What are the foundations of a good business?

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“You can’t build a great building on a weak foundation. You must have a solid foundation if you’re going to have a strong superstructure”

Gordon B. Hinckley – American religious leader

Deciding to go into business is the first step. The second step is to ensure that from the beginning the business has solid foundations. This is critical and is relevant whether your business is a start-up, or you are purchasing an existing business. Like a building constructed on solid rock, a business with a solid foundation will have a better chance of surviving the inevitable challenges, than one built on unstable foundations. Cracks will inevitably appear in a business over time, as they do in a building. By solid foundations I don’t mean a market niche, systems and processes, skilled employees and loyal customers which can be easily found in ‘how to’ management books, and on the internet.

When my partners and I were going into business, it involved a management buyout of an unprofitable business. We were eager to ‘have a go’ on our own and prove we could build a successful business. This leap of faith meant mortgaging our houses to raise the capital, not an unusual practice for funding new businesses. This certainly focussed our attention. Failure could mean losing the family home and all the implications associated with family life.

As with an elephant’s legs supporting the world’s largest land animal, having a solid foundation on which to build and support a business is essential. Luckily the previous owner had an excellent financial director who provided us, with some practical and useful advice;

”Protect your assets and limit your risks and liabilities”.

We also sought advice from external experts. As owners and managers, we didn’t know what we didn’t know. Seeking external expertise is essential. From our experience in setting up in business, the disciplines where external assistance is required in the following disciplines:

  1. Legal advice in setting up the business’ legal entities, including each owner’s private company which were shareholders in the business, establishing corporate structures that reduce the exposure to legal claims from avaricious ambulance chasing lawyers, completing shareholder’s, agreements, terms and conditions and suppliers’ agreement.

One of the lessons learnt was whilst the structure of the founding team set out the entitlements of each founder, we did not clearly outline our roles and responsibilities which lead to. performance and accountability becoming issues and was complicated by two family tragedies. This could have been managed more effectively if roles and responsibilities had been more clearly set out and a company board that held the executive team and founders to account had been established.

  1. Financial advice from a chartered accountant on business related finance issues, including insurance, taxation, banking and recommended corporate structure in combination with legal advice .

The main lesson learnt was to separate the business entity from personal affairs is essential. Unfortunately, I have witnessed some businesses getting into financial difficulty by not separating private and business affairs as well as a lack of discipline and  no clear understanding of the importance of keeping this separate. This is particularly relevant to family businesses.

  1. Strategic business advice from an advisor with business owner experience. There are two issues here;
    • seeking external advice
    • ensuring it comes from a consultant or advisor who has practical experience in managing and owning a business.

Too often there are consultants who do not have this experience and do not understand what it is like to have their money and house on the line.

In retrospect we should have sought in our logistics business external assistance in strategic planning.  Our annual budgets were built from the ground up and served as our business plan. The weakness became apparent in the vital areas of values, vision and a mission statement which underpin the budgets and business plan. These were missing. We did not recognise their importance. Values, vision and mission statement were only created when we established a webpage. We would have benefited immensely from engaging an external advisor earlier in the piece. The business although profitable would have been more profitable and would have developed more strategically. Professional external advice would have opened up opportunities through identifying strategic long-term customers, obtaining government grants and developing new networks.

In conclusion, the message is seek advice from those with expertise so the business has solid foundations, so when inevitably the storm comes the business has a greater chance of survival. Seeking external advice is not a sign of weaknesses. Elite athletes and sporting teams all have coaches. A business is no different. Also as a manager and business owner, on-going education is essential for continual success.

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Management lessons from the sinking of the Bismarck

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“Sink the Bismarck”

Quote attributed to British Prime Minster, Winston Churchill in 1941

Just over 80 years ago this month, the Bismarck was sunk.

What was the Bismarck?

The Bismarck was a World War II German battleship. With over 2000 sailors, it was the flagship of the German Navy and was the largest battleship then commissioned. In late May 1941, the recently launched Bismarck and another German warship, the Prinz Eugen evaded the British Navy and escaped from the Baltic Sea into the Atlantic Ocean. Their mission was to destroy as much Allied shipping as possible, and together with the U-boats, force the suspension of the supply convoys from the USA, vital for Britain’s survival.

The Bismarck was the most advanced battleship at the time. More modern, faster and more heavily armed than any ship in the British Navy. The Bismarck had a special anti-torpedo belt made of nickel-chrome steel. The Germans believed that no torpedo could penetrate the shield and were convinced that the Bismarck was almost unsinkable. Furthermore, the Bismarck had a sophisticated anti-aircraft fire control system to protect it from attacking aircraft.

