Winning Business

2011-11-19T11:55:00.001Z

I think this article from Seth Godin says it all about the 2 ways to approach the future. One thing is sure, the status quo will be a slow death for any business in our new economy.

Can you afford to wait for it to get better?

The following article is a from an email by Seth Godin blogmailfromseth@yahoo.com>

"Optimisticenthusiasm as a form of realism

How does your organization respond to new opportunities?

Most companies launch new things, try out new initiatives, brainstorm newapproaches. The internal response (or reaction) to these ventures is a culturalchoice, one that often turns into a self-fulfilling prophecy.

If your organization is both pessimistic and operationally focused, thenevery new idea is a threat.

It represents more work, something that could gowrong, a chance for disaster. People work to protect against the downside, toinsulate against the market, to be sure that they won't get blamed for anythingthat challenges the system.

In organizations like this, a new idea has to beproven to be better than the current status quo in all situationsbefore it gets launched.

On the other hand, an organization filled with people who are rewarded for shakingthings up and generating game-changing products and services just mightdiscover that outcomes they are dreaming of are in fact what happen. Theenthusiasm that comes from believing that this one might just resonate with themarket is precisely the ingredient that's required to make something resonate.

One more thing: outsiders are way more likely to approach your organizationwith fabulous projects if they think they're likely to both get a goodreception and succeed when they get to market."

2011-09-11T19:16:00.002+01:00

It's Time for a New Business Strategy

Construction output contracted by 3.3% in July compared to a year ago.

Headlines like these are not good news, they give an indication of how hard the year ahead is going to be.

All construction businesses should now be looking at their business model, yes it is important to keep a tight rein on spending but for how much longer can you batten down the hatches?

Think about your marketing, the public sector is drying up, where do you go now? how do you market to the private clients?

Do you have a business strategy? where can you get the help you need now?

Our clients are benefiting from the recent work we have done with them so could you.

Give me a call on 07788 102306 to discuss.

Sunday Herald Opinion piece

2011-08-07T15:49:00.002+01:00

Constructive criticism

BY BRIAN JUKES

7 Aug 2011

Many Scottish construction companies are dying a slow death because the Scottish Government’s flagship procurement policy excludes them from competing for public work.

Following the 2006 McClelland Report on value in public procurement, the Scottish Government has used “bundled contracts”, frameworks and hubs. The effect has been to freeze out smaller contractors who cannot compete for these high-value contracts.

Alex Neil, the Cabinet Secretary for Infrastructure, last month sought to lay the blame for this mess at the foot of the EU and the Westminster Government. Speaking in Fort William, Neil said Scotland was forbidden to consider the economic impact of a contract when tendering, which is why local companies often lose out to foreign contractors making slightly lower tenders.

Neil is obviously making political points but he must know that EU rules for works procurement don’t apply to contracts below £3.9 million, which comprise up to 35% of the total. Below this value, the rules for procurement are set by national governments and public authorities are free to set their own procurement processes and priorities.

The argument that smaller contractors should work in the supply chain of bigger suppliers is a red herring. Many smaller businesses know that this exposes them to difficult contract conditions and poor payment practices, recently exemplified by ROK and Connaught going bust owing millions.

If the Scottish Government had the will it could change its policy in a couple of months and give SMEs a chance. My experience leaves no doubt about business frustration with the Scottish Government and incomprehension about why it has chosen to go this way. Businesses want action and they can’t wait for any more studies, workshops or political point-scoring.

What value do you get from your management team?

2011-08-05T14:24:00.000+01:00

Gary Hamel is ranked as the world's most influential business thinker by the Wall Street Journal and he was asking some good questions in a Harvard Business Review about reinventing management. You know the usual guru bulls--t stuff.

But it did get me thinking about what value do companies really get from their managers. Have you ever tried to measure it ? Do they save you from disaster? manage risks? motivate your people to greater performance? find new and innovative ways to make money? increase productivity?delight clients with their performance? prevent mistakes? deliver continuous improvement?

If they do all of this then that is great, but if they don't then what do they do and why do you employ them.

Gary Hamel believes that management should be the 5th and highest level of innovation in any business, managers should be providing the unique differentiation that sets your company apart and creates the most enduring business advantage.

