Taking the next step

Successful manufacturer Thermasolutions wants to expand. But how do the key men take the step from hands-on to objective detachment? Strategy coach Alec McPhedran pays them a visit.


Name:
Alec McPhedran
Experience: Former head of learning and talent development at Channel 4. Now coaches businesses in leadership, strategy and management through his own company, Skills Channel TV. Has worked with the Sears Group, the FT and Railtrack.
Website: www.skillschannel.tv

Where next? It can often be a big question for a small business – especially one that’s grown up as fast as Midlands manufacturer Thermasolutions. The company has been producing specialist energy-saving “night blinds” for supermarket chiller cabinets and has seen demand soar over the past five years.

Now, as the company embarks on further expansion, lead director Ken Patel recognises the need to step back and re-evaluate. “We’re good at what we do,” he says, “but we need some guidance for progressing the company.” To help him with this, business strategy coach Alec McPhedran of Skills Channel TV visited his Northampton factory for an afternoon of advice, with a particular focus on people management and organisational structure.

The background

Thermasolutions makes manually operated and motorised fabric blinds, often in bespoke designs. Its client list includes Tesco, Marks & Spencer, Sainsbury’s, Morrisons, Iceland and Asda, who can save up to 20 per cent on their refrigeration bills. Since the company started in 2006, the number of blinds it produces has soared from 250 to 6,500 per week, and its turnover from £500,000 to a projected £3.2 million for the past financial year.

According to Ken, this growth has come about largely through having a quality product, spotting marketing opportunities and listening to clients’ individual needs. It’s also a case of being in the right place at the right time, as companies come under pressure to save money and to comply with energy regulations. “There are times when you ask yourself, ‘Is everything going too fast? Can we cope with it?’” he says. “But then you do cope, and you get hungry for the next challenge.”

Thermasolutions has already taken on a distributor in Turkey and last year fulfilled its biggest-ever order, worth £1.5 million, for Australia. Ken and director Bob Spencer, who attended their first international trade fair this spring, are now looking to Mexico, Argentina and Canada for new business, and have hopes for imminent sales from the US.

Closer to home, they’ve just purchased the industrial unit next door – picking up the keys only days before Alec’s visit – which doubles their factory floor space. The aim, once it’s up and running, is to be able to produce up to 10,000 blinds a week. “If there’s one thing we would do differently if we could start all over again, it’s choose bigger premises,” says Ken. “When we first saw our 3,000 square-foot unit, we thought, ‘Wow, fantastic!’ But within three months, we’d already run out of space and had to put in a mezzanine level.”

The structure

The company consists of four directors and seven full-time employees (plus temporary staff when big orders are going through). At the heart of this small team are Ken – who takes the lead on finance and business development, and who works largely from his home in Wisbech in Cambridgeshire – and his right-hand man, Bob, who is the technical expert and is based at the Northampton premises. Alongside them are their other halves, who also have shares in the business. Ken’s wife Mina deals with accounts, while Bob’s wife Tracy manages the stock control and production targets.

The couples have known each other for years as friends, and make a point of never talking shop when they meet socially. Alec wonders if they have ever thought about the potential for conflict in this arrangement further down the line. “I’ve seen it happen as businesses start to make more money,” he says, pointing out that organisations can crumble if personal relationships break down.

Ken – who has an entrepreneurial streak and also runs a separate company, Chiller Blinds, that makes similar PVC blinds for supermarket cabinets, turning over £3 million per year – says this isn’t something he’s felt the need to consider, as he and Bob go way back. They’re both veterans of the industry, he explains, and have worked together on other projects without any problems.

In fact, he adds, they depend on each other. Bob relies on him to take the lead on the business side of things and to talk to clients, while he relies on Bob (whose father was the first to manufacture night blinds in the UK in the 1970s) to deal with any technical issues. “We’ve always respected each other for the different skills we bring,” he says.

With such a clear division of labour, which has obviously contributed to their success so far, Alec advises that they should make a big effort to preserve this as much as they can.

A people plan?

