Director magazine

Director magazine

BUSINESS WISDOM EMBRACING CHANGEChangemanagementHow businesses can adaptfast to face future challengesIn association with

Embracing changeFOREWORD 3When trading is tough it’s even more importantfor businesses to change, says Steve AttwellSOFTWARE SWITCH 4Answer our questionnaire to find out how tobenefit from a software implementation10 FUTURE TRENDS 6Which issues will determine your company’sfuture success? These should be on your radarCASE STUDY: ZAHA HADID 8When the market dipped, the architecturalpractice knew it had to become more commercialCASE STUDY: GYRO 10After acquiring 13 companies, the marketinggroup had to integrate them into a unified wholeGroup Editor Lysanne CurrieWriter Peter BartramChief Sub Editor Robert SlyArt Director Chris RoweCommercial Director Sarah ReadyAdvertising Director Jo McGrawAdvertising Manager Ben HammondClient Sales Manager Fiona O’MahonyAdvertising Sales Executive Vicky FosterProduction Manager Lisa RobertsonChief Operating Officer Andrew Main WilsonEditorial 020 7766 8950director-ed@iod.comAdvertising 020 7766 8900director-ads@iod.comProduction 020 7766 8960production@iod.comSubscriptions 020 7766 8866membership@iod.comInstitute of Directors 020 7839 1233www.iod.comARE YOU READYFOR CHANGE?Embracing new ways of working helps companiesmaximise investment and operate smarterThe world has changed greatlyas the result of a financial crisisthat hit harder than anyoneexpected. Today, with the UKstill in recession, the businesslandscape has had to adapt toa shrinking economy, forcingmany into hard decisions regarding the workforceand budgets simply to balance the books.Despite the gloom, there are businesses thathave embraced change and are now workingsmarter as a result. These companies havemanaged change successfully. They have investedthe time and effort needed to put a plan in placethat really works – from engaging with staff tointroducing new processes – and which makesthe organisation more efficient and, therefore,more likely to see it negotiate the tough times.As businesses seek to capitalise on newopportunities for growth, here at Sage we’reseeing rising demand for solutions that can helporganisations improve the efficiency of theirprocesses. The deployment of methods such asthese may mean a new way of working andinvolve a high degree of change managementwithin the organisation to maximise investment.At Sage we, along with our business partners,are passionate about helping customers makethe most of the benefits our products bring andpart of that means assisting them to plan theproject and support them through it. Change forbusinesses is necessary. With a well thought outplan and excellent project delivery – along with agreat product – it doesn’t need to be a bad thing.Steve Attwell general manager, Sage lowermid-market divisionPublished by Director Publications Ltd for the Institute of Directors, 116 Pall Mall, London, SW1Y 5ED. Opinions expressed do notnecessarily reflect IoD policy. The IoD accepts no responsibility for views expressed by contributors.NOVEMBER 2012 DIRECTOR3

Can you managea softwareupgrade?Spending the time to ensure a new ITsystem is right for your business canearn you rich rewardsToo many directors have a love-haterelationship with business software.They know they need it to run theirorganisation – but they don’t want totake the time making sure the right softwareis supporting their company in the mosteffective way. But time spent getting a softwareimplementation right can pay rich businessdividends in the years ahead, argues DavidWhitcroft, sales director at PinnacleComputing, a Sage business partner. AndMartin Gaffney, Pinnacle’s implementationdirector, adds: “Don’t think about the hassle –just think about the opportunity for change.”So just how brilliant will you be when yourcompany undertakes its next implementation?Answer our questionnaire to find out…“Don’t think aboutthe hassle –just think aboutthe opportunityfor change”4Director Business wisdom