Is this true of your management? is this true about you? how many times do we hear MD's and CEO's saying that our people are our greatest asset. If that is true then what value do you earn from these assets?

Time for a management audit? email me at brian@businessfix.co.uk to discuss

No Margin – how long will you last?

2010-06-03T13:16:00.002+01:00

In recent discussions with business leaders from all parts of the construction industry it is obvious that there is huge concern about what will happen next and how long the downturn will last. This started me thinking about what needs to be done to ensure successful exit from this recession..

Is winning new work a new beginning or the start of your next set of problems asks Brian Jukes from Business Fix? We are certainly at another change point in the economic cycle, where that will take is nobody really knows. In addition there are massive changes ahead from “Green Regulations” and Government cutbacks..

All of the companies supplying construction services - architects, contractors, quantity surveyors, engineers or specialist contractors are under extreme pressure to cut or eliminate margins to win new work to keep their businesses going. This may be expedient in the short term but will undoubtedly weaken their company for years to come and possibly fatally.

The Solution won’t be found in the past but in a new future

What business leaders need to do now is to develop a strategy for making margin. The market won’t suddenly change, and the pricing levels are set for the medium term ahead. So you need to change your approach from survival to managing in the current market for profit.

There is not a business out there that is not capable of improving their overall performance by 10% or even 15%, I know it might not be obvious or easy but in an industry that is at best only 50% efficient there is huge scope for improvement.

Many people or organisations will offer you the simple solution, do this and your business will gain massive benefit. It is unlikely there is a simple answer. The answer may be to dramatically redesign your business and start to do things differently. There are hundreds of bright and talented people in the construction sector with tremendous technical skills. They deal with many difficult issues with imposed constraints and provide brilliant service to clients. In return they are rewarded with the opportunity to tender for the next job at an even cheaper price.

What if we were able to engage that talent to improve the business rather than solving the same construction issues time and time again? This is now not an option but an absolute necessity.

A completely new approach is needed; it’s about everyone working on improving the business as well as serving the clients’ needs. It’s about taking action now to remove the internal constraints that stop your business from operating efficiently. It’s about working to generate margin at all levels in the business.

The process will be incremental, 1% at a time. But who wouldn’t want a 1% improvement right now?

Business Fix provides strategic business improvement advice to construction businesses, contact us at brian@businessfix.co.uk to begin your recovery.

Beware Action Director on Board

2009-09-05T14:33:00.001+01:00

Beware Action Director on Board

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Optimism?

2009-09-05T12:15:00.000+01:00

A time for optimism in Construction?

With few encouraging signs of “green shoots” what should business leaders in the construction industry be doing?

From conversations with business leaders across the industry it is clear there is still little reason for optimism, if anything, things appear to be getting tougher. There is increased competition for every piece of work. Tender prices are now firmly set at suicidal levels and everyone is trying to cut the throat of everyone else, including the big guys, who are now feeding at much lower levels.

Why then should there be any reason for optimism? Well it is my firm belief that despite the current economic difficulties there are still opportunities to grow or develop your business. Walking round Glasgow and Edinburgh there is still plenty of evidence of construction activity; work hasn’t come to a complete standstill.

A recent report by the Bank of England indicated that mortgage lending in June 09 has risen from 47,891 to 50,123 the highest figure since April 08. This must be encouraging news for house builders. The most recent CIPS, Purchasing Managers Index for August reported that the rate of decline eased slightly from the July figure, its lowest rate of decline in 18 months. The CIPS also reported that despite the continued decline in current construction activity, UK construction companies reported a sustained optimism over future business activity. Although not yet conclusive, forgive me but are these not positive trends?

Yes, it is getting harder to win work, but not impossible. In the very recent past the industry had grown accustomed to being able to pick and choose what projects to go for. Demand for construction exceeded supply; it meant that even average or below average companies, for that matter, could prosper. The industry had reached a state of equilibrium. In nature, equilibrium is the precursor to death, as you become comfortable with the status quo and are unwilling or unable to adapt should circumstances change.

