​Business plans that are tracked and kept current will improve alignment to vision and mission and overall performance. Identified adjustments to goals and strategies can then be made in response to the changing business environment, allowing the company to move forward using a relevant and timely strategy.
 
Plans that are not monitored and updated gradually become irrelevant, leaving your business rudderless, rather like driving in an outback region without a map or GPS. Progress only comes from experiential trial and error, rather than design.
 
Now that the first quarter 2018 has ended, it's time for a reality check of this year’s annual plan.
 
It’s important for your management team to look closely at that plan quarterly, tweak it where appropriate, and carry on for the next quarter. Ninety-day cycles or sprints are widely accepted as appropriate for short-term goal-setting, providing you with enough time to make substantive progress while keeping the due dates in focus.
 
Review Vision and Focus. The overall direction and mission of your business should not need updating on a quarterly basis. But it is useful to remind yourself frequently about why you are in this business, who are your customers, and what is your core focus. This will help keep you aligned with your big picture.
 
Confirm Goals for the Year The goals you set at the beginning of the year may no longer be entirely relevant now that you have been through the first three months. Look at your goals as part of your plan and celebrate those that have been met. Of the remainder, identify those that should be modified or even deleted, and make the appropriate adjustments. Decide whether any new goals should be added. You now have an updated set of goals for the remainder of the year.
 
Review Rocks for the past Quarter. Rocks are those 4-7 things that you set as the top priorities for the quarter. Review each of the rocks from the past quarter and celebrate success with your team for those that were met. Identify any that are no longer relevant and delete them. For the remainder, identify what prevented the rocks from being achieved and take appropriate action to improve the probability of success for the next quarter.
 
This could include modifying or re-aligning responsibility for some rocks. Finally, look at your updated goals and define any new rocks that should be added for the coming quarter. You now have an updated set of rocks for the next quarter.
 
Set Tasks for the next Month. Set the tasks that you and your team must complete within the next month in order to make satisfactory progress toward next quarter's rocks.
 
Carry On. Check at the monthly management meetings for the next two months on the tasks that have been assigned to the team, to ensure alignment, relevance, and progress. Adjust tasks and rocks as necessary. Set tasks for the next month.
 
You should complete a similar quarterly review at the end of the second and third quarters. Do the same at the end of the fourth quarter, reviewing your vision and focus in more detail at that time. Prepare a new annual plan for next year.
 
Need help staying accountable?

Over the past 12-18 months small and medium sized businesses across Australia have faced an increasingly volatile marketplace. This volatility has arisen from the drawn-out decline in iron ore and coal prices, the free fall in oil prices, the drop in the Australian dollar and the ripples that flow on from such changes.
 
The broader economy has adopted a variety of responses, depending on the impacts to their sector:

• Banks have instigated tighter controls on access to debt finance;
• The ATO has tightened payment terms, significantly increasing the prospects for creditor strain where ample cash reserves haven’t been maintained;
• All sectors have experienced a shift from a buyers’ market to a sellers’ market, resulting in an increasing number of suppliers competing on price alone;
• Import costs have risen by 30 percent because of the drop in the Aussie dollar;
• Many businesses are dealing with customers that have either extended payment terms to better manage cashflow, or defaulted on payments when that is the only option left;
• A significant number of WA businesses have been forced to seek opportunities in new, unknown industry sectors now that the mining construction, mining services, state government utilities and residential housing construction sectors have contracted as long term sources of revenue;

 
Many business relationships that were once friendly and built on trust have become fractured and face litigation due to increasing financial pressures.
 
While there is no one silver bullet that will fix all the challenges that you face, we've compiled a selection of responses that we, at Genesis Business Advisors, have encountered amongst our clients over the past six to twelve months.
 
You might find these strategies a useful source of inspiration or, if nothing else, an alternative perspective to your own responses.
 
