So, first, the part which Mann's statement about canon was taken from.
It was a report from, as
stated by Lynata, someone who "was
a regular Dakkanaut with his own shop, who doesn't seem to have any interest on this particular subject itself and as such should possess a neutral opinion."
The text is found
here, by Precinctomega, the 19-09-2008, at 10:20.
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Games Workshop Group Plc Annual General Meeting 2008
I don’t know what motivated the change in format for this year’s AGM. But if I were to hazard a guess, I would suggest that someone may have pointed out to the Chairman that the dry, tedious business that was the usual format was glaringly at odds with the company’s prevailing culture.
Whatever the reason, it was a delightful surprise to get an invitation to attend a beefed-up AGM at which it was promised that investors would enjoy not only the standard fare of voting on matters only vaguely understood but also a round of presentations and workshops to explain recent and developing projects and how they were coming together to sustain the company in the long term.
That there would also be a chance to have a chin-wag with developers, managers and executives as well as the proverbial “free lunch” was a tantalizing bonus.
I won’t dwell on the AGM itself, partly because I wasn’t listening and partly because even if I had been listening I wouldn’t have understood was I was listening to. However, I was most intrigued by the explanation of Tom Kirby (Chairman) that only the votes of the attending members counted and that each attending member had one vote, regardless of the number of shares held. The proxy votes were announced but only to ensure that they conformed with the attending vote.
This did seem to suggest that a determined bloc of private, small investors (like myself) could theoretically remove half of the Board of Directors from post. This seems unlikely to me, so I’m open to correction, but it did seem that that was what Tom was suggesting. Not that I recommend trying it.
The meat of the event was in the presentations that followed, and I’ll summarize these:
Global Stock Management
Anyone working in the UK’s hobby centres will probably already be aware of this. The introduction of an automated stock management system in Games Workshop was well overdue. Essentially, it means that the shop tills track the throughput of stock, identifying those areas that are selling strongly or weakly and adjusting the regular deliveries to ensure that stock levels in stores remain high. This is a major change to the old system in which individual managers were responsible for ordering stock after doing a weekly, manual count of held stock.
Stock availability under the new system has risen from 92% to 98%.
However, what this also means is that the hobby centres are going to reduce the “held lines” – i.e. the breadth of product held in the stores is going to come down, focussing on the fast-moving stuff.
For the less-popular lines, there will be an in-store web terminal, where customers can order products direct to the store from the distribution centre in Nottingham (or the local distribution centre in Memphis or Sydney or wherever) and then pay for the ordered products at the shop’s till. Of course, this will mean coming back to collect your product later, which is mildly inconvenient but which doesn’t noticeably affect sales revenue.
In some follow-up questions I discovered that the in-store terminals are not rolling out in direct parallel with the GSMS. Some stores already have terminals linked to the existing website. More stores will get new terminals once the new website goes live (already live in the US, goes live in 2 weeks in the UK).
In addition, the reliability of the new stocking system is such that, should a product from the “held lines” be out of stock when you go in to get it, you will receive free mail order of that item to your home.
Distribution
The presentation from the Distribution team was less about improvements in the distribution system that it was about improvements in the distribution team. This was nice but I have to say that my bulls***-o-metre was swinging into the red on several occasions throughout the presentation.
Not, I hasten to add, because the meat of what was being said was bad, per se, but because the presenter was talking with the voice of the new convert. As an HR professional, I see this all the time (even went through it myself). A person with no experience of training management or personnel development, usually someone with a manufacturing background, is sent off on a course full of cynical low expectations and dismissals. But at some point the light bulb goes off in his (or her, but it’s usually a bloke) head and he realizes that it just might work and from that point on becomes a sort of sponge for everything they chuck at him.
All this stuff is then regurgitated when he gets back.
So – Development guys – don’t get me wrong. The management of the team and the processes being used for developing the team and distribution processes is great. The Key Performance Indicators show a consistent improvement and highly-effective operation.
But, please, stop calling it the “Team Journey”. Stop talking about “Critical Business Improvement Tools” and “Business Development Tools”. And give your whole “team building exercise” programme a second look, because it’s hopelessly out of date.
