Woolworths ill-considered foray into the home hardware business has ended in disaster with losses of 1.300,000,000! I cant imagine how you could lose so much, let alone the cost of the misery of lost jobs for the Masters staff and their suppliers.
What you see in the Masters debacle is a practical example of the error of line extension. It goes like this; We sell stuff in our supermarkets (Woolies), we do it well. Hardware stores like Bunnings have supermarket style processes and therefore we will be just as excellent and profitable if we build a chain of hardware stores (Masters).
Except its not true. The businesses are similar but different and skill, experience and profitability in 1 doesnt necessarily mean similar results in others.
Nevertheless the idea that successful businesses can extend their product line and enjoy equal success is beguiling. The Federal Government have found the concept attractive and, at least for people with disability, to the very real cost of results in employment services:
How might the thinking have flowed? - We privatised generic employment programs, that went well, therefore opening up the privileged position of disability employment services will mean tremendous gains as the efficiency of the private sector removes the soft fat from community services in other words organisations with no history in disability employment but demonstrated ability in what at least appears similar are just whats needed to improve results.
To some extent the thinking has merit and is reflected in what happened. However, you only have to look at present results to see that the myth of line extension in practice. Disability Employment Services deliver less than 3 years ago (significantly) in a larger economy with greater acceptance of workers with disability.
The smears that tarnished the reputation of excellent providers (poor performers) are shown clearly to be false.
Actually, Disability Employment Services (DES - like NOVA) have totally different skills sets, requires different attitudes and actions and behave very differently from generic employment services to succeed. 5 Star Job Active providers with 3 Star DES programs (and these results need close scrutiny).
Recognised for a failed experiment, Woolworths are going back to core business.
The same is true for disability employment. Its interesting to note that things knocked back (like the treatment of DSP voluntary jobseekers) as impossible, impractical and ineffective are now going to be used to return choice and opportunity for people with disability.
On the 6th of December 2012 I wrote to the then Minister (Kate Ellis) begging for the talent and commitment of hundreds of workers in the sector and the jobs of thousands of workers with disability to be maintained through the initiative now introduced by the current Minister (Jane Prentice).
The reply I got essentially told me to be quiet, the Stars were infallible and the high performing services were entitled to freedom of action.
Not so, the results tell a different tale.
Failed!
Failed to the cost of people with disability.
Lets hope that the initiatives heralded by Peter Broadhead (DSS) and flagged by Minister Prentice are quickly introduced so that philosophically sound and commercially savvy programs can be exposed to the marketplace and allowed to improve outcomes for the people they most want to care for.
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