Dean Forbes - Columnist - Business Matters

Business transformations: Communicating a new vision and inspiring employees

Dean Forbes — Tue, 26 Apr 2022 18:24:02 +0000

If you’re about to lead major change at your organisation, one thing’s for certain.No matter how great your vision, your plan, the enthusiasm of investors and your top team, you’re also going to need the excited engagement of your employees.

My earlier Business Matters article “Business Transformations – A Formula for Success,” covers several key ingredients to transforming an enterprise. Currently I’m excited to be re-invigorating the fortunes of ERP software vendor Forterro. It’s right up there in my duties as CEO to communicate with and inspire our 1,400 employees.

Go talk about it

To transform an enterprise demands you first define your new mission and high-level plan and communicate it to your leadership team in a meaningful and powerful way. Then you must listen to and act on quality feedback, move onto detailed plans that define actions, responsibilities and timescales. Then go out among your workforce and earn their confidence. You’re going to need to energise and empower everyone to deliver.

Signpost what will change (and what won’t). Why will it change and when? Why is it necessary? How will the changes better serve your people’s goals? You’ll need employee buy-in and for that you’ll need localised engagement models.

Personalise your employee message

Not everybody is motivated by the same things. Tailor your message for different groups, geographies and perspectives. Salespeople in the UK will be motivated by something very different to a software development team in India or a professional services group in Sweden. Some folks are driven by the potential to earn more, or by job security. Some seek an exciting growth company offering career progression. Others want more responsibility or to work with new technologies. Others will appreciate how you’re delivering something for the greater good.

At Forterro, our people are passionate about smaller manufacturers. Our mission is to help these firms succeed by serving their customers well. So how we’ll do that even better, and better than our competitors, is core to my transformation plans and the framing of my message to employees and other stakeholders.

Define the road ahead

For all the roles across your business, you’ll need to define key changes and how your people will be expected to accommodate or make those changes. What will you ask your product development, marketing, sales, customer support people and other teams to do differently? Let people know for how long things will stay ‘business as usual’ and when they can expect for change to begin.

Define how the journey will be navigated in detail and outline everyone’s part in the journey. Talk to team leaders and win their cross-company support. They’ll then communicate and promote change to their teams, be able to answer the many questions, help earn buy-in and overcome anxiety or resistance.

Lead by example

Having communicated a new mission and plan for getting there you must stick with it; as long as it continues to make clear sense. Support your leaders when difficult decisions have to be made. Stick to the plan. Try not to allow exceptions to the rule or confusion will set in diluting energy and clarity for future decisions.

At my previous turnaround CEO project, an HR software company, a vital element of the strategy was to move from a legacy on-premise product offering towards cloud-based software as a service (SaaS). This offered better value and service for customers, would be easier for us to support and free us to scale the business. But we needed to gently move our customers away from our old product, which we’d have to cease supporting. One big customer wanted to stay with the legacy platform. I led the decision to drop the customer, even though that would hit our immediate revenues. Our employees got the message that I was serious about the new strategy and our new future. It gave employees a framework by which they could act confidently. They knew they’d have my support.

People are the heart of your business. Plans for transformation only succeed if you can communicate a clear vision in a way that inspires, engages and enables every employee to both visualise and deliver change. It can be a huge challenge. But win the hearts and minds of your employee community and success will follow

Business transformations – A formula for success

Dean Forbes — Wed, 26 Jan 2022 06:40:41 +0000

Could your business do better? Did early successes suggest a future that hasn’t materialised? Has organic and acquisitive growth failed to deliver imagined outcomes? Have you failed to keep pace with market growth or meet profitability expectations? Then perhaps the time has come to strategically reassess your operation.

With the right formula, external guidance, new leadership and/or investment, perhaps you can re-invigorate your business; even re-invent it in order to secure a better future or exit.

I’m currently leading my fourth tech business transformation. That’s the role I like the most. I love the challenge of a complex business environment with huge potential for upside. For each assignment, I was approached by founders and their chosen investors, venture capital firms (VCs) and private equity companies (PEs), to enter as CEO, define a new future for the business and lead it to success with a great team.

Currently I’m CEO of Forterro. It’s an ERP software company backed by Battery Ventures. I’m driving the 1,200 employee business and its multiple localised brands across Europe. It’s a great business with great people. Forterro brings business efficiencies to 8,000 small and midmarket manufacturing companies, while vendors like SAP, Oracle and Infor focus on traditional enterprise scale clients.

Forterro has historically operated under a group structure of independent brands, but now we see a great opportunity to leverage our scale. I’ve led three other transformation success stories: Primavera (sold to Oracle), KDS (sold to American Express) and CoreHR (sold to the Access Group). I brought significant growth and stimulating new opportunities to each company and its employees and in total over $1bn in added exit values to founders and investors.

