BSC Int CEO Magazine 2012 page 1
When CEO Andrew Lepan took over BSC five years ago, it was plagued by internal politics and self-destructive one-up-manship. Today, BSC’s cohesive culture has helped it overcome the Global Financial Crisis and expand its operations.
Andrew accepted the CEO position at BSC after working in various sales and marketing roles, and receiving a graduate diploma from the University of New South Wales. “It’s daunting and out of my comfort zone. When running a distribution company like ours we do not manufacture; we buy and distribute product. Therefore, sales and marketing are key elements in our business. Early on, though, I was able to understand that the logistics were just as important as sales. A lot of the systems and operations of the business had to be overhauled.”
A company-wide structural and cultural change has transformed BSC into a unified business that expects to double its revenue growth in the next three to four years. Andrew says it has been a lengthy process.
“BSC is a national organisation that had 36 branches when I took over. Each branch was like a little island; the state managers had their own profit and loss statements. It was very political and there was a lot of in-fighting. I walked into an environment that was not working from a head-office point of view and an individual branch perspective.”
This process involved replacing selected state managers and reorganising the management team.
“I brought in a couple of externally hired people that I had previously known. I was very conscious about making the initial structural changes early. Once we worked through that, it was about getting the team engaged and working together even the ones that were sitting on the fence. I had management-type retreats and used an external facilitator to help me. We now have a stable team at a senior management level, and we are working on funnelling that stability down into our branch network, which is very centralised,” explains Andrew.
Andrew visited every single BSC branch when he assumed the CEO role. “I wanted to make sure that I listened and followed through, even if I could not deliver everything that I was asked. I engage the store people and I shake their hand each time I visit a branch. I want to position myself as a figurehead who lives and breathes the values of BSC.”
BSC Int CEO Magazine 2012 page 2
“I engage the store people and I shake their hand each time I visit a branch, I want to position myself as a figurehead who lives and breathes the values of BSC.”
From these visits, Andrew implemented a range of measures to change the interaction between head office and the branches. One successful initiative is the sarcasm jar, which promotes open and positive communication. If a manager makes a sarcastic comment, they are expected to put a dollar in the sarcasm jar. Andrew says this has significantly improved relations between middle and senior managers as well as the branches.
“We are trying to change behaviour; we want people to trust the management in our organisation. Let’s not break that trust by embarrassing staff in front of their peers by cracking jokes about serious issues. I want people to be respected at all levels of our business.”
The establishment of a women’s organisation is another initiative that has received a great response from BSC employees.
“We are a male-dominated industry; we do not have enough ladies in our branch manager or senior roles. We hold specific information sessions for the women of our organisation and we encourage them to have careers beyond administration and supply functions. I am now looking at getting more females in sales roles,” states Andrew.
Andrew says the male employees also experienced changes. “I wanted an environment where the boys stopped dragging their knuckles on the ground and came out of the cave. We brought in an alcohol policy to address the drinking culture among the sales representatives. When people travel, we only allow four standard drinks. We ultimately wanted more professionals within our organisation. Even when we get together for Christmas parties, we do not have spirits. In order to encourage more ladies to come and work for us, we had to create an environment that was not dominated by a ‘boys club’ mentality.”
In recent years, BSC has consistently expanded. “We have 42 stores and have gained six stores over the last five years, and I will soon add another eight. The fact that the business is growing while we are experiencing a GFC and so much uncertainty demonstrates how we have got our act together,” says Andrew.”I am a very driven person; I want to get on with things and can be quite bombastic at times. It is about understanding your own limitations and strengths and surrounding yourself with people who complement them. A lot of my leadership development was shaped through learning how to manage myself. If you cannot manage yourself, how can you manage other people?”
According to Andrew, the key is to consider everybody’s opinion and decide how to address an issue as a group. “I try to involve as much peer decision making in the business as I can. If I just sat on top of this business and said, ‘We are going to do this and this’. it does not work as effectively as getting the whole team to say, ‘Yes, this is the way we are going to move forward’. Instead of one trying to reinforce the strategy of culture, we have a peer group, which is more effective at driving it.”
As Andrew fixed internal relationships, he also had to mend BSC’s external alliances with its suppliers. Following years of tough treatment from previous managers, many suppliers were disengaged.
“They needed to see a demonstration that proved we were serious in the business. The politics and dysfunctional culture was affecting our sales growth. Our profitability was down because the business was not growing. I approached all our key suppliers and laid out our strategy for the next four years.”
Andrew now has regular meetings with 15 of BSC’s key suppliers to discuss joint business plans and how they can all move forward together. Last year, Andrew visited Japan to help BSC’s suppliers who were affected by the devastating earthquakes. Andrew says suppliers are an investment – a marriage and not a one-night stand.
“When I joined the company we had only one engineer and four accountants. We had plenty of analysis on what was wrong with the business, but not a lot of innovation. We needed to come up with a point of differentiation a value proposition to our customers to turn our business around and increase sales.”
“In 2012, we have more sales and marketing people across the business, and one accountant. We also have 12 engineers, I have a support structure in each state that allows us to take a value proposition. As a result of having a strong point of differentiation, we have been winning a significant amount of contracts. Our suppliers have been pulled in, and their sales are growing with BSC even greater than some of their other distributors. They have a lot of trust in what we are doing.”
Over the past five years, Andrew has spearheaded a locus on differentiating the business and developing BSC’s value proposition. He says he will continue to focus on developing strong and healthy relationships, both internally and externally.
“We practically built these relationships from nothing. It is not about the revenue; it is about the relationships we are building with customers and the product pull-through. I want to solve problems, and by doing that we will sell parts.”
Approaching 50 years, the partnership between BSC and NSK Australia has seen many changes and has never been stronger than it is today. The strength of this partnership comes from the open and transparent working relationship experienced at all levels.
– Ian Rice, Managing Director, NSK Australia. Pty Ltd