Following on from the ongoing sucessful REV business group I chair in Horsham I will soon be starting a new monthly business owners roundtable made up of business owners from Stawell and Ararat.
In Horsham eleven owners of successful Wimmera businesses meet in a confidential forum for half a day each month to share issues, business ideas, and to improve their own business performance. This group has developed into a network built on trust and a willingness to help each other. They are now looking to help others in the regional business community.
The new group will alternate between meetimngs between Stawell and Ararat and we are looking for nominations to join the group.
The cost is $2000 per year each member and any surpus after operating expenses are used to fund field trips to successful businesses in Melbourne or send a local up and coming entrepreneur to a business development program.
The funds are managed by the Wimmera Development Association in Horsham
I am being asked by directors in private and family owned companies about any consequences rolling down to small compnaies as a result of the recent High Court ruling on the directors of James Hardie.
My attitude is that directors of private companies should take careful note of the issues. As a director you have responsibilities and accountablilities under the Corporations Act and, although some of the high profile court cases involve directors of listed entities, every director has common responsibilities no matter your size. Just because your board room might be the kitchen or the lounge room table it does not excuse you from the Act.
It just makes common sense that you should run your business on a professional basis and that you comply with any laws impacting on your company. If your objective is to best the best at what you do then it should start at the top and that is by running effective board meetings. You cannot claim ignorance as you have a statutory duty as a director.
Thre are a number of common law and statutory duties of directors such as :
Duty to act in good faith in the best interest of the company
Duty to act with care and diligence
Duty to aviod a conflict in the position of a director
As a director you owe a fudiciary duty to the company
How many directors of private companies can say they pass the test on this limited list ?
It seems that director's lack of due diligence in private companies only gets found out when there is a financial crisis and the company is wound up. My advice is to bring an external board advisor or a non-executive director who understands compliance and risk managemnet and who can ask the hard questions at the board table.
You don't have to be a James Hardie to implement formal and professional disciplines at the most senior level of your business.
Executive Accelerators have established a Rountable Group for business leaders in a small, confidential and supportive environmment where successful CEO's, MDs or emerging leaders from non-competing businesses meeting every month in greater Geelong.
This group is in collaboration with G21 - Geelong Region Alliance and is modelled on two very succesful groups currently operating in the City of Kingston in Melbourne and include the City CEO and the leaders of a number of successful local business and social entities.
The primary focus of the Geelong group is business model innovation and accelerating the potential and growth of business and leaders. In today's fast changing business environment everyone should be challenging their current business model and seek to create innovation as a core business culture.
G21 is the alliance of a variety of independant organisation with a shared vision for the Geelong Region and inlcudesfive local councils and I strongly believe this rountable fits within their goals of sustainable development for business and leaders in the region.
The groups will meet once a month for a breakfast session for two and a half hours.
In recent times I have been exposed to a number of companies in various market segments and they all are questioning the future of business, the economy, the lack of trust and confusion from Canberra and inability to predict the short term business climate.
There is so much negativity in the press, not helped by journalist looking for senational stories and writing without really understanding the facts or the sniping between rival media giants.
There is no doubt in my mind that, for business to survive, you must have a focus on some essential strategies such as a culture for innovation, low cost manufacturing, staff who are engaged and who understand what the vision is that everyone is striving to achieve. And, a product or service that fills a need in the community
The real key is the Vision. Once you can clearly articulate a Vision that is achievable and believable then it is strong and effective leadership that will guide business success.
A leader in any situation who cannot win the hearts and minds is bound to fail. An effective leader has to influence behaviours and, according to some, there are two ways to influence human behaviour: you can manipulate it or you can inspire it.
A great leader commands and not demands respect. The successful companies I come across in my work are those who understand the value of vision driven by leadership throughout the organisation. I often refer people back to the work of Kouzes and Posner who wrote their Ten Commitments of Leadership nearly twenty years ago and holds true today. The key practices as mentioned them are well worth repeating as the attributes of practices of exemplary leadership.
Challenge the process:
Insiring a shared vision
Enabling others to act
Modelling the way
Encouarge the heart
There is no room for egos or silos within a successful business. It's 2012 not the 1960s. There is no more damaging leader than one who will not take advice or accept that they have to keep learning themsleves.
Yet again Victorian business in rural regions are bracing to recover from flood damage.
Its the third time in two years that they have experienced a dispruption such as this. Recently I have been travelling through regional Victoria and spoken to business owners who are still trying to recover over a year later and they express concerns that they cannot see how they will ever fully get back to where they were before. The research shows that over 80% of business never fully recover.
I have also seen first hand that 95% of private business owners do not have what is known as a BCP plan. ( Business Recovery Plan ). And, unfortunately, many still have their head in the sand on this issue which is surprising to me given the floods and bush fires we have had in recent times.
I would recommend that you visit the SES web site and download their documentation on the emergency tool kit and they also have a a book titled Business Floodsafe Toolkit and Plan. If you cannot find it on the web site call them 1300 842 737 and ask for a copy. The kit applies to storms and other disasters.
If a diaster hits your business do you have a check list prepared that covers:
Your family, communications, staff, IT systems, customers, suppliers, cash flow, debtors, creditors, automatic debits from your bank account etc. Do you have a check list that details all your documentation and policy numbers on contracts etc ? If you are seriously injured or actually die, where is your will and who has power of attorney on matter with your personal health and/or the continuation of your business.
It's time to address this issue. You have an obligation to your family, staff and yourself. Also, if you are a legal director of your company , you are not meeting your legal obligations to properly manage your business under the Corporations Act.
