Best lesson? Learn to deal
Neil Tilley, founder of Upstream Solutions talks to Jacqui Walker about how he grew his software and laser printer distributor business from six staff in 1995 to a 300-staff business with $88-million turnover in 2005-06 in just over 10 years. He’s aiming for a $100-million turnover in 2006-07.
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Tilley tells how he has survived growth and thrived by creating a culture that gives him a competitive advantage. He has a FiFo policy – (Fit in or F off), regularly does 360 degree reviews of everyone (including himself) and holds “Bring out your dead” days to ensure problems in the expanding business are solved.
Jacqui Walker: Now tell me Neil, how have you expanded so quickly over the past 10 years?
Neil Tilley: I don’t think we ever set out to be a fast-growing company. It happened more by default. I think what we wanted to be was a great company in terms of providing value to customers and providing a place where staff could really show their own entrepreneurial spirit. The growth came off the back of having a good value proposition for our customers and for having a good environment where staff could find their own skills and environment to succeed.
Upstream is a very simple business. We’re in the business of helping people manage paper in their offices more effectively. We provide software solutions and management for any device in your office that produces paper, so a laser printer or a photocopier.
Do you believe that a positive attitude among staff and encouraging entrepreneurialism among your employees has been an important part of your growth? How do you do that in practice?
Look, it’s a pretty simple theory but it’s difficult to get right in your business.
My theory is that most every new employee, and including myself, comes to work with an attitude of ‘I want to do the best I can and I’m going to add value and I’ll do the right thing by my customers and by my clients’. Then because we’re all humans it all gets messed up based on the inter-relationships that we have with each other.
We’ve done a lot of effort in deciding a culture or a set of ethics that we wish to do business with, but most importantly a set of rules about how we want to get along with each other. Once we formed that culture as a very small company everybody who comes along gets educated in that culture and either decides that they’re going to like those rules and fit in with them or they can leave and go somewhere else.
We have a term called FiFo, which most people could guess what that means, and the Fi means for Fit in or… but basically it’s a set of rules that define how we work and get along with each other.
Do you provide these rules to people at the recruitment stage or once people arrive?
We talk a lot about our culture and so we don’t necessarily spell it out up front. But it’s a very important part of people we’re hiring. So people are in no doubt that the culture of the business is important at the point of hiring and if they are interested we’re happy to share it with them.
It’s important to understand that these set of rules are not made up by myself. They’ve been agreed by all of us and we do modify them from time to time. As we’ve got a little bigger we have had to change them because you need different sets of rules to deal with larger organisations than we did when we were a dozen people or so.
What are some of those rules that have changed?
It’s just how we inter-relate with each other. It’s a good question; I have to think back. We started off with 12 rules and we still have 12 so we’ve obviously dumped a couple and picked a couple of new ones up along the way.
A good example of a rule would be asking everybody to think about the impact that you have on everyone else’s ability to work. Each of our staff are asked to rate their work colleagues as to whether they provide a negative, neutral or positive impact on how you feel about work and how you produce results at work.
Let’s say I’m very effective at getting things done, but in the process of doing that I actually inhibit everybody else from getting things done because I’m too aggressive or I’m not very inclusive of them. Then your whole organisation becomes less effective.
What we’re helping people do is understand the impact they have on everybody else. If you’re clever with this you can educate people to have a positive impact on everybody else.
That must be tricky sometimes. Have you learnt anything from implementing that process?
Look you learn not to take it overly seriously. What I mean by that is if I have a staff member who’s upset because they feel like they’ve been harshly judged by a peer group, and that does happen, then my counsel then is: ‘Look it may be that people have misinterpreted who you are or what you’re trying to do, and take this information simply as some advice as to a perception people have. It doesn’t necessarily suggest that you’re doomed.’
Sometimes people view it as a popularity contest and they say ‘well, people do well just because they’re popular’, but I keep distilling it back to say I want everybody to be aware of the impact they have on everybody else’s ability to do their job while you’re doing your job.
And do you get reviewed?
I do. I got reviewed just last week and I was given some counsel about some things that I do that make it more difficult for other people to get their job done.
We also try and make the review a positive experience so in my review for example I was given lots of positive feedback about the things that I do, and in a negative sense. Many of the people said that they find me intimidating at times and so I have to be mindful about that.
Sometimes in business being intimidating can be a good value, but other times it’s pretty scary for staff and so I need to be more conscious of when I go to the accounts department not to be so scary a figure.
And another bit of feedback I got was not to delegate something to somebody and tell them it’s totally their responsibility to work out how to do it and then when they bring it back tell them that I didn’t like the way they did it; that they should have done it differently.
It’s amazing how quickly it catches on and you do develop a culture. My theory is that if we all get along 10% or 20% better than your average organisation, that’s a huge competitive advantage for us.
People say, ‘have you got this perfect work environment?’ Well no, we haven’t. I mean people still argue with each other. It’s just that we have a far more effective work environment than ones that I had experienced previously.
How does that translate into entrepreneurialism? Specifically how do you encourage your employees to be more entrepreneurial and how has that manifested in a product or service that you deliver to your clients?
I think that it gives people the confidence to be themselves and to not be scared of making decisions and doing things in the business and understand that we as a company respect everybody as an individual and expect that we’ll have good days and bad days and good behaviours and bad behaviours.
Is that encouraging people to come forward with their ideas?
