Tag Archive for: People Management

From owner dependence to staff empowerment and accountability

When you start a business, it is natural to be very hands-on and want to be across everything. But, as the business establishes and grows, if this approach continues you begin to disempower and demotivate your staff. While perhaps not the intent, you start to heavily micromanage your team. While this management style is typically disliked by staff, it is also a style that creates a lot of problems for the manager. If you always need to oversee all the details and sign off on everything with limited delegation, you end up working a lot more than you’d like. More importantly, time that could be spent on the wider picture – company strategy, direction, and vision – must be set aside, to make space for the day-to-day. Never a good plan for a business to succeed.

This was very much the case for a client of ours. A small manufacturing company that initially came to us with issues involving a poor company culture, and succession – the owner was keen to step back from the business. With a turnover of $2.5 million in sales with a 15% Earnings Before Interest and Tax, from a financial standpoint, the company was doing well. But staff morale was low, and the owner saw no possibility where he would be able to reduce his involvement in the business.

As is often the case, we may be called upon to address a particular challenge with a company, but when we take a closer look, other issues become apparent. Certainly, there was a lack of opportunity for succession and company culture issues, but we also found significant micromanagement in place to maintain efficiency, quality, and service levels. Understandably this was not helping the low morale which was prevalent throughout the workplace. There was an extreme reliance on the owner who as a result had a very poor work/life balance. Systems were under-utilised and human resource processes very lacking. Moderate to high levels of supervision were required because of the skill levels within the company.

Over a 2-year period we worked with this company to address the need for human resource processes, structures, and staff development that were required to overturn a poor company culture and too much reliance on the owner. We defined and sourced a General Manager for the organisation. The owner wanted (and needed) to become less hands-on and this would only be achieved with a highly skilled and experienced General Manager to take over a lot of the tasks the owner had acquired. A suitable reporting structure with the General Manager was enabled to ensure that the owner remained appropriately informed.

We established human resource processes and provided training as appropriate to support this. Staff were restructured in line with appropriate skill levels and cultural fit with the organisation. Training processes and procedures were set up to ensure skill fit with role and upskilling as required. Training reviews and retraining were included within this along with processes for non-conformance. To support staff engagement and to improve morale, human resource engagement and recognition tools were determined and initiated.

As a result of our work, there were significant improvements in quality, efficiency, and throughput across the business with less support from the owner required. Staff morale has substantially increased, the company culture is much improved, and the owner is mostly stepped back from the business. Having the support of Gibsons provided the focus and expertise to work through the solutions needed. Often this can be difficult when you are too close to the problem, or do not even see all the issues in place.

The benefit of having a Gibsons Consultant support your business is having an expert with extensive, hands-on business experience. Not an academic or theorist, but a realist who can provide practical advice and assistance that will deliver increased productivity, greater efficiency, and improved profitability to your business. Find out more about the services we offer and how we can help you reach your business goals.

Let us take the following tasks off your list:

  • Strategic analysis and business plans.
  • Becoming an Employer of Choice.
  • Marketing and sales plans.
  • Brand development and promotion.
  • Business process modelling.
  • Improving systems and workflows.
  • Optimising organisational structure.
  • Pinpointing skills gaps and implementing training.
  • Reviewing financial performance.
  • Profitability improvement programs.
  • Managing organisational change.
  • Mentoring to develop executive leadership.
  • Business process modelling.
  • Mergers and acquisitions.
  • Technology strategy and implementation.

We wish you a Merry Christmas…

…and a Happy New Year.

As 2023 starts to draw to a close, we would like to extend our seasons’ greetings. We hope you get to enjoy some relaxation and fun during the festive time. To all our clients, present and former, it has as always, been our privilege to support your businesses to reach and extend their potential. Our intention is always to work collaboratively with you to meet the goals and objectives for your specific business. We look forward to continuing our work with you in 2024. If you have not engaged our services this year, please know that the door is always open if you are keen to reinvigorate your business performance, as we enter 2024. We can be contacted at https://gibsons.com.au/contact/.

The Gibsons team.

Our services

As consultants each with a career lifetime of industry experience, there’s little we haven’t seen and little we haven’t dealt with in business. Each Gibsons business consultant, in addition to their personal area of career specialisation, has extensive, hands-on practical experience meeting challenges with solutions in a wide variety of scenarios, industry sectors and business model types. We are not theorists. We bring advice and assistance that has been “road tested” and known to deliver productivity increases, improved sales, and increased profitability in a business just like your own. We have a keen eye for the issues and opportunities that need actioning, and we’re here to help you build a stronger business right across the functions of peoplemarketingprocesses and profit.

Let us take the following tasks off your list:

  • Strategic analysis and business plans.
  • Becoming an Employer of Choice
  • Marketing and sales plans.
  • Brand development and promotion.
  • Business process modelling.
  • Improving systems and workflows.
  • Optimising organisational structure.
  • Pinpointing skills gaps and implementing training.
  • Reviewing financial performance.
  • Profitability improvement programs.
  • Managing organisational change.
  • Mentoring to develop executive leadership.
  • Business process modelling.
  • Mergers and acquisitions.
  • Technology strategy and implementation.