Transformation – signs of opportunity

I’ve found that for businesses to gain most from a transformational shake-up, they need to be in a growing market, perhaps a shifting one where fortune favours the brave. They also need to have an innate potential to do better than is being realised by the existing leadership.

Often the skills of the entrepreneurial founder and their team lie in product or service innovation, or in startup and early growth phase businesses. Then as the enterprise grows to tens, hundreds and perhaps thousands of employees, they struggle with the complexity of business strategy, organisational structure, management, people leadership and maybe compliance matters.

Steps to success

My formula for success covers these essential steps:-

Have the dream: The starting point for any transformation business plan is to first have the imagination to see something more; to review the mission and picture the ‘desired state.’ Where are we now? Where could we be in three, five, seven years time? Be reasonably specific about what the future could look like.

If you’re currently making rocket engines, is that where you want to stay? Or is your dream to have a space business that takes people into orbit? At Forterro, our mission isn’t simply to sell software for a profit. It’s to grow by helping SME manufacturing businesses succeed when the biggest ERP software vendors serve mainly larger manufacturers.

If you can picture a new future, roughly what it might entail to get there and think there’s a chance of doing so, then you must another question. You must ask ‘why’?

Know your motivation: What’s your motivation? Is it strong enough to get you through the challenges? Typical drivers for founders and their investors are growth, improved sales and profits, better outcomes for a good cause, or a more lucrative exit. Certainly the PE firms I’ve worked with tend to invest in businesses with latent potential in existing or changing markets and their usual motivation for injecting capital is a transformation pursuant of a profitable exit. This is great, but the motivation should be to solve a problem that you care about…and can continue to care about.

Know the ‘big bets’: What essential but potentially difficult and/or expensive changes, hires or investments would need to be made? Scope the costs and assess funding. What obstacles lie along the way? Assess the risks and determine how you might mitigate them. Can you begin to align some of the funding and clarify some of these big bets before committing? I’ve found that being courageous in your ambition is part of what gets staff and customers excited about your direction.

Design your top team: Critical to any transformation will be your executive team. Will the current team excel or be mortally challenged? Does it have the skill sets for the new mission? If you need to assemble a new team, is it reasonable to expect that you’ll find the people you need? At one of the companies I was hired to transform, management culture was terrible. People just didn’t bother turning up to meetings. A shake up was needed. In most cases I’ve had to hire some new top talent to help me carry the transformation through.

In a business of hundreds or thousands of people, you can’t expect to command major change without hiring significant talent to support you. You’ll need people you trust, you’ll need domain expertise and you’ll need a team that will spread enthusiasm amongst your workforce. I always focus on building teams that are better than the mission at hand. Extraordinary people achieve extraordinary things.

Get granular – write a 100 day plan: Now it’s time to plan who, what, how, why and when in detail. What would your first 100 days of the transformation look like in terms of decisions, activities, budgets and goals? How will you measure progress and outcomes? Define the timeline. How will you communicate with and enchant investors, inspire your leadership team and employees?

Present the plan: In presenting the plan, be sure to assert why it’s special. What will the new mission mean for each stakeholder group; investors, employees and customers? Why is it good for them? Why will it make them more successful? When pursuing stakeholder buy-in, be sure to communicate, communicate and communicate. Also think about different forms of communication as people consume information in different ways. Use written, video and graphical formats. Mix communications between detailed overviews and brief, bite-sized summaries.

Refine the plan. Launch the journey: Once you have investor backing, then it’s time to get into really detailed planning and to get underway. Begin to assemble your executive team. Refine the plan together. Firm up on, prepare and make those early big decisions.

As the transformation gets underway, you’ll learn new things. Your business environment may change. So it’s important to have check points and make adjustments to your plan as things progress. I’ve found it critical to define my check points before the mission starts as you cannot change to emerging market trends, or new unforeseen situations daily. It’s important to stay the course long enough to know if something is truly working, and if not, why. You can’t build this understanding if your strategy and plan is constantly changing.

Talk with and inspire employees: This is my favourite part of the journey, seeing the reaction of employees who’ll have to drive the change and of customers. You hope they’ll react positively. If they’re not excited by your plans then perhaps something is wrong. Ultimately they’re on your side.

Get out and talk with your department heads and team leaders. They’ll be critical to making your plan work. Talk too to some of those at the coal-face in product development, finance, HR, IT, marketing, sales, support and more. Also speak with a few close customers in confidence. You’ll be encouraged by the high level of support you’ll get for good ideas. Your eyes will be opened to new possibilities. And in doing the walk, you’ll share your enthusiasm and win the buy-in of your employees.

Give people clarity. Help them understand what’s in for them and try to be specific. Recognise that different people have different motivations. What drives sales people is very different from what drives customer support staff or product developers for example.

Business transformations are complex and sure, there are many other factors to consider. But I’ve learned that with vision, a trusted executive team, detailed planning, engaged investors and motivated employees it’s a journey that can be successfully navigated to great outcomes.