Survive & Thrive by Being Willing to Evolve

Adapt…Change…Evolve

A Presentation for Napier Rotary Members

• Prepared and Delivered by: Peter Alexander• On: Monday 26th January, 2015• To: Napier Rotary Members• At: Breakers Restaurant, Napier, N.Z.

Peter’s contact details:Email: pete.cathy@xtra.co.nzLinkedIn:nz.linkedin.com/in/peterdalexanderPhone: (06) 8395999

Presentation Scope

• Quick introduction• Survival of the species that are most adaptive to

change• Speed of Business Evolution formula• Business culture development• The principle of “inclusivity”• How to set your team up to win• The place for predictive modeling in evolving your

business

Quick Introduction…

• Business Studies graduate of 1991 era. Majored in marketing.

• Have worked in the primary, manufacturing, export, retail and property industries in N.Z. over the past 24 years.

• Have worked as CEO and General Manager in the retail jewellery sector for 15 of these years, and as a CEO in the property valuation sector for the 6 month period leading-up to Labour Weekend 2014.

Quick Introduction (cont)…

• Have lived in Hawkes Bay since 1991, and currently live in the Puketapu community.

• Have been involved coaching a Napier City Rovers junior soccer team for the past 3 years, and are presently helping-out with junior tennis coaching at Greendale Tennis club in Taradale.

Quick Introduction (cont)…My Business Values -• Set other people up to win.• Lead people to become the masters of their own

destiny (imparting knowledge continuously and readily).

• Push my own boundaries continuously – and help others push through their “glass ceilings”.

• Recognise and praise achievement and provide encouragement.

Quick Introduction (cont)…Areas of Expertise -• Governance guidance• Strategic and operational planning • Information technology design and development• Market research• Business intelligence and analysis• Data capture, collection, analysis, management and reporting• Training programme development and management• Financial management • Marketing campaign design and implementation• Business development (parent company and individual site level)• Change instigation and management• People management • Preparation and/ or evaluation of legal documentation• Business culture development

Quick Introduction (cont)…Commercial Milestones in Recent Years –• Instigating and facilitating the merger of the

Gemtime Jeweller franchise ($20 million sales T.O. p.a.) with the Australian based Showcase Jewellers franchise (approx. $500 million sales T.O. p.a.).

• Designing and developing the Showcase Jewellers ecommerce platform for Australia and N.Z. (approx. $500K investment across 300 stores), and B2B online platforms (Knowledgeboards, KPI reporting menus, etc)…a further approx. $500K investment.

Why I’m Here Today ?Because it concerns me greatly the extent to which

particularly SME businesses in Hawkes Bay – and elsewhere in N.Z. - are failing to evolve at a rate which will ensure their survival in the medium-long term.

Because I care about SME business people being shown current proven best business practices, to elevate the performance of their businesses…to evolve.

Being intelligent is not enough It is not the strongest of species that survive, nor the most intelligent,but the ones most responsive to change.

[Charles Darwin]

Domination of Michael Hill Jeweller in N.Z. – failure of traditional jewellers to recognise the MHJ business model as a realistic threat. 40 % market share after only 10 years in the NZ market soon pulled heads out of the sand.

Nimble and Agile vs Strong and Big

Showcase Jewellers franchise evolutionary course (scale orientated) versus Gemtime Jeweller evolutionary course (nimble/ agile).

Same market share %, yet vastly different operating structures, intellectual property and business cultures.

Business Evolution FormulaThe speed at which a business will evolve is dependent on:

Factor 1: Resource Capacity and Allocation PlusFactor 2: People CompetenciesPlusFactor 3: StructurePlusFactor 4: Desire/ Will to Change

“e” = Factor 1 + Factor 2 + Factor 3 + Factor 4

Resource Capacity & Allocation The availability of the right number and range of

people with the right skill sets focusing on activities that closely relate to the Critical Success Factors of the business.

Are the most suitable software systems being used by the business ? If a system was to be changed (updated or replaced), would this free-up 1 or more person to concentrate more of their time and energy on activities which are more closely associated with the Critical Success Factors of the business ?

Where are resources being directed to currently ? Putting-out fires, fixing software system glitches ?

Resource Capacity & Allocation “Noise” management. ‘Noise’ refers to all the chatter/ email/ txts/ Skype

calls that is directed to the people who are designated the ‘evolutionary cogs’ of the business…effectively locking them up so much so that they can’t dedicate meaningful time to focus on ‘evolutionary’ type tasks.

Effective ways of managing ‘noise’ include:Introducing an electronic Knowledgeboard.Introducing an electronic Noticeboard.Designating a certain timeframe in each

week/ month when particular topics/ matters can be discussed.

Resource Capacity & Allocation ‘Noise’ can be the No. 1 cause of a business failing

to evolve…particularly if your business is an SME and the number of people designated as ‘evolutionary cogs’ is only say 2 – 3.

‘Noise’ reduction should be your No. 1 activity in preparation to set-off on your evolutionary course if your business currently reflects an environment where the noise volume is turned-up fairly high.

People Competencies Are the right skill sets apparent in the people who

are currently in your team ? Given the new objectives you have defined in your

Business Plan for 2015, is it time that you reviewed the skill sets of your team relative to the skills that you need in order to achieve your objectives ?

Are the right people performing functions that they are best suited to ?

What need is there to guide certain people in your team to undertake a course/ study in order to become more proficient at what you employed them to do ?

Structure Introduce the right structure from the outset which is

compatible with your medium-long term business objectives.

Contractors versus Licensees versus Franchisees. If your objective is to engender a real sense of business

ownership amongst primary stakeholders then often a ‘Services Contract’ or similar will fail to produce this feeling amongst third parties who you engage to deliver your client proposition...especially if the contract fails to provide for the contractor to sell his/ her business interests over time.