The British Navy sent the flagship of the Home Fleet and their largest warship, the HMS Hood and another ship the Prince of Wales to hunt down the Bismarck. In the ensuing battle in the North Atlantic, the Hood was sunk within three minutes and over 1400 sailors lives were lost. Only three survived. The loss of the Hood was a significant blow to British morale. Although also hit, the Prince of Wales managed to damage the Bismarck before retreating from the battle. This forced the Bismarck to abandon its raiding plans.

The British Prime Minister Winston Churchill then issued the order “Sink the Bismarck!” and the relentless pursuit of the two German warships by dozens of British Navy ships began.

The damaged Bismarck, leaking oil, limped towards Nazi occupied France where protective air cover and a destroyer escort were waiting. However, by a stroke of luck an RAF Catalonia flying boat sighted the Bismarck’s oil slick and reported her position. From then on, the British Navy used radar to track it and over a dozen warships followed the battleship.

One of the British ships shadowing the Bismarck was the aircraft carrier Ark Royal. On it were 16 obsolete open cockpit Swordfish bi-planes. With time running out, and with the Ark Royal being the closest ship to the Bismarck it was decided to attack the Bismarck from the air. In atrocious weather and in the fading light the slow-moving Swordfish attacked using torpedoes. Bismarck’s sophisticated anti-aircraft guns were too advanced to shoot down the slow-moving bi-planes. In the final attack, a single torpedo hit the Bismarck’s rudder and steering gear, and from then on it was unable to maneuver. It could only steam in a wide circle.

Unable to repair its rudder and steaming in a circle the Bismarck was doomed. The next morning the British Navy opened fire on the crippled battleship. With its large guns partially out of action, and unable to maneuver, the Bismarck was sunk within two hours, on its maiden voyage, with the loss of over 2,000 men.

What do you think are the management lessons from the sinking of the Bismarck?

Here are three lessons to consider.

1. Do not rely on technology.  The Germans considered the Bismarck as virtually unsinkable with superior firepower, advanced torpedo shields and sophisticated anti-aircraft guns. However, the low-level technology of the Swordfish bi-planes managed to cripple the Bismarck.

2. Technology is an enabler. It indirectly resulted in the sinking of the ship. The British used radar, which was a very new technology to track the Bismarck. Without it, the Bismarck would have escaped to the safety of Occupied France.

3. Persistence pays off. Despite the superiority and perceived danger of the Bismarck to Britain and its navy, a well-planned and persistent chase managed to find and sink the Bismarck. Furthermore, in the dying light in atrocious weather and against all odds, a single outdated Swordfish bi-plane managed to damage the Bismarck just when it looked like the Bismarck would escape the Royal Navy.

What other lessons can you find?

Remember: We can learn from history.  The use of well-known historic examples helps paint a more vivid picture and storytelling helps communication.

Can we learn anything as managers from the 1975 film, Monty Python and the Holy Grail?

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“I am invincible!” said the Black Knight

This British comedy film concerns the legend of King Arthur travelling throughout Britain seeking men to join the Knights of the Round Table in the search for the Holy Grail.  In medieval British legend, the Holy Grail was the cup that Jesus used at the Last Supper. Beliefs at the time said it could heal wounds, deliver eternal youth and grant everlasting happiness. Today, it is a term used to describe a goal or object that is elusive and can never be found or achieved.

It is one of my favorite movies which I must admit I have watched at least 10 times and has a cult following. In watching it again last month, I realised that it had some important lessons for us as managers.

  1. The Black Knight. (https://www.youtube.com/watch?v=ZmInkxbvlCs)

King Arthur approaches the Black Knight who says: “none shall pass”. Despite pleas to be reasonable King Arthur is forced into a joust, resulting in the Black Knight losing all his limbs in the ensuing sword fight. He refuses all offers by King Arthur to cease the one-sided contest. One of my former business partners refused to accept that a manager was having detrimental effects on morale and profitability, despite being presented with the facts. It was only when the partner went on holidays that we were able to take action and dismiss the manager.

What is the lesson for managers here?

Clearly, the stupidity of the Black Knight resulted in him losing all his limbs. Stubbornness, refusal to face facts, bloody mindedness, denial and continuing poor decision making is not a sound managerial strategy. Managers should be realistic when confronted with facts, however unpalatable.

