The restructure of a rapidly growing corporate consultancy put great strain on its freewheeling culture. And hiring a change consultant did not help matters.
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Entrepreneur: Steve Chezzi, Managing Director
Company: Efex
Business type: Corporate branding agency
Founded: 1986
Employees: 24 employees
Turnover: (2002 - 2003) $6M
Head office: Sydney & Melbourne (opened March 2003)
Contact details: Sydney: +61 2 9438 1315; Melbourne: +61 3 9529 5777
The Efex Story
Steve Chezzi’s corporate branding company, Efex, has been growing quickly. Its $6-million turnover in 2002-03 was a 20% increase on the previous year. The growth has come from a strategy of repositioning the business as a one-stop shop that can meet all of a client’s corporate branding needs. But the growing pains of such a dramatic corporate expansion have been considerable.
Efex began in 1986 as a producer of wide-screen audio-visuals. It now offers services including event management, product launches, video production, web design, exhibitions and displays, and has its own on-site post-production facilities.
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Key learning points:
- Team-building - Allow people to give their opinions and suggestions - and then act on them. It gives staff the sense of being part of a team. The answers to most business problems are in-house.
- Communication - Before making big changes at a business, get the staff involved and committed by seeking their input. Never ask for input and then ignore what was said.
- Consultants - Give consultants clear guidelines and monitor their activity, especially regarding its effect on employees.
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In October 1999, Chezzi and his management team split the company into three business divisions: On Screen (which does video production, television commercials and other related services); On Stage (which organises business meetings, gala events and product launches and other events) and On Line (which looks after web design, CD/DVD ROM production and other such services). A fourth division, On Display (which arranges exhibitions, display stands and other related promotions), was added in February 2003.
Chezzi says: “In our earlier days, we were a bit of a this, a bit of that. Some clients would see us as a video production company, others would see us just as a staging company. We wanted to let clients know that we could provide these other services in-house.”
However, the move to create separate business units met with resistance from some staff members. Chezzi says: “Change management is one of the toughest things that we’ve had to face. When we were a smaller company of 5–10 employees, people would wear multiple hats. One day you were the director; the next day, the coffeemaker; next Monday, you might be the event manager. There was a philosophy within the business that we would allow people to try different things.”
But separate divisions threatened that philosophy and friction developed between business units. Some staff wanted to continue crossing over into other areas; others believed that they should confine their activities to a particular division.
Chezzi realised that multi-skilling is good in theory but difficult to manage. “If you have a production assistant who wants to be an event manager, it’s not enough to just say, ‘OK, let’s give it a go for the next six months’. You have to find whether that person is right for the job. And you need to have a proper review process in place for support and feedback. Our problem was that we grew too fast and lacked adequate management systems.”
In February 2002, Chezzi hired a consultant to develop new management systems and prepare the company for further growth. But things did not go to plan. Chezzi says that he failed to give the consultant clear guidelines. Nor did he have a formal review process for keeping track of the consultant’s progress. As a result, Chezzi says, the consultant ended up coming between Chezzi and his staff. “People thought that they couldn’t have access to me. They thought that they had to go through the consultant. That was because I had failed to give him a proper brief.” The consultant left in August 2002.
Chezzi then created a new management layer of department heads for the business units, which was a big move away from the company’s long-established flat management structure. The change created more problems. “Again, although most people saw the administrative benefit in it, implementing the change proved very difficult. The new layer of management created a bit of an ‘us and them’ mentality. We are still facing those challenges.”
Despite that, Chezzi says people again feel that they have access to him and he continues to encourage an open, collaborative approach within the company. He emphasises the importance of a weekly Monday meeting attended by all staff. It is the one time of the week when the whole company gets together.
“Getting different sides of the business to work as a team continues to be the key challenge. A lot of our internal difficulties came down to poor communication. If I could do it again, I would involve staff a lot more as opposed to just telling them what was going to happen.”