Recession is a time of dramatic change with only the strong surviving. When the recession ends, and it will; it is these companies that will grow and prosper. Those companies who are not as well prepared will struggle, they will cut costs and then margin in a desperate attempt to maintain cash flow. We are seeing it already, with bids of 10% below cost, not uncommon. This is corporate suicide for those businesses that cannot produce significant improvements in performance and the companies who find themselves in this situation will not survive, nor should they.

Recession is hard on everyone, and particularly construction, with its very low barriers to entry, associated risk and wafer thin margins. I believe recession will bring an overdue clear out of weaker companies who are poorly managed or poorly financed. This will undoubtedly mean significant opportunities for those who remain.

So what does this mean? It means that sticking to what worked in the past or what you’re comfortable with will not necessarily ensure survival. Business Leaders need to step outside of their comfort zone and take control of their future direction. It is a time for new thinking and radical change.

Recovery from recession demands change and that means:
changes in strategy
changes in direction
changes in services offered
changes in performance levels

This is no time for average performance; we will not return to a state of market equilibrium for many years to come, businesses therefore need to respond now to changes in market need.

Those who survive, and very many will, need to be anticipating the changes needed; this means refocusing their strategies and communicating to their own people, supply chains and demonstrating to existing and new customers how they add value. If you haven’t done this already, now is the time to start.

There is cause for optimism because our industry needs this shake-out and change that recession brings. Just as with forest fires that initially cause extensive damage they are essential in promoting new growth and sustainability. Better times will come and those who have adapted accordingly have every right to feel optimistic as they will be best placed to benefit.

Crazy Prices and Prequals 5 ways to Win

2009-08-07T15:05:00.001+01:00

We live in very difficult times with fierce competition for every piece of work leading to ever cheaper prices. We all have to live with a combination of the following:
Crazy pricing
Burdensome prequalification and tender processes
Ever more onerous marking with no leeway
Bigger companies feeding at lower levels
Longer tender lists
Long established relationships counting for little

For how long can this continue? Is this what it is going to be like for the foreseeable future? The last recession took 5 years to shake off and get back to a more even market, but the unfortunate truth was that prices were lower, margins still squeezed and productivity down due to the loss of key people.

What can be done now to improve your situation?

Brian Jukes from Business Fix is currently working with a number of clients to do exactly this. His top five tips for improving your winning ratio are:

1. Use your resources wisely, don’t just fill in every prequal you can get your hands on. Be selective and put the effort into the one’s you can win.
2. Make sure the people completing the documents fully understand how to answer the questions and are able to interpret exactly what the client is looking for.
3. Brainstorm with a diverse team for the most important bids.
4. Get feedback on every submission and act on it
5. Develop a clear business strategy and communicate it to all staff. Revise every 2 or 3 months as the market changes and develops
Remember this is not a lottery where more chances increase the opportunity to win. This is competitive race that will be won by the smallest of margins. It is also worth remembering that each PPQ and each tender costs you money to submit. The best prepared have the best chance and waste the least amount of money

Do what you can - waiting is the strategy of failure

2009-04-09T14:39:00.006+01:00

You have now done all you think is possible to survive the recession. Cut costs, reduced or eliminated discretionary spend, reduced the staff numbers, increased bidding and cut prices.

Now all you have to do is wait for the good times. How long will you wait? Three months, six months, till March 2010.

When will life get back to normal? From past experience the answer is never.

Business life will now be different, possibly very different to what we have experienced in the last ten years. The last ten years were in themselves totally unprecedented, None of us have ever experienced 10 years of growth before.

Waiting is the strategy of failure. You can't change the Banks' strategies, you can't force clients to do more business, public spending will happen when they get round to it.

What you can do is take action on the elements you control or have real influence.

One key area is to take action where you can influence performance. Having made all the cuts you now need to take the following three steps for decisive action.

Create a strategy for performance improvement in all parts of the business
Communicate this strategy to everyone in the business and the supply chain
Implement the strategy NOW

Done properly immediate benefits will flow from taking action, the workforce will become energised, waste will be driven from the business and costs will reduce further without losing more key people. If necessary a significant performance improvement will allow you to compete more aggressively for new work.

