Wednesday, 24 June 2015

No Idea, Really?

Image via iStock
by Marcus Powe, RMIT's Entrepreneur in Residence

Where do ideas come from? Why do some turn out to be wonderful opportunities but others remain great ideas and never go anywhere?

The challenge is often to determine how these great ideas connect to people, markets, technologies, communities and societies in such a way that they then become wonderful opportunities. The first step is creativity. Adults have in many cases forgotten their creative skills, how to play with ideas, connect ideas and dream. Creativity is simply making connections others can’t – could these connections be your advantage? You cannot make these connections unless you take off your blinkers.

While many may not consider it professional, you have permission to play: Play with your ideas, thoughts and imagination. Mix things up to get different results. Make sure that you learn from your and others’ mistakes. Too many people take the traditional linear approach o business, the way it has always been, to achieve outcomes.

Entrepreneurs (or, if inside an organisation, intrapreneurs) have an enterprising mindset and  the ability to remove their blinkers so they see opportunities more clearly.

Did you know that if you are physically tired, creativity is not going to happen, if you are emotionally exhausted, its even worse, the blinkers are well and truly closed.

Rest. I dare you to stop being busy.

Only then can you ‘see’ and use the tools of innovation. The tools will help you, as an entrepreneur, decide which idea to invest in, and when and how it should be developed, adjusted, accelerated or held back. The tool kit developed will give you the ability to adjust your idea, business or organisation to help maximise its potential.

There are so many ways of growing opportunities; so many models, theories, rules, strategies and tactics – how do you have the time to remember them? What should you do first? In answer to this I have developed a very simple list called "the Cascade".

When you are challenged with the pace, turbulence and even the chaos of creating, developing and delivering opportunities, I envisage the Cascade will help prevent you from looking back if something goes wrong and saying, ‘How could I have forgotten that?’

Going with the flow or May the forces be with you!

The the power, simplicity and advantage of the Cascade can be used for all businesses, not-for-profit, communities, small, medium, large, clubs and societies. I have developed and used it for over 30 years.

It works.

I have found that people learning about business, innovation, marketing, entrepreneurship and strategy had learned many business models. But these models were always taught in isolation – meaning that people could never see how the models influenced one another, or connections between the models.

The models were generally taught with academic, not real-world, situations in mind. Once people had learned the models, they would go out into the market and realise that they had no idea why or when they should actually use them – the ‘so what?’ of the models. It was like they were taught how to put a car together, but never how to drive it.

The Cascade follows the idea of getting into a raft at the head of a river rather than the end. This river trickles down over a series of nice gentle steps, slowly and easily getting you to your final destination. Have you ever tried to paddle upstream? Going with the current is easier and smarter.

I like the idea of minimum effort for maximum results, and the power of simplicity over complexity.

Got a paddle?

Happiness is a positive cash flow.

Friday, 12 June 2015

The facts on Australian housing affordability

Housing in Australia: what's really happening? Image via iStock.

by Gavin Wood, RMIT University and Rachel Ong, Curtin University

Housing affordability, high house prices and rents are attracting plenty of media attention right now. The latest figures on house prices, mortgages, number of first time buyers and so on are dissected by journalists and commentators as if this is an issue of recent origin. In fact what we have here is a long-term structural problem that has been neglected for decades.

Back in 1982, the ABS Survey of Income and Housing revealed that 168,000 or 10% of home buyers spent more than 30% of their gross household income on housing costs. Nearly 30 years later in 2011 these numbers had soared to 640,000, equivalent to 21% of all home buyers.

The trends in housing cost burdens reflect rising real house prices. The history of house prices over this timeframe is one of booms in which real house prices escalate to higher levels than they peaked in the previous boom. Periods of house price stability punctuate these booms, and give household incomes some breathing space in which to catch up.

But at each peak in house prices, household incomes have fallen further behind. According to the same ABS data source, households in 1990 on average valued their homes at a multiple that was four times their average household income. By 2011 this multiple had climbed to nearly six times average household income.

