Lessons from Procter & Gamble – The Next Step

What is your next step to drive profitability as you start 2015?  What worked last year and what will you continue?  What markets and customers will you pursue and what needs to be put in place to be successful?

 

 

What is your next step for the right plan that all in your company know and can follow?

As we have written in earlier articles, Procter & Gamble devotes considerable time and effort to creating the specific strategic plan for their overall business and under that plan for each of their business units and brands.

 

During these early weeks of 2015, P&G has a clear next step.  It is an in-depth review of their plans to insure that they still are on target and will achieve the required results.  This is very important work since it will direct corporate effort and resources.  Once the plan is vetted, they will move quickly to put it into action.  It is understood across the company, the roles and responsibilities of all.  The focus is clear and the next steps known.

 

How will they accomplish this work?  It involves top management and then as it cascades down, directors and managers.  It is facilitated by professionals with the experience to guide the required data collection and the subsequent reviews.  These professionals are required so that the executives can concentrate on developing the right plans.  Most companies do not have these skills on staff but hire experienced consultants to assist the company.  It provides a very positive ROI on the relatively small amount of funding required.

 

What are you doing?  If you need help in either creating the right plan to start or refining an existing plan and committing it to written form so that all can follow, please contact us.  We have a wealth of experience both at Procter & Gamble as well as with companies in a broad range of industries.

 

Thanks 

John Maver
Founder and Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Branding

 

 All companies and executives know about branding but many are not familiar with how to use it or how it can affect the bottom line.  Over the years P&G has become a master of this and has many multi-billion dollar brands as a result.  A strong branding strategy can increase the awareness of a company’s products in such a way that establishes strong feelings and reactions and a favorable view towards the company as a whole.  Successfully out-branding your competitors is a continuous battle for the hearts and minds of your customers.  The proposition your brand strategy makes must be very compelling, attractive and unique among competitive offerings.  Done correctly, branding is that extra margin that companies achieve over generics or even store brands.

 

Building on the inherent values of a brand should be the core of any branding strategy.  Winning brand strategies starts with top-notch research.  Your target customer will determine your success.  Research with consumers will identify needs and then it is up to your branding to make the fit of your offerings fill those needs.  Consistency is a key here, since all aspects of the branding must fit together.

Make it your mission to get as detailed information as possible on their age, gender, income, shopping habits (online and off) and anything else of relevance you can determine. If you’re targeting a business market, these criteria will differ, depending on the industry. Understanding your target market and what they want is key to developing a winning brand.

 
The research will lead to the brand promise.  It states the benefit of buying and using your company’s products or services.  A great deal of time and effort at Procter & Gamble is spent on finding the right promise and making it competitive so that it stands out in its industry or category.   They know that it must be specific because specific is exponentially more memorable.

Creating a positive emotional association in your market for your product or service is key. It can create want and desire by the mere mention of your brand, product or service name. Needless to say, that’s powerful. For instance, the mere mention of Tide detergent makes buyers think of clean clothes. 

To create a brand promise that creates such emotional connections, it should be:

1. Grounded in the brand’s core values.
2. Clearly relevant and engaging to your target market.
3. Able to create some sort of positive emotional attachment beyond just being “good”.
4. Adaptable to the business climate in terms of how the basic promise is presented although the promise itself does not change.
5. Continually reinforced and consistent across advertising and marketing.

 

It is clear that branding can make a significant difference in the success of a brand and a company.  Without intentional effort, unintentional positioning will occur and that can spell disaster.

 

The Moon & Stars team have had long experience and great success over the years with branding and have developed solid procedures to help clients.  We are happy to share these with you.

 

Thanks,

 John

John Maver
Founder and Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

Lessons from P&G – Favorite places to work

For many years, Procter & Gamble has been one of the favorite places to work.  It was renowned for its training.  The quality of the people and the quality of the CPG brands made it an ideal environment.  Last year world-wide there were more than two million applications for less than one thousand entry positions in Marketing.  Many other CPG companies tried to duplicate the P&G culture, including Clorox an ex-P&G company here in the Bay Area.

There are many CPG companies of varying sizes here in the Bay Area.  However, based on a survey done by “The Business Times” they are not appearing as favored places to work.

