Businessuite markets may 2016

1 Businessuite Markets March 2016


ContentEDITORIALPerspective

COMMENTARYThe Disconnect Between Marketers and CEOsBrand Promises and the Customer Experience Gap – What Can Small Businesses Do?

COVER FEATURE ‘Growing the Bank’; Sagicor Group’s Richard Byles Promises to Achieve Double Digit Year on Year Growth in Profits

BUSINESS ENVIRONMENTMaking Use of Human Capital to Improve Productivity

STOCK MARKET FOCUSGetting Your Business Stock Exchange Ready (Part 1)

READER SUBMISSIONSticking with the IMF (Part 2)

REGIONALChinese to Finance Completion of Bahamas’ Baha Mar Resort BUSINESSUITE EVENTS The Private Sector Organization of Jamaica Private Sector Service Excellence Awards

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EDITORIAL

PerspectiveSitting in the Blue Mountain Suite of the Knutsford Court Hotel at last month’s Mayberry Investment Briefing, I was taken by an anecdote relayed by Chairman of the Lasco Affiliated Companies, Lascelles Chin..

A teenager had lost her contact lens while playing outside in the driveway. After several minutes of searching, she gave up and reported her loss to her mother who went on her own search. A short while later the mother got up from the ground with a look of triumph and handed the once missing contact lens to her daughter. ‘How did you find it,” she questioned her mother. Her mother replied, “While you were searching for a piece of plastic, I was looking for $25,000. Because that is how much I would have had to pay to replace it”.

The key as explained in this story is based on your perspective. The value of an item or venture is then based on how you perceive it. If you see your business as being without much value, then it will continue to be that way. You

may also find it easy to walk away with very little provocation. However, once you view your business as an item of great value, deserving your attention and continuous investment, then you may find abandoning it that much harder.

A perfect example of sticking with your business no matter the challenge is that of Jeff Bezos and Amazon. Although it is now known as the ideal online market place, it never began that way. While Amazon started seeing huge profits by 1996 with sales reaching $15.7 million and $147.8 million in 1997 despite its fledgling state, people were intrigued by the prospect. Bezos had left his work on Wall Street and headed to Seattle to sell books online from his garage after all and within 2 years was seeing massive results. By 2000, Amazon wasn’t as promising as it once seemed. Despite having revenues of $1.6 billion in 1999, Amazon lost $719 million. But Bezos finally turned a profit in 2003, nine years after being founded and seven years after going public.

By Kayla Wright

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COMMENTARY

The Disconnect Between Marketers and CEOs

After thirty years in progressively senior marketing and general management positions in some of Jamaica’s largest and best run companies, I have come to the view that all is not well between CEOs and their marketing managers. There are clear and recurring evidence of a trust deficit

between both. Quite often you will hear senior executives led by CEOs saying ‘under their breath,’ “the marketing plan is not properly thought out”. The marketers on the other hand retort “senior management does not understand marketing”.

Whatever the reason for the

mutual distrust, it exists and must be addressed in the interest of effectively running the organization. Having been more a marketer than a CEO however, I have become fully familiar with the marketers’ perspective in the dilemma. They are of the view that, too often CEOs see marketing as an expense

rather than an investment. As a consequence, they are generally predisposed to resist, reduce or eliminate marketing related activities. Some marketers are even of the view that their proposals suffer the greatest degree of interrogation in the company before approval.

By Ronald Sutherland


By Yanique GrantCustomer Service Strategist

Today’s consumers expect promises to be kept. Delivering on brand promises is fundamental to unlocking customer value.

A great brand promise connects a brand’s purpose, value and positioning to articulate what customers can expect to receive in their interactions with a brand and why it’s worthy of consideration.Sometimes articulated in a strapline, a promise signifies the value that’s created when the customer engages with a brand. While brand purpose inspires an organization to do what it does, a brand promise delivers the value in the customer experience.

The customer relationship has become increasingly complex. Changing

technology, disruption of traditional business offerings, shifts in customer purchasing behaviour and the role that brands play in people’s lives translates into brand behaviour that’s not always in sync with customer expectations.

Only very recently, The Coca-Cola Company changed its promise from ‘Open Happiness’ to ‘Taste the Feeling’. The Open Happiness promise was built on the back of a social purpose – emotionally connecting the brand with consumers by positively impacting society.

Today, brand leaders need to pay close attention to disparities in the promises the brand makes and what the customer experiences.

