Home' Ausmarine : January 2011 Contents "Coulda, Shoulda, Woulda...
didn't" -- Fran Drescher
Sometimes it's concentration of effort that gets you into trouble.
When an enterprise devotes all its resources to a single product
or market, it's a bit like a military commander ignoring the
possibility of being outflanked.
Diversification of product, markets and manufacturing was
always a hot topic at co-op workshops in days long gone. The
traditionalists tended to prefer the fortress strategy, building
defences for their core business, locking in supply and strenuously
defending the perimeter of their influence.
The other group were fewer in number. For want of a better
description they could be tagged "the progressives". Their
approach to business varied, but was usually more entrepreneurial.
Growth through diversification, subsidiaries, investment and
borrowing was their chosen strategy.
Product development and innovation was pretty apparent in
the dairy and agriculture co-ops, but, with a few notable
exceptions, less obvious among the fishing co-ops. Strengths
and weaknesses of both strategies became more visible as times
The progressives coped well in the market place, benefiting
from a spread of product and enterprise. What took the wind from
their sails was the spiralling cost of money and shareholder
demands to separate the profitable bits from the stuff that was
losing money. Usually the not-for-profit part of the business was
left holding the loss-making baby. It doesn't take long for the
hungry corporate raiders and traders to then move in.
The traditionalists, clinging tightly to their core business and
firmly anchored to the mutual model, suddenly found weaknesses
in their own defences. Production cuts, whether just seasonal or
imposed by government, were temporarily compensated for by
price increases. However when cuts continued and production
costs per unit went up, there was only ever going to be one
outcome. The co-op can carry the fuel and gear bills of its members
for only so long. Murphy's Law is ever present and even good
contingency planning is rarely able to cope with the combination
of production cuts and market setbacks. The single product, niche
market fortress doesn't then protect producers all that well.
Lately it's the western rock lobster fishermen who copped the
double whammy, leaving its inevitable trail of bank demands,
foreclosures, family break-ups and despair. Prior to that, it was the
Victorian and New South Wales abalone producers. In fact,
travelling the coast of Australia, one can only be surprised at how
many single activity enterprises survive, let alone flourish. Pearls
and oysters lead the survivors, I guess, with salmon and tuna yet to
prove their longevity. Most others have gone the way of sealing
The stand-out success stories in the fishing world are not too
different to what we see in business elsewhere. Someone (usually a
bloke), with an eye for opportunity and the drive to succeed, turns
those attributes into a thriving, shamelessly undemocratic family
dynasty. Employees are well rewarded but principal decision
makers are family members who are made to learn the business
from the ground up. If a family member's heart and soul isn't in
the business, they are sent off elsewhere to pursue their chosen,
Personally, I have found it intriguing how many of these
dynastic empires managed to reach the top of their game without
the benefit of a CEO with an MBA and a stratospheric salary. Oh
sure, the offspring and family members who show their
commitment may be sent off to study and grab a degree, but only
after they have a grounding in the business.
What I am suggesting is that we have become hypnotised by
the management myth. Maybe we should apply the same rules to
MBAs, that we apply to "tradies" and builders. If they "stuff up",
they lose their licence. Why not strip the degree from overpaid,
incompetent MBAs. It would mean a hell of a lot of vacancies at
the World Bank and IMF. Those remaining might then better
understand the meaning of due diligence.
"If Thomas Edison went to business school we would all
be reading by bigger candles" -- Mark McCormack
At a "Future Directions" seminar, well stocked with
presentably-attired, business and marketing degree-equipped
participants, the then chairman of Dairy Farmers Co-op asked for
some one to give a concise definition of marketing. The silence
was embarrassing. "Meeting the needs of the consumer at a
profit," he told the uncomfortable looking silent suits. It was a
valuable lesson. I learned not to assume competency. Here was a
group of people with the right clothes and tickets to enhance a
potential employer's business, but unable to readily define what
they had studied.
I had a pretty disastrous academic background and therefore
assumed emergence from university, with some letters after your
name, was proof of accumulated knowledge and the ability to use
that knowledge to advantage. A little reading and some questions
revealed that marketing and business degrees had come about not
for any reason other than a need to fill a gap in declining
university enrolments and the desire of advertising agencies and
consulting groups to attach some academic credibility to the fees
they were charging.
It's that sort of disillusionment that turns folk like me into
cynics. Self-interest is not confined to commerce. It can drive
decision making in institutes, bureaucracy, in research, in
management and as we all know, in politics. Often by degrees.
The December meeting in Paris to regulate the Atlantic tuna
catch didn't manage to do much as far as tuna went. They did,
however, agree to cut the shark catch. Meanwhile, Australia is
doing its bit to look after hungry sharks by feeding them the odd
carcass from the live sheep shipments to the Middle East. Five
attacks on tourists in two weeks on the Egyptian coast seems to
suggest shark numbers are pretty healthy in that area. I'm not sure
if Egypt got to vote at the meeting.
A personal comment from Ulladulla's very own
Barry McRoberts on Management Matters.
January 2011 AUSMARINE
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