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We run companies by providing experienced leaders on demand to help clients accelerate change while containing risk. "We're in the agility business." To contact us about your needs for an interim executive anywhere in the world, email Chris Callinan and Garry Ringwood melbourne@eim.com.au (Tel: 03-9629 7260) or Robert Turton and Alan Locke sydney@eim.com.au (Tel: 02-9231 4400).
Agility Update 04.03
As well as looking at the changing approach of venture capitalists and new opportunities in China which will result from China's accession to the World Trade Organisation, this issue of Agility looks at the outcome of an Audit Committee's search for the facts. We also check out some practical matters for business travellers in Europe.
Performance wins
When hype was at it's peak, venture capitalists in the US looked for the promoter with sales skills. These people were the fundraisers and the gurus who talked with press and analysts. However, time has shown that they rarely combined their skills of persuasion with real ability to steer their fledgling companies into profitability. As a result of the stagnant US economy, venture capitalists are not making the quick profits of the past, instead, they are finding themselves holding on to their investments for longer. The fundamentals have returned and executives with plenty of operational expertise and solid backgrounds in finance have once again been recognised for the contribution (and profits) they can make for their investors. The Financial Review reports that US venture capitalists are looking at Australian companies which are well placed to capitalise on the US appetite for 'innovative companies with technologies ripe for commercialisation'. (AFR 26/2/2002). The preferred Australian company needs to have a track record of performance, a solid business plan and clear revenue model, as well as a plan for getting the product to market and a way of differentiating itself from competitors.
China - a fresh opportunity
China has, for many years, been seen as a potential market. In the early 1990s, foreign countries brought in hugely expensive expatriate managers to supplement the skill gaps of local people only to find the cost structures could not be sustained. Transfer of knowledge was slow as many expat managers, to protect their jobs, were reluctant to train local managers. The new decade and the accession of China into the WTO provides an opportunity to reassess the opportunities which will grow from China's projected 7 per cent annual growth in GDP. One of the keys to future success is getting the management right by using experienced Interim Managers. To obtain a paper written by Chee-Lung Tham from EIM's Hong Kong office regarding suggestions for a flexible solution for doing business with China (particularly in the insurance, textile, agriculture, telecoms and banking areas) email Veronica Rickard vrickard@eim.com.au.
Overskilling provides foundation for turnaround
EIM was contacted by the audit committee of a medium-sized company with turnover of $250 million. The committee members were concerned that the accounting and reporting systems were not truly reflecting the company's financial position as the numbers were fluctuating substantially from month to month. An experienced CFO with large company background was assigned to the company by EIM.
Within a week the Board had to be informed that the cash flow reporting was inaccurate and the company was close to insolvency. Authority was obtained from the Board to negotiate a temporary position with the bank and short-term liquidity improvement strategies were immediately implemented. Further investigation confirmed that the systems were inaccurate and that source information from a new IT system was unreliable. Several other problems in the manufacturing and inventory areas were also identified. The CFO, Managing Director, Chairman, Manufacturing Manager and Marketing Manager all either left or were replaced in a short period of time, leaving our Interim CFO as a temporary CEO while the recruitment of replacements was undertaken.
Overskilling the assignment by placing an experienced CFO as Interim Manager was influential in the company moving from a loss to a profit of $4 million.
Euro Challenge
Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, The Netherlands, Austria, Portugal and Finland all now have common currency. Most important though for those who travel frequently and who keep a small cache of foreign currencies for these times, old currencies are gradually being withdrawn and will soon become worthless. It's time to start converting to the new money. The conversion exercise has been a logistics challenge, dealing with the practicalities of conversion as well as the emotional issues. For example, did you know that while the Euro notes have a common design for all countries, the coins (Euros and cents) while similar on one face (and having the same equivalent value which can be exchanged in any country) all have individual designs which reflect their country of origin? Interesting things have come out of the Euro conversion. French retailer Galeries Lafayette has had to have floors strengthened in several of its stores to withstand the extra weight of cash and the weight of all new euro coins is equivalent to 24 Eiffel towers at 239,000 tonnes! More information about the Euro, dates of conversion and the latest news is available at http://europa.eu.int/euro/html/home5.html?lang=5.
EIM has completed more than 3000 change management assignments in its 23-year history.
We provide multinational companies with high quality, local solutions to a range of international
and local business and management issues. Our global reach is supported by offices in
twelve countries in addition to Australia.
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Level 28
333 Collins Street
Melbourne Vic 3000
Tel: 03-9629 7260
Fax: 03-9629 7269 |
Level 5, Ashington House
16 O’Connell Street
Sydney NSW 2000
Tel: 02-9231 4400
Fax: 02-9231 4477 |
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