Our business pillars

Map out a better business with Gibsons. The first step on the road to success for any business is a strategic analysis. Our analysis reviews your current position, develops a vision for the future, and evaluates the strategy options available to take your business from where it is now to where you want it to be.

Once we’ve determined the best strategy, we’re able to develop a strategic business plan with you. This plan provides the detail needed across those key business pillars we always come back to – PeopleMarketingProcess and Profit.

People – Empower the agents of your success. Many people say their people are their most important resource, but do they act that way? Gibsons Business Consulting offers a range of people management services and capabilities to help you build a team that will drive your business forward.

Marketing – build a market-focused operation. Gibsons offers expert, tailored solutions beyond the scope of most marketing agencies because we approach marketing through the business-strategic lens. Whilst Gibsons excels at coordinating the tactical marketing activities involved in marketing promotion, we’re well known for strategic marketing which is the foundation that effective advertising, public relations and sales promotions should be built on. Ensure that everything about your business is meeting needs and reinforcing why customers should buy from you and not your competitors.

Process – build practical processes for greater productivity, efficiency, and profit. The primary reason for implementing business systems is to build consistency and, therefore, predictability into the quality of outcomes. Better systems and processes also establish the means for day-to-day operational activities to manage themselves, leaving managers with the time they need to deal with exceptions and to work on business development.

Profit – maximise business profit and cash flow. The aim of any business is to generate sustainable profit and positive cash flows consistently. If a business is unprofitable or isn’t cash positive, it can’t survive. It isn’t a viable business. We make sure you have the right measures and review processes in place so you can take informed action when you need to and keep your business on track.

Structure and process change to turnaround business performance.

It’s rare that we are approached by a company requiring assistance where there is clarity about why business performance is not as expected, and what should be done to fix this. Often, there is an understanding of the problem – a drop in sales, financial targets not being met, limited growth and so on – but the ‘why?’ of the issue is not clear, nor are the actions required to turn things around. We may enter our work with a client having been given one brief, only to find that other issues come to light as we investigate the problems that are taking place.

A manufacturing and installation company supplying the construction sector reached out to us for support with cited business performance issues. Sales levels were falling, and the company was experiencing a sharp decline in their Earnings Before Interest and Tax from a level of over 10% to only 2.5% of sales. We conducted a thorough review of the business’ operations and in addition to the problems with sales levels and EBIT, identified an issue with their margins for quoting and pricing. The company simply were not running at a level of margin that was long-term sustainable. They had significant quality and warranty issues which were cutting into profit margins, and there was poor labour management and supervision in place.

Without the right business structure and processes in place, it becomes very difficult to identity the ‘why’ when things go wrong. Clarity is missing, and as such appropriate actions are unlikely to be taken to turn things around.

Our business review identified the key areas to address, and we initially focused on implementing management review practices and reporting within the business to build an understanding of why these difficulties were occurring. We provided training and coaching to the company’s accountant to better analyse and report issues as they arose, and to make appropriate and timely recommendations to the management team. Management and supervision practices were established within production and management teams, and training and coaching of key management staff was enabled. Project management processes were also set up for all new projects initiated. A thorough review of the sales team and sales processes was conducted, and we established a sales management program with a priority to refocus the sales team. Alongside this, pricing and quoting margins were reviewed with a new pricing and quoting policy agreed.

After 6 months of working with this organisation we saw sales return to their normal levels, and after 9 months of sustained implementation of our recommendations, profits returned to 12% of sales. No significant quality issues have occurred for 6 months, and margins are stronger than ever with labour efficiency dramatically improved. The company now has high accountability throughout the management team, reduced stress, and happier staff with more satisfied customers.

Business change takes time, and modifying structure and processes doesn’t immediately impact the bottom line. It is with consistency and perseverance that business transformation is possible.

The question we often get asked is “why can’t a company just do this for themselves – why do they need an external advisor?”. In the case of this company, the management structure and processes were not in place to support the company to prevent these issues occurring. Without a significant and appropriate change to company structure and ways of working, change was not possible. Often it takes someone outside of a business to identify the change required, and once initiated, it can be easier to align with business priorities to meet, and often exceed, performance goals and success indicators. It’s also never an easy and quick fix.

Find out more about our strategic approach to unearth the challenges within your business and set you on the right path for success. Reach out for a no obligation, informal chat with one of our Senior Consultants today to chat about how we could help you and your business, call us (07) 3025 3220 or email [email protected].

[Photo credit: Minku Kang]

What’s holding your business back?

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.

