May 2009

Andrew Pegler was editor of Monash Business Review for three years, which published original research, including fully refereed academic articles, plus case studies, ideas, trends, special events and more. The journal covered business in a broad sense for an equally broad audience ranging from managers to graduates, and academics in management, corporate strategy, finance and other disciplines.

This article first appeared in the Monash University Business Review

The well trodden road for SMEs is littered by the failures and short coming of many who tried and enlightened by the success those that made it past the flack. One thing they all had in common was a set of challenges that could undo the best of intentions. Andrew Pegler takes a look at a few.

In Australia an SME is defined as a firm with less than 200 full time employees and/or less than $10 million turnover. Of our 624,010 SMEs, more than two thirds employ between one and four people with a further 180,880 employing between five and 19 meaning that 93.5 per cent of people employed by SMEs in Australia are employed by what can be described as ‘micro-SMEs’, namely companies with less than 20 employees. These mostly independently owned and operated businesses survive by adapting the crucial issues of return on investment, debt-equity ratio, break-even analysis and cash flow to their particular business. Meanwhile an emphasis on liquidity, rather than profit, gets them through the everyday reality of skills shortages, stretched finances, and the short-range management lens determined by the erratic and intensely competitive environment they operate in.

It’s about confidence stupid

One of the things SMEs are most sensitive to, more so than their than their bigger business counterparts, is confidence. This intangible but crucial determinant of profits and losses was revealed to be waning in a recent National Australia Bank survey of SMEs which took in 650 with an annual sales turnover of between $2 million and $10 million. It found most felt conditions were worsening with labor market pressures, interest rates and demand the main constraints. “The role of confidence is all important,” claims Tony Steven, Chief Executive of small business peak body the Council of Small Business of Australia. “When the economy is going well SME confidence builds with it, but when the Reserve Bank puts up interest rates we get a critical mass where consumers and SME confidence crashes at once. I believe this has now happened and confidence won’t return quickly. I also think SMEs are still carrying too much debt which can impact heavily on confidence. These debt levels also reflect the most important issue to us at the moment which is education around how to run a business.”

Skills, Skills, Skills

Broadly speaking, in an era of high employment as we have in most Western Economies at the moment, small businesses suffer skills shortages because the staff they need are already hired by larger organisations offering better salaries with more bells and whistles. “Skills has been an issue for us but we’ve developed a successful response to the challenge,” explains Dianne Taylor, joint owner of Stug Australia, a Melbourne based mechanical engineering company with 32 employees. “We literally had to take a marketing strategy approach and ask ourselves what is our unique value proposition and we discovered our advantage is size. So we’ve focused on creating a more family friendly work culture where the boss knows your name and it has worked really well.”

It’s not all bad news moving forward, for SMEs with the Federal Government about to boost Australia’s skilled migrant intake by 30%, taking skilled migrant numbers to 133,500 for the year, by far the largest component of the country’s total migrant intake of 190,300.

Innovation on the global playing field

Countries and regions like China, India, Brazil, South East Asia and now Eastern Europe now attract the majority of Foreign Direct Investment and increasingly dominate global supply chains. Brazil, Russia, India and China combined - the BRIC economies – are putting over 3 billion highly competitive workers on the global playing field and not just in low-wage manufacturing and information labor but increasingly in high-skilled areas like engineering, programming and design. Some sobering figures back this up for example while China produces over 350,000 tertiary qualified engineers a year the US only produces 138,00; over 400,000 American tax returns will be processed by Indian accounting firms this year and Brazil’s second largest source of exports is now passenger jets made by Embraer, the world’s fourth largest civilian airplane maker. With those sort of figures it’s not hard to see why Goldman Sachs estimates that in less than 40 years the BRIC economies will be larger than the G6.

In order to gain a niche in this fiercely completive global economy Australian SME’s need to find something that nobody is doing and innovate on it. To quote one of Australia’s leading innovation researchers, Steve Dowrick Head of the School of Economics at the Australian National University “…although the rest of the world provides a huge source of ideas and technologies, a country like Australia cannot rely on a strategy of passive absorption to maintain strong productivity performance. In order to benefit from the global public good of world knowledge, countries need to have well trained scientists, a technologically capable workforce and active engagement in cutting edge research.”

