We were warned in February 2006...why did we not act?

On Sunday, February 05, 2006, when some US media commentators began thinking about their own economy, Why The Economy Is A Lot Stronger Than You Think, I challenged their perspective:

"...Are we measuring the right aspects of our individual economies?"

The commentators were talking about missing data...I was talking about measuring the right things...measuring behaviours not activity.

Twenty months later the same problem has reared its very ugly head again...in the form of the current global financial mayhem.

Because of our personal short-term financial hells, many of us have been blinded to the core issue - the behaviours that have caused the problem - instead focusing on our perceived losses.

Former US Federal Reserved Chairman Greenspan said (October 23) that he had made a "mistake" in believing that banks in operating in their self-interest would be sufficient to protect their shareholders and the equity in their institutions.

Greenspan called this "a flaw in the model that I perceived is the critical functioning structure that defines how the world works."

Greenspan seems to have been unaware that the world is made up of humans. Countries are collections of humans in the same space, Teams are groups of humans with a supposed common interest (though we doubt this when they lose). Banks are structures employing humans with particular and common personal interests.

When we incentivise those humans in the banks with personal gain targets (otherwise known as bonuses and commissions) what do we expect will happen? That they will think of the national interest?

Any performance professional worth their salt will tell you that it is the aspects of a role that are measured that will drive the performance of the individual concerned. If we measure the profit the bank makes from the activities of an individual, in order that the bank can share that profit with them, guess what is going to happen?

Recapitalising, or offering guarantees, might stop the bleeding. It is only by changing the model that we can be sure the same problem will not occur again in the future.

Measuring Outcomes - Down-under Doubts

Tourism Australia has no bloody idea: report

...screamed the Sydney Morning Herald headline...with a pointed play on a key Australian Tourism marketing slogan.

A report by the Australian Federal Auditor-General's office, has found that the indicators used to measure Tourism Australia's performance are flawed. "They are primarily for the industry as a whole, rather than the success or otherwise of Tourism Australia's marketing activities," the report says.

In 2006–07, tourism accounted for 3.7percent ($38.9billion) of Australia's total Gross Domestic Product (GDP). To achieve that the tourism industry employed 482,800 people, 4.7 percent of Australian workforce.

The 5.6 million international tourists that year spent $A22.4 billion, just one quarter of the total $85billion on goods and services.

To put this all inperspective however, this was less than one percent of the world’s international tourists.

Tourism Australia, the prime tourism promoter best-known for its controversial "Where the bloody hell are you?" advertising campaign of 2006 featuring bikini-clad model Lara Bingle, has no accurate way of measuring the impact of its promotions., according to the audit. While that campaign was credited with higher tourist spending, visitor numbers dropped in the months following its launch.

Further, the Auditor-General's office says the indicators used to measure Tourism Australia's performance are flawed. "They are primarily for the industry as a whole, rather than the success or otherwise of Tourism Australia's marketing activities," the report says.

"Evaluating the impact of its projects ... would place Tourism Australia in a better position to measure its own effectiveness and impact."

On the operational performance front four internal audits and four external reviews into the awarding of creative development and media placement contracts in 2005 - worth $184 million - "did not include an assessment of whether the objectives of the contract had been achieved or the various projects undertaken within the contracts were effective", the report says.

But wait there's more! The AG's office found that Tourism Australia's Board did not adhere to its own charter for managing potential conflicts of interest.

So to pro-actively solve the problem the Board "revised the charter to reflect its practices".

The AG recommended the agency revise its conflict of interest procedures and review its performance management framework.

Tourism Australia has said it has accepted the recommendations and says it's taking steps to implement them.

But how does Tourism Australia actually plan and monitor its performance?

Well they have a strategy map! - page 6

Which includes a set of Outcomes and Key Strategies for Core Marketing Platforms:

• Increased intention and actual travel to and throughout Australia.


• Consumers are able to access and buy Australian travel experiences more easily.


• Australia stands out for its compelling experiences and is more competitive as a destination

Focused and somewhat measureable you might say.


Then they have a set of Outcomes for Core Enabling Platforms...and it all goes soft:

• People and Culture - Tourism Australia has a motivated, skilled and cohesive global team


• Insights and Planning - Tourism Australia staff, partners and stakeholders are able to make informed tourism and investment decisions. Stakeholders can assess how Tourism Australia is meeting its core objectives...

The performance-eye challenge (the pec challenge) - how are you going to know?

Their Corporate plan states:

"Tourism Australia has established a Performance Management Framework (PMF) through which it evaluates the performance of Australia as a visitor destination as well as our specific platforms and programs".

And how does it work? The structure, with one example is:

• Key Performance Indicator: Ensure Australia is thought of when considering travel
• Measured by: Brand Tracking
• Performance measure: Ranking for Australia on preference
• Base level (Year ended Jun 2006): UK: 5th, Japan: 6th, NZ: 1st, USA: 6th, Korea: 7th, China: 3rd, Germany: 7th
• Target Level (Year ended Jun 2008): Rank up 1: UK, Japan, USA, Korea, Germany Maintain top 3 rank: All others

And no, performance-eye has not changed anything...it is word for word! At the next level the performance measures? are even more interesting.

Key Performance Indicator: Tourism Australia complies with Government standards, regulations, internal policies and procedures
Measured by: KPMG Internal Audit Reporting
Performance measure: Corporate Governance audit ratings
Base level (Year ended Jun 2006): Compliance Recommendation Category 1 – Issues of concern from an external audit viewpoint
Target Level (Year ended Jun 2008): Compliance Recommendation Category 2 – No major issues which require management attention

And how does that link with their strategy?

And how did Tourism Australia respond? A search of their website for media statements = 0

"Where the bloody hell are you Tourism Australia?"