Business growth through sales culture change

It would be understandable to think that issues related to sales are down to the sales process, pricing and the overall sales strategy. This is after all what drives a business’ sales levels and its approach to selling in the marketplace. However, dig a little deeper, and you’ll see the massive impact the culture of your sales team has on the implementation of your strategy. Perhaps the sales strategy is strong and appropriate for your offering, but how is it being executed and how is this being managed?

We were engaged by a major player in the Australian construction landscape to implement changes to their sales process and pricing structure to optimise margins. Our client’s construction reinforcing product had been used in most of the iconic structures in Australia including the Sydney Opera House, Melbourne’s Westgate Bridge and freeway, and Brisbane’s Gateway bridges. The company was well known and well established (100 years).

It initially appeared that the issues impacting sales and ultimately margins were related to the sales strategy. However, after a period of discovery, it became clear that sales performance was impacted primarily by the people within the sales team. While dedicated and committed, the sales team were agreeing to meet every customer requirement. There’s nothing wrong with putting the customer first and focusing on customer needs, but in this case, it resulted in unclear accountabilities. If you agreed to everything, who is going to follow through with the requests, and importantly can / should they be met? Inefficiencies were the result, as the team lacked clarity on what to prioritise and how.

Develop an effective sales strategy that is fully understood by staff to ensure consistency and accountability, but that also supports an effective management of performance.

In this case, there was no ‘organisation’ behind the sales team effort. To address the culture and performance inequities, Gibsons worked to embed processes and practices designed to clarify accountabilities, and to manage sales performance both company wide, and for sales team personnel. In total, 6 improvement programs were established and implemented over a 6-month period. This phased roll out started with the company’s Queensland team and are being progressively implemented across the rest of the business.

No matter how astute a management team is, often there are issues that from the inside are easy to miss, or people are too ‘close’ to the challenges, to effectively manage them. A Gibsons Senior Consultant who lives and breathes business improvement, will quickly get a feel for your business and be able to identify areas for improvement.

With accountabilities now understood and aligned across the entire sales process, these improvement programs have enabled the sales team to be more focused. An ‘achievement’ sales culture that the company was seeking has been established and revenue targets are being exceeded. The business growth potential identified has been enabled through this sales team reinvigoration. As is often the case, it’s not always that a strategy is wrong for your business. Often, the processes in place for implementation and management are not there; or are misunderstood or inappropriately executed by your team. Ensure your people know what they are accountable for and set up ways to manage this. Support your business’ potential by providing clarity in roles and expectations, and transparency in how this aligns with your overall company objectives.

As with many projects Gibsons work on, the reason we are called in is not always the cause of the challenges being faced. A Gibsons consultant is accustomed to scanning operations from a more objective viewpoint, with the benefit of deep experience gained from scores of business improvement projects. They can almost immediately spot problem areas that you may not be aware of. Find out more about the services we offer to support businesses and let us take the following tasks off your list:

  • Strategic analysis and business plans
  • Becoming an Employer of Choice
  • Marketing and sales plans
  • Brand development and promotion
  • Business process modelling
  • Improving systems and workflows
  • Optimising organisational structure
  • Pinpointing skills gaps and implementing training.
  • Reviewing financial performance
  • Profitability improvement programs
  • Managing organisational change
  • Mentoring to develop executive leadership.
  • Business process modelling
  • Mergers and acquisitions
  • Technology strategy and implementation

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.

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.

Plan for the unexpected

Many things can and do go wrong during succession planning, but here are the top 3 we at Gibson’s see during succession planning:

  1. The owner is not mentally prepared. The mind dictates clearly that it is time to hand over, but the heart does not want to let go. It is one of the key tasks of a supporting consultant to prepare the owner for the exit. If the owner is not ready to let go, progress will slow down and can even stop, and the succession ends up in the “too hard” basket.
  2. Waiting for better times. If during the succession planning the business does not perform as hoped, progress can come to a halt. Especially if external circumstances such as market decline or currency exchange rates impact business results, companies tend to put their succession plan on hold and wait for better times.
  3. Different understandings of the same terminology. A classic example is the offer of a multiple (to the profit) for a company. For some, this means all the assets and goodwill, others understand this includes stock, work in progress, etc. The same is true if a business broker is involved: commission on sale price includes for some business brokers, also the value of the owner’s stock. It’s important to be clear about terms and meanings from the start.

You only get to exit your business once, so it pays to get it right. Most owners are very successful managers but have very little experience in selling a business. Bringing in an independent business consultant with the experience and knowledge – one who has no agenda and who doesn’t act as a business broker or legal or financial advisor – can help define the best fit succession plan for the owner and achieve the best overall result.

Your role as an owner

There’s a saying amongst business consultants that some business owners aren’t looking for a successor, they’re looking for a monument conserver!

Understandably, leaving behind the business you’ve built up through your hard work is an emotional one. You need to remember however that you’re selling the company, not yourself. When owners are having difficulty letting go, they can send conflicting signals that compromise credibility and create confusion and doubt in the minds of potential buyers.

