Be able to plan a complex team activity
Since Malta joined the European Union in 2004, the free movement of goods and services within the community, brought about through membership, has re-defined the roles and relationships between suppliersand retailers. It has therefore become increasingly common for retailers to bypass importers/suppliers and purchase directly from the source. In the meantime, Malta being a country with limited natural resources, a favourable climate and long history, Malta’s economy has traditionally been highly dependent on tourism. As a direct result of the current global recession, the number of tourists visiting our island is expected to decline over the next 5 years. This set off an alarm to all importation and tourism dependent businesses causing them to review their business strategy and identify additional business opportunities.
My line of business is the importation and distribution of silver filigree jewellery to retail outlets, which target mainly tourists, and summer accounts for about 80% of my total business. So, after I experienced slower than prior year’s growth in sales last year, I started giving serious consideration to opening a single or chain of retail outlets. My primary objective was to deliver my products to tourists directly and at the same time promoting my products instead of relying on my retail competitors to do it.
My greatest concern at first was how to deal with the reaction of loyal retail clients to this proposed new strategy. Will they still be willing to purchase goods form me once they perceive me as a competitor instead of a reliable “partner”? However, eliminating the middle person should almost double my gross profit margin as well as provides me with greater control of my own destiny. In order to go down this path I will also have to consider the capital investment which will be required and the increase in operating costs this change in strategy will bring about.
My experience as an entrepreneur has taught me that the competitive analysis of a business plan should be a statement of the business strategy and how this relates to the competition. My objectives therefore includedidentifying the strengths and weaknesses of my competitors within the market, as well as strategies that will provide an edge to develop and prevent my competitors from increasing their market share, and any weakness that can be exploited through product development.
When I discussed my concerns with my financial adviser he suggested that I should conduct a feasibility study before embarking on a major change in strategy, and to ascertain that it will be bear fruit for at least ten (10) years. When the study was completed it resulted that, not only was it necessary to adopt this strategy, but that it should also increase profitability on the long run. I then proceeded to put together a five year business plan which identified the need to open at least four retail outlets during the first two years after implementation. However, in order to implement the new business strategy without disrupting the ongoing operations, a qualified project manager had to be identified and recruited in order to lead this project. Once this person was on board, his or her primary objective would be to create and manage the expansion of my business into retail with minimal negative impact on the existing import/distribution business.
A New Project Manager was indeed recruited and his first recommendation was to operate the new retail business through a subsidiary entity in order to insulate the already established import and distribution business. He then also proposed setting up a special team, made up of five individuals already employed in the existing organisation, which he would chair, and would be actively involved in creating an action plan leading to the opening and operations of four retail outlets and an organisational structure for the operations of this new subsidiary. This included setting up separate sales, marketing, IT and administration divisions with each division head reporting to an operations manager. My own role would be expanded to that of shadow director of the new subsidiary in order to minimise the risk of damaging our relationship with existing retail clients. Therefore, the four individuals who were selected to be part of this new project team included one person from each of the four divisions of the current business operations.
Re-engineering an already profitable business organisation naturally involves risk. However, if properly managed this will be a calculated one as long as all potential obstacles should be anticipated and properly dealt with. I have learned in the past that whoever is not willing to take risk is not a good leader. “To win without risk is to triumph without glory” (Pierre Corneille, Pratt, J, J, 2009).
One of the cornerstones of the new retail operations is to create uniformity for all four outlets. This included consistent decor, same opening and closing times and days and staffed by smartly dressed sales staff. The action plan created by the new project team listed the need to identify the locations of the four stores as top priority and that negotiating leases would be the responsibility of the project manager. The plan also called for staffing each store with two sales assistants and one store manager. The marketing department would be staffed by one individual to start and the administration department would require a full time human resources professional and one part-time person. This meant that we needed to recruit 15 new employees to make up four sales teams and support for these. The present IT manager’s role would be expanded to support the requirements of the new subsidiary. It will be necessary however to out-source the initial set-up and integration of the new subsidiary operations into the existing IT system and therefore create a centralised data base for all the silver items for all the shops to have access to all stocks. This would enable shops to offer customers special high value items which they do not typically stock in their outlet.
