Tag Archives: Effective Management

Business continuity …do you have a plan?

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elephant in room - 2

Business continuity …do you have a plan?

What would happen if you did not turn up to work today?

This is a very important question for business owners.

Would your business continue to operate?

Can it continue to grow and can you sell it?

In a recent bog, I wrote about my friend Tim Boyle, Australia’s first kidney lower intestine transplant recipient and his positive attitude in the face of a seemingly impossible situation. This helped him get through a complex and lengthy surgical operation and be out of hospital in five weeks. At the time of writing this blog Tim is recovering well.

As a finance broker, he was passionate about providing people with opportunities to own their own home. Over the long years while he was waiting for a suitable donor, Tim continued to build his business and put in place contingencies for the business to operate without him. Whilst recovering in hospital he talked to staff at all levels explaining how important it is own your own home. I witnessed nurses coming up to him and thanking him for giving them hope. His business continued to operate.

However the real message was that his business continued to operate whilst ‘not being there’. His staff of two continued to work without him being there.

Why?

Because there was a business continuity plan – it could operate without Tim, the owner being present.

This is one of the biggest issues for small to medium sized (SMEs) owners – the elephant in the room. Would your business survive without you coming into work?

If your business cannot operate without you, then your business is vulnerable. This goes to the next step. Should you wish to sell your business in the future, and the business is dependent on you on a daily basis then the value to a potential buyer is significantly lower.

The following link summarises how it is important to be a ‘leader’ rather than a ‘doer’, otherwise your business cannot operate (or grow) without you.

Putting it bluntly, the first step is to put your ego aside and plan to have your business operate without you……………you can go on holidays, be absent, protect your wealth, family relationships and your health.

You have nothing to lose and everything to gain………….

What is your plan?

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boer maak ‘n plan

In Afrikaans, the language spoken by the mainly Dutch immigrant descendants living in South Africa ‘boer maak ‘n plan’ means a ‘farmer makes a plan’.  The deprivations and harshness of farming in a foreign land brought resolve and the need to plan to get around or solve these problems.  Having travelled recently in Southern Africa I came across another similar saying in Zimbabwe where people often spoke about ‘making a plan’.

What does the saying really mean?

Not as it appears literally. The ‘hidden’ meaning is that you have an alternative plan (a plan B) when your first plan fails or is impossible to implement. In other words, you need to be flexible and adaptable to solve a problem.

How does this equate to being a manager or managing a business?

As business owners or managers, we need to plan in the first instance. As the saying goes, ‘if you fail to plan, you plan to fail’. 

However, having a rigid plan may not work if circumstances change. Let me give you an example?

Many years ago in our third party logistics business we were having difficulty in getting our trucks unloaded on time at a retailer’s distribution centre despite meeting their strict time slots. It was OK for the distribution centre to run late unloading you, however if you failed to arrive at the designated time slot you were ‘fined’. What made the situation even worse was that to make the early morning delivery time slots, trucks had to battle peak hour traffic to and from the distribution centre as well as the loading delays. This became an expensive experience – instead of 3 hours it was taking 6 hours to deliver and unload. It was further compounded by our fixed price delivery charge.

We had many meetings with distribution centre management and despite their assurances that the situation would improve, it did not.

What would solve our problem and be a ‘win’ for the distribution centre? Our Plan B.

Making some observations and talking to the receiving team at the distribution centre a plan emerged. All loads were hand unloaded (rather than on pallets) onto a conveyor with the individual cartons being scanned as they travelled up the belt. The distribution centre had a prime mover that was used for moving trailers around the receiving area.

We asked distribution centre management whether we could trial loading a 40’ container instead of an ordinary tautliner semi-trailer. We would bring the loaded container in early in the morning before peak hour, leave it in the receiving area for the distribution centre prime mover to move onto the unloading conveyor when it suited the receiving team. The empty container would then be picked up on the next early morning delivery. After a short trial, it was found that it was a win/win for both us and the distribution centre. Delivery time halved with a massive increase in margin for us and the distribution centre was able to utilise their receiving area far more efficiently.  

The success of the trial enabled us to purchase two second hand and obsolete hand semi-trailers for 10% of their replacement value and establish a unique closed loop delivery system that was extremely profitable.

We solved the waiting time problem and the peak hour travel problem which initially appeared to be unresolvable. We significantly increased our profits by having a Plan B.

Remember in any situation, you should always have a Plan B like the farmer faced with the unpredictability of the harsh African environment…….

What is NOT Leadership?

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What is NOT Leadership?

“Leadership is the art of getting someone else to do something you want done because he wants to do it”

Dwight D. Eisenhower

Too often we spend time on creating ‘To Do Lists’. Would we be more effective managers if we created ‘Stop Doing Lists’? Jim Collins, the author of Good to Great certainly thinks so.