As the current owner, ensuring your house is in order and that you, your advisers and your team are pulling in the same direction and presenting the business well, is critical.

The first step is changing the way you see yourself – no longer as an operational owner but as a managing director of a strong management team. In many companies the owner wears many hats from General Manager to CFO to Sales Manager. Although this is often for good reasons, it is a big hurdle to overcome in succession planning. The value of a business is enhanced if the owner is not required to run the business. To get your business ‘sale ready’ you need to hand over any unique knowledge, such as customer contacts, special production or product knowledge, to the team that will remain when you leave. Without this, the business is worth far less.

Often it goes ‘against the grain’ to hand over control. But when you are planning to exit your business, you need to find ways to delegate responsibility to streamline the management of the business so that you as the owner are not tied to running every major aspect of the business. For now, you might control of some critical tasks, such as hiring of new staff, sales reviews and cash flow checks, and keep sensitive information such as company profit and employee salaries to yourself. But having a strong management team in place for all day-to-day activities is much better place for a successful succession plan. After all, you will need your employees’ help to prepare the business for the transition and then to make that transition successful. And while you negotiate the sale, you need to know that the on-going management of the company is running smoothly so that no surprises crop up at a critical point in the sales process.

While there is no one-size-fits-all approach to managing the challenge of simultaneously overseeing a successful business and managing a sales process, careful preparation and ensuring you have a strong management team is vital. Employees feel empowered and informed, you are freer to focus on succession planning and the sales process, and the new owner gains a thriving business. In that scenario, everybody wins!

Timing is key

“Retirement timing is always a tricky thing. I think it’s different for everyone. How you say goodbye to the thing you have really focussed on that much is a tough one. I’ve always intended to leave in good shape, to exit on a high note”. – Damian Woetzel

Business owners will inevitably move on from their business, yet the data shows that succession planning is typically last on their list of priorities. Business leaders are usually focused on building the business, and don’t like to think about the day they will leave it behind. But the reality is that planning for the sale or succession of your business is one of the most important decisions you can consider, and that proper succession planning will deliver the optimum results for you, your employees and the new owner.

To understand basis for succession planning, take yourself forward in time and imagine what you want to put on the table for potential buyers. You want to show them:

  • A successful business with a steady sales growth over the last 3 years
  • A stable management team which has demonstrated their management skills over many years
  •  A stable cash flow over the last 3 years, and a strong financial position
  • A predictable future income for the business, ideally supported by long term contracts
  • No legal disputes
  • A stable and engaged work force
  • A very presentable premises with well-maintained assets
  • A managed business that does not rely on the current owner for its success.

When a business can tick all these boxes, a succession plan can be implemented quickly, but unfortunately this is not often the case. This timing can make an enormous difference in what you take away from the closing table.

Succession planning should ideally start more than five years ahead of the business sale, with more detailed planning over the three years before the planned exit. If your circumstances allow you proper time to plan, you will be able to turn your attention to critical issues that need to be addressed before the sale. Depending on the business these types of issues might be:

  • The owner is heavily involved in operations. When they leave, production, sales or other areas will struggle.
  • The product portfolio is at the end of its life cycle or under threat of cheaper Asian imports.
  • Other key members of the management team will also leave once the owner leaves, and the business depends heavily on single individuals because of their knowledge or skills.
  • The company has no sales plan and a very unstable sales history

Within a reasonable timeframe, most issues are fixable – although one of our Gibsons Consultants fondly remembers a client who stated “I am 73 years old and want to get out of the business by the end of the year”.  Succession planning in this environment is obviously challenging and reduces the options on the table. In succession planning, timing is everything!


The key to successful succession planning

Whether or not you like to think about it, it’s inevitable that one day you’ll leave your business. It may be that you decide to sell up and enjoy the fruits of your labour in retirement, or you have to exit the business due to health reasons. Whether today or far in the future, the time will come when you, as a business owner, have to answer: Who will continue to run my business?

The key to successful succession planning is to ensure you are not asking this question too late! Leaving it until you have reached an age where you are no longer healthy enough to work, or when the enthusiasm that drove your business to success has disappeared, will devalue your business.

You could decide, or need, to sell at any point in time – but it takes time to have the business in a state to maximise the sale value. The reality is that planning for the sale or succession of your business is one of the most important decisions you can consider, and that proper succession planning will deliver the optimum results for you, your employees and the new owner.

Succession planning has a time horizon for the next ten years and allows you to plan ahead all the necessary changes for an optimal handover. A succession plan answers two basic questions:

  • Who will own the company in the future?
  • Who will run the company in the future?

For many SMEs, the owner is heavily involved in the daily business, so essentially the owner and the managing director are the same person. A Succession Plan might split these two roles, with a potential scenario being that the owner first steps back from operations while remaining the owner, and a certain amount of time, transfers the ownership.

