News Archives | Page 2 of 4 | Board Associates

Family Business Research: How do Boards create value in family firms?

November 21, 2021/in News/by Matthew Dunstan

QUT Masters of Philosophy Student, Matthew Dunstan is conducting a study into when and how boards enhance (or erode) financial performance in family business and we need your help! We are surveying owners and senior executives of non-listed, family firms to help us investigate this important question.

Please take a few minutes to complete a short survey. Your input will provide a valuable contribution to this project and the findings may lead to improved guidance for business owners.

Participants will be offered a copy of the benchmarking report from the study (available mid-2022), showing how their firm compares and performs against their peers.

Further information can be obtained by contacting Matthew Dunstan on 07 3138 6611 or by email: matthew.dunstan@hdr.qut.edu.au

For more information, visit QUT’s Australian Centre for Entrepreneurship Research

Are you curious enough… ambitious enough?

October 21, 2021/in News/by Matthew Dunstan

QUT’s Centre for Future Enterprise and MIT hosted the first of a 3 part series on the future enterprise. Michael Rosemann, Director of CFE, called all leaders to be more ambitious – not in a self serving, ego agrandising manner, but rather in the pursuit of creating more value for all. Here’s a quote from Michael’s opening remarks:

“Future enterprises will be exposed to an opportunity-rich environment, but there is a danger that enterprising in the future will not be ambitious enough, that we are not curious enough and that we are not decisive enough. And if this is the case, we under-capitalise on the power of enterprises and the value they can create, not just as commercial goods, as public services, but also as a greater good for all of us and next generations.”

Some questions for you and your management team:
1. What value are you creating in the world?
2. What is your ambition? Are you ambitious enough?
3. How might you embrace new technologies, networks or processes to exponentially deliver more value?

Budget Setting Is Like Renovating A House

May 6, 2021/in News/by Matthew Dunstan

Many of us lack any vision when it comes to renovating a house. The people on TV make it look easy but when we try, the result is just a slightly different version of the same house we’re already living in. The same principle can be applied to budget setting.

Establishing a budget for next year is just good business management. Yet, we come across many owners who struggle with it. Most take an incremental approach – they take last year’s budget. They tweak it a little and cut back a little here and there and then say “that’ll do”. A better approach is to take the “Grand Designs” version of house renovation. We need to envision a different type of business and not just what we want next year but a different type of business over a three to five-year time horizon.

THE REAL QUESTION IS NOT HOW MUCH ARE YOU SPENDING NEXT YEAR, IT’S HOW MUCH ARE YOU INVESTING NEXT YEAR?

If we apply this thinking to your current budget setting, yes, it’s useful to look at what BAU (business as usual) requires in terms of funds. But, when you go through that exercise, we recommend doing it from the perspective of what return am I getting from that current expenditure. And am I getting a return on investment in the right places?

You’ll find that some of your expenses this year have been about keeping the lights on, producing today’s products and services and selling to today’s customers. No doubt you’ll also have some expenditure which relates to things that you’re doing to generate tomorrow’s customers. However, you should separate these groups and ask yourself:

ARE YOU GETTING THE RIGHT RETURN ON INVESTMENT OR IS YOUR RETURN ON INVESTMENT MEETING YOUR EXPECTATIONS?

At Board Associates, we start the conversion by looking at what your future vision is and what it is that you’re trying to accomplish over a three to five-year time horizon, what the potential of the business is and what investments are required to get there.

To give you an example, we recently spoke with the inventor of a motorcycle company here in Australia. This company produces some of the most innovative electric vehicles you’ll find anywhere in the world. These motorcycles have significant market potential as well as social benefit. The thing that’s holding them back is investment. And so the question we posed to the founder was:

“if you have that much passion for getting your vehicles into the hands of as many people as you can, and creating this environmental and social benefit, why would you put the brakes on that by taking an incremental approach to growth and only investing internally? Why not take a more ambitious approach so that your company can live up to its full potential?”

We believe that this is the approach that you should take on all budget lines when planning next year’s budget.