Misperception of policy makers

As a founding father of entrepreneurship, the late Mike Scott of Stirling University in the UK, once famously quipped “a small business is not a little big business”. It is easy to assume that all businesses are the same, regardless of size. That they have the same structures, competencies, capacity to delivery on customer requests, capability to handle legal issues, HR etc, etc but they don’t. Policy makers often overlook these facts and treat all businesses as the same, because they are dealing at a meta level, on policy, law and so on. “About the only thing small and large businesses have in common is they sell goods or services,” says Associate Professor Mark Dibben of the Monash University School of Business & Economics. “SMEs don’t exist for the benefit of shareholders and don’t have any capacity to generate big funds like big business. Also their raison d’etre is often worlds apart, big business is about growth and shareholder value while an SME is more often about putting the owner’s kids through school and keeping a roof over the family’s head. This generally smaller scale of SMEs means that things like company tax laws, GST registration, employment law, data warehousing and health and safety compliance are a disproportionate burden to SME’s compared to their larger competitors. It’s not to say that the laws are wrong, or should be changed it’s just that the burdens on SMEs are not at the forefront of legislators minds.”

Funding high technology

High technology SME’s come in all shapes and sizes ranging from IT and Biotechnology to makers of advanced materials and medical device. They need state-of-the-art equipment for optimum results, marketability and contract retention and the challenges they face include problematic legal definitions of patentability, the high risks of research, long lead times to the commercial exploitation and, particularly in biotech, sticky moral/ethical issues like embryonic stem cells use. However, according to Prof. Nick Birrell Director, Monash Asia Pacific Centre for Science & Wealth Creation, their main challenge is getting finance. “If you are a bio tech and you want to undertake a clinical trail it costs a lot of money. Banks are not that keen to lend unless your have established revenue and profit so typically a high tech will look to venture capital which is often very hard to get.

And things just got a whole lot tougher since Commercial Ready, a Federal Government SME grants program that subsidised innovation and commercialisation, was scrapped in the recent Budget,” says Prof. Birrell “Companies used to be able to claim 50% of innovation project costs under the program, up to AU$5 million and its demise is considered by most high tech SME’s as a disaster.” Any new grants programs will not be introduced until the next year’s budget, which will mean that SMEs looking for help with their innovation projects will have to wait.

Weaving a web

Meanwhile, on today’s web-enabled playing field SMEs can work together or compete, regardless of geography, time zones or soon, even language. This means business not only has the ability to move jobs wherever there’s a factory, but now wherever there’s broadband. Tech savvy SMEs with an internationally viable product can exploit serious exporting opportunities with the right web presence. However, as Mark Dibben warns, a global presence, especially in emerging industries, can be problematic because of the possibility of an unexpected and considerable surge in demand. “The demands placed on an SME will be commensurate with the quality of its website in other words if they look like a big business they’ll be expected to deliver like one. This can crush a business much like it nearly did with Amazon when it first started. ”

Regulation: Better the devil you know?

Important to any functioning SME sector are the invisible but all powerful tillers of regulation. According to research from Ibis World our least cumbersome sectors, in terms of regulation, are health and community services, personal services and cultural and recreational services while the most regulated are the construction, agriculture and mining sectors. Not surprisingly mining enjoys the best growth conditions.

Regulation takes many forms from licenses to permits to quotas some examples include limits on taxi licenses, taxes on exports, anti merger legislation and, although often derided, industry codes of conduct like those in advertising and television. “The two big issues for most SME’s remains compliance associated with GST and the State payroll tax,” reveals Graeme Chipp, Managing Director of the Growth Solutions Group which employs 20 and consults to senior management in Strategy and Marketing. “The associated paperwork with the GST is not insignificant given quarterly BAS requirements and State payroll tax is a clear penalty for growth particularly in our industry where creating new productive jobs for people is as much a key driver of growth as it is an outcome.”

This article first appeared on http://www.abc.net.au/unleashed/ in 2009

Apparently Kevin Rudd is worth $60 million. Apparently Malcolm Turnball is worth $120 million. Apparently this is an issue because apparently the drought has not killed off all the tall poppies. Yes folks the ever-present egalitarian Aussie scythe is out and swinging’ and it has our top two pollies in its sight.

Australian’s are compelled to deflate the pretensions of those who take themselves too seriously or flaunt their success without due humility. We like our leaders to be like us. It’s called the tall poppy syndrome. Turnball’s mistake the other week of not knowing which footy team he supports could eventually prove an election issue and Kevin’s recent nifty off swinger on the parliament lawn could swing a few seats.