Over the last month I have travelled over 2000 kilometres around country Victoria and I mentioned in a previous blog my angst with the activity, or lack of it, in the main retail strips in country towns.
In the workshops I have been facilitating in country regions the question of buying on the internet always gets into the conversation and when I ask who has bought off he internet in the last three months nearly all hands go up. Yet when I ask who has a formal internet strategy and a professional internet site that is in sync with their business, you hardly see a hand go up. Why is this happening ?
If you have a business of any kind and have not made a real effort to understand how you can use the internet to grow your business you have no one to blame but yourself. I bet you that someone in a business similar to your's in some place around the world has developed and implemented a strategy that is successfully in building an online presence and growing their business.
Your generation Y customers are now more interested in going to a gym and /or drinking at a local coffee shop than they are in going shopping in a bricks and mortor store. Where I live in Albert Park/Middle Park in Melbourne the coffee shops and eating places are packed. Their customers are not shopping in the local shops as they do that on the internet.
If you want to really get a handle on what people are buying online go the nearest Australia Post parcel depot as see the volume of parcels moving through the facility.
One prime example for me recently was trying to book motels in country towns. The web sites range from crappy to good. No wonder I drive pass lots of motels that have very few customers. If you are like me you do your research online first before making a booking. The I usually book through whatif.com.au
Your internet site is your gateway and fist impression to thousands of potential customers.
Finally , it does not end with just web site , its the whole jigsaw. vidoes, facebook, twitter etc etc
This has been another week where the press is covered in stories about companies putting staff off.
So, it was refreshing to attend a breakfast briefing this morning put on by Matthews Steer, Chartered accountants and hear a successful private business owner tell his story. This family business, is in high-tech engineering and surface coatings.
They survived the impact of the last four years without having to put one person off and, in fact, employed some new staff. They had a typical successful family business attitude that their staff come before higher profits. The family believes that persistance is the key ingredient to their success and decided to just work harder to get through tougher times.
They understand the value of innovation, partnering with institutions such as universities and the CSIRO and seeking outside assistance where they have identified a weakness.
Finally, judging by the presentation I heard this morning, they understand the vital leadership attribute of humility.
I was involved in a discussion today about culture within a business or a Not For Profit and the question revolved around who drives and/or leads the culture within an organisation.
As usual, this monthly group had some different points of view. That's fine because it makes for a robust discussion and enables us to consider different aspects instead of having a one-sided debate. The real question was what role directors play in influencing a culture that ensure success.
I once saw a great definition of culture that stated Culture is what people do when no-one is looking. I believe that the culture within a business needs to be pervasive as everybody embraces the principles that make a business standout from the crowd. It the way people in an organisation behave, their over-arching beliefs, the unwitten rules, the respect for each other and the ability to work towards a common and shared objective.
I also personally believe the standards are set from the top of the pyramid in a traditional heirarchy type business structure and the directors must be more involved in the business in way that they can see and understand the behaviours and actions at grass roots level. After all that is where our customers experience the culture within a business. Just as the Chairman of board can set the standard for board effectiveness, the CEO sets the standard for the management team who in turn can make or break what filters through the whole organisation. A poor CEO will result in a poor culture throughout. Therefore the Chairman has a responsibility to manage and mentor the CEO as well as the board.
Two reference points worth looking at is a book titled The Maverick written by Richardo Semler and the other is a book titled The New Gold Standard by Joseph Michelli. The first will challenge you on a different business model and the second will explain how The Ritz-Carlton Hotel Company have a culture of customer service that is ledendary.
In my experience, over a number of both large and small to medium businesses, the great ones are those that have been successful in winning the hearts and minds of all employees and everyone is on the same bus heading in the same direction. They don't need to be told or micro managed. Everyone just does it.
Late last year Grant Thornton published a paper on private food companies in Australia. For me, the key issue that came out of that survey is that innovation is a core success factor in growth and profitability.
I often see private companies who have their head in the sand when it comes to taking a proactive stance on innovation. They believe that what has worked in the past and been successful will get them through in these ever changing times.
Jack Trout wrote a book that should be a must read for all business owners. It is titled Differentiate or Die although written in 2000, it is even more relevant in today's highly competitive business world. The only difference is the impact of the web in 2012 an some of the examples mentioned are no longer in existence due to mergers , takeovers etc.
Consumers are faced with thousands of choices on a daily basis. They research on the internet before making a purchase and are able to access product from all over. For example, my daughter is expecting her first baby next month and I have watched with interest how nearly all the new baby gear has come via research on the internet.
Innovation has to be part of your DNA and be a constant core activity in your business. Your competitors will copy you and that requires you to be leading the way. My experience is that the greatest change is in packaging and making convenience king.
What are you doing to ensure your clients will chose you and your products over your competitors ? If you have an advantage now, is it sustainable ?
Just look at McDonalds menu today compared to ten years ago and their sales are still growing.
This photo was taken after last year's flood in Ipswich. If this was your business would you survive and be able to recover ?
The building belongs to the Peter McMahon Swim Factory, a successful swim centre for kids and learners. Back in 1974 Peter's father also operated a successful soft drink company from the same site and it was completed flooded in those at that time as well. It took a long time to recover from that closure in the middle of their peak sales season.
So, this time around Peter knew to prepare and removed all his motors, papers. computers etc out when he saw the signs that a flood was heading his way.
Pre-planning enabled him to recover quickly and be back in business within ten days. The reseach says that 80% never fully recovery from such a disaster.
Where is your your recovery plan ? Contact us if you want some help in developing a business continuity plan.
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