Strengthen Management Decision Making Processes

• Hold leadership team meetings as often as necessary to monitor progress against your business plan. We suggest weekly or fortnightly when circumstances are critical;
• Critically review leadership behaviour to ensure a functional, cohesive leadership team;

 
Grow Revenue Streams

• Consider premium pricing. The most attractive growth opportunities in 2016 will continue to be in the premium segment of all markets. Fearless pricing, high-touch CRM, and remarkable delivery will be key success factors;
• Offer new products or services to existing clients that address new opportunities or challenges that have arisen;
• Seek out new clients in more active industry sectors;

 
Cut costs to achieve realistic profit expectations

• Look at areas you can make changes to reduce employment costs.
  • Explore the benefits of non-traditional employee/contractor structures for your team including remote work, digital workspaces, revenue or profit sharing, and intrapreneurism.
  • Negotiate reductions in employee wages/salaries for an agreed period;
  • Introduce flexible work times (ie. four day working weeks);
  • Cross train key staff to improve overall efficiency and employee satisfaction;
  • Reduce non essential staff numbers;

• Reduce operating costs
  • Negotiate lower cost supply agreements with suppliers;
  • Implement new technologies to more effectively manage job costs and improve productivity;

• Reduce overhead costs
  • Renegotiate tenancy agreements or relocate to cheaper premises. Perth CBD and wider metro rental rates have dropped 25 - 30 percent over the past twelve months. It might be worth breaking your current lease agreement;
  • Sell surplus plant and equipment to reduce or stop lease payments and free up valuable cash;
  • Renegotiate lower cost access to finance with banks/lenders;

 

Improve Cashflow Management

• Closely monitor cashflow forecasts on a weekly basis;
• Tightly manage debtor payments using a clear understanding of your clients’ payment approval processes;

 
If you would like to explore any of these strategies in more detail, give me a ring on (08) 9389 4414 or let me know the next time we meet.

Nobody likes to think they’re replaceable. As business owners, often our sense of self is tied up in our business too, which makes it even harder for us to imagine our business running without us.
 
And yet, it is a necessity if we want the freedom to take holidays and sick leave throughout the year. More than that, it’s absolutely vital if we find ourselves in a position where we need to take a step back from the business or maximize its value to a prospective buyer.  A large part of a business’ sustainability is dependent upon how well it can survive without you – the business owner.
 
I’ve said it before and I’ll say it again – the best way you can ensure that your business can run successfully without you (or any of our team members) is if you put sufficient systems in place to support the day-to-day operations, including your leadership team’s decision making process.
 
These systems should be able to handle major processes that take place within the business as well as keep track of important information and formalise communication so that if one person leaves without warning, the business doesn’t collapse in a heap.
 
Do your systems make sure that each of the following conditions are met?
1.     No detail is overlooked.
2.     The client is always valued.
3.     Each staff member knows what to do, when to do it and how their role impacts the overall picture.
 
Good systems make sure your business is sustainable, scalable, efficient, and profitable.
 
Implementing good systems across all areas of your business helps you and your team work smarter, rather than harder. It also helps minimise the risk to your business, whilst maximising the return.
 
Do you want to alleviate some of the burden that sits on your shoulders? I always enjoy talking about my experiences with business systems and succession planning. Send me your questions via email: bruce@genesisba.com.au

Whether you follow AFL, Soccer, Rugby, there is a common understanding among sports teams that sometimes it is necessary to overhaul the current status quo and rebuild the team in order to become more competitive and successful in the future.
 
As business owners in our current economic climate, there's a lot we can learn from the way our top sports teams use periods of rebuilding in order to get ahead.
 
In Australia, we're going through more economic changes now than we have in the last 24 years. Which means that it's the opportune time to lead your business through a period of rebuilding in order to not only survive, but thrive in the future.
 
I've written on the topic of rebuilding teams before, but I thought we could all use a reminder of what it takes to succeed in a period of rebuilding:
 
1. Belief
The number one indicator for success lies with your internal belief system.
Do you and your leadership team truly, deep down, gut-checked, know with all your heart, believe you can rebuild or rebound?
Not believing only leads to losses. Some may be small, some may be big, but over time not believing in yourself and your team’s abilities will only create disappointing failure. Take the time to list out WHY you believe you can accomplish whatever your goal is. Do it now! Reflecting on the “why” will help solidify your belief.

