Trusted Advisors to Private Business Owners

Breathing Your Own Fumes

williamwinter — Mon, 23 Jan 2012 23:58:38 +0000

As I sat in my local coffee shop early this morning reading today’s press I thought how easy it would be to think the economy is coming to a screaming halt.
There were headlines about redundancies at Toyota, the banks,financial institutions, credit card debt, carbon tax, OHS legislation and reports of factory closures. Everyone seems to be offering short term solutions and very little forecasting of what we will can do in the longer term.
The debate around manufacturing is hot and unfortunately will become a political football between govt and the unions. We have to take a pragmatic approach and face the reality that manufacturing in 2012 is never going to return to the past.

Those who are calling for protection and millions of tax payers dollars need to stop breathing their own fumes and get their head out of the sand. It a short term solution.

As a school boy I remember the 1950′s and 1960s in Geelong and the great activity in all sorts of manufacturing including our own family soft drink facility supplying the majority of home delivered soft drink in Melbourne from a new factory in North Geelong. However that is all in the past and we need to be looking for what the changes will be in the future. Ten years ago we did not have IPhones, IPads, Facebook, Linkedin, social media and the change is happening faster by the week and the same is happening in consumer buying habits.

I believe manufacturing in Australia will have to morph into much smaller units and be always looking for innovative and niche segments. Gone are the days of factories employing hundreds of people in a single site. The large sites have moved to the mining industry and even that will not last forever. Mining is more about digging holes, moving product and building infrastucture.

The closure of large factories will cause great distress for families and communities and unless we address our future and prepare for change many will be caught. I know its hard to lift your head above the daily grind of living, I was in that position in my own business in the past.

The future starts in our schools where the skills being taught are not addressing workplace needs nor are we reskilling existing workforces for future change.
Business owners and managers have to start thinking in a new way and stop the short term strategy that is driven by short term incentives and month by month KPIs.

Take some time out and ask yourself what will your business look like in five years ? What changes will you need to make to get to that future place ?

Private Company Directors – Change your behaviour or stay away from the business

williamwinter — Sat, 07 Jan 2012 04:23:00 +0000

As I move about in private enterprise in Australia I continue to see actions by senior management and directors that ignore the cultural changes taking place in the workplace. On top of this there is often scant regard for the impact of legislative change in the field of employment law by the more senior members of private boards. This is most relevant where the second generation have taken over and don’t agree with hold old habits they learned from their parents who founded the business. It is also common in private board rooms where the founder or their peers are still attending board meetings to hear some long term directors keep talking about the past.

There is no room in the boardrooms of today for comments such as When I was in charge we never had to worry about sacking staff or all these nanny-state safety rules. Etc It’s time for those who long for the past and will not accept change to wake up and stay away. You are putting the other directors at risk

The obligations of company directors in 2012 including recent legistalive changes in areas such as Fair Work Australia and the Safe Work Australia are too onerous to let those who cannot change with the times attend board meetings.

The same applies to CEOs and senior managers who still believe that the only way to influence human behaviour is to manipulte it.

I advise you to get hold of a copy of the new draft national code of practice on workplace bullying to see why those at the top have to change their own behaviour. Just because you have implemented training, and have a manual in place with policies and procedures you are not protected. You have to set the example even in private meetings. Be aware that your language will catch you out every time and I can guarantee that we will see workplace bullying claims in 2012.

Its 2012 not the 1960′s, 70′s or 80′s

Your Business Web Site

williamwinter — Mon, 02 Jan 2012 04:07:36 +0000

There was an article in the Herald Sun last week quoting figures from the ARA stating that 50% of all shoppers in Australia use the internet to compare products and prices. I also saw research from the USA that said over 70% of all consumer research their intended purchase on the internet. The Herald Sun newspaper article stated that Australia Post delivered 3 million parcels extra in December. Some larger suburban post offices do not have enough space to carry the volume of parcels. Looking at my own purchases over the last six months I have:
1. Bought perfume from Hong Kong
2. Bought airfares
3. Booked rental cars
4. Bought a data projector
5. Bought hard copy books from Amazon( and downloaded books to my Kindle)
6. Bought and downloadled new software
7. Researched conference venues for a series of workshops I am facilitating and made venue bookings
8.Booked a car sevice
9.Bought and downloaded business magazines to my IPad
10. Bought a subscritption a newspaper
etc etc

So,what would I see if I went to your website ? Would it show me why I should buy from your and not your competitors ?

If I were setting a marketing budget today it would be heavily weighted to online business. And finally, I would only use a professional web company to help design and develop my site.

If that is right, then what will I find if I went to your web site ? For most, the answer to this question in not positive.

