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Introducing Change on a Shoestring
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Kadence International changed management team in June 2016, charged with re-energising the fortunes of a company whose growth had flatlined and indeed required significant investment and restructuring. After years of relative inactivity, the positioning and execution of this change were critical to ensure that the staff members were comfortable with the pace and strategic direction of the change. Whilst the transition is still far from complete, we believe that the direction that we’re moving and successes that we’ve had already make a strong case for recognition.
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In May 2016 the newly transferred Managing Director (MD) of Kadence UK inherited a business whereby one half of the company had suffered significant top-line and bottom-line losses for 9-12 months and the other half (although making a small profit) wasn’t structured for growth and had a very limited strategy. Crucially neither team had historically been encouraged or incentivised to collaborate to allow the company to be more than the sum of its parts – and this despite there being significant potential synergy. The situation was complicated further by the business having been sold recently and being in the midst of an earnout period (a final tranche of payment in return for the equity in the business).
The overhead costs (both salary and lease) were too high and it was imperative to stabilise the loss-making department through restructure to create a sustainable platform for future growth. Unfortunately, this involved the loss of some roles via redundancy in addition to some office rationalisation to reduce rental costs.
Following from off-site strategy days, the MD and new leadership team developed ‘Kadence 2.0 – the next chapter’. Our newly defined aims for the future were to maximise profitability during the earnout period and build a sustainable business platform for the future, post earnout.
This was distilled into a 5-point strategy piece:
We articulated 5 core values based on existing strengths and aspirational goals; ‘trusting’, ‘creative’, ‘commercial’, ‘empowered’ and ‘efficient’. These are more than just empty slogans; they permeate our actions and behaviours and are encouraged through job descriptions and appraisal processes. They flow through our monthly Kudos (peer) Awards and HR Strategy, recruitment and on-boarding processes and actions, to training, development and reward.
Trust is particularly key and provides our teams with a far better contextual platform from which they can exhibit proactivity and contribute substantively to the broader business success.
We’re also aiming to emphasise trust in external relationships. By establishing credibility and reliability – and ‘always doing the right thing’, we’re finding that strong relationships are being built far more readily.
2. Value propositions
We have created two new value propositions that are compelling, memorable, marketable – and importantly extendable. For Insight, we have ‘Insight Worth Sharing’, and for Fieldwork, ‘The People Behind the Data’. Both are supported by videos and ‘tweetable’ to communicate them quickly and creatively to our audiences.
Insight – ‘Kadence aims to deliver impactful, immersive Insight Worth Sharing to enable an ever wider set of global blue-chip clients to make better, faster business decisions.’
Fieldwork Services (FWS) – ‘Kadence FWS highlights the people behind the data; combining respondent quality & team capabilities to deliver quality data with a personable & authentic approach.’
Crucially – these aren’t just empty marketing slogans – they represent substantive improvements to our business; particularly for Insight, where our product and service delivery has significantly evolved. By vertically integrating other marketing communications functions (PR, design and video) into our offering we’re now providing a higher quality and greater value for clients, and reinforcing our relationships with them.
3. A content-led marketing and business development strategy
Without the luxury of large budgets, we were compelled to approach sales and marketing in a creative and cost-effective way. A consistent and integrated approach put authentic, self-generated content to the fore, aligning the messages of each business unit to our differentiating propositions.
From an outbound business development perspective, greater structure has been introduced; prioritising existing and prospect clients and separating them into tiers to reflect their importance and potential – and ensuring we share targeted content with them.
As for client servicing, we want to ensure that clients enjoy a positive experience every time they work with us. We appreciate that every touchpoint counts and every single piece of communication reinforces our ‘communication culture’, always delivering on clarity, quality, speed and values.
4. Creating a longer-term commercial mentality
Historically, there has been a focus on minimising the cost of goods (COGS), rather than the more sustainable aim of building better relationships through revenue generation.
Our focus is now on driving revenue, establishing new relationships and strengthening existing ones – and investing money where necessary to support these objectives. Of course, we don’t encourage profligacy – it’s just the emphasis that’s changed, as it feels more positive to be focussing on gross profit (the money that we’re left with that can be reinvested), rather than the money that goes out of the door. These are two sides of the same coin, but deliver a significant difference in mentality.
Spending is no longer viewed as an evil – indeed when there is a positive investment case to deliver longer-term value, it’s to be actively encouraged.
5. Investing in the company and its people
Given the precarious financial position that was inherited, we have not been able to invest heavily from a financial point of view. However, we have refurbished the office to support the new values of the team, and create a more open, collaborative and creative work environment. Incremental additions such as a new coffee machine and Sonos music system have played a significant role in building employee morale and general bonhomie around the office!
Another key investment has been on new PCs for the senior team – very little investment has been made in IT infrastructure for years, and so the introduction of Microsoft Surface Pros for the senior team have had a bit impact to productivity and also image in front of clients.
We have just recruited two new Graduates and our recruitment plan, based on our revenue and profits numbers in 2017 will bring new skill sets. We are very excited about bringing in a Design Communicator to be responsible for further driving our Insight Worth Sharing proposition.
Finally, the revised cost structure means that we are offering above-inflation salary increases to all members of the team – rewarding people for their loyalty through a difficult time, and making a longer-term investment. Current projections also mean that we’ll be reintroducing bonusses in 2017!
The business is in a dramatically healthier state already – with projections even stronger for 2017. Indeed – our revenues are up nearly 40% (comparing 6 month periods) – and from a loss-making position, we’re projected to make a net profit of at least £500,000 in the 6 months from Q4 ’16 to Q1 ’17.
