Advisory Panels secret ingredient for regional success.

Running a business is a lonely job. 

 

In a country that is increasingly city-centric, running a regional business is even lonelier.

Regional business is tough business in Australia.

The unofficial source of much trusted advice in the regions is friends, family, industry, accountant, lawyer and other business owners.  This type of ‘buddy’ system has good intentions and is seen as a ‘safe’ environment for getting feedback; but it is very limited in terms of effectiveness.

It is often the case that these people do not understand the business.  Forming an opinion about the direction of the business is difficult, because each piece of advice takes precedence on a different day in the mind of the owner / operator.

As-far-as many other owner / operators are concerned, ‘no one knows the business like we do’ and they are not seeking any help at all.

What are others doing to get ahead of the game?

Some of the best product innovations, business models and marketing initiatives to come out of regional Australia in recent times, are from organisations that have formed Advisory Panels.

An Advisory Panel is a small group of independent mentors that use their complimentary skills and experience to provide advice on the strategic direction of the business.  These people do not have formal authority to make decisions on behalf of the organisation.  The structure is informal and flexible.

Advisory Panels allow owners and operators to step away from day-to-day management issues and focus on the growth and development of the business, using a forum that challenges critical thinking.

Doings things right will always be important.  True value for a regional business is created when the owner / operator has the opportunity to ask if they are in fact doing the right things.  This is the difference between working in the business and working on the business.

The use of Advisory Panels has many benefits that can be tailored to meet the current needs of the business.  Some of these are:

• Ideas and suggestions to grow and develop the business
• Vision and purpose
• Increased productivity
• Increased market insight
• Improved culture
• Increased management capability
• Create new business model
• Technical support
• Increased understanding of compliance and governance requirements
• Practical commercial experience
• Financial knowledge
• Independence

An Advisory Panel is functioning at its best when:

• The business owners and operators are open to receiving input from others
• Input from mentors is strategic, constructive and relevant to the current needs of the business
• Everyone keeps an open mind and actively participates
• Communication is open and honest
• Everyone is being challenged through critical thinking

Advisory Panels are a proven technique that serves as an informal guide to help a business learn, grow and perform better.  In most cases, owners and operators are already talking to some of the right people; it’s just a matter of bringing that feedback into a forum that is more effective for the business.

Tools that help farmers communicate the value of local food to consumers.

Consumers are under increasing pressure to shop as citizens of the planet; not as consumers.  This has increased the complexity of the choices they have to make about food.  When deciding what to buy, consumers are being asked to keep many issues front-of-mind; such as:

-          - Was this product made:

o   Sustainably?

o   Ethically?

o   Organically?

o   Morally?

o   Humanely?

o   Environmentally friendly?

o   Locally?

o   Safely?

o   With concern for animal welfare?

……to name just a few.   

So what do consumers want?  They need answers to these questions that will point to an easy solution to their problem i.e. how do I know that a product meets the above requirements?  This is the value (help) they are willing to pay for.

When I was doing Maths I & II back in school I discovered that if I knew the answer first, I could work out the correct formula that answered the original question, much faster than if I was given the question first and was asked to process a formula of information to work out the answer.  In the former, I was still learning but I wanted the quickest path to home and was more successful getting the questions right.  Not the conventional way to learn at the time; but a better learning experience.

The key to helping consumers make the right choices we want about the food they buy is to simply GIVE THEM THE ANSWERS.  Never ask a consumer to find the answer.  Give them the immediate experience of making the right choice.

I see a lot of initiatives at the moment providing great information about the agricultural and agribusiness industry that are failing to change behaviour because the consumer is still left to work things out for themselves.

The key message about a product needs to be quick, simple and blatantly obvious.  The solution to their concerns (i.e. the right product) then needs to be readily accessible otherwise the consumer won’t change their buying behaviour.

The advantage farmers have is they are in the best position to help with answers and solutions; and are regarded as a believable and trustworthy source – very good start.  So how can farmers get better at communicating value to consumers?

