The case for a long, mid and short-term view in sailing and marketing

Working within an organization’s annual financial process means you are likely to be either preparing, or have just finished, your annual planning and budgeting. In fact, it can often feel that just as you complete one round of planning and budget setting, the next round has arrived before you have really got into implementing your plans.But there have been major changes over the past decade, which have had significant impacts not only on the marketing planning process, but also on the role of marketing strategy. Instead of setting a long-term marketing strategy and implementing the tactics to deliver it over the year, marketers are often finding themselves so focused on delivering the short-term tactics to deliver the immediate wins that often the longer term strategy is forgotten.

Even that most traditional and strategic of marketing categories, Consumer Package Goods, is focusing on short-term tactics to reach and convert customers to drive revenue and market share expectations. And retailer marketers, who plan out their marketing a year or more ahead to leverage seasonal retail events, are finding themselves competing with online e-commerce, which appears to be able to create sales events almost overnight. What has caused these changes in the role of the marketing strategy? What is the emerging trend we are seeing across a wide range of categories and markets where growth is a strategic focus but continues to prove a challenge? In his book “Good strategy, Bad strategy”, Richard P. Rumelt writes “Strategy is at least as much about what an organization does not do as it is about what it does.”

In developing a marketing strategy, the marketer is mapping out a plan of action to optimise successfully achieving the marketing objectives for the organization. It is aligned to delivering the business objectives (usually growth-related) and takes a medium to long-term view of achieving the same, based on the resources at hand (products/services, distribution channels, budget etc), the competitors’ positioning, activity and strategy, and of course the customer. Traditionally, the marketing strategy was developed either at the launch of a new product or service or when it was deemed the current marketing plan was not working and a new one was needed, often with the appointment of a new CMO or head of marketing. The implementation of the marketing plan, developed from the strategy, would often take a year, and therefore by the time the plan was executed it was time to review and do the same again.

The role of the marketing strategy was to set the direction for the foreseeable future (12 months to up to five years in some cases) and inform the marketing plan on an annual basis to define what marketing should do and more importantly what marketing should not do to deliver on the organizational objectives.

Fig 1: While Marketing Strategy is aligned to the strategic objective, the marketing plan is the plan of action to get there. Both are needed to assess progress in the lifts and knocks of the market.

More than at any time the marketing function, within most organizations, is under pressure to deliver or at the least contribute to measurable growth to justify the marketing budget – which has been under downward pressure for most of the 21st century. At the same time, the rise of social media, digital media channels and marketing technology, such as programmatic and real-time media bidding, provides marketers with a means not only to position brands, products and services against the competition in the mind of the customer, but also help fill the euphemistic ‘online sales funnel’ with leads to be converted by sales or even, in an e-commerce world, convert those leads to sales themselves.

Enter the concept of Agile Marketing, inspired by the process of agile software development, and adapted to the marketing discipline. Agile Marketing is about testing and learning, using the results to adapt in real time and go back to the market to optimise marketing investment and deliver measurable Return on Marketing Investment (ROMI). In this world the measures are customer acquisition, cost per lead and acquisition and revenue growth. The focus is on the short-term sales results and optimising the lead and conversion rate. But what about the longer term marketing strategy and market positioning of the brand? An online insurance company we work with embraced agile marketing as a way to maximize marketing budget and ROMI. This included in-house creative and media buying, so they could respond to the market in real time with all agile marketing processes managed totally within the organization.

Fig 2: Traditionally marketing plans laid out a planned route to market. In uncertain and changeable times a more agile approach allows marketers to deliver short-term wins while delivering on longer-term strategic objectives.

But while the marketing team was driving terrific acquisition results in the short-term, there was a realization within the marketing leadership that their agile response to the market had caused them to drift from the core marketing strategy that had built their competitive strength and differentiation. As Richard P. Rumelt had stated above, the marketing strategy defined what they would do and just as importantly what they would not do. But with a short-term focus on driving sales results they ended up doing whatever it took to continue or improve those results, without consideration of what the strategy told them not to do, and therefore were compromising the marketing strategy.

This is easy to do. After all marketers face more choices than ever. There are more channels and more options than there ever have been. Marketers are also facing greater levels of unpredictability, competition and complexity. But out of this complexity and unpredictability comes more opportunity, and therefore a greater need for the agility to take advantage of opportunity as it arises. However, there is also a need for a framework to inform the decision on which opportunities should be taken and how you should take them. This is the emerging role of the marketing strategy in an agile marketing process. I like to think of it as being like sailing. Not the cruising type sailing – a lazy afternoon in the sun, sitting on the deck, sipping champagne. But the racing type of sailing, with an ultimate goal – the finish line and a fleet of competitors in changeable conditions.

A good skipper knows the strengths of the boat and the crew and will have a strategy to play to those strengths and maximize performance in current conditions. The skipper also has tools at his or her disposal to provide updates on the current situation and changes in the surrounding environment. The skipper should know something of the competitors in the fleet – their tactics, strategies, strengths and weaknesses. As with agile marketing, the crew will hopefully have practiced and become incredibly efficient at changing tack. As they sail up to the starting line, the skipper will position the boat to get the best opportunity on the wind and the fleet. From before the start to the finish line the focus of the skipper and crew is on the ultimate goal, which is crossing the line ahead of the rest.

Fig 3: In varying and changing conditions do you stick with the plan and the fleet or strike out and search for immediate opportunities while maintaining a view of the longer-term strategic objectives?

The skipper will stay on strategy to ensure the maximum performance of the boat and the crew, but will constantly be looking for opportunities to take advantage of changing wind and weather conditions and the tactics of the competitors, only reacting when there is a clear opportunity to take an advantage or avoid a disadvantage. After all, simply following the fleet means if there is a knock from a wind change then the whole fleet gets knocked back, but the skipper who decides to stay the course when everyone else tacks is looking for the wind lift that will put him or her ahead of the fleet. What does this mean for marketers? There is a business objective, which is the finish line. Aligned to this objective is the marketing strategy, which defines the best use of the resources available to position the brand, product or service successfully to deliver that objective. There is a marketing plan derived from this strategy, which is the race plan, based on the current weather conditions, the competitive set and the resources available. But then throughout the race there is a constant need to monitor changes in the current situation that might deliver opportunities. Whether these opportunities are taken, or not, depends on the marketing strategy and plan.