Re-structure if you need to, to lay the right foundation to develop your business on.

Desire/ Will/ Appetite to Change Finally, if sufficient resource capacity exists, the right

people competencies are in place and the right structural foundation has been laid…YET only a low level of desire to want to evolve is evident amongst either the business owners and/ or 1 or more team member then the speed of change (“e”) will be relatively slow compared to a business whose stakeholders are all brimming with excitement and desire to evolve.

“Change Lead” dedicated roles (titled as such) now appear in the likes of the SEEK website.

Business Evolution FormulaThe speed at which a business will evolve is dependent on:

Factor 1: Resource Capacity PlusFactor 2: People CompetenciesPlusFactor 3: StructurePlusFactor 4: Desire/ Will to Change

“e” = Factor 1 + Factor 2 + Factor 3 + Factor 4

If you’re serious about evolving your business then concentrate your efforts and energy on optimising Factors 1 – 4 above.

A Business Without a Positive Culture is Underperforming• If you do not have a business environment which is

characterised by cultural principles such as “cooperation”, “collaboration”, “empowerment” and “inclusivity” then your business is more than likely not a happy and (intrinsically) rewarding place for people to work…and unhappy people equates to less than optimal productivity and creativity; and can reflect in a relatively high staff turnover rate.

“How” we conduct ourselves in business is as important as “what” we do • Example of an outstanding positive business culture.

• High level of collaboration • High level of camaraderie• Commonly agreed upon decisions are still

supported by the opposing minority• Ready exchange of ideas

• Example of an undesirable business culture.• Poorly communicated stakeholder expectations• Low level of trust amongst internal stakeholders• Low level of cooperation and collaboration

“How” we conduct ourselves in business is as important as “what” we do • The most successful businesses spend time, effort

and money on fostering a “great place to work” feeling amongst their team. People feel:• Included on the journey.• Valued.• They can apply their individual strengths/

characters in their role without fear of being judged.

• Naturally drawn to want to help their colleagues.• That they want to share their ideas openly.

The All Important Cultural Principle:INCLUSIVITY

• If you want to take other people on a journey that you have mapped-out, then you need to SHARE the facets of that journey with them. Discuss: Parent company level Strategic Plan disclosure treatment differences between two different companies.

• The quickest way to distance yourself as a business owner from your team is not to share your vision/ plan with them…and KEEP them informed about the progress being made towards realising the vision periodically. ENSURE they stay on the journey with you !

Setting Your People Up to WIN !• ‘People Management’ versus ‘Management By Legal

Instrument’.• It is far more positive and productive to manage

the activities and behaviours of other people through management practices versus enforcing some legal agreement.

• Talk with your people…often.• In “managing” your people, set them up to win…

equip them with a solid understanding of what you expect them to do (and how) from the outset.• The failure of business owners to set their people

up to win. Example.

When You Know It’s Time to Grow !• What is “predictive modeling” ?• Essentially, it is the act of predicting future outcomes

based on the assumption that certain conditions/ events/ values will materialise and cause those outcomes.

• An Excel spreadsheet is a very effective predictive modeling tool. Discuss merger variables used to prove a lower operating cost scenario

• Set-up your ‘predictive model’ and be disciplined at practicing changing the values in this model each month – at the same time you review your P & L tracking.

When You Know It’s Time to Grow !• Your predictive model will help you identify when it is

time to (for example):• A) Expand your business interests – engage more

contractors/ licensees/ franchisees in existing and/ or new geographies.

• B) Merge your business with a likeminded business to achieve greater economies of scale and market share.

• C) Acquire another business to achieve greater scale and market share.

• D) Re-structure your current business to achieve greater productivity and sales.

When You Know It’s Time to Grow !• If you keep doing the same things that you’ve always

ever done, then sure as sure the results that you achieve from one year to the next will be similar…if you’re lucky !

• Make the time to review the tracking of your actual business achievements relative to your Business Plan objectives, and during this time update your predictive model to keep monitoring to know when it makes good sense to grow your business using whatever method you desire.

• If you’re achieving more or less the same results year on year currently, then you’re vulnerable to market share erosion…and you’re not evolving.

Parting Suggestions• If you haven’t already done so, share your Business

Plan (overview) with your team…start bringing them on your journey.

• Put real effort, time and money into developing a positive business culture. A small start is to shout your team morning tea once a month (or more frequently) – during which you update them on how the business is tracking (keep bringing them on the journey).

• Commit to evolving your business and work on optimising the four factors which will determine the speed of your business evolution – within the bounds of affordability.

Parting Suggestions• Research ideas/ practices to incorporate in your

business – and commit to trialing those concepts that on face value look like a good fit for your business.

• Develop a predictive model and use it month to month to gauge when it makes good sense to take the next step in your business evolution…measure the risk, measure the investment and forecast the likely outcomes using your model…………then ACT.

• Commit to designating at least one (1) day each week when you do not go to your normal work place. Free yourself to work ON your business and not in it. You simply MUST find this headspace in order to evolve your business. Tell others what this day is.

Parting Suggestions• Perhaps have a suitably skilled person from outside

your business – who is not a friend and ideally who has no vested interest in your business - help you gauge where you are currently at on your evolutionary path, and to help you chart a course to start evolving your business more convincingly in the direction that you want to take your business.

• Now is a good time to start...life is short, be the best that you can be at what you do and live life to the fullest. Evolution is a choice, and requires time, effort, energy, considered thought, conviction and commitment/ discipline. The consequences of choosing not to evolve are clear to understand.

Thank you

• Remember: start by making a few small changes, and your comfort around implementing change will steadily grow and you’ll be surprised how quickly you gain momentum on your chosen evolutionary course.

• Thank you for listening.