Creating business partners

A hotel chain was wrestling with how they might implement an increase in wages, brought about by a change in government regulations, without adversely affecting the ongoing profitability of the business.  The senior team decided that the best way that they could solve this problem would be to involve the staff in finding the solutions.  Their thinking was that how they solved the problem was as important as the solutions themselves.  If they could get their staff to think more like business people, then this would not only be good for dealing with this wage increase, but also benefit the long term performance of the business.

Together we designed a one day workshop that introduced 8 teams of 5 people, drawn from different parts of the chain, to the core business essentials principles.  After the workshop the teams had 4 weeks, with coaching support from one of the senior managers, to come up with their ideas as to how they could cover the wage increase for their part of the business.  Their brief was not only to come up with great ideas to increase the profitability of the business but also to show how they had engaged all the staff in coming up with these ideas.  They were seeking to create business partners.

After the four weeks each of the teams presented back both their ideas and their working.  The senior management team had hoped to see ideas that might generate in the region of £100k to cover the wage increase.  On the day the 40 people presented back over 200 ideas to improve the profitability of the business with an estimated value of over £700k.  Ideas ranged from longer term projects and investments to quick win ideas that had already been implemented in the four week period.  The buzz in the room was amazing.  People had become involved in the ‘game’, they saw that what they did could make a real difference and had been actively encouraged to do this by the senior management team.  The staff’s perspective had shifted from, ‘we work for your business’ to ‘this is our business’ and improvement in engagement and performance was immediate.

Pipe fitters to businessmen

So the job of a pipe fitter is to fit pipes; all that numbers stuff you just leave to the finance department.  That’s right isn’t it?  So thought the workforce in an oil and gas fabrication business, employing 400 people, before we started to help them develop a wider view of their business.

During a two day workshop key staff from the shop floor were introduced to the key business principles of profit and cash.  They were helped to see that every decision they were making every day was in some way affecting these key numbers.

Up to that point success for them had been defined as getting a job done right and on time.  It was within these boundaries that they used their initiative.  With this new understanding of business fundamentals they immediately started to apply their initiative, not only to getting the job done right, but also in a way that maximised profit and minimised the cash tied up in the process.  For example, they now saw a completed pipe spool in their yard not as someone else’s problem but as a lump of cash that was taking up valuable space.  This was now invoiced for immediately and charged for storage until collected.

As they engaged their whole workforce in improving business performance the company saw immediate improvements in both their profit margin and their cash position.  The workforce didn’t change roles, they just broadened their focus as how they should use their initiative to improve things.

Organisational clarity – the foundation for success

On the eve of their annual strategic senior team meeting an IT department in a multi-national company learnt that they need to make a 20% reduction in their budget over the next year.  This would include two of their present number of ten also losing their jobs!  The temptation to dump all things strategic and try to work this out was immense.

To his credit the leader held true to their original agenda.  He realised that a short term fix might solve their immediate budgetary issues but what was required here was a more fundamental solution.  The problem was not just surviving the next 12 months but building a department that met the needs of their fast changing organisation as it continued to evolve.

Working with the team we spent the first couple of hours acknowledging the emotional impact of the news, both on the team and the department, before committing to a process of fully understanding the changing world in which they were operating, and defining the critical principles that would not only see them through this crisis, but also shape a department ‘fit for purpose’ in the future.

This work proved foundational to the success of the organisation as they not only delivered the short term budgetary cuts, but over the next three years enhanced levels of staff engagement and became acknowledged both internally and externally to be delivering an exemplary level of service to the business.

A message from a CEO

Melbec Development has been developing and running our business essentials course for the past three years.  In total we have successful targeted and upskilled over 150 senior and middle managers, primarily from our UK and Australian businesses.  The programme was designed as a platform to upskill operationally-minded managers, primarily focusing on commercial and customer skills-sets.  In our experience, the course was able to raise awareness of critical commercial disciplines such as pricing strategies and cost awareness.  It also introduced management to customer positioning strategies.

The subject matter was delivered in a very succinct, easy-to-understand and often entertaining way.  Coupled with a sustained after-course development programme, our group has enjoyed increased sales growth, increased margins and significant profit increases in the past three years.  Moreover, the group has successful increased the leadership capacity within the group by introducing management to the world of business.

CEO of a multinational energy company