Products
Now, I know this is what the online community’s really interested in, but we didn’t get shown sneak previews of anything you haven’t already seen. Yes, the drop-pod’s cool. Yes, Codex: Space Marines is brilliant. We also got hands-on with the new army bags (fabulous) and modular plastic gaming tables (stupendous) but I that should all be old-hat to you lot by now.
The important thing was what I heard from the representatives.
Max Bottrill, head of the Design Studio, made the following points:
1. The aim of Games Workshop Group Plc overall was to continue to provide support to the Games Wokshop hobby from now until the Age of Ending. The business decisions made at every level are driven by that prime directive: sustain the hobby.
2. “People want plastic” but GW doesn’t foresee a time when they will no longer make metal models. Plastic is popular with the vast majority of customers and we can expect to see the range of plastics continue to expand, but metal models will always have their place.
3. Regardless of the movies, GW intends to continue supporting and expanding its Lord of the Rings range which has proved very successful in attracting new players. Especially, apparently, more girls. Go figure.
4. The object of the development process in the Studio is to ensure that new rules “never” invalidate models or armies and that new core rulebooks “try hard” not to invalidate old codexes and army books. There are, Max, admitted, exceptions but these are either accidental or, in their opinion, trivial.
5. In response to a question about the customer demographic (i.e. is GW chasing the pocket-money market at the expense of the veterans?), Max insisted that the hobby centres give a distorted view of the hobby population. Younger enthusiasts tend to “hang around” in the stores more, whereas veterans either dash in and dash out or do most of their purchasing via the website.
George Mann, Head of Black Library, had the following points to make:
1. The Black Library imprint of BL Publishing (no mention was made of Solaris) is principally there to “recruit” and “retain” customers of the hobby. For those already involved in the models and games, it allowed them to continue to immerse themselves in the background and imagery when not actually at the gaming table or painting station, sustaining their interest (and, by inference, desire to buy more stuff). For those not yet involved in the hobby, the books offer a new access route to the hobby by engaging people’s imagination up front.
2. In further conversation, George emphasized that Black Library’s main objective was to “tell good stories”. He agreed that some points in certain novels could, perhaps, have benefited from the editor’s red pen (a certain multilaser was mentioned) but was at pains to explain that, just as each hobbyist tends to interpret the background and facts of the Warhammer and 40k worlds differently, so does each author. In essence, each author represents an “alternative” version of the respective worlds. After pressing him further, he explained that only the Studio material (rulebooks, codexes, army books and suchlike) was
canonical in that is HAD to be adhered-to in the plots and background of the novels. There was no obligation on authors to adhere to facts and events as spelled out in Black Library work.
3. In terms of forthcoming products, George said that more audio books were a definite plan. He also said that a Calpurnia Omnibus was definitely being seriously discussed although nothing had physically been done to produce it yet and that no sensible release date could be suggested.
Tony Cottrell, Head of Forgeworld, didn’t have a lot to say that wouldn’t have been familiar to hobbyists, but it was nice to see the new Minotaur tank up close and the forthcoming Forgeworld “Advanced Modelling” book. No, I didn’t take pictures. Do I sound like a desperate fan-boi to you?
Global Web Business
Paul Lyons, head of GW’s Global Web Team, introduced us to the new website, its background and objectives.
The website, he explained, had grown out of a complete re-think of how GW conducted its business online and aims to provide better service and more efficient transactions. The aim, he said, was to provide a service “as good as the best GW hobby centre” consistently.
Now, he admitted that you couldn’t get the same personal service on the website (Laurie Stewart, another shareholder and Vice-President of the Gaming Clubs Network, mentioned getting a cup of tea in his local GW; personally, I think I’m lucky if I get the time of day!), but with real-time inventory updates (linked to the GSMS, so that if the online store says something’s in stock then it’s actually, definitely, physically present in the distribution centre, fo’ sho’!), free shipping to local stores and a faster dispatch (88% same day), they’re aiming for quality.
However, he also explained that the website was intended to become a tool to encourage customers to go to their local hobby centre to get the personal service that GW considers its bread and butter. For example, you will be invited to enter your local store when you make an order. You will then be placed on a database so that, if your local store has an event or promotion, you’ll get a letter or email notifying you of the fact. Likewise, if a new store opens (more relevant for non-UK hobbyists) that’s closer than the one you indicated, you’ll get notification of its opening and new location.