A generational threat

It is therefore not surprising to find that young first time buyers are finding it increasingly difficult to purchase a home. As our first table shows, on a person basis the rate of home ownership in the prime 25 – 34 year age group has slumped from 56% in 1982 to only 34% in 2011. Delayed entry into home ownership is a factor, but it turns out that these declines have set in across all but the post-retirement age group. The “Australian dream” of home ownership is under threat.

Home ownership rate 1982-2011, in percentage terms

ABS Surveys of Income and Housing

How have we reached this position? To be sure population growth, low interest rates, deregulation of mortgage markets and rising real incomes have helped fuel the demand for housing, and pushed up real house prices. But there are deep seated structural problems that contribute to an inflationary bias in land and property markets.

Fiscal concessions in the form of capital gains and land tax exemptions to home owners, negative gearing and concessionary capital gains tax for “mum and dad” investors, and asset test concessions to home owner retirees offer powerful incentives to accumulate wealth in housing assets. As a result, the supply side problems are not so much about a shortage of housing, but an inefficient distribution of the stock of housing.

According to the 2010 Household, Income and Labour Dynamics in Australia Survey, roughly 1 in 6 Australian households own two or more properties, and for 30% of these households the second property is a holiday home. Growing numbers of ageing “empty nester” households are deterred from downsizing and releasing housing equity by stamp duty, the taxation of alternative investments of the equity released, and the lack of suitable housing opportunities in the communities they would like to stay in.

Meanwhile according to the latest census more than 100,000 Australians are homeless, and many more than this are struggling to meet housing payments.

The supply issue

Back in the early 1980s these fiscal drivers did not matter so much, because there were ample greenfield sites on which new housing could be constructed. These sites still offered reasonable access to amenities and jobs. But such opportunities are drying up, and state governments have introduced curbs on urban expansion, as well as developer charges and fees that have increased the costs of construction on the urban fringe.

Adding to supply side problems are planning controls that impede higher density development in middle ring suburbs, as “insider” home owners understandably seek to protect the “leafy character” of their communities.

We are left with a problem that has wider ramifications because it has created a housing system saddled with growing indebtedness. In the 21 years illustrated in the chart below the average mortgage debt has soared relative to the average household incomes of mortgagors in all age groups.

Mean mortgage debt to income ratio

ABS Surveys of Income and Housing.

Moreover, the proportion of home owners with outstanding mortgage debt has increased, especially in the 55–64 year cohort that is typically approaching retirement (see chart below). Interest rates were much higher back in 1990 and so household incomes in 2011 can comfortably service loans that are larger relative to household income.

Percentage of home owners with a mortgage debt

ABS Surveys of Income and Housing

Nevertheless repayment risks and investment risks (house values falling short of outstanding mortgage debt) loom more prominently, and for a larger number of precariously positioned households. These risks could test the resilience of local economies and the national economy.

The Australian housing system weathered the global financial crisis much better than did many of its counterparts in the developed world.

Does this suggest a resilience that we can bank on in the future? Federal and state governments might be well advised to introduce structural reforms to housing finance that strengthen that resilience.
The Conversation
Gavin Wood is Professor of Housing at RMIT University.

Rachel Ong is Principal Research Fellow, Bankwest Curtin Economics Centre at Curtin University.

This article was originally published on The Conversation. Read the original article.

Thursday, 4 June 2015

Adam Goodes: a story of class and prejudice

Adam Goodes in AFL round 9, Sydney versus Carlton. Photo: Getty/Cameron Spencer

by RMIT Adjunct Professor Stephen Alomes, author of Australian Football The People's Game 1958-2058 

The below was first published on ABC’s The Drum but contains an additional afterward in light of developments since. 

Australian Football has come a long way since the 1920s when some Carlton players didn't like the smell or the presence of star on-baller Doug Nicholls, who went on to a successful career with other clubs.

Later, the Reverend Doug Nicholls became Sir Doug Nicholls, the Governor of South Australia.

Footy led Australia in its moves against racial vilification in the 1990s, despite some prejudice at local levels.

Despite the tom toms of the politically correct few, vilification has been rare at AFL matches, and the few individual exceptions each year prove the rule.

Yet, have some Hawthorn supporters booing Adam Goodes taken us back several steps?

