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the power of ONLINE LEARNING



The road to great learning is never a straight line...


eLearning LMS

BSI Learning helps organisations plan, develop and deliver exceptional learning experiences that utilise technology to engage people and get real business results. If you need us to help conduct a Training Needs Analysis, Plan and build a new program, develop a piece of eLearning or house it in a Learning Management Solution, get in touch with us today.

Contact: 1300 137 504 |


issue no.8 spring 2016


Contents 6

Harnessing the power of online learning


Why REACH is the new GROW in Coaching


Digital Transformation A Case Study


Successfully Sourcing Product from Asia


Against all Odds


Workers Compensation The Hidden Money, The Myths and how the Right Questions Can Save Business Owners Thousands Š2015 by Pow Wow Pty Ltd. All Rights Reserved. Reproduction in whole or in part without permission is prohibited.

The articles in Spark Magazine are of a general in nature only. Always seek independent financial, investment, tax and legal advice.


spark magazine

WELCOME T O S PA R K M AGA Z I N E Welcome to the Spring 2016 edition of Spark Magazine.

prominence by the mainstream media in Australia.

As usual we bring readers a range of articles of interest to SMEs and their advisers, with an emphasis this issue on e-learning and training.

It seems like the politicians are tying themselves all in knots with the irrelevant so let’s hope that means they leave SMEs alone to get on with what they do best – entrepreneurship, job creation and promoting Australian products and services worldwide.

The article on wasted money via workers’ compensation premiums and claims will strike a chord with many SMEs. Leading digitisation practitioner Mark Cutfield gives readers some deeper thoughts on what really makes a digital strategy successful long term, way beyond the cheap headline dominating lines so often seen in “light touch” articles. Anyone in business will feel that the rush to the Christmas / New Year break is well and truly underway now. Its seems all the Chicken Little naysayers predicting the collapse of the Australian dollar, property market, share market and businesses have gone quiet. Perhaps it’s time for the optimists, especially SMEs that drive this great economy to be given a little more

One of our stories this issue is about a business and its owner who refused to die and have gone on to great success. That is a common theme for SMEs in Australia, never giving up. Look for our Summer issue in December, just before Christmas. We wish all our readers a good run of business up to the end of year break. May all revenue, net profit and personal targets be exceeded.

Paul M Southwick CEO and Editor

issue no.8 spring 2016

Spark Magazine is “The fuel for business”. The target audience is business people, with an interest in innovation, technology and new ideas. We provide the ideas, motivation, and inspiration for success.


Pow Wow Pty Ltd Level 7, 14 Martin Place, Sydney, NSW 2000, Australia


Paul M Southwick (+61) 424 70 40 10


Paul M Southwick (+61) 424 70 40 10


The information in Spark Magazine is of a general nature only and should not be relied upon for individual circumstances. In all cases take independent and professional investment, financial, tax and legal advice. Spark Magazine and all persons and entities associated therewith accept no responsibilities for loss or damage related to any inaccuracies, errors, or omissions in the magazine, or reliance on anything in the magazine. The views expressed in the magazine are those of the authors and do not imply endorsement by Spark Magazine, its controlling entity or associated persons. Similarly placement of an advertisement in the magazine does not imply endorsement by Spark Magazine its controlling entity or associated persons. In some cases journalists writing for SPARK Magazine may consult to or provide corporate writing for companies mentioned in articles. The journalists or Spark Magazine do not accept payment from companies to cover or include them. ©2015 ©2015 by byPow PowWow WowPty PtyLtd. Ltd.All All Rights Rights Reserved. Reserved. Reproduction Reproduction in inwhole whole or or in in part partwithout without permission permission is is prohibited. prohibited.



spark magazine

Harnessing the power of online learning. 

Designed by

BSI eLearning

issue no.8 spring 2016


ave money and time, and engage your team to deliver business outcomes. The BSI eLearning team talk through some of the important considerations that can save on costs, and deliver tangible business results by harnessing the power of blended learning, engaging your team and growing their capability. Read on to find out more about online learning, demystify some of the buzz words and creating a plan for the future of learning in your organisation.

Introduction Is your training approach getting the results you need? Are your people engaged and motivated to learn? Are they getting the results you are looking for to drive your business forward? There are a number of reasons that organisations embark on learning and development projects.

Sometimes it’s to implement a nonnegotiable compliance course or to meet legislative requirements. At other times a change in the market place, software, or the way your business operates might necessitate a new approach. Ultimately it’s about ensuring a productive and motivated workforce. Whatever the reasoning, rolling out a learning program can be a costly exercise. Ensuring your approach is effective both in terms of cost and outcomes is critical to getting the return you need for your investment. An effective piece of learning can increase organisational efficiency and ultimately your profitability. So don’t neglect it! Importantly, organisations that demonstrate a real and lasting commitment to development through timely and relevant learning for employees can dramatically improve job satisfaction, loyalty and staff retention. In the past few years there has been an explosion in the options available


to organisations in terms of the way they deliver staff training. While this creates a plethora of opportunities, it can also be daunting to determine the best approach for each entity’s unique set of circumstances. When time and resources are limited it can be tempting to stick with methods used in the past, without considering if they are actually fit for purpose. When all of the options and approaches seem overwhelming, considering four basic principles can help to set you on the right path: 1. What business outcomes do you want to achieve? There aren’t many situations in the business world where large sums of time and money would be funneled into endeavours without measuring the results, yet strangely this is not uncommon when it comes to learning and development. Many organisations provide a suite of training programs for their staff, but never measure whether they actually improve performance.


spark magazine

Figure 1. The Kirkpatrick Five–level Training Evaluation Model is a useful tool to determine whether the training has resulted in the demonstration and application of real skills beyond reactions such as ‘liking’ the trainer and the training.