  1. The Man called Dennis. (https://www.youtube.com/watch?v=-8bqQ-C1PSE).

King Arthur approaches some peasants on the way to a castle on the horizon and mistaken calls one of the peasants an “old woman”. He then makes excuses for not knowing the peasant’s name (Dennis), age (not old he’s 37) or the fact that he was a man.

Can you spot the poor management here?

Managers should make the effort to know their staff. It’s the attention to detail and often the small things that are important and appreciated. I remember witnessing a manager whom the staff had no respect for walking around a warehouse pretending to know their names and be interested. It became a game to get him to call the person the wrong name.

  1. The Rabbit Cave. (https://www.youtube.com/watch?v=TnOdAT6H94s&bpctr=1588724390)

King Arthur and his Knights are directed to a cave by Tim the Enchanter. Inside the cave are the directions to the site of the Holy Grail. The entrance to the cave is littered with bones and is guarded by a killer rabbit. Tim warns the Knights that rabbit is a killer and they ignore his advice. They choose to ignore, they attack, which results in the deaths of several knights.

As managers, what can we learn here?

Why did the Knights attack despite being warned and seeing the bones outside the cave? Because they didn’t listen to advice and ignored the evidence. Often as managers we make these fundamental errors, sometimes because our egos get in the way or we don’t wish to face the facts. When managing a transport business, I remember discounting the option that theft from motor vehicles was occurring in our depot even though the evidence seemed to suggest otherwise. A private investigator proved me wrong

In conclusion, the final lesson is within the film itself. Faced with budget constraints, the use of real horses was deemed prohibitive. Instead the Knights ‘travel’ on invisible horses with the sound of the horses’ hooves clopping coming from the clapping coconuts. The idea came from an old radio technique of  using coconut halves as sound effects for horses. Yes, as managers we should all be prepared to compromise, improvise and find solutions that could be just as suitable and more affordable. In our logistics business we were confronted with excessive waiting costs at a retailers’ distribution centre and could not recoup the costs. After some experimentation initially with shipping containers we negotiated a drop-out system for a van trailer, thereby eliminating waiting time and significantly increasing our returns.

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What is a SWOT?

‘Proper planning and preparation prevents poor performance. ’

Stephen Keague – Irish author

The aim of this section is to explain the benefits of performing a SWOT analysis on your organisation. It is not how to perform a SWOT – which can be found on the internet and in management books – but why SWOTs should be done and who should conduct them to achieve the best outcome.

What is a SWOT analysis?

SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is an organised list of a business’s greatest strengths, weaknesses, opportunities, and threats. It is a planning tool which businesses can use at any time to assess a changing environment and respond proactively.

Here are some important SWOT concepts:

  1. SWOT analysis is part of a business review.
  2. Strengths and weaknesses are generally internal to the business – for example, internal resources and capabilities such as people’s skill levels, business processes and assets.
  3. Opportunities and threats tend to be external to the business – such as the economy, competitors, new technology and suppliers.
  4. Strengths and opportunities are positive to the business.
  5. Threats and weaknesses are normally negative to the business.
  6. The outcome of a SWOT analysis should result in a dynamic action plan, not a static statement.

The major problem with a SWOT is that too often it results in a list of statements for each of the four components. It is not an action plan. This is the challenge for management. Each of the four sections of the quadrant are linked to each other, so a list of actions can be created. These are shown below.

 Figure 6: Four Quadrants of a SWOT

Here are the six questions that should be asked:

  1. Strengths – Weaknesses: What actions can be implemented using the organisation’s strengths to overcome the identified weaknesses?
  2. Opportunities – Threats: What actions resulting from the identified opportunities can be used to overcome or reduce the threats?
  3. Strengths – Opportunities:  What are the actions that can leverage off your organisation’s strengths and take advantage of the identified opportunities?
  4. Strengths – Threats:  Using the organisation’s strengths, what actions can eliminate or reduce threats to your organisation?
  5. Opportunities – Weaknesses: Considering the opportunities, what actions can be taken to overcome the organisation’s weaknesses?
  6. Weaknesses – Threats: What actions are required to overcome the organisation’s weaknesses, to assist in preparing to face threats, both now and in the future?

