How to keep your best people on board

How to keep your best people on board

Unintentionally, many of us allow our good people to resign. And then resort to recruitment to find other good staff.

At times like this, when it is hard to find good people, this is not particularly effective…

What if, instead, we reviewed our retention policies – not after a staff member has resigned, but before?

What if we were proactive about it – and made retaining good staff our highest priority?

If we did, what might this look like?

  • We could treat people as our equal – as worthy of our trust and respect
  • We could find out what matters to them and offer this, or the chance to pursue it, where this is possible
  • We could ask them for input on improvements to their area of the business – and let them know we value their input, while improving the company
  • We could let them know we appreciate them, as people, as well as for their contribution to our business
  • We could offer them flexibility in those areas where our business can sustain it, so that as far as possible, they can live their life the way they want to
  • We could be open and transparent, and make it safe for them to be open with us
  • We could regularly let them know how well they are performing – and support them to improve their performance – so they can meet their (and our) standards
  • We could create a team environment, where people feel they belong
  • We could find ways to be more generous – recognising that when we give, we receive more in return

In short, we could value them.

We all instinctively know the importance of this. But how often do we act on it?

Activate Auckland

Activate Auckland

Activate Tāmaki Makaurau, the agency established to implement the Government’s support package for Auckland businesses, is now up and running.  The $60 million package designed to assist Auckland businesses through this Covid transition period enables businesses to apply for up to $3,000 for business advisory and planning support and $4,000 for the implementation and execution of that advice.

Your business can access expert advice and support in the following areas: 

  • Business Planning, Strategy and Continuity (e.g. workforce planning, risk management, new products, new markets, new opportunities, operational improvements) 
  • Financial Planning and Cashflow Management (e.g. budgeting, forecasting, scenario planning) 
  • HR and Employee Relations and Legal (e.g. people leadership, advice about attracting and retaining staff, contract law, legal requirements, COVID-19 framework guidelines) 
  • Business Hibernation or Exit (e.g. liquidation plan and succession planning advice) 
  • Marketing Advice (e.g.  marketing strategies, value proposition development) 
  • Digital Marketing (e.g. digital marketing strategy, website strategy) 
  • Digital Enablement (e.g. digital productivity, client interaction strategy, operational digitisation, cyber security)  
  • Health and Safety Advice (e.g. working within COVID-19 framework guidelines) 
  • Health and Wellbeing Advice for your business to support your workforce (e.g. to develop plans to support wellbeing and build resilience of your employees) 

To get started visit Activate Tāmaki Makaurau here.

It’s been a long, hard road for many Auckland businesses.  If your business is one of those adversely affected by the events of 2021 we’d love to assist you to get your business moving again. The Alternative Board is registered to provide both advisory and planning support and the implementation and execution of that advice under the following categories:

  • Business Planning, Strategy and Continuity
  • Financial Planning and Cashflow Management
  • Business Hibernation or Exit
  • Marketing Advice

You can contact our Auckland Facilitator/Coaches here.

Business Mentoring vs. Business Coaching: Which is Best for Your Business?

Business Mentoring vs. Business Coaching: Which is Best for Your Business?

A question that business owners often ask, is: ” What will work best for me, a business coach or business mentor?” The difference between the two can be confusing, so let’s clear it up as best as we can.

Both coaches and mentors are experienced business owners, consultants or leaders who have been successful in their careers and can bring an objective view to your business, which will help you improve your performance. While the aim of both coaching and mentoring is to help you achieve better outcomes from your business, the method of getting there – the journey – is quite different.

The Role of a Business Mentor

The defining factor of a business mentor’s role is that they have experience in your specific industry. Accordingly, they will help you understand the business norms and best practices in your industry. A mentor will also give you direction on what path they think is the best one when you are making key decisions. An important point to note here is that because a mentor knows more than you do, they will give clear recommendations, which you will be expected to take.

This works well in corporates and large businesses, where those with more experience mentor those with less experience, particularly when you, as the client, are new to a role or function, and where the mentor truly does understand the industry and business better than you do.

As a business owner, however, identifying the best approach for you: business mentor or coach, can be refined down to one question: how directive would you like this person to be? If you want someone who will tell you what to do, choose a mentor, for they will provide specific solutions to problems you are having, and recommend their preferred route when you are faced with choices.

If you decide to go with a business mentor, however, make sure you choose the right mentor for you – one that has experience in your industry and, if possible, in your industry niche.

