Tag Archive for: business processes

Most of Gibsons clients with people issues needed a strategic review. Do you?

Did you know that most clients who come to us with people issues discover in our strategic review process that the core of their problem is driven by poor strategy? Inadequate management structures, deficits in skill areas and a team that just isn’t performing or aligned with business objectives; is poor strategy driving people issues.

It’s not just a lack of strategy that can be a problem. It can also be an inappropriate one; or you may have the right strategy, but it is being poorly implemented. We address all of this.

As consultants, we encounter many businesses who have developed unique products or services that often have the potential to fill a need in the marketplace. There is no shortage of innovative ideas developed by highly talented people within Australia’s small to medium enterprises today. However, while businesses exhibit technical brilliance with seemingly great products and services accompanied with operational capability, they still often struggle to deliver successful business outcomes. Often, it simply comes down to strategy, or rather that there isn’t one, or a suitable one, in place.

The importance of a well thought through plan, that is supported by an appropriate management structure, aligned with corporate objectives and an overarching vision of ‘where we are going’ can never be underestimated. People simply work better when they have a clear view of what’s expected of them and where they fit within an organisation. A structure to support appropriate performance, mentorship, training, and retention is paramount.

Gibsons was engaged to support a mid-sized professional services company that was performing badly in terms of profitability. Despite a good reputation in the marketplace and a loyal customer base, the company had been experiencing poor financial results for several years. Before Gibsons’ involvement, the company had implemented several tactics to mitigate losses through cost cutting measures and operational streamlining.

We conducted a complete strategy and business review to fully understand the issues and to develop and implement strategies to address their performance situation. It became clear that the company had an inadequate management structure with poor management practices in place. This was accompanied by the absence of an effective human resource process, skill shortages at all levels within the business, and little review of business performance.

A strategy was developed and implemented to address these human resource issues, which were underpinning the poor financial performance being experienced by the company. Strategic and business review processes were established, along with the development of an effective management team, and a revised organisational structure. Comprehensive training and mentoring programs across supervisory and management levels were initiated.  Human resource processes to support employee engagement and business alignment were enabled.

By determining and implementing the right solutions to correct key performance issues, a business has the capacity to overturn poor financial performance.

The result – staff engagement was greatly improved, and productivity levels increased across the business. There was a significant upturn in profitability levels which has been sustained in the medium term. While the business saw cost containment as a strategy to improve its financial performance, a robust strategic process allowed the business to understand the real issues it was facing. It was able to move from a strategy focused on cost cutting, to put into motion a robust and relevant human resources strategy.

Strategy is at the heart of all smart business decisions. Without it, a business is essentially operating in the dark. Find out more about the Gibsons strategic review process and how it can benefit your business.

Webinar invite: Join us as we chat with Fabric Solutions (22 Oct)

Join us in an AME (Association for Manufacturing Excellence) hosted FREE online ‘Fireside’ Chat this Friday (22nd October 11am-12pm AEDT). We’ll be talking with Rohanna Abberton, the General Manager for Fabric Solutions Australia, about our transformational work with them over the past 3 years. Learn about how we’ve supported their business to improve operations – enhancing the company culture and profitability levels, as well as enabling the owner to progress down the path to succession. Specific areas that we’ll be discussing include our work in:

Register your place and find out more at: https://www.ame.org.au/email/8ca7da1f-7036-4bd9-b5c1-7175a511dd68/e8178aaa-ff4a-4d5e-82c0-b70f1646f71e?fbclid=IwAR0AGSby86uAoNnsEyI2U_m70tJw2sogESgam97D1fopcflH7UHMQ4xxb4c

Why strategic thinking was a $10m game changer for this client

Even when your business is going well, spending time to take a step back and address the current market climate, and your company’s strategic priorities and direction is a must do for any senior manager. But when turnover is growing and profit margins are good, it can be very easy as a manager or business owner to fall into the trap of becoming too hands on. You end up spending your time focused on the day-to-day business operations without giving much thought or time to the company’s future strategy.

Without a strategy for the future of your business, the company and its management will be ill prepared to address issues as they may arise. A lack of direction and clarity in the company’s focus and objectives can result in poor decision making and inappropriate business systems and processes.

A lack of strategic direction is very common and will undermine the real potential of any business. Without a plan and a deliberate focus on where your company is going and how it will get there, it’s unlikely ever to be achieved.

