Warrington Wolves success can be a blueprint for other businesses

THE rise of Warrington Wolves, both as a sporting team and as a business entity has been quite dramatic over that last decade or so.

Their consistency on the pitch, coupled with investment in infrastructure has ensured that they have the appeal and through the Halliwell Jones Stadium the capacity, to draw and cater for an extensive fan-base.

A blueprint for rugby league facilities the creation of the stadium, despite any nostalgic feelings around moving from Wilderspool, represents the intent to grow the biggest club possible.

A shift from terraces to seating, the addition of added on-site leisure facilities, parking and good accessibility makes for a better crowd experience and so a stronger family appeal. The “From Wire 2 Wolves” display and DVD captures a huge shift in the operations, cultural context and business model of this historic entity.

The 130 year plus history of the club is a triumph, as few businesses manage to survive through so many ups and downs over such a period. It is the loyalty of the supporters which has ensured continuity. All businesses should learn from this lesson; build a brand that enough people love and the future should be assured.

Professor Lawrence Bellamy is Associate Dean at Warrington School of Management, University of Chester (Padgate Campus)

Flexible working in a 24/7 culture

Marketing and organisational behaviour lecturer, Stephenie Hodge, from the Warrington School of Management (University of Chester) provides insight into flexible working practices.

There is no disputing that over the last decade organisations of all sizes and sectors have worked in a constant state of change brought on through the recession, expansion of globalisation and the speed in which new technology and social media are testing the skills of even the most effective managers. So how does the manager of the future not only cope with, but thrive in, leading and motivating a team that is aligned with the organisational goals and have a mind-set of managing output, not hours?

A flexible working approach

A major future trend researched by The Institute of Leadership & Management (ILM, 2013) has identified that 94% of UK organisations offer some form of flexible working. 51% of all the managers surveyed expect flexible working to become the norm within five years and recognised as a future global trend. This is proven to be a highly effective incentive to attract and retain talented employees. It empowers the individuals, giving them greater control over their working week; increasing their engagement, productivity levels which in turn reflects positively to the brand image of the organisation. Their autonomy creates a corporate personality and helps to identify and verify the company’s values, therefore achieving the ‘buy-in’ to the culture and psychological contract.

Individual’s values and perspective on working life has changed; they don’t buy into the job for life concept anymore and would rather have the option to adjust their work/life balance to best suit their personal circumstances. Therefore, flexible work options can also be used as a trade-off against a salary increase, which may suit or be the only option available to an employer.

This research is further endorsed by Kingston University/Ipsos MORI who found that ‘workers on flexible contracts tend to be more emotionally engaged, more satisfied with their work and more likely to speak positively about their organisation and less likely to leave (CIPD, 2014)

Leadership and management

However, before this approach can even be considered the 2020 manager will not only have to be agile and adaptive, but also that the fundamentals of good leadership and management will matter more than ever.

52% of managers agree that skills such as communication, delegation, goal-setting and motivation are vital when operating with less time and in a more complex working environment (ILM, 2014). Trust and transparency are key as the flexible working approach has to be seen as fare and consistent and be embraced by the organisation and not seen a career limiting option.

There will be yet more on-going cultural changes due to the social and demographic shift, so a different hybrid breed of manager is required that still possess the traditional skills and qualities, but is equipped with a modern mind-set and approach (ILM, 2014).

Generation Y

There is now an expectation from our up and coming generation that this freedom and autonomy goes hand in hand with their ambitions. They are very much motivated by money, status and career advancement and do not perceive working in a flexible manner as impeding their promotion or dedication. This does not mean that they don’t want to work as hard or as long as required, but in a different working format to enable more a work life balance. This mind-set of changing working patterns needs to be embraced by employers or they could be missing out on new talent to take their business forward.

What is the payback?

If managed correctly, the payback will be built around a stakeholder relationship approach:-

·         The individual-Self-motivated and empowered which leads to a natural drive and commitment to the team effort.

·         The manager-Managing a contented team with an ethos which is aligned with the organisational values, therefore reassured that the job is being done to the best of its ability with no conflict acting as a barrier.

·         The customer & external stakeholders-The vision for transparency leads to collaboration and mutual trust which can bring a true competitive edge.

·         The organisation-Will be viewed as holistic and modern forward thinking in their approach. It holds potential value as a recruitment, engagement and retention tool; as well a great brand endorser.

Managers who are prepared to trust in their team and think differently can model the way into making flexible working the norm, will be the ones who are remembered not just as managers but as great managers.

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Profit or Cash - which is more important?

Jim Stockton, Senior Lecturer in Finance at the Warrington School of Management (University of Chester), discusses profitability and liquidity planning – essential elements for every business to succeed!

Introduction

There are many reasons why these failures occur-some relate to the lack of a coherent business strategy, some to the absence of a focussed market research but many are simply due to the absence of some rudimentary financial planning, or to be blunter, basic budgeting. This brief article seeks to point out some fundamentals on this often neglected skill or to quote Monty Python the “bleedin obvious”!