3 STEPS TO BETTER BUDGET PLANNING

Step 1: Split your current years’ actual figures into two groups

Group 1: expenses which are about delivering on business as usual, and;
Group 2: the money that you’re spending on investing and preparing for your new customers.

Step 2: Analyse and adjust your current return on investment.

For both of these groups, you should be clear about what your return on investment expectations are and measure them.

For Group One, ask yourself if you’re generating a commercial rate of return. If not, this should guide how you adjust your BAU budget.

For Group Two, ask yourself how attractive your return on investment will be and again use this to guide decisions about investing more, investing less or changing the balance between BAU and incremental investments (group two). Importantly, get rid of those pet projects if they’re unlikely to generate a sufficient return.

Step 3: Take a fundamental return on investment approach

Ask yourself: what investment would you make in the business now to create the next version of the business and to secure a better return on investment over 10 years?

This step is more like developing a business case for investment than setting a budget but of course the answers to these questions then drive where you allocate funds next year and importantly whether that investment is coming from internal vs external sources.

SO HOW CAN BOARD ASSOCIATES HELP?

The team at Board Associates have a significant amount of expertise not only in CFO and financial management services, but also in new venture assessment, investment management and strategic planning. If you’d like some assistance in analysing your current allocation of funds, the return on investment that you’re getting versus industry benchmarks and how you might fuel your future potential, reach out to us and we’d be happy to schedule an initial chat to discuss how we might be able to help.

Why Strategic Plans Fail

March 18, 2021/in News/by Matthew Dunstan

STRATEGIC PLANS ARE JUST LIKE NEW YEARS RESOLUTIONS. THEY START, BUT NEVER FINISH.

We’ve all heard the word strategy many times in our careers. Strategy is believed to get us from Point A to Point B in a seamless transaction. Yet, one of the most common complaints is that strategic plans fall apart somewhere in the execution phase.

Strategic plans are always well-intentioned and they begin with enthusiasm and passion. All too frequently, they succumb to daily emergencies and urgent requests, leaving the business owner’s plans to wither and disappear into the darkness.

WHAT’S GOING WRONG? WHY DON’T OUR STRATEGIC PLANS STAY ON TRACK?

At Board Associates, we’ve been able to help many organisations keep their growth aspirations and strategic plans on track. In our experience, there are a number of reasons why strategic plans fail.

ADAPTING TO CHANGE IS HARD

The idea of a strategic plan is to engage the future. In the 21st century, the continual transformation of business environments means that “keep doing what you’re doing” is thrown out the window. Yet, business culture is set around a stagnant environment that is centered on what got the business to where it is today. Changing this habit is often a daunting experience and one business owners find difficult to tackle. There is an enormous amount of anxiety about what the repercussions may be for a game-changing strategic plan. Our recommendation is those fears are tackled head-on and spoken about as a part of the planning process.

PLANS LACK INCLUSIVITY

For a business to grow and thrive, there needs to be more than just a small group of people driving it forward. When strategic plans are developed behind closed doors, it becomes difficult to get the entire company onboard when it comes to the implementation phase. Obviously, there is a lot of leadership involved in establishing a vision for a company. But we see time and time again, businesses have large pools of talented individuals but are not leveraging this to its fullest potential. It is worth listening to these people to ensure they are feeling heard and that they are also contributing to the company’s successful future. By including your entire team, your strategic plan is more likely to run smoothly.

YOUR ORGANISATION IS TOO FOCUSED ON SHORT TERM RESULTS

We live in a world where the constant question of, “what are you doing for me?” is said too often. Whether this is coming from employees, clients, investors or management, everyone is under significant pressure to deliver results on a regular basis. Longer-term strategic plans can contribute to those results in the short-term. Forfeiting short-term performance for long-term growth requires steadfast leadership that can say “no” to the easy way out.