2. Talent
In order to rebuild anything, you must first have the talent to do so. Whether the talent is you or someone else, your business is not going to simply rebuild itself, it’s going to take the efforts of talented people who have the skills and capacity to improve your business. Your job is to identify who the talent is and build upon that. Your game strategy for the next season might require a few strategic draft picks.

3. A seasoned coach
A coach is instrumental in the success of rebuilding. Having a mentor or leader that can effectively motivate, inspire, and set the example for the team, amplifies each person's individual talent and belief. The coach creates the game plan and calls the plays. A coach’s job is to showcase the talent, make decisions for the team, make mid-game adjustments, and do whatever it takes to win. As the leader of your team, do your coaching techniques need refreshing?

4. Back-up
This is probably the most overlooked piece of the puzzle in business, but something that sports teams do well. In football, if a player is indisposed there are several back-ups available. But, in business, it is rare to have a back up for each person.
Think of someone in your office who does something that is instrumental to the company’s success; do they have a back-up? Do you have a back up plan for when someone gets sick, is laid-off, quits, or goes on maternity leave? Back-up your people, your talent, your team, your coach (as well as your hard drive) so that your business doesn't derail when one person doesn't show up.

Sports teams don't win season premierships based on dumb luck. They win because they have genuine talent, they believe that they can, they have an experienced coach leading them, and they have a back-up plan in place.
 
Do you want to win next season?
​
(Go the Cats!)

This post from Melbourne based colleague and futurist, Paul Higgins struck a chord with me, particularly his identification of the three drivers of change:
​
Originally posted on March 18, 2016 at Futurist Paul

I recorded a podcast yesterday with John Briggs at Technotopia (the podcast should be up by Sunday Australian time). The discussion was around a number of future stories and we touched on the nature of work and what was happening in US politics which got me thinking a bit more deeply about Australia.


​
A lot has been written about Donald Trump over the last few months including this mornings revelations that The Economist Intelligence Unit had rated a Trump Presidency as a global risk ( The Economist dubs Trump a ‘global risk factor’ — but not for the reasons you might think ) Some of the analysis has centered on fringe elements of his supporters rather than the core reasons that most people are voting for him in the Republican primaries.

It is my view that the core reason that people are voting for Trump is a general dissatisfaction with the professional political class. A large part of that dissatisfaction is driven from a significant minority of people in the United States that either have gone backwards economically or or stagnated as the winds of change have swept across the world. This includes globalisation, outsourcing, and the developments in automation that are only just starting. The changes are also a product of systems and decisions that benefit the well off and leave others behind. These changes have resulted in headlines like:

Majority of U.S. public school students are in poverty and

6 Of The Fastest-Growing Jobs In America Pay Low Wages and

Disparity in Life Spans of the Rich and the Poor Is Growing 

Now these are not sudden changes, they are slow burn changes and as we are now learning political and social events can build slowly until they reach a tipping point and it is very hard to pick that tipping point. The Trump political insurgency and the sudden Arab Spring events are cases in point. While we do not have the same level of economic issues or disparity in Australia it is clear from these sorts of events that we need to be looking well into the future when we think about the issues.

In Australia we have certainly had protest votes in the past. People have voted for Pauline Hanson in particular, One Nation as a party, and more recently Clive Palmer. These sorts of movements have fallen apart because of a combination of there not being enough critical mass and through the incompetency and infighting of the people involved. However I do believe that there is a scenario where a successful Australian Donald Trump could emerge.

In my view we are on the verge of an unprecedented wave of change and volatility and Australia could possibly face a perfect storm of three factors.

Firstly there a significant problem of the economy in China with very high debt levels which have rapidly built since the GFC: China cannot escape the economic reckoning that a debt binge brings and Australia is very dependent on our trading relationship with China as the falling revenues from commodity prices have shown.

Secondly we seem to be moving towards a significant re-ordering of the energy systems of the world with huge leaps in renewable energy cost structures and investment. That impacts on revenues from coal and gas. A wild card here could be increased action on climate change if accelerated climate change occurs.