Gibsons was engaged to support a heavy earthmoving equipment company with exactly this challenge. Involved in the repair, overhaul, field service and spare parts for heavy earthmoving equipment, the company’s National General Manager had become too involved in the business’ daily operations. He had no time to work on high priority strategic concepts for the business. He saw the benefit of having an experienced person to act as a sounding board to challenge and discuss his ideas in helping the business prepare for the future.

The company had built a reputation for high quality services and parts across a diverse portfolio of sectors with another division planned. Turnover was at $8m but the company was keen to grow. The need for an external expert with extensive experience in business improvements was sought. Gibsons was able to bring confident insights, ideas and techniques from decades of experience in supporting clients develop the most appropriate business strategies. Stimulating and challenging management team thinking, and ensuring the best approach was actioned.

Gibsons developed an aggressive growth strategy underpinned and supported by significant organisational changes. A management review process was implemented; and mentoring and coaching for Senior Executives commenced. A new Human Resources structure was embedded into the organisation accompanied by a change in company culture. Several process improvements were initiated to streamline operations and provide staff accountability. The resulting impact of strategic change to this company – a growth from $8m to $18m in only 4 years.

During a period of change management, it is essential to get the structure right – management, Human Resources and processes. This is even more significant during a period of growth.

During Gibsons’ work with this company, a significant risk was identified. The company had a large customer who was contributing a third of the organisation’s turnover. The impact on the company of losing this client was significant, and at the time of Gibsons’ engagement no strategy was in place to mitigate this risk, or what to do if it was realised. With Gibsons’ help, the dependency on this one client was reduced over time and measures were put into place should the client be lost. As a result, when the client did leave years later, the company was able to compensate for the loss due to this extensive planning and preparation work.

Gibsons Senior Consultants bring with them decades of experience and are valued for their extensive knowledge and insight into business improvement initiatives. Providing ideas, tools and techniques to challenge the status quo and enact considered change as needed, Gibsons continues to be an indispensable business advisor to this company.

How a robust business review can support sales growth and profitability

It seems obvious enough. If you fully understanding what’s happening in your business, then you are well placed to exploit your company’s strengths and tackle any key issues appropriately. Yet despite this pretty simplistic notion, many business owners do not have clarity on the financial health and operating complexities within their companies. When sales and profitability levels fall, it can be all too easy to focus on the wrong things particularly if you are a very hands-on owner.

All too often we see business owners taking a cut to their salary and operating their business more from a survival standpoint rather than taking a step back to see where the gaps and issues are. This was the case for a small manufacturing business whose Earnings Before Interest and Tax had dropped to -12%, with a turnover of $1m per annum.

Gibsons helped this manufacturing company to access government funding which enabled a rigorous review of the business.

Through Gibsons’ strategic review the key strengths of the business were clear to see – a small and highly skilled team headed up by an owner with a high level of technical understanding, and a satisfied and very loyal customer base who were not sensitive to changes in price. Customers valued the products and service provided by the company and the owner was very passionate about the business.

The strategic review brought to light some fundamental issues to the company’s operations. No financial performance reviews, coupled with little or no understanding of costs in estimating, were central to the profitability issues the company was experiencing. The owner was only taking a very modest salary and was unable to fund any growth to the business as a result. The company had experienced a poor financial performance for the previous 3 years. However, with no financial review being conducted, the specifics and an understanding of why this had taken place was not immediately clear.

Gibsons set into place some key actions to overturn this downward profitability trend and address the issues identified. An effective system for costing and estimating was developed and implemented, with staff trained in its use. Administration support was clearly defined and set up to better support the owner. Freeing up the owner’s time, he was better placed to focus on sales, estimating and overseeing production. Regular accounting and financial review processes were established so the company was better positioned to respond promptly as issues were identified.

Within a short timeframe, these actions moved the company from -12% to 15% EBIT and increased their turnover by $0.8m p.a. The owner was able to take a market-based salary. Gibsons continued to support the business as necessary to enable this level of performance to continue.

Without clarity on your business’ operations and financial health, it is hard for any business owner to take the appropriate actions needed to overturn a drop in profitability. An independent third-party advisor can bring an objective insight to identify and support the changes needed to enable sales and profitability goals to be met.

Culture has a BIG influence on profits…

…and good culture starts with good management.