We often hear or read about definitions or examples of great leadership. So is it important to recognise the opposite of good leadership in either ourselves or others?

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 as a manager. So maybe this approach works!

The recent drugs saga in the Australian Football League (AFL) surrounding the Essendon Football Club which began in 2011 (and is still ‘unresolved’ at the time of writing) provides some good examples of ‘how not’ to be a leader.  In summary, a biochemist began a Club sanctioned supplements program with the aim of improving player and team performance. The team members were injected with unknown substances with the knowledge of the coaching staff and Club executives. While the drugs  may have been illegal (no records were kept so the drugs remain unidentified) there were further unanswered questions about possible long term health effects on the players. A lack of duty of care.

The club was fined, some board members resigned and players were provisionally suspended for the pre-season Cup pending further hearings. The head coach, the person responsible for the players went on ‘study leave’ to Europe for a season whilst still collecting his substantial salary taking no responsibility for the supplements taking regime that occurred under his management. On 1 October 2014, the club announced that they would not appeal the Federal Court’s ruling, stating that to do so would act against the interests of the players. However, the head coach appealed the Federal Court decision acting in an individual capacity and “on a matter of principle”.

This brief summary highlights some three clear examples of poor leadership and like the John Cleese training films tell us, what not to do as leaders.

  1. You don’t take responsibility when something goes wrong

It’s OK while things are going well however when something goes wrong you start to look for someone or something else to blame. Leaders take responsibility whether it’s good or bad. Taking responsibility makes you a leader. That is why people follow you. Clearly the head coach did not take responsibility for what was occurring.

  1. You put yourself first and not your team.

While the Club refused to appeal the Court decision as they deemed it would “not act against the interests of the players”, the head coach did appeal on a ‘matter of principle’ effectively putting his interests ahead of the team. It could also be argued also that the subjecting those whom you are responsible for to unknown dangers (i.e. unknown drugs in this case) is poor leadership.

3. Complacency or failure to ask questions

As the team coach, complacency or just plain incompetence for allowing an unregulated sports supplements program to be undertaken when you were ultimately responsible. As a leader you have very important responsibilities, one of which is to ask questions whether it is to ensure the safety of those you are responsible for, get the best from suppliers or seek answers to improve performance.

So as a leader, the people you are leading whether they are subordinates or people who choose to follow you, expect you to take responsibility, put the team first, actively lead the team, ask the right questions and look after their welfare……………failure to do so is NOT leadership.

Doing Your Homework

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Doing Your Homework

“All of us, at certain moments of our lives, need to take advice and to receive help from other people”
Alexis Carrel

How often in your work or business life have you not done your homework and put yourself under unnecessary pressure?

I can remember an incident very clearly where I thought I could prepare a capital expenditure application for an environmental washing plant at a concrete plant located in regional Victoria, whilst sitting in my office in Melbourne. There had been great reluctance from head office to fix the environmental problem of disposing of concrete waste as it was costly. Nothing surprising about that! I gathered ‘letters of protest’ from neighbours, one of whom was an employee who lived behind the plant. Upon touring the area with my General Manager several weeks later, he brought out the application and stood near where I had said the washing plant was to be located and started asking questions. This was a very trying time as the document explained where the waste water was running – and it was up hill! Obviously not immediately obvious from my office in Melbourne!

I learnt two valuable lessons:

• do your homework
and
• there is no substitute for physically being on site

However, even the largest companies fail to do their homework. Several years ago Rio Tinto, a major international mining company was forced to write down $3B because their plan to barge coal down the Zambezi River was not physically possible and required government approval to dredge the river. Perhaps they could have learnt from history – David Livingston the famous African missionary and explorer was unable to navigate up the Zambezi in a small craft due to the Cahora Bassa rapids which he had not investigated previously. The Rio Tinto Managing Director lost his job primarily over this debacle.

Years later in our logistics business we had to convert a casual warehouse lease to a more formal non-casual lease. We were nervous that our landlord would want both a long term commitment and an increase in rent. The previous week our warehouse manager advised us that the owner had been on site several times over the past month with ‘unknown’ persons in suits and that there had been some cosmetic tidying up and painting on external parts of the building.

I did some more homework and discovered that the landlord was seeking to sell the property and he needed a permanent lease to interest a possible purchaser. This information changed the dynamics of the negotiations and we were able to negotiate a less than market rent, shorter fixed terms and lower annual increases and the owner was delighted – a real win/win.

Remember there is no substitute for doing your homework thoroughly……..

“Do as I say, not as I do”

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“Do as I say, not as I do”

This is not a really a quote, but an expression. The derivation is believed to originally come from the Bible, Matthew 23 “For they preach, but do not practice” when Jesus highlighted the hypocrisy of the Pharisees in the Temple. Years later a book by Peter Schweize titled Do as I Say (Not as I Do): Profiles in Liberal Hypocrisy sought to expose the public utterances and conflicting private actions of leading ‘progressive’ USA politicians.