Will your web site make me want to investigate your services and /or products further.

If not. Why not?

2012 – Where will you find the right staff to run your business effectivley ?

williamwinter — Tue, 27 Dec 2011 20:28:37 +0000

A week before Christmas I spent four days in Rockhampton working with a family business operated by a couple who started twenty three years ago and, now have reached a point where the business is too big to manage on their own.

Without having senior managers who are able to take responsibility and run each of the six business units, the owners will burn out and the business will not grow. However , they are experiencing the same problem I find all over. They cannot find skilled employees. They face a particular problem in Rockhampton in that they suffer from the mining boom. The local paper advertised for mine supervisors at $300k a year, trades at $180k and I was told that cleaners can earn $100 + . That means that engineering and like companies in Rockhampton cannot find employees at a reasonable wage rates. Suppliers servicing the mining boom are critical to keep the wheels turning and do the maintenance etc.and they are forced to offer unrelaistic wages. In fact when I met with a local business banking manager he indicated that a few of the older company owners are just shutting up shop and selling the real estate.

This shortage of labour is just as critical in regional towns in Victoria where I visit every month. I have contacts who have full order books and struggle to meet delivery dates all the time.

Is there an answer to this issue ? I have yet to see a short term solution, yet it is an immediate problem. One issue is that we should encourage manufacuring as viable career option within our school system.

If we were in China or India then you would see the emphasis on engineering etc at school and tertiary level. We have a shrinking manufacturing industry and the polititicians just talk about it and do nothing at it at the coal face.

Federal Government and Small to Medium Business

williamwinter — Tue, 13 Dec 2011 03:02:02 +0000

Following yesterday’s re-arranging of the deck chairs in Canberra we have yet another Minister for Small Business. It seems that there is not a high priority for this portfolio by the Prime Minister and yet again we hear the rhetoric about how important SMEs are to the Australian economy.

2 million SMEs in the country, largest employer of Australians, backbone of the economy etc etc.

Why is it that the Small Business Minister is not in the inner Cabinet?
Why is it that our employment laws are working against private business owners ?
Why is it that the Federal Government are attacking the rights of contractors and the self employed ?

The new minister , Mark Abib will not have time to scratch himself with the responsibility he has with his other duties and therefore it will be up the the public servants to really run the department. We can only hope that they are up to it because the Minister will never have enough time to address the real issues. Not his fault, I bet he was as surprised as anyone.

As I travel around the country and work with owners and directors of succesful private ecompanies, I believe that they have given up on worrying about who is the Small Business Minister in Canberra and they just get on with it.

Over the last few weeks the papers and the internet have reported on a number of companies that have gone into administration, mostly they have fewer than 200 employees and there is no outcry from anyone or questioning what is causing this. It’s always the large puplic entities that get the press coverage.
One can only live in the hope that one day the private business community will see a ray of light at the end of the tunnel and that the Federal Government will actually take notice.

Its not handouts we want, it’s a level playing field and right to reward individual effort and be able to operate in a flexible workplace where the labour laws understand that all business is not the same and working different markets to different demands .

Everyone is not equal and that’s a fact of life.

In the meantime, forget about hoping, just get on with it, innovate, take calculated risks, understand the changing trends business and consumer behaviour and set a clear vision for you and your employees to embrace.

Advisory Boards and Your Business

williamwinter — Fri, 25 Nov 2011 21:11:56 +0000

This week I chaired a briefing session for the AICD at the offices of Pitcher Partners in Melbourne. The two speakers were from Pitcher Partners and have vast experience in this area of private companies and understand the real benefits to you buisness if you set up an advisory board correctly.

To me the key lesson is that no one ever achieves real success working on their own and, as the founder or CEO of your business, who holds you accountable ?

Just as the top sports people of the world require coaches and managers etc, business leaders need a trusted advisor who is not afraid to challenge you from time to time. Someone to cause you to consider the options you face and to ensure you can make better decisions.

An external board member ( formal or advisory ) with knowledge, wisdom and the ability to bring experience from outside your industry can add enormous value to you and your business.

Only thirty per cent of family businesses in Australia have a formal board of some kind and it is the successful ones who make up the thirty per cent. I challenge you to find out more on advisory boards and the benefits that will result from embracing this for your business.

Proposed Trans-Pacific Free Trade Agreement – Be careful

williamwinter — Tue, 15 Nov 2011 01:09:24 +0000

Is this going to be a one way benefit to the US ?

Already it has been highlighted that there are going be substantial caveats and my fear is that our food and agricultural industry could be the big loser. I cannot see the farm community in the USA going along with this without a fight and wanting protection for their industry. America is heading into an election year and this will bring the sectional lobby groups out in force looking to protect their industry groups. Unemployment in the US is at 16 per cent and Obama is looking to increase exports and sees this region as an easy target. After all, Europe is stuffed.