Here are a couple of tools that farmers can use to strip-down their knowledge and understanding into some effective, bite-size messages for consumers.   As simple as these techniques are; they still demonstrate how hard it is to strip information back to a message that means something to consumers.

The 5-Whys

You may have heard of the 5-Whys as part of Lean Six Sigma.  5-Whys is a questioning technique developed by Toyota and is used to find the root cause of a problem; the idea being that by asking Why? 5-times the problem and the solution will become clear.

-          - Initial problem statement:

o   ‘The printing press broke down’

- Why?

- Why?

- Why?

- Why?

- Why?

The first problem statement is questioned Why?  Each subsequent answer is questioned again Why?  If need be you can continue questioning past 5.

I believe the 5-Whys are a great marketing tool for working out how to effectively communicate the root value of a product.  The 5-Whys are designed to point to the process, to quickly identify the problem in simple terms.  Coincidently, the issues consumers are being asked to consider when buying food are all about the process i.e. consumers need answers about the process in simple terms.  So why not use the same method to point to the food process in simple terms for the consumer?!

Try it for yourself.  Basic example of process:

-          - Initial value statement:

o   ‘Cherries from the Adelaide Hills are the best’

- Why? Because our cherries are plump and rich in flavour.

- Why? They are plump and rich flavour because of the soil and climate.

- Why? The soil and climate means that..................

- Why? ................etc

- Why? ................etc

This technique can be used for individual products or regional marketing.

The Message Map 

The Message Map is a quick and compact process that enables farmers to communicate their story simply, clearly, concisely and quickly; using the messages created through the 5-Whys technique.  It ensures the messages are compelling enough for consumers.

The process looks like this:

-          - Step 1

o   A ‘Twitter-friendly’ headline

- A single over-arching message that you want potential consumers to know about your product

- No more than 140 characters

- Keep asking ‘what is the single most important thing we want consumers to know about our product?

-          - Step 2

o   Support your main message with 3 key benefits

- Specifically outline the 3 most important benefits of your product

-          - Step 3

o   Reinforce your 3 key benefits

- Support the above claims

- Be very specific

- Use stories, statistics and examples

- These are points that will prompt the delivery of the message

In most instances, collaboration is needed with down-stream customers of the food chain to ensure the above messages are positioned in the right place for consumers to see them; and that the solution products are made readily available and can be easily accessed by consumers to complete their purchasing decision; in favour of the products that met their needs.

Alternatively, some farmers are now vertically integrating their marketing and delivering messages of value to consumers farm-direct from a regional base and this is exciting to see.

Why are good people rejected during a skills shortage?

‘Employ good people and get the hell out of their way’  That was the secret to success as told to me by an old guy from the US that had successfully built a famous business from the ground up over decades.

I was early in my career at the time and his words stuck with me because I knew that one day I wanted to start a business.

Often I hear from very skilled and experienced people that are frustrated about being turned down for jobs because they are ‘over qualified’ or that have lost their job during a ‘workforce skills crisis’ – to quote some rural media headlines.

So what is really going on here?

Recently I had a conversation with the owner of a successful up-and-coming food company at an industry function that shocked me.

He was in the process of interviewing people for a part-time sales and marketing position and had just completed another ‘frustrating’ interview that afternoon.  He was offering good money for 2 days a week.

“I can tell you now we won’t be employing this one – he’s overqualified” he recounted.

“What do you mean by overqualified?” I asked.

“Well, I can’t understand why this person bothered to apply to work for us”.  The owner went on to explain that the applicant had high-level food wholesale and retail sales and marketing experience in Australia; and had also previously held high-level food sales and marketing category roles with one of the UK’s leading retailers.  The applicant was a treasure chest of knowledge, experience and skills for selling food products to retailers.

Suspecting the owners perception of this applicant was that they wouldn’t hang-around; I asked if he thought the applicant to be genuine.  “Did you ask what attracted him to apply for the position?”