What relevance does this have to being a good manager?

Plenty.

Let me give you an example. It was a condition of site entry in a business I was involved with that all staff had to either sign in or use an in/out who’s on site entry board. Two senior managers, including the CEO rarely did this, despite it being mentioned and noted in safety and management meetings. One day we had a fire evacuation drill which is mandated by law. This is where the building is evacuated and the site safety representative calls out the names of those on-site to ensure everybody is out of the building. After the names were called out you are asked to stand to one side. This is to ensure that the fire safety drill has worked successfully.

In this case, two people were left with their names not called out – the two senior managers. One made some excuses. The other was embarrassed.

How did this look to staff? Well you can only imagine.

Staff pick up hypocrisy quickly, word spreads and the authority of management and company policies are eroded. Also the moral authority or status of individual managers is severely weakened. In this case it seemed to demonstrate to the assembled staff that either safety was not important and/or that there were two sets of rules. I witnessed plenty of sniggering and hushed conversations at the time.

Another example is the wearing of safety vests in industrial environments such as warehouses and construction sites. In the business mentioned earlier, it was a requirement for all staff to wear safety vests and this was enforced by the supervisors. However some senior managers still continued to walk around the site without safety vests as required by company policy. Warehouses are potentially dangerous places, especially with fork lift trucks and other equipment on site. Even worse, this action unsettles operators who have to perform their duties with a heightened level of concern that, at any time, plain clothes staff can and will wander the warehouse, exposing all parties to risk. These actions undermined the authority of the supervisors and in discussions with them, reduced the respect for the managers who did not abide by company rules.

We are often bombarded by media coverage of politicians in safety vests, goggles and hard hats on the campaign trail. Whilst this may seem like overkill, it does send an important message. What would be the affect if the politicians did not wear the prescribed person protective equipment?

Management is about integrity and leading by example – you can’t expect staff to perform or conform to the required standards if you as a manager or supervisor don’t. Do the right thing at all times, and your staff will respect you for it. Don’t and you will pay the price, at the least in lost respect and poor compliance and at worst – an avoidable site injury or fatality.

As a manager your actions are important to the organisation, yourself and the staff…

Never, never, never give in

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“Never give in. Never give in. Never, never, never, never—in nothing, great or small, large or petty – never give in, except to convictions of honour and good sense”

Winston Churchill

Winston Churchill was known for his inspiring speeches. Unlike most politicians today, he wrote many of his speeches himself. In business, as leaders and managers we could do far worse than be inspired by some of Churchill’s famous speeches.

Never giving in? Often in the face of adversity it is easier not to make the extra effort to achieve the outcome required. As I reflect on my journey of establishing and managing a business, Churchill’s ‘never give in’ speech resonates.

Back when the business was just starting out, we were given a 3 month contract with a major Australian retailer to manage their Christmas overflow. This effectively doubled our existing business and would have prevented the business from failing. After we had signed the contract we then received a phone call saying ‘sorry, we’ve decided not to use you’.

Large Australian retailers are notoriously ruthless in dealing with suppliers, especially small ones. Although we had a contract we were in no financial position to seek redress for them breaking the contract. If we had taken legal action we would have been out of business before the matter was addressed and, we could not afford it anyway. With our backs to the wall, we went back and negotiated successfully with the retailer’s manager and convinced him that the honourable action was to adhere to the contract. This gave us our first big start in the business.

Several years later, our largest customer owed us a six figure sum and was reluctant to pay. Failure to pay would have meant our business would have collapsed unless we were able to secure a bank loan to cover working capital. This was something we were reluctant to do as our houses had been mortgaged to establish the business. Negotiations were not fruitful in reducing the debt owed to us and we became extremely worried. We kept the pressure up without success. Luckily the customer decided to cease using our services but they needed to move their stock. This presented the lever we needed to get paid. Put simply, “no payment no stock” and our business was saved (post note: 12 months later the customer went broke). Never, never give in had saved our business on a number of occasions.

Finally, successfully selling our business was our last example of ‘never, never, never give in’. After 2 failed sales attempts in 12 months it looked as though the business would never be sold and we would not receive a reward for our 15 years of hard work (and worry!). Seven prospective business brokers were interviewed to assist in selling the business and were rejected for one reason or another. It looked like another failure. However, I encouraged one of the brokers to try another approach. After weeks of trying to convince all my partners to use his company’s services, he was appointed to sell the business. This proved a decisive. The broker had international experience and was able to sell the business to an international buyer well above expectations.