Here is the summary of the survey by industry.

The criteria for this survey were:

·       Trust top execs (honest, capable of leading the organization to prosper, integrity in dealing with all stakeholders)

·       Trust other employees (loyalty to each other, camaraderie and teamwork, integrity)

·       Longevity (Employee length of service, invite friends to apply)

·       Satisfaction with what the employee does each day (feeling challenged and engaged, feeling positive about the company and the other employees)

·       Feeling Valued (talents noticed and cultivated, seen as essential contributors)

Having spent several decades at P&G and been at the Executive level and now consulting in the Bay Area, the differences for CPG are obvious.  Most of the larger ranked companies value training and work environment.  They take advantage of senior management and have them serve as teachers and mentors to the more junior managers.  With the significant cost of replacing and recruiting talent, providing this development support is not only prudent but very cost effective.

You may know that P&G has a strong promote from within policy and therefore the impetus was on each layer of management to develop those below them since they will be associated with them and their abilities for years to come.  Their personal performance was going to be influenced by the productivity and expertise of those who report to them.

But in the Bay Area, given the exigencies of business and the heavy workloads being carried by senior management, from where should this expertise come in companies who are not a promote from within?  The obvious answer is to take advantage of either consulting senior executives who have the experience or bring in on a temporary basis retired executives from other companies.  Both are going to have significant cost benefits and higher overall productivity.  

As you can see from the chart, most of the companies are in industries that have strong startup or growth phases.  The founders are in constant contact with the employees. This helps support the favorite company status.  For those other industries like CPG, the message is clear.  If you want the top performers and you want to keep them, provide the mentoring and development support.

Thanks

John 

John Maver
Founder and Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Downsizing, Rightsizing, RIFs

Most companies have been faced with the need to cut costs over the past several years and many people and jobs have been eliminated from the workforce. You will note that we have the highest level of unemployment as one of the impacts. The personnel reductions have come under the heading of downsizing, rightsizing or just reductions in force (RIFs). The net result in addition to lower costs is a substantial change in the way that companies have to operate.

At the same time, technology has made tremendous progress and we now have available significant capabilities that never existed before. The idea has been that companies can do much more with much less. Believe it or not, when the first computers were being introduced, there was an expectation that the work week would shrink to less than a day a week. Computers would do the rest. You know personally from your now extended work weeks that this was not the case and was, at best, a wild dream. And yet companies expected that technology could overcome the impact of the lost personnel.

Procter & Gamble is no exception. In 1993, well before this became common practice, P&G undertook a worldwide cut back in personnel under the heading of strengthening global effectiveness. SGE was designed to streamline work processes, drive out non value-added costs, eliminate duplication and speed productivity through a leaner organization. Initially, it was directed at the manufacturing operations but the idea quickly spread to the rest of the company. Up to 10,000 people/jobs were eliminated. The objective, just as it has been the objective of most companies, was same or greater productivity with less cost.

Unfortunately, that hasn’t happened. It didn’t happen at P&G and it isn’t happening with many other companies. Certainly, some aspects worked as expected. But in many cases, the people and jobs were eliminated, yet the work required remained.

This did produce a short term profit bump after the reorganization costs were passed through as a “one time hit” to earnings. However, as Stephen Covey outlined in his book the 7 Habits of Effective People, the golden goose was maimed if not killed outright. The reductions in force often targeted the higher salaried, longer term employees. Companies lost years of very valuable experience and expertise. As a result many companies faced substantial redesign, slower process, business and profit losses.

What made it worse for many companies is that the personnel reductions came on a “chain saw” basis and not a “surgical” basis. This means that cuts were made across the board. The result was reductions in one department greatly affected what was left in other departments or functions, to the detriment of the business. This has led to renewed needs for reorganizations and then further rightsizing. In fact, that is exactly what has happened at Procter. They have had several full company reorganization plans. They have offered several waves of early retirement and outplacement packages to employees around the globe.