A study by management consultancy firm Bain found that 80% of companies believe they offer a superior proposition. However, only 8% of customers held that same view – Bain coined this disparity the ‘delivery gap.’An effective approach to improving customer value is to ensure that the brand promises made are the promises kept. What’s required is an outside-in, customer-centered approach to designing interactions that meet customer expectations, are aligned with the brand promise and can be delivered seamlessly.

In practice, creating promises is easy – fulfilling those expectations is where the hard work begins. Most organizations are not built to deliver a great customer

experience aligned with a promise – out-of-date processes, legacy systems and technologies, internal silos and product-centric rather than a customer-first culture provide inconsistent interactions that fall short of the brand promise.

Leading customer-first brands have engaged employees who are empowered by the company’s purpose. They are united by the brand’s customer experience vision and understand the role they play in delivering the brand promise.

Importantly, these leading brands recognize the fundamental relationship between employee engagement and customer experience. They help their

Brand Promises and the Customer Experience Gap – What Can Small Businesses Do?

I am also privy to the impression of frustrated CEOs in their dealings with marketing people in their organizations. They are of the troubled view that marketing people are too quick to thoughtlessly dive into solutions, new techniques and channels. Their idea of “thoughtlessness” has to do with their impression that marketing people lack the over-arching strategic thinking that is necessary to optimize for success. They are also of the further but related view that marketers do not plan and measure enough.

Whether the perspectives of both sides are right or wrong, there is no doubt that a great divide exist between both levels of operatives in the company. This obviously poses a challenge for the organization that must be addressed. To start, it makes little to no sense that marketers make it their issue that the ultimate decision makers in the organization that do not understand

marketing, even if it’s true. As a former teacher and lecturer, I am committed to the view that if the students didn’t learn, the teacher did not teach

I hold the view as a marketing professional that if the CEO does not understand what I am saying, I failed to communicate effectively. This being my guiding philosophy had me thinking deeply in the early stages of my marketing career as to the most effective ways to communicate with my superiors. It was very clear to me then, that in order for me to communicate effectively with another I must be speaking in a language he understands.

This is precisely where marketers fail in communicating with CEOs. I can hardly recall hearing a marketer making a presentation with reference to the impact the programme he/she is proposing will have on gross margin, return on equity, operating income

or earnings per share. Those are the metrics that matter in assessing the performance of the business and that’s the language of the CEO. Until marketers are able to connect what they do to the metrics that drive the business, it’s not likely that CEOs will take what they are saying seriously.

Marketers need to take responsibility for what is evidently a commercial disconnect with senior management. The ultimate challenge is to gain respect from giving confidence. This can be achieved by translating the business objectives into marketing KPIs. In doing so, you assert your relevance and in the process give power back to the senior management to understand what you are about. When you are both speaking the same language, they will be more engaged and feel obliged to contribute. This is a precondition for buy-in at the most senior level.


employees deliver the brand promise by ensuring they have the right people in the right roles; they’ve developed internal processes and systems to help them do a great job, and they’re committed to customer training programs.

Global brand Starbucks’ customer experience strategy has employee engagement as a central tenet of delivering great experiences – its corporate website proudly states, “When we are fully engaged, we connect with, laugh with and uplift the lives of our customers – even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection.”

The brand promise of a “perfectly made beverage” reflects the importance of beverage personalization to its customers. To deliver a superior customer experience Starbucks fitted 500 locations with Clover coffee machines, a cloud-based system that tracks customer preferences.

Brand promises matter to customers – designing and delivering experiences that deliver the promise are fundamental to unlocking customer value – and, for today’s brand leader, that adds up to engaged customers that talk positively about the brand.)Customer Experience in 2016 is so much more than the stereotypical call centre full of script-reading automatons plowing through customer

inquiries. Today it is seen as the viable profit centre, it really is, with the potential to explode sales and improve customer retention. Of course evolution is never really completely, and so the story is not over. Excelling at customer service requires ongoing investment and attention. In fact, Gartner reports that by 2017 (next year), more than half of research and development investments will be redirected toward innovations in customer experience. For companies who want to remain competitive, customer experience must be a top priority.

The Click philosophy……“Creating compelling conversations and experiences between Brands and consumers and helping clients shift from interruptive messages to immersive

experiences.”

www.blackslatehldings.com


Cover FEATURE

President and CEO of Sagicor Group Jamaica Richard Byles has indicated that one of the major goals for his company in the coming years is delivering double digit year-on-year growth in profits.

Addressing shareholders at the Sagicor Annual General Meeting last week, he indicated that some of this growth will come from acquisitions, selling ‘big, new’ business by coming out with new products constantly, conservation, growing the bank and incorporating new technology.