Be able to communicate information on the activity to your team.
The new project team was scheduled to meet every Tuesday and Thursday of each week from 8.30am till 10.30am. Minutes of each meeting were kept and shared at the beginning of each meeting with each team member. The team chairperson met with me every Friday from 8.30am till 10.30am to keep me updated on progress and to obtain my feedback. This helped to set a clear framework for all the activities, roles, tasks and goals set by the team.
Each team member was chosen to fill a specific role in order to achieve our final objective based on their expertise and experience. The first team meeting was attended by myself, the New Project Manager and the five team members. After introducing the New Project Manager to the team I briefed them on the purpose and aims of this new business activity and provided them the opportunity to ask questions, make any comments and even raise any concerns.
The team member from the Sales Division was assigned the responsibility to make recommendations relating to the ideal locations and optimal size of the four shops, as well as the desirable qualifications of the retail Sales staff. Recommendations had to be both realistic and achievable, taking into consideration the high cost of retail space on the island and the limited number of applicants which would be available to choose from.
The team member from the Marketing Division was assigned the responsibility to create an image of the retail shop network as well as to propose a three year advertising plan mainly aimed at tourists. Cost projections were to be presented with these recommendations and these had to be in conformity with the resources budgeted for this activity.
A member from Finance was also selected to be included in this team. Finance was to first develop a detailed budget for this project which I had to approve. All expenditures related to this project were to be accounted for separately in the finance system in order to closely monitor the project activities. These costs were to be treated as nonrecurring in order to keep them separate from ongoing operations. The Finance team member was also required to set up a financial system for the new subsidiary, separately from the current financial system. However, the two systems were to be compatible in order to facilitate periodic consolidation.
The team member from Administration was also responsible for human resource matters. This team member was assigned the task of searching for the stores to lease in accordance venue recommendations made by sales team member. Human resources were asked to develop an organisation chart for the new subsidiary, preparing job descriptions for the prospective employees, designing vacancy notifications and interviewing prospective candidates.
The IT team member would be responsible for identifying the hardware and software requirements for the integration of the subsidiary into the existing IT system. Input from the Sales and Finance team members were critical in identifying specifications required and preparing requests for quotations from at least three different suppliers for the acquisition and installation of these services and hardware.
Each team member was required to provide a weekly update on their assignments to be presented at each meeting. Every communication needed to be clear and supported by a task chart. Each team member was also given the opportunity to ask for more details if they were not clear on some topic or if they felt that one member’s actions conflicted in any way with their own plans. For example, it was proposed by the Sales Team member that the shop assistants would need to prepare an order at the end of each week to replenish their stocks. The IT team member had proposed an automated system to do this instead.
Be able to review own ability to lead a team through a complex activity
This system, though slow to yield results in the beginning, worked well and continued to improve as each member saw how their role and contribution fit into the overall objective. The New Project Manager made sure that each member felt empowered and accountable for his or her role in the project and, as importantly, that the entire team would take credit for the success of the project, not just the team manager. This helped build up team spirit and made every team member feel committed to make the project a complete success.
Each team member’s progress report was matched to the master time chart prior to my weekly meeting with the New Project Manager who also came prepared with proposed solutions to solve any deviation from the plan. Once we agreed on the solutions, these were communicated to the team members at the next Tuesday team meeting.
In order to effectively manage a team, such as the one assembled for this complex activity, motivating the team had to be a leader’s top priority. This was achieved by encouraging their participation and asking each member to share their ideas during team meetings. A leader’s role is that of facilitator and coordinator, allowing each team member to take responsibility for their share of the full task and obtaining their commitment to deliver. A leader’s effectiveness is therefore judged by the success of the team in achieving a goal such as the one at hand, namely to set up a chain of four retail outlets to compliment the import and distribution business.
Pratt, J, J, 2009. Turtle on a Fence Post: Wisdom Graduates Need to Make It in the Real World, 365 Days of Life Lessons. 1st ed. UK: Agio Publishing House, 2009.
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