Eumundi Voice, Issue 101, 5 September 2024

BUSINESS

AC Cobra

This is the second article in a series, following on from Hot Buttered Toast published in Issue 100 on business planning. It describes how an effective planning process took a longestablished small building company stuck on $4M in annual revenue to more than $40M in just five years ...

The building company originated as the result of a management buyout by three capable builders with a complementary combination of skills.

The core problem was easily identified. The company was focused on the lower and middle ranks of the domestic housing market which had small margins and although the issue was easy to identify, it was not so easy to fix.

The solution:

• Shred the 5-year plan submitted to the banks to gain finance. Although it was modestly profitable it showed little growth.

• Shorten the planning cycle to 3 months and focus on the more challenging but more profitable commercial building projects available.

• Initiate ‘harvest’ planning meetings to take immediate account of both challenges and new opportunities.

The term ‘harvest’ meetings originated from the fact that they ‘harvested’ every single challenge or opportunity known to the team. These were termed ‘issues’ and around 40 emerged from every meeting. The key issues – no more than 4 – were formed into proposals, then into objectives.

Objectives were complemented with strategies (how to) and tactics (what, who and when) creating action points with clear timelines and accountability.

Everyone left these offsite meetings ‘on the same page’ with thoughts and actions clearly agreed, aligned and coordinated. You could feel the renewed energy!

The results were evident within 6 months, and they accelerated from there with the purchase of several toys including an AC Cobra and a 40ft yacht.

So, what was different?

1. The ‘harvest’ meeting rules included no ranks, and ‘no holds barred’. Susie, the personal assistant to the managing director was the champion of these meetings, taking no prisoners and making sure that everyone knew exactly what they had agreed to in writing.

2. The meeting meant that every resource from intellectual capital to the nail guns, was aligned and focused on the same clearly defined objectives.

3. Output from the meetings devolved action and responsibility to the appropriate level, avoiding misunderstanding and locking in accountability.

The key factors were:

1. The frequency of meetings, not weekly as in the previous article but quarterly, was enough to keep pace with an ever-changing market.

2. The dynamics and rules of the ‘harvest’ meetings outlined above.

3. Clear definition of action points (tactics) that were going to make a difference and most critically, alignment of thinking and resources; just one agreed agenda ruled the day, every day! Or there would be hard words from Susie!

The final article will sum up all the key elements of the planning process which became known as RADAR.

Read the third article here.

Tony Botsman, DDA, MBA, botsmananthony@gmail.com.