Thursday, August 16, 2012

Who was minding the ICBC store?

A government internal audit has apparently discovered mismanagement at ICBC. The Crown corporation president is leaving, and it has pledged to chop 135 management positions by June 2014. The report found that between 2007 and 2011 the corporation reduced union ranks by one per cent, but added 32 per cent more management positions. The compensation costs for management increased by 50 per cent over five years, while union compensation costs increased by nine per cent.
In part, the review found, that was because managers had a "generous" bonus plan "with easily met criteria resulting in almost all staff receiving them." Management pay, perqs and benefits were also more generous than other branches of the public sector.
"A culture of cost-containment and financial discipline has been lacking in recent years," the audit found. "ICBC's expense policies are generous when compared to the B.C. public service with exceptions approved by senior management."
Finance Minister Kevin Falcon said he was unhappy, and things had to change. But he's been the minister responsible for ICBC since March 2011. Shirley Bond and others were responsible before him. They could have read the annual reports and asked some questions.
And, of course, the Liberal government appointed the board of directors, including party supporters, who bear responsibility for the corporation's direction.
Then there's the legislature committee on Crown corporations, with MLAs from both parties tasked with providing oversight and direction.
Except the premier's office decides if they can meet. And the Crown corporation committee hasn't met since 2008. (The education committee hasn't met since 2006; the aboriginal affairs committee hasn't met since 2003. MLAs are named to the committees every year, there are important issues they could examine and committees in other jurisdictions are an important part of the democratic process. Not in B.C.)
If the corporation has been mismanaged, it means the government failed in its reponsibility.

And another thing:

The Liberal government's internal disorganization and scandals have played a significant role in these problems.
Since 2007, seven different ministers have been responsible for ICBC - Falcon, Bond, John Van Dongen (now a Conservative), Kash Heed, Rich Coleman, John Les and Iain Black. None of them had time to become knowledgeable, and the board faced a succession of new ministers, none of whom were around long enough to make a difference. It's an irresponsible way to manage a critical Crown corporation, and a symptom of the chaos that has afflicted the province since the 2009 election.

Sunday, August 12, 2012

The marketing folly of renaming Copan Ruinas

President Lobo in Copan Ruinas    La Prensa
As a stranger here, I struggle with how much to rely on my observations about Honduras, based as they are on limited information (and given my bad Spanish).
For example, it has struck me that Hondurans don't get marketing. But that's based on limited experience in the country, and I wondered if I was just wrong.
Then President Porfirio Lobo came to our town Thursday, and bolstered my confidence in my judgment.
The president was in Copan Ruinas to celebrate the International Day of Indigenous Peoples at the archeological site. And, out of the blue, he proposed renaming the town.
They aren't Mayan ruins, he said, they are a holy site. Lobo said he doesn't like the name and the government should change it to Copan Galel, recognizing a Chorti chief - the Chorti are considered descendants of the Mayans - who led an unsuccessful resistance against the Spanish invaders.
But Copan Ruinas is one of probably three Honduran destinations that international tourists might have heard about. (Roatan and Utila, beautiful Caribbean islands with great diving, being the other two.) The Mayan ruins, a kilometre outside town, are spectacular, if still not widely enough known.
Changing the name would damage a Honduran tourism industry that's already struggling under the triple whammy of the global recession, lingering effects of the 2009 coup and Honduras' unhappy claim to the highest murder rate in the world.
Tour operators would be offering a chance to visit Copan Galel, a place travellers had never heard of, in a country they had mostly heard bad things about. It is, as local reaction quickly confirmed, a really bad idea, especially from a marketing perspective. Critics also noted there are a lot more serious issues facing the country, and its impoverished indigenous population, then our town's name. (As a Canadian, I'm no position to comment on the lives of native people in any other country.)
My observation that Hondurans don't get marketing was based, until Lobo's anouncement, on random observations.
My bus trip to Tegucigalpa last week reinforced one of them. Near Lago de Yojoa, a beautiful lake, there was about a three-kilometre stretch of roadside highway vendors - all selling big heaps of pineapples and bananas in exactly the same way. No one made even a tiny effort to offer a selling point - a price, a pledge that the pineapples were fresher or the bananas a better variety.
It's the same in Copan, where melon season brings three or four pickup trucks heaped with melons, all the same and all at the same price. No one has a little sign saying 'Picked this morning' or 'Organic.' No one plants a different variety that will ripen a little earlier, or later, than the rest.
Honey is always sold in recycled, 26-ounce glass bottles. No labels. Just big bottles of honey, on roadside stands or sold door-to-door.
So if you buy from one woman, whose hives are in a great location beside a meadow rich in sweet flowers, there's no way to try and buy from her again, because there are no labels. No one does a banana honey, or dark honey, or tries small, stylish jars to sell to tourists.
It's all honey.
During Spanish classes, I talked with my teacher about corn production in the many small farms around the town. Most of it is for the family - corn, as tortillas, and beans provide 81 per cent of the total calories consumed in the basic Honduran diet.
But any surplus is sold. Farmers can process the corn in two ways. After the corn dries on the stalk, they can husk them, pick out the bad kernels, put the ears in a net bag and beat them with sticks until the kernels come off. Or they can put the whole ears in a machine that strips the kernels.
Machine processing, my teacher said, is faster but the bad kernels - bug-damaged - aren't culled, and the corn can spoil more quickly.
So, I asked, do you charge more for hand-processed corn?
The answer was no. The better corn sells a bit more quickly. But in terms of price, corn is corn.
It's not just agricultural products. Furniture makers all produce more or less the same kinds of tables and chairs at the same prices. I went to a workshop for producers on increasing value, and the notion of design as a sales tool, or trying different products, was not really on their radar.
Restaurants, hotels, stores, people offering horseback rides - few operations appear to have given much thought to letting people know about their businesses, let alone offering a reason to choose them.
We've gone too far the other way in North America, with marketing more important than the actual product or services. New, improved, life-changing - the hype is largely empty, and expensive.
But finding ways to add value - to get just a little more for your products, or labour - should be on the agenda for Hondurans and their businesses.