Action Plans from a SWOT

In answering these questions and forming the resulting actions, plans can be developed which can then become part of the strategic business plan. Performing a SWOT analysis is a vital part of creating a business plan and should be done every 12 months. I recommend conducting a strategy review meeting at least once a year, beginning with a SWOT analysis. In my experience, SWOT sessions should be performed with the management team, preferably with an independent facilitator. The independent facilitator is less likely to have a personal agenda and can impartially manage the discussions. When a new client first meets with me, we normally complete a SWOT session. This session may extend over two to three meetings depending on what is found. This establishes the groundwork for understanding the business and the foundations of a business plan.

In over 15 years in our logistics business, we only performed a SWOT session twice. Looking back, this was a major strategic error. We missed out on opportunities and failed to act on some of our weaknesses. There were many reasons for this, including the reluctance to face the brutal facts, less than rigorous discipline by some partners and reluctance to seek professional external advice and assistance. We did, however, compile an annual budget in which our performance was measured each month but, in hindsight, a SWOT with a corresponding business plan would have been more beneficial.

When was the last time you performed a SWOT analysis session with your team?

Were the resulting plans of action completed?

Did they form part of the business plan?

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Business plan – why the journey is more important than the destination?

‘A goal without a plan is just a wish.

Antoine de Saint-Exupéry – French writer and pioneering aviator

What is a business plan?

It is a formal statement of future business goals and a plan for reaching those goals.

In their 2017/18 SME Research Report, Australian financial and business advisory  HLB Mann Judd found a staggering four in five businesses do not have a working business plan. Of those with a business plan, only one in three regularly spends time refining their plan. Similar results were found in the UK  in 2015 in a survey by Barclays Bank. Only 47% of all UK small- to medium-sized enterprises (SMEs) had a formal written business plan.

Should this be of concern?

Yes.

Failing to plan increases the likelihood of failure, whether in business or at a personal or professional level.

What should be in a business plan?

A business plan should commence with a vision, mission and values statement. It should set goals, realistic objectives and attainable targets. These targets should also be stretch targets to challenge management  and include strategies as well as a plan of action.  A business plan is not static. It must be a dynamic living document, providing a mechanism to resolve problems and maintain profitable growth.

What are the benefits of having a dynamic business plan?

Change is inevitable. A dynamic business plan can provide a framework to manage internal change and to  meet the challenges and opportunities of external change. The process of developing a business plan commences with a Strengths Weaknesses Opportunities Threats analysis (SWOT). The SWOT, if performed well, will identify the opportunities and threats to the business and its strengths and weaknesses. My clients tell me the best SWOT sessions should be conducted by an external professional facilitator, who does not necessarily have an intricate knowledge of the business or industry. They are less likely to have internal business agendas or conscious or unconscious biases. The best SWOTs are derived from a well-facilitated process.

How can a business plan fit into the annual running of the business?

In writing a business plan, some of the greatest value is derived from the time spent thinking about the business – understanding its background and the external and internal aspects of the business and industry. A SWOT is a good example of this process.

The next step is to write a business plan. There are many different models and templates that can be used to write a business plan, and the choice of model  is a matter of personal and professional choice. In my experience, the best plans result from a team effort – which includes input from key managers and provides greater scope for involvement and commitment. Even as the business owner or CEO, you may not be  the smartest person in the room.

The ongoing  value of a dynamic business plan is in monitoring the plan. I use the model below  which breaks down the plan into 90-day projects, 1-year goals and a 3-year  vision. This is aligned with the annual budget.

 Dynamic Business Plan

The business plan is presented in manageable and achievable bites, like eating an elephant. At monthly management meetings, 90-day projects are monitored to check progress towards the overall vision. Small projects build towards the 1-year goals, which in turn form part of the 3-year vision. The power of this approach is that those involved can measure the progress against the plan and are therefore more committed. At the same time, financial performance is checked against the annual budget. If circumstances change, priorities can be easily adjusted. With our logistics business, our goal was to be recognised as the pre-eminent provider of floor-ready merchandise services for suppliers to major retailers. When the retailers established distribution centres in Asia, we were forced to change our strategy to providing full warehousing services to SMEs.

Remember: business planning – like life – is a journey, not a project.

Do you have a business plan for one year or three years?

 

So who were Burke and Wills?

“No expedition has ever started under such favourable circumstances at this”.