Thirdly we are seeing huge advances in Artificial Intelligence and Robotics and this is likely to impact on jobs in a significant way over the next ten years. Mckinsey has released some preliminary findings from a report they are writing on this issue and one of the conclusions is that: about 60 percent of occupations could have 30 percent or more of their constituent activities automated

This is a huge change that will sweep across our jobs landscape and there is a very real chance of what is termed a “hollowing out of the middle”where there will be very highly paid jobs for those that can do them, very low paid jobs for those with few skills and very few jobs in the middle.

If all these three come together with low commodity prices affecting our resource dependent economy and middle range jobs disappearing at the same time we could have the sort of social settings which breed political revolutions.

So the answer to my question is I don’t know who Australia’s Donald Trump is but there is a very real possibility that we are breeding the conditions for one to emerge.

We need to be carefully thinking through how our economic and social systems work and avoiding both high levels of disparity but also people going backwards economically. If technology does in fact start destroying jobs more quickly than it creates them then we need to be rethinking what work and the economy are all about in a “Post Normal” world. New Zealand is already starting: New Zealanders want to give everyone a ‘citizen’s wage’ and scrap benefits

Paul Higgins

Have you ever witnessed someone try to manipulate other people into doing what they don't want to do? It's usually done with either a very large carrot (bribery) or a very large stick (discipline).
 
How often do those people feel personally motivated to give their best efforts to the task?
 
If you've followed this blog for a while, you'll know that at Genesis Business Advisers we're big fans of leaders who coach the members of their team in order to encourage their best work. 
 
Part of being a coach is taking the time to sit down with each of your employees and provide the space to have a two-way dialogue about their role within the business.
 
Even though this dialogue can (and should) be happening on a consistent basis throughout the year, annual performance appraisals are the key to establishing a culture where honest and judgment-free communication and feedback is encouraged.
 
Performance appraisals focused on giving and receiving feedback build trusting relationships where the employee feels:
1) understood, and
2) receptive to any constructive criticism you might need to provide over the course of their employment.
 
While it can be tempting for managers to default to using performance appraisals as opportunities to criticise employees, constructive feedback is linked strongly with employee satisfaction and productivity, even if areas of under-performance need to be addressed.
 
To motivate your employees, give valuable feedback that answers the following questions:

• Why does my role exist?
• What am I supposed to achieve?
• How do I influence others?
• What is the quality of my relationships with my manager, team members and colleagues?

 
Are you building a workplace culture where honest feedback and two-way dialogues are encouraged?
 
If you already have a formal performance appraisal process in place, now is the time to collect employee feedback and schedule one on one interviews.
 
If you’d like to talk more about how to get the best work out of your team, ask me about performance appraisals next time we meet, or send me your questions via email: bruce@genesisba.com.au.

When a small business is going from strength to strength, evolving as it grows, the small business owner must also evolve to keep up.
 
They might be strong in product knowledge, customer service and identifying opportunities within their market. But, to keep up with the demands of a larger business, the SME business owner needs to also think about staff management, financial management, marketing and sales management, and systems development - areas which may sit outside their wheelhouse.  
 
If your business is currently going through this and you recognise that you're being stretched beyond capacity, the wisest course of action is to consider appointing a General Manager.
 
It's such a critical position that the recruitment of the first GM will probably be the most challenging in the history of the business.
 
Even with capable, high-quality candidates, it is unreasonable to expect that:

• a GM will be able to slot straight into the role without any time investment from the SME owner,
• the GM will manage the whole business on their own,
• the business will grow quickly and easily cover the cost of the GM, or
• the appointment of a GM will immediately allow the SME business owner to step away from the business without any loss to revenue or profits.