Why does this happen? There are probably a number of reasons but sometimes it can seem easier to deliver a generic piece of education rather than stop and define the performance required for success. Before embarking on any learning project consider asking. •

How will you know if the learning program has been successful? What will you measure? (see Figure 1)

If you can’t answer the question about how you want to measure capability at the outset, you may want to reconsider making a large investment at this point. After all, if the organisation doesn’t know what result they are after, it’s a bit unfair to expect employees to deliver it. 2. What skills do you need to build in your people? When you are clear on the business outcome you want to achieve it’s time to consider the skills,

knowledge and attitudes your team needs in order to make it happen. It is also important to consider that a new initiative is rarely accomplished by one specific group in the organisation, and it rarely happens through them alone without the right support and coaching. Don’t make the mistake of thinking that a learning program you have created for your frontline staff will also meet the needs of your managers and leadership team. Requiring people to complete training that is not relevant to their role is a sure way of disengaging them. Bring them in, show them the bigger picture, and emphasise the importance of their roles and provide them with specific tasks to support their teams. Another essential step is to analyse and recognise the current skill levels of your employees and the gaps that need to be filled in order to achieve the desired outcomes.

It is also important to consider how you will ensure your managers, coaches and support staff have the skills to assist learners to reach competency – what new skills will they need to manage, monitor and report on the outcomes that are being achieved? 3. Who is your audience? This brings us to probably the one of the key considerations, understanding your audience (your team and employees). Whether it’s adhering to safety legislation or rolling out a new sales strategy the success of any business initiative is largely in the hands of employees who are working at the coal-face. Without the right attitude and the necessary capabilities any initiative is destined to fail. Unfortunately, staff training can at times be an afterthought; something that will be handed to the learning team after management has finalised objectives and strategies

issue no.8 spring 2016

and then thrust on employees who can be caught unaware and feel resentful. Does your learning plan set aside time to educate the team on the basics and logic behind your business strategy? Do they understand “why” they need to do what you are asking them to do?

and skills. In the Learning and Development ‘old world’, it wouldn’t be uncommon to invest the bulk of time and resources into a single training event, with less thought given to the support mechanisms that the employee requires back in the workplace.

It can be easy to forget that your employees might not have the same vision as the leadership team who have been working on an initiative for months. If employees do not understand the rationale for change it can affect their receptiveness to any learning program, no matter how good it is.

In fact, it is widely recognised that around 90% of learning occurs outside the training room, through workplace experience, dealing with real world challenges and informal social interaction with work colleagues, whether it be through coaching, personal networks and more recently through social media channels. This is what the 70/20/10 framework represents – the breadth of all learning that takes place. It also presents a range of options about how you can structure learning for maximum effectiveness and the tools that are available when your team need them most. (see Figure 2)

When employee training is central to a business initiative from the start, multiple touch points can be created to ensure employees share the vision, feel consulted and have the opportunity to build knowledge and skills over time. 4. How do you engage them? The 70:20:10 framework recognises the realities of how people typically develop workplace knowledge

Figure 2.

Some companies have had great success with 70/20/10 because


they put processes in place to support it. Others have challenges because they haven’t implemented the necessary cultural changes and ensured there’s on-the-ground support. Recognising that learning and development is not always a single event (i.e., a training course or an eLearning module), and that it evolves as the employee gains experience and exposure to new situations is key. Providing the right type of learning opportunities at the right time allows employees to build and retain knowledge and to expand their skills incrementally, improving retention. This is known as “a blended approach to learning,” where a variety of learning modalities are employed at different times through the employee’s “learning journey”. Each element of a blended learning program needs structure and a robust learning strategy to link together all the pieces of the puzzle. (see Figure 3)

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Figure 3.

Learning and Development Jargon: What does it all mean? When you embark on a project involving your Learning team you might notice that they seem to have a language of their own - particularly when it comes to online or digital forms of learning. The technological challenges of an eLearning strategy can be

unnerving enough, without all the jargon that tends to go with it. Below, we put some of the common terms into plain language for you. (see Table 1)

Summary The steps outlined in this article provide some food for thought on creating effective learning opportunities for your

organisation. If you’d like more information, consider downloading our whitepaper at http://www. or for some advice, support or simply a sounding board for your ideas, BSI Learning can help. You can get in contact with us by emailing or calling the number 1300 137 504

issue no.8 spring 2016

Table 1.



Will that eLearning program work with our LMS?

LMS stands for Learning Management System. An LMS is a software application that allows organisations to manage their online learning. With an LMS, organisations can deliver eLearning content to learners and track and report on their progress.

This eLearning will have to be SCORM compliant for our LMS?

There are probably a lot of L&D professionals that don’t fully understand what SCORM means so don’t feel bad if this one has you stumped. SCORM stands for ‘Sharable Content Object Reference Model’. SCORM is a set of standards and specifications for eLearning that enables eLearning content to be distributed to a variety of different LMSs. Most eLearning development tools publish content in a SCORM compliant format.

Our sales team would love it if we could gamify this eLearning module?

Gamification is the use of game design elements such as problem solving, competition, reward and recognition to motivate and maintain the interest of learners.

