A textile wholesaler surveyed its staff and found their main concern was communication with management. Now, a new feedback system is helping its expansion plans.
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Entrepreneur: Michael Fitzsimons, Managing Director
Company: Instyle Contract Textiles
Business type: Contract textile wholesaler
Founded: 1987
Employees:
Turnover: $10M - $50M
Head office: Alexandria, New South Wales
Contact details: +61 2 9698 7255
The Instyle Story
Michael Fitzsimons knows the value of creating a company culture that gets results. His company, Instyle, is a Sydney-based upholstery fabric designer that sells to commercial clients. It competes on its reputation for product quality, individual design and customer service.
Sound internal business systems are essential to the business, but for Fitzsimons the company’s real success has grown out of its culture. He says: “It has to do with setting a culture within the company that is not only performance-based but is equitable for all the people involved. Part of that comes back to communications. People want to know what is happening with the business and want to have an input.”
A workplace attitude survey conducted in 2001 asked Instyle’s 40 staff members about their main concerns. Communication with management headed the list. To improve communications, Fitzsimons introduced a new structure called One-On-One Management, which aims to open up communication channels in the company.
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Key learning points:
- Company culture - Establish a company culture based on performance. It leads to customer satisfaction, which leads to profitability.
- Communication - Do not leave one-to-one discussions until annual reviews. Talk informally with staff members often and openly.
- Consistency - Provide consistent service all year. You can’t be good one month and bad the next.
- Staff selection - DO take your time in selecting key staff; DO check resume references; DO remember that past performance indicates future performance.
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With one-on-one, monthly informal chats between managers and staff have replaced formal performance reviews, which would normally occur every six months or annually. Either managers or employees can now quickly raise issues of concern. “We have opened up communication channels in the company,” Fitzsimons says.
The emphasis on better communication is reflected in how the company handles external queries from clients, potential customers or business contacts. Fitzsimons says: “With many companies, you get put on an answering machine. I can’t think of anything worse. It’s so impersonal. I will never put in voice mail at any company that I have anything to do with.”
Instyle has an effective IT strategy to streamline processes such as customer service and inventory control. Fitzsimons says one of the company’s best moves was to introduce bar coding in November 2001. Before bar coding, if a customer rang to check on a fabric’s availability or design specifications, customer service staff had to go to the warehouse for information. With bar coding, the query can be answered on the spot. And warehouse staff have been freed from having to do stock or colour checks.
Fitzsimons says another good move has been to combine the roles of key personnel. Instyle’s accountant doubles as the company’s operations manager, with the added responsibility of looking after IT matters. This means he has the authority to make changes in IT strategy as well as operational management.
When recruiting, Fitzsimons says Instyle often takes a long time to hire staff – particularly at the senior level: “You’ve got to dig past the CV. And you’ve got to make sure that the reference checking you do correlates with that CV. By asking the right questions, you can find out fairly quickly about the truth of what is on that resume.”
Instyle’s biggest external challenge remains the Federal Government’s decision to drop the furniture tariff to zero, resulting in far more imported furniture coming to Australia. This has hit Instyle’s bottom line: 2001-2002 turnover of $13 million was down about $200,000 on the previous year.
Fitzsimons says the company is searching for new growth areas and is expanding into leather upholstery. In July 2001, Instyle merged with its main competitor in that market, Contemporary Leathers. It runs the business under that name from its Alexandria headquarters. Fitzsimons says the venture is going well and the sales force is expanding.
Instyle has also decided to try exporting to the United States. In March 2002, the company opened a sales office in San Francisco. Instyle’s goal is for 40% of its business within the next five years to come from the US.