So often do these programmes start with a family-owned
business making a loss, yet having aspirations of grandeur. Obstinate founders
still at the helm whose lack of communication with their workforce jeopardises
morale. They understand change is needed, but frequently lack the ingenuity to
undertake it & expect it to be done for them.
Perhaps I have my own biases from watching similar
programmes, but episode 1 of Lord Digby Jones’ new troubleshooter was no
different. Hereford Furniture are a family-owned business manufacturing wooden
furniture, supplementing this with imports from China and retailing these goods
in 3 outlets – a jack of all trades but master of none. Mike Muxworthy, the 59
year-old co-director, founded the business and intended for his company to be a
household name when he retires – not likely if it continues in the loss-making
manner it’s currently run. This is why Digby was brought in, to try to transform the mindset and company itself.
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| I spy with my little eye, someone who doesn't like budgeting |
15,000 Variations
I certainly do not claim to be a business expert but having
15,000 variations of the furniture you manufacture does seem rather excessive.
Mike himself seemed rather embarrassed by it, in that he quickly shot the claim
down to 2,000 variations. This would imply to me that he understands where a
source of the problem is, yet hasn’t made a strategic decision. By focusing on
a smaller core product range, the company can maintain a steady inventory
instead of the made to order system which impacted working capital (and
ultimately lead times).
Revenue Decline
While the demise of some customers cannot be predicted,
another factor Mike blamed for the declining revenue was an influx of Chinese
imports into the UK market. Forgive me if I am wrong, but aren’t Hereford
Furniture also importing Chinese goods into the market (albeit probably better
quality)?
Q: How do you differentiate yourself in a market flooded
with Chinese imports?
A: You definitely don’t import similar goods yourself
There seemed to be a lack of focus on who the target audience
was and what they wanted in furniture. In a competitive industry with a customer-base
who like to express themselves through the products they buy, the mundane
coloured products and lack of brand identity left the company without a
personality. My interpretation of this situation would be to differentiate
yourself through a brand of Britishness – and dump the Chinese imports to
ensure brand continuity. Brands have the potential to add real value and this
British branding may facilitate the achievement of Mike’s goal of becoming a
household name.
Brand
Q: If Mike had this goal, why has a brand not been created
and developed before I hear you ask?
A: It amounts to a lack of bravery to take action and
deviate from the status quo, despite making a loss.
Previously, the majority of goods were sold to independent
retailers and because of this they were sold without a brand imprinted on them.
There was a fear independent retailers would no longer stock their goods if
they were branded. The lack of business awareness to produce branded goods and
non-branded goods to sell to differing customers is worrying and it took Digby
Jones’ intervention to give him the confidence to do so. One thing I disagree
with Digby Jones on is the acceptability of a Norweign name on brand focusing
on British manufactured goods. While I confess it may well get people talking
about the brand because of the intrigue of the Hygge meaning, for me the
Norweign branding and British goods is something that adds confusion for a
strong and clear brand.
Poor Organisation
We’ve all heard the old adage “Communication is key”. Well,
a lack-of is therefore detrimental to a company’s success and longevity.
It was a rather toxic atmosphere on the factory floor with
blame being passed among the team siloed factory floor workers for hold-ups in
production. There was a clear disconnect between Mike in his office and the
factory floor, with communication lacking both ways. I think it is rather
pertinent that the first thing Lord Jones did was to speak to those people on
the factory floor. To become more efficient, those carrying out the operation
need to be involved in the decision making process, they understand the
intricacies of the job. The lack of communication or governance structure to
allow those employees a say in becoming more efficient in how to carry out their own jobs, resulted in low
staff morale and little autonomy. By having a respected mechanism in place
whereby anyone can make suggestions to the way things operate, employees will
feel more appreciated. This intrinsic motivation may result in a more engaged
and efficient workforce in itself.
Summary
I understand it is difficult to take a step back and
objectively analyse your company (although if Mike took the financial planning
side of the business a bit more seriously, it may be easier!), especially
considering the length of time he worked there, but there is little excuse for
not listening to colleagues.
While there were drastic changes in the number of variations
offered, team morale through an ‘away day’ and branding, there is still
significant work to be undertaken in order to realise the potential of the
workforce and company. It would have been nice to see the progress (or lack of)
in the future, to see if Mike’s obstinacy was still preventing further business
development from happening.
Have you watched this episode? – Do you agree with my
hard-line stance on Mike?
Let me know your thoughts below
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