The Role of a Business Coach

Where a business mentor coaches through telling, a business coach believes in your inherent wisdom and ability to make the choice that is best for you. They are aware that your personal goals and style of leading will result in you making a unique set of decisions that reflect what matters to you. Let’s face it if you own a kitchen design business, you know if you want to:

  1. be the biggest supplier of kitchens in the country,
  2. supply a smaller range of kitchens, at the highest possible margin, or
  3. want to be known for beautifully designed kitchens that utilise sustainably sourced products.

We all have our own way of looking at the world and the choices we make reflect this.

Coaches inherently respect this – and support you to choose the path that is best for you, believing that you need to be the author of your own life.

For this reason, a business coach will support you to set clear goals and identify strategies and a set of concrete actions that will enable you to achieve your goals. They will then walk beside you as you take this path, and challenge you if you start to veer off the path. They will also hold your feet to the fire if you put off decisions or actions that you need to make to achieve your goals.

But they will not tell you what to do.

They will be there for the long haul, acting as a sounding board when you need to bounce ideas around or help you stay motivated and connected to your vision when you start to lose sight of where you are going.

Getting started

It’s surprisingly easy to get started. To get results, a coach will sit down with you to define your goals and create a strategic plan.  They will then meet with you regularly to review where you are at, and whether the actions you are taking are achieving the results you need, so you can revise and update the plan as necessary.

Once you are clear about where you want to go, they will ask questions that will help you get a bigger perspective on the issues and opportunities in front of you. In this way, they support you to make the best decisions you can – and help you to achieve what you are capable of as a business leader.

They will also help you to develop clarity on the strengths and weaknesses of your business, and what you need to do differently to strengthen the foundation of your business so that over time its performance constantly improves. Read more on business coaching here.

How to boost productivity through labour efficiency

How to boost productivity through labour efficiency

New Zealand has one of the OECD’s lowest levels of productivity and to stand alone in an uncoupled world this is something we need to improve – and a very practical way to start that improvement is by understanding your businesses labour efficiency. 

In his book Simple Numbers, Greg Crabtree details what he refers to as the Labour Efficiency Ratio or LER.

It is a simple calculation as follows:

Sales – Cost of Sales = Gross Profit before Direct Labour.

If you then divide your direct labour costs into the gross profit before direct labour, it tells you how many times direct labour is covered. Generally, a score of anything less than two is problematic with the goal set above three.

Let’s look at some examples where direct labour has been managed differently using automation, more flexible staffing and other approaches. Notice the correlation between the LER and percentage net profit before tax.

Note: it is important to ensure all direct costs are captured in your cost of sales. Too often equipment hire, project travel and accommodation and other direct costs are shown in overhead expenses. These should be recoded as COS to give a true contribution margin. Similarly, direct labour needs to incorporate all those in the making of products or delivery of a service. If supervisors spend more than 50% of their time on the job, then include them as direct labour, otherwise show them as indirect labour as an overhead expense.

As you can see from the examples above, getting productivity up impacts on your bottom line.

So how can the LER be improved? Here are some ideas;

  • Staffing levels
    • Use subcontractors until there is sufficient business to support a full time equivalent
    • Employ more part time staff and map them to periods of demand
  • Staffing effectiveness
    • Ensure people know what is expected of them
    • Remove obstructions to production
    • Employ supervisors who are independent and capable of effective supervision
  • Eliminate Rework
    • Know your error rate – DIFOT (Delivery In Full On Time) for products or IFOTIS (In Form, On Time, In Specification) for service delivery. Target 98% or better
    • Follow up on all complaints and respond with a ‘Correction Action Process’
  • Post Audit Quotes & Estimates
    • Conduct post audits on project work
    • Review and recalibrate processes from findings
    • Constantly incorporate learnings into Standard Operating Procedures (SOPs)
    • Regularly debrief and reset SOPs – again, people need to know what is expected
  • Equipment
    • Look at using machinery to do the mundane
    • Look to introduce robotics to significantly increase throughputs
    • Use systems to capture any manual processes like books or paperwork showing units input, outputs, labour hours etc. Electronically capture and utilise API’s etc to put directly into the system.
  • Proactive Equipment Maintenance
    • Ensure your equipment is always functioning at full capacity
    • Monitor equipment downtime within
    • Have planned back up processes when failure occurs

Although not related to staffing, the following will favourably affect your LER.

