It appears that the Rubicor Board have submitted an early entry for biggest laugh of March; a tall order considering the Melbourne International Comedy Festival kicks off this week.
Last week’s blog on Rubicor is now my most-viewed blog this year and I wasn’t planning to write another blog on Rubicor this week, however last Tuesday, 20 March 2018, Rubicor released a slide deck covering their July 2017 – December 2017 results, that just can’t be ignored.
If what I wrote in the last blog doesn’t give you enough evidence that Chairman and CEO David Hutchison and the rest of the Rubicor Group Board don’t have a clue how to rescue their sinking ship, then this latest investor update closes the case for the prosecution.
Exhibit #1: “(Rubicor) employs 165 human resource consultants and administration staff across 17 offices” (page 3).
Any half decent recruiter hates being called an HR Consultant. We are recruiters, we recruit, we love recruiting! HR Consultants are a different species completely. Recruitment is a sales and marketing activity. HR has nothing to do with sales and marketing. Recruitment consultants love the thrill of the chase. HR consultants, with few exceptions, hate the chase, full stop. Everything you need to know about how connected the Rubicor CEO is to his coal-face employees is contained in that one sentence.
Exhibit #2: Conspicuously absent from Slide 11, containing a list of initiatives that have been completed or remain work-in-progress, was anything specific about building core recruitment skills and leadership capability. The improvement to sales capability that the new board promised when they took over “ …(the new board will) establish a group sales function to target national and international contracts with high growth and high margin potential” (ShortList 22 June, 2015) is, predictably enough, not mentioned as either a completed initiative or work-in-progress.
Exhibit #3 (part 1): On the same slide listed under work-in-progress is ”Move up the HR value chain through the development of the Candidate Engagement Platform”. Let’s remind the Rubicor Board, yet again, that Rubicor’s core business is recruitment. Rubicor is overwhelmingly known for its recruitment services. Recruitment is booming right now. Why are you even thinking about the “HR value chain” during this recruitment gold rush when your results are trending in the opposite direction to the overall market? Utter madness.
Exhibit #3 (part 2): Slide 12 begins with the details of the “…. Significant Complementary New Business Strategy through Development of Candidate Engagement Platform”. This is the project established to convert the Rubicor candidate database to a mega loyalty marketing machine that Rubicor OO, Sharad Loomba admitted had a “guesswork” level of commercial viability earlier this month (ShortList 1 March 2018).
Slide 12 lists the people charged with leading this project (Phil Gunter, Andrew Mason and Tony Zakula). I have no idea whether these executives are contractors or employees as none of the three mentions Rubicor anywhere on their LinkedIn profile. One thing for sure is that none of them would come cheaply. So why does a company that is crying out for recruitment expertise, then invest their precious financial resources in three people who contribute nothing towards leveraging this expertise?
The rationale for this investment appears to be this head-spining piece of meaningless jargon on page 18:
“Traditional recruitment firms place candidates and then move onto the next assignment. Rubicor is seeking to become a candidate’s lifelong partner, enabling a deeper ongoing relationship through maintaining relevance. This relevance comes from providing preferred and relevant “third party services” that improve lifestyles over time, reinforcing ongoing engagement to assist with driving employment income. This benefits corporate clients by enabling better CV profiling and improving candidate performance predictability”
Can anybody on the Rubicor board explain specifically how a recruitment agency loyalty scheme “….enabl(es) better CV profiling and improv(es) candidate performance predictability”? It’s meaningless corporate jargon of the highest order and excruciatingly embarrassing. Who seriously puts something like that in an official public document to explain strategy? It’s simply gobbledegook.
Let me tell you what has a candidate think you’re a recruitment agency with “relevance” – you find them a great job, not a good deal on car insurance or cheap flights to Bali!
Exhibit #4: Equally bizarre is the final line on Slide 11, under work-in-progress: “Appoint a majority of independent board members with skills in Legal, Human Resource Strategy, Consumer and Business Marketing, and Consumer / Data Science Technology”. Anybody notice anything a little odd here? Here’s a clue – Rubicor is a recruitment company. It currently has no directors on its three man board that have run a recruitment company before their current, disastrous, attempt. Do you think the board might be well advised to find a board member with extensive experience of running a large recruitment agency?
Exhibit #5: Page 13 has a visual of the three time horizons that the Rubicor Board is working to. Under Horizon 1 – Short term: Achieving Industry Average Levels of Consultant Productivity we find two of the four bullet points are the following:
- Extend the services we do across all geographies and clients
- Extend the occupation specialists we have across all geographies and clients
No! No! No!
Rubicor should be cutting back, not extending!
The most junior MBA student will tell you that when you have an underperforming business, one of the first decisions you make is to cut back and focus! Diversification and expansion is a luxury that only companies with deep cash resources and healthy core businesses can afford.
An underperforming businesses, like Rubicor, needs to concentrate its resources to ensure the maximum chance of success. The story of how Steve Jobs returned to Apple in 1997 and turned around the ailing giant by returning to core business and cutting out everything else, is a case study contained within many business schools’ MBA programs. It’s a text book example of what a CEO should do in that situation, yet many do the opposite, as Hutchison has done.
I could go on, but it’s too depressing; so much corporate double speak and so much muddle-headed thinking in one document, is wearing me down.
However, I can’t finish without sharing the strapline across the bottom of page 16:
“The Board of Rubicor have been developing a database monetisation plan for over 36 months”.
This is the same 36 month period in which the recruitment market has been slowly warming up to a point that it is now white hot and raining profits. In this same 36 month period Rubicor’s results have underperformed the market leader, Hays, by 400%. Hays, you can be absolutely certain, were only using their candidate database for one thing – to find candidates for the jobs they were attempting to fill.
Do you think, it’s just possible, that the Rubicor board might have been focusing on the wrong thing to turn around their sales decline and re-build profitability?
How much worse can this car crash get?
Watch this space.