But first, the current owner has to answer some fundamental questions:


1. What is my target for the transition?

  • Maximum upfront money
  • Legacy for my family
  • Protection of my brand name
  • Shortest transition period
  • Job security for my staff
  • Monthly income for the retirement

2. How much do I want to be involved after the transition?

  • A day or two per week
  • Consult to the business for some years
  • Bye, gone fishing

3. When do I want to step out?

  • Next 3 to 5 years: Plenty of time to make the company really attractive, optimise the product portfolio, clean up structure, train internally or hire required key positions
  • Next 2 to 3 years: Sleeves up, clean up fast, fix broken processes, prepare accounting
  • Less than 2 years: Doable, but no time to waste. Some transition models might be already gone, avoid a simple fire sale

The answers to these questions will guide your timeframes and approach.  It’s all about having choices. If you have a plan or strategy in place, then you can choose what you really want to do, at the time when you want to do it. And isn’t that what success is all about?


Engage Your Staff and Improve Your Bottom Line

Organisational leaders who exhibit a committed focus to people practices not only increase their chances of having a more engaged workforce but can also drive profit growth.

Recent studies by Real World Group and others have found that organisations with a highly engaged workforce have significantly better profit growth than those that do not.

There is no doubt that there is a high correlation between profit growth and employee engagement.

What do we mean by employee engagement?

Some people see it as being ‘job satisfaction’ but this can be a transactional relationship that is only as good as the organisation’s last round of perks or bonuses. Other people gauge employee engagement by employees’ emotional commitment to their organisation. While this is an important element it is only part of the engagement equation.

From our extensive experience in business consulting and human resource management, we take the view that employee engagement focuses on the:

  • Contribution of individuals to the organisation’s success
  • Personal satisfaction of individuals in their role.

We believe that aligning employees’ values, goals, and aspirations with those of the organisation is the best method for delivering the sustainable employee engagement required for an organisation to thrive and increase profits.

Full employee engagement represents an alignment of:

  • maximum job satisfaction – “I like my work and do it well”, with
  • maximum contribution – “I help achieve the goals of the organisation”.

Leadership commitment is one of the key features of organisations that rank highly in relation to employee engagement and effective human resource practices.

There is a very strong correlation between leadership commitment and employee engagement.

While the need to build employee engagement within a workforce may seem clearly obvious to many employers and HR managers, some businesses still fail to understand the importance of effective human resource practices to develop and engage your people.

While leadership commitment needs to come from the top of the organisation it is important to understand the key role played by line managers who are critical to the building and maintaining of high employee engagement.

Building employee engagement includes:

  • Recruiting staff who are aligned with the organisation’s values
  • Promoting flexible workplace options for employees
  • Creating succession plans for key staff
  • Providing opportunities for continued employee growth

It requires managers to build their leadership skills and not just focus on their management skills and theories of human resource management.

Practical steps you can take to help encourage higher levels of employee engagement:

  1. Set a positive tone of partnership. This is not a performance appraisal (not that we are suggesting performance appraisals should be adversarial).
  2. Talk about the importance of the employee’s job and how it fits with the organisation’s larger goals.
  3. Discuss your employee’s top priorities. Many managers find gaps in perception which can have a negative impact on engagement.
  4. Ask ‘What support do you need from me?’ and ‘What kind of feedback is most useful to you?’
  5. Talk about ways to use the employee’s talents (the ones that this person enjoys using).
  6. Ask about job conditions: What gets in the way of great accomplishments? What gets in the way of a great day at work? What does the employee enjoy most?
  7. Discuss how you work together. It is not enough to agree you should meet regularly. Clarify what that term means to you both.
  8. Agree to meet again. You can’t have one discussion and check off the box that you have addressed your employee’s engagement successfully. Engagement levels are dynamic. Things change. The conversation lays a foundation for specific HR-related discussions about performance, development, or career management. It also establishes a common language you can use to check in quickly – and regularly – about engagement issues.

Employee engagement is an integral part of managing the human resources in your business which can transform unknown ‘resources’ into people who will engage with their work, engage with your business and drive profit growth.


The Importance of Cultural Resilience in a Downturn

If there is one thing that companies learn in an economic downturn, it is the importance of resilience – the ability of an organisation to withstand shocks and remain sustainable under prolonged periods of duress.

The most resilient companies display the following characteristics:

  • A high level of staff engagement
  • A low level of cultural entropy
  • A vision of the future shared by all employees
  • A set of values shared by all employees
  • A focus on adaptability and innovation

Not only do these qualities create resilience, they also lead to internal cohesion, a key component in building a strong internal community that can drive the goals and performance of the organisation. The current economic climate shows us that organisations that are strong on the inside are also strong on the outside.

Being strong on the inside means having a values-driven culture, a highly aligned, cohesive and effective leadership team, a low level of cultural entropy, and a high level of staff engagement. It means effective human resource management practices / people management to develop your people and develop leadership.

