Market Gap Investments
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  • July5th

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    Strategy is about direction, setting the path and the support mechanisms to deal with reality encountered as you strive to reach your destination.

    The following discussion is a little about strategy and more about execution.

    Making the decision about strategy is the first strep of many along the path to success.

    Strategy and execution

  • June8th

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    If you can find the time, I think the following podcast summarises a lot of my thoughts on the issues companies face as they grow.

    pd-sound-business-podcast.html?Division=Victoria&Segment=The+Rest

    We work with a number of companies who are on a growth path, and some of the issues we face are almost the same –

    • Capacity – can we deliver on our promises
    • People – do we have the right people doing the right thing – and do they have adequate resources to perform well
    • Money – how do we manage the flow
    • The business model – can it deliver on our promise consistently – deliver value to clients that they are happy to pay for
    • Our environmental impact – what should we consider is important to us as we seek to grow

    The podcast is about 15 minutes – worth a listen if you take the time now or download the MP3 for later.

    Thanks to CPA Australia for supporting and sharing this podcast, they have done a great job in making the issue of growth real.

  • April12th

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     I recently completed a number of interviews with CPA Australia in relation to recovering from a disaster.

     One of the topics that came up several times was about being prepared.

     While you may never be able to know in advance what may lie ahead of you, and lots of things that do happen are unexpected, it is how well you are prepared and understand your business and your personal and team capabilities that will allow you to achieve success.

     You can have a listen at:

     http://www.cpaaustralia.com.au/cps/rde/xchg/cpa-site/hs.xsl/pd-sound-business-podcast.html?Division=Victoria&Segment=The+Rest

  • February25th

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    CPA Australia has a great resource on Disaster Recovery, and recently I recorded some advice at the following link:

    http://www.cpaaustralia.com.au/cps/rde/xchg/cpa-site/hs.xsl/knowledge-practice-toolkit-disaster-recovery.html

    The point about recovering from a disaster is that we all should be prepared to deal with the unexpected.

    Recovery is about understanding your business and being able to adapt quickly when unusual events occur.

    Have a listen.

  • February8th

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     Some of the reasons it is important for a business to be aware of its environmental impact and manage sustainability:

    • Reduce waste
    • Add value to clients and suppliers
    • Improve the bottom line
    • Develop systems that  use resources effectively and efficiently
    • Effectively manage company brand and positioning
    • Be a good citizen
    • Contribute to the environmental awareness of its communities and workforce
    • Reduce carbon emissions

     It seems to me that sustainability is about being mindfully aware of our impact on others and the planet and taking positive action now.

     Good business sense really.

  • January25th

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    Management has a reputation for overusing words to a degree that they lose their ordinary meaning, and eventually lose relevance, even for the best intentioned of managers.

    Management speak, especially when not genuine, has the capacity to make eyes role and attention switch off, and rather than encourage performance can act as a disincentive.

    Innovation is a word that is used frequently, and it is the overuse of the word that blurs the importance of what innovation can be for you and your business.

    Innovation is a new way of doing things” is the definition provided by Moody and NoGrady in their book “The Sixth Wave” (http://sixthwave.org). A simple definition and a great starting point for discussion.

    In a commercial sense, I suspect you want several benefits from doing something new, so in my view innovation goes beyond something new into meaning something better.

    Michael Bungay Stanier has a fantastic model for doing work that is meaningful, and he provides a great overview of his model and activities that support taking action to do “great work” at http://www.domoregreatwork.com.

    While not focusing on “innovation”, Michael categorizes work as

    • “bad” – stuff that just doesn’t add value and we should get rid of
    • “good” – essential stuff that fills our job descriptions, that keeps us busy, yet may not make the difference we want to make and
    • “great” – work that makes a difference, is challenging and helps us understand our worth.

     In many ways “great “work is the foundation for innovation.

     Looking at what you do, where you create value for your client and making sure that you always look for the best option.

     Innovation means not taking your job for granted and recognising that everyone has the chance to make a difference every day.

     While that may be challenging, developing a culture that encourages and fosters innovation offers us all the chance to be the best we can.

     Innovation is important for a number of reasons, but if it brings out the best in you it is something we all should be interested in.

     I recently presented on “Innovation Leadership” to a group of local government leaders in Mildura – here is a copy of the presentation: Innovation leadership

  • January17th

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     Most businesses that have taken a Christmas break start back at work today.

     There will be a range of different levels of energy in your business, from those that are refreshed after a break and really keen to get back into making things happen, to those that just don’t want to come back.

     From a leadership perspective, this is a great time to show the way, and demonstrate the standards you want maintained. In many ways, you will find your people ready to accept some of those changes that you have been meaning to get around to, but just haven’t found time to do.

     In my experience, some of the busiest times in the businesses I’ve been involved with are just before Christmas, and everyone’s focus is on getting the job to the customer on time and on spec. Mid December deadlines seem to accumulate, and it’s all hands on deck to get the job done. Often during these peak times the job is done well, yet the paperwork and the follow up can slip to one side as you move from one urgent deadline to the next.

     This week is a great time to go through all those sales from December, make sure they have been invoiced, and then get in touch with your client base for several reasons.

    • Make sure the job was completed properly and that the client was satisfied with the work
    • Make sure the client has received the invoice, and that you will receive your payment on time – after all you did “whatever it took” to deliver on time.
    • Start to develop a sales plan with the client for the coming year – so you can both be in control when the peaks and troughs come during the year.