  • Increase sales
    • Price increases – when was the last time you put them up?
    • Tighter terms of trade – stop discounting and provide transparent terms based on volumes and true costs to serve
    • Improved account management to increase sales
  • Improved or increased effective marketing
  • Improved buying
    • Look at your main basket of goods and get people to bid and achieve EDLP (Every Day Low Pricing)
    • Ask your suppliers for improved terms – you will be surprised
  • Know your costings
    • Forensically cost all your product lines and or services – the devil is in the detail
    • Know what margins each of your products and services deliver
    • Re-engineer unprofitable lines or services or delete them

Following all or some of these will improve your business performance.

A guide to Net Profit before Tax

Less than 5% and your business needs life support – meaning its dying.

Between 5 – 10% you are on your way to recovery, but you have a way to go.

Between 10 – 15% you are running a good business, retaining sufficient profit to manage growth and any business shocks.

15% plus puts you in a good niche but keep an eye on your competition. Unless you are nicely niched, over time, you may be seen as too pricey which will encourage new players to enter your market.

These are volatile times, and it is important we have balance sheet strength to help us get through. What is good is different for each business but as a rule of thumb, if you can access resources to sustain you for three months of overheads without any sales, then you will be better off than many others.

Simple Numbers by Greg Crabtree is available on Amazon.

We’ve Done It Before – We Can Do It Again

We’ve Done It Before – We Can Do It Again

A sudden slip into Alert Level Three, the blast of the emergency ‘COVID’ warning through our phones and once again we’re into the balancing act of keeping our businesses moving in exceptional circumstances.

Last month our Pulse Check results told us how adaptable and flexible New Zealand’s small business are, with business owners altering operations and changing practice in order to survive the challenges that 2020 has thrown at us all. Just as we have rolled out our August Pulse Check – which you can access here if you would like to participate – the beat has changed again and, in Auckland, we are facing at least three days at Level 3, probably more, with the rest of New Zealand parked up at Level 2 for the time being.

We asked our Auckland team for their thoughts on the current situation and their advice was simple — we’ve been here before, rely on past experience and know that it will pass.

The Alternative Board’s managing director Stephen James said: “Knowing it will pass, spend some time addressing a few scenarios. For example, if Level 3 lasts, as announced, for three days what do you need to do? Or, if it remains in place for two weeks or if Level 4 is declared and we have full lockdown for an indefinite period — what then? Develop plans of action for each scenario and communicate these to your staff and stakeholders.”

Scenarios are very helpful when it comes to managing uncertainty as Alfredo Puche explained in his recent blog post. Other helpful advice is to be found in Gordon Stuart’s tips on surviving a recession and Karen Van Eden’s thought-provoking piece on thriving in times of uncertainty.

Whatever your approach, remember that The Alternative Board is here to help you, the business owner, manage and grow your business regardless of circumstances — and we are all here, ready to help you.

As Karen says: “We’ve done this before – together we can do it again. Stay safe, stay well.”

How Do We Survive – And Even Thrive – In Times of Uncertainty?

How Do We Survive – And Even Thrive – In Times of Uncertainty?

First, we acknowledge that we will face challenges as we navigate our way through this. Expecting to do this with ease is not realistic.

Second, after we get clearer about our path forward, we hold this path lightly – evolving and adapting what we do in response to the changes we see around us.

Third, as we move down this path, we stop and find that place of stillness that exists within us. This supports us to find our true north, our anchor, in challenging and uncertain times.

Fourth, we act as mindfully as we can. Being present to what is happening, being here in this moment – and the next one – enables us to see a more accurate version of the world around us. This helps us to make better decisions, so we swim with the current rather than against it.

And finally, we relate to ourselves, and to other people, with the greatest generosity we are capable of; as we appreciate and open to new and different ways of doing things.

This willingness to see the good in ourselves and others and to appreciate what is – may be the game-changer. For our willingness to do this reflects – and enhances – our belief in our ability to influence the outcomes around us, which is so much harder in times of uncertainty

At The Alternative Board, our business owners meet together regularly. And when we do, we share our best understanding of what is happening. And as we see more, and learn more, we course-correct. And then we course-correct again. And again…

If you are struggling to identify the best path forward, please call us to see how we can help you navigate through these uncertain times.

The Alternative Board - OwnersAuckland West