 
To avoid these pitfalls when the time comes, here are some of the most effective ways you can ensure you recruit a valuable GM:

1. Recruit from within - Consider if an existing manager could make the transition into the GM role. Consider potential and whether some education and mentoring could bridge a gap in knowledge.
2. Create a Job Description Form (JDF) - Document the role, responsibilities and performance measures.
3. Update the Organisation Chart - show the new GM position reporting to the MD and carefully consider who will report to the GM (6 maximum).
4. Consider recruiting the new GM into a manager role first (in the field of their greatest strength) with a plan to promote them to GM after 1-2 years.  This will provide a ‘trial period’ before fully handing over the ‘keys’ to the business.
5. Invest time in coaching the GM to close any ‘gaps’ in knowledge, experience or skills, and seek comprehensive feedback on how the GM is handling the role.
6. Be rigorously fair and honest with the GM – they should be of the caliber to receive robust feedback and it will help with the development of the role and the business.

 
If this is where you are at, and you'd like guidance from someone who has led many businesses through this same transition, I'd love to offer my assistance. Send me an email with your questions: bruce@genesisba.com.au. 

Guest post
 
A few years back, I was working in administration for a medium-sized company that was growing rapidly.
 
As we accumulated more and more work, the processes that suited our company in the beginning began unravelling at the seams.
 
Our management team had already anticipated that a change was needed if we were to grow efficiently and effectively.
 
One of the things we so desperately needed was a way to keep track of our expanding library of documentation. So, we decided to implement a document control system.
 
In theory, the company was doing the right thing - establishing a good system so that we could increase efficiency and productivity.
 
However, when it came time to actually start, the management team fell into some common traps which made implementation of this new system almost impossible.
 
As the nominated systems manager, I saw it all firsthand and I want to use my experience to warn other business managers about some common mistakes companies make when implementing new systems.
 
If you want to implement business systems that work, don't do the following:
 
- Don't cut the systems manager out of meetings that discuss system development.
The person on the front line needs to be able to know the process inside and out, understand the decisions that have been made, and hear the common problems that managers want to be able to overcome. If that person is left out of the communication loop, you are expecting them to create and implement a system with only half the information that they need.
 
- Don't try to get too many people involved in the decision making process.
It's essential to have a management team that cares about what different departments need from business systems, but when managers can't see eye-to-eye, there can be more wheel-spinning than action. There should be one executive decision-maker (might be the MD or similar) who is committed to prioritising growth and moving the company forward together.
 
- Don't try and recreate what hasn't worked in the past.
Good systems solve problems. If you are overhauling your old system, it's most likely because it's no longer effective. Get clear on the issues that you had with the previous system and come into any planning meetings focussed on the problems that need to be solved by a new system.
 
Are you planning an overhaul of your business systems? Do you want to learn how your business can make a seamless transition and keep growing?
 
If you’d like to talk more about the best way to implement new business systems,  ask to discuss this topic with me the next time we meet, or send me an email: bruce@genesisba.com.au. 

If an Editor does their job well, nobody notices.
 
When done well, editing is invisible. Its purpose is to ensure readers take notice of what has actually been written. But when poor grammar, rambling sentences, or numerous spelling mistakes end up in the finished article, the editor’s work is noticed.  
 
Not everyone will notice when things work the way they should, but almost everyone will notice when they don’t.
 
The same can be said of your business systems. When they work for you behind the scenes, your clients, suppliers and staff shouldn’t notice. There should be no complaints and no issues with non-delivery of services, relationships with clients and customers should be harmonious, and employee engagement and retention should be high.
 
It’s when you have systems that are ineffective (or non-existent), that things will start to go wrong for your business. And when they go wrong, it can take a lot of time and effort to catch up, make amends with your customers, and improve their experience with your business.  
 
Finding and implementing good systems is part of ensuring that your business will grow. But constant monitoring is required to ensure that those systems continue to work for you long-term.
 
As your business evolves, it is likely that it will outgrow its existing systems. Changes in the economic climate and expansion of your business structure will mean that processes that worked while your business was in its infancy will no longer serve its growth as it matures.
 
Ineffective or outdated systems will impact your profitability and growth, keeping your business stuck in the mud rather than driving it forward.
 
Are your systems moving your business forward? Or are they holding it back?
 
If you’d like to talk more about monitoring and improving your business systems,  ask to discuss this topic with me the next time we meet, or send me an email: bruce@genesisba.com.au.
 
*You might also like to read Eliyahu Goldratt’s book The Goal as background reading.