What’s the lesson? Clearly it is taking the long view. It is an in depth understanding of what is really required to operate profitably and then providing the technology and human resources required to deliver the objectives. Short term solutions just don’t work. Second, it means focus. It means being choiceful on what activities are really required to operate profitably and to achieve the corporate goals. Other activities that are just nice to do, have to be eliminated. Finally, it is deciding on what data is required to operate. Most companies are buried under an overload of information. Layers of the organization are employed to develop the data, analyze it and interpret it and then try to find meaningful actionable conclusions. The loss of the experience and expertise caused by the cuts has led to much of this wheel spinning over-analysis.

If your company is experiencing “sludge” in your operations and slower speed to market, you might consider relooking at some of the experience that was cut out in the rightsizing. Interestingly, many companies are hiring back ex-employees as consultants at a higher cost to do the same job that they originally did.

Since we have had experience both at Procter & Gamble with SGE and similar programs at other companies, we can help you. Just contact us.

Thanks,

John

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

Turnaround Management – Tips that work

Is your company in a “turnaround” condition? The common definition of a turnaround is very broad. It is basically about improving performance from one state to a better one. Being in this situation can cover more than just those companies that are about to go under. It can also be companies that have great opportunities for growth ahead of them, but need to change the way they do business in order to capitalize on them. While there are common lessons that apply to all, in this article we will focus on turnarounds from a negative position.

In the recent economic climate, we have become accustomed to companies struggling, with many going out of business. They haven’t been able to control their costs effectively or create the sources of revenue that will sustain the company. The majority of respected surveys put the success rate of turnarounds in these situations at between 20% and 35%, depending on the definition of under-performance and success. Those with turnaround experience know that turnaround situations are usually highly stressful and, if unsuccessful, very poorly rewarded.

Yet, they offer some excellent insights on what is important for a new CEO to consider. Clearly, there are factors that are unique to certain situations but in general these seven factors have led to success in most turnaround situations for troubled companies. For those companies who are not in turnaround mode but need business acceleration, there are some gold nuggets in here too.

1. Identify the real problem.
There are two generic reasons. Either something major went wrong for a short time, usually loss of a dominant customer or a dramatic market change; or something minor went wrong for a long time, usually poor understanding of customer or product profitability, that led to misguided allocation of capital and resources. Given the economic climate, it is tempting to blame market changes when things go wrong. That may also be true. What matters is the need to establish what went wrong and fix it.

2. Take control of time.
Senior teams, and particularly new CEOs, experience relentless demands on their time from all stakeholder groups from the Board, down through the banks, suppliers and customers. At the same time, management is constantly harried by a series of apparently urgent tasks, each of which is critical in its own way. The CEO needs to create breathing space for actually working on the business operation as a whole. While there are the fires to fight, there is also a necessity to protect the time that they and their team need to think, understand the problems in the business, formulate the plan, and implement it.

3. Get the finances under control.
Creating a bottom-up budget and making the team accountable for every part of income and spending. In addition to problems of solvency and profitability, most companies in turnaround situations have issues with liquidity. Whereas profitability can be addressed internally by sensible planning and performance management, liquidity usually requires external support from financiers, ranging from payment holidays through to cash injections. Sources will need to be reassured that there exists a viable business both in the short and mid-term, and that they are not throwing good money after bad. This liquidity brings breathing space that allows management to make calm, rational decisions that support long term survival and profitability.

4. Make promises you know you can keep.
In a turnaround situation, all of the stakeholders are concerned: employees, shareholders, banks, creditors, business partners, customers and suppliers. Increasing their confidence is critical to making any progress. Management has to be proactive and make a series of promises, which it knows it can keep. Hitting these checkpoints is the most effective tool management has to build its credibility.

5. Upgrade the executive team.
New plans almost always require a new team that is committed and able to execute the plan. Seldom is there a dramatic change in the fortunes of a company without a corresponding change in the senior team. This means at least two or three changes in senior personnel and that started with the change in CEO. It should be done quickly and bringing in senior consultants with specific experience is an excellent short term aid.

6. Simplify
Complexity is a double-edged sword in turnarounds. Companies often get into trouble when they take on too much and when they are in trouble they try extra benefits to get out of what they are doing. When resources and time are constrained, the business needs to concentrate on doing a small number of things well. This can mean reducing product lines, cutting or selling business units, outsourcing business processes or numerous other simplifications depending on the situation. The process of simplification needs to go far enough to give the remaining activities the focus of management time and investment required to do them well.