Business Fix have the knowledge and tools to help you move quickly to transform your performance, contact brian@businessfix.co.uk or 07788 102306 to discuss or for informal advice.

Remember, waiting for the good times to return is not a business strategy.

Best wishes

Brian

PS Performance improvement is like losing weight, it is more dramatic in the early stages.

Economic Downturn - Remain optimistic but be prepared

2008-04-14T11:02:00.003+01:00

Many business leaders in the Scottish Construction and Property sector are wondering if the industry is recession proof. Despite all of the depressing news about the credit crunch, reduced rates of growth forecasts and rising mortgage rates the Scottish Construction Industry remains buoyant and optimistic. The recent RICS Construction Market Survey showed growth slowing across the UK except for Scotland where surveyors were more positive about future workloads.

Is Scotland therefore immune to the global financial difficulties or is there a delaying effect on the back of current high levels of construction activity? This is a difficult question to answer. No one wants to predict a coming downturn as it might be a self fulfilling prophecy. There is no doubt that some commercial activity is being put on hold and Miller Group reported an oversupply of 2 bed flats making that part of the market flat.

Can history help find an answer. The last major downturn was in the late 1980’s early 90’s and only a few of today’s business leaders were in management positions then and some were still in education. Interest rates in 1988 were at 9%and then rose almost 80% to 14% in 1989 and there was a dramatic 33% slump in house prices. The real problem then was a dramatic fall in the commercial market in England with contractors going overnight from turning away work to being unable to find any new work at all. The effect in Scotland was serious but did not have the same massive impact as workloads had not grown as quick anyway.

I was the Regional Director for Norwest Holst at that time and can recall some of the impact on the industry. “One of the most difficult things to deal with was the sudden downturn in work as nobody had the experience of managing this situation. Everybody had spent 10years growing their businesses with positive cash flow which offset some of the problems. The downturn meant cash flow reduced and high interest rates made borrowing very expensive. Companies had to cut back and there was round after round of staff redundancies. This was a very painful time and the Scottish Construction Industry was reshaped in the coming years as a result of this period. Big names changed, my own company Norwest Holst pulled out of Scotland, Miller Group totally reshaped their business, Tarmac and Wimpey swapped their housing and construction portfolios, Taylor Woodrow pulled out of main stream construction and names like Lilley disappeared.”

Based on the experiences at the time I would recommend all businesses to consider the possibility of a downturn and to have a strategy in place for dealing with such a situation if it happens. Every business should review their strategy on a regular basis but when things are going well and everyone is busy a review seems to be unnecessary. In times of change this can be a very serious omission and leave the business vulnerable and unprepared. Don’t repeat the errors of 1990 be optimistic but be prepared.

if you would like a free copy of our Strategic Marketing Workbook to help with your strategy review please email at brian@businessfix.co.uk

Why not bookmark this page for future reading.

Brian

Be mean with your time

2008-03-21T15:00:00.000Z

Everyone knows that their time is their most precious resource, but how many of us give time away?

On Wednesday I met with one of the business leaders that I coach. How was she doing, not particularly well. She had been through a very busy period, running from meeting to meeting and not achieving her important objectives. Not sleeping well and failing to use the time set aside for exercise. Why was she doing this? Because she is a really caring and thoughtful person who looks to help everyone.

We talked through the situation and about time management. She knew all the theory but was being driven by other people's agendas and the hectic schedule needed to build the new business that was kick started at the beginning of the year. The strategy was being threatened by new opportunities and ideas that might be good to look at.

How can she retrieve the situation?

Be selfish with her time and use short term objectives to identify the priorities when accepting invitations to meetings and events. She needed to realise that her time was more important than everyone elses' time (except for clients).

Let people come to her and don't allow meetings to over run.
If it only needs 5 minutes only use 5 minutes.
Delegate every thing that someone else can do
Ensure there are gaps between meetings
In town use a taxi, or get someone to drive you
Keep time for you

All very useful tips, but the key to using your time successfully is to have a clear strategy with short term and long term objectives. Use these to prioritise your time and plan your diary.

Look at your diary for the past month and see how it could have been better organised. How much time could you have earned for yourself? how much would it have been worth?

Thanks for visiting

Brian