We have carved ourselves a classless Elysian Fields, the final resting place of meek, where millionaires rub shoulders with the unemployed under the beach showers, taxi drivers yell with surgeons at the footy and tradies swap waves with intellectuals in the surf. Indeed this all noble stuff but when writ large as with the Rudd/Turnball ‘modesty-off’ we have going on now, there’s an element of farce that echoes Monty Python’s We Were So Poor skit. “Well when I say “house” it was only a hole in the ground covered by a piece of tarpaulin, but it was a house to us.” Stop Press! Kevin grew up in a corridor with 126 others and young Malcolm had to eat gravel for breakfast!
For me, the most striking thing to come out of this race to the bottom to get to the top is the contrast with the US presidential candidates. Over there you wear your wealth and success as a badge of honor. It shows the kind folks at home you keenly align with the core US values of rugged individualism and nous. It tells the voting public you are capable and you’ve have lived in the real world and prospered on your wits. Perhaps the most direct parallel is John McCain. Just like our Therese, his wife Cindy is stinkin’ rich. Cindy is an heiress to her father’s stake in Hensley & Co. of Phoenix worth over US$100 million. Her beer earnings have afforded the GOP presidential nominee a wealthy lifestyle with a private jet and vacation homes at his disposal, and her connections launched his political career. And no one holds that against him. Sorry Kevin.

Then there’s Mitt Romney a one time serious Republican presidential contender. He was CEO of a significant management consulting firm called Bain & Company, and he was all over private equity as co-founder of Bain Capital. After this stellar business career he was CEO of the 2002 Winter Olympics and then became the 70th Governor of Massachusetts. Today Mitt has a net worth of $400 million USD, not including a $100 million blind trust in the name of his children. In the US such a hugely lucrative career as a banker credentials him as a capable administrator, worthy of public office. Sorry Malcolm.

Then there’s Hillary Rodham Clinton, not short of a dolloar or two, who racked up more than $30 million in debt during her Democratic primary campaign, (mind you she could emerge from her loss with a bundle of campaign cash to either play kingmaker or mount another campaign of her own.) Sorry Bill.

This article appeared on http://www.abc.net.au/unleashed/ in 2009. ABC Unleashed presents diverse and robust opinion about politics, society, belief and behaviour.

Meanwhile back here is Oz it’s all about modesty and to maintain that ruse here’s a few etiquette tips for the aspiring polly. Loose any trace of superiority in public, don’t annunciate too clearly, punctuate sentences with the word mate (pronounced maaattte!!), practice comfortably sipping beer from a bottle for the camera and never, ever say “joy good show” when you can say “on ya”. Be comfortable in the surf, be happy to kiss babies for the cameras, keep your wealth a dirty little secret, and most importantly avoid Italian suits and French clocks.

Government

Victorian Government Departments include:
Premier and Cabinet
Transport
Education and Early Childhood Development
Primary Industries
Planning and Community
Human Services
Justice

Other bodies
Melbourne Water
Brand Victoria

Non Government
National Australia Bank
Westpac
ANZ
BP
Seek
Telstra
Melbourne Business School
Monash University Business Review

Client testimonials

Victorian Department of Premier and Cabinet
‘Andrew was briefed to take dense, scientific and bureaucratic information and make it simple and concise without losing meaning or detail. He did this successfully. His attention to detail and excellent editorial suggestions and responsiveness ensured the project’s success.’
Mark Burford

National Australia Bank
‘The report is a lot better since your edit. It reads well and says it all more concisely.’
Kim Lovely, Manager CSR Communications

Victorian Department of Transport
‘With the draft material provided from a number of areas, Andrew successfully created a single
narrative voice. In addition Andrew not only met incredibly tight deadlines but in a number of cases
provided work ahead of schedule.’
Joanne Davie, Communications Manager

Victorian Department of Innovation, Industry and Regional Development
‘There was a huge improvement between the original document we sent you and the one you returned to us after your plain English edit.’

Consistency in communications is important. Using the same logos, fonts, terms and even punctuation conventions gives your material a more professional look. It makes things easier for the writers and editors you hire, whether they’re in-house or freelancers. It also gets you thinking about how you want your material to represent you. With this in mind why not speak to us about creating your in-house style guide and also training your people how to use it?

Whether you’ve just completed a multi-million dollar tender, prepared your annual report, finalised a new government policy or revamped a newsletter, we will eliminate all surface errors like misspellings, grammar, punctuation, verb tense and sentence structure. We can also apply your house style guide or create one for you. With such attention to detail you will always be represented in the best possible light.