My real concern is that we must protect our bio security at all costs be careful about food imports in Australia.

Finally, where do China, India and Japan sit in all of this ? Lets not be too quick to fall in love with a quick fix for Obama. And where is Canada ?

Qantas – What would you have done?

williamwinter — Mon, 31 Oct 2011 06:39:36 +0000

There is no doubt that reading the press and watching TV news items that there are three opposite points of view as to the situation with Qantas at the moment. We have the company issues, the unions’ ongoing tactics and the passengers who are inconvenienced by the disruption to services. Even more disturbing was the performance in the House of Represenatives in Canberra today where the Government has taken this as an opportunity to attack the oposition leader and not the issue. I don’t really care who the leader is in either party but today was a pathetic effort and one based on vitreol by one side trying to resurrect an old scare campain on industrial relations.

I also have a fear that Fair Work Australia will not have the internal fortitude to make a decision that will ensure the long term survival of the company.

When will everyone the workforce and business realise that the world is changing at a rapid rate and that business models are also changing at a fast rate to keep up with world- wide change and, to survive in the future, you cannot maintain old work practices as technology reinvents the way business is conducted.

No one should expect that an employer can guarantee employment. You cannot guarantee that even the best businesses will survive. If you go back and read the books In Search of Excellence and Good to Great you will find that not many of the companies highlighted as shining examples to follow still exist. They failed to meet the challenge of change.

Where are Ansett, PAN AM, Continental and some of the other famous airlines today ?

If we, as Australians, do not accept that change is necessary in the way we run and structure our way of doing business, then we have no right to whinge about companies going out of business. You cannot keep doing tomorrow what you do today and expect to stay in business or keep you job.

Boards and the CEO

williamwinter — Fri, 14 Oct 2011 21:47:46 +0000

I recently saw a presentation ( By Colin Carter ) that showed the results of feedback from CEOs and what they thought of the effectiveness of their board and vice versa. It came as no surprise that more than fifty five percent said their board was ineffective when understanding what drives performance. This confirms to me that many CEOs don’t understand the importance of a strong relationship between the chairman, the board and senior management.
Eighty percent of directors stated that they thought boards do understand what drives strategy.
Unfortunately, through bitter experience, I come across CEOs who deliberately hold back on what they tell the board and, more importantly, what they instruct their senior management to do when providing information to the board. It is not unusual to get feedback from executives that the CEO has told their direct reports that they have the board under control.
This attitude is driven by the CEO’s ego and also by not wanting to be held accountable. It can also a sign of a weak board or chair.

Its time CEOs fully realised that in 2011 the liabilities and responsibilities of directors is onerous and the penalties that are now being applied to directors are increasing and, as a result, directors must be better informed on operation issues and not just the general overview and strategic direction. This can only be achieved by keeping the board informed both before and after an issue.

The mantra must be “No Surprises ” If your CEO does not want to enagage the board and not accept that they should stick their noses in then maybe its time to change the CEO or time for you to resign from the board.

The personal consequences for directors is not worth making a compromise.

Assessing Proposals at Board Level

williamwinter — Wed, 14 Sep 2011 03:35:00 +0000

There is an article in the latest Email newsletter from the AICD discussing proposals presented to board meetings that involve projects seeking approval . They can be for projects, capital expenditure or for new contracts and supply agreements.

Over the years I have been involved in presenting proposals to boards and also been on the other side as board member listening to requests for approvals to go ahead for a particular issue.

When presenting to boards we were often instructed by our managers to set the presentation and information based on what would generate the least number of questions and paint the best possible future senario if we thought the concept was worth fighting for. I have seen many requests that do not contain the full facts.

The best boards were the ones who insisted on full disclosure of all facts with the positive and negative outcomes that could eventuate from proceeding. An effective chairman would also make sure that there were no surprises when the proposal got to the board. You should make sure board members have enough pre-reading on the issue before it is presented . Saves time, needless questions and makes for a better discussion on the issue.
As directors you should not approve anything that does have detailed support material and full disclosure of the financial implications. One thing that need careful disclosure is details of the due diligence that went into reaching the final proposal.
I recently heard of a request for a capex proposal where competitive quotes were not obtained and it turned out that there was a commission paid to someone to ensure the presented quote was approved. It was picked up in a external audit sometime later and two senior staff were fired. I think this board should also be held reposponsible for not carrying our their duty effectively.

In the end, it is the chair of any board who is ultimately responsible for the way the board conducts its business.