Following on from the ongoing sucessful REV business group I chair in Horsham I will soon be starting a new monthly business owners roundtable made up of business owners from Stawell and Ararat.
In Horsham eleven owners of successful Wimmera businesses meet in a confidential forum for half a day each month to share issues, business ideas, and to improve their own business performance. This group has developed into a network built on trust and a willingness to help each other. They are now looking to help others in the regional business community.
The new group will alternate between meetimngs between Stawell and Ararat and we are looking for nominations to join the group.
The cost is $2000 per year each member and any surpus after operating expenses are used to fund field trips to successful businesses in Melbourne or send a local up and coming entrepreneur to a business development program.
The funds are managed by the Wimmera Development Association in Horsham
In recent times I have been exposed to a number of companies in various market segments and they all are questioning the future of business, the economy, the lack of trust and confusion from Canberra and inability to predict the short term business climate.
There is so much negativity in the press, not helped by journalist looking for senational stories and writing without really understanding the facts or the sniping between rival media giants.
There is no doubt in my mind that, for business to survive, you must have a focus on some essential strategies such as a culture for innovation, low cost manufacturing, staff who are engaged and who understand what the vision is that everyone is striving to achieve. And, a product or service that fills a need in the community
The real key is the Vision. Once you can clearly articulate a Vision that is achievable and believable then it is strong and effective leadership that will guide business success.
A leader in any situation who cannot win the hearts and minds is bound to fail. An effective leader has to influence behaviours and, according to some, there are two ways to influence human behaviour: you can manipulate it or you can inspire it.
A great leader commands and not demands respect. The successful companies I come across in my work are those who understand the value of vision driven by leadership throughout the organisation. I often refer people back to the work of Kouzes and Posner who wrote their Ten Commitments of Leadership nearly twenty years ago and holds true today. The key practices as mentioned them are well worth repeating as the attributes of practices of exemplary leadership.
Challenge the process:
Insiring a shared vision
Enabling others to act
Modelling the way
Encouarge the heart
There is no room for egos or silos within a successful business. It's 2012 not the 1960s. There is no more damaging leader than one who will not take advice or accept that they have to keep learning themsleves.
According to an article in today's Australian Financial Review by Fiona Smith, high-performing workplace are 12 percent more productive and up to three times more profitable than their low-performing competitors.
There is plenty of research to back this claim and my own experience, working in and with small to medium sized companies, is that most private business owners do not understand the importance of understanding reward for effort when it comes to winning the hearts and minds of employees.
The large coporations measure their employee engagement and are able to benchmark against some reliable numbers that have been established over many years. The lowest score I come up aggainst was in 2008 when I became the interim contract COO of subsidiary of a well known listed entity. The parent company had set a target of 65-70 as the engagement score of this business unit recorded a score of 28 %. Productivity was in the pits and I calculated they were invoicing less than fifty percent of the direct time on the shop floor.
Over two years, with the help of a great support team of five key managers, we achieved an engagment score of 62 percent and, just as important, we turned the financial result around. There were a number of initiatives that were implemented, the most important being that people had targets and we engaged them in what we were trying to achieve. We created a whole new focus on leadership that recognised those who wanted to be involved and understood the end goal.
We had the dream-stealers and the those who wished that nothing would change as it was easier before the changes. We made the changes in spite of them and worked around them. We set about changing behaviours and allowing employees to have pride in their work. We created a whole new OHS environment and started to implement a lean culture with the initial implementation of 5S. Initially we did this with one hand tied behind our back from head office personnel who were from a past culture. Fortunately we had new champion appointed at head office who encouraged and backed our ideas and passion to improve behaviours and workplace culture.
Employee particpation and involvement were critical. Can you say that in your workplace ?
Over the last month I have travelled over 2000 kilometres around country Victoria and I mentioned in a previous blog my angst with the activity, or lack of it, in the main retail strips in country towns.
In the workshops I have been facilitating in country regions the question of buying on the internet always gets into the conversation and when I ask who has bought off he internet in the last three months nearly all hands go up. Yet when I ask who has a formal internet strategy and a professional internet site that is in sync with their business, you hardly see a hand go up. Why is this happening ?
If you have a business of any kind and have not made a real effort to understand how you can use the internet to grow your business you have no one to blame but yourself. I bet you that someone in a business similar to your's in some place around the world has developed and implemented a strategy that is successfully in building an online presence and growing their business.
Your generation Y customers are now more interested in going to a gym and /or drinking at a local coffee shop than they are in going shopping in a bricks and mortor store. Where I live in Albert Park/Middle Park in Melbourne the coffee shops and eating places are packed. Their customers are not shopping in the local shops as they do that on the internet.
If you want to really get a handle on what people are buying online go the nearest Australia Post parcel depot as see the volume of parcels moving through the facility.
One prime example for me recently was trying to book motels in country towns. The web sites range from crappy to good. No wonder I drive pass lots of motels that have very few customers. If you are like me you do your research online first before making a booking. The I usually book through whatif.com.au
Your internet site is your gateway and fist impression to thousands of potential customers.
Finally , it does not end with just web site , its the whole jigsaw. vidoes, facebook, twitter etc etc
This has been another week where the press is covered in stories about companies putting staff off.
So, it was refreshing to attend a breakfast briefing this morning put on by Matthews Steer, Chartered accountants and hear a successful private business owner tell his story. This family business, is in high-tech engineering and surface coatings.
They survived the impact of the last four years without having to put one person off and, in fact, employed some new staff. They had a typical successful family business attitude that their staff come before higher profits. The family believes that persistance is the key ingredient to their success and decided to just work harder to get through tougher times.