I recently read a great blog about not giving in where the author states “Anything worthwhile is worthwhile sticking with until it is done” this applies to not only business but life itself.

In business as in management, staying power or persistence will often win out in the end………sometimes when you least expect it.

Priorities…

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Priorities…

“Having my priorities in order has really helped me look better, fresher and more relaxed”
Kim Cattrall

Maybe a quote from a TV star (Sex and the City) is not what you would expect to head a blog about priorities in work and business. However, it does highlight the fact that if you have your priorities in order, you can achieve great things and not be side-tracked by unimportant issues.

Let me give you an example. A friend of my daughters popped in recently for a quick catch up. I asked casually how things were going in first 12 months of her job. She started to complain that the new managing director (and this was a multinational company) had decreed that only white coffee cups were to be used and she wanted to use her Lord of the Rings coffee cup. Other people were complaining as well.

These types of decrees are not uncommon as shown by the linked article about the former managing director of BHP Billiton, the world’s largest mining company. He put out an edict about desk ‘etiquette’ that bordered on the neurotic, at a time when the company had both great opportunities and of course many problems. He subsequently left the company with very little to show for his tenure at the helm, in particular the missed opportunities.

Micro management is normally a red light that may indicate that management does not know how to prioritise; treats staff as unimportant, and is not up to the “real” job. I once worked for a manager who was obsessed with orderliness, where all prospective customers were placed in labelled manila folders and filed (and that’s where they stayed!) whilst he complained that I should not keep active files on the floor near my desk as it made my office untidy. Perhaps it did make my office untidy, it certainly did not stop my success in achieving sales. I can remember another good example from years ago. I was studying whilst working full time and thought it would be a good idea to give my then manager a draft of one of my one of my assignments (which was about the industry we work working in). He proceeded to mark the spelling and grammar (this was before Spellcheck)

…………..little wonder he was dismissed some years later.

So what would be your advice to my daughter’s friend?

Be defiant and show independence and continue to use her Lord of the Rings cup?

It’s all about priorities.

Is it important?

………possibly demotivating, irritating and annoying ‘yes’ but important ‘no’?

We asked her:

“Is this important to you doing your job to the best of your ability?”

“No”

“Then it’s not a high priority is it?”

As the link to blog below, the expression “when a dog is in the hunt, it has no time to search for fleas” has relevance.

Remember it is up to you get your priorities right………………..

If you do, life and work is far less complicated and you are more likely to be much happier and more successful.

Networking

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Networking

“The successful networkers I know, the ones receiving tons of referrals and feeling truly happy about themselves, continually put the other person’s needs ahead of their own”

Bob Burg

A current business buzz word is “networking”. To be successful in your career or business, networking is considered a vital tool.

So what is networking and does it really work? I once attended a training course where networking was the topic. We were told that the way to network successfully was to attend an event and take 50 business cards with you, work the room handing out your business card and collecting the other person’s card, before moving onto the next person. Your success was gauged by how many business cards you collected. I was horrified at such an approach and argued that this would not work because it was all about what’s in it for them and offered nothing to others. I was derided by the presenter.

How would you react to such an approach?

Would the person handing out the cards ever consider your needs?

As the Bob Burg implies in his quote above, putting other people’s needs before yours will make you a more successful networker. Heiner Karst in his Let’s Talk Coaching blog on networking defines networking as “the building and maintaining of relationships that lead to opportunities for all parties. It works with the right attitude and is based on such “laws” as law of reciprocity or clichés like “what goes around, comes around”.

Here is a great networking example.

I have a friend I met whilst undertaking a course over 25 years ago. We kept in contact and bounced ideas off each other and this lead to:

• him joining a company I was working for at that time
• this lead in turn to him recommending I undertake further studies as he had done.
• he subsequently changed employment, which lead to the establishment of a new business where I became involved. His employer’s services were outsourced reducing their costs and improving their service levels.
• my further studies opened up the opportunity of casual post-graduate lecturing in Asia for an Australian university as well as a new full time career opportunity
• my friend was in Singapore and had several of his staff enrolled in the post graduate program.
• whilst this was occurring, the new business in which I was a major shareholder grew significantly
• last year we decided to sell the business. We contacted him in Hong Kong where he was residing and he recommended a buyer – this proved successful and they purchased the company
• he is now in contact with the business agent who assisted us selling our business and this is now leading to opportunities for both parties in Asia.

All this was achieved through maintaining a relationship, and looking after other’s needs, before your own and not burning bridges.

When I started up a new business there were several people in my consulting network who gave freely of their time and expertise to help me.
They put my needs ahead of their own and showed a genuine interest in my business. They have since been “repaid” as I have been able to engage them to work on some of my business projects – “what goes around comes around”.

Consider networking as helping others because they in turn, will help you.

So next time you wish to network, what will be your approach…………?