Cultural entropy is the degree of dysfunction in an organisation. It is the amount of energy consumed in unproductive work and is therefore unavailable for useful work. Cultural entropy arises from the presence of limiting values such as bureaucracy, internal competition, blame and fire fighting rather than an environment of promoting positive values.

The experience of our business consultants shows that low levels of cultural entropy are accompanied by high levels of financial performance and high staff engagement. Companies with these attributes are able to grow their incomes significantly faster than companies with high entropy.

The following checklist of actions will help you to build your organisation’s resilience, support you in traversing economic downturns, and place you in a strong position for success when growth rates pick up.

This checklist is based on the core principles of a ‘values’ driven organisational culture. Each of the six items on the checklist represents a critical step in building a sustainable organisation.

How to build your organisation’s resilience:

Step One: Be clear on your direction. Re-energise your vision, mission and values to build internal cohesion.

Step Two: Communicate with staff and customers: confidence is important. Ensure everyone knows what you are doing to get through when times are tough.

Step Three: Focus on your core business. Get lean. Streamline your systems and processes to reduce costs and increase agility.

Step Four: Learn to adapt to a changing environment. Eliminate activities that don’t add value.

Step Five: Build strategic alliances. Align with your customers and suppliers to create mutually supportive and beneficial relationships.

Step Six: Keep the long term in mind. Ensure your short-term plans do not compromise your long-term viability.

It all sounds fairly basic, but remember that successful organisations – both in boom times and downturns – are generally those that harness positive energy to consistently do the basics well. That includes consistent and effective human resource practices that develop and support staff and leadership to build and maintain a culture of resilience in your business.



Running an Effective Toolbox Meeting – Part 3

To finish off our ‘Running an Effective Toolbox Meeting’ series, we provide some practical tips and ground rules to keep in mind when conducting a toolbox meeting.

With a little preparation, the right attitude, a simple process to follow and a bit of practice, business managers/supervisors can run effective toolbox meetings that produce useful results, engage employees, facilitate human resource management and assist in your day-to-day business operations.

1. Knowing How to Do it

Most people don’t enjoy speaking in public (remember the wedding speech) and this shows. However, you can learn how to run good toolbox meetings, because like a lot of other things, it is mostly experience and knowing a few ‘tricks of the trade’.

Here are a few tips, and after some practice you can get over being nervous, relax a little and run a really effective toolbox meeting.

  • Don’t try to run a toolbox meeting with too many people.
  • Preparation is critical so make sure you set aside preparation time.
  • Employees won’t remember a lot of detail so pick out the important things.
  • Carefully think out just what it is you want to say, and sound confident.
Presentation, attitude and body language
  • Remember people can talk faster than they can listen, so don’t go too fast.
  • 85% of all communication is non-verbal, so watch the body language.
  • Don’t put yourself down by pretending you haven’t got anything important to say.
  • Position yourself so you can see everyone and they can see you.
  • Look them in the eye and make them listen to you.
  • Use some notes to make sure you don’t forget things.
  • Don’t be too self-conscious for no one will be as critical of you as you are of yourself.
  • Remember, you have called this meeting and it is very important to everyone.
Produce useful results
  • Ask open questions that will encourage people to speak up.
  • Don’t get defensive when people ask hard questions, or criticise you or the company.
  • Don’t get sucked into arguments in the toolbox meeting in front of all the others – take individual gripes offline and handle one-on-one.
  • The first couple of toolbox meetings might be ‘bitch’ sessions but persevere.
  • Don’t try to cover too much in each meeting and put a time limit on the meeting.
  • Make sure you keep notes of what has been done – this is particularly important in relation to discussion about and initiatives taken on safety. (Refer to the meeting template below.)

2. Are Employees Really Interested in Toolbox Meetings?

Yes they can be, but they don’t like boring meetings that waste their time and don’t tell them anything about how they are doing at work, what might be happening to their job and what their prospects are for earnings, promotions, training etc.


Where supervisors have persevered with toolbox meetings, they have quickly found that their employees, the company and the supervisors are better off as a consequence of being involved in toolbox meetings.

3. Some Basic Ground Rules for a Toolbox Meeting

  • One speaker at a time – be an active listener
  • No personal attacks/comments
  • Everyone participates, no one dominates
  • Work to understand each other’s view as well as communicating your own view to the group
  • Keep an open mind
  • Work together for solutions and agree to the action plan
  • Keep a record of the meeting (the toolbox meeting template can help you with this).

To help keep your toolbox meetings on track and to assist you to record important information from your meeting, download our Toolbox Meeting Template.

Try out these simple toolbox meetings in your business and keep an eye out for the positive results that will follow.

And if you need advice or assistance with any HR / people management issues or in managing your day-to-day business operations, talk to an experienced business consultant.


Running an Effective Toolbox Meeting – Part 1

1. What are Toolbox Meetings?

A few supervisors and managers have been holding successful toolbox meetings for many years, but now the secret is out. The reality is that they are easy to run and do produce very good results on a regular basis.

How do Toolbox Meetings work?