2016 Strategy

Byles says the selling of ‘new, big’ business will be a major for the 2016 financial year. “We are a selling machine and we have to be a selling machine in this company….and we can’t sell ‘pyaa

pyaa’ new business, we have to sell big, new business”. He says to this end, marketing efforts are focused on being good at that.

To support this aim, he says there has to be a constant suite of new innovative, value added products in individual life, investment business, banking business and in the employment business.

Meanwhile, Byles says while the concept of conservation may not be an important factor for smaller entities, as a company that boasts approximately 70 percent of the market share, conservation has to be a major part of company strategy to ensure that costs are kept under control.

The Sagicor CEO and President says approximately US$100 Million into the bank so far. He says this represents

a major investment for the group and hope is that the company will see a commensurate return on its investment

Ease in Banking

The Sagicor Head says while he will not share the Group’s full strategy, the focus will be on being more aggressive in areas where other banks are not strong, such as the service area. Byles says his aim is for Sagicor to build on that aspect by making the bank more personable and easy to deal with.

Byles says he believes the market is there to accommodate this growth; however, the team at Sagicor will be who must be held responsible to achieve it.

some of this growth will come from acquisitions, selling ‘big, new’ business by coming out with new products constantly, conservation, growing the bank and incorporating new technology.

President and CEO of Sagicor Group Jamaica

Richard Byles


Financials In review

For the 2015 financial year, Sagicor Group outperformed the prior year and met several key business objectives. In his report to shareholders, Byles indicated that the growth trend continued with the team producing improved financial results for the sixteenth consecutive year. Net profit for the year was $9.79 billion, which is 15% above 2014. Revenues were 21% ahead of prior year, reaching $55.00 billion.

Meanwhile for the first quarter of 2016 (January to March), Byles said consolidated net profit attributable to Stockholders was $1.90 billion, a 40% improvement over Q1 2015’s $1.36 billion.

BUSINESS ENVIRONMENT

Make Use of Human Capital to Improve Productivity

Prime Minister, Andrew Holness, has called on employers to take charge of their work environment by ensuring productivity and efficiency.

Speaking at the 34th staging of the Jamaica Employers Federation (JEF) Annual Business and Workplace Convention last Friday, the Prime Minister emphasized that employers must put the requisite leadership in place for this to be achieved. He says to do otherwise could be devastatingly costly and counter-productive.

“In this regard, the employers do have equal if not more responsibility than the employees to ensure efficiency and productivity within the organization. And, that is even more so in the case of Government – the largest employer of persons in the country,” he said.

Make Tough Decisions

The Prime Minister has also urged business leaders not to shy away from making tough decisions as running an effective business usually comes with making decisions that are unpopular.“I am often reminded that leadership is not necessarily doing what is popular or fashionable all the time. Oftentimes this will mean some form of discomfort and some form of conflict. However, if it is properly managed, at the end of the day the benefits will be for all,” he said.

Prime Minister Andrew Holness arriving for the Jamaica Employers Federation ( JEF) 34th Annual Business and Workplace Convention last Friday

“( i ) believes the market is there to accommodate this growth; however, the team at Sagicor will be who must be held

responsible to achieve it.”Byles6


READER SUBMISSION

Sticking with the IMF (Part 3) By Priesnell Warren

He is described as a ‘Financial Analyst with an Economic View’. Warren began his banking career at Capital and Credit Merchant Bank now JMMB.

(The following is the final in a 3 part series from Financial Analyst Priesnell Warren regarding a potential road map for the new government administration that was elected on February 25, 2016).

Jamaica concluded her 17th general elections on Thursday February 25, 2016. It saw the Jamaica Labour Party (conservative leaning) over turn the previous majority of 42-21 seats in the House of Representatives previously held by the People’s National Party (socialist leaning). In that context, it was a large reduction in gap, which lead to a very close victory margin of 32-31 seats.

Whatever the Government does, it must maintain the plan of action left in place by the previous administration.

Within their first 90 days in government, the current administration must set out to perform or implement the following Key Performance Indicators.

7. Create an inclusive economic policy that encompasses major private sector companies for the development of sustainable partnerships. Now more than ever, it is important that PPP’s are used to increased productivity and lower prices where cost of production decreases with the installation of new technologies, cleaner cheaper energy and the creation of scale and scope of economies. The avoidance of been branded seems to be a major factor why previous partnerships have failed to gain traction that would result in the creation of multipliers.

