When you’re looking to grow your company but it’s ‘stuck’ it is useful to conduct a full strategic analysis to determine what’s going on. It might not be what you think. Far too often, businesses will make assumptions on the issues preventing their company meeting goals and achieving desired outcomes. These assumptions are rarely based on anything substantial, or there’s a focus on one key issue at the exclusion of all others. To truly understand what’s holding your business back, an objective analysis of all the issues, and the company overall are essential. This can be tricky to conduct in-house, where objectivity can understandably be somewhat clouded. You may believe that you have the right structure in place and the right team to achieve the profit margins you’d like, but often this is not the case.
Take the example of one of our clients – a small manufacturing and installation company operating within the construction sector. Gibsons were approached to conduct a strategic and business plan, with the objective of determining the issues at play that were preventing sales and profit growth. As soon as the planning process was in full swing, we discovered key factors that were holding the company back. Primarily these centred around people and processes. Key staff were modelling poor values and performance, there were manufacturing and installation process inefficiencies, and there was the absence of clear and consistent communications across the business and the management team. People were unsure who was accountable for what, they were disengaged, and were struggling to see a distinct company direction.
Once you have the right people in the right place doing the right things, a business can tackle operational and process issues that might also be holding them back. But you must get the people bit right first.
In our experience, people issues are often the cause of the most serious business problems and can be the most challenging to resolve. However, if ignored they can significantly endanger a business, or at the very least, leave it with a performance and success level far below true capability and potential. We often see attempts to ‘fix’ staff issues which in turn create more problems as structure and processes are used to ‘work around’ people difficulties, which rarely resolves the concerns, and instead adds significant cost and time to the situation.
To address these challenges, Gibsons conducted a thorough review of management practices to build a culture of understanding and a process of consistent and regular review. Next, we helped the company to develop the right business structure to support continuous improvement and accountability throughout its personnel. Progressive review of performance of key personnel alongside the company’s management team enabled the rationalisation of staff via retraining, mentoring, role changes to better suited skill sets, and in some cases, retrenchment. A complete review of operational processes and factory layout was then enabled with confidence that the recommended changes could be acted on with best immediate effect.
Build an effective business structure that puts the right people with the right skills into roles that best suit them, is key to ensuring a business with long-term and enhanced profitability.
The results of Gibsons’ work speak for themselves. Over a 3-year period, working closely with Gibsons, this business increased its profit on sales by 8-10%, culture and customer engagement improved, and there was a $10m rise in turnover. Importantly, the owner is now in charge of a highly self-motivated team with an appropriate structure to support the continued growth of the business.
Find out more about the Gibsons’ approach to ensuring your business is on the right path and your team are focused on what matters, through our in-depth strategic review.