This is a short, mid and long-term view of a marketing strategy. The long-term is set within the marketing strategy. And while they say you should always review that strategy, tactics never drive it. Instead, the tactics are assessed against the strategy to make sure they capitalise on the short-term objectives while building the long-term marketing strategy. The marketing plan is the medium-term review where strategy and tactics meet to achieve short, medium and long-term objectives. While the organization may be interested in this quarter’s sales results and marketing’s contribution to those results, marketing must remember it also plays an important longer-term value creation role, ultimately to win the race. The role of the marketer today is to use the marketing strategy to assess short-term tactical opportunities, but to ensure the organization stays on track to deliver the agreed medium- and longer-term objectives of the organization as well.

Darren Woolley is the Global CEO for TrinityP3 Marketing Management Consultants: www.trinityp3.com.

TRUMP: the influencer President?

In 2016 I wrote an article about how then candidate Donald Trump had used the influence and reach of social media to bypass the media and create a movement of followers online and in the community. In 2018, now President Trump has applied his social media acumen to foreign policy with shocking results. So what precedent has Trump set for the next generation of leaders?

On January 2017 the world witnessed the swearing-in of a billionaire real-estate mogul and reality TV star as President of the United States of America. Trump was the first President in the history of the United States to have neither served in the military or held political office.

Love him or loath him, Donald Trump has had an enormous influence on the political and media landscape by utterly devastating the status quo.

Pundits that derided Trump as a ‘celebrity president’ had failed to see the almost decade-long strategy he and his team implemented to grow his online following that propelled him into the political stratosphere. Take for example the Conservative Political Action Committee (CPAC), a popular event for republican presidential hopefuls held every year. Except in 2016, Trump has addressed the CPAC faithful every year, finetuning his messaging and growing his conservative followers. It’s important to understand that in his 2011 CPAC address Trump first road-tested a version of the ‘Make America Great Again’ slogan to rapturous applause from the audience. Less than five years latter he’d use that same slogan to galvanise the Republican base and take the White House.

Since his first CPAC appearance, Trump, knowingly or unknowingly, has disseminated his key campaign messages by adopting the same social media playbook that many young so-called ‘social media influencers’ have used to build enormous followings. Those who can remember the early days of YouTube will remember how young, relatively inexperienced ‘YouTubers’ were able use their social media platforms to directly engage their followers in ways that hadn’t been seen before – growing their influence and reach among many young people to such an extent their fame began to rival some of Hollywood’s movie stars.

By adapting this raw and direct method of engagement, Trump was able to completely flip the old, out-dated media business model on its head. Political pundits and opponents were left scrambling to adjust to this new form of direct messaging. Many of Trump’s GOP primary foes were still caught in the past. They were utilising cookie cutter campaigns which bogged them down with the same romanticism of West Wing style presidential campaigning that the public had come to view as manufactured and fake.

Trump on the other hand opted to use Twitter and phone-in media appearances to get his message out. Long-winded press statements were replaced by short, sharp and often grammatically incorrect tweets that cut to the point. Trump was communicating in the same way many Americans had become accustomed.

Before Trump, Barack Obama was hailed as the first social media president. But was that true? Obama’s team were the primary drivers behind his digital strategy. Each Tweet or Facebook post was carefully crafted and vetted to ensure no particular electoral demographic was offended. This left Obama’s tweets sterile and unengaging. After becoming president, Obama rarely tweeted or posted directly to social media. Unless it was campaign season, most Americans could only hear from the president through mainstream media outlets or via scripted YouTube videos encouraging them to signup for a healthcare plan. Direct tweets from Obama became so infrequent that engagement via the @BarackObama and official @POTUS Twitter accounts fell off a cliff. Now compare that to the tweets coming from the @RealDonaldTrump account. For better or worse, I doubt anyone would argue those tweets aren’t authentic.

You can certainly question the substance of the online messaging coming from Trump, but you cannot ignore that fact that he has set a new standard for leaders to directly engage with their followers. From Hollywood to Wall Street and to Washington D.C., leaders are waking up to the new notion of ‘digital influencers’. Picking up where Trump left off, movie stars like Dwayne ‘The Rock’ Johnson, Will Smith and Kevin Hart have invested heavily in growing their online influence. Smith for instance has dived headfirst into social media by launching his own YouTube series to compete with the new breed of young internet stars. To-date he has amassed over 4 million followers on YouTube alone. In the world of business, titans like Elon Musk and Gary Vaynerchuk have been able to leverage their own online influence to outpace their competitors and establish trust in the market.

We are now witnessing the rise of the political and industry influencer: individuals who use social media to build an audience of followers capable of being mobilised online and in the community to achieve an objective.

Don’t get me wrong, I’m not necessarily endorsing the use of Twitter to conduct foreign policy. Trump’s untested foreign policy social media tactics are certainly a highwire act with enormous consequences. However, ignoring the substance, the strategy he is implementing is sound. In today’s world of influencers, it isn’t hard to imagine an Oprah Winfrey or even Will Smith leveraging their online influence to leapfrog establishment politicians in order to run for high office.

Matt Versi is the Chief Digital Strategist for digital media group, ImpaQmedia. Matt has worked across both the government and private sector advising organisations and industry leaders on their digital strategy, influencer branding and content creation capabilities. Find out more by visiting impaq.media.

Ontario: Still Canada’s biggest and best province

Province-of-Ontario-Canada

The province of Ontario is on the move, harnessing a historically rich and diverse economy to take full advantage of national economic conditions and continue providing jobs for a significant portion of Canadian workers.

Ontario is going through a period of change. In June 2018, Conservative businessman Doug Ford was elected premier of the province, ending a 15-year period of governance by the Liberal Party. It’s a change many Ontarians have been desperate for.
Ask any Ontarian and you’ll get a sense of how special this place is. A hive of vibrant multiculturalism and varied landscapes, Ontario has plenty to delight tourists and residents alike, and is home to about two in every 5 Canadians.