Yeah. I think it’s about encouraging people to get things done.
I personally think that ideas are grossly over-rated in today’s entrepreneurial business world. I would say in my opinion that a good idea is at best 10-20% of something that’s successful in your business. What’s really difficult in business is implementing good ideas.
My experience is that how well you can get people to work together, accept that this new idea maybe isn’t their idea but we need to implement it well together is critical.
I know certainly in the software world the last 10% of getting that software to work well is probably as much effort as the first 90%, and I think that’s true for good ideas and implementation.
Many many things that you try and implement will fail. I think that the good thing about business is that if you try to implement some things that fail you learn a great lesson, and when you’ve realised they’re going to fail you can stop doing them, and so all you’ve lost is the money or the time or the effort to implement it.
What are some of the challenges in growing the business and how have you overcome them?
Well there are several. I think that mostly they are to do with systems and processes.
The way that you would just go about doing things in your business when you had 40 or 50 staff doesn’t work anymore when you’ve got a couple of hundred staff.
If you go back in time say five or six years, we had a problem. Peter came up with a great solution for it and we all implemented it and it worked fantastic. Five or six years later Peter’s solution doesn’t work anymore but we’ve all celebrated how good it was for the last five or six years. Eventually you’ve got to wake up and say this thing doesn’t work anymore. You’ve got to abandon it and start with something new.
How do you make sure that you’re doing that properly? Is it someone’s job to be keeping an eye on systems and processes? Or does it come back to the culture?
We have a term called ‘Bring out your dead’. The concept is that twice a year our HR department writes to all staff says ‘tell us what’s broken’.
It’s very easy in a management sense to become oblivious to what’s broken in your business. What happens is we get dozens and dozens of issues raised. Then we go as a management team and lock ourselves off-site for a day or two. We look at each one of the issues that’s been brought up and we make decisions about it.
The first decision is ‘do we really think this is an issue?’ If no, why don’t we think it’s an issue. Then we have somebody document why we don’t think it’s an issue and tell everybody.
If we think it’s an issue, we ask: ‘Are we doing something about it? Is it something we’ve already identified? Is it something that came up in the last bring out your dead session?’ The communication is very important because that’s what encourages people to bring their issues up.
How you solve problems becomes much more complex as you get bigger.
When you’re a small business you can get away with quick-fire solutions. There’s a problem the way the phones work. You all have a five minute debate about it. You decide what’s wrong and you fix it up.
When you become an organisation with 300 people and you discover you’ve got a problem with the phones, you need to spend a bit more time to really research and understand it. Even though you’ve got more money to spend and you can afford to apply more sophisticated outcomes they become more tricky.
Phones is one we are battling with at the moment. We had a meeting just today about phones.
We’ve just merged a company that we bought in with our company and we’re having problems with our phones.
We’ve heard from some customers that the phone’s engaged sometimes and these are really big no-no’s from a business point of view.
But we sit down and we say, look everyone has an idea as to what’s wrong but we don’t know it’s wrong and so we’ve very quickly got to figure out exactly why isn’t it working. And then you’ve got to decide, is it a technology problem? Is it a staffing problem? Is it a cultural problem?
I think one of the things that you need to do if you want to grow fast is make sure you don’t leave any legacy issues or minimise them as much as you can. How well you can put problems to bed makes a big difference as to how you go forward.
You just merged with another company, how is the integration going?
We started life as a laser printer technology business. In the past five years laser printers and photocopiers have essentially become the same device and so most people today have a multi-function device in their office.
Over the past few years we have made some investments to buy some photocopier companies and in the past 12 months it became obvious to us that running a photocopier business and a laser printer business as separate entities was no longer a smart thing to do.
We’ve actually merged our copier business in with our printer business to form Upstream Print Solutions. The challenges that’s created for us is once again staff challenges.
We had a very successful photocopier company with a great culture, the business we bought had a very different culture. In merging them we’ve had to go back to square one and reform the rules that we’re looking for about how we’re going to succeed together.
You can’t build trust quickly and so the hundred or so staff from one business meshing in with the 200 staff in another business, there instantly is a degree of distrust. You’ve got to start doing programs to get them together.
But the advantages that you have is that suddenly you’re a new more powerful player so your ability to be more aggressive with pricing and with marketing and to provide better deeper services are all good but you’ve got to be able to deliver that.
You’ve got to implement that and lots of pros and cons of being small and being big.
Any last tip for growing businesses?
Looking in hindsight with our business, when you’re young in your business you get really scared and you think will I have enough revenue next month or next six months to pay the bills. And where am I at?
It’s very easy to bastardise your value proposition and to chase revenue in areas that aren’t really what you’re about. That gives you short term relief in terms of you feeling more safe and secure about being able to pay the bills next month, but it actually creates a bit of an anvil for later on.
So if you start sowing all these other activities or seeds of other activities around the place that aren’t really what you’re about, when you just get your true value proposition up and firing you start getting ready to really run forward and grow very quickly, suddenly you find all these legacies you’ve left out there, these other things that you’ve done are going to slow you down.
One of the reasons we’ve been able to grow and be successful is that we’ve been very bloody minded about ‘not getting outside of our sandboxes’. You’ve got to know where your sandbox is and make sure you don’t play outside of that because it really will slow you down.
This is an edited version of the conversation, which is available as a podcast.