Budgeting

Budgets are generally regarded as having at least five areas of usefulness:-

• Budgets tend to promote forward thinking and the identification of short term problems
• Budgets can help, in larger businesses to co-ordinate activity and ensure a common understanding exits on priorities-for example there is little point in the sales team aiming to deliver optimistic targets if the production team have a different aim in mind
• Budgets can motivate managers and staff to improve performance if “stretch “ goals are set
• Budgets can help control a business-simply put does actual performance, measured monthly, compare favourably or adversely with the budget?
• Budgets can also act as a means to authorise spending within a business

The purpose of this article is to concentrate on the difference between profit and cash flow or, put another way, highlight the fact that profitability AND liquidity are opposite sides of the same coin when it comes to business survival. Business may fail through lack of profitability but its running out of cash that actually sends them to the wall. Indeed it is entirely possible for a profitable business to go bust by failing to pro-actively manage cash flow (known as overtrading)

Profitability

Let’s consider some basics-business has to generate profit in the medium to long term-after all, in our capitalist society, that is what it is all about-why take the risk otherwise? Business entrepreneurs see an opportunity in the market place to launch a product or service and to do so in a way that will generate a profit possibly with an idea or expertise that others will find difficult to copy. A business plan can be developed around this which should be capable of being expressed in financial terms-in other words- a profit forecast based on the sales compared to the cost of those sales. All pretty straightforward so far hopefully.    This forecast or budget can and should be expressed over a reasonable time scale and should be as detailed as possible especially in the early days of the business-certainly for the coming year (broken down into months) and hopefully for another two years after that in order to give a reasonable perspective on the future of the business.. Let’s assume our small business compiles a profit forecast and that it looks reasonable-losses can be incurred in the early months as long as the longer term position indicates future profitability on a sustained basis. This profit projection can be enhanced by compiling a forecast balance sheet which will indicate:-

• The assets the business will own
• The liabilities it will generate
• The impact on the owners initial and subsequent investment

It is important at this stage to differentiate between the long term (investment in fixed assets such as premises, machinery and vehicles) and shorter term assets such as stock, debtors and free cash). Equally a distinction needs to be made between short term financing obtained by trade credit from suppliers and an authorised bank overdraft and longer term funding via a formal bank loan for example.

Cash flow/liquidity

It’s at this point where the cash flow forecast becomes important-even vital. Our profit forecast can and should indicate business profitability based on the assumptions made by the owner of the business. However the next question to be asked is how does this affect cash flow going forwards? Just because the profit forecast is positive does not mean that the business will generate a positive cash flow and enable the business to meet its short term liabilities which includes those nice people from HM Revenue and Customs as well as suppliers to the business. The profit forecasts need to be converted into cash flow forecasts that take account of:-

• Credit terms to be granted to customers
• Credit terms obtained from suppliers
• Stock holding levels to prevent stock outs but avoid overstocking
• Investment in longer terms business assets
• Use of any agreed overdraft facility
• Longer term financing facilities

Plugging this information into our cash flow forecast should reveal any problem areas regarding whether the business will run out of money or need to increase any of its financing sources i.e. additional overdraft facilities, a longer term loan arrangement or increased investment in the business from the owner. At this point, it should become clear whether the business has a chance of financial survival or whether a complete rethink is required concerning the business assumptions built into the profit forecasts. Sometimes numerous iterations are required (know rather grandly as “sensitivity analysis”) in order to arrive at a business plan that meets the business owners’ aspirations but is also grounded in commercial reality as far as the generation of cash is concerned.

Summary

This article is necessarily brief and skips conveniently over numerous issues in order to deliver a fundamental point-(remember Monty Python above?). Business must financially plan to in order to succeed and that planning must involve profit planning and liquidity planning. One without the other is a business disaster waiting to happen.  

  Jim Stockton, Senior Lecturer in Finance at the Warrington School of Management (University of Chester)    



    

Straightforward & quite useful read on starting a business RT @InCheshireMag: Profit or cash? Which is more important http://t.co/nHSnOqkj7I
— Matt@NooksYard (@NooksYardCider) April 28, 2014

Warrington Businesses set to benefit from the International Festival of Business

THE International Festival of Business 2014 will be held in and around Liverpool during June and July.

The aim of this event is to boost international business opportunities and focus on regions of the world; China, India, USA, Asia, Europe and South America during different weeks.

Sector themes include Energy, Finance, Logistics, Manufacturing, Maritime, Creative and Digital Industries, Science, Technology, Research, Education and Enterprise.

The north west is well-recognised for these.

This will be a huge event, with 50 days of workshops, presentations, expert advice and networking activities to attend.

The City of Liverpool will be putting on an extensive cultural programme too, to showcase itself as a leading business and leisure destination.

So if your neighbour in the big house next door is having a party then you’d better make sure that you have an invite!

Warrington businesses are well-placed to benefit from the opportunities which this event will bring.

Energy, Manufacturing and Logistics industry clusters lead, not only in the region but also internationally.

Warrington businesses should not only be attending, but should be putting themselves forward within workshops, on stands, displays, volunteering their expertise and raising their profile with the international attendees.

Let’s make it IFB Warrington.

Professor Lawrence Bellamy is Associate Dean at Warrington School of Management, University of Chester (Padgate Campus)

Do you feel like your business needs a boost? 