Historically, Ontario has a rich and diverse economy, the largest in Canada, with the province’s Ministry of Finance reporting GDP of over $830 billion for 2017, almost twice that of the next largest province, neighbouring Quebec.

It’s little surprise that Ontario has such a valuable economy. With a population of more than 14 million living across an area just over 1 million km2, it is the most populous province, and the fourth largest, in the country.

City-of-Toronto-Canada
In 2017, the Greater Toronto area added almost 70,000 jobs to the province’s 7 million strong workforce.

 

Size and diversity help the province excel in a number of different economic sectors, with manufacturing in particular playing a major role. Ontario is the leading Canadian province for manufacturing, providing almost half of the country’s manufacturing GDP in 2012.
As a significant part of North America’s manufacturing heartland, Ontario’s key manufacturing industries include automobiles, biotech, pharmaceuticals, medical devices, and information and communication technologies.

With manufacturing on the decline throughout the world, Ontario has suffered a significant loss of jobs in the sector since the turn of the century. However, the sector has remained strong, shipping more than $258bn worth of product in 2011.

The manufacturing industry is a key driver of jobs in the province. Ontario has the third highest number of manufacturing employees of any jurisdiction in Canada and the United States, behind only California and Texas.

The automotive industry is particularly strong in the province, with Ontario representing the largest sub-national automotive assembly jurisdiction in North America, with a recorded 88% of its vehicle production exported in 2011.

Agriculture forms an equally important part of the province’s economy, with Ontario being home to over half of the Class 1 farmland in Canada, the highest quality of land. In 2011, the province’s almost 52,000 farms made up nearly a quarter of national farm revenue.

The province also boasts an impressive innovation corridor along Highway 401, between Toronto and Waterloo, the second largest on earth next to California’s Silicon Valley, which employs 280,000 tech workers from around the world.

Other sectors that have continued to thrive through difficult conditions are forestry, which supports almost 200,000 direct and indirect jobs in Ontario, Mining, which produced more than $10bn in 2011, and the largest part of the province’s economy, the services industry.

Ontario is an important region for petroleum refining, and is the national leader for wind power. The Green Energy and Green Economy act of 2009 has helped the province make the move towards having a renewable-energy economy in years to come.

Recent reports on the province’s economy remain positive, with its major city Toronto in particular seeing something of a jobs boom. In 2017, the Greater Toronto area added almost 70,000 jobs to the province’s 7 million strong workforce.

According to the Financial Accountability Office of Ontario, the province saw an overall gain of 128,400 new jobs in 2017, its largest since 2003. Additionally, its unemployment rate dropped to 6%, representing the lowest rate since 2000.

In his new post as premier, Doug Ford has pledged to oversee a period of growth in the province of Ontario, proclaiming it ‘open for business’, with the promise of new jobs, lower taxes and less government waste.

The province’s growth is expected to slow a little this year, but with a fantastic economic infrastructure in place, and a number of sectors still leading the way, the province of Ontario is set to keep pulling its weight as a key player in the nation’s economy for years to come.

A sales opportunity for the ages

Cyclicality makes for many opportunities, many have made millions studying cycles, taking deliberate action to capitalize on turning points, be they peaks and troughs, or the birth of a new way of doing entirely new things.

Canadians who were owners of Blackberry’s till the iPhone came along, and “phone” is just a moniker for a pocket computer that also makes and takes calls. Not at all the way we did things 15 years ago. Each of these cycles individually offers many possibilities to become the next Blockbuster or Netflix, or many other B2B examples. But today we are, as we are now, at the cusp of a number of cycles converging, a “Perfect Storm” scenario that will have a transformative impact on how we sell and generate revenue. An opportunity to grab your board and ride the wave or be crushed by the same wave.

What follows is not an exhaustive list of a number of events that will, and others that may present themselves, which will test how people sell. Just think back to 2008, as everything was grinding to a halt, salespeople were stuck in unfamiliar territory, clinging to old ideas, ridiculing new ways, remember the initial reaction to The Challenger Sale, go back to what people were saying then, not their hype now (I love the internet, nothing goes away). It took sales a long time to recover, I had a front-row seat to the drama, but other than a fresh coat of paint and some new titles, little changed, and soon things were back to a familiar reality.

One way to look at it, is before Lehman Brothers if you asked a VP of Sales how he/she would address a revenue challenge, they would want to throw a body at the problem; today, they want to throw an app at the problem. They still haven’t addressed the problem, they are still throwing – just something new. Feels good, feels right, really fashionable. That was one economic cycle, a historical one no doubt, but not unpredictable.

The economy

As teased above, I think we are on the verge of many cycles converging that will reward the willing and flush out the also-rans. Let’s start with the above example, the economy. By every measure, we are in the most extended bull market in history, and the current expansion is asking for a breather. I am not a fortune teller, nor do I have to be to believe that we will experience some pullback in the next 18 months or so, even the R word. Add to that the realities unfolding to the south of us, it is not foolish to begin to think about switching modes.

The booming x’s

Contrary to popular myth, those who did best during and after the Great Recession, were those same sellers who were consistently achieving or exceeding quota. Based on the groups I am training, there are less and less of us, we reflect the population. Many of the managers I work with are great people, enthusiastic, and have learned to throw apps and bodies with the best of them. But they have not lived through a down cycle when doors are shuttered and getting in is a whole new ball game. Bob who would always take your call has ‘ghosted’ you. Selling, and more so, leading a sales team through that winter is an experience-based skill that many of today’s managers have had the chance to learn. The current flock and methods of selling have not been stress tested at all. If we examine the new “Disintermediated Sales Approach” used by most SaaS companies, mostly because it came from the mothership SaaS machine, while slick, has not yielded great results based on available public stats, certainly no better than in the days of Smith Barney. While revenues could, in fact, be greater, productivity on an individual rep level is different, especially when measured in practical ways such as conversion and closed MRR (not looking at retention here). Apps are making the hamsters lazy; it takes more hamsters to run the wheel. Coming out of the Great Recession, the pundits and sages were predicting our tribe would be reduced by more than half. An article on Selling Power asked “How Many Salespeople Will Be Left by 2020?“, now a dead link, gee, I wonder why. (I love the internet, you can try and pretend you didn’t say that).