The supervisor merely sits down somewhere at work (perhaps on the toolbox, hence the name) and talks over work related issues with his or her employees. This also allows workers to tell the supervisor what is really going on with the job, resulting in a two-way communication flow. This is an informal process and therefore has advantages over more formal meetings where people often feel uncomfortable or don’t think the meeting has much to do with them.

Research shows that business performance increases significantly when people are engaged so it is important to find effective ways to pass on information to employees and receive information back from staff – and toolbox meetings can be the answer.

2. Why are Toolbox Meetings so Important?

  1. Toolbox meetings allow for two things which are quite critical to successful business operations and effective human resource management and employee engagement:
    • They are the best way to give employees more information about the business, about what changes are occurring, how they are doing, what is going right, what is going wrong – both at the broader level and most importantly, at the local level. They can help you manage your human resources.
    • They are often the best way for management and supervisors to tap into the most precious information which employees have and which they are usually willing to share if only we ask them in the right way. All of us understand that the person doing the job knows just what is going wrong and what can be done to improve things and toolbox meetings can be the way to gather this information. Increased employee engagement leads to better business performance.
  2. Toolbox meetings are also important because we now have the evidence that employees are interested in what is happening to the business they work in. That should be no surprise, but somehow it often is. Employees are interested in information about their jobs, changes that are going on locally, how they are doing, their own prospects for promotion, what training is available and so on. Most importantly, they want to hear about all of this from the person they would like to believe before anyone else – their immediate supervisor.

Employees are interested in what is happening to the business they work in and in information about their jobs

3. The Nuts and Bolts of Toolbox Meetings

Over the years, a lot of supervisors have tried ‘having a meeting’ with their employees and many times these have been quite disastrous. Usually, this has been because the nuts and bolts have not been right. In particular, there are four things which have often gone wrong:

  1. They have been held in the wrong place at the wrong time.
  2. The supervisor did not have anything important to say and probably didn’t want to hold the meeting in the first place and that quickly shows.
  3. The supervisor didn’t know how to run the meeting and it became an embarrassing shambles.
  4. The employees had been through these sorts of meetings before and thought they were a waste of time. They had offered ideas before but nothing happened, so they figured why bother?

For more on Toolbox meetings and how to tighten those loose nuts and bolts and avoid disastrous or simply ineffective meetings, look out for Running an Effective Toolbox Meeting – Part 2.


Employer of Choice – Becoming a Learning Organisation

Business Success: The Human Factor (Part 6 of 6)

Is your business successful and profitable?

Are your people productive? Are your employees costing you money?

If you missed the earlier parts of our Employer of Choice series, you may wish to start with: ‘Become an Employer of Choice’.

Our people management series kicks off by looking at the various human resource management issues consistently found in the SME sector that worry business owners. It then covers Effective Staff Selection, Induction, Performance Management, and Employee Exit Procedures.

Subsequent articles discuss Effective Communication, Meetings, and Goal Setting and Feedback; then Rewards and Recognition; Selling the Value to Employees; and Building Leadership and Succession into your Business.

One of the keys to business success is employee engagement and alignment.

Staff Engagement = Motivation = Performance = Productivity = Profitability

What other human resource management strategies can you use to ensure your business becomes an employer of choice?

Become a Learning Organisation:

Monitoring, Measuring, Understanding and Working on Your People and Your Business

Understanding Your Organisation – Monitoring and Evaluating Success

There are many tools that enable you to see deep into your organisation. In skilled hands a range of these diagnostic tools provides an objective window into the human health of your organisation. There are clear steps to this very fundamental process:

  • Regularly assess the key barometers of human success
  • Review and understand the key drivers
  • Objectively measure and analyse those drivers
  • Review the results in a team environment
  • Develop a course of action to improve and and/or maintain a strong human culture within your business


Act on what you see and understand by implementing actions that continue to build and maintain strong engagement and alignment, the essence of a strong team.

You can then fine tune and continually learn how to improve employee engagement and alignment and ultimately the human and business health of your organisation.

Human health does not eventuate via a once off feel good employee survey. It is a continuous process.

Become a learning organisation. And become an Employer of Choice.

Sound simple? Yet in the current business environment where sourcing and retaining the right people is so difficult, managers and supervisors all too often don’t apply these basic human resource management principles.

VERY IMPORTANTIt is never too late to act.

You’ll be amazed at the results if you do apply these basic principles. And if you need advice or assistance with people management issues or business planning, talk to an experienced business consultant.


Employer of Choice – Building Leadership and Succession into Your Business

Business Success: The Human Factor (Part 5 of 6)

If you missed the introduction to this people management series, how about starting with: ‘Become an Employer of Choice’.

Our Employer of Choice series starts with a look at the various human resource management issues consistently found in the SME sector that worry business owners, and then covers Effective Staff Selection, Induction, Performance Management, and Employee Exit Procedures.