They understand the value of innovation, partnering with institutions such as universities and the CSIRO and seeking outside assistance where they have identified a weakness.
Finally, judging by the presentation I heard this morning, they understand the vital leadership attribute of humility.
I was involved in a discussion today about culture within a business or a Not For Profit and the question revolved around who drives and/or leads the culture within an organisation.
As usual, this monthly group had some different points of view. That's fine because it makes for a robust discussion and enables us to consider different aspects instead of having a one-sided debate. The real question was what role directors play in influencing a culture that ensure success.
I once saw a great definition of culture that stated Culture is what people do when no-one is looking. I believe that the culture within a business needs to be pervasive as everybody embraces the principles that make a business standout from the crowd. It the way people in an organisation behave, their over-arching beliefs, the unwitten rules, the respect for each other and the ability to work towards a common and shared objective.
I also personally believe the standards are set from the top of the pyramid in a traditional heirarchy type business structure and the directors must be more involved in the business in way that they can see and understand the behaviours and actions at grass roots level. After all that is where our customers experience the culture within a business. Just as the Chairman of board can set the standard for board effectiveness, the CEO sets the standard for the management team who in turn can make or break what filters through the whole organisation. A poor CEO will result in a poor culture throughout. Therefore the Chairman has a responsibility to manage and mentor the CEO as well as the board.
Two reference points worth looking at is a book titled The Maverick written by Richardo Semler and the other is a book titled The New Gold Standard by Joseph Michelli. The first will challenge you on a different business model and the second will explain how The Ritz-Carlton Hotel Company have a culture of customer service that is ledendary.
In my experience, over a number of both large and small to medium businesses, the great ones are those that have been successful in winning the hearts and minds of all employees and everyone is on the same bus heading in the same direction. They don't need to be told or micro managed. Everyone just does it.
You put a frog in a pot of boiling water and it will jump out. Put it in a pot of cold water and then gradually turn up the heat the frog will eventually boil to death.
This is how I relate to most of us with regard to having regular health check ups. We go along putting up with the minor creaks and pains and before we know it - Bingo , a heart attack. The same applies to bowel cancer, without regular checkups we wake up one day in pain, go the specialists, have a colonoscopy and find we have bowel cancer.
This is so for those over forty. You would'nt let your car go without servicing for a couple of years yet this is the way you treat your inner health, you never get it serviced.
As someone who believes in acting the minute something sounds or feels wrong, I would have had open heart surgery by now if I had not noticed a minor change in my efforts at the gym a year ago. One of my sisters would still be with us today if she had gone to the sepcialist when she first had pain. No, she was a nurse and knew better. She chose to ignore it, thought it would go away and she died too early. Again, I would have had the same issue had I not had regular tests.
You are no use to your family and your business if you are out of action due to your own stubborn atttude and do have regular check ups. I don't mean just going to your GP, go and have an echo stress test on your heart, have a colonoscopy, get you skin checked by a specialist, have your eyes checked, get your hearing checked and measure your various blood levels for potential early warning signs.
If you don't then your are not only a dill, but also selfish. Just make sure your life insurance is paid up.
Late last year Grant Thornton published a paper on private food companies in Australia. For me, the key issue that came out of that survey is that innovation is a core success factor in growth and profitability.
I often see private companies who have their head in the sand when it comes to taking a proactive stance on innovation. They believe that what has worked in the past and been successful will get them through in these ever changing times.
Jack Trout wrote a book that should be a must read for all business owners. It is titled Differentiate or Die although written in 2000, it is even more relevant in today's highly competitive business world. The only difference is the impact of the web in 2012 an some of the examples mentioned are no longer in existence due to mergers , takeovers etc.
Consumers are faced with thousands of choices on a daily basis. They research on the internet before making a purchase and are able to access product from all over. For example, my daughter is expecting her first baby next month and I have watched with interest how nearly all the new baby gear has come via research on the internet.
Innovation has to be part of your DNA and be a constant core activity in your business. Your competitors will copy you and that requires you to be leading the way. My experience is that the greatest change is in packaging and making convenience king.
What are you doing to ensure your clients will chose you and your products over your competitors ? If you have an advantage now, is it sustainable ?
Just look at McDonalds menu today compared to ten years ago and their sales are still growing.
On Jan 24th we start a series of workshops to assist business owners on how to start planning in advance in case they are hit by a natural disaster such as a flood, fire or storm.
We know that 80% of business never fully recover from a natural disaster and planning can greatly help in reducing the impact.
Funded by the Federal Government through Enterprise Connect there are eight workshops being held in Ballarat, Horsham, Mildura, Kerang, Colac, Dunkeld, Warrnambool and Bendigo.
The Federal Government, through Safe Work Australia, issued a draft code of practice on workplace bullying last year.
How many directors of private companies are aware of the contents of this draft and their liabilities and responsibilities under the Act ? I suspect, hardly any.
There was an article on page seven in last Friday's Financial Review that pointed out the issues around this draft. The article quoted a survey of 5000 employees by employment company WorkPro that found 23 percent claimed to have been bullied in the past two years, and 68% worried whether their own bullying behaviour could be seen as bullying.
The question was posted who has duties in relation to workplace bullying ?
The answer:
Everyone in the workplace
A person condcuting a business or undertaking has the primary duty
officers, such as company directors, must exercise due diligence
In my experience the culture within a business on this issue starts in the board room or in senior management meetings. What is often said in so-called humour filters down through the whole business and has negative effects throughout.
If you chose to ignore this, I guarantee that you will get caught out and pay a high price in the future. As an experienced director, I am aware of the need to be on top of this issue.
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