PLAN IS SHORT AND ACCOUNTABILITY IS LIMITED

These two go hand-in-hand. People develop plans that sound fantastic and think it will solve everything. But that is where the problem starts. Goals and objectives need to be concrete enough to provide a viable path to the implementation phase. Developed strategic plans need to assign accountability and specific accomplishments within their timeline for each action it encloses. Without accountability, the daily emergencies will quickly supersede moving the plan forward.

None of these challenges are impossible. With a different and innovative approach to strategic planning – one that gets people thinking and keeps them at the edge of their seat both creatively and practically, will include goal setting and accountability and getting all of the fears out in the open. By using these strategies, it will help your business end up with a solid plan that lives and breathes instead of collecting dust.

WANT HELP WITH YOUR STRATEGIC PLANS?

If you would like to develop a better and more actionable strategic plan for your business, register for our Strategic Planning Bootcamp! It is an online workshop series, running over the 29th & 30th of April.

GOT A QUESTION?

Join the conversation on Strategic Planning with the Board Associates team of experts on our socials!

CHECK IT OUT!

Don’t miss this weeks video episode from Board Advisor Martin Bishop & Matthew Dunstan, Founder and CEO of Board Associates.

If You’re Failing To Plan Then You’re Planning To Fail

March 4, 2021/in News/by Matthew Dunstan

MOST STRATEGIC PLANNING SESSIONS FAIL. MOST STRATEGIC PLANS FAIL.

At Board Associates we have a strong focus on strategic planning, from why it fails and how you can do a better job of it this year.

Over the next few weeks we’ll be sharing our favourite tips and tricks, frameworks for strategic thinking and for subscribers, access to some of the templates and tools we use in our workshops.

IN THIS MONTHS EDITION…

Register for our Strategic Planning Bootcamp
See how you compare in our Benchmarking Survey
Read our favourite books on planning and strategy
Watch an interview on the common mistakes (coming soon…)
Learn our key tips for making plans more effective

STRATEGIC PLANNING BOOTCAMP
ONLINE WORKSHOP SERIES: 29TH & 30TH OF APRIL

Many businesses have succeeded through a combination of serendipity, perseverance and raw talent. However… “the factors responsible for our success to date, won’t be the same as those required for the success of tomorrow”

PRESENTED BY

Matthew Dunstan (Founder of Board Associates)

Leesa Chesser (Human Services, Innovation and Regulatory Environments)

Justin Cloete (Insight and Strategy)

This event is delivered over 3 x 1.5 hour online sessions.

DOWNLOAD YOUR STRATEGIC PLANNING BOOTCAMP PACKAGE

DOWNLOAD THE ONLINE SESSION TIMETABLE

THE TEAM AT BOARD ASSOCIATES WILL BE PROVIDING INSIGHTS ON HOW TO…

Get clear on your overall goal, mission and why you exist.
Develop a business strategy that works towards your overall mission.
Translate strategy into actionable plans and drive accountability.

DID YOU KNOW THAT 67% OF ORGANISATIONS STRATEGIC PLANS FAIL? (PRIVE, 2020)

“A goal without a plan is just a wish

— Antoine de Saint-Exupéry

BENCHMARKING SURVEY

To get you thinking and to see how you compare to your peers, you might like to participate in our our 5 minute benchmarking survey.

COMPLETE SURVEY

IT’S TIME TO BECOME MORE FOCUSED ADAPTABLE AND AGILE

Effective strategic planning will enable you to put concrete plans in place that drive your business and your profitability forward.

To help our clients be more effective, we’ve developed a framework using Playing To Win: How Strategy Really Works.

Here’s an overview of how it works.

Great By Choice

By James C. Collins

Playing To Win – How Strategy Really Words

By Alan G. Lafley and Roger Martin

One Page Plan Framework

GOT A QUESTION?

Join the conversation on Strategic Planning with the Board Associates team of experts on our socials!

Half of Australian Businesses Underspend on Innovation

February 11, 2021/in Innovation, News/by Matthew Dunstan

Most of us accept that innovation is imperative to business. It fuels competitiveness, profitability and feeds our entrepreneurial spirit. Unfortunately, though good intentions aren’t enough and the fact is that more than half of business owners spend less on innovation than they do on their annual grocery bill. That’s not very innovative!

