Monday, 5 October 2015

Digby Jones : The New Troubleshooter

Based on the documentary of Digby Jones: The New Troubleshooter, Digby Jones was seen helping out Hereford Furniture to their current situation which they made a loss of  £80,000 in the previous year's sales.  The main reason for Hereford Furniture's downfall was Mike Muxworthy, as the managing director, are doing three businesses at the same time.  The company was unable to cope with this challenge as the management was poor and disorganized as well as the company's accounts and cash flows.

As Hereford Furniture was looking at three businesses together, which was importing, retailing and manufacturing, it has made the company to lose its focus. And how Digby wanted to help them was to make them refocus on what Hereford Furniture is able to do, which was to focus only on one business.  In the video content, Mike said "why not?" to handling three businesses because he thought he could do it, which was wrong because I personally think it would make him lose attention at some point.  Because Hereford Furniture is a medium-sized company, its competition in the furniture industry is going to be definitely large and all the medium-sized company will find its way to go further, and if Hereford Furniture is unable to cope with so many ranges of business that they are doing, they will get to nowhere; therefore, making a loss in their revenue. That's why, to beat the foreign brands of furniture, companies like Hereford has to work harder to attract UK customers. However, after many discussions, Mike was willing to take advises that were given by sir Digby, which was to scale down their ranges of stock and only build for stock.

Another issue that was brought up in the documentary was Mike and the team were unable to provide proper accounts that Digby wanted to see.  Mike only assumed that by cutting down ranges of products, it would increase 40% of the stock but are unable to do the accounts that can prove it. Also, they are unable to show Digby a proof of financial implication because they do not have enough accounting resources in the company.  But as they move on, they realized that they need this financial implication to implement their project, whether or not this work can be done. The figures that they will be getting will be sufficient enough for them to work things out.

Also, the issue of communication between workers were shown in the workplace, and the employees were saying that this department does this and that department does that, but nobody was doing it as a whole, which I think it has made the workplace to be a little inefficient.  As Mike realizes this problem, the company has made a small activity among the employees to build a better relationship and to communicate between one another, to create a new stamp which could be a symbol of the new brand.  In my opinion, building a good relationship among employer and employees will definitely be a plus point for the company as they can communicate better instead of being inferior to their boss and being reluctant to voice out their opinion.

At the end of the documentary, it was shown that Mike has done all the necessary changes that was mentioned by Digby and it is good thing because I see that Mike is willing to let go his old methods of doing things to ensure a better future of this company and for the betterment of his employees.  

2 comments:

  1. Hi Vin,

    You seem to highlight the importance of the company not really having much faith in financial statements etc. do you think this affected at all the ability of the company to show shareholders the value of the expansion plans? How would you feel as an investor if the companies management displayed similar viewpoints towards cash flow forecasting etc. when you were assessing their future projects and expansion plans?

    - David

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    1. Hi David,

      Yes, it would definitely affect the value of the expansion plan because if the company do not have faith in their financial statements, we can't expect shareholders to have faith as well. If the company do not have confidence in providing clear financial statements of their plans, I personally don't think shareholders will have the confidence to invest in the company's new project as well. If I were to be a shareholder of the company, and if they are unable to provide a proper financial plan, I would not be able to evaluate the effectiveness and the performance of upcoming projects, and due to that, I would not be able to make an investment decision. Because this is a huge change in the company, with the inability to provide clear statements, I would most probably sell my shares.

      -Vin Yee

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