Due to economic lags, the common man is yet to feel the effects of stability. Although, been stable by itself is not a good indicator of progress nor prosperity. By virtue of interviews done during the recently

STOCK MARKET focusGetting Your Business Stock Exchange Ready (Part 1)

One of the major requirements to list on the Jamaica Stock Exchange (JSE) is that upon listing, the subscribed voting share capital must be no less than $50M or more than $500M and it should have at least 25 participating voting shareholders holding no less than 20% of its issued share capital.

To even remotely be able to reach this number however, one of the first things a company must be able to do is increase its profits. Using ActionCoach Founder, Brad Sugar’s Marketing Leverage Chart as a guide, we will over the next five weeks, explore the five ways a company can increase their profits.

Despite Jamaica’s progress in doing business, local companies continue to struggle, especially when it comes to sales. In many cases, these struggles are due to the state of the economy and the belief by salespeople that they’ve hit the upper limit of people and companies to sell their products or services.

Sugar’s chart focuses on five key issues to growing a business. They include; lead generation, conversion rate, the number of transactions, average dollar sale and profit margins. For this week, we will focus on lead generation.

On Thursday, January 7, 2016, the Jamaica Stock Exchange ( JSE) listed two unrelated companies on its Junior Market; tTech Limited and CAC2000 Limited

Lead Generation is considered as the initiation of consumer interest or inquiry into products or services of a business. Although Sugar’s list of ways to generate leads includes tens of options, our focus will be on just a few of these ideas and how much they can impact on generating a good basket of leads.

• Advertising• This category involves TV, Radio,

Newspaper and Web Advertising. • Billboards and Posters• Sponsorships• Uniforms and Nametags• Business Cards• Networking Functions• Telemarketing• Fundraising Campaigns

Simply put the more leads you get, the more pitches your sales team is ultimately going to close.

concluded elections, one would realize that poor household economies are still in a tail-spin, stemming from a prolonged recession which started from the global crisis. Put another way, economic growth (GDP related) does not imply growth of individuals and households. Albeit, the macro-economy is made up of the micro-economy-households and firms; in this case central government and multilaterals are also stakeholders. Approximately 63% of every dollar goes towards interest payments; the remainder is spent on recurrent expenses and what’s left on capital spending to fuel growth. Countries in both developed and emerging markets are handicapped by inept fiscal policy, slow productivity growth and staggering debt levels, subsequently Jamaica is by no means an exception.

8 The Jamaica Stock Exchange (JSE) was nothing short of superb; in this context it upstaged the Jamaicans’ athletic performance at the Beijing IAAF World


Championships in 2015. Growing in excess of 80%, this meant a huge benefit to all first movers that stayed the course when the market went from bearish with nowhere to go, right through to its historic growth. With such an achievement, the issue now becomes one of maintenance. Jamaica’s Reggae Boyz qualified for the 1998 FIFA World Cup. It was so grand, the country was given a public holiday in celebration of the moment. Fast forward, almost 2 decades later, Jamaica has yet to make a return. While, Japan has made consecutive World Cups since, Croatia ended up 3rd place finishers, and most recently Argentina came second only to Germany these were all members of Jamaica’s group.

That story is all too similar across the country and steps must be taken, not to only grow the junior listing but must also be made with regards to the main index. “A healthy stock market helps equitize companies and reduce the country’s debt” so says Jamie Dimon.

9 The Caribbean Court of Justice debate must be continued. The arrangement was before the senate (upper house) after a super-majority vote was taken in the lower house. However, while MP’s are elected, senators are appointed by the Governor General on the

recommendation of the Prime Minister and the Leader of Opposition accounting for 13 and 8 members respectively. As a result, the government at the time was lacking the requisite 2/3 majority to pass the bill. Such a matter is of great importance to the country, and not to be toyed with by political agendas. Both parties have played with history-recall the West Indies Federation when at referendum was taken in 1961 by then Premier Norman Manley. The arguments must be presented and the end result should reflect the best interest of the country. The stakeholders will agree that Jamaica should gradually leave the

Privy Council as its final court of appeal.