“If you have always done it that way, it is probably wrong”

~ Charles Kettering

WHY INNOVATION FAILS

Many projects end up losing money, frustrating employees and heading into the abyss. Yet, large corporations spend billions of dollars annually in pursuing innovation.

Authors from the Harvard Business Review believe that innovation projects fail as a result of resources being spent on the wrong type of innovation. Too much money is being spent on attention-grabbing activities that are straightforward to do such as outrageous PR stunts and shocking videos, procuring new technologies and buying more facilities. However, innovation lies in changing the design of a current service system, introducing new customer service experiences, or a much better business model.

At Board Associates, we like to distinguish between “capital I” innovation and “little i” innovation. Not all innovation needs to be the big bang approach. In fact, following the advice of Jim Collin’s we actually recommend against it in the first instance until your innovation is proved (see “firing bullets and then cannonballs” in his book “Great by Choice”).

HOW MUCH IS ENOUGH

The real question is, for a successful innovative idea to take off, how much should we as business owners be spending?

The Australian Bureau of Statistics has recorded that half of Australian business owners spend less than $25,000 on innovation activities. That’s less than the average family grocery bill. It’s less than your spending on keeping the lights on (electricity) and probably less than you’re spending on toilet paper and stationery.

We accept that we need to invest in marketing to grow our business. Why don’t we apply this same thinking to innovation?

BUT HOW MUCH IS ENOUGH?

We’d challenge you to think of it like this: “how much is an appropriate investment in your growth?” If you believe there’s opportunity to grow from $10m to $50m, surely that’s worth a little focus and a little cash.

HOW DO YOU ALLOCATE THIS SPEND?

The problem with innovation implementation and success is a lack of strategy. A strategy is nothing more than a commitment to a set of coherent, mutually reinforcing policies or behaviours aimed at achieving a specific objective and competitive goal.

Great strategies promote alignment among diverse groups within an organisation, explain objectives and priorities and help centre efforts around them.

Companies regularly define their overall business strategy (their scope and positioning) and identify how various functions; such as marketing, operations, finance, and particularly R&D – will support it. However, firms rarely communicate their strategies to align their innovation efforts with their business strategies.

Without an innovation strategy, innovation improvement efforts can easily become a grab bag of proclaimed best practices: dividing R&D into localised autonomous teams, generating internal entrepreneurial ventures, setting up corporate venture-capital arms, pursuing external associations, embracing open innovation, collaborating with customers and implementing rapid prototyping, just to name a few.

A company without an innovation strategy won’t be able to make trade-off decisions and choose all the elements of the innovation system.

INNOVATION REQUIRES THINKING OUTSIDE THE BOX

Board Associates innovation experts, Justin Cloete and Peter How regularly run innovation and ideation workshops for clients. If you’ d like to find out more, contact us here

The Danger of Family Councils and Family Constitutions

January 24, 2021/in Advisory Board, Family Business, News/by Matthew Dunstan

Managing family within a family business is one of the most challenging things an entrepreneur and a Board has to do. To help keep these lines separate and smooth, the prevailing wisdom has been for family shareholders to have a governance structure which manages family harmony (family council or family assembly). Recent research, however, suggests that in some cases this may do more harm than good.

“Family regulatory framework provides obsolete laws without the family governance structure, whilst this structure causes complete confusion without the right regulations.”

THE STUDY

Researchers from the University of Valencia studied over 1,000 family firms, looking at how financial performance is affected by things such as family constitutions, family assemblies and other mechanisms which define the rules by which family members operate in business. They found that these structures and rules were important where family complexity was high (multiple generations and family branches) but in other situations, they were associated with a negative return on assets.

