Articles

If You Were Going To Spend Lots & Lots Of Money - say a lazy $48 Billion or So – Would You Have A Plan?

According to OECD measurements Australian households enjoy average internet access speeds equal to the top 15% of countries in the world. Yes, there are some areas in Australia where access speeds move at the pace of a retired circus elephant with arthritis. And yes, there are some pockets of some cities in the world where Kim and Su luxuriate in speeds powerful enough to change the rotation of the earth. But generally speaking, the Australian population is relatively well served by global standards.

At this point in time, no major Western government is looking at using a 100% taxpayer funded model to create a unilateral broadband system that would deliver average speeds of up to 100 Gigabits per second to households. A bandwidth that is impossible for the average household to fill even if they had every computer in their suburb running HD porn through their account 24/7.

Better yet there isn’t even a proper cost/benefit analysis nor tested revenue model attached to an intention to spend the money entrusted by every man, woman and child in this country to a group of people who are meant to be spending our ‘community chest’ prudently and for our collective benefit.

Return on investment it seems is a foreign concept in Canberra.

But it can’t be in a retail business. New or increased expense without a productivity gain (profit outcome to make it simpler) is just not acceptable. A business case does not need to be the equivalent of War and Peace, nor does it need to take the resource and time eaten up building the Snowy Mountains Scheme. It needs clear objectives, unambiguous deliverables, a revenue model or payback analysis and a concise statement of how it contributes to profit growth.

Evidence of industry may cut it when all you want to do is convince people you are working hard, but working clever relies on purpose and outcome. Brevity is actually your friend in retail. That does not mean being fast and loose with the truth nor skirting over due diligence. It means doing what’s needed to prove a return and keeping it simple and to the point so you can make a decision and act on it, knowing that you are investing resource, time, energy and money to achieve a set of deliverables which drive a positive profit contribution.

As the saying goes “If you always do what you’ve always done, you’ll always get what you always got.” Continual innovation is part of the DNA of retail business, but it needs a plan. Not one done on the back of a coaster in a spare moment on an airline flight, but a plan that clearly states objectives, deliverables, a build plan and profit outcomes.

Perhaps if our politicians took a leaf out of their colleagues play book in the United Kingdom we’d have a retailer like Sir Philip Greene doing the business case for them on investment decisions. Retailers after all know the value of a hard earned dollar and that you spend it for a return on investment – not a return in the popularity stakes.