Countless entrepreneurs who have started off as one-man businesses face the same challenge – how to expand the business beyond their own input so that it can grow into an entity on its own. The answer is seldom easily found.
Real business growth requires structures that free up the managing director from the day-to-day operational running of the business, but that in turn requires solidly accountable, and therefore commensurately remunerated, staff.
If you’re in the services industry, there’s the question of how to ‘wean‘ clients who’ve come to expect the hands-on involvement of the business‘s founder in every aspect of the work. These are challenges with which Keri-Anne Clarke, founder of Kezi Communications, is very familiar. But they are also ones to which she has devised an innovative solution which is becoming a trendsetter in the world of communications.
Growing into the vision
“When I started Kezi Communications, we were chiefly a writing and publicity business, but the vision was always to grow into a full communications consultancy,” says Clarke, describing how the business initially grew slowly and organically, increasing the scope of its services as clients’ needs dictated. “But having said that,” she adds, “one of our key differentiators is the fact that we are small and personal. It’s something our clients value and we never wanted to lose it by becoming a really large consultancy.”
Having started the business alone, Clarke has always been an integral part of the face of the company and long-term clients have come to rely on and trust her input. “I was concerned about how they would react if the business suddenly changed and I was no longer interfacing with them.”
For these reasons, and because being cash liquid has always been a key driver, Clarke’s approach to growth has historically been conservative. But it’s a strategy that’s worked well for Kezi. In the five years since its inception, the company has three times been voted by FinWeek’s Ad Review as a Top 20 PR Company in South Africa in 2008, 2009 and 2010.
The challenge then was how to grow without being subsumed into a large existing business, without having to employ an expensive management team and without giving clients the jitters that too much change was on the way.
Taking the leap
“But in spite of my concerns and fears, I also knew that the business had so much potential and I really wanted to see it realise that,” Clarke adds.
Her solution lay in a business model that leveraged the strength of her existing team to expand the business’s offering. Dividing the company into four business units that would afford it growth opportunities in four key areas, Clarke offered staff members the opportunity to head these up.
This meant that all staff, barring an administrative core of four people, would swap their permanent positions for remuneration based on a percentage of the client’s retainer. The pool of writers and designers would continue to be outsourced to keep overheads down.
It’s an entrepreneurial and highly incentivised model. “Each account manager is wholly responsible for the clients and budget in their business unit. If they lose a client, they lose money personally, but if they work hard and grow their portfolio, their earnings will increase,” Clarke explains.
In spite of the risks associated with the change, Kezi staff jumped at the opportunity for greater responsibility and greater potential earning power, providing Clarke with an almost risk-free model for expansion.
“I think what people found attractive is the fact that they get to build their own small business, within the Kezi business. Some staff have already hired their own assistants to help them expand their unit. That’s not to say this kind of model works for everyone, but when people take to it, it does help the business to retain staff because it gives people flexibility, freedom and autonomy,” she says.
Managing the change
The growth shift has involved hard work; Clarke has invested heavily in change management, both for staff and for clients. “I undertook a road show towards the end of last year to explain to clients the change in how the business is structured.
There were some really positive spin-offs because long-standing clients hadn’t realised how many offerings we had, so what started out as a communication exercise ended in us signing on new business in some instances,” she says.
While the account managers are the key point of contact for clients, Clarke attended all meetings and ensured she was copied on all correspondence for the first three months following
A quarterly meeting with clients provides an important opportunity to assess how the model is working for them, while staff meet every Friday at a workshop to catch up. For Clarke herself, the biggest challenge has been letting go and learning to trust that things will run smoothly.
For a self-confessed A-type personality, she’s managing remarkably well. And as she points out, “The pay-off is that I can concentrate on bringing in new business. That’s when we’ll really start to see growth and take things up a level.”
Player: Keri-Anne Clarke
Contact: +27 11 616 1860, www.kezi.co.za