KEY POINTS:
Getting more calls than usual from head office these days to see how you are doing? You're not the only one. It's another new and unappealing part of being in business in 2009. When things were flourishing, Sydney or Singapore pretty well left Great Company NZ alone to do its thing. It was your own fiefdom and that's the way you liked it. And in recent years, typically you only had good news to relay.
Nowadays when the skies are not so blue, head office wants to know exactly how bad things are going to get, and in daunting detail. And if you don't have the data they need, they will be jetting in for visits far too often for comfort - a bit like your mother-in-law, checking to see if you are bringing up baby as she would. And even if you are able to give them all the information they need, the trend is for more decisions to be taken back under head office's control.
Head office, unsurprisingly, has particular interest at present in budgeting and forecasting data. "Boards are being more demanding, rather than assuming that the future will be good. There is more rigour around assumptions," says Steve Wakefield, managing partner of Deloitte Christchurch. There an increasing demand for accuracy. Organisations need reliable systems to inform the CEO and the board, he says.
There has been no better time to invest in those business systems that you have been talking about for the past couple of years, but have been too busy to do anything about. Think of it as rather essential housekeeping. Head office isn't going to turn down the expense, because it is in their interests. What decision makers from on high want is transparency. They want to know where the bodies are, before the rest of the world finds out.
Fortunately, there have been quite good advances in software packages for business performance management in recent years, and management consultants can help you choose the right one.
Deloitte recently invited John Ward, Professor of Strategic Information Systems at Cranfield University in Britain, to visit its offices in New Zealand. Professor Ward, the author of Benefits Management: Delivering Value from IS & IT Investments, with Elizabeth Daniel, talks in his book about how IS/IT investments can be aligned accurately with organisational strategy. The expert offers a toolkit to management when choosing their business system and IT.
Wakefield spends a lot of time consulting with organisations of all sizes, and much of the time he is talking to them about the right kind of business systems for them, ones which will help them read their vital signs better.
The Deloitte partner, drawing from business literature, likens it to a dashboard. Some key indicators will be on there - business forecasts, budgets, the inventory. This informed dashboard will show you "where the hot spots are", says Wakefield, and you will be able to adjust your driving accordingly.
The Deloitte partner is currently advising a large listed $500 million turnover company which made a number of acquisitions in the good times. "They've been running so hard with all of that, they have not integrated their systems together," he says. Until now they have consolidated the results on a spreadsheet on a monthly basis, but this is not good enough in the current market. Although each part of the business may have its own business management system,
there is no one cohesive system drawing all the operations together and showing a clear picture.
Now, when they really want to drill down into the details, there is a convincing argument for an integrated database, says Wakefield. That way they can look at the whole operation at a more "granular level", he says. Information on accounting figures, operational KPIs, the inventory - all these details can really add to management's knowledge at a time like this, he says.
Staff can be resistant to new business systems when they are first introduced, says Iain McCormick, managing director of the Executive Coaching Centre. But one advantage of the current market conditions is that staff will raise less of a stink if new management software is installed.
Putting in a new system is a big change, he warns. He adds: "I think that this is really the time to be looking at effectiveness and streamlining business processes."
The executive coach says he is busier than ever as companies look to him for advice. They want someone independent.
Leaders should be managing actively as never before, advises McCormick, both from the people side and the business process side.
Investing in business systems is all part of the area of strategy, McCormick says. "Businesses are saying, 'Well, what do we need to get through this?' You are wanting an approach that engages the whole senior management team and builds enthusiasm."
Of course all the data in the world won't help the business if the leadership isn't using the information well.
Business consultant Andy Collyer of Bishop Collyer Leadbetter is talking to a number of managers seeking direction in the current climate.
"A good skipper would always know that he has leaks in the hull and when the time is right they'll need caulking. A good skipper is also going to have his eye on the horizon and see the swell coming. The action they then take is imperative - they have to lead their crew," Collyer says.
"It takes clarity of thought, articulation of the purpose and the ability to persuade, cajole and carry with them the whole team. It's a time for putting together a battle plan and a war chest and a team that is fully briefed on the plan and is clear on the consequences of failure."
Gill South is a freelance business writer based in Auckland.