Ignite Business Club is a unique initiative set up by Warrington School of Management to help local organisations access the extensive network of expertise available at the University.

Find out more here

Can you hear the employee ‘voice’?

There has been a lot of interest in the business news recently around the idea of ‘employee engagement’. This is not a new initiative; it has been an agenda item for government and organisations for a number of years now writes Meryl Bradshaw.

The recent recession highlighted the need for organisations to create a sense of belonging and loyalty in the workforce, required to sustain retention of key skills and knowledge. The thinking behind this is that a feeling of belonging would maintain a sense of stability, even where pay-cuts/ freezes, and the possible threat of redundancy were present. Therefore, engaged employees are far more likely to support the management’s efforts to cost cut and where called for, do more for less.

Cultural Change

To move towards an employee engagement policy, management may have to recognise that cultural change is necessary, and to achieve this they need to work closelywith all staff members.

This common approach will be the starting point in establishing an employee voice, which is led by senior management and endorsed by line managers.

Indeed, it can be argued that the success of employee engagement is in the hands of well trained and committed line managers, to drive, guide and feedback to staff. It can therefore be justifiably stated that culture engages or in reality disengages staff.

When management recognise that the workforce needs to be ‘on board’ with the corporate vision through an engaged level of commitment, it naturally falls to HR to make this possible.

For example, HR can ensure that line managers have the right skills training to be able to support the policy. It is far more beneficial to have a line manager who can regularly communicate with teams, offering levels of autonomy, rather than being controlling with limited staff feedback.

Supporting this is the necessity to understand that job satisfaction is only a part of engagement, employees’ behaviour and their expectations fall in line with what they see and hear within their work environment. Managers then should acknowledge that staff and customer attitude is based on how they see themselves as being treated. Hence, if staff feel ‘engaged’ they will behave accordingly.

Staff Surveys

When an organisation has committed to an engagement policy, the question of

‘How do staff feel now?’ and ‘How can this be measured?’ arise. In order to answer these questions most organisations chose to identify the current levels of engagement. Again, this task should be led by HR and senior

management; how it is organised is again a management decision based on advice.

Many organisations choose to ascertain current staff attitude through a staff survey.

However, to make sure the responses are useful to the organisation, it is important to inform all staff of the reasons behind why it is being produced, and their role in

the process.

The responsibility for informing staff of the value of the survey and what staff can expect to get from it, again will come down to the line managers, HR, and in some cases the union.

Many companies chose to outsource the whole process of employee surveys to specialist suppliers; this does not preclude those who wish to maintain an in-house approach however, providing the skills are available to do so. If a supplier is the preferred choice, the company will need to work closely with them to ensure they are clear about their objectives and expectations for the survey itself. A pay-off in deciding to outsource is the acknowledgement of confidentiality for staff, thereby encouraging honest participation; this may not be so for the in-house survey.

The evidence of monetary investment in this process also affirms for staff, the commitment that management have to

the policy. The use of specialist suppliers allows benchmarking against comparable organisations, a useful resource for management decision making.

There are many different categories that

could be included within such a survey,

for example:

• Day-to-day working life

• Training

• Values

• Line management effectiveness

• Teamwork

• Flexible working

• Job clarity

• Workload

• Career development

These are generally fixed within three

discrete sections:

1. A demographic section

2. An opinion section

3. A space free for comments

Most surveys measure engagement by rating scales, which are answered by tick boxes, for example, strongly agree to strongly disagree.

Different systems can be utilised to distribute the survey, but most are now carried out online through the company

intranet, with employees being sent emails linked to the questionnaire.

The initial survey will enable management to identify areas for possible change / development within the company. The very fact that senior management are recognised as implementing such a scheme and the appreciation of why it is being introduced may well boost initial engagement.

Companies that have used a third part supplier can expect to receive a break- down of results.

These results are usually presented to the senior management team initially.

For example by ‘Headliners’ followed by departmental and then through the sectors, such as demographics.

Managers can chose to hold team meetings at local level to present significant results for discussion. It is important to review results with staff, enabling them to offer their thoughts and feedback to the management team. The evidence of action taken from the comments made is vital for the process of engagement to be recognised as upheld by staff.

It may be said therefore, that any company that is actively looking to support their employees’ engagement, needs to carefully consider what the core values of the organisation are, and how they are evidenced in the culture of that organisation. If there is any cause for concern, for example in internal communication, there are strategies available to help in securing a strongly committed workforce.

Meryl Bradshaw is Academic Lead and Senior Lecturer in HR at Warrington School ofManagement, University of Chester. 

Do you feel like your business needs a boost?

Warrington School of Management is launching Ignite Business Club on Wednesday 26th March  - an initiative designed to help businesses increase sales through: a business diagnostic, ongoing webinars and master classes, access to grants and a mentoring network. 

This launch event is free to attend and provides local business people with the opportunity to network and find out more about the Business Club. You will also get the opportunity to hear the inspirational story of local entrepreneur, Adrian Lomas who set up his business from a spare room in his house to grow it into one of the most successful digital agencies in the UK, with a multi-million pound turnover.

Book your ticket now