'If you "under promise, over deliver," you will not only keep the customers satisfied; you'll keep the customers.'
- Tom Peters (1987)
Perhaps that is a rather overly simplistic approach to running a business. However, it is often regarded as sage advice in many aspects of life, particularly in business, and particularly in circumstances where the 'customers' have historically been subject to an habitual 'over promise, under deliver' approach. It was a point certainly well made by Steve Schapera during yesterday's investor phone conference, and was a central theme that I was constantly reminded of as he spoke. In the first opportunity he has had to speak publicly to OBJ investors, he chose to define himself as someone who under promises and over delivers. I have inferred that this will be his general approach in his capacity as interim chairman of the Company in the short-term, as well as a director in the longer term. By his own account, this would appear to be the approach he will be taking at least until 2023.
He has been a director of the Company since August 2017 and interim chairman for only 2 months. Realistically, he would not have been able to assert his authority and impose his own approach to business, which he articulated yesterday, until he took over from the previous chairman. So he's really only had 2 months to sort this strategy out, with the last 6-7 months also permitting him to come up to speed with the complexities of the Company's technologies and more than 10 years of its corporate affairs. In those circumstances, I will take everything he says right now at face value because he has no past with the Company by which we can realistically judge him. I would suggest that all shareholders, particularly the longer-term shareholders, to bear that in mind. Mr Schapera is his own person with his own accumulated experiences that have nothing to do with OBJ before he arrived. We should therefore be mindful not to tar him with the same brush that has often been applied to the Company for questionable decisions and communications in the years gone by.
The point he made in that regard was very robust indeed, and I appreciated his honesty and candour about the significance of Hotcopper - YES, directors of publicly listed companies DO read Hotcopper! The negative views expressed on the forum can be extreme, and I would accept his general point that many investors, when articulating their views, are effectively airing their dirty linen in public/sh*tting in their own nest (whatever metaphor you prefer). The underlying criticisms in many of such posts are usually valid in my view (I read them all), but the frequency of them and the manner in which many of them are expressed certainly does not do shareholders any favours. Like many other shareholders, I have fuller and franker discussions about the on-goings of the Company 'off-line' . When I make contributions on the forum, I adapt to my audience, which is much larger and with many more unknown variables. There are many more people listening, each with their own mindset, and each will be influenced in a different way by what I am saying (of course, there will be many who couldn't care less what I have to say). This approach is no different to everyday situations of communication in life more generally. Adapt to your audience. Preserve your own interests.
It would be wrong to dismiss Mr Schapera's claim that prospective directors and the investing community are influenced by such negative things said on Hotcopper. When Mr Schapera agreed to be a director, he did his due diligence and discovered a lot of negative sentiment being expressed about the Company. For him, it was a warning sign not to become involved in the Company. But he decided to look past it and do further research. It is evident from what he said yesterday that he came to realise the game changing technology and intellectual property owned by the company was truly remarkable. For him, that was obviously key to his decision to come on board. He reflected on the shareholder discontent and public perceptions of the Company and obviously considered that he was able to grapple with these issues in the longer-term. The fundamental technology and commercial innovations of the Company clearly weighed heavily in his ultimate decision.
But as he pointed out, not everyone is like him. Indeed most people will not be inclined to do full due diligence into a Company, unless their preliminary/superficial investigation rings no alarm bells. So where does one go to in their preliminary investigation of a Company, whether you're a mum and dad investor, company director, or institutional investor? Google, social media.... Hotcopper? Yes. Certainly, that's what I did when I first invested in the Company in 2010, when OBJ was a revered stock on Hotcopper. If the posts were of the ilk that are posted today, I would have stopped there and never investigated further before making an investment decision. That is not to suggest that people base their investment decisions solely on Hotcopper. Mr Schapera's point was simply this - Hotcopper is a preliminary litmus test. If the test is negative, most people will move on and not conduct further investigations. Fortunately Mr Schapera did choose to consider the possibility that the litmus test was wrong for OBJ. We should all be extremely grateful for his diligence in that regard.
And so we come to my overall impression of his presentation yesterday. Several hours before the conference began, I posted about what I thought Mr Schapera needed to achieve:
"He needs to speak and answer questions in a way that:
- demonstrates his superior commercial acumen;
- demonstrates clever and considered thought in relation to his long-term corporate vision for the company;
- demonstrates an acute awareness of corporate history of the company and the reasons for long-held shareholder disappointment with management.
In short, in this phone conference he needs to differentiate himself from what we have come to know and resent about OBJ in recent years. If he does that well, for me that will be a good outcome from today's conference. "
In my view, I am pleased and relieved that he clearly met all of those desired outcomes. He was very articulate and expressed himself in a manner that clearly demonstrates a high level of commercial competence and long-term personal corporate vision for the Company. He has a plan. Until now, management of the Company has never articulated a plan. That is how businesses become successful. People who run a profitable company plan ahead, rather than making commercial decisions on an ad hoc basis hoping for the best. The latter is what we appear to have had until now.
He gave us figures. 5 x $100m business units by 2023. A half-billion dollar company by 2023. That's great. When have we ever seen such clarity of long-term fundamental goals from Company management in the last 10 years? Never. And don't forget, he's articulated this in the context of his general philosophy - under promise, over deliver. So my inference is that he is really hoping for it to be a $1bn company by 2023.
In 6 weeks we will have his Olympic team. Or, is that really 3 weeks? Seeing how that pans out will be a first true indicator of whether he's true his expressed philosophy.
For the first time since being a holder, yesterday I felt that OBJ is no longer a company best characterised as the corporate vehicle for Jeff Edwards' remarkable inventions. It is not Jeff's company anymore. It is being taken over by people who are capable of transforming it into a profitable global corporation. That is what I want. So Mr Schapera certainly has my support. I will be eagerly watching to see how he and the new Board transform the Company in next 12 months.
J
(20min delay)