Key Findings

The results show that the relationship of family rules and institutions with performance (ROA) is contingent on family complexity.
It should fit the level of complexity of the owner’s family. Any misfit will lead to a non-significant effect or, worse, a negative impact on a firm’s performance (ROA).
When family complexity is low, a complete set of rules and agreements that regulate the relationship between the family and the firm is adequate.
However, when the level of family complexity is high, a complex set of rules (i.e. a complex family regulatory framework) is not enough and may even be counterproductive.
High family complexity requires a well-developed regulatory framework supported by the right family governance structure.
The family regulatory framework provides obsolete laws without the family governance structure, whilst this structure causes complete confusion without the right regulations.

LESSONS FOR OWNERS

This research is an important reminder that one size does not fit all and that prematurely adopting the structures and rules of larger, more complex family businesses can damage the organisation’s financial performance and wealth generation.

One interesting and simple finding from the research, however, is that starting with simple agreements on how the family operates within the business is useful at all levels and that this should be implemented before considering family governance structures.

There are many studies which show that the creation and deployment of rules regulating ownership and work with the family business provide several benefits:

Protection against owner-owner conflict,
Develop and protect ‘familiness’,
Regulate ownership transmission without draining financial resources or reducing family control,
Formalise communication processes,
Strengthen a shared commitment to norms and values and;
Provide institutional legitimacy to the family and the business

IN OUR EXPERIENCE

Having a forum to raise and address family matters is essential, but it doesn’t have to be a formal structure such as a family assembly. It could be as simple as a regular meeting around the kitchen table. What’s probably important though is how you run it.

Here are some simple tips:

It needs to be regular and committed to. It doesn’t work if it’s ad hoc.
The agenda can be pretty simple, but you need to have one so that management issues don’t creep in.
How you run it is more important than what you discuss. The tone has to be set early (preferably when things are going well) and revisit those at the start of each meeting.
If things are already a little fractious, don’t try to fix it yourself. Get some professional assistance to get those topics out from under the rug and into the light of day.
Separate family and business meetings. Let the board meeting focus on running the business and the family meeting focus on protecting Christmas lunch.

NEED A HAND TO HELP DEVELOP YOUR FAMILY BUSINESS?

In our experience, most family businesses do not have a simple set of family agreements in place to protect both the business and the family. If you would like to discuss how these might be developed for your family business, contact us here

ABOUT THE AUTHOR: MATTHEW DUNSTAN

Matthew is the Founder of Board Associates, a firm dedicated to the sustainable growth of family and private firms. Matthew is also a researcher at QUT working towards his PhD in family business governance.

LINK TO THE RESEARCH:

Tomás González-Cruz , José Antonio Clemente-Almendros & Alba PuigDenia (2021): Family governance systems: the complementary role of constitutions and councils, Economic Research-Ekonomska Istraživanja, DOI: https://doi.org/10.1080/1331677X.2020.1867603

Growing 100 Organisations over 100 Days

September 4, 2020/in News/by Matthew Dunstan

At Board Associates, we believe in using entrepreneurship as a lever for change. We believe the best way to enable this is to drive strategy, leadership, accountability and growth in the boardroom.

In pursuit of our mission we’re offering $10,000 in free services to up to 100 organisations who have the potential to grow, innovation, inspire or create change in the world.

Watch an overview of our Growing 100 program, what it does, who it’s for and what you’ll receive if you’re a successful applicant.

DELIVERY PARTNERS:

The Growing 100 Organisations Over 100 Days program has been made possible with the support of our delivery partners:

Digital agency and consulting: Your Digital Solution (yds)
Board portal platform: Process PA – move your board online
Video content & production: Pollymedia

ASSESSMENT CRITERIA:

This program supports organisations who have the potential for growth and impact through one or more of the following:

creation of jobs
development of new IP
new export opportunities
regional development
social or community outcomes

WHO CAN APPLY:

Nominations are open to organisations of all types including existing commercial companies, not for profits and scale ups.

HOW TO NOMINATE:

Nomination is easy! If you or an organisation you know could do something great with the support of the right Advisory Board, nominate them via the online form here.

KEY DATES:

Nominations close 15 October and will be assessed at that time.