Are there any MOOCs we could direct our managers to?

MOOC is an abbreviation for ‘Massive Open Online Course’. These courses are open access, online courses, many of which are offered by elite universities -often for free.

We really should be offering M-learning to the team?

M-learning is short for mobile learning. It refers to learning material delivered on a mobile device such as a tablet or smart phone which is accessible anywhere, anytime.


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Why REACH is the new GROW in Coaching.  by Linley Watson

issue no.8 spring 2016


oaching is now considered a core skill for leaders at all levels. Defined by Sir John Whitmore as “Unlocking a person’s potential to maximise their own performance,” coaching emerged in the ‘80’s and ‘90’s as a means to empower individuals and teams to reach their goals in the workplace. Good coaches work with individuals using a variety of tools, skills and frameworks to inspire and motivate people to draw on the resources and competencies they have within themselves. Unlike in the sporting arena, where the coach is often seen as an expert who guides and directs the behaviour of the athlete or team, pure business coaching is an equal partnership where the coach asks powerful questions, actively listens and avoids giving advice, instead encouraging the coachee to solve their own issues and devise their own actions to achieve what they want. One of the original coaching models is GROW which has endured to become the world’s most popular coaching framework. Born out of the need to understand and leverage what makes a successful coaching conversation, the GROW model which stands for Goal, Reality, Options and Wrap-Up, has guided coaching conversations for close to thirty years.

A new evidence based approach to coaching Beyond traditional coaching, the current research challenges organisations to embrace evidence based coaching as a new approach to capability management. Evidence based coaching draws from the social sciences and considers how humans learn and develop over their life span, intellectually, emotionally, socially and in life as well as in organisational contexts. Today’s professional coaches understand how to develop human potential and have an approach that fosters building not just individual but organisational capability. This has required continual development of tools to enable and support practitioners to have deeply transformational conversations. One of the contemporary tools gaining traction is the REACH© coaching model. Built to address some of the perceived short comings of other tools, REACH© is now well-established and replacing the GROW model in a wide range of organisations across Australasia and beyond.

A healthy start for REACH© The REACH coaching model was developed in 2008 by Kathy McKenzie, CEO of Fire


Up Coaching, to meet the needs of a large client in the health sector. Coaching was still in its infancy in Australia and they needed a holistic model for having coaching conversations that was sophisticated enough to enable the depth of conversations that arise in the health context, but practical enough to roll out on a large scale. Evidence based coaching was also gaining momentum and REACH provided a more robust approach to supporting capability development. When they looked at the popular GROW coaching framework the client noted that the model jumps straight into goal setting without acknowledging how critical rapport is to the success of a coaching relationship. They wanted to really emphasise the building of rapport and trust to help people open up and engage fully in the process. Effective coaching is results focused and action oriented. Another key aspect perceived as missing in GROW was around the coachee internalising the value and importance of achieving their goal. Ensuring they could clarify and articulate the reason or the benefits of getting their desired outcome McKenzie believed made it more likely that they would take the actions they had identified to achieve it. This was also validated by the research coming from the International Coach Federation.

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Often people get very little validation and acknowledgement for their efforts. McKenzie and colleagues had long since realised that concluding a coaching conversation by authentically honouring the coachee meant they left the session energised, believing that they can achieve what is important to them and feeling good about who they are - something the client also saw as critical for developing and embedding a successful coaching culture. In response to customer demand, the REACH© Coaching Conversation Model was born. The REACH acronym stands for Rapport, Explore, Action, Clarify and Honour.

REACH in Practice Any model is only useful if it works in practice. A Learning and Organisation Development Manager at a public sector agency attests to the benefits of REACH at an organisational level. “We have recently decided to adopt the REACH coaching model in our organisation. One of the key reasons is that I think the Rapport and Honour steps add more of the ‘human side’ to the coaching conversation. In my last role we had a development centre where leaders would practise coaching skills using a different coaching model. Our feedback would often

be that leaders needed to spend more time building rapport into their coaching, and encouraging their team members to take on challenges. I often wondered why those steps weren’t themselves part of other models.” Business Consultant and Coach Julie Keating says that “Having used both the GROW and REACH methods, for a Coach I see REACH as providing a better basis for building a long term relationship with a client. While both include the basics, REACH starts with the building of Rapport which for me introduced my awareness of the ‘love and empathy’ that needs to exist between a coach and their client, to provide the safe space for a client to


Building rapport is essential to get coachees engaged and in the space of trusting and opening up, prior to gaining agreement on what a successful coaching conversation topic or outcome would be.


Most of the conversation is questioning and exploring the topic at deeper and deeper levels. Various tools and techniques can be applied to access the sub conscious. The key to quality answers is asking quality questions that are solution oriented and focused on possibilities not problems.


An effective coaching conversation leads to action steps that are stated as SMART goals which can be measured and monitored.


Clarifying the value in achieving the outcome cements the importance of realising each goal and builds the desire to make it happen.


Reflecting on the value of the coaching conversation and authentically validating and honouring the coachee means they leave the session feeling good about who they are and believing they can achieve their goals.

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really delve below their conscious level.

flows naturally and I am now using it when coaching my own team”.

esteem by 29% and performance management by 77%.

GROW is great for a workplace situation; it is a model that could be used by any manager or by others to analyse any situation. For me it’s more of an analysis tool for a specific situation rather than a coaching process that helps people understand what drives them. “

Coaching for a greater return on intelligence

The proof is in – it is no longer just about return on investment but return on intelligence and coaching is a great method for fostering that emotionally, socially and mentally.