From what he’s heard so far, Alec observes that it sounds like the directors know where they each stand and where they want to take the company in terms of profits. But have they thought about the people side of growth? “For many businesses at your stage,” he says, “it becomes more critical to look at the personnel strategy, too.”

Yes, answers Ken – in their heads, but not on paper. “When we’ve bought the equipment we need for next door and gone into full production there, we’ll have to look at making some promotions and taking on maybe two or three more members of staff. We’ll probably create some more offices, too, for accounts, stock control and a manager to oversee the day-to-day running of the unit.”

But, he acknowledges, they are hesitant to make plans that are any more concrete than that until a new contract is signed and they’ve got a guarantee of an increase in revenue.

Alec urges them to be bold in their planning – to devise a ‘road map’ so they’re ready in advance for the new business when it happens, rather than having to cope with the unexpected as they go along.

“I know you operate well and can manage an increase in sales,” he says. “And you’ve told me that you’re ambitious for your turnover. So be confident. Think about two years from now. What is your exact turnover target? What is your margin? Who are the people you have in position? You need to be able to act quickly when the new sales come in.”

Share the knowledge

Preparation is key where staff skills are concerned, says Alec, especially in a small specialist organisation where the leaders are so experienced and so hands-on.

“Current research shows good business isn’t just about hiring people for their technical and professional skills. There’s also a need for staff – from at least team-leader level upwards – to be multiskilled in certain areas and to have some commercial awareness and understanding. So that they realise, to give a simple example, the value of turning the lights off to save costs. A really fluid business of your size is one where the people are fluid within it.”

Alec is concerned that if either Ken or Bob, both of whom are in their fifties, wants to retire or needs to be absent for a long period for any reason, there isn’t anyone who can step in to take over the reins. They may have trained their staff, some of whom have worked for them for nearly 25 years, to multi-task around the factory floor, and looked after them with nice gestures like bonuses and bacon butties – but have they shown any of them the senior ropes?

“It’s difficult,” says Ken, “because Bob and I are so experienced at what we do, and because we’re both so committed. We like to give a quality service, which means that we’ll sometimes travel miles to visit a client to troubleshoot a problem, even if that problem takes only half an hour to solve. That said, Bob has spent a lot of time recently on our website, and on the marketing for the trade fair. If we’d had someone skilled enough to do some of that for us, it certainly would have made his job a lot easier.”

This, emphasises Alec, is exactly why they need to start thinking now about delegating, with coaching in mind, to some of their managers when it’s appropriate. “What you’re not doing,” he says, “is sharing now for the future. You have some incredible knowledge, which is a precious asset, and it would be a shame to think that some of your staff might not be interested in finding out about it.”

And, he warns, there’s another area of people development that business leaders can miss. “You’re a business that has grown because of your client relationships. As you continue to grow, more of your staff will be involved in speaking to your clients. You need to be confident that they are skilled enough to do this, and to represent the values that important to you and your business success.”

The big picture

Overall, Alec would like to see Ken and Bob take more time to assess the company’s big picture. “I’m not asking you to have board meetings every day,” he says, “just to step back, without having to have your sleeves rolled up, to think about the future – even if you do this just one day a month, or one day every couple of months.”

In Alec’s view, Ken and Bob clearly have a good business, but they should think about working out some medium-term objectives, whether on paper or not, and make some succession plans. It wouldn’t hurt, he adds, to look at other organisations, and to talk to other business leaders, who have been through similar growth.

Alec’s advice doesn’t fall on deaf ears. “We’ve had to learn how to do things very quickly,” says Ken. “But Alec has given us good advice today, to help us take Thermasolutions to the next stage. Bob and I need to start delegating. Certain tasks we will always do ourselves but we need to find areas in which we can stand back. It’s going to be hard, but it will mean progress, and it’s important to make our staff feel even more part of the team, and part of our growth.”

Alec Mcphedran’s Strategy Tips

  • Share knowledge now for the future
  • Delegate by coaching rather than telling
  • Be confident in planning ahead
  • Make time to view the big picture Use technology to assist you wherever possible

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