The ROI on Staying Profitable

Today’s economy is tough. Many companies are facing revenue shortfall, profit squeeze, cost cutting, reductions in force and layoffs as well as the resulting increased stress throughout the company. Many companies are incurring losses and this isn’t just in the financial and automobile industries.

Long ago Samuel Gompers, the first President of the American Federation of Labor said “The purpose of business is to make a profit.” We may modify that a little today with our social consciousness, but it is essentially correct. Profitability is essential.

What is the ROI on being profitable?

We generally look at it in terms of the financials. What is the financial return on the investment to stay profitable? It is commonly agreed that it is significant. It impacts the internal programs, initiatives, operations, staffing and spending. It impacts the external aspects as well, in the relationships with our suppliers and the financial institutions, for example.

Beyond the financial aspect , there is a large emotional impact. A profitable organization tends to have a positive outlook on the day and the future. Employee moral is much better. Spending plans are tight and crisp to insure that the company remains profitable. However, when a company crosses that critical line and slips into unprofitability, there can be a sloppiness in planning. What is the difference between losing $100K or $150K or even much worse in the millions. This is a very dangerous situation.

How do you avoid slipping below the profit/loss line?

Unfortunately we find that many companies continue to operate in the same way over and over despite the fact that it isn’t working. They do not take the needed actions to change their result. Or equally bad, they do drastic cost cutting without a clear plan or assessment of the impact on profitability. Across the board cuts always lead to under-supporting key projects in other departments where the funding has remained.

Warren Buffet said “I am amazed at the number of supposedly smart executives who think they have all the answers and yet continue to make the same mistakes. Learn from someone with experience.”


Is this speaking to you? Ask yourself these questions.
· Are we less profitable today than we were last year or the year before? If we are actually unprofitable, mark this with red!
· Are there bottlenecks in our operations for which we do not have a solution?
· Are we in the cost cutting mode that may shore up short term profitability but could cause a much more significant impact across our organization as we go forward?
· Are we working harder and our results are lower?
· Do we question if we have a plan that really works?

If you answered yes to any of these questions you should consider getting some expert help. Our recommendation based on years of working with many companies is to divert a small portion of the company’s spending and invest it in obtaining a better way for you to do business and to stay profitable. The ROI can be considerable.

Don’t keep doing the same thing. The definition of insanity is doing the same thing over and over again, but expecting a different outcome.

If you are still wondering about this, contact us. We have a simple starter plan and it’s free to you.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Time for a tune up for you and your company?

You're back from summer vacation. But do you really want to go back to business as usual? Did you find that you were working much longer hours and not achieving all the results that you had wanted? Our experience has been that when the economy becomes tight, companies benefit from an effectiveness check. Much like your car does when you take it in for a tune up to make those adjustments that keep it running right. This covers the basic analysis of what is and what is not working, resetting the processes and reviewing the use of your resources to help cut costs and increase the output they generate.

That's why we're offering you our Back-to-Work specials. Choose one from these packages.

1 Analyze and identify key challenges that impact your profitability with recommendations for how to deal with them effectively and to navigate the profitability maze.
2 Document a current workflow process of an area that is problematic such as being inefficient or producing inconsistent results. The outcome will be put into a flow diagram format which will allow for better clarity, understanding and discussion.
3 Discuss and develop a management action plan to ensure employees understand their role in reaching key goals and get the information they need to perform.

Book before October 15 and our team will conduct two half-day sessions on one of these packages for $4,500 (25% off the regular rate). We will take the time to review the findings and recommendations with you and may even help get you started on the upgrades.

If you are outside the San Francisco Bay Area, there may be additional travel expenses if required. For our International clients, we will find a way for this to be a cost effective offer for you.

To reserve a time or for additional information, contact us at john.maver@the4views.com.

Make this a great end to 2008. Let us help.

John

PS How does 4Views fit with Maver Management Group? In addition to serving our existing clients, The Maver Management Group has joined a team of senior consultants called 4Views. By employing a systemic approached based on Planning, People, Process and Profits — the 4Views — we are able to serve our clients even more thoroughly and produce actionable, measurable and sustainable results. We can help you navigate through the profitability maze.

Your Friends at 4Views,
Cathy Hammer, John Maver, Margery Mayer

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Your Competitive Advantage - Seth Godin

Seth Godin wrote “Your Competitive Advantage”on his blog earlier this week. It was so good and matches so well with what we at Maver Management Group promote with our clients that we decided to post it in its entirety.

People are fickle, but we're generally rational. When someone makes a choice (hiring, firing, choosing a vendor, buying a soda) they're using some sort of internal logic and reasoning to support that choice.

As a marketer, you win when they choose you.

So, why choose you?

The answer to that question is your competitive advantage. What makes it likely that more than a few rational people will consider their options and choose you or your company or your organization?

Truth: It's rarely a computerized cost/benefit analysis. Instead, it's a human choice.

When the factors that matter to me are processed through my worldview and compared against the options I'm aware of, I will choose you when your advantages are greater than the competition, provided I believe that you're worth the cost of switching.

Key points:
Matter to me: Not matter to you or to the next guy, but matter to me. That's all I care about. (Example: it might mean more to me that my friends use your product than it does that you're cheaper).
Worldview: Based on the way I see the world, the assumptions I make, the truth that I believe in. (Example: If I don't trust young people as a matter of course, I'm not likely to choose you if you're young, all other things being close).
Options I'm aware of: If I don't know about you, you don't exist.
Switching cost: The incumbent gets a huge advantage, especially in high cost/high risk/network effect instances.

Some of the ways you might build or maintain a competitive advantage:
* Access to hard-to-replicate Talent
* Hard-earned skills
* Higher productivity due to insight or organization allowing you to be cheaper
* Low cost of living for you and your staff allowing you to be cheaper
* Protected or secret technology or trade secrets
* Existing relationships (switching costs working in your favor)
* Virally organized product and organization
* Large network of users already and a network effect to support you
* Focus on speed
* Monopoly power and the willingness to use it
* Unique story that resonates with the worldview of your target audience
* Shelf space due to incumbency
* Large media budget
* Insight into worldview of prospects--making what they care about
* Emotional intelligence of your sales force or customer service people
* Access to capital and willingness to lose money to build share
* Connection to community

Not on this list, at least not prominently, are "we are #1!", "we are better!" and "we try harder." Cheerleading skills are not a competitive advantage in most settings. And, with few exceptions, neither is "we are new." Also, "we are better and I can prove it," is rarely a successful argument.

Here's what your board wants to know:
* What's your competitive advantage?
* Is it really, or are you dreaming it up?
* How long will it last?
* Can your competition copy it?
* Does it resonate with the part of the market that is looking to buy?
* Is the advantage big enough to overcome the switching cost?

Seth’s thoughts are very good. How does your company stack up on these ideas? Call us if we can help you define your competitive advantage and then drive it to increased profitability.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management