     Every year has its unique challenges, and while it is difficult to predict everything that will happen, it is good to be prepared and start to plan now.

     Getting your clients involved in the process also helps you get a really good understanding of how the economy is affecting your client base.

     January is traditionally a slow month from a cash flow perspective, and some businesses that have gone on Christmas break may choose to not come back

     Staying in touch with your clients will make sure that you maximise your chance of being paid for what you have delivered.

  • January10th

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    So if there are three critical aspects to business success, and focus is important to achieving success should you focus on only one aspect or are each of them equally important?

    It really does depend on where you and your business are right now as to what drives your activity and focus.

    I can recall the times in a number of businesses that I have been involved in where everything seemed to run perfectly. The customers were happy and paid on time, new business was generated by referrals from satisfied existing customers, our market was buoyant even though the economy was reportedly slow, employees were enthusiastic, having fun and working very hard to meet customer expectations and help the business succeed, and we had money in the bank. All three aspects of the business were in perfect alignment; the business model delivered value, the finance model delivered cash and profit and the people management model was effective in developing people to work together.

    And then stuff happened that made things fall out of alignment.

    In one instance, a major client, who had grown to generate some 20% of our revenue, decided to change their payment terms from 30 days to 60 days, adversely affecting our cash flow and exposing us to significant financial risk.

    While we had established some ground rules that no one customer should constitute more than 10% of revenue, our business model systems had not been robust enough to pick up that we had started to operate outside our guidelines. Our client was growing very quickly, and while they required extra product and service from us, they were also experiencing the cash flow pains that come from rapid growth, and had decided to pass some of that cash flow pain onto their suppliers.

    At the same time, one of our staff members received an attractive offer to work with one of our major competitors. I believe that as an employer our obligation is to develop people for their next role, and while we were disappointed to see a valuable team member leave, as an employer we felt a sense of satisfaction that the way we developed team members was recognised by a major competitor.

    So what issue got our focus?

    1. The easy fix – we introduced a more robust management metric into the business model to ensure a tighter control on sales – so we could work with clients to manage their growth without stressing our business model
    2. The routine fix – we negotiated payment terms with our client that provided some flexibility and didn’t significantly deplete our cash position
    3. The review fix – we reviewed our succession model on a regular basis so that we had a range of experienced employees and regular recruits moving through the business. People leave businesses as a matter of routine for a range of reasons and personal development. We structured the business to not be dependent on any one individual.

     

    Did it work? Eventually. Business is a dynamic process. Moments of alignment are just the best experience, yet they are not the constant that we always hope for.

  • January3rd

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    There are a range of drivers that help define success for a business, and a lot has been written about what it takes to achieve success in a diversity of books, articles and blogs. No one but you can define what success means for you.

    While we all have our own view of what success look and feels like, and it is arguable that the criteria for personal and business success are different, there are many “core” elements in all our versions of success. Some of these include achieving a level of financial sustainability beyond mere survival, fulfilling a worthwhile function that is recognised in some form, while achieving the standards you have set that define your version of personal and business success.

    I believe there are three critical aspects to a business’ success:

    1. The business model – what the business delivers or makes that meets client needs, how that product or service is marketed and sold to the client base, how the product or service delivers profit to the business and how the business positively interacts with the environment.
    2. The finance model – the flow of cash into and out of the business that determines ongoing viability. Cash is the lifeblood of every business, the essential oil that must be managed effectively to keep the business operating.
    3. The people management model – having the right people doing the right thing in an environment that encourages excellence in delivery and experimentation to always be better. People who are committed to being their best operating in an environment that accepts that failure for the right reason can be tolerated as the organisation seeks success for the business and its people.

     These aspects do not operate in isolation, and a real secret to success is to get each of these aspects of your business model operating at the right level for your business both statically in isolation, and more importantly in combination so they deliver value to the client, profit and cash to the business and rewards to the people who make the business function.

    During this year I’ll examines the component parts of each of these aspects of business success individually, and provide examples of how each component contributes to success, yet can not succeed in isolation.

     In my view, success in a business sense is as dependent on excellence in coordination as it is on individual or technical excellence.

  • November12th

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    I gave a presentation to a CPA Australia SME discussion group this week and found the discussion very interesting.

    I am a presenter for The Climate Project http://www.acfonline.org.au/default.asp?section_id=193.

    The first half of the presentation provides an overview of  what climate change is and why it is important to start to do something about addressing the causes now.

    The second part of the presentation is a discussion about innovative businesses that are taking positive and profitable steps to reduce their impact on the environment.

    While we discussed reducing waste and making conscious decisions about how we do business now, we also discussed how successful those businesses who have changed their business models are becoming.

    While my expertise and focus is in the SME space, I am aware of a number of significant projects that major corporations are doing to change their business model.

     A great and informative read is “The Necessary Revolution” by Peter Senge – a summary is here: http://edgarwille.wordpress.com/2010/03/26/peter-senges-book-the-necessary-revolution-full-review/

    I know a number of businesses who have started to harvest water, who are generating sufficient renewable power to run their business, who are thinking outside their current framework to reshape their future.

    The traditional valuation model centres on current investment models using some form of assessment of maintainable earnings as a basis for determining value. The future model will include a calculation to assess a business’ environmental cost or contribution as part of the process.

    Reshaping the future means value will be determined by the customer, the community and the impact we leave on our environment.