It seems the tribe can’t reproduce fast enough. Every sales and even marketing related LinkedIn profile starts with “I’m hiring.” It seems people are getting good at throwing money at the problem. I saw one Sales Development Rep (SDR) with eight months experience, jump to the same role, different title, a 35% increase in base, base! Oh, new title, Supervisor, he’s going to groom others. To do what, jump ship?

Not taking away anything from any individual organization or seller, but how will this cohort whether one cyclical storm? What if two hit at once. If the tribal knowledge has moved on, what will help us weather the storm? To be clear, I am focusing on this not because there is no hope, we’re not doomed. But now is the time to deal with this. Yes, we all know we have to get ahead of it, not when it hits… and it will.

New expectations

As we continue to move into the GIG and Service Economy, salespeople will only have two levers to pull on, both require a change in the relationship they have with their own company if they are going to improve relations with their clients measurably. In the Service Economy sellers will have to focus on outcomes and experience, and I mean customer outcomes and experience. As the product disappears, reps have to sell the experience to buyers, both direct and economic beneficiaries. SaaS reps should be doing it now, but the volume is there. When the wack a mole days pass, it will be too late to transition to being a subject matter expert whose customers rely on because of the experience they perceive, and the outcomes you help them achieve. Product specs and pain points will be secondary to what you did for them in their market, how they measure it, and how they feel about it.

Many of your buyers are already experiencing this digital experience in their consumer life, as well as in their B2B interactions with other outward facing groups, customer service/experience as one. But is your sales organization digital inwardly, in their view of their customers, the customer’s market challenges/opportunities; are your reps aware of how they can help your customers give their customers a better outcome and experience using your service?

I could argue that there are a number of other real headwinds facing us in the next 18 – 24 months, these were but a couple. As sales leaders we are indeed at the most inviting times possible. Turbulence is coming, probably a storm, you have an opportunity many will not have, to truly transform your selling, top down, bottom up, but you need to act now, not when everyone is hip. The best buying is done when the market is down, the best time to introduce change is when you can afford to make mistakes, not when you are paralyzed by fear and zero budget.

Tibor Shanto works with leading B2B companies including Bell Mobility, Imperial Oil, and Pitney Bowes, helping them improve their sales execution and results. Called a brilliant sales tactician, Tibor works with clients to translate sales strategy to reality. Find out more by visiting www.TiborShanto.com.

Hope and tax cuts in Iowa

What can we learn from middle America? Gideon Rozner heads deep into Iowa to find out

Even by the standards of smaller airports, Iowa’s Waterloo Regional Airport is conspicuously spartan. One boarding gate, one baggage carousel and only two flights daily – both to Chicago. No taxi rank, no Uber for miles and the rent-a-car window is closed. I should have planned ahead.

A man at the information desk dials one of the few cab companies in the area. ‘It’ll be half an hour,’ he says. ‘At least.’

So I sit and wait, fiddling with my phone. Opposite me is the airport’s sole advertisement: A diorama showcasing the history of the John Deere tractor, with a sign inviting visitors to the company’s manufacturing plant. Hardly a thriving tourism industry, I think to myself.

I’ve come to Waterloo, Iowa to meet the man behind the Job Creators Network (JCN), a small business advocacy organization whose mission is to ‘educate employees of Main Street America, so we can protect the 85 million people who depend on the success of small businesses’.

The JCN was established by Bernie Marcus, philanthropist and founder of Home Depot, America’s answer to Bunnings Warehouse. ‘When I started the Home Depot, I was guided by two very basic rules,’ Marcus explains. ‘Rule number one, talk to your customers; rule number two, talk to your employees. I still believe in these rules, and I learned early on that my employees wanted to know what I knew. Let me be very clear about one thing: I never told them how to vote. I simply told them how policies and law could impact our business and potentially, their jobs.’

Today, the JCN speaks to and for small businesses and their employees on a national scale, and has solid policy wins to show for its efforts. Its high-octane ‘Tax Cuts Now’ campaign was instrumental in the passage of Trump corporate tax cuts by Congress in late 2017. Now, in the lead-up to this year’s midterm elections, the JCN is engaging in its subsequent ‘Tax Cuts Work’ campaign, underscoring the benefits of the tax cuts for middle America.

And that’s where I come in. I’m en route to the Los Angeles for an unrelated work trip, and a colleague has suggested that I meet with the JCN while I’m in the US. The only place our schedules cross is a JCN campaign stop in Waterloo, which is fine by me, of course. If nothing else, it’s a rare chance to see a bit of middle America. The ‘real’ America.

Bud Lite and John Deere

The voyage from Melbourne to Iowa has taken just over 27 hours, so it’s well into the afternoon before I wake up. Still, enough time to check out the town and get the lie of the land.

I’m staying on Main Street in the neighboring township of Cedar Falls, a short distance from Waterloo. It’s a gorgeous little town with clay brick footpaths and old-timey street lamps. There are restaurants – emptying out after the lunchtime rush – shops, bars adorned with neon signs for Miller and Bud Lite, community banks, law offices and a public library. Main Street, USA – literally. That vital slice of the American economy that sits between Wall Street and Silicon Valley.

And the place looks quite healthy. Functional. Far from the desolate, ruined landscapes that have been documented by the likes of JD Vance in Hillbilly Elegy. This does not look like a town that has succumbed to welfare dependency, drug addiction and existential despair. Somehow, Cedar Falls has survived.

The next morning, I check out and head to the JCN rally. The cab situation is even worse than it had been at the airport, but Ron, a fellow hotel guest, offers me a lift. I hoist my baggage into the boot of his SUV and we head off into the suburbs. The houses, the nature strips, the cars in the driveways – all modest, but clean and well-maintained. More evidence that Cedar Falls is faring quite well.

What’s driving this town, I ask Ron. ‘John Deere,’ he says as we hit the freeway. ‘Been here 100 years. It’s the biggest employer.’

So, it turns out that the John Deere factory – the advertisement for which I sniggered at a couple of days earlier – is actually a big deal, employing more than 5,000 locals.