As you are reading this article, you might think that all of these tips are common sense and relatively obvious. However, all of them are also easy to dismiss, overlook or delay. DON”T!!

Let us know how we can assist you. We have experience across a broad range of industries and turnaround situations.

Thanks,

John

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

Time for a tune up for you and your company?

It’s almost Spring and the economy is just starting to blossom. But is your business ready to blossom and grow into full bloom? Do you really want to continue business as usual? Can you or your company afford business as usual? Are you finding that you are working much longer hours and not achieving all the results that you had wanted?





Our experience has been that after 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 Spring time specials. Choose one from these packages.

• Analyze and identify key challenges that impact your profitability with recommendations for how to deal with them effectively and to navigate the profitability maze.
• Review and upgrade the branding opportunities for your company and your products to increase customer appeal and profitability.
• Review your marketing programs and recommend implementation upgrades that make the plans more effective.
• 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 April 15 and we will conduct two half-day sessions on one of these packages for $3,500 (30% 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.

To reserve a time or for additional information, contact us

Spring ahead this year. Let us help.

John

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

The 12 Days of Strategic Planning Questions

“The 12 Days of Christmas” is a Christmas song that chronicles a series of gifts that are given just prior to Christmas. These are wonderful gifts on their own, but when taken together can be overwhelming. Think of all those animals and people.

Conversely, this article is a series of gifts for you, that on their own are valuable but taken together can really jump start your business progress. December is the month for final revisions to the strategic planning for companies that operate on a calendar year basis. Yes, we have recommended that it be done more frequently, at least every 6 months, but as a start, once a year. Here are 12 questions to ask about the plan you are creating - one for each of the 12 days of Christmas, so to speak. Despite appearances, since the questions are simple, the answers are not. They need study and reflection and of course action as you put them into your plan. Enjoy a new one each day.

1. Are you making your numbers now? If not, why not?

2. How has your target market changed in this past year? What are the key challenges that face your customers?

3. How well do your offerings solve the needs of your customers? What do your customers say?

4. What was the greatest success of your organization this past year? Does your plan provide for making this repeatable?

5. What was the greatest stress on your organization? How have you corrected this and set up processes that can operate without causing this stress?

6. If you were to evaluate your people, who would be in the top 10%? What are you doing to increase their impact on the organization and prevent turnover with them?

7. Given the significant talent pool that is currently unemployed, who are the 20 % of your organization that are least effective and how can you upgrade from the pool? This needs to be done surgically, rather than with a general cut.

8. What bottleneck is causing increased costs? As the economy improves and sales rise, how will you keep up with the new production requirements cost effectively?

9. How are you capitalizing on social media to increase your business?

10. What metrics are critical to monitoring the success of your plans? How are you measuring them and what are you doing to keep them in range?

11. What three things will you initiate that will make a significant difference to the results this next year? How do they leverage your and your company’s core competencies?

12. Do you actually have a written business plan that has been shared throughout the company?

Ask and answer these questions and you will have a better plan. Contact us if we can help.

Thanks and Merry Christmas

John

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

Peace of mind

How is your piece of mind these days?

The pace of business is getting faster and faster. Customers and clients are becoming more demanding and lead times are getting shorter and shorter. Unfortunately payments are stretching out which causes financial stress to many companies. This financial stress is compounded by the business increases and the inventory and accounts receivable builds that go along with it. Cash flow is under pressure. Priorities are shifting and today’s top project may be gone tomorrow. The cutbacks in personnel have caused process problems and often times those employees who remain are handling multiple responsibilities, some of which are outside their personal core competencies.

Are you experiencing any or all of this in your company?

It can make you feel like you are out of control. We have written often about the importance of a written business plan that identifies for the company and all of the employees the direction you want to go and how you expect to get there. Having this game plan significantly reduces the stress. While it may not solve all of the pressures outlined above, it can put you more in control and that changes the entire outlook for you and the business.

You do have a written business plan, right???

How is it working for you? If you are having problems, perhaps either you have the wrong plan or it requires a tune up. Let us know if we can assist you in this.

A related question is, what do you have as your “security blanket”. As I watch our children over the years and our grandchildren today, I realize that all of them have a “security blanket” of some form. It can actually be a blanket or a stuffed animal or something comforting. But they all have one. They turn to it to reduce stress and give them peace of mind.

