nem Capability Document
- 1. CAPABILITY STATEMENT<br />Non Executive Management (nem) was founded in 2001 by three former senior corporate executives who saw an opportunity to assist a wide range of organisations to accelerate the achievement of their businesses objectives. <br />Aimed primarily at the private enterprise space nem developed a non-conventional approach to assisting businesses. This approach focused on establishing a clear understanding of the fundamental issues facing the business and identifying the blockages and obstacles that caused them. More critically, ensuring management and all stakeholders understood what the barriers are is a cornerstone to the client establishing ownership and a commitment to addressing them. <br />The nem consulting approach has been extremely successful within the private enterprise space with the partnership growing to over 40 Principals operating nationally from three offices in Melbourne, Sydney and Brisbane. nem is now arguably Australia’s largest boutique consulting firm, offering non executive management services to the SME market. In particular, nem focuses on the $2 million to $100 million annual turnover segment where the majority of our referral networks also have most of their client activity. nem is an active, trusted advisor to such businesses, and the majority of clients have turnover in the $2 million to $30 million range. <br />nem relies on the expertise of the individual Principals to undertake business reviews, identify strategies and to document agreed implementation programs. They then work with the client’s internal resources and existing external service providers to guide, monitor and assess progress. This contrasts significantly to a conventional consulting approach that relies on a team of staff, many of whom are commercially inexperienced, working independently of management. <br />All Principals are past senior corporate executives or successful business owners in their own right. While they are commercially remunerated and focused their primary driver is not to generate wealth for themselves but rather a desire to assist and impart knowledge in a sector that is poorly serviced by conventional consulting organisations. <br />The Principal group hold a wide range of Directorships, Not For Profit Board positions and community based positions in addition to their active role as a nem Principal. <br />The firm’s genuine approach of only engaging where value added outcomes can be achieved, the modest recovery rates relative to the major consulting firms and the fact the firm does not operate a leveraged structure has created wide spread interest amongst the partners’ wider corporate networks. <br />As a consequence nem has been increasingly engaged in the major corporate market offering superior independent assessment and analysis, along agreed frameworks, that work in conjunction with the client’s resources. This has resulted in a number of very successful engagements by a number of large publicly listed companies that have become sceptical of the benefit of engaging conventional consulting firms to assist them to achieve key objectives. <br />nem APPROACH AND PROCESS<br />ComplimentaryCoffee Meeting(with signed Deed)Can we add genuine value to the business?Desk Top Review$4K to $6K 3 to 4 Hours ContactComprehensive Review$6K to $18K 3 to 5 Days ContactSpecific Review$2K to $3K dailyDays to WeeksNoYesConsult Referrerand/orRefer on <br />Consult with referrer and seek engagement in process where appropriate.Scope of works are signed off with agreed terms of engagement with nem.<br />All assignments are overviewed by the Board of management. Specific points of reference can be established with Principals to assess referrals, monitor activity and provide a central control point and contact.Review ConfirmedConduct reviewCompile reportBPA and timingAssistance agreedNot open endedScope of WorksConduct reviewProvide reportBPA and timingAssistance agreedNot open endedScope of WorksFluid processProject orientatedVary widelyNot locked inAssistanceWorkshopAgreed ProgramsMonitor & Guide3 to 6 monthsAssistanceValidationWorkshopAgreed ProgramsMonitor Guide6 to12 monthsAssistanceGuiding & advisingSounding boardAccelerate actionInterim Management<br />nem CASE STUDIES<br />CONTRACT PACKER<br />Turnover of $6 million, 18 staff MD + financial shareholders.<br />Financier funded the MD into the business 4 years ago. Sales were $2 million EBIT $300m. Sales last year $6 million losses of $200k.<br />Financier wanted to know: did the business have a future? If yes, a plan to be implemented to achieve a profitable basis and future for the business.<br />Comprehensive review with the Management Team, MD and his son. The review identified that the business has great potential with targeted growth of 15% per annum. EBIT identified to improve to 10% of sales in the first year and 15% of sales in year two. One day workshop $8,000.<br />Restructured sales strategy and direction, in the last two months new sales of $1.1 million pa signed at an average net profit of 22%. The business will become cash flow positive and profitable by years end. <br />Defined the roles and responsibilities of the MD and his son. This has allowed a more focused approach to the business.<br />After 4 months; factory productivity increased by 20%+, expected to reach 30%. A new trend/batch production to be put in place by late July allowing production to move from 2 shifts to one 10 hour shift saving 3 people.