The applicant had explained during the interview that after a number of years working in high-level roles around the world, he had returned to Adelaide with a young family and was looking to apply his ‘know-how’ locally on a part-time basis for some work/lifestyle balance.  

I could see the owner was still unsure why this applicant was willing to accept such ‘low’ money in a ‘low’ job and therefore what future risks did this present his business.  Was the owner low-balling the position?

“Gee” I said “Why don’t you just exploit him” half-jokingly. 

 

Maybe the owner actually didn’t want someone that knew more than him.  I felt the owner might have been interested but maybe wanting to self-talk his way out of it.

“Have you ever thought about approaching this situation from a different angle in order to engage this person’s skills in way that would make you more comfortable?” I said.  “It would be a shame to push this applicant away”.

After a bit of discussion about such things as flexibility, reducing recruitment costs and interim contracts with specific outcomes, the owner finished by saying “We won’t consider other options – we want someone for ourselves”.

I started to get the impression that perhaps the position wasn’t available – if deep-down the owner wanted to keep control of thiings.

I think I finished things up by commenting “I have to say, if it was my business I would find a way for this person to work for me and not my opposition”.  No answer.

During my one-and-a-half hour drive home that evening, all I could think about was why this employer would not recruit the skills and experience of the applicant.  I was very frustrated.  He would probably end up with a lessor person that wouldn’t deliver in the position; and complain that due to the skills shortage good people can’t be found.

This situation reminded me of a book written by Wharton Management Professor Peter Cappelli called ‘Why good people can’t get jobs: Chasing after the Purple Squirrel’.  It caused quite a stir when it was released.  http://knowledge.wharton.upenn.edu/article.cfm?articleid=3027

Understanding Australia's food chain:  whose responsibility is it?

WARNING – this blog contains a lot of questions and not many answers!  So if you are in the mood for a bit of light reading and pondering some hypotheticals that are not supported by evidence then this could be the blog for you.

There has been a lot of emphasis on creating value for Australian farmers, using a range of industry initiatives designed to increase the consumer’s understanding of how food arrives on their plate.

What is it that we are asking consumers to do?  Is it clear to them?  A part of me is starting to empathise with consumers.

Is it the consumer’s responsibility to understand the food production chain; or the farmer’s?  Consumers have many questions.  What answers are they willing to pay for?

Who provides the answers?

How many farmers understand their industry beyond the farm gate?  Don’t they care?  Don’t they value what they sell?  Why are they not asking the right questions to find out?  How will they know what to produce and how?

Why are we so reliant on people that didn’t produce the product, to pass on such an important story to the consumer?  Are they skilled at doing this?

Why do we ask consumers to understand the origin of their food all the way back to the farmer?  Are we prepared/comfortable with the maximum scrutiny of our industry that will come with this?

There is nothing in that relationship that relates to the consumer’s world.  How do we get to know their world beyond the shopping trolly?

When we are talking about initiatives that put value back into the industry, is it more effective to focus on the marketing activities of farmers or the purchasing behaviour of consumers?  If we need to change attitudes whose is the easiest to change?

Is it the responsibility of the consumer to help us run our industry?  The key words I see in articles and publications regarding this topic are; ‘lack of understanding’; ‘disconnection’; lack of appreciation’ – many of which have been used in a context that squarely takes aim at consumers.

Is the perception of agriculture in the suburbs really that negative?  Or are we responding to our own feelings in an industry that fights to be heard amongst all the other noise?

Why do we want consumers to know so much about what we do?  Do they have the inclination to spend that much time with us in the shopping aisle?  I have no idea where my iPod was made or who made it.  So why did I buy it?  Trust. 

 

Who is it that is disconnected?  Some would say the ‘disconnect’ is a consequence of a disconnected industry.

 

If the consumer is not getting the right message; isn’t that our responsibility?  Simply asking consumers to do something different does not work.

What is the catalyst for change?