The US website is, of course, up and running. The UK website will launch on 9 October 2008. Next up – although not with a definite date – will be Germany, France, Italy and Spain, whilst last in the queue will be Canada, Australia and the rest of Europe. But, unlike the current system, the local sites will all essentially be “tweaks” of a single website run out of Nottingham. So whilst language and price conversions will be managed by small local teams, the supporting code, design, layout and content will be managed centrally so that one page in the US is identical to the same page in Italy except for language and the currency used.
Hobby content on the website is now integrated with the store, unlike the current two-site system. Hobby content is being coordinated out of the White Dwarf office and should, again, be unified across the different countries so that everyone has the same material (expect in the local language) rather than having to go to the US site for one article and the UK site for another etc.
Development of the US Hobby
Despite being a Brit, I actually found this by far the most interesting and exciting aspect of the whole day. Ernie Blake, head of US operations, was there to explain the new, structured and (above all) American approach to GW operations in the US.
Apparently, three years ago, the turnover of managers in the US was 114%! The average manager lasted only three months before he was either sacked or resigned.
The new recruitment and promotion system is based on a 24 month process of learning and assessment that sees the average Red Shirt (his term, not mine) go through 4 tests and a final course to move from hobby specialist all the way to manager with incremental pay increases comfortably above minimum wage. At a recent recruiting assessment centre, they had 174 successful recruits out of 580 first-round attenders.
He also explained the new strategy for locating stores. In each targeted urban centre, they locate a store by identifying “a really great High School” and then put a “Standard” Hobby Centre in the nearest shopping precinct (rather than out-of-town mall). This allows them to target those middle class, affluent families that are more likely to be interested in the hobby. In each cluster of Standard Hobby Centres, there will then be two “Recruiter” Hobby Centres positioned in those big, sprawling out-of-town malls that Americans seem to love so much. These are there to attract the weekend and holiday trade but not (interesting, this) to take their money, although they’ll be able to do that, too. No, these Recruiter shops will be tiny little places whose primary role is to demonstrate the product and then to re-direct the customer to their local Standard Hobby Centre. Clever, eh?
Finally, each cluster of Standard shops and Recruiter shops will have one Bunker – a larger store with its own gaming room, painting stations, club and events. This is the flagship store that provides those without the means to indulge in the gaming aspect a place to meet and play.
Frankly, this is all so cool that I’m starting to wish I was a yank and that’s not something I ever thought I’d say.
The process is well-established (but far from finished) in Chicago, Baltimore, Washington DC, Los Angeles and Seattle, and underway in Detroit, San Francisco, Dallas, Houston and Philadelphia. There are currently 54 stores in the US, but Ernie refused to be drawn on how many he thought there eventually would be. Nevertheless, the impression from the Directors was very much that the potential of the US market had barely been scratched.
I challenged Ernie of the question of market domination when he claimed that a PriceWaterhouseCooper market-analysis had ascribed Games Workshop 94% of market share in the wargaming hobby market. I was understandably sceptical. Now, I’ve not seen the report (I’d love to), but Ernie assured me that this market share incorporated not only traditional miniature games, but the new collectible miniature games, HeroClix, CCGs, historical games and RPGs. More interestingly, GW does not, apparently, wish to increase this market share. The belief is that the existence of this 6% competition serves as a “revenue-neutral” recruitment path for new players and customers of the GW hobby.
Conclusion
So, that ends the first of what I hope will be my annual report from the AGM. Other than the fact that Tom Kirby was rude about my hair-style (at least I’ve still got mine, Tom!!) I came away with a very positive impression. Particular thanks go to George Mann for being refreshingly straight, to Paul Lyons for giving me Jervis Johnson’s email address and to Jim Butler for taking me through the new Space Marine codex. I should also say a big thank-you to the Warhammer World and Bugman’s staff for being their usual friendly, efficient and welcoming selves.
I live in hope that one day my shares might actually turn out to be a good investment.
Regards,
R.