Obviously, John Deere is the economic lifeblood of the whole metropolitan area. The kind of business that has collapsed elsewhere, under the weight of tax or red tape or unreasonable wage hikes or any other manner of bureaucratic interference. The kind of business routinely demonized when it gives in to the commercially understandable impulse – and too often, need – to relocate to a place in which doing business isn’t so damned difficult. That’s when the community collapses – when the jobs go. But Cedar Falls and Waterloo still have John Deere, jobs, an economy. They still have the liveliness and richness that comes from prosperity and the dignity of work.

Ron agrees with me, to a point. ‘Yeah, but we’re not growing either.’ Why’s that? ‘Taxes,’ he says. ‘State taxes. A lot of the other states are basically buying businesses by lowering their state corporate tax.’ (Competitive federalism does work after all.) ‘Politicians here seem to think that companies are going to move to Iowa for the lifestyle. I got news for you, buddy, it ain’t gonna happen.’

editorial-institute-of-public-affairs-ipa
The rally opens with a couple of small businessmen speaking about the ways in which the Trump tax cuts have affected them personally

Honk if you like tax cuts

Ron’s GPS indicates that we’ve arrived at the venue for the rally. I cautiously disembark, looking around at what appears to be the middle of nowhere. A small warehouse, surrounded by cornfields. Off in the distance, a great pile of coal. Not exactly Madison Square Garden.

I head into the front office. I’m here for the rally, I tell the bloke behind the desk. ‘Yes, of course. The Aussie! (that’s me)’ he says. ‘You’re early. I’m Erik, by the way.’ Erik is the owner of Jerald Sulky, the manufacturer of what he calls ‘the Maserati of horse-drawn vehicles’. He gives me a tour of the warehouse. ‘We export to countries all over the world,’ he explains.

Before long, the campaign bus pulls up. It is an impressive vehicle, bearing all the hallmarks of the glitz and pageantry of American politics. Tax Cuts Work and JCN logos are emblazoned on the side. On the back, an invitation for passing motorists: Honk if you like tax cuts!

Attendees begin to arrive. There are only about 20 or so locals, but I’m advised that thousands will be tuning to the live stream on social media. There are also print journalists, camera crews and hangers-on. A troupe of protesters pull up, hauling a giant inflatable chicken apparently intended to resemble Donald Trump, but this rally is on private property, so the protesters are too far away to be noticed.

The rally opens with a couple of small businessmen speaking about the ways in which the Trump tax cuts have affected them personally. First up is Walter, the owner of a bar in downtown Cedar Falls.

‘The thing that I got into business for was to be able to take care of my employees as well as to pass something down to future generations,’ Walter says. ‘I’m sure there are many of us out there who’ve been a server or a cook before, or in the service industry in general, and some may ask: “How does this tax cut for corporations or small business help me be able to pay the bills?” And to that I would say that it allows me to get more money in their pockets by offering more incentives for raises, more opportunities to allow them to grow in an industry that traditionally has high turnover.’

Erik goes next, telling the story of Jerald Sulky. Even though the Trump tax cuts haven’t kicked in yet, Erik is already seeing the flow-on effects.

‘Our largest dealer called me up about a month ago and says: “Do you think I should send Trump flowers or a fruit basket? This is the best first quarter of orders I’ve seen for your product in 20 years.” He said all of his floor stock is sold and he’s excited for us to get more orders out to him.’

Erik and his wife have gone years without drawing a salary, and even spent some time sleeping in the factory’s conference room. Thanks to the boom in business, they are looking forward to the company becoming profitable. ‘When we get to see profit, we’ll be very grateful that Washington DC is the junior partner in our income, not the other way around,’ Erik says.

Last is Rod Blum, the local congressman, Tea Partier and passionate supporter of the Trump tax agenda. ‘I cannot believe the amount of misinformation that has been put out to the public about the tax bill,’ he says. ‘My political opponents suddenly got fiscally conservative, suddenly started caring about the debt and deficit. You never hear about that, unless it’s about letting people keep more of their money. It is not the government’s money, we forcefully take it from you. So the misinformation is that this is going to cost a trillion and a half dollars, that it is going to bankrupt us. Hogwash.’

Blum cites the growth in government revenue that occurred after tax cuts by the Kennedy and Reagan administrations. ‘All we need is half a per cent GDP growth for these tax cuts to pay for themselves. Our problem in Washington is spending. It is not that we’re bringing in too little tax revenue.’

All of this is hauntingly similar to the debate over corporate tax cuts back at home; the arguments from the left sound almost identical. But what is different is the response from the right. And the difference is not necessarily in what the congressman is saying – as articulate and impressive as he is. It is the speakers who preceded him and the fact that the rally highlights the real, human stories behind the policy. It is a stark contrast to supporters of tax cuts back at home, who too often revert to dry economics or, at best, glib sloganeering in a high-vis vest. Rallies like this are the reason Trump’s seismic tax cuts steamrollered themselves onto the statute books.

I join Blum afterwards in the campaign bus. He is gregarious, open, and brimming with rare authenticity. Blum is up for re-election in November, and holds the American equivalent of a marginal seat, beating the Democrats last time around by just 3.7 per cent. Conventional wisdom is that he is in a precarious position, given the tendency of mid-term elections to go against whichever party occupies the White House. But you wouldn’t know it from talking to him. Sitting in the campaign bus across from me, Blum has the calmness and self-assurance of somebody who knows that, come what may, he is doing the right thing.

And there is ample evidence that Trump’s tax agenda is the right thing. Economic data abounds proving that the prosperity enjoyed by the likes of Walter and Erik is a national phenomenon. Unemployment is at an 18-year low. As at June, average earnings are up 2.7 per cent over the past 12 months, with over 300 companies increasing wages or benefits for workers as a direct result of the tax cuts.

Under Trump, the jobless rate for African-Americans has fallen to its lowest level on record – no mean feat for a supposedly ‘racist’ president. Even the New York Times – a credible but left-leaning outlet – begrudgingly ran the headline: We Ran Out of Words to Describe How Good the Jobs Numbers Are.

Is the ‘big end of town’ benefitting from the tax cuts? Probably, but that’s beside the point. In a country that has been hollowed out by the scourge of joblessness, the biggest winners are the thousands of Americans who are going back to work.

