WITH THE FAMILY BUSINESS
Every family business comes to a point in its life when it becomes necessary for the current generation to find a successor due to age, health or other interests. It is a well known fact that passing the torch to the next generation in the family does not always lead to the most successful continuation of the business, especially with regards to the third and further generations. Usually, firstly, because the later generations have not invested their own blood, sweat and tears into creating and growing the business, and secondly, because each successive generation has grown up sheltered from the reality of the business and industry in general.
In witnessing successes with the third generation and beyond, it is often because the newer generation received an appropriate education and then worked in the real world for a few years before coming home to the family business. Another positive indicator is when the older generation agreed to a fixed period of mentoring before they would step down and lived up to the agreement. When these factors don’t happen it can lead to business disaster and personal tragedy.
To read the remainder of the article, click here.
Thursday, November 10, 2011
Thursday, October 6, 2011
SASKATCHEWAN GETS THREE F'S
Article written for Osborne by Paul Martin of Martin Charlton Communications.
Even pessimists are finding it difficult to produce a Saskatchewan economic statistic that is negative. Investment is at record levels, the population is growing faster than the national average and consumers are showing no signs of flagging confidence.
For many years the Canadian province described as the easiest to draw but hardest to pronounce was something of an economic laggard. Often characterized as the gap – that space between the Winnipeg and Calgary airports – the once sleepy province is now an economic dynamo.
The big drivers in the Saskatchewan economic story are to be found in the resource sector. First it was oil and gas powered by the dual engines of growing global demand driving prices higher and a faux pas in Alberta where tinkering with the royalty regime sent industry players scurrying for new plays. Saskatchewan’s Bakken project, located southeast of Regina, turned out to be the winning suitor for these new players.
Then came potash. An emerging middle class in China and India, a huge population base with rapidly rising disposable income levels, provided an additional catalyst. One of the first things the nouveau riche seeks is an enriched diet. Growing demand for protein prompted farmers globally to increase their output. Saskatchewan, of course, has plenty of farmers so this development lifted the agricultural sector. But farmers everywhere also wanted more fertilizer to feed the Pacific Rim’s new consumers and potash came into its own.
To read the remainder of the article, click here.
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.
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
Mark Olson
Principal
Wednesday, August 10, 2011
CASE STUDY: CEVENA BIOPRODUCTS
THE CLIENT
Cevena Bioproducts Inc. (later Natraceutical Canada) was a spinoff biotech start-up company from the University of Alberta in Edmonton. The company manufactures supplements from grains that have shown in clinical studies to deliver multiple health benefits, including cholesterol and weight reduction.
THE CHALLENGE
Like many start-up operations, Cevena required assistance to commercialize the manufacturing process, reduce production costs and provide product consistency from a quality and quantity standpoint.
THE APPROACH
An Osborne Principal was hired as Interim Vice President of Engineering and Manufacturing with the mandate of defining the current production costs, to develop a plan to reduce those production costs at the current location or find an alternative location to do so, and to identify reasons why the bench scale process was not repeatable at a commercial scale.
THE RESULT
A multi-faceted plan was developed to reduce production costs. Subsequently, the company was purchased by a global enterprise (Natraceutical Group) that added additional capital, technical expertise and worldwide marketing support. The Osborne Principal was requested by Natraceutical to remain with the organization to assist with the ownership transition and implementation of the plan; the Principal also assumed the lead role for research and development at the time.
As a result, production costs were reduced by 70 percent to commercially viable levels by tripling plant capacity and converting to a commercially available raw material. Doing so also resulted in a reduction of raw material inventory by 90 percent. Lastly, the overall production process was vastly improved so that product quality was consistent and met quality requirements.
Cevena Bioproducts Inc. (later Natraceutical Canada) was a spinoff biotech start-up company from the University of Alberta in Edmonton. The company manufactures supplements from grains that have shown in clinical studies to deliver multiple health benefits, including cholesterol and weight reduction.
THE CHALLENGE
Like many start-up operations, Cevena required assistance to commercialize the manufacturing process, reduce production costs and provide product consistency from a quality and quantity standpoint.
THE APPROACH
An Osborne Principal was hired as Interim Vice President of Engineering and Manufacturing with the mandate of defining the current production costs, to develop a plan to reduce those production costs at the current location or find an alternative location to do so, and to identify reasons why the bench scale process was not repeatable at a commercial scale.
THE RESULT
A multi-faceted plan was developed to reduce production costs. Subsequently, the company was purchased by a global enterprise (Natraceutical Group) that added additional capital, technical expertise and worldwide marketing support. The Osborne Principal was requested by Natraceutical to remain with the organization to assist with the ownership transition and implementation of the plan; the Principal also assumed the lead role for research and development at the time.
As a result, production costs were reduced by 70 percent to commercially viable levels by tripling plant capacity and converting to a commercially available raw material. Doing so also resulted in a reduction of raw material inventory by 90 percent. Lastly, the overall production process was vastly improved so that product quality was consistent and met quality requirements.
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