Advisory and accountancy firm BDO, Lloyds Bank, law firm Gateley Legal, commercial and residential advisers Vail Williams and Henley Business School sponsored this roundtable, held at the Henley Business School
Ideas and experiences shared by participants at the roundtable covered managing cashflow, business planning and retaining talent. As well as being a useful networking opportunity, the participants discovered they faced some similar challenges – from frustrations implementing ERP systems to communicating their business vision and maximising the use of social media.
Keep cash flowing
Despite aiming to keep the ‘B’ word out of the discussion, Brexit made its first appearance within the opening minutes as participants talked about money management challenges, particularly cashflow. While Brexit uncertainty continues companies are tending to hold onto their cash, observed BDO’s David Brookes. “It’s important to keep on top of cashflow, get cash in as early as possible and build a war chest in case you need it.”
For building sector companies like Francis Construction, the accuracy of cashflow reporting is essential. “We’re in a high risk, low margin sector, so our reporting needs to be robust and delivered quickly. We’re always looking at ways to improve the speed of reporting,” said Will Barrett.
Timeliness in reporting is crucial thought participants. Francis Construction uses cashflow software with a 13-week cycle. Lloyds Bank’s Ed Toms cited a client who relies on an app that delivers a daily cashflow status.
At office design specialists Fourfront Group, weekly reporting is the norm. Gary Chandler said: “But there are so many variables; our cashflow position constantly changes. You can never be totally accurate. And you need the whole company concentrating on the figures – it only takes a few staff not being quick enough in debt chasing to affect your cashflow.”
The transactional nature of M&A advisors BCMS’ business poses challenges for Jonathan Dunn. “M&A transactions don’t always go to schedule, so forecasting success fee cashflow is an art rather than a science in our business.”
There can be a counter-intuitive element at play in money management observed Gateley Legal’s Christopher Avery. “If you have a successful, growing business then you often have plenty of cash available, but that’s precisely the time when you need to watch it most closely.”
Chandler agreed. “One area of concern for us is around recruitment. When you’re growing fast you have to be sensible about not just throwing cash at recruiting more people as quickly as you can, which can cost you in the long run if they aren’t the right fit.”
Cashflow headaches for Farol centre on the cyclical nature of its agricultural sector customers. Matt Balch said: “We work closely with our customers to understand their business and their cashflow patterns and keep open lines of communication to manage the level of debt.”
The panel agreed there are benefits in bringing outside expertise in for certain financial and accountancy advice. Farol relies on R&D and tax claims specialists. “They help us make the right calls at the right time,” said Balch.
BDO finds clients are often surprised by the benefits of external support in areas like R&D and capital allowance claims. “Having people you can talk to who understand these areas can help your cashflow,” said Brookes.
Knowing when to change your advisers is also important. We often find that our clients have outgrown their accountants by the time they are ready to pursue a sale. “Changing adviser can be a good move if the time is right,” observed Dunn.
Planning for better business
The panel moved on to look at business planning and the pitfalls of failing to communicate plans and visions effectively to all employees. Toms noted that larger businesses can focus too much on short- rather than long-term planning. “Smaller businesses often find it easier to put in place longer-term plans because they don’t have shareholder demands to meet or performance targets to maintain, which tend to concentrate only on short term benefits,” he said.
Poor communication can hamper the best laid plans. “Bigger companies, in particular, can struggle,” said Mark Swain from Henley Business School. “Especially if they fail to give employees answers to the core questions like explaining ‘what we are here for’.”
As well as clarity in communication with employees, connecting business vision to an individual’s job role helps messages to resonate. “Linking your business purpose to the KPIs you set employees is a good idea,” thought Barrett.
Balch agreed: “That way, you keep things joined up. An individual can see how their performance links to their department and to the business as a whole. We are doing more to educate staff about what their KPIs mean in terms of our overall business success.”
Business planning increasingly includes a strong emphasis on how you intend facing up to and tackling environmental issues. Green issues are at the heart of Reading Transport’s agenda, as Robert Williams explained: “It’s very relevant for us. Our business plan focuses on whether we can be carbon neutral and what is the right level of investment to get us there. But without political focus on expanding the electric charging infrastructure and investment in battery technology we may struggle to deliver our plan. We have to make sure our vision joins up with reality,” he said.