Small business heroes

Finally, I get around to the purpose of the whole trip: My meeting with Alfredo Ortiz, president and CEO of the JCN. We’re on the same flight out, and arrive at the airport a couple of hours early. The café is closed, so we sit down with a couple of Diet Cokes as the vending machine hums a few feet away.

Alfredo points out that, as with most of the JCN’s rallies, Congressman Blum was the last speaker, not the first. ‘We make it about the people,’ he says. ‘We didn’t host today’s rally for the congressman. Our heroes are the small business owners. It’s their stories that we highlight: The 20- hour days, mortgaging the house for finance, going 12 months without a salary. That’s what we like to talk about, the blood and the sweat and the tears and the toil.’

We head towards the tiny propeller plane that will take us back to O’Hare airport in Chicago. From there, I head to Los Angeles and Alfredo goes on to a meeting at the White House. We shake hands as Alfredo takes his seat and I head towards the rear, take out the iPad and start tapping out my notes.

I don’t have long. Soon enough, a flight attendant asks me to raise my tray table as the plane taxies, takes off, and middle America disappears from view.

This article was originally published by the Institute of Public Affairs: www.ipa.org.au.

Ermineskin Resource Development: Connecting industry with the Ermineskin Cree Nation

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Ermineskin Resource Development works to create employment, business opportunities, training programs and contracting, all while ensuring oil and gas companies respect the needs, traditions and way of life of the Ermineskin Cree Nation.

Trevor Saulteaux is the Vice President and Operations Manager of the First Nation owned and operated company. In an exclusive interview with The Canadian Business Quarterly, Mr Saulteaux details how organization, legislation and documentation enables the company to create partnerships that benefit both industry and First Nations people.

Starting a company

The need for a body like Ermineskin Resource Development arose when Consultation Director, Carol Wildcat, began noticing opportunities from her position as first point of contact between the nation and industry. “If any oil and gas or pipelines were in our territory, all over Alberta, or within our reserve, they had to consult with Carol,” Mr. Saulteaux said.

“We both worked with industry, she as first point of contact and I as the second phase of her strategy. She requested from our Chief and Council that we join forces, and from that point we opened up our Economic Development offices.”

I made sure that the company had the proper qualifications within industry to qualify as a business-based company. I helped start, and gave us the grounds to use the consultation to do negotiations and talks for traditional territory and any business opportunities.

When the business began in 2009, the Alberta government was not initially proactive in notifying the Ermineskin Cree Nation of upcoming opportunities. Fortunately, Carol Wildcat was able to implement a successful strategy to declare intervener status from the beginning of any buildings or infrastructural changes taking place on the land in which the nation hunts, picks berries and produces medicines. The result was that a negotiation process between oil and gas companies and the Ermineskin Cree Nation became vital to the progression of any operations in the area.

The Ermineskin nation creates an intervener status, which forces the company to come to us and listen to what we have to say. Then after Carol has completed her negotiations she allows the company to add that checkmark to their consultation obligations.”

Ermineskin Resource Development

As a main producer of oil and gas, the Ermineskin Cree Nation is able to quickly and reliably compare the needs of oil and gas companies with its own land uses.

“Our area is rich in resources. But if it’s on our land, we have an approach that you’re in our backyard’, and as such you have to accommodate our opinions and requests. We always do it professionally and come up with a good opportunity that fits both [the business’] needs and ours.

One of Ermineskin Resource Development’s main objectives is to provide employment opportunities for its population of 4,500. “We don’t want to have to explain to our members when they look at their backyards and see that somebody who lives two hours away is doing the work that they could be doing.

Companies currently conducting work in the area include ATCO, Canadian Natural Resources and Imperial Oil. The work is channeled through Ermineskin Resource Development as an incorporated company with a limited partnership agreement with the Ermineskin Cree Nation. Operating in this way both reduces risks and liability to the First Nation, and allows the company to partner with larger firms in order to manage projects too big to approach on its own.

We’re a small First Nation and a small company, so we partner with companies which have experience with First Nation and who are accommodating in making sure that everyone is happy. They hire our people, we get subcontracting opportunities, and they are made more competitive in their contracting. We make sure that these companies are well known and that we happily work with these companies, and they give us a revenue stream, training and employment.

Reclamation at Pigeon Lake

Ermineskin Resource Development’s recent work with the Pigeon Lake Reclamation Program is a perfect example of its efficacy. The 10 to 15-year project with Imperial Oil is aimed at cleaning up the lake and surrounding area. The company’s entry into the project involved negotiations which would lead to the inclusion of many First Nations employees.

We negotiated that all the work is done by the First Nation for this ten-year project. That started two years ago, along with two other First Nation companies doing reclamation and remediation. We started out with some reclamation off-reserve, which we were very happy to do. We cleaned up a site with contaminated soil, loading the soil on trucks to be cleaned or disposed of properly, and bringing back clean soil.

With the process of reclamation, we also bring in a First Nation aspect. With reclamation, you are putting that land back to its natural state, but that’s often within what western science deems necessary. We add in a traditional way of looking at it, some traditional medicines we want to harvest and grow are considered, some plants and trees or things which attract wildlife to restore hunting and trapping areas are also included.

Mr. Saulteaux explains that the company is always looking to diversify, and posits that as it grows and is able to find more and larger opportunities, its ability to best serve both First Nation people and oil and gas companies will become better and more efficient.

We do business to create more business. We want to impress [the businesses we work with] and leave both parties happy at the end of the day.”

Find out more about Ermineskin Cree Nation by visiting: www.ermineskin.ca.

2018 Ontario General Election: why did Ontario’s voters elect Doug Ford?

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Ontario’s voters took to the polls in June to express their dissatisfaction with the Liberal Party’s governance under Kathleen Wynne, expelling her for Conservative populist and successful businessman Doug Ford into the premiership with an impressive majority.

A few days before the 2018 Ontario General Election, Liberal Party leader and premiership incumbent Kathleen Wynne’s forthcoming loss of the party’s fifteen-year stronghold on the province was all but confirmed.

Less than a week before polling day, the soon-to-be-outgoing premier was conceding defeat, giving an emotional speech in which she told voters she had no idea who the next premier would be, but that she was “pretty sure it won’t be me.”