10 Jamaica’s Water Crisis of 2015 has lead to many difficulties, and continues to plague the island in many respects. There are no quick fixes, but clear steps not just talk, should be taken to reduce and ultimately remove future occurrences of a severe drought in the Land of Wood and Water. Water is never short on the island; catchment and channeling mechanisms are limited. Prioritizing is necessary to spend a limited budget wisely, there is no need to go alone. Policy makers should do just that, make polices referred to above that will attract partnerships. This could see private interest making worthwhile contributions to the harvesting and supply of water. The above relates to a few of the issues faced by post-independence Jamaica and whichever schools of thought are used, the end result must be the same. A book from Sir Arthur Lewis’s catalogue, the Father of Caribbean Economics can be used to curb the lackluster performance of the Jamaican economy. Other areas of concern have been left out for simplicity; however, they too are very important. It is understood, that the government must perform a balancing act as there’s a thin line with high stakes and lots of stakeholders to suit. As such, some matters should be kept constant in the short run by maintaining the adequacy levels while gradually improving others. Industries to watch include, Bauxite and Mining with plans of reopening Alpart, Agriculture and Fisheries-Agro parks, Manufacturing with Red Stripe returning its North American beer production and transportation-colour coding of buses and taxes-overall regulation of supply.The interest of people must not be taken for granted and serious consideration must be given whenever decisions are been made. The Jamaican people are the majority shareholders of the company called the Jamaican government and they will vote every 5 years or less.

DISCLAIMER: The views expressed in this article do not represent those of Businessuite Magazine or its affiliates

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The Export-Import Bank of China has agreed to finance the construction and completion of the multi-billion dollar Bahamas based Baha Mar Resort in conjunction with China Construction America (CCA).

Making the announcement during the country’s 2016/2017 Budget Communication earlier this week, Bahamas Prime Minister Perry Christie said work is expected to resume soon.

He did not disclose any timelines for resumption of construction or how much it would cost to complete the project, but he said the details should become apparent in the near future.

For Sale

The unfinished Baha Mar resort complex was officially been put on the block after the financial interests involved were unable to reach an agreement that would have resulted in the completion

of the $3.5 billion Bahamas project a few months ago.

The listing followed a six-month stalemate between developer Sarkis Izmirlian; the primary contractor CCA Bahamas, a division of China State Construction Engineering Corp.; the Export-Import Bank of China; and the Bahamas government.

Izmirlian, who originally planned to open Baha Mar in late 2014, blamed construction problems for repeated delays, then unsuccessfully attempted to put the project into bankruptcy in June in order to protect his assets.

Bamboozled

Some concern has been raised however that the government is being ‘bamboozled’ by the Chinese government in regards to the new developments surrounding the project. According to Former Baha Mar Director,

REGIONAL

Chinese to Finance Completion of Bahamas’ Baha Mar Resort

Dionisio D’Aguilar, the bidding process to sell the megaresort was disingenuous. He says he does not understand the point of going through the process of selling the project and ending with the same result under the same contractor.

D’Aguilar also questioned the wisdom in allowing a foreign firm to take full control of the project considering the 15% unemployment rate affecting Bahamian citizens and what he describes as the willingness of Bahamian companies to complete the project. He says he does not understand why ‘the government would allow the Chinese government to finish the project when Bahamian companies are desperate to do so’.

The 1,000-acre beachfront project was originally slated to open in late 2014, though it has since been set back by delays. Plans call for four new hotels totaling about 2,200 rooms as well as a casino, a 200,000-square-foot convention center and a Jack Nicklaus-designed golf course.

Aerial View of Baha Mar

D’Aguilar also questioned the wisdom in allowing a foreign firm to take full control of the project considering the 15% unemployment rate affecting Bahamian citizens and what he describes as the willingness of Bahamian

companies to complete the project.


Jamaica’s top two commercial banks, NCB and Scotiabank, were last week crowned the winners in the large business-to-consumer category at the 5th staging of the Private Sector Service Excellence Awards. The awards were held in conjunction with the Jamaica Customer Service Association (JaCSA) during the PSOJ’s bi-monthly President’s Forum.

Other winners included JAMALCO, who won in the large business-to-business category, Massy Gas Products (GasPro) who won in the medium sized business category, and Sarifa Insurance Brokers who won in the small business category.

BUSINESSUITE Events

The Private Sector Organization of Jamaica Private Sector Service Excellence Awards

Category awards were also offered in the following areas:

• Leadership and customer service strategy (Scotiabank)

• Customer Service Charter and Standards (JAMALCO)

• Training and capacity building (NCB)• The existence and effectiveness

of monitoring and measurement systems (JPS)

• Complaints management (Scotiabank)

• The existence of mechanisms to reward and recognize the delivery of excellent service within the organization (NCB)

• The use of international benchmarks (JAMALCO).

First Global Bank, JAMALCO, JPS, NCB and Scotiabank were also recognised as the top 5 large companies ‘offering the best customer service’.

The Private Sector Service Excellence Awards’ was launched in 2011.

D’Aguilar also questioned the wisdom in allowing a foreign firm to take full control of the project considering the 15% unemployment rate affecting Bahamian citizens and what he describes as the willingness of Bahamian

companies to complete the project.

Businessuite markets may 2016

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