Robert O’Hara Burke – leader of Burke & Wills Expedition

Yesterday over 160 years ago, watched by 15,000 cheering people, 19 men, 26 camels, 23 horses and six wagons loaded with 20 tonnes of supplies, including 80 pairs of boots, a cedar-topped oak desk with matching chairs, a bath, rockets, a Chinese gong and six tonnes of firewood, left Royal Park in Melbourne heading north. It was the first expedition in Australia to use camels for transport. This was the start of the famous Burke and Wills expedition. Sponsored by the Royal Society of Victoria the expedition was attempting to be the first to cross Australia, from south to north and return. By the second day at Essendon, only eight kilometres from Melbourne, three of the six wagons had broken down.

It was the best equipped expedition in Australia’s history, sponsored by a Victorian Government, flush with the wealth from the Gold Rush, and the Royal Society of Victoria. It was led by an Irish-born police officer, Robert O’Hara Burke.  Initially the second in command was George Landells, but he left the expedition less than two months later following disputes with Burke, so, William John Wills replaced him. The first night, Burke rode back to Melbourne to see Julia Matthews perform at the Princess Theatre as he was infatuated with her. It is alleged that Burke’s main motivation for leading the expedition was to win Julia’s heart and her mother’s approval. It took the expedition two months to reach Menindee in western New South Wales, even though it took a mail coach just over a week to make the same journey.

Burke, following a questionable army career where alleged gambling debts meant he had to resign his commission, joined the Irish Constabulary. When dissatisfied there, he boarded a ship for Australia. With the Gold Rush in full swing and the resulting chaos, and a shortage of police he managed to secure a position as a Police Inspector. He gained a reputation as an eccentric, a gambler, a risk-taker, and a strict disciplinarian with a “talent” for getting himself lost. Through connections and lobbying Burke somehow got himself appointed as the leader of the expedition. Burke had no knowledge or experience in managing an expedition and had never travelled in the Australian Outback. Wills in contrast, was a surveyor and scientist and was considered by his friends as dependable, rational and intelligent.

By June 1861 over eight months later, nine of the original 19 men had died, including Burke and Wills. When it became apparent that the expedition was in trouble, four separate expeditions went into the Australian interior and not one person lost their life.

So, what went wrong?

It was obviously a well-equipped expedition, backed by a government and a Royal Society.

By the time the expedition reached Cooper’s Creek in central Australia, the outer limit explored by Europeans it was early summer. The sensible action would have been to wait until after summer when the severe desert heat had subsided. However, Burke decided to make for northern Australia with three other men to beat a rival expedition from South Australia, led by John McDouall Stuart. Burke instructed a party to wait behind for three months. In the searing summer heat, the expedition walked up to 30 kilometres a day until they reached the north coast of Australia. By then, the animals and men were exhausted. Instead of spending time recuperating they headed back, not before letting some of the camels go which could have been used as food.

On the return journey, the men became exhausted and began to run out of food. One of the men, Gray died, and they began to eat the remaining camels. By the time they reached the Cooper’s Creek depot over 4 months later, the depot party, who were starting to suffer from scurvy had already left, ironically in the early morning of the day they arrived.  Malnourished and exhausted they were too weak to catch the depot party heading south. The survivors’ meagre supplies soon ran out and despite trading their fishing gear for some fish, they failed to befriend or observe how the local the local aboriginals were able to hunt and gather food. Burke had little respect for the local people and in one incident fired over the heads of some aboriginals who tried to offer them food. Just over two months after arriving at the depot, both Burke and Wills died of starvation. Only King survived. He was taken in by the local Aboriginals.

What management lessons are there for managers in the failure of the Burke and Wills expedition?

Here are three lessons I think we can learn from Burke and Wills.

  1. Leadership – the lack of sound leadership often leads to failure. Clearly Burke was a brave man, clearly irrational and mentally unfit to lead such an expedition. Moreover, bravery is not an alternative to experience and leadership.
  2. Planning – there is no substitute for sound planning. Right from the start the expedition was poorly planned. It had too much equipment, much of it not needed. Travelling in the Australian Outback in summer with its extreme temperatures was ludicrous. Furthermore, Burke had no bush skills and left a trail of confused orders and wasted equipment. The 20 gallons of lime juice to prevent scurvy was dumped early in the expedition leading to the depot party suffering from scurvy. In contrast explorer John McDouall Stuart, Burke’s rival in crossing Australia was an experienced bushman. He carefully planned and after several exploratory expeditions in previous years, successfully crossed Australia in 1862
  3. Bureaucracy – Governments and bureaucracies do not lead to the most appropriate outcomes. Flush with government money and with issues of egos, arrogance and prestige, the Royal Society selected an expedition leader who was clearly unsuited for the job and who purchased inappropriate equipment. For example, why would you need six tonnes of firewood, a bath and cedar-topped desk?