Embracing changeFIVE VITAL QUESTIONS…1If your software systems are not keepingup with the growth of your business,do you:a) Review your business processes and theway software could enhance them inthe future.b) Use manual methods to get moremileage out of the existing systems.c) Buy another computer running the samesoftware to increase capacity.d) Tell staff to work more overtime to keepup with the increased throughput.2When planning to install an importantnew software system, will your first stepbe to:a) Leave it to the IT department to handlethe problem.b) Conduct a staff survey to discover whatthey need from a new system.c) Visit your local computer warehouse andbuy the software off-the-shelf.d) Research what software other companiesare using to solve similar problems.3Before you start on your softwareimplementation, will you:a) Focus on one key improvement youwant the system to deliver to keep theimplementation simple.b) Make a few minor improvements withthe intention of making more when youcan find the time.c) Try to get the new system to work asmuch like the old one as possible to avoidstaff disruption.d) Redesign key business processes totake advantage of the power of thenew software.4When training your staff to use the newsoftware will you:a) Send round a memo describing how thenew system works and what to do.b) Tell team leaders to train their own staff intheir own way.c) Give staff the opportunity to practiseusing live data in a training environment.with assistance from the project leader.d) Ask the IT department to run a quicktutorial during the lunch hour.5When you come to judge the successof your software implementation, willit be by:a) Whether you made the changes withoutlosing a single day’s output.b) Asking the accountant whether theproject came in on budget.c) Measuring the uplift or decline in keyperformance measures in your business.d) Counting the number of staff who are stilltalking to you.SCORING1. a=4; b=2; c=3; d=1. 2. a=2; b=4; c=1; d=3. 3. a=3;b=2; c=1; d=4. 4. a=1; b=3; c=4; d=2. 5. a=3; b=2;c=4; d=1.17-20 Congratulations! Your company will havea trouble-free software implementation – andreap long-term business benefits.12-16 Nearly there: There will be a few hiccupsalong the way but you should get there in theend and reap some benefits.8-11 Must do better. You could be storing up alot of trouble – and you won’t get all the benefitsyou wanted.5-7 Ouch! You better sit in a darkened roomand think some more about what to do next.NOVEMBER 2012 DIRECTOR5

10 trends to watch for inFrom faster innovation to cyber security, SMEs must be agile enough to meet new demandsBusiness winners are the companiesthat spot trends early and changemore quickly than competitors to takeadvantage of them. So which trendsshould SMEs watch out for over the next fewyears – and how should they embrace them?1A low-growth economyA Bank of England forecast suggests that UKeconomic growth for the rest of this year will beslower than predicted. Growth is forecast to belower in 2013 as well. “The UK economy looksflat for some time to come and public sectorretrenchment seems likely to continue over thenext three or four years at least,” says professorStephen Roper, director of the Centre for SMEsat Warwick Business School.2Demanding customersWhen cash is tight, customers want more.And that message applies whether thecustomers are consumers spending their hardearnedcash in the high street or firms lookingto stretch their business budgets further.Businesses that thrive in this climate arethose that keep their prices keen andlook for low-cost ways to add extravalue to their offering.3Banks not lendingA big increase in bank lendingfor SMEs is unlikely to come throughsoon, predicts Roper. In August, thegovernment launched the Funding forLending scheme aimed at providing lowcostfunds to banks which can then be lent tonon-financial companies and as mortgages toindividuals. But the previous National LoanGuarantee Scheme made little impact.4Rise of alternative financeWith banks not lending, small businesseswill continue to seek finance from othersources. “Business needs to be more creativeabout exploiting different sorts of financialinstruments,” says Roper. More SMEs couldturn to invoice financing. Others could seekfunds through peer-to-peer lending networkssuch as Zopa.5More public sector miseryThe cuts are not going to end any timesoon. In fact, some of the worst is yet tocome. That could make life difficult forcompanies which rely on selling tothe public sector. But Roper arguesthat the nature of publicsector contracts maybe changing. He6Director Business wisdom