Our new value propositions have meant we have a differentiated identity to promote to prospective and current clients. And it’s having the desired effect:
- Amongst existing clients, we’re expanding the perceptions of Kadence, and indeed securing work as a direct result.
- We are attracting significant new clients – in the last 6 months, we’ve won substantial international contracts from BP, Wall Street Journal, Cimpress, Elanco, Mansion Global, TUV SUD and Scripps Networks – all directly attributable to our new service offering.
Beyond the core metrics of business health (topline and bottom line growth), we’re also investing back into the team – superficially in terms of improving the office environment – but also substantively in terms of developing the team through revised job descriptions and appraisal criteria, new staff hires and modernising our IT infrastructure.
There is a more vibrant, positive energy in the office – the refurbished office was designed with the goal of increasing collaboration, impromptu brainstorms, generating immersive, creative outputs or storytelling.
Also, in line with our value of ‘trust’, people are benefiting from more flexible working. They now have the autonomy to decide how and where they work, provided they deliver on their own and the team’s responsibilities and we’ve found this to be a positive factor in ensuring ongoing staff recruitment and retention.
Underpinning these increasing revenues and greater confidence is the significant reduction in our cost base, meaning that we’re working far more effectively and profitably – which satisfies our shareholders as well as providing a buzz to the office.
What encourages business to evolve is ideas, hard work, creativity, vision and commitment. By re-energising and empowering the team around a consistent and achievable vision, we provided the internal resource platform from which everybody can contribute to the ongoing success of the company.
We highlighted our trust in the team by reducing the use of certain restrictive technology, offering greater flexible working and more holiday – before harnessing skills and expertise that already existed internally, but in a more proactive and creative way than we had previously. For example, our new videos that promote our value propositions were written and created internally, and set us apart from many of our competitors, therefore giving us a more creative, authentic edge.
Equally, we have designed ways to exceed clients’ expectations in small ways – for example videos and vox pops to summarise outputs for clients, in addition to the agreed PowerPoint decks and reports.
We have also emphasised the Japanese heritage of our parent company to introduce our version of ‘Kaizen’ – redefining it as ‘restless, continuous innovation’ – and empowering all team members to make incremental changes to their roles and workflows in order to improve communication, processes and outputs. By explicitly highlighting that innovation can be characterised by incremental change as much as shifting paradigms, we’ve facilitated all levels of the business to proactively drive change.
Pace and structure the change ‘tolerably’
Gauging the speed of change is essential – and understanding the nature of the team is a critical starting point. Who is going to help drive change, what is the tolerance of the group for change, how does it need to be positioned to bring people along with it?
It was vital to introduce the concept of a business being a constantly evolving organism – something to which change and adaptation is vital to its ongoing survival and success. This Darwinian perspective brought a critical shift in mentality, and ensured that subsequent change initiatives were understood and embraced.
As time progresses, we are encouraging a culture whereby ‘the only constant is change’ – and ensuring that a risk-averse culture appreciates the benefits in embracing an ever-evolving environment.
Introduce a short-, medium-, and long-term vision
We’ve learned that constant change is only tolerable if there is a goal to aim for – otherwise the change is purely disruptive and unsettling. Introducing clear targets and a roadmap to achieve these targets has allowed the team to coalesce around them, and provides a shared understanding for everyone to demonstrate proactivity in playing their individual role in helping us achieve our collective targets.
Quick, visible wins are essential
By nature, people and businesses are change-resistant – particularly if that’s compounded by a conservative environment.
Whilst a clear vision helps to make change accepted, quick wins serve to demonstrate that change is to be actively embraced; they are vital to generating initial buy-in; and it’s essential that these quick wins support the initial steps of the longer-term strategy.
In our instance, a brand new aesthetic was introduced early, followed by exciting new clients and projects. People were soon travelling to different corners of the globe, we’re generating creative and innovative content, our brand is now truly differentiated – and these substantive, yet early victories meant that the team were immediately comfortable with the broader vision, and inspired to contribute to the success, rather than resisting the change.
Communicate as transparently as the situation allows
One of the key challenges to change is gauging when it’s appropriate to communicate with the broader team. Too little information leads to Chinese Whispers developing, rumours which inevitably get removed from the original message; too much information can be indiscrete from an HR or ethical perspective, and generate unnecessary concern or even alarm.
Openness and transparency is therefore essential – be clear about what can be communicated, the reasons why it’s inappropriate to disclose more at that point in time, and most importantly, provide full information as soon as is appropriate.
Be consistent, be flexible, be patient
Change does not happen overnight. Stick to the long-term vision, but not pigheadedly so – know when it needs to evolve and adjust to fit with changes in the internal as well as external environments. Listen to staff, listen to stakeholders and keep a close eye on progress towards targets.
Do the right thing
By setting a positive example amongst the senior management team – and ‘doing the right thing’ we’ve established a supportive, nurturing culture – and also generated efficiencies. Fair treatment around redundancy negotiations, not penny-pinching from suppliers, paying invoices promptly, offering pay rises not to match, but to beat inflation – all contribute to a business that is at ease with itself.
Don’t get carried away with positive news. Life is never that easy!
Not everything has been plain sailing. Indeed, there was a period where we were the victims of our own self-publicity; we gained a huge new client which transformed the financial fortunes of the business overnight. However, due to the combination of excitement and relief, the team involved suffered from a degree of complacency and failed to spot pitfalls. Much as we should always be embracing change, we should also be constantly evaluating challenges and ensuring that we develop the skills to meet them.