If you are interested in learning more about the expedition, I recommend the following book:

“The Dig Tree”, by Sarah Murgatroyd 2002

Retaining long term good customers…

‘Customer satisfaction is worthless. Customer loyalty is priceless.’

Jeffrey Gitomer – internationally renowned expert on sales and customer loyalty

How many sales executives are given sales targets for new customers rather than nurturing and maintaining current long term customers?

Too often in business today, the focus is on finding new clients – often at the expense of existing clients. Generally, there are two types of salespeople with different personalities. They can be best described as either hunters or farmers. In the business sales process, they have different roles. A hunter’s role is a sales role – find new clients. A farmer’s focus is maintaining accounts and developing long-term relationships with existing customers – an account management role.

Attracting new customers is a challenge and, although it can be rewarding, it involves planning and hard work – and it costs money. International consultants Bain & Company found that the cost of attracting new customers was seven to eight times more expensive than retaining existing customers. They also found that an increase of 5% in retaining current customers could increase profits from 20% to 80%.

While acquiring new customers is important, retaining current profitable customers is a far more cost-effective strategy. Listening to current customers and actively seeking their feedback provides an opportunity to improve service, develop new services and provide a new source of referrals.

Remember: over 65% of customers leave due to indifference.

Do you have a system in place to nurture and manage current profitable customers?

I was providing advisory services to a business who were faced with two of their largest customers threatening to leave. There had been a history of poor service and strained relationships. Both client businesses were headed by difficult and often unreasonable personalities. Careful analysis of each business showed that one was not growing and was unprofitable to service, whereas the other was growing and profitable. To the credit of the business’ general manager, and despite pressure from the owner, he took action. While it forced the unprofitable customer to leave, at the same time he developed a strong working relationship with the other customer – which resulted in the signing of a new contract with increased rates. The customer also recommended the business’s services to another company. This is a good example of successfully managing an existing profitable customer.

Are farmers more important than hunters as salespeople?

No.

It depends on the business’s objectives. Both are needed for a business to grow. It is very important to maintain the current profitable customers, as it is cheaper for the business and offers other opportunities to improve and expand both services and products. The emphasis is on ‘profitable’ customers as, according to the Pareto Principle, not all customers are profitable. Making and maintaining sales need not be a difficult task. It requires an understanding of the business and must be aligned with the business’s plan and goals.

Do you know who are your most profitable customers?

Why are they the most profitable?

Which customers are you not making money from?

The Charge……the lessons

“ With bayonets drawn, they charged the town, they were a fearsome sight

But they had fulfilled their orders, they took the town by night”

From the poem “The Wells of Beersheba” by Warren Eggleton

105 years ago during World War I, British, Australian, New Zealand, French and Empire troops stormed ashore at Gallipoli in western Turkey on 25th April. The plan was to seize control of the strategic Dardanelles Strait and open the way for their naval forces to attack Constantinople, the capital of Turkey and the Ottoman Empire. The campaign failed. The Turks never succeeded in driving the Allied troops back into the sea, and the Allies never broke out of their beachhead. After eight months of bitter fighting the peninsula was evacuated in December 1915.

On 25th April, each year ANZAC Day (the acronym ANZAC stands for Australian and New Zealand Army Corps) is commemorated in Australia and New Zealand with marches and ceremonies, even though the Allies were defeated. This year due to the COVID-19 pandemic, ANZAC Day will not be publicly celebrated, for the first time since 1916.

Ironically Australia’s first great World War I victory, the Charge of Beersheba that ended the Battle of Beersheba is barely remembered or celebrated. It is considered history’s last great cavalry charge and provides some great lessons for managers.

Beersheba (now Be’er Sheva, in modern-day Israel) is situated in desert terrain and was a strategically important town. Here the Allied advance into Palestine was blocked as it was protected by over 4,000 well-armed Ottoman Empire troops in trenches. Beersheba an important transport hub had water wells that were vital in the desert for both men and horses.