As a pragmatic business owner and CEO, Justine Teggelove has worked with a coach a couple of times over the years and has found it a valuable process. “Having now been on the receiving end of both GROW and REACH coaching conversations as a coachee, I feel that the subtle but important ‘relationship’ differences in REACH have been instrumental in keeping me energised, motivated and encouraged to achieve the outcomes I want. I find that the REACH coaching conversation

To become a skilled coach requires training and practice. REACH is now the core of a Diploma in Leadership, Coaching and Mentoring offered by FIREUP Coaching which is endorsed by the International Coach Federation (ICF), the body taking the lead in defining coaching and setting professional and ethical standards for coaches. Coaching is now becoming a main stream approach for business. A recent whitepaper by Korn Ferry on the impact of leadership styles on organisational climate found that a coaching style enhanced a positive, engaged organisation culture by 50%. Developing a coaching culture has been shown to improve communication by 63%, team effectiveness by 68%, self-

Find out more about REACH at

About the author Linley Watson is founder and managing director of Peak Performance International a leading Australasian people and culture consultancy that develops peak performing people and customercentric cultures. Linley has a BCom in Marketing and International Business and numerous professional accreditations. Contact:

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Digital Transformation A Case Study  by Mark Cutfield

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This is a business case study in digital transition and continuity, the main elements needed to foster, complete and continue the constant digital evolution that all industries are subject to. Digital transformation is a commonly used phrase or reference to the undertaking a business or an individual engages in as they move from analogue to digital across people, process, technology and customer.

Key Questions The important questions are: Do you have a road map for change? Is digital transformation a sign post with a marked destination, a milestone or a continual process required to combat competition and remain relevant to your market? Do you have the fundamentals and investment/funding in place to move from business models under constant threat to faster, cheaper and more competitive models, whilst maintaining the continuum to prevent inertia? It’s no longer an argument of whether most competitive industries across the developed and now the developing world are subject to the greater forces of digitisation, digital is the norm and is here to stay.

Innovation from individuals and companies the world over is rallying to develop technologies that automate, process and communicate, and at the same time provide data and the intelligence packed with it for real time visibility and responsiveness to your revenue source, the customer.

Real Life Case Study The Company Company X is your typical mid - tier company, unbridled in its ambition to lead its sector and use every means digital and otherwise to leap frog competitors and lure more prospects to increase market share. The company wants all this cheaper, faster and more profitable without burdensome overhead or large teams to run it. It could be many companies - there are common themes transferable to others in this case study.

A digital roadmap Let’s look at having a plan of action or a road map, outlining the digital journey: Having ambition is a great place to start and of course without it, the journey doesn’t usually commence or indecision dominates the process and it gets moved into the procrastination department. Having the right leadership, external advice and digital team to work with willing and able executives

and boards is a key contributor to success on any business journey. Company X by virtue of experience in a highly competitive industry recognised that, survival of the fittest wasn’t just a cliché for them, it was something they needed to adopt and fast. Having a real life problem or threat generally triggers action.

Margin Tension Company X was experiencing margin tension from rivals competing for business in a commoditised services sector, margin loss from using intermediaries as sales channels. They had “end customers” whom they hadn’t had a direct relationship with and no ownership of customer data to leverage new revenue streams. Strategies are wonderful theories unless they have objectives, order, action and outcomes. Company X outlined its three main threats/ problems; identified its strengths; and plotted a transition path that would protect current business relations whilst setting a mandate of time to deliver change. The road map considered current models, the resourcing attached, the technology (ERP, salesforce. com and Marketo) and the process (tried and tested, yet somewhat redundant) required to ensure adoption and readiness.

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The transition plan was as follows: PROBLEM 1 – Margin threat from commoditised business silo with no future proofing SOLUTION 1 - Aggregate projects under one cloud based internet interface. Build direct engagement lines with the new and existing customers assuming minimal marketing risk and reducing the need for large numbers of sales staff. Improve the position to trade future margin increases and reduce overheads. PROBLEM 2 – Margin loss from reliance on intermediary sales channels. SOLUTION 2 – Build digital capabilities by delivering decision making information directly to customers throughout their purchase journey, providing an interface with high demand products with public access and a lead generation process with real time customer profiling for targeting accuracy and better, faster return and sales conversion speed and rates. PROBLEM 3 – No current direct relationship with customers and no data to leverage new owned margin preserving revenue streams from. SOLUTION 3 – Utilise current technology platforms and develop them to allow for improved customer data position by developing a direct public web based interface, assume minimised marketing risk, build data, integrate analytics and automation to

manage and respond faster and be more relevant to customers’ needs in real and delayed timeframes.

customer data ownership, quicker sales, and repeat business at a reduced cost.

Is digital transformation a sign post with a marked destination, a milestone or a continual process required to combat competition and remain relevant to your market?

This position for company X is a two to three-year transformation and the forecasts are they will be doing 40% + business from their own data, increasing profit margin in some cases by up to 35% pacing them in an enviable position of data ownership of significant size to trade higher margin and improved number of deals at negotiation/ contract phase.