You may be asking yourself, “What does this have to do with me? I am a mature adult and I have no need for something this childlike.” In part, you are correct. You probably don’t want a real blanket or stuffed animal. But you do need something or someone toward which you can turn to help ease the stress and provide peace of mind. Take a look at pro athletes. They all have personal coaches, attitude coaches, motivators etc.

Most senior executives do not have anything like a “security blanket” and would never admit that they needed one. However, we encourage you to reflect on that issue for a moment. When times are stressful or you are having difficulty working through thorny issues with the business or an employee, to whom can you turn for help? You can’t go to your subordinates. They would sense weakness and really just want solutions not problems. You can’t go to the Board or to your boss. They too want solutions. After all, that’s for what they hired you. Spouses are loving but generally not involved enough in the business or its intricacies to provide unbiased help.

So to whom can you turn?

We recommend, hiring on retainer a senior, experienced professional who has been where you are and can provide solid, unbiased feedback, guidance, motivation and even training to you. This person can serve as a sounding board to let you explore alternatives as you work through challenges and opportunities. This trusted advisor, who keeps all of your interactions confidential, can be your “security blanket”.

You may not think this idea would work for you. Let me suggest that you take a look at some children and see how relaxed they are when they have their security blanket. What are you missing?

Contact us if we can be of assistance. We have been providing “security blankets” for many clients for years.

Thanks

John

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

The New Business Model – More Support

Recently, I wrote about a new business model that can accelerate business progress and is also extremely cost effective. This is the link to the article: The Cost Effective Way to Drive Business. Essentially, it makes use of experienced consultants who do the strategic and planning work, capitalizing on their knowledge, supported by lower level workers who are responsible for the execution of the tasks.

There are a number of staffing companies starting to provide this service of experienced consultants. Executive recruiters, for example, are finding short term opportunities for the talent in their data bases to the benefit of their clients, the candidates and of course themselves. This capitalizes on the new economy where companies are reluctant to commit to larger personnel expenditures or realize that there are significant unproductive periods in the executive week. This trend is spreading with other staffing companies offering the service of C level consultants on a short term or part time basis.

As a CEO or President you might consider this model and make use of the significant talent pool that is available to you at a relatively low cost. The great news is that you can test the model out in your business with no downside, as you can terminate it immediately in the unlikely event it doesn’t pay out.

To be clear, I am not recommending the use of large consulting firms for this model like McKinsey or Bain. No! Rather I am recommending experienced single or partnerships of very experienced executives who have the specific talents and track records required for your particular situation. You don’t want to trade one set of substantial overhead internally for another externally, all which impact your bottom line. Get lean and hire lean.

You may perceive this to be a very biased point of view since the Maver Management Group is a successful consulting company to C level individuals. While there is definitely a benefit to us from this model, it also reflects my long experience at the executive level with very large established companies, Procter & Gamble and Clorox, who operate with extensive executive staffs and generally promote from within. I have seen both sides of this opportunity. Hence, I am recommending it to my clients, whether they are well established or in the start up mode.

Please contact us if we can help you either create the plans for your company or set this model in operation to accelerate your business.

Thanks

John

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

Ten reasons to use Consultants in the New Business Model

We have been writing about a new business model for companies. One that is based on the use of specific experienced consultants, used in short bursts for the strategic development and program creation of all aspects for companies’ business. It uses lower level employees for the execution. There are a number of benefits for companies from using this model if they capitalize on the experience of knowledgeable consultants who also have low overheads and are therefore cost efficient. Not the large multilayered, high overhead consulting firms.

Here are 10 reasons to use consultants in this model:

1. Knowledge. Companies can select a consultant with the specific knowledge to address a particular challenge or opportunity and not be burdened by having to force fit an existing executive with some of the required knowledge into the position. You can get exactly what is needed when its needed.

2. Experience. While closely related to knowledge, this reason reflects the consultant’s success in applying the knowledge to a problem like yours from other companies. In effect this is a “test market” for you and a proof of claim for the expected result.