Our business proofreading services cover:

Government Policy Documents
Advertising and Marketing
Business Proposals and RFPs
Sales and Promotional Letters
Internal Business Documents
Corporate Communications
Annual Reports and Public Documents
Business Plans
Publicity and Public Relations Materials
Policies and Procedures Manuals
Teaching and Training Manuals
Market Research Surveys
Grant Proposals
Fundraising Letters
Prospectuses
Press Releases
Promotional Materials
Media Kits
Marketing Proposals
Executive Bios
Founder and Partner Profiles
Company Fact Sheets
Website Content
Newsletters, E-zines and Blogs
Journal Articles
Speeches
Advertising Copy
Display Ads
Catalogues, Brochures and Flyers
Direct Mail Content
Opt-in Email Communications
Radio and Television Spots
Query Letters
Data Sheets
Technical Documents
Consumer Product Manuals
Hardware/Software Manuals
Programming Manuals
Corporate Intranet Communications
Tutorials and Training Materials
Reference Guides

We are experienced in providing in-house writing-skills courses for government bodies, companies and councils. These organisations trust us to pitch courses at an appropriate level, to respect and develop the existing knowledge and skills of their staff, and to provide rational writing and editing methods. 

Our courses are tailored to meet your writers’ needs, which we identify by discussion with you and by studying examples of their writing in advance. The style is informal and participative, with practical work, quizzes and group work. We often create courses on special topics, such as the writing of reports for government departments.

Topics

Our plain English courses teach the principles of clear, concise writing and how to use these for reports, brochures, case studies and more. We’ll email you typical programs on request, but the courses include:

• refresher on the basics: structure, sentence length, everyday English, powerful verbs, active and passive verbs, conciseness, accurate punctuation (including apostrophes, dashes and hyphens), essential grammar
• writing myths explained and exposed
• translating bureaucratic prose into plain English

Most of our courses go under the general title of Communication Skills, with subtitles to reflect their particular bias, for example:

• Advanced Writing Skills – usually covering letter and report writing
• Better Letters and Emails – a one-day course at various levels
• Effective Report Writing
• Grammar and Punctuation Workout
• Proofreading – one day
• Writing Minutes and Agendas – one day
• Editing for Clarity and Consistency – one or two days, covering essential editing skills
• Writing for the Web – one day

General aims of the courses

• to help your staff produce clear, well-punctuated and well-structured writing that fulfils its purpose
• to save staff time, particularly by improving their planning of written work
• to help staff identify good writing and rectify sub-standard work
• to help staff decide when writing is ‘fit to go’, and therefore when to avoid making unnecessary alterations

Number of participants, follow-up, one-to-one training

Courses cater for up to 12 participants. We offer an optional, tailor-made follow-up. One-to-one coaching is also available by special arrangement.

Materials that participants receive

To ensure the lessons are not forgotten, attendees take away our helpful Professional Writing Reference Booklet.

Assessments of our courses

‘It was refreshing to be taught by people who could take an independent look at our written work. Their comments and criticisms were constructive. I found them approachable and their enthusiasm motivating.’ Victor Sposito, Department of Primary Industries

Appearances are deceptive. What is apparently a simple and effective message is usually the product of long and careful crafting. This process is impossible without a sound grasp of language from the ground up. So whether it’s a light edit or major surgery involving a complete rethink of an existing document, let us craft you a leaner, cleaner and more concise read that can be understood and acted on after one reading. Of course, we rigorously maintain the original meaning and intent and never change facts or figures.

Below are some recent case studies.

The brief:

The Department of Premier and Cabinet is Victoria’s leading government department. Its annual report sets out the Government’s achievements for the year and its ambitions for the next one. Andrew Pegler was commissioned to conduct a plain English edit and proofread on approximately 40,000 internally prepared words.

Copy sample:

The role of infrastructure in our economic growth and development

The Resources and Infrastructure Branch helped the Premier reduce transport congestion and speed up public transport improvements and major projects. It also helped develop and implement the Premier’s Congestion Roundtable which brought together industry and community to talk about practical solutions. The result is the Premier’s $112.7 million traffic congestion plan called Keeping Melbourne Moving.

The brief:

The Victorian Government needed a brochure to explain its $4.9 billion water plan Our Water, Our Future – Securing Our Water’s Future to the general public and media. Andrew Pegler was briefed to take dense, scientific and bureaucratic information and make it simple and concise without losing any detail.

Copy sample:

Desalination plant for Melbourne

Desalination creates new water that does not rely on rainfall. This plan provides for the construction of a major desalination plant to service Melbourne, Geelong and towns in the Western Port and South Gippsland region from late 2011.

The plant will be located in the Wonthaggi region, which is close to Bass Strait’s freely circulating currents that will rapidly disperse any salty outflow. The plant will add up to 150 GL annually to Melbourne’s water system – around one third of Melbourne’s water needs.