Company X recognised very quickly that complacency from a big win provisioning digital transition wasn’t a “game over” business, just a milestone, albeit a significant one. Milestone one got company X back in the game, made them competitive, helped them form a new position to protect and increase margin, reduce cost and formed a basis from which to further capitalise on the digital initiative. Company X has realised through this transition or transformation that the journey is a moving/evolving process to hold position and lead the pack.Milestone one got company Building and owning customer data is the central component to successful digital business, customers demand that you know their needs, provide the solution, product or service and make it easy to access, digital does this.

Results and Outlook Company X is now providing easy access to its products and the products it is an agent for via a digitally branded interface, aggregating products, and providing decision influencing information and connection to its in-house experts. Thus result is

Do you have the fundamentals and investment/funding in place to move from business models under constant threat to faster, cheaper and more competitive models whilst maintaining the continuum to prevent inertia? Company X made the right moves at the right time, forming a lead digital team with an executive and board committed to positive digital outcomes with the required funding. This was supplemented by the design of workflows, workforce management and processes to administer and manage not only the transition, but the new operating model. So many companies fail by their own sword when adopting change management and integration of new processes. Without the right skill sets and resourcing they are left with a sunk cost and no means to capitalise on the digital investment. Company X invested in change management outlining the people,

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process and technology enablers to cope with change and profit from it. They did the following to ensure the new digital model was resourced and the process was systematised as part of everyday operations: •

Identified the business problem and evaluated current business models

Assessed and evaluated current status of people, process, technology and customer

Set a defined action plan with change management, up skill and redundancy plans

Road mapped the technology requirements

Outlined cost and revenue models

Set digital transformation in motion

Built on the change and recognised that the digital journey is a continuum and improved profitability is not a quick fix, however not changing is far more expensive

Conclusion and Learnings In conclusion there are no easy fixes to business issues. Digital is a constant, and the need to take time to evaluate and identify the challenge, business position and threats is paramount.

You will need a digital advisor and or team, a committed executive and board and a clear defined plan across people, process, technology and customer to combat the digital evils (competitors). More often than not the answers lie inside the business, if you take time to critique positively and set a plan, and get the best advice. Both technology and advisory are expensive and a sure way to add to your legacy bucket of sunk costs, so choose wisely and don’t be just reactive, but positively proactive.

About the author Mark Cutfield is a leading digital thinker and industry executive

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Successfully Sourcing Product from Asia  by Paul M Southwick

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There are many stories written about entrepreneurial small businesses exporting to Asia and their tips for success. Here we reverse things and ask owners of companies importing from Asia for their best advice.

Delf Architectural Hardware Established 20 years ago, Port Melbourne based Delf, designs and imports quality door, window, cabinet, and security products, in contemporary and period ranges, from China and India. The company supplies Bunnings, Masters, and hardware stores through Australia and New Zealand.

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“In my decades of sourcing product from Asia, and contrary to popular belief, I have never been ripped off,” says owner, Ian Berger. “Australians have a good reputation in Asia and wise manufacturers know a track record of production quality and reliability builds US-dollar-paying business, over time.” Berger visits suppliers often and recommends the same to other importers. “Whereas India is going ahead of China in terms of state of the art manufacturing equipment, their infrastructure needs to catch up. From time of order to getting our goods on board a ship from the factory near Delhi takes 12 days. In China the same distance is covered in 12 hours! We hope the proposed PPPs [Private Public Partnerships] that have been floated come off in the Indian transport area.”

On-Line Retailer and ‘Savvy Importer’ “I turned my passion as a shopaholic into a business,” says Jo Munro, an experienced buyer of goods from China. She is author of “The Savvy Shopaholic” and “The Savvy Importer,” which is about to be published. Munro imports from China to both

Australia and the US where she has multiple on-line business selling via E-Bay. Her specialties are garden items and implements – like pink greenhouses – yes, they sell very well. Munro leads dozens of Australians on “master importer,” educational, shopping and importer trips to Hong Kong and China. Her favourite destination is the massive China Import and Export Fair (Canton Fair) held in Guangzhou. It has exhibition space of over a million square meters, 55,000 stands, over 22,000 of the best Chinese exhibitors – who pay to exhibit, and 100,000 visitors. “My top tip would be to understand how the Chinese system operates and use a ‘Relationship Management’ approach: what I do, is tell factories from day one that I am looking for a long term relationship; I will want to go and see their factory first hand; I will buy from several sources; I will place a small order first to ensure my customers like the quality; and finally, I share with them my anticipated three to five-year volume projections,” says Munro. “I never do contracts – they are unenforceable, but get suppliers to send me purchase orders that I

work over to ensure specifications are detailed and correct, e.g., that paint must be non-poisonous and comply with Australian regulations.” Munroe says “Factory visits are critical to make sure you are dealing with the owners. Genuine owners are delighted to show you around. If it’s a middleman – who might run off with your money, they might stall or resist. I ask them to make up samples and the best factories will do this literally overnight. Additionally, I ask who else they supply to in Australia.” “Make sure you have professionally translated Chinese business cards – they take them seriously,” says Munro.

