Implementing strategy in a family-owned private company
In a series of interviews, I explore the approaches of different business leaders (all of them chartered accountants) to strategy. This month I was in conversation with Garrick Bowker, CEO of the Tavcor Motor Group
Tavcor is a family-owned private company employing 300 people with dealerships in Port Elizabeth and George. Garrick started at Tavcor in 2005 as financial manager and after holding different roles in the company, was appointed CEO in 2015 at a time when the company’s shareholding was consolidated, and the sole shareholder assumed the role as executive chairman.
During the conversation, Garrick took me through his strategy implementation journey as well as confessing how the COVID-19 pandemic was a blessing for him as it led him to champion various initiatives enhancing the implementation of the organisational strategy.
His valuable insights are best highlighted through his practical experience before and during COVID-19:
The board of directors set the strategic purpose of the company over five-year periods. The five-year mission that I was given in 2015 was to transform the group into a high-performance company regardless of the market conditions, to be achieved by no later than 2020.’ Put differently, Garrick had to take a family-owner-run business to a family-owned business run by professionals. He added: ‘I took over a family company that had a clear business positioning statement with sound values and operational structures in place. But I knew this mission was a huge challenge as the criteria had never been achieved before and I was going to have to do it in a declining market. In addition, the company recently expanded with extra operational costs that will be incurred.
The first thing he did was to identify which areas needed attention in order to achieve the mission:
- Changing the corporate culture to one that was professional and results driven
- Getting the senior executive team and every employee to believe in the strategic mission
- Getting employees to understand that high performance and results are required to ensure the sustainability of the company for all stakeholders − it’s not about mining a bottom line for the shareholder
- Holding senior executives accountable for performance, and
- Rewarding results rather than mediocre performance
I must confess, for my first four years as CEO I was somewhat under-performing on the professional high-performance mandate. I had all the action plans, individual executive goals, set company values, structures and processes, but I realised I did not have the buy-in from my team or the employees. I also realised that as the previous financial director, I did not 100% believe that the goal was achievable.
Then COVID-19 hit, and the hard lockdown had a major impact on both their operations and finances. It was through these challenging times that Garrick implemented different approaches and practical initiatives that changed his journey:
Engagement and approach to the leadership team
‘I changed the engagement with the senior executive team, which included all business unit heads and central support heads, to be more structured and focused. Small things made a difference: meetings were held weekly (on Zoom) rather than monthly, with a fixed agenda and minutes, and were kept to no longer than two hours.
‘Together we agreed on a corporate culture each executive would adhere to − a corporate culture aligned to our mission of not just talking professional but living it. We also documented business principles that were to be consistently applied at all business units in the group and applied for every transaction and decision to be made. Senior executives were holding each other accountable in executive meetings and made sure that they followed through on agreed actions.’
Getting buy-in from senior executives and employees to believe that the strategic mission was achievable by implementing a new operational and measurement model
‘We then changed what we measured,’ explained Garrick. ‘We designed a productive model aligned to industry benchmarks which we use to measure business unit performance. The productive model is able to take every rand income and expenditure spent back to every employee in the organisation. Business leaders were able to prepare their budgets using this productive model. All budgets were automatically aligned to industry benchmarks and business unit heads were able to discuss these with each one of their employees. This made it easy to identify underperforming and unproductive employees. Using industry benchmarks took judgement away from the return that the board was looking for me to deliver as the CEO. We furthermore linked all incentive structures to the productive model, which ensured that only performance was rewarded. This inevitably created competition and collaboration between business unit leaders and promoted the sharing of best practice within the executive group.’
Getting buy-in from staff that the company mission was not all about bottom-line profits but sustainability for all stakeholders
Garrick admitted that through COVID-19 and the hard lockdown, while the company’s ability to focus on sales and profits was taken away, it allowed the board and him as CEO to do the right thing for their employees:
We provided our staff with maximum salaries possible while at the same time allowed the company to run at least cost to stay in business through things like negotiating rent holidays and when salary reductions unfortunately had to be taken, the highest impact was taken by directors and business unit heads. We hid nothing and had complete transparency and communication on the company financial position and COVID-19 implications – nothing was hidden.’ This approach proved successful: ‘We were rewarded by achieving our highest employee climate scorecard (measuring employee satisfaction) in November last year without having given, or committed to giving, any of the salary reductions back.
Setting employee goals to take the business forward
To grow sustainably as a business all employees need to grow at an individual level as well. Garrick explained: ‘We set goals at the beginning of every year for each employee to contribute in driving the business forward. These goals are not necessarily aligned to any budgets or KPIs. It is challenging and the paths to achieving the goals must not be known at the time of setting them.’ He referenced an example: ‘When the goal for putting a man on the moon was set in the ‘sixties, there was no known way or solution to achieving it.’ Through this, they changed their culture from justifying why goals were not achieved to what are they going to do to reach the goal.
Encourage business unit leaders to react to challenges (and listen to their people!)
On this point Garrick mentioned some practical things the management team implemented: ‘First identify all problems and root causes before rushing to a solution. Rather delay answering so that one can confirm understanding and then investigate whether improvement is possible, this builds respect.’
Through all these initiatives, Garrick and his team transformed the achievement of their strategic goal, something which they are very proud of. ‘Ironically, having followed this approach, we were able to achieve the high-performance mission for the first time in 2020 even with our industry having had to endure a hard lockdown for over six weeks.’
The role of environmental and social impact
Tavcor runs various environmental and social impact initiatives which form part of their organisational mission: from generating their own solar electricity through upliftment initiatives and sponsoring YES candidates through internship opportunities to implementing a cradle-to-grave initiative for their waste products (especially oil). Furthermore, through staff collaboration, they ensure that their initiatives target the communities their staff come from. Said Garrick: This is one of our business principles, there is no financial reward for it. If we want to remain sustainable in business, we have to be the right corporate citizen doing the right thing – it is a culture and business philosophy. High performance is not just a bottom-line money thing!’ They are proud of the accolades they have received acknowledging their commitment.
Advice for young professionals
Garrick had the following advice for young professionals entering leadership roles where they have to engage with the implementation of strategy: ‘Set goals and challenge yourself,’ adding: ‘Always ask questions. as this is how you can gain an understanding of what is going on in your business. You will soon realise if the business, or someone within the business, is not on top of their game and you can do something about it.’ He continued: ‘Open yourself up to the opportunity to learn − learn from experienced people. Confirm your understanding of advice given by others as this shows respect for listening and you are opening yourself to the opportunity to learn and improve. I am lucky to have a wonderful mentor in Tavcor’s owner, who is an extremely strategic thinker and challenges me as CEO.’
Garrick’s final nugget of advice for young professionals: ‘Understand true accountability − it took me far too long to learn it myself.’
AUTHOR │ Christiaan Vorster CA(SA), SAICA Regional Executive
