the corner of Cranbourne Rd and McClelland Dve, Langwarrin, from Rural Conservation Zone and Road Zone Category to Special Use Zone. Plans were approved by Frankston Council in early August. Owner Australian Unity Healthcare Property Trust plans a redevelopment that will more than double the private hospital’s size. The first stage includes an intensive care unit, overnight and day surgery beds, operating theatres, allied health centre, consulting rooms and multi-storey car parking. The hospital is operated by Ramsay Health Care.

PARTNERS FOR COVE PROJECT Business advisory firms KordaMentha and PPB Advisory have joined builder Three Pillars to complete construction of homes at Martha Cove, Safety Beach. The 97-hectare $650 million plus housing and marina development was proposed in the early 1990s and approved in 2002. The project was slated to include 1100 houses, 750 marina berths and commercial, shopping and tourist facilities. Nineteen waterfront homes were built by March 2007, ranging in size from 340-480 square metres and in price from $1.7- $2.1 million including a freehold berth in the marina. The project came to a halt in 2009 with the main developer, Queensland-based CP1 Ltd, going into receivership. By mid-2011 it was announced 35 more houses were under construction with plans for 10 more. Receiver PPB was appointed as administrators of CP1 Ltd. Two other receivers controlled other parts of the development. CP1 Ltd gained approval for a 150-seat restaurant and a retail centre with 2000 square metres of floor space, but neither has been built. Rights to develop various parts of Martha Cove have been offered a few times since 2008. The new consortium is offering townhouses and homes of up to five bedrooms, some with direct access to boat berths and the marina boardwalk.

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START ON S E WATER HQ Work has started on the $84 million South East Water headquarters beside Kananook Creek, Frankston. The building is expected to be finished in two years. South East Water managing director Kevin Hutchings said Probuild was constructing a “five-star Green Star energy rating” building that would meet strict targets for energy and water use. “Residents will enjoy the new cafes and shops wrapping around the verandah and business will benefit from our 700 staff making the most of local goods and services,” he said. “Moving to a new office on land we own will reduce operating costs by more than $5 million a year from 2015-16.” Frankston Council sold South East Water the land between Beach and Playne streets for $4 million. Council ignored its own building height regulations to speed up approval for the building on land that was a car park.

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October 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 21

MANAGING

Embracing technology These days small business owners need to actively engage with technology to ensure that their business can survive by integrating new devices into every aspect of their operations. Today, businesses fall into one of three categories: • Technology-savvy businesses that would not exist without current technology, • Technology adapted businesses that have integrated technology throughout their traditional business model, and • Traditional businesses that have not really used technology to change their business model. Irrespective of which category you are in now it is important that you regularly revisit your business strategy giving yourself every opportunity to succeed in a rapidly changing world. Never in the history of man has technology being changing so quickly, but many small business owners who have not grown up with technology, struggle to understand how technology can improve their business performance. In these cases, it is critical to find someone to help – either from within your existing team, or externally in the form of a specialist technology consultant. The best starting point for a conversation about technology is to have a round table about your business strategy and current performance. This conversation should focus on how well your business strategy is developed, how well it is working and the strengths and weaknesses in your current performance. It is often difficult to have this conversation without jumping to identify solutions, but it is important to resist this temptation until you have dimensioned the scope of all your issues. Once you are clear about your current strategy and issues, you will need to decide how you are going to source your specialist technology input. If you choose to use an external consultant, it is critical that you review several candidates before you select one, as this is one of the most important steps in the whole process. Make sure that you choose someone who can understand your business. Avoid anyone with divided loyalties (like working with your direct competitors at the same time). Ideally, this person should participate in your strategy review, becoming sensitised to your issues

Hamish Petrie*

Business Consultant

and opportunities before making recommendations on technology solutions. Technology is a fashion where you can waste a lot of time and money chasing something new that ultimately does not add any value to your business. Focussing your technology spend on the few key value adding areas can ensure that you get real rewards from your investments. It may be valuable to do some benchmarking with businesses that you admire. Reviewing how they use technology platforms to improve their business processes can sometimes be done online, but the most valuable method is to have a face-to-face conversation with them. I have found that most business leaders will welcome a call for help from another business, unless you are a direct competitor. A large part of technology supports the basic infrastructure of life today, things like smart phones, emails and messaging. It is important to understand how the latest versions of these devices can help your business, but this is not where the big benefits are. It’s the value adding technology applications that can really make a difference to your performance by reducing waste in your business in terms of time, materials and money, and by building stronger connections to your customers. There is a range of business parameters, like sales of individual items, inventories and order status that classically was available on a monthly basis, but now can be available in real time. While there is a substantial investment to achieve this with reliable data, it is a powerful tool to adapt your business to actual customer behaviour. These types of tools can really help you to identify where your business is wasting resources and they can help you to experiment in real time to determine if your improvement ideas can really change customer behaviour. Many businesses have reacted to the social media phenomenon that has swept

22 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | October 2013

around the world in the past few years. Facebook, Twitter and Instagram are examples – there are now almost 200 social networking sites listed by Wikipedia and the list just keeps growing. While it is tempting to adopt one or more of these tools to your business, it needs to be done very carefully as, in many cases, it may be a solution looking for a problem. By that I mean that while you can connect your customers to your business through these platforms, you need to keep them connected by providing regular and frequent information that keeps them interested. This takes a lot of work and requires continuous commitment from the business leader to support this, so don’t start using a social networking platform unless you really want to continue to keep it fresh in the long term. Overall, your technology specialist, either internal or external, needs to be watching the technology landscape and have the authority to call for a review of your business strategy to work out if enough has changed to warrant changes. Business strategies used to last for at least five years, but with the pace of change now, they may only last one or two years before major adaptions are needed. Technology is a bit like nature, it drives a process of natural selection where the businesses that adapt best to the changing technology environment will be the ones that survive. Action Planning Questions: 1. Have you selected a technology specialist as a business partner to help guide you through this process? 2. Have you reviewed your current business strategy and performance with your technology specialist? 3. Have you separated technology issues into basic infrastructure support versus value adding applications? 4. Have you benchmarked with other businesses that use similar processes? 5. Have you determined how a social networking platform will add value to your business in the long term? *Hamish Petrie had a 37-year corporate career including 25 with Alcoa Inc. His latest position was VP People and Communications for the Global Alcoa Corporation based in New York. He can be contacted at hamish@nitroworld.net or on 0404345103. © Hamish Petrie 2013

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