Swain emphasised the necessity of getting CEOs to hold board-level conversations about the climate emergency. Brookes pointed out that if providers like Reading Transport can offer more choices on public transport then it will reduce the number of cars on the road. The panel also touched on the moral dilemma of shifting the challenge of achieving carbon neutrality by getting other countries to do the dirty work for you, for example, manufacturing batteries overseas for electric cars driven on the UK’s roads.
Choosing the best way to communicate internally is another challenge with multiple solutions. David Thomas at property agents Vail Williams said his firm is currently in the second year of a three-year goals-directed business plan. “The plan is based on information gathered at staff conferences. We now have various teams working on a weekly and monthly basis to identify what is going right and where we are behind schedule. Our managing partner updates the whole company twice a year. Using this method, we have made incredible progress to date.”
He added: “We realised that the headings on our employee appraisals system were not the same as those in our business plan. If you want everyone moving in the same direction you need to be measuring the same things and getting commonality of language, so everyone understands what you are doing.”
Dunn observed that greater levels of communication with staff and customers led BCMS to set up a ‘Fellows Programme’. “We talked to our past clients about their experience of the sale process and learnt how emotional the journey can be for clients. Their participation in the programme enables us to improve the experience and support for current and future clients.”
Town hall or not at all?
Once you have your business messages ready, when you deliver them is another challenge. Panelists were divided on the benefits of holding town hall employee meetings and their smaller village hall alternative, with some preferring to share messages at a team level involving far fewer people.
It’s also a question of keeping messages simple, said Louisa Griffiths from market researcher MMR: “Our challenge is making messages to employees stick globally. We’ve found that having ‘ambassadors’ on the ground, wherever messages are delivered, helps. We also do a lot with videos that can be shared and watched again, and by making events truly memorable. For example, we brought in a guest speaker who was one of the youngest people to climb Mount Everest and they brought an inspiring dimension to our event.”
The opportunity to get your messaging in as early as possible shouldn’t be missed, starting with new employee inductions. Vail Williams goes back a stage earlier and asks candidates in job interviews to give examples of things they have done that meet its brand values. “Cultural fit is important so there are no surprises when someone joins the company,” said Thomas.
ERP and CRM headaches
The discussion turned to an issue that irked many participants. Chandler admitted his company has struggled with its recent migration to a new Enterprise Resource Planning (ERP) system and asked if participants had examples of ERP and Customer Relationship Management (CRM) implementations that went well.
Toms said: “It’s a question of understanding why you are putting it in place, why it is a benefit. Businesses can struggle getting this message across all the way down to the people using the system.”
The arrival of an ERP system may not be well received by everyone. “Grass roots users may not like it,” said Chandler, while Griffiths added: “A common problem with a CRM system is that unless a person is positively impacted by it they won’t always understand the benefits and this impacts the uptake of using it.”
Avery agreed; “You can end up with a classic example of employees saying ‘why should I bother using it as the system only benefits others’.”
There’s also a risk of creating an ERP monster thought Barrett and Dunn. “Some people want the system to do everything so you bespoke it too much. I’d say try to keep it as ‘off-the-shelf’ as possible. It’s better to go on a journey of development with ERP rather than having everything available at the start,” said Dunn.
However, Balch was for going down the bespoke path. “Technology platforms that sit outside of a traditional ERP system have made great leaps forward recently. These platforms make it much easier and accessible for end users throughout the business to create bespoke approaches. The capabilities they bring overcome past constraints and limitations where only a select few highly skilled experts could do some of these things.
The bottom line is that people have to understand the bigger picture in an CRM system – and it should be easy to use. “The fewer clicks users have to make the better,” said Griffiths.
Getting value from reports can be frustrating if they aren’t appreciated at a senior level, noted Chandler and Richard Perriman. “You can have senior people in a business who don’t use your ERP or CRM systems trying to impose them on everyone else without realising how difficult it can be. That’s not a good way to go about it,” said Chandler.
Horizon’s Perriman related an experience he had at a previous company. “I was up until 3.00am once tailoring a CRM-generated report just so the charts would be in a colour that the senior manager preferred.”
Taking on social media
No company’s marketing activity nowadays is complete unless it includes social media. Participants discussed how they use it as a platform to attract business.