The speech was a response to damning polls that suggested the Liberals may be lucky to walk away from the election with a single seat in the Legislative Assembly, an outcome which once seemed improbable but was now becoming all too real a possibility.

Wynne took to the podium to deliver a last-ditch plea for voters to elect enough Liberal MPs to ensure a majority government couldn’t be formed by populist Conservative candidate Doug Ford or New Democratic Party leader Andrea Horwath.

History tells us this plea was too little too late. Ford went on to win 76 of the 124 seats on offer in the legislature, securing a majority government and becoming the 26th premier of the province of Ontario.

Kathleen Wynne couldn’t have had a more humiliating fall from grace. After the huge success of the 2014 election, where she became both the first female Premier of Ontario, and the first openly LGBT Premier in Canada, the manner of her demise was significant.

The loss not only ousted Wynne from the premiership, but consigned her party to its most devastating defeat in its 161-year history, with seats reduced from a majority 55 to just 7, one less than it needed to maintain official party status.

It’s not hard to see why Ontario’s voters turned their backs on Wynne so ruthlessly. For some time, there had been growing apathy for a party that had been governing the province for 15 straight years. Many voters felt the time was right for a change.

Much of this apathy stemmed from an air of arrogance that has been hanging around the Liberals for years, most notably since Wynne took over as leader, and a failure to acknowledge key political mistakes the party had made.

In truth, a Liberal victory never looked on the cards. By the time Wynne delivered her concession speech, it was clear those at the top of the party had realised just how much voter confidence it had lost, and that there was little chance of competing.

The Official Opposition was formed by the NDP, which saw impressive gains in the Legislative Assembly since 2014, and whose leader Andrea Horwath was every bit a contender for the premiership as Ford. For many it was a surprise to see her lose out.

So why did voters put their faith in Doug Ford in such huge numbers? Ford had long been dismissed as the ‘controversial’ candidate, with a number of high-profile stories, including being sued by his late brother’s wife, arising while he was still on the campaign trail.

Ford’s brother was the infamous Rob Ford, former Mayor of Toronto, whose troubled legacy still remains fresh in many Ontarians’ minds. Ford’s connections to a chaotic family were the subject of much discussion, often threatening to render him unelectable.

But as Liberals shied away from directly attacking Ford’s person, they instead succeeded in bringing greater attention to his policies. A slew of campaign ads questioning what effect a Ford premiership would have on working-class Ontarians did little to help the cause.

There is certainly plenty of evidence to suggest that Wynne and the Liberals were guilty of losing the election, rather than Doug Ford doing anything particularly impressive to win it. But that’s not to say Ford didn’t play his part.

It might be an over-simplification to suggest that the Conservative win was further evidence of a distinct shift in global political mood, veering towards conservative austerity and away from liberal values, often seen as harmful to business and the economy.

It’s true, however, that the Liberals pre-election budget proposing billions of dollars in new spending for free childcare and expanded coverage for dental care was largely seen as extravagant. Ford, a successful businessman, considered this to be excessive.

Both Liberal and NDP platforms forecasted at least another half-decade of deficits before the economy would improve, but Ford and the Conservatives stuck their neck out by promising just a single year of deficits until spending was brought under control.

kathleen-wynne-former-ontario-premier
Kathleen Wynne couldn’t have had a more humiliating fall from grace.

 

Ford’s fiscal confidence struck a chord with voters. Having already shown himself to be an astute businessman, his plan to conduct an audit on what was considered a free-spending Liberal government cemented this reputation amongst his supporters.

As Ontario’s populist candidate, and one with the kind of slim political credentials that had many people giving him no chance of winning, Ford spent plenty of time with the people of the province during his campaign, determined to win their trust and their votes.

In an election largely recognised for voters being emotionally rather than ideologically influenced, Ford took full advantage of a disillusioned voter base. Anywhere was up in comparison to the Liberals, and Ford put himself in the best position to capitalize.

In the run-up to the election, the Huffington Post published a poll that suggested around half of voters were motivated by blocking the party they didn’t like rather than supporting one that they did. The Liberals were the ones to block.

With Liberal votes effectively split between Ford and Horwath then, it was little more than a matter of staying in the race and maintaining visibility with the people, something Ford did with aplomb.

It remains to be seen how far Doug Ford will succeed in delivering on his ambitious campaign promises, but what has already become clear is that the Liberals didn’t do enough to retain voter confidence. It will likely take a long time for the party to recover.

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Devonian Health Group (TSX-V:GSD): Efficient botanical drug development

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TSX-V listed company Devonian Health Group is a late-stage botanical pharmaceutical corporation that utilizes innovative therapeutic approaches designed to target unmet medical needs across the globe, following a more efficient drug development pathway for prescription botanical products.

President and CEO Dr André Boulet has vast experience in the pharmaceutical and biotech fields, standing out by combining strengths in applied science, business and finance. Since 2005, Dr Boulet has been leading the development of the technology and products owned by Devonian Health Group, raising more than $40M in private and public equity. Here he talks to The Canadian Business Quarterly about the benefits of working with botanical drugs, the company’s new science-backed cosmeceutical range, and the exciting avenues for growth in Devonian’s future.

Vast experience in drug development

Dr Boulet achieved his PHD in physiology at Québec’s Université Laval, before moving to the United States to undertake postdoctoral study in biochemistry-biophysics at the University of Pennsylvania.

“I worked in the pharma world for quite a few years,” Dr Boulet says. “I managed the clinical trial development of different drugs within Marion Merrell Dow. I went then back to school at York in England as a trainee in economics, in the Pharmacoeconomics department.”

After his economics education, Dr Boulet went on to lead the reimbursement program on a number of products for Hoechst Marion Roussel, before becoming partner in a venture capital fund in Montreal called BioCapital.

“Then I found [the] technology which is now in the Devonian Health Group,” he says, “and I financed it with myself, my family and my own angel network – with $50m invested in the company.”

Having worked in botanical drug development before, Dr Boulet started the company by taking advantage of new FDA regulations in the US allowing companies to use plants to develop prescription medicine.