<br />We are on target to achieve the goals set. Profits for the year 2009/10 are forecast at $600k and $900k the following year.<br />Expected fees for the implementation $60,000 over nine months.<br />SOFTWARE BUSINESS<br />$10 million revenue, 40 staff and 100 dealers.<br />Breakeven profitability with a new product launch planned but uncertain about approach with franchising being pursued with franchise organisation engaged.<br />Comprehensive Review with senior management. One day workshop with 3 Principals. Cost $7,500.<br />Recommended charging existing users for upgrade and installation. Engaged to validate and implement. Cost $37,500.<br />Revenue increased immediately and reached 70% increase over the first 12 months with half flowing to the bottom line.<br />nem CASE STUDIES<br />AGRIPRODUCTS BUSINESS<br />Turnover of $100 million, part of a listed entity.<br />Management reporting unreliable and untimely. Critical reporting time lines and deadlines missed.<br />High level review with General Manager over coffee (complimentary) and comprehensive review undertake over 3 days by one Principal. Cost $7500.<br />Engaged in interim capacity three days a week to restore capability to reporting function until permanent staff could be appointed.<br />Cost $2,500 a day, three days a week, spanning 4 months.<br />MEDIA DISTRIBUTION BUSINESS<br />$110 million revenue, profitable, 85 staff, single shareholder Managing Director.<br />The business had no clear leadership and succession options, lacked strategic focus or even a business plan and a dysfunctional management structure had evolved over time.<br />Comprehensive Review with senior management including half day workshop clearly articulating current issues and suggested actions. Cost $7,500.<br />Recommended structural changes including appointment of a CEO and changes to the management team. Agreed a vision and developed the basis for a detailed business plan and appointed an interim General Manager to develop and implement clear role definitions, Key Performance Indicators and improved management reporting. Refocused the business on sales and market development.<br />When demand dropped, revenue of competitors fell by half whereas this business only had single digit revenue decline.<br />Ongoing strategic advisory role including chairing management meetings at a cost of $4,000 per month.<br />PEST CONTROL BUSINESS<br />Extremely successful pest control business with 10 vans want to franchise to improve operator capability and quality and engaged Franchise Developments at a cost of $70,000.<br />Conventional model recommended with sale value of $70,000 and retention of 12.5% royalty.<br />nem appointed for a fee of $30,000 and model developed for 60% income retention, $100,000 income guarantee and $200,000 franchise sale price.<br />Over 35 franchises sold and business expanded into other regions.<br />nem CASE STUDIES<br />WINDOW CLEANING BUSINESS<br />Turnover of $300,000 and a father and son business. Referred by their accountant.<br />Father is in his early sixties and the son is in his mid forties. The father wishes to sell the business and the son is not willing to purchase.<br />Desk Top Review undertaken at a cost of $1,250 (several years ago) with the father and son.<br />The father worked six days a week and was quoting for at least three while the son worked five days a week. <br />The business advertised extensively in local papers and Yellow pages. The conversion rates for quotes were extremely low with no follow up mechanism. <br />Work was divided between domestic and retail with domestic better priced and retail often coming under competitive threat.<br />Recommended a recurring service model for domestic work only where good domestic customers were registered for recurring service in a four or six month cycle. Estimated no advertising cost within eighteen months and no more than five days a week work with no deterioration in income with profit increasing $100,000.<br />Accountant implemented a basic CRM system and estimated outcome achieved within nine months with only eight man days a week of work. Son purchased business and went on to expand with sub-contractors.<br />PLUMBING BUSINESS<br />Turnover of $600,000 concentrating on body corporate work. Son had taken business over from his father and operated with two apprentices at differing stages of experience. Referred by their accountant.<br />The owner had a serious accident during his apprentice ship breaking his back in several places. As a consequence he was very safety conscious and followed all OH&S guidelines to the letter.<br />Desk Top Review undertaken at a cost of $1,250 (several years ago) with the owner and the accountant.<br />Quotes had thirty percent conversion rate and a time line of ten months. Quotes were also inflated by the OH&S measures. Often compensated by using technology such as cameras to detect blockages and reduce excavation and labour costs. <br />Recommended highlighting OH&S measures on all quotes and stating all competing contractors should be asked to positively confirm the same to the body corporate. Also recommended a OH&S consequence site report if items not rectified. <br />Conversion rate increased to sixty percent with a time line of four months. Owner went on to acquire cameras and computers and is now considering franchising this aspect of the business. <br />