Subsequent articles discuss Effective Communication, Meetings, and Goal Setting and Feedback; then Rewards and Recognition; and Selling the Value to Employees.

Staff Engagement = Motivation = Performance = Productivity = Profitability

Building Leadership and Succession into Your Business

Knowledge, Skills and Attribute Development – Set your people up for success

Stage 1 – Build success in your team in their current roles

  • Understand and establish role criteria – What defines success for each role in your business?
  • Knowledge – What are the knowledge requirements for each role within your organisation?
  • Skills – What are the skill requirements for each role within your organisation?
  • Attributes – What are the key attributes, qualities or values required for each role within your organisation?

Define and document each role in the organisation clearly and thoroughly to provide a blueprint for success.

  • Assess your team against their roles – How well do they meet the criteria for their respective roles in your organisation?

Assessments often reveal human weaknesses in your organisation which may require difficult decisions to be made. For example, there may be a need for an organisational restructure.

  • Take ACTION
Human Resource Case Study: Assessment of suitability of employees for their role

For an SME that Gibsons Business Consulting recently provided human resource management consulting services, using the above process it was found that 14 out of 26 key people employed in the business were deemed not suitable for their roles.

The result:

  • Some staff moved on,
  • Some staff changed roles, and
  • Some staff stepped up and met their role criteria.

The bottom line is that all of the employees of this business now meet the criteria set for their role, and business performance has improved measurably as a result.

For those employees who stepped up with the aim to meeting their role criteria, the following human resources management approach was undertaken:

  • Train staff where their knowledge or skills do not meet the criteria for their role.
  • Mentor staff where their attributes are inconsistent with the criteria for the role.
  • Revise or change role definition while the development process takes place to allow time for staff to transition effectively into their new role.
  • Regularly review staff against the criteria set for their role and provide feedback supported by action and support.

The above human resources management approach should be followed for every role in your organisation to ensure every member of your team meets her or his role criteria. This is the blueprint for individual, team and ultimately, business success.

Stage 2 – Build succession in your team in their future roles – become a learning organisation

These assessments become the blueprints for future leaders. Rising stars become obvious through this process as does their development into their next career move. Actions can be taken well in advance to train and mentor people into their next career move before it happens. Intentional leadership development and succession planning as part of your human resource management and business planning sets the business and staff up for ongoing future success and development.

Your employees will thank you for it and you will not only build a strong team, you will create the basis for true succession in your business by developing your future leaders in a dynamic and pro-active way.

Sound simple? Yet in the current business environment where sourcing and retaining the right people is so difficult, managers and supervisors all too often don’t apply these basic human resource management principles.

It is never too late to act.

You’ll be amazed at the results if you do apply these basic principles. And if you need a hand with any people management issues or human resource management initiatives, talk to an experienced business consultant.

The next blog and final blog in this series is ‘Employer of Choice – Becoming a Learning Organisation‘.

Employer of Choice – Selling the Value to Employees

Business Success: The Human Factor (Part 4 of 6)

Is your business successful and profitable?

Are your people productive? Are your employees costing you money?

If you missed the beginning of this people management series, you may like to start with: ‘Become an Employer of Choice’.

This first article in this series builds the foundations to becoming an employer of choice by looking at the various human resource management issues consistently found in the SME sector that worry business owners; and then covers Effective Staff Selection, Induction, Performance Management, and Employee Exit Procedures.

The others articles discuss Effective Communication, Meetings, and Goal Setting and Feedback; and Rewards and Recognition to engage and align staff.

One of the keys to business success is employee engagement and alignment.

Staff Engagement = Motivation = Performance = Productivity = Profitability

Why would someone want to work for your business?

Why would an employee or prospective employee consider you to be an employer of choice?

Selling the Value to Your Employees

Employees’ Value Proposition – Understanding and Respecting the Individual’s Path to Success

Selling Products and Services to current and prospective customers is all about understanding the Value Proposition of those customers. When we know what represents value to our customers then we can develop clear sales and marketing plans built around communicating and delivering that value to them.

Not only do we need to communicate that value to customers, we also need to communicate that value to employees.

One of the keys to attracting and retaining quality staff is based around understanding their Value Proposition, that is, understanding what drives your current and prospective employees to want to work for you.

The key first step is to Understand the Employees Value Proposition. What are the key factors that your employees use to determine the value in working for you?

VERY IMPORTANT: if you don’t know the key factors behind your employees’ value proposition then find out.

Then, build the right messages into your communication processes in all areas of your human resource management:

  • Recruitment and Selection
  • Induction
  • Performance Management
  • Skills Development and
  • Rewards and Recognition.

Remember, you must communicate that value to current employees as well as to prospective employees.

So, train your Managers and Supervisors to do it right. Then, sell it to current and prospective employees, and not only once – over and over again – and keep reviewing and refining the message because the Value Proposition will change over time.

It is never too late to act.

The next blog in this series is ‘Employer of Choice – Building Leadership and Succession into Your Business‘.