"Why?" and "Who?" are questions we can't easily answer. The "who" is difficult as the booers are not easy to identify. As Hawthorn's premiership star Jordan Lewis remarked:

I personally don't like it. I don't get why they do it and I don't understand it. I would love for someone to come out and say why they do it ... It's got to stop.

The booing is not related to earlier accusations that the Brownlow Medallist too often slid into other players, or tripped opponents. If that was so, the crowds would be booing Dustin Fletcher or, for different reasons, several noxious taggers who try only to stop a star player. Nor is it significantly related to the booing of champions, who opposing club supporters hate because "they are too good". If it was, the list of targets would be longer.

The pattern of Hawthorn supporters booing Goodes - and they may not be the only ones - brings a rare political note into footy.

Why is this happening in the game that expresses Australian social democracy at its best, the game that puts aside class, religion, ethnicity, race and most other things (although not always gender or sexual preference) for the shared experience of the players and that of the fans?

The most logical speculation is that the booing mixes two elements: residual racism and political reaction.

Let's bring two unmentionables into footy: class and politics. Hawthorn's supporter base has many fans from the upper middle classes, good boys and girls from private schools and with good bank accounts. Sometimes, with class goes conservatism. They may not like Goodes' political radicalism on Indigenous issues and they may feel fortified by the idea that politics should be kept out of football.

In other words, the racism is political and perhaps class-based as well.

Goodes's admirable role as an active Australian of the Year who argued the case for Indigenous Australians may offend some footy traditionalists, who like to keep their class society and their political values separate from the footy field. In some quarters, a degree of unease was felt when Patrick McGorry argued the case for greater expenditure on mental health.

The booers don't please the Hawthorn administration, which is establishing a new Indigenous foundation. Nor do the booers recognise the courage which has brought change. As Adam Goodes remarked:

People like Michael Long, Gilbert McAdam, Robbie Ahmat, Scotty Chisholm and Nicky Winmar, of course, have taken a stance, and it's made it so much easier for the next generation of Aboriginal and Torres Strait Islander footballers to come through without that stress ... For us to go out there and feel equal and run around and just play footy, it's a blessing in this day and age.

The most fundamental reason contrasts with that moral courage. As one voice on the footy blog, The Roar, remarked:

The sad truth is that Australians want, or expect, their sportspeople, particularly their footballers, to be oafish and when they're not (shock, horror, they're human beings with brains!) they get pilloried for it.

Footy is still short on moral courage. Fans and players sometimes feel happier with physical courage alone. Consider the failure of the Essendon players to stand up to the Dank experiments by saying "no".

Perhaps those booing Hawthorn fans are also short on the social democratic values of Australian life that are now under challenge.

Or perhaps the booers prefer those days when the "Australian of the Year" was just a smiling sporting achiever.

Afterword: The Medium may be the Message

When I wrote about the booing of Adam Goodes (well before the SCG match against Carlton and the subsequent controversy),  I suggested that the reasons for his being booed are multifactorial, not simple. This includes the idea that the Australian of the Year should be just a smiling sportsman or woman ('Bewdy Newk!' - tennis champion John Newcombe was, surprisingly, never an Australian of the Year).

While the war dance by Adam Goodes raises many other questions, even if celebrations can vary as in the Jason Akermanis handstands, I want to comment on only one aspect.

The contemporary world doesn't like complexity or ideas. It does like visual presentation and performance. We judge many performers (eg political leaders) as much by their visual presentation as by their content. TV has created this image culture. 

Yet it has always been true that we judge footballers by their performance, by their manner on the field. Consider the theatricality of ‘Richo’, Matthew Richardson for Richmond, the imperious arrogant swagger of Wayne Carey as the dominant bull centre half forward. The bravery, skill and charming manner of James Hird the player won him fans and even continues as James Hird the interviewee today (despite less pleasant realities).

In footy, as well as more generally as Marshall McLuhan suggested, often the medium is the message.

Goodes chose a performance statement which was visual and theatrical, even if unconventional.
Yet he has been living, as a footballer, in unconventional times recently.

While a thousand trolls will have their two cents' worth (could several be expelled from the virtual stands?), unlike the image world of TV, it is all very complicated.

As is too often written in brief academic articles, ‘there are several interesting subjects for future research.....’