“Devonian Health Group started as a botanical drug company, with at the beginning only one product, which was the anti-inflammatory drug we have in development right now, and we had a vision to have also a cosmeceutical unit.”

Working with plants often leads to the discovery of byproducts with additional applications. This was the case when the company discovered R-Spinasome®, a patented anti-oxidant molecule that became part of its Purgenesis™ anti-aging cream.

Devonian Health Group went public in 2017, and conducts drug development with the aid of research from the University of Québec, where a chance discovery by a student found that part of the molecule they were working on was an anti-inflammatory drug.

The company works with four plant types onsite at its extraction facility in Quebec, the only one of its kind in Canada, purpose built in order for the company to safely run botanical drug developments.

With the risk of contamination surrounding botanical products, Devonian could not find a pharmaceutical facility willing to house its materials during the trial, and was forced to design its own sterile facility to accommodate them.

Faster and cheaper development

“Botanical drug development is an interesting field when you come from the pharma world,” Dr Boulet explains, “because it allows you to move much faster and less costly than regular drugs in what we call the New Chemical Entities (NCEs).”

These significant benefits were evidenced during both Pre-clinical and Phase I of the group’s Thykamine™ development, both of which were completed within eighteen months, as opposed to the 3-5 years it would usually take for an NCE.


“It saves a lot of time and money to reach the proof of concept. Phase II is the key component of drug development, where you realize if the drug works or not, and then [in] Phase III the regular rules for an NCE apply to a botanical drug.”

The group is currently using its anti-inflammatory drug, Thykamine™, to develop a treatment for ulcerative colitis, for which it has completed a Phase II proof of concept, and is moving into a larger Phase II next year to continue development.

“We have an ongoing Phase II clinical trial in eczema, it should be completed in the coming months. We’re going to move then into the pediatric population, because physicians don’t want to prescribe corticosteroid to kids.”

In addition, the company is developing a product to treat radiodermatitis, relevant to the nearly 50% of cancer patients receiving radiation treatment. Around 95% of these patients suffer from radiation beams burning the surrounding tissue of the affected area.

“We have a very good program there, where so far, we have some preliminary data, we protect the surrounding tissues, so obviously it would be a medical device application – so this is ongoing as well.”

Also in Phase II is a program for treating inflammatory acne. The group is developing a specific formulation which would include Thykamine™ to help nearly 85% of adolescents who are affected by acne.

“At the end it will have taken about six years to develop the [eczema and colitis] indications,” Dr Boulet explains, “with an overall cost of $90-100m, compared to a New Chemical Entity which is now, as reported by the pharma industry, close to $1bn.”

The power of FDA approval means that North America is a significant focus. Once a drug is FDA approved, it’s approval rate across other countries increases dramatically as other agencies follow suit.

“We will file all the reports to all countries around the world, probably not alone but with a partnership with big pharma. There are quite a few botanical drugs already on the market worldwide, so the big [pharmaceuticals] are coming there.”

Science-backed cosmetic range

In addition to its therapeutic developments, Devonian Health Group is developing a cosmetic range, Purgenesis™ Cosmeceuticals, working on the basis that cosmetic products backed by science have the greatest market potential.

“The anti-aging treatment [we have developed] is patented,” Dr Boulet explains, “and everything we do, we do at the pharmaceutical standard, which that means it’s double-blind clinical study.”

This means that every one of the group’s cosmetic products will be compared in a double-blind clinical trial to prestige brand products. With the anti-aging cream, the results of this process have made it clear that Devonian is handling things a little differently.

“We’ve been told that we are the first company in that world that is mentioning that there is a placebo effect, and the massage effect around the eyes that treats the wrinkle. This is why we are marketing these products to Canadian dermatologists only.”

Additionally, the anti-aging product has been accredited by the Canadian Dermatological Association, making these products the only ones sold by dermatologists across the country to have been so.

“It is very good for us, because they market to physicians, and they have a network of dermatologists, so the goal here is we deal only with physicians in everything that we do at Devonian.”

Devonian Health Group head office

 

As a result, dermatologists have become aware that the company has further sun-care and skin products in the pipeline, offering photoprotection against Blue light, Infrared A and UVA/UVB, lending extra credibility to its product offering.

With a stretch-mark program on the way as well, Devonian has a few formulations that will reach the market by early- or mid-next year, promising a sales increase. Additionally, the company has recently been awarded the Best Anti-Aging Skin Treatment Technology 2018 from UK-based LuxLife magazine.

A growing business

Early in 2018, the Devonian Health Group acquired a specialty pharmaceutical company called Altius Healthcare, which was focused on acquiring and in-licensing safe and innovative medicines and healthcare products.

“They reviewed what we had in our pipeline, and we sat together and they said there was [a chance] to keep sales in Canada for Devonian, because globally the sales in Canada represent only 3% of the market.”

With such a small market share, Devonian benefitted from Altius’ sales and marketing acumen, which helped the company keep the Canadian share away from big pharmaceutical companies.

“When we develop a drug, it’s always good to have feedback from the sales and marketing people, to be sure that we collect the data we will need, and also if we are targeting the right [areas] from a marketing point of view.”

In addition, Devonian benefitted from the existing structure within Altius, which had existing sales of around 10 million, helping attain between $1.5-2bn in revenue, which the company was able to put into holding to decrease the need for new investment.

“Right now, obviously Altius continues to license the distribution of NCE and other products for the Canadian market,” Dr Boulet says. “We bring them our pipeline, so there will be growth in the revenues there.”

Further growth will come from the expansion of the company’s botanical drug program, which it expects to see grow rapidly over the coming years as the demand for botanical products for humans continues to rise.

“We expect to have another arm, which is animal health. As people see companion animals as family members, Devonian’s goal is to offer innovative medicines to the entire family. We are coming with products there. Our Thykamine™ has application on the vet side, because the largest market in veterinary is the one with eczema for dogs and cats.”

In the long term, the company is keen to expand as wide as it possibly can within its field. “The full name of the corporation is Devonian Health Group – so we really want to be a health group [which brings] new innovative products in human and veterinary, all validated through a pharmaceutical development pathway.”

Find out more about Devonian Health by visiting www.groupedevonian.com.