Business in Heels Lisa Sweeney, co-owner at Business in Heels, a network with over 40,000 members in eight countries and growing fast, was for more than 20 years a buyer for Target, Spotlight, and Best & Less. “Financing is key to buying from Asia. Some markets insist, especially when you first start, on letters of credit (LOC) that tie up your money for six months. This is risky as funds are released before shipping and before you see the

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goods. It’s much better if you can move to telegraphic transfers (TTs), which you only pay on release of your goods to the freight forwarder,” says Sweeney. “Another option is to find a truly independent quality assurance auditor who checks and photographs the products before the letter of credit is released. But the auditors must not be from the local area and should have a reputation for independence.” With respect to Bangladesh, which produces 65% of the world’s T-Shirts, Sweeney says “It’s important to understand large parts of the country flood and know lead times to get goods out.” In terms of finding good factories in Sweeney says “Follow the European [buyer] trail. There are some state of the art factories supplying Europe, who have imposed very high standards on the factories, even crèches. Another tip is that if you are ordering something 99% like other items they make, then you are much more likely to get what you ordered – assuming you meet the minimum order size of 10,000 units.” With respect to Cambodia, Sweeney has a great tip “Many of the factories are now owned and run by Chinese companies. If you are dealing with

a Chinese company that owns factories in Cambodia, you can use them to access the substantially lower prices [up to 40%] and save import duty into Australia. It takes longer, but the savings are worth it.”

OzTramolines Founder of OzTramolines, Richard Haby, started selling out of his garage, and now imports 25 containers per year from China. He also ships directly to the US and UK. “Be aware that their customs are very different to ours. Be careful not to offend,” says Haby. Unlike others who deal directly with factories Haby uses a reliable agent – to whom he pays a volume based commission, to source products and liaise with factories. “I would not have my business without him,” says Haby. “If something goes wrong with an order – a warranty issue for example, the factory does not want to hear from me, but my agent can negotiate a solution. My agent employs six of his own staff, speaks good English, visits Australia regularly, and provides a similar service for other Australian companies, so knows the way we do business.” Haby says “An agent is great but I still go to the factories myself

each quarter, especially when we introduce a new product – to ensure it is right. Only I can do that.” “One reason I visit regularly is to avoid ‘quality fade’ – something unacceptable to Australians but normal in China. This is where, once they have produced an initial batch of quality items to your specification, and set a price, they tender out your work to other factories, each time secretly, and step by step, reducing the quality of the materials used, so as to maximise their profits.” The term “quality fade” was coined in the 2009 book “Poorly Made in China: An Insider’s Account of the Tactics Behind China’s Production Game,” by Paul Midler, which chronicles his years spent working with American businesses sourcing products made in China.

Expert advice “It’s important in terms of lowering input costs and managing cash flow that importers seek expert advice and understand both goods and service tax and customs duty implications of buying from particular countries,” says Eugen Trombitas, an Auckland based partner at PWC.

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“A lot of value can go missing. It’s important to know how free trade agreements work – the preferences and concessions available, plus the carve outs or exceptions. For example, a business may think that buying from a certain country means no duty, but if the goods enter the commerce of another country on the way here, duty may apply. Importers must get source, route, and destination all right.” Trombitas notes the tension between customs and importers

on “transaction value” used as the duty calculation base. Importers must know what is or is not included, for example freight, insurance and royalties. “Some importers are surprised to know that if goods are bought and sold after leaving the producer and before import, then the higher price charged to the last entity will, under coming legislative changes, need be used for duty purposes. “We see companies pay amounts overseas that they think will reduce

“transaction value” when in fact these costs must be added to the base,” says Trombitas. With respect to GST Trombitas says moves are afoot in New Zealand to remove it at the border for commercial importers – who currently pay GST to Customs but then must claim it back from the Inland Revenue Department; or to have a direct set off, that is pay and claim at the same time, like it happens in Australia.

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5 Tips for Importing from Asia 1. Visit regularly and make sure what you are told exists really exists, and is owned by who says they own it and not a third party masquerading as the owner. 2. Find out who else (in a major customer sense) – especially in Australia or New Zealand that your potential supplier produces for. 3. Get expert chartered accounting advice on trade agreements, import duties and GST. 4. Get mentored by an expert then start small before placing large orders. Beware of ‘quality fade’. 5. Pay attention to financing and working capital requirement options in your planning and budgeting.

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issue no.8 spring 2016 27

Against all Odds Business Owners Who Refused to Lie Down 


hen Jessica Gilchrist took over her auntie’s chocolate tours business in Melbourne she set about modernising and systemising the entire operation. Little did she realise that this action would not just continue the business’ success but also ensure it would survive a serious personal health challenge. Just one year after taking charge Gilchrist, then aged just 25 was diagnosed with cervical cancer which after a series of tests and other treatment led to surgery, from which she recovered. Quite a challenge for a young, new business owner. It was the systems and people she had put in place while well that enabled her business to survive while she was “offline” for treatment and recovery. Anyone who meets Gilchrist can tell there is much more to this successful businesswoman than meets the eye. Her resume includes modelling, acting and a string of television advertisements. And it’s that acting career that allowed Gilchrist to hit on a rare but very good idea, the use of actors in business.