The battle for Beersheba began at dawn on 31st October 1917 when the British infantry began attacking with artillery and air support combined with infantry attacks. By mid-afternoon the British had failed to capture the town. The situation had become serious – horses and men needed water. In the late afternoon, looking at a potential defeat the order was given to the Australian Light Horse to charge the Turkish trenches protecting the town.  800 mounted Light Horsemen, armed with bayonets not cavalry sabres, charged over 6 kilometres of open ground towards Beersheba. Initially the Turks opened fire with shrapnel. This was ineffective against the widely spaced horsemen. They then used machine guns. which were quickly silenced by British artillery. The charge caught the Turkish defenders off guard. They failed to allow for the speed of the charge and had little time to recalibrate their weapons for close range fighting.  The Light Horsemen, whose horses could apparently smell the water, jumped over the trenches. Some men dismounted and attacked the enemy with rifle and bayonet from the rear. Others galloped ahead and captured the town and its vital water wells.

If the Allies had failed, over 60,000 troops would have been stranded in the desert without water. If they didn’t prevail, men and their horses who had already been without water for two days faced dying of thirst. It was also the first major victory for the British army over the Turks in World War I. More importantly, the Battle of Beersheba was a precursor to capturing the city of Gaza. The city barred the way north to the important cities of Jerusalem and Damascus. Within a week Gaza fell, and the Allies marched north routing the Turkish troops. The campaign to secure the Sinai Peninsula ensured the Suez Canal remained open to Britain and its allies and led to the collapse of the 400 year old Otterman Empire.

So, what are the lessons for managers from the Charge of Beersheba?

Here are three lessons, that as managers we can learn from the Charge of Beersheba.

  1. 1. A leader needs to be flexible. The Australian commander, General Chauvel had planned to make a dismounted attack on Beersheba but as evening approached, ran out of time. The alternative was to make a cavalry charge. The traditional strategy was to dismount and attack with rifles from a distance. In the open desert this would have made the Light Horsemen vulnerable to shrapnel and machinegun fire. Clearly a different approach was required so a new strategy was devised. The Light Horse attacked like a cavalry unit, with bayonets in their hands like sabres, thereby catching the Turks by surprise. Their speed and determination outweighed their limitations of protection and weapons.
  2. Planning. There is no substitute for sound planning. Fighting a war in a desert required careful planning as Beersheba was surrounded by desert. This posed obvious logistics challenges for moving troops and equipment, particularly mounted troops. British army engineers established forward supply dumps of water and reopened wells that had been blocked by the Turks. This secured sufficient water for the troops and horses as they moved across the desert. Although the town was protected by a system of trenches, there was no barbed wire on one side because the Turks believed they would not be attacked through the desert from the southeast. The British-led forces, by careful planning and doing their homework  proved this to be a false assumption. Logistics planning and doing your homework is critical whether in warfare or in business
  3. People. Success in any organisation depends hugely on the quality of the people. The importance of experience and training is critical. Many of the Light Horse men involved in the Charge of Beersheba were battle hardened from fighting on the beaches at Gallipoli, and most were tough Australian bushman who were experienced horsemen and used to tough living conditions having also trained extensively in Egypt for desert fighting before the Palestine campaign. The Turks led by German officers, were poorly trained as evidenced by them failing to set their rifle sights correctly and not being able to adjust to the changing circumstances.

What do you think the management lessons from the Charge of Beersheba are?

If you are in Australia or New Zealand on ANZAC Day please don’t forget to remember the sacrifices made by service men and women in your country’s defence.

Note: if you are interested in reading about this event in more detail, I would recommend reading the following books:

Paul Daley, Beersheba, Melbourne University Press, 2009

Roland Perry, The Australian Light Horse, Hachette Australia, 2009

Management lessons – why the Schlieffen Plan failed: the What vs the How

“In western Europe the military machine, with its thousands of wheels, costing millions to maintain, cannot stand still for long. One cannot fight a war for one or two years, from position to position, in 12 day long battles until both combatants are completely exhausted and weakened and forced to sue for peace. We must attempt to defeat our enemies quickly and decisively.”

Count von Schlieffen, German strategist, 1905

What was the Schlieffen Plan?

Long before 1914, Germany was preparing for war. In 1905, Count von Schlieffen, the German Chief of Staff completed what became known as the Schlieffen Plan in which planning commenced in 1897, based on the theory that Germany would be at war with France and Russia at the same time.

The aim was not to fight the war on two fronts at the same time, in the West against France and in the East against Russia. The plan was to first defeat France within 6 weeks by invading through neutral Belgium and capturing Paris before Russia could mobilise its army. After the fall of France, German troops could then be diverted to the East and attack Russia.