No matter how skilled and experienced your staff, without a sound management and accountability structure in place, you’re setting your business up for failure. It is commonly assumed that if a business is made up of a group of highly skilled, degree qualified professionals, that the operation and people should be able to self-manage. This is rarely the case.

Management is a skill and discipline in its own right that is essential for every high performing business.

Without good management practices in place, staff are unlikely to contribute equally, enthusiastically and consistently over a period of time. This can slowly chip away at a positive business culture creating dissatisfaction and disillusionment amongst your team and undermining even the best-laid plans.

As a business consultancy with years of experience and extensive expertise in strategic management, Gibsons is well placed to provide invaluable, objective insight into an appropriate management structure for your business. We provide the support needed to meet your business goals and align with your company values as well as setting up meaningful accountability processes and systems.

An effective management structure with appropriate decision-making mechanisms in place, will support the business structure needed to generate profit, accountability and a healthy company culture.

In demonstration of this, Gibsons was approached by a large and well-known firm in the Professional Services sector to help them deliver a Strategic and Business Plan. With no decision-making mechanisms in place, and little understanding of management as a separate area of expertise and skill, the business had started to develop an unhealthy culture.

It became clear during our engagement that a number of staff were underperforming in their roles, lowering the organisation’s efficiency. With the absence of performance measures and little management of expected standards, there was limited accountability throughout the company.

To overcome these challenges, Gibsons implemented its Employer of Choice program to engage staff, align them to business goals, and to build a culture of accountability based on core values. Personal leadership mentoring for the company’s CEO as well as the mentoring of supervisor staff took place. Select staff were provided with soft skills training around people management, personal performance and project management to upskill. An effective board structure and practice along with sales management practices, Key Performance Measures and a management reporting regime were all initiated.

Changes to management structure and processes can take place quite quickly whereas cultural change within an organisation is something that takes time to have positive influence in decision-making processes. The turnaround in this Professional Services company took 4 years and resulted in an EBIT improvement from 10% to 15%. For a Professional Services firm in its particularly sector, this was a significant increase. The improvements made in the company’s staff engagement, culture, human performance and morale which increased customer satisfaction were able to become entrenched in the business and sustainable.

Never underestimate the importance of having all your people working towards the same goals to shared and agreed standards. People and their synchronised alignment with business goals is at the core of business success.

The right technology solutions can make or break a business

When we think about a successful business, whether large or small, there are some key ingredients which cannot be overlooked. Yes, you need the right people, in the right roles, and a well thought through business strategy with considered objectives.

Matching your IT strategy to your business strategy seems like a ‘no-brainer’ but many businesses don’t perform this step and run the risk of limiting their ability to achieve their goals. For instance, if your strategy is growth then your IT infrastructure must be easily extensible – if it is not then your business processes will falter when you hit the limits. If your strategy is customer retention and growth, then your customer care application software must add value to your relationships, not just perform transactions.

But, even if you have the right strategy, underpinning your success is a need to get your business processes right, and the technology that supports them. Without trust in the data that you have about your organisation and appropriate systems in place, business decision making is based on ‘finger in air’ conjecture. You run the risk of spending time on activities which could be automated rather than time on more strategic endeavours. Financial and administration errors can often start to become more commonplace.

A technology solution that caters for the data and IT requirements of each member of your team, is needed. A specialist consultancy provider like Gibsons has the expertise and experience to conduct a rigorous Business Requirements Analysis to identify needs, and to determine how to best fulfil them.

Often your typical company ‘IT guy’ and even many IT service providers, are not in a position to support a company with the strategic end-to-end technological solution that it needs.

A $120m organisation came to us in need of such support. A national student accommodation provider, their technology solutions were letting them down. Legacy systems were either not scalable or were not an ideal fit for the business model.  There was very little trust in the data in their installed legacy software, and there were significant issues with their accountancy and administration accuracy. Working from the ground up we identified the company’s processing needs in consultation with all stakeholders.

By looking to enable strategic processes, encompass the needs of every role within the business, and heed the lessons learned from the legacy systems, we could ensure the procurement of the most appropriate solutions that would support the business well into the future.  We were also able to identify the real focus for application solutions so that we could specify not just the required features but also the speed and simplicity required in capturing guest data.

Investing in digital and technology strategies for your business that adopt a Whole-of-Business approach, considering both the customer and business outcomes; are crucial for business performance and success.

The technology selection process we adopted was rigorous, ensuring a best fit was sought across managed services for network management, hardware, print, telephony and desktop.