by Paul M Southwick

Examples of actors in business include John Cleese of Fawlty Towers fame who made a most entertaining and informative series of business training videos in the 1970s. Allianz, the German insurance giant, used actors to simulate difficult employees in top executive assessment centres. Actors are also used in presentation coaching, especially media training for government and business. A little about Chocolate Tours: Chocoholic Tours is a premium walking experience designed to showcase Melbourne’s lanes, arcades and all of the city’s cultural hot spots. The tours are all inclusive small groups with a maximum of 12 people which allows the opportunity to connect and share the local experience. Chocoholic Tours was started in 1995 by Suzie Wharton. Her father was a closet chocoholic who introduced Suzie to the delights and health benefits of chocolate. He was known to never share his spoils but would occasionally let Suzie sample the wonders of a dark chocolate almond. Suzie studied nursing and then

went on to study events and marketing. It was during work experience at the Melbourne Convention and Marketing Bureau, at a brainstorming session that her passion for the sweet side of life surfaced. In order to help Melbourne promote itself as the food capital of Australia, she suggested doing a chocolate and desserts walking tour. The Just Desserts Tour was born. Suzie soon realised that chocolate was her passion and it was shared by the bulk of her followers. In order to continue to expand her chocolate knowledge she travelled to chocolate companies such as Haigh’s (Adelaide), Cadbury’s (UK), Terry’s (UK), Neuhaus (Belgium), Milka (Austria), Lindt (Switzerland) and Felchlin (Switzerland). She has also been to cacao plantations in Mossman (FNQ), Brazil and Hawaii. In 2015, Suzie handed over to her niece, Jessica Gilchrist (also known as her chocolate daughter) to keep the passion of chocolate alive. Gilchrist has also grown up around chocolate with Suzie showing her its secrets, she comes from an

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event management background and is a fun, charismatic and motivated person that has spent her entire life surrounded by an entrepreneurial family. The company now offers a wide range of tours and attracts local, interstate and international visitors including: Melbourne Chocolate

Lanes and Arcades Tours, Queen Vic Market, Donut And Chocolate Lovers Tours, and Private Group Chocolate Tours. More recently Gilchrist has added Yarra valley Chocolate and Wine Tours, and Sunrise Balloon Flights and Chocolate. There are also School Group Chocolate Tours.

The business has received a Lord Mayor’s commendation and a Trip Advisor certificate of excellence. Spark Magazine discovered on one of the walking tours that, yes, it is about eating a fine selection of the best chocolates, but much more than that it is about the history and business of chocolate as well as the

issue no.8 spring 2016 29 city of Melbourne itself. The sorts of things customers learn on the tour, apart from meeting other interesting “walkers” include: the types of chocolate; how chocolate is grown, harvested and processed; where chocolate is best grown, including the location of the only chocolate plantation in Australia; the history of chocolate making in Australia; the European roots of chocolate makers here, and the interesting relationship between some of them (who talk who chocolate making in return for being taught English?); the best spots for chocolate in the Melbourne CBD; how to choose and eat chocolate and much more.

A surprising aspect of the tour is exclusive access and treatment at the key chocolate house. Customers on the tours find themselves in private rooms, secret hidden cellars beneath famous restaurants and with a personal audience with chocolate makers. The real bonus on the tours is the equality of the guides and the information they impart, not just about chocolate, but Melbourne and its people too. Most fascinating is the international Italian (Milan) history and connection of the CBD’s most beautiful and famous arcade – The Block Arcade running between Collins and Elizabeth Streets,

the ladies who used to “walk the block” outside in their “Sunday best” in the early 1800s, and the “always has a queue” tea rooms at the front. The stories are where the actors come in. Gilchrist hires almost exclusively actors as guides. “Actors are very good at learning, recalling and sticking to a script, as well as telling a story with passion in an interesting way,” says Gilchrist. Perhaps they also appreciate the work and the income before they move to Bafta, Hollywood or other fame. Now there’s an idea, maybe John Cleese could add chocolate tours of Melbourne to “Meetings, Bloody Meetings” and “Can You Spare a Moment?”

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Workers Compensation The Hidden Money, The Myths and how the Right questions Can Save Business Owners Thousands 

by Jason Doueihi

issue no.8 spring 2016 31


verpayment of a “love to hate”

Whilst insurance is a ‘must have’ that some Australian’s love to hate, clever questions can unlock a treasure trove of savings. Many Aussie businesses are paying between $10,000 and $100,000 more than they need to on their Workers Compensation premiums and claims, simply because, like most insurance policies, the devil is in the detail. There are simple ways to minimise both the upfront premiums as well as the often costly process of managing a claim. Some insurance agents offer businesses the basics, with little or no customization.

Protection An important part of the Australian working landscape, Worker’s Compensation Insurance not only protects employees in the event of accident or injury and saves many from financial ruin if forced out of the workforce, but also insures a business against the cost to support the injured workers as they recover from injuries sustained in the workplace. When taking out such a policy, business owners can unwittingly pay too much for their Worker’s Compensation Insurance, either

because they don’t know the best questions to ask their insurance agent, or the agents themselves are less than diligent when establishing the relevant policy detail

Compounded Problems Doubling the financial pain of the policy can be a bi-product of mounting a claim. Once a claim is ‘live’, many businesses are equally unaware of the impact their actions and can have on both the handling and resolution of the claim, and the knock on effect to the premium increase as a result. Business owners’ lack of awareness of the positive impact of better engagement and communication with their workforce on both avoiding workplace injuries or becoming embroiled in a messy claims process, lead to businesses copping a rough deal, read “incurring unnecessary costs,” when it comes to insurance.

Experience Shows One of the first steps in the process is the accurate creation of the policy from the outset, based on relevant business circumstances, and it is at this early stage, that some businesses go wrong. The author, as an independent expert in Workers Compensation policies, sees first hand the

disingenuous practices of insurance agents whilst supporting Aussie businesses to ensure their policy and the premiums are accurate. Experience over 17 years in the industry, has revealed: •

70 per cent of Aussie businesses are overspending on their Worker’s Compensation Insurance.

Insurers sometimes “hide” the laws that are key to a business owner saving money.

