by Ken Matthews, Managing Director, Matthews Steer
My journey started in a garage at home in Keilor East where I first set up our accounting and advisory business. Things were very simple then -- I did all the work, took on any client who came through the door and made all the decisions.
Over the last 30 years, we’ve transformed our business from that one-man operation in Keilor East into one of Melbourne’s preeminent financial services businesses, and over the last four years, in particular, we’ve focused on setting the business up to be investor-ready.
Last year at the height of the pandemic and during the lockdown in Melbourne, we concluded a transaction to form a strategic partnership with a business that is backed by one of Europe’s largest independent investment groups based in Milan.
We underwent six months of due diligence virtually and only met our investors in-person once. Yet with the appropriate advice and support, we were able to take all our stakeholders with us, and we concluded the deal to everyone’s satisfaction. A genuine win-win!
Our business journey has not always been plain sailing and, when I think back to the trials and tribulations my team and I have been through over the years, I kick myself that we did not make some hard calls earlier. But every challenge we’ve encountered has provided lessons, so I want to share my experiences with you here in the hope that you will find something you can take away and use in your own business or adapt to your particular situation.
Strategic Board
Fifteen years ago, we adopted a board structure that has Non-executive Directors. It was a very important step in our business transformation, giving us direction, helping keep us on track with our strategic plan, and holding me and the other Executive Directors accountable.
This structure has brought another level of sophistication and professionalism to our business. For example, it is far easier to have uncomfortable conversations with fellow Executive Directors when there are Independent Directors present because the discussion focuses purely on the welfare of our people and the business.
Know your market and build a sustainable strategic plan for the future
Over the years, we have had several advisors including business coaches and board members who – in the most part – have added value.
I saw a very successful CEO present at one of my client’s executive sessions and I asked him if he could point me in the right direction strategically. Over a couple of lunches, he agreed to facilitate our strategy day and to help guide us to prepare our strategic plan. He challenged us to know our market, our people’s needs, the technology we used, to understand our location and to identify the key challenges for our industry now and in the future.
We spent four months researching these facets of our business before finalising our strategic plan, and each month, our task force meets to drive the actions outlined in this document.
Our strategic plan has become our key source of truth and the road map that drives change in our business, and it was one of the key selling points when we were in our investment negotiations.
Tip: A CEO without a strategic plan that outlines actions, timelines and accountability is a ship without a sail and a rudder.
Free yourself to work on the business
I have employed an executive assistant (EA) or personal assistant for the last 15 years to free myself up, prioritising strategic activity, networking, relationship building, and business development, identifying the next x-factor that will differentiate our business from our competitors in the future, and mentoring and coaching our people. A good EA will afford you a day or a week to do the work on your business that matters and will be the gatekeeper to your most valuable asset: your time.
Appointing a General Manager was another step that set our business up to move forward, having someone specifically looking at our systems, processes, people, resources, workflow and IT – all the internal stuff that usually most entrepreneurs struggle with. It’s vital for your business that someone is taking a long-term view of what you are trying to achieve, and most likely they will handle these roles better than you, anyway.
Tip: Make space for yourself to work ON your business, not just IN your business.
Keep it simple, stupid
Leonardo da Vinci once said, “Simplicity is the ultimate sophistication”.
I have actively tried to streamline my life and business and I’m constantly looking for the silver bullet that will drive simplicity.
Each fortnight, I go to my farm on Friday to focus on the things that matter – family, health, career and community – and to work on my business and myself.
I start with my journal and plan the coming weeks, and I look at my achievements, learnings and intentions. I reflect on how I am doing and where my focus needs to be over the next couple of weeks. I try and pinpoint where complexity is getting in the way of doing and where I am going to get the best results for my efforts. If I don’t understand a concept, new product or service or if it is too complex – most of the time it will fail, so I’m never afraid to say: “I just don’t get it” and ask for more information.
Reflection and meditation have helped me enormously to stay on top of my game. When you’re a CEO, you often get bombarded with other people’s problems. It’s vital to let your people do their jobs and find solutions to their issues and challenges. In most cases, time and space solve most problems, although sometimes an injection of common sense from an objective third-party is required.