Nominees will be notified whether they were successful or not by email on 22nd October 2020.

Festina lente. Make haste, slowly.

July 16, 2020/in News/by Matthew Dunstan

Wise words from Ryan Halliday, speaker on Stoic Philosophy author of “Ego is the Enemy” and “The Obstacle is the Way”, two books on our recommended reading list. In his podcast (www.dailystoic.com) he shares an important lesson from leaders across history: there is such a thing as moving too quickly. The following from his blog sums it up nicely:

“It’s easy to rush in. It feels good to start doing. But if you don’t know what you’re doing, why you’re doing it, and how to do it? Well, it’s not going to go well. If you’re going quickly for the sake of speed, you’re going to make costly mistakes. You’re going to miss opportunities. You’re going to miss critical warnings.

In the military they have another way of expressing this idea: Slow is smooth, smooth is fast. In Stoicism, we know that there is no prize for doing things first, and that the only thing that matters is doing them well. So slow down today. Go smoothly, go with less speed… and you’ll actually go faster… and better.”

Are you Chasing the Wrong Success?

June 21, 2020/in News, Personal Leadership/by Matthew Dunstan

If you’re like most owners, you wake up thinking of your to-do list or all the places you have to be today. Your day continues in much the same way. You run from job to job, meeting to meeting, and at night you probably fall asleep with work on your mind. But is this living?

Now I’m no Dalai Lama, but I’m pretty sure that mastering your to-do list is not why you were put on this earth. It’s probably not the example you want to set for your kids, and I don’t think it what you dreamed success would look like either.

Now I’m no Dalai Lama, but I’m pretty sure that mastering your to-do list is not why you were put on this earth.

ARE YOU WORRYING ABOUT THE RIGHT THINGS?

Here’s a simple thought experiment for you: of everything you worried about or daily crisis you handled last year, which of them do you still remember?

Not very many right? And this is the question that keeps me honest. It’s the reminder that most of what we do or the things we worry about don’t really matter. We waste a lot of time focusing on things that aren’t important in the long run.

A SUNSET EPIPHANY

I have a personal example that brought this idea home for me. Several years ago, we were living on a boat in the Caribbean. One evening we were anchored off a beautiful little village on the island of Grenada, and I had a pen and paper in hand. I was trying to develop a schedule that would help me organise and stay on top of the endless list of boat maintenance jobs that were starting to overwhelm me.

As the sun set and the colours changed, I had an epiphany: we were sailing together for two years and I wanted to be able to say we had made the most of our time together. Our goal was to explore and experience the wonders of the world, together as a family. My goal was not to be able to say “man, I really nailed that maintenance list”.

At that moment, my definition of success became clear and with it, how I needed to prioritise my time and my days. It changed what I thought about when I woke up and what I reflected on at the end of each night.

Sure I still needed to maintain the boat and to do the things that kept us afloat but I now no longer let that dictate my focus or experience of where I was, what I was doing and most importantly, why.

STARTING WITH “WHY” APPLIES TO YOU TOO

You’ll have heard of Simon Sinek’s “Start with Why” concept. Well, this is as true at an individual level as it is at an organisational level. It’s an approach I discovered anchored off that beach in Grenada, and it’s one that continues to serve me well today in business.

As so I ask you the important questions:

Why do you get up in the morning?
What’s your definition of success? Not just what you read on a poster but the complete holistic definition of success?
Are you waking up thinking of the main game or just today’s calendar and to-do list?

The questions are easy, but in truth, the answers are often hard. Not because they’re missing but because for most of us, they are buried so deep, we’ve forgotten them. The great news is that it’s never too late to start asking the right questions. There’s always time to reconnect with your purpose.

If you need a little help, I find coaching an invaluable tool to redefine and reconnect with my “Why”. If you don’t have a coach…well, you should. If athletes need a coach, then why not you too. A little time with an independent person is sometimes all you need to reconnect with your definition of success and ensure you’re spending time on the things that really matter.