Embracing changethe futuresays: “There may be more renewable types ofcontracts which look beyond the initial cost tothe lifetime benefit of the product or service.”6High-cost energyPrices of oil, gas and electricity fluctuate butthe long-term trend is up. SMEs should budgetfor higher energy bills in the future. “In orderto minimise the impact, companies shouldpush energy saving measures further up theirbusiness agenda,” says Roper.7The young and the oldImportant shifts in the demographics ofBritain’s population are taking placeand they could present opportunitiesfor businesses savvy enoughto spot them,suggests Roper. The proportion of elderlyamong the population is growing steadily. Ithas created new markets in some product areas,such as “silver surfers” for IT. But Roper alsonotes that the ethnic mix among youngerpeople is growing. “That’s an interestingdynamic and could create a new marketplacefor some companies.”8New markets overseasMany SMEs have already targeted the fastgrowingBric economies of Brazil, Russia, Indiaand China. But Roper says firms shouldn’t limitthemselves to these countries. He suggests thatAfrica could become a promising growth marketfor UK companies – especially as so manyAfrican nations are English-speaking.9Innovation speeds upRoper argues that SMEs need to innovatetheir products and processes faster. WarwickBusiness School surveys show that more thanhalf of SMEs have done no product orprocess innovation in the past threeyears. “That really worries meprofoundly because companiesmust be moving forward.”Security gets harder10 It’s becoming a riskier world– and that applies to businesses aswell. Civil disturbance provides athreat to smaller businesses – as lastyear’s riots showed. And more potent, asbusinesses seek to exploit online marketsthey will need to focus much more on cybersecurity.Taking security seriously lowers risksand makes online and conventional businessmore profitable.NOVEMBER 2012 DIRECTOR7

Case study: Zaha HadidUnderstanding the need for change allowed the renownedarchitectural firm to keep track of costs – and deadlinesZaha Hadid, the international firmof architects, has designed manylandmark buildings, including theAquatics Centre used during theLondon Olympic Games. But even brilliantprofessionals need to change from time totime. So earlier this year, the company –started just over 30 years ago by three peoplein a small studio in London – decided it neededto become more commercial, recalls generalmanager Christian Gibbon (above).The economic crises of the past few yearshave had an inevitable impact on the kind oflarge construction projects, such asthe Cardiff Bay Opera House or theDubai Financial Market, at whichZaha Hadid excels. The easy yearsof big projects with big fees wereover – at least for the time being.Although the firm had beenrunning prestige projects, it hadbeen managing the admin andfinancial side of the business withtools, such as Excel spreadsheets,that were no longer adequate. Therewas no way to monitor easily thecosts and fees associated withprojects. Change was needed.“In a sense, the architects hadbecome a little bit too spoilt,” saysGibbon. “I don’t mean that in a badway – but because informationwasn’t easily available to them, theyMARTIN GAFFNEY’STIP FOR CHANGEAttention to thequality, capabilitiesand capacity of theimplementation teamfrom the vendor iscrucial. Engaging theright consultants,coupled with a properrequirement exercisebeforehand, will helpin ensuring theimplementationworks at all stages.Martin Gaffney isimplementationdirector at PinnacleComputing, a Sagebusiness partnerjust assumed that what they were doing wouldeventually make a profit.”But as Zaha Hadid embarked on the biggestadministrative changes since it opened, Gibbonhad two key principles in mind. First, he didn’twant to reinvent the wheel in terms of thesystems the company needed. That led to a keydecision to choose two well-establishedpackage systems to sit at the heart of the firm’sfinancial and project management in the future– the Sage 200 suite and Union Square’sWorkspace document management system.Second, it was vital that everybody in thecompany, especially the seniorarchitects, understood the need forchange. “There was very littleresistance,” says Gibbon. “Bothproducts were welcomed with openarms because people understoodthe need for installing them.”Gibbon admits thatinstalling both packages atthe same time was a bigjob. But there was helpfrom PinnacleComputing, a Sagebusiness partner,and UnionSquare, ingettingbothsystemsup and8 Director Business wisdom