The Schlieffen Plan failed spectacularly as World War I became a war of attrition, bogged down in trench warfare in eastern France and Belgium, well short of Paris. The Germans believed that neutral Belgium would not resist and that the British through their 1839 treaty with Belgium, allegedly described as a ‘scrap of paper’ by the German High Command would not come to the support of Belgium. Furthermore, the Germans believed that there was no need to fear the British Expeditionary Force (BEF) which the Kaiser called a ‘contemptible little army’.

What are three management lessons from the failure of the Schlieffen Plan?

Lesson 1: inflexible and arrogant leadership leads to failure

Apparently over 80% of the German soldiers were not professional soldiers. The schedules were prepared by a military hierarchy for fit regular soldiers under ideal conditions, not for non-regular soldiers who were not for physically or emotionally fit to march 30 km per day with heavy packs. The German High Command refused to modify the plan when the advance faltered. There was no Plan B

Lesson 2: under estimating and not understanding your opponents and their tactics

The BEF was not expected to support Belgium but they helped delay the plan. This led to atrocities being committed often by the inexperienced and untrained German troops. The bureaucratic minds of the German planners justified these actions as nothing should stop the plan’s operation. These atrocities in turn assisted in portraying the image of the ‘evil Hun’, which mobilised public and political opinion, first in Britain and later in America, indirectly allowing America into the war several years later.

Lesson 3: not understanding and taking into account logistics in your plan

The Schlieffen Plan was partially successful in the first month of the war, as it resulted rapid penetration into France. However, the speed of the initial advance created its own problems, placing a strain on the supply lines as well as placing great strain on the German troops, where the majority were travelling on foot and also having to fight on the way. They became fatigued, sunburnt and developed blisters reducing their fighting capacity. The daily needs of feeding the hundreds of thousands of horses and men, and providing ammunition was a logistical nightmare (logistics in your business). The army moved away from the railheads at 30 kms per day resulting in the supplies being brought to the front by horses. It is estimated that the German army needed 3,900 tonnes of food and fodder each day, clearly a difficult task when overwhelmingly horses were used for transport. Clearly logistics limited the operational success of the plan.

There were other reasons for the failure of the Schlieffen. However, as managers that we can learn from the three management lessons from the failure of the Schlieffen Plan.

In conclusion, the questions you need to ask yourself are:

Post note: The Russian Army mobilised quicker than the Germans had predicted which meant a war on two fronts.

How NOT to celebrate Christmas…

“Every Who down in Whoville liked Christmas a lot

But the Grinch who lived just North of Whoville did not!

The Grinch hated Christmas! The whole Christmas season!

Now, please don’t ask why. No one quite knows the reason.

It could be, perhaps, that his shoes were too tight.

It could be his head wasn’t screwed on just right”

From the book “How the Grinch Stole Christmas!” by Dr Suess (Theodor Geisel)

So, what relevance does a children’s book of rhyme about a grumpy, solitary creature who tries to end Christmas by stealing Christmas-themed items from the homes of a nearby town Whoville have for managers?

In previous Christmas blogs, topics covered  included the need to have rules on behaviour, the importance of taking the opportunity to celebrate, thank staff and display leadership as well as a time for renewal and evaluation and setting the tone for the next year

John Cleese the famous comedian and Antony Jay one of the authors of TV show “Yes Minister” made a fortune from training videos that emphasised what not to do. With the large number of articles on management and leadership easily available today, I find it inconceivable that managers still display appalling examples of how not to do things. In these times where communication is spread quickly through social media it is even more important to ensure communication to staff in particular, is considered and done carefully.

This year I was sent a copy of the following Christmas notice posted on a company notice board.

From the text it would appear there have been problems of behaviour at the company’s Christmas parties in the past. As a manager, what do you think of this Christmas message to staff?

Here are some questions to ponder…

What is the underlying message in this Christmas notice?

Is it positive?

Would this communication help lift employees’ morale and get them working to improve performance?

What tone is set for the future?

What do you think of this company’s culture?

Do you think that culture effects profitability?

Between January 2016 and late 2019, the price of the commodity this business mines rose 40%, however in two of these years this company made losses and did not pay a dividend. Anecdotally it would appear that culture could be a contributing factor to less than satisfactory financial performance.

My advice to managers and business owners is “don’t be a Grinch-like at Christmas”. It is traditionally period of goodwill. Celebrate the occasion display graciousness, thank your staff and their families…

Take advantage of the opportunity, provide hope for the future and display leadership.

And to all the readers of this blog, thank you for subscribing and I wish you and your families the compliments of the Season and best wishes for the New Year.