3. Bandwidth. In many instances you or someone else on your staff may have the experience and knowledge required, but in today’s cost driven economy there just isn’t the bandwidth. You are too busy with other tasks and are weighed down with administrative tasks as well. The consultant in this model gives you that short term bandwidth required to capitalize on the opportunity now.

4. Cost effectiveness. You only pay for what you need. This isn’t a long term commitment nor should it fill up full weeks at a time. Structured properly, you download the expertise quickly and pay for only that time. In the historical model, you would have the executive on a full time basis and during those less productive times, the hourly cost is high. It is also clear that executives want to be working on something and as a result, they start additional projects which require staffing and resources and added expense.

5. New ideas. There is a significant advantage to having worked successfully in multiple industries. One experiences different ways of doing business, many of which are applicable to the new client’s business. These fresh ideas have been screened for success through the experiences in the other industries. The ideas have an established track record which makes their potential impact much greater for you.

6. Creativity. Pick a consultant that has fresh ideas and knows how to adapt them for implementation in your industry. Creativity is not measured in business by the uniqueness of a thought. It is measured by the impact of a different idea on your business in the market place. Consultants who are able to apply learning creatively from one industry to another are gems.

7. Productivity. This is closely tied to cost effectiveness. In this model, you are able to substantially reduce the down time of meetings, time filling and information seeking. You also have the higher expense person working on the thinking portion and not on the hands on execution portion that can be handled by lower cost personnel. The productive time you wish you had for the higher level thinking is exactly what you should be getting in this model.

8. Flexibility. Hire the specific talents you need at any one time. Use them for exactly the length of time you need and then finish the assignment. If you think you will need more help in the future from them, offer a small retainer. You are not burdened with the challenge of deciding what severance to provide or how to remove an employee who may not have the specific skills required for a particular job.

9. Openness. Since the consultants don’t have to rely upon you alone for long term remuneration and livelihood, they will be more open and honest about the potential risks and rewards of the various projects and initiatives. They also recognize that their future with you is going to be based on success, not longevity and so they have to bring their “A” game every day and that causes openness.

10. Connections. Consultants who focus on specific business areas have established productive relationships and connections with other professionals who provide different services and expertise. They can recommend talent to you for these other areas. Once again, their reputation with you is on the line so you can be assured that you will get higher level talent recommended to you through these connections.

We expect that there are many other benefits as well to using this model. Contact us and let us share our thoughts on this and the applicability to your business. It will be well worth the hour you spend with us.

Thanks,

John

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

What Consultant’s Clients can learn from the airline industry?

A USA TODAY analysis of 2005-2010 government and consumer survey data, which ranked the airlines, had some simple conclusions. The winning airlines, Jet Blue and Southwest make it easy to fly, despite their low prices. They don’t charge extra for bags, phone bookings or changing flights. Boarding is organized and stress free. The airline personnel most often have the authority to make simple changes that solve most problems for the traveler. Importantly, these folks are upbeat and make flying fun.

As a client in any industry, you might want the same attributes from your consultants
• Expertise – both technical and in practice
• Ease of use and hassle free
• Low but value pricing
• No hidden or extra charges
• Simple operation and stress free
• Authority to make changes as required and not have wait for higher authority
• Consultants who are upbeat and make the work pleasurable.

Is that what you are getting now?

Of course if you are now using consultants at al,l you don’t get the benefit of their expertise or the business acceleration they can provide.

The larger older airlines are struggling with their own profitability and yet don’t get the message about what passengers want. This is not unlike many larger consulting firms. Their process is arduous from initial contact through to delivery. In the consultants’ case the deliverable is generally a thick report that will go on the shelf. Junior people do much of the work but don’t have the experience or the authority to make simple changes as they go. There are extra fees charges for add on projects to the basic proposal. So while these consulting firms may have the reputation like the large traditional airlines, they just don’t meet the needs of many of their clients. But they continue to be the “safe” choice.

It strikes us that the right way to go is for a company to hire a consulting company that has both the expertise and the ability to understand the needs of the client and deliver directly against those needs. The consultant can cut away much of the extraneous clutter in the proposal and focus on what needs to happen to deliver the result. Having consultants that have been line managers with previous bottom line responsibilities vs staff who have been trained only to serve others is the right way to go. These consultants can get to the core issues quickly and develop the plans to resolve them.