Embracing changerunning. But this involved more than newsoftware, notes Gibbon. In a sense, thesoftware has triggered a culture shift at thefirm – making team leaders more aware ofthe costs and revenues on their projects andalso of their use of resources.“It’s changed the wayarchitects go about their dailywork,” says Gibbon. “At any time,team leaders can look at how farthey are on a project and theprojected costs on it.”Sage 200 and Workspaceare linked so they can swapinformation. Workspace sendsdetails about projects to Sage forinvoicing. Sage sends data back toWorkspace when an invoice ispaid. The packages combine toproduce report information –especially on under-utilisedresources – for a meeting ofteam leaders which takesplace every two weeks. So itis now easier to moveresources to where theyare most needed.And Gibbon’s advicefor others planning a bigchange? “Consult andengage with staff sothey understand thereasoning behindthe systems.”NOVEMBER 2012 DIRECTOR9

Case study: gyroThe marketing services company has removed “silos” andadopted a collaborative culture. The result? More businessHere’s the problem. You’re a growinginternational business. In a shortspace of time, you’ve acquired 13companies in a variety of globalregions. They’re all successful in their differentways. The trouble is, their methods differ andyour firm now looks like a gaudy patchworkquilt of many colours. You want it to appear thesame to customers whether they’rein Britain, the Middle East or the US.That was the problem whichfaced Rick Segal (above), presidentof marketing services companygyro. His solution: move towards acommon culture inspired by a globalvision. He explains: “We wanted tocreate a situation where the talent inthe different parts of our companycould flow across borders and workon clients’ projects anywhere.”To do this, gyro created what itcalls its UNO culture. UNO providesa common vision for staff, no matterwhich country they’re working in,says Segal. “It’s based around thevision that we aim to inspire ideaswhich are humanly relevant to ourcustomers and prospects.”Marketing is a business in whichcreative ideas are all-important.“The big thing that makes the UNOculture a success is that we’ve foundthat working together on clientMARTIN GAFFNEY’STIP FOR CHANGEEnsure keymanagement andstaff agree tomeasurable steps,goals and milestoneswith the vendorthroughout theimplementation toensure the projectkeeps moving.Perhaps hold the lastpayment to thevendor to ensure alltheir commitmentshave been met. Berealistic – don’t betempted to go-livebefore you’re ready.Martin Gaffney isimplementationdirector at PinnacleComputing, a Sagebusiness partnerproblems, drawing on resources across thecompany, is a joyful experience,” says Segal.The company has adopted the slogan “nocreative apartheid here”, he says. It means thateven within the business there shouldn’t be any“silos” which cut themselves off from otherparts of the firm. It’s about sharing ideas andworking collaboratively.“I call it formal informality,” saysSegal. “It means that you can breakthe rules to pursue an ad hocapproach to the task in hand, butyou can’t break the culture.”It’s been tough work movingfrom more than a dozen disparatecompanies in 10 countries to onefirm with one vision and a singleculture. Segal says that thetransformation journey wentthrough three distinct phases– norm, storm and form.“In the norm phase, wedeveloped a conception of the newvision and identified the key playerswho would make it happen,” heexplains. In the storm phase, thecompany started to make thechanges which would realise thenew vision and culture.“That involved drawing the bestout of each part of the organisationand reconciling them so that weended with something that was10 Director Business wisdom

Embracing changebetter than the sum of the parts. It wascomplicated work and involved looking closelyat issues such as the company’s facilities,accounting and HR systems.”The business reached the form stage wheneverybody understood the UNO vision andculture, and had started to work in a morecollaborative way. Along the way, gyro hasmade a global broadcast to all its offices andrun roadshows to explain the changes to staff.It has also published a manual – knownaround the company as “The Book” – whichSegal describes as “the gospel according togyro”. He says: “It’s not only an importantchange management tool internally, but it’salso our principal vehicle for communicatingwith prospective employees and clients.”And the result of the culture change?Business rose by 25 per cent last year.“You can break rulesto pursue an ad-hocapproach to the taskin hand, but you can’tbreak the culture”NOVEMBER 2012 DIRECTOR 11

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