Whenever I at my farm that one day and fortnight, I dream about what is possible and think deeply about the challenges we all encounter. I get back to basics, listening to the birds singing and the wind rustling in the trees, sitting around the fire and talking to the local farmers who keep me in touch with how the world truly is. It’s my time of renewal.
Fix the broken windows
It is sometimes easier to put up with poor performance than to confront issues. Contentious situations can fester and generate resentment, particularly when you’re dealing with high achievers who find themselves plugging the gaps or compensating for mistakes made by underperforming people. If you don’t nip underperformance in the bud, you’ll end up spending most of your time with the people causing the problems rather than the people who want – and need – to grow. You often need to make tough decisions about the people who don’t belong in the future of your business. Once addressed, these situations will be a weight off your shoulders and you’ll wonder why you didn’t do something sooner.
Mentors/EO Forum
I have had several mentors and business coaches over the years who have added enormous value to me personally.
“If I have seen further it is by standing on the Shoulders of Giants.” - Isaac Newton
Quite often, I have felt guilty about the time – and cost to the business – of engaging mentors, but when I look back, they have taken me and our business to a level that I could otherwise have only imagined. When I measure the cost against the return, it is the best investment I have ever made.
My EO Forum has also been invaluable to me; lifting me when I’ve been down, helping me keep up to date with the latest business trends, and also being there for me when times are tough – not just in business, but in my personal and family life. There are numerous amazing occasions when I’ve arrived at my EO Forum flat as a tack and emerged energised and positive.
Tip: Surrounding yourself with positive, passionate, trustworthy, entrepreneurs!
Appoint good and experienced advisors to act for you in an acquisition or sale
We have been approached several times to sell our business. Even though the processes involved can be very disruptive and time-consuming, we’ve learnt about our own business when someone turns the microscope on it, more about our market and industry, and about our suitors’ business, all of which has enabled us to take our business – and my performance as a CEO – to another level.
These experiences have convinced me that it is very difficult to act for yourself in what is an emotional and stressful process. Good corporate advisors and lawyers don’t come cheap, but our advisors added value from an asking price perspective to the terms of the deal and to getting the deal done. I am convinced we would not have achieved our sale price or terms without their expert support and advice.
Tip: Good advisors won’t only pay for themselves at the additional price negotiated but they will also get the deal done on terms that you won’t be able to negotiate yourself.
Our most important asset - our People!
Our business purpose is to “Enable our communities to live their potential” – our communities being our team, our clients and our wider community. I firmly believe that if we grow the capability of our people we will be able to provide the quality of service and knowledge our clients need to grow their businesses, and this, in turn, will grow our business.
We have continued to invest in our people through leadership courses, post-grad study and by providing external and internal mentors/coaches. Attracting talent, growing our people and giving high-achievers a defined career direction is one of our key strategic intentions.
While other financial services firms have off-shored, we remain committed to employing local kids and giving them a career pathway within our firm. Each year, we undertake extensive research to ensure we are paying market salaries and undertake 360-degree reviews of everyone. It is time-consuming and costly, but it is worth it. We also have a key executive share equity plan that has evolved over many years. It is a key retention strategy and when someone becomes a shareholder it invariably elicits an amazing change in attitude.
During the COVID-19 pandemic, we made it clear that we would cut all discretionary spending, share the pain, continue to invest in our business and people, and leave no one behind. Our last employment engagement survey clearly illustrated the results of this approach. Our business had improved on every key survey measure, building on the incremental year-on-year improvement we’ve seen for the last four years.
All of the staff engagement initiatives I’ve detailed have contributed to these results and the success of our business.
The take-away
When I look back, our business journey has been a story of continuous improvement. Little steps in the journey of life, with most gains made through trial and error. Inspiration and learnings are always there, you just have to look for them – from your peers, mentors, and your Board. They have all been invaluable to me – and our progress – in a journey I wouldn’t have missed for the world!
Ken Matthews is Managing Director of Matthews Steer, Director of Family Business Australia and a member of EO Melbourne.