Annual overspend amounts ranged from $10,000 to over $100,000

The most common shortfall of Workers Compensation insurance policies has been insurance agents not stipulating to business owners what they are entitled to with regards to reducing premiums.

Classification There are literally hundreds of industry classification and varied premium rates. If an insurance agent makes one or two assumptions about the business, or overlooks basic questions which are able to correctly classify a business, then there is risk it will be classified incorrectly which potentially costs the company hundreds of thousands of dollars in unnecessary premiums.

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The Top 5 Policy Potholes Industry Classifications As there are multiple industry classifications, businesses should review in detail what their predominant business activity is. At times this results in identifying another industry classification that is more suitable for the business. Separate and distinct businesses Businesses should review their business operations and identify if they operate separate and distinct businesses. In some states, in particular NSW allows for Workers Compensation policies to be restructured (particular criteria applies). Premium Calculation Reviewing the premium calculation processed by the insurance agent, to ensure it has been processed correctly. Common across the Australian business landscape is business owners who are simply unaware that their policy is inaccurate or that their business has been classified incorrectly. They rely on being somewhat guided by someone who should know better, and often have no idea their classification is wrong and their premium higher than necessary. As a result, they are spending too much on their Workers Compensation policies, and don’t have the time to review their policy or even realise that they should.

Causes The root of the problem is that insurance agents are under no obligation to either review a policy for their client or tell them where they could be saving money. This means more and more battling Aussie businesses are overspending significantly, and there is no watch

Location The premium of a NSW based business, where part of that business is located interstate and/or overseas, can be significantly affected if not emphasised in the policy. Workers Compensation costs Businesses need to monitor the actual cost of their Workers Compensation claims. If not managed well by their insurance agent, premiums could double or even triple depending on the size of the business.

dog to oversee the rollout of workers comp policies to ensure both employers and their employees are getting a fair deal.

It’s about more than the policy Many in the industry believe that setting up the policy correctly is only the first hurdle. In the event of a Workers Compensation claim for any conscientious employer, emotional and financial stress go hand in hand. For smaller employers

where resources are tight, having an employee absent from work for an extended period can have a significant impact on business operations and team morale. Yet smaller businesses may not have the knowledge or in-house expertise to understand how to manage this. Carl Albrecht from Australian Work Health and Safety says; “It is not widely understood by businesses that for every dollar paid out during a claim by the insurer,

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the employer pays $3 and that a Workers Compensation Insurance policy is ‘fund management’ and not insurance. It is therefore vital that businesses get the best bang for their buck and minimise this risk of increased premiums wherever possible. This can be as simple as ensuring all policies relating to workplace safety and protection of employees, are in place and that as an employer, you work closely with your employees to ensure those policies are both understood, role modeled and adhered to.” Increasingly businesses are experiencing their claims being handled by junior clerks, crudely assessing it from generic, tick-abox type checklists. The result is a poorly managed claim, conducted at what is financially expedient for the insurer, rather than what is in the best long-term interest of the employer. With mental health claims on the increase (now representing 24% of the dollar value of all claims) now commonly the cause of compensation disputes by employers suspecting a fraudulent claim, soame business owners are reporting a lack of interest by their insurer to really help them solve or resolve the claims process. It is easier to proceed with the claim than investigate, and with any costs incurred in doing so being charged to the employer, it has created a system which does not incent insurers to act in the best interests of their customer, the employer. “Workers Compensation is rapidly

becoming an ‘us versus them’ mentality with businesses feeling increasingly unsupported by their insurer despite doing all the right things to protect their workforce and minimise risk,” says Carl, “And so to be armed with the knowledge to understand the system better, businesses could literally save thousands over time and reduce the pain when a claim does strike.”

Further consequences But the consequence of a lack of knowledge in this crucial area of business ownership is not merely financial. John Makris is a Health & Safety Lawyer at K&L Gates Lawyers and deals with a number of cases each year, which reach his desk, unfortunately at the point in which a claim has become problematic. By this stage, a business is feeling not only the financial pressure but is most likely experiencing the stress of a prolonged period of conflict. “Increasingly we are seeing cases of psychological injury being brought to us by an employer who is struggling to achieve resolution and return the employee to meaningful work. These are usually complicated and sensitive cases that often develop into an employment law issue and it is imperative that the employer is proactive right from the start,” says John.

Legislative changes Recent legislation in NSW means that insurance premiums are directly linked to the salary of the employee. Being fully engaged

with the employee and working with them to return them to work in the safest and most expedient manner, is imperative if a business is to avoid a hefty premium increase and the distress of workplace injury disputes.

Communications It is crucial that business owners adopt strong communication strategies with their employees and actively encourage a diligent attitude towards workplace health and safety and risk awareness. This can support the reduction in both workplace incidents and the resultant claims. However, should a claim be made, if due regard for the employee and a good relationship is fostered throughout their employment, the claims process may become a far smoother one with a swifter resolution and return to work.

In conclusion - demand more Business owners should adopt an holistic approach to reducing Workers Compensation costs by demanding more of their insurer; asking questions of medical professionals, interrogating their policy terms as a matter of diligence and not allow the insurer to take sole control during a claim. And in conjunction with this, business owners should aim to foster stronger relationships with their employees to spot issues before they develop and create an environment, which embraces health and safety and personal protection at the heart of its operation.

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Spark Magazine Spring 2016  

Spark Magazine Spring 2016 The fuel for business

Spark Magazine Spring 2016  

Spark Magazine Spring 2016 The fuel for business

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