Perriman found that becoming an expert on Brexit’s implications for supply chains created excellent marketing opportunities through a combination of social media activity and face-to-face meetings. He participates in Thames Valley Chamber of Commerce Brexit roadshows and has appeared in the press and on TV in the UK, Germany and Japan. “This opened doors for Horizon with people approaching me directly. It has been far more effective than making thousands of sales calls,” he said.
At Farol, social media is a key part of its sales process. “We anticipate that in the future fewer customers will talk face to face or visit a dealership before buying. They’re more likely to do their research online. We have a YouTube channel with product videos. In our industry we were early into online marketing and are committed to maintain our advertising budget, even during tough times,” said Balch.
You need to be brave about what you say on social media, suggested Swain. “Say what you think, be a personality and be genuine. Business leaders should say what they believe, as sometimes being wrong won’t necessarily do your reputation any harm.”
There are no easy answers in how best to invest in talent, particularly younger people. BDO focuses on flexible working. “Some people prefer to come in early or stay later. We have to make it work for everyone,” said Brookes.
The changing nature of work, especially with an increase in automation and machine learning, further complicates the challenge. Griffiths said: “In the market research sector business is changing and, with the automation of lower level tasks, it’s hard to imagine what the future will look like.”
It’s not easy changing work patterns if your business is anchored to centuries-old processes. “It can be tough in professions like banking and accountancy,” confirmed Toms, “so we need to ensure we have good staff engagement and that everyone understands why we’re changing in areas like flexible working. We also need to trust employees more.”
At Fourfront, a ‘next gen’ group of employees aged under 30 helps in the retention battle. “The group organises events to share ideas and make connections with next gen employees in other companies,” explained Chandler.
Toms pointed out that the average time in a job is now about 2.5 years. “You have to think about how you look after your talent. If they can’t see a career path to aspire to they’re more likely to leave. At the same time, you also need to find the right balance of youth and experience,” he said.
Balch saw positives in people with a transient approach to employment. “They gain experience in other jobs and industries before they join us.”
MMR has benefited from leavers who later return. “It’s great for us,” said Griffiths. “They come back with more experience having decided that the grass isn’t always greener on the other side. We always try to keep the door open to former employees,”
BCMS even has a four-time leaver in its ranks. “It’s great that past colleagues actively want to come back to BCMS, but leaving collections can be tricky.” said Dunn.
Mentoring – good idea or risky move?
MMR is committed to training employee mentors. “It costs more in time rather than money. We find employees feel more valued if they have a mentor,” noted Griffiths.
But mentoring can backfire thought Chandler. Fourfront found that over a five-year period more people left who had been mentored. “You raise their expectations about career progressions and they leave if they don’t think they are getting anywhere,” he said. “Although it’s always good if they later come back.”
Larger businesses can avoid the risk of losing talented people by promoting them internally. “They can advance their careers at Lloyds by moving up through different teams,” said Toms.
Employee reviews: hold them, avoid them, make them formal or informal? There are no easy answers on how to rate employees. Most participants agreed that there is often a degree of cynicism about the effectiveness of performance reviews.
“It can be awkward if it’s someone you get on well with who you then have a frosty conversation with twice a year,” said Chandler.
Using a rating system isn’t always helpful. “We scrapped our rating system years ago,” said Griffiths. “Our biggest challenge is getting peers/colleagues to be completely honest. You need all types of feedback, including the negative, so people can improve themselves.”
Performance reviews are usually a middle management issue, thought Chandler. “Middle managers tend to have the largest reporting lines, which they have to deal with in addition to their day job. We provide training to help our managers conduct performance reviews.”
Having overrun its allotted time the participants concurred that the roundtable had, as one of them put it, provided “engaging discussion with some very interesting people and businesses”.
Christopher Avery: partner and head of Reading office, Gateley Legal
Matt Balch: finance director, Farol
Will Barrett: managing director, Francis Construction
David Brookes: managing partner Reading office, BDO
Gary Chandler: CEO, Fourfront Group
Jonathan Dunn: CEO, BCMS
Louisa Griffiths: HR director, MMR
Mike Harling: commercial director, ESP Global
Richard Perriman: vice president supply chain development, Horizon International Cargo
Mark Swain: director of partnerships, Henley Business School
David Thomas: partner, Vail Williams
Ed Toms: relationship director, Lloyds Bank
Robert Williams: CEO, Reading Transport
James Harwood: consultant, The Business Magazine, chaired the discussion