Monday, September 19, 2011

CASE STUDY: MANUFACTURING COMPANY

THE CLIENT
A Saskatchewan based animal feed component manufacturing company that produces Omega-3 rich feed supplements for all classes and species of livestock.

THE CHALLENGE
In an effort to bring a more integrated approach to the business and cohesion among all departments in the company, the internal finance role needed to be elevated from that of an accountant to a more senior position. In addition, there was a need to implement new tools that would help communicate key financial information in a more universal way which could be better utilized and understood by more people within the organization.

THE APPROACH
An Osborne Principal was engaged in the role of Mentor to transition the existing Junior Accountant into a Controller role. First, the Mentor reviewed what was required of a Controller and what it would take to get the accountant to step into the role. Then together they modified the financial reports to add more results-based information (such as a margin per product line) and to present the information in a more visual way (by adding graphs and charts) so they could be easily interpreted throughout the company. Lastly they reviewed all technical accounting aspects of the business and ensured the accounting treatments were understand in how they were made and why.

THE RESULT 
The improved communication and presentation of information resulted in a stronger reciprocal relationship between the Controller and the rest of the company. In addition to the Controller, everyone in the organization understood the process better, how the organization was doing financially, and what was required to improve. A more detailed documentation approach was implemented, which led to better risk mitigation and a better supported budgeting process. As well, the Controller became more assured and is now able to defend his decisions with confidence.
COMPETENCY: FINANCIAL MANAGEMENT INDUSTRY: MANUFACTURING osborneinterim.

Thursday, September 8, 2011

THE COURAGE TO GET IT RIGHT

I didn’t ask Shaw Communications Inc. CEO Brad Shaw who was a greater influence on his decision to pull the plug on Shaw’s wireless network, Kenny Rogers or Jim Collins, but I suspect that either through song or script, as he grew up in the family business, he respected subliminally the messages from them both.

Rogers, the 60’s and 70’s country icon singer, who crooned in his classic “The Gambler”, “you gotta know when to hold ‘em, know when to fold ‘em, know when to walk away, know when to run”, was talking about poker, but most would agree that today’s economic climate is about as high stakes a game as you’ll find.

Collins, in his 2001 best seller Good to Great, espoused that great companies follow the “hedgehog concept”. Namely, an understanding of (1) what they can be best at in the world, (2) what drives their economic engine, and (3) what they are deeply passionate about.

Not many CEO’s with just south of $200 million already invested would cancel a project that many critics called vital to the company’s growth. But in Collin’s speak, “facts are better than dreams” and the facts were that Shaw’s wireless business was a $1 billion build-out that didn’t align with its hedgehog concept and deliver shareholder value.

Weeks earlier, Leo Apotheker of Hewlett Packard had made a similar gutsy call on behalf of its shareholders; HP pulled the plug on its TouchPad tablet and announced its PC unit was for sale. Simply put, HP couldn’t be the best at tablets, and margins on personal computers were dragging not driving its economic engine.  Apotheker is also an enterprise, business solutions disciple and it is likely there that he felt HP had to focus.

History of course will be the ultimate judge of these tough minded decisions, but don’t let the size of these businesses mask the lesson to be learned, irrespective of whether you’re leading a public or private company or for that matter, a not-for-profit turning to social enterprise to survive.

As contract executives, transitioning in and out of a wide variety of organizations in need we sometimes see how dreams have blinded reality. Simple businesses have been made incredibly complex and leadership struggles with a singular focus on what they can win at, versus who they can be like. Stakeholders are not aligned (in fact oft ignored) and potential is not being fully realized. Every business must be ID’d in the following fashion, “What is it you do?”  “What is it you make money at?”  “What is it you can be the best at?”  Once the business is validated in this way, the disciplines, processes and people need to be in place for growth to be achieved and be sustainable.

And if the realization is that you’ve lost your way, cut your losses and get back to what you do best.


Mark Olson
Principal