We implemented fit-for-purpose application software and services for the student accommodation industry. We also commissioned general purpose application software for accounting, payroll and rostering that had native integration with the accommodation application. The new technology was implemented at the start of a period of growth at the business and did not required further investment to scale as the business grew.

All too often we see businesses let down by their systems, their processes and the technology that support them. Get these right and you set your business up for greater efficiency and effectiveness across all aspects of your operation.

How to ‘win’ in a market that isn’t growing

How Gibsons helped Pro Powder grow its profit by 600% in 10 months. 

Profit is the one metric that matters most, for nearly all businesses. There are a number of measures that each business should be keeping an eye on, but deciding which ones are more critical for YOUR business requires getting under the bonnet to find out what really makes it tick.

A thorough examination of a business’s operational processes, human resource function, sales and marketing activities, core value proposition and key business drivers is required. While many tried and true theories of business management can guide you on this, the reality is often more fluid, unexpected, and industry specific.

When you are completely immersed within the operations of a business, it can be difficult to see what is actually going on. You are in effect too close to the issues to see them clearly; especially if you, like many business owners, have fallen into the trap of doing too much yourself.

Our work with Pro Powder is a stark example of the great improvements that can be made when a business invites an objective and experienced third party in to help.

A powder coating business, Pro Powder was achieving a $1.4M turnover at the time they engaged with us, but profits were barely reaching the $20K mark. The company’s owner was stretched and feeling that so much hard work just wasn’t paying off.

Despite the company operating at full capacity, its profit margin was still too low to be sustainable without burning out the owner. 

Pro Powder provided our Senior Consultant, Graham Pridham, with full access to the business: its staff, operations and procedures. We assessed financial information alongside insights from discovery sessions, staff engagement and a review of business processes. Because of our extensive experience in supporting manufacturing companies, we could identify how best to support the company very quickly, saving discovery time.

Armed with practical solutions to ensure the team was fully utilised and with insights into more appropriate marketing and sales tactics, Pro Powder were able to invest more time in sourcing and targeting more profitable work. They were able to determine their “ideal” client profile to successfully reposition themselves; as well as focus on sales efforts and accountability.

It can be difficult for businesses like this to choose to invest in getting help when profit margins are so limiting, but the decision to do so can be empowering. The business is now positioned to do well, the owner feels on top of things, and the financial return on investment from third party assistance is very clear.

These are the results Gibsons strives to achieve for its clients, every time, no matter what their size at that time in their journey when they connect with us. We have helped countless businesses to grow and become more profitable, well beyond their own expectations.

Improving businesses is in our DNA.

Quality systems for your business

To produce consistent and predictable quality outcomes you need effective systems in place in your business. Having effective systems in place also streamlines day-to-day operational activities and makes it easier to manage these activities, allowing managers time to deal with exceptions and to work on business development.

What is a system?

A system is basically a set of rules for processing information and facilitating decisions.

Another major benefit of developing and documenting systems and procedures is to help to personality-proof your business. It reduces the level of dependence on particular individuals by downloading their knowledge and documenting it so that the knowledge can be shared with other staff and become corporate knowledge rather than individual knowledge.

What happens when your business systems are lacking or ineffective?

  • Customers are dissatisfied due to unpredictable levels of service and quality.
  • Staff are often frustrated and demotivated because every task becomes a unique challenge rather than an established process with known outcomes.
  • Low productivity: without documented, effective and up-to-date systems, new employees must rely heavily on experienced staff for guidance even for the most basic of tasks resulting in low productivity for both new staff members and for those training and supporting them.

What are the characteristics of effective systems?

  • They are documented.
  • There is some level of automation in data capture and processing information.
  • They are not reliant on individual knowledge.
  • They operate in a predictable and timely manner.
  • They provide guidance in routine decision making.
  • They improve efficiency and reduce costs.
  • They accommodate the ability to measure performance.

If you don’t have systems in place in your business now, where do you start?

First establish a clear picture of the required outcomes, assess the current position, and then develop the logical, step-by-step processes required to consistently achieve the outcomes required. Incorporating input from people at the coal face who work with the processes on a day-to-day basis is essential to develop and refine these systems. They are the ones who are implementing the systems and generally know what works well and what causes frustration.

It is also important that systems adhere to relevant Quality Assurance and Workplace Health & Safety standards.

It is not too late to start developing effective systems for your business and to see predictable and consistent quality results.