This is exactly what happens with the winning airlines. Next time you are looking for consulting help to provide either the expertise or the bandwidth needed to reach your goals, recall the winning airlines and apply their learning to your business.

Contact us if we can assist you in any way. We would be happy to provide a “boarding pass.”

Thanks

John

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

The Cost Effective Way to Drive Business Success

How do you get the expertise required to drive to your business goals and still be able to keep costs under control?

The Problem
Companies both large and small have tried a variety of methods and models and have had limited success. Training and developing the expertise is expensive, resource consuming and takes a long time to germinate results. Hiring from the outside is risky since what you see on resumes and in interviews is not always what you get. Additionally, there is the added expense of recruiting and then once the hire is made, knowing that more than half will turn out to not fit well for very long.

The Solution
A better model for today’s economy is one that takes advantage of the services and talents that are readily available and does so in a cost effective manner. Our experience has been that the staffing model for today is a mixture of consultants and in-house talent. Having been personally involved with this model and its success with a number of companies, as well as participated with the other models, we know it works!

The Need
Expertise is required to quickly identify the opportunities and develop the plans required to reach the goals. It is also required to oversee the execution of those plans, since strategy and execution cannot be separated. Hiring this expertise as part of your company’s ongoing staffing can be cost prohibitive for small to medium sized companies and difficult to assimilate for larger companies. The requirement is for the brain power, not the administrative, paperwork and supervisory capabilities. Yet, for management employees, most of their days are spent on tasks other than creating.

Concurrently, there is also a need for the legwork and the administrative talent that will actually execute the plans and make certain that all the details are followed and completed in a timely manner. This is best achieved through in-house talent familiar with the organization with productive relationships to make it happen smoothly and quickly. This talent is not quite as specific as the expertise talent and from a cost standpoint can be quite reasonable.

How it works
The plan would be to put several high powered consultants, NOT consulting firms, but specific consultants on retainer, so that they can help you directly create and then oversee from a distance the strategies, plans, programs and execution. The actual labor of putting the plans into the market would be done by the in-house staffing.

In today’s marketplace, senior level expertise can be found in every function and is readily available. So, too, is the basic labor that is required.

The Benefits
A sample cost comparison might be:
Complete staffing in house
Senior executives (2) – Compensation, benefits, overhead, expenses etc –
annual cost $375K
Lower level management (2) - Compensation, benefits, overhead, expenses etc –
annual cost $125K
Total $500K

Recommended Model
Senior executives (2) - 2 days per month each –
annual cost $120K
Lower level management (2) - Compensation, benefits, overhead, expenses etc –
annual cost $125K
Total $245K

In addition to the significant cost savings, there are several other benefits. The consultants should bring fresh ideas with experience from multiple other companies. This can provide competitive advantage vs other companies in your industry. There is also no severance when projects are completed or alternative talents are required and flexibility in usage of time required.

An added benefit is that the company can get exactly the expertise and fit needed at any time and require existing management to take on tasks that are not squarely in their sweet spot. We all know how ineffective and expensive that can be.

Think about it. Doesn’t this model make more sense and not just because the Maver Management Group are consultants? Aren’t the benefits apparent for your company? Doesn’t this expand your capabilities and bandwidth most cost effectively?

Contact us if we can help get you started. We have the experience.

Thanks

John


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

Is Strategic Planning Necessary?

"My business is small to medium in terms of revenue and staffing but has the opportunity to be much larger. Do I really need to develop a full strategic business plan?"

The best response to this question is, "Only if you want to stay in business and prosper." Consider the following reasons for strategic planning.

Competition is becoming tougher. In most cases, businesses your size find themselves competing with much larger companies, ones that know the benefits of strategic planning and practice it. From a defensive standpoint, it is important that you apply the same concepts to your operation.

Good financial control alone is not enough to ensure your business's success. In addition to a budget, you need long-term goals and plans to determine the future direction of your company.

Technology and the fast pace of change are making business management more complex. Strategic planning will help you foresee and react quickly to market changes and opportunities and identify areas in which your business is lagging behind.

You can use strategic planning to involve employees in all areas of your business, so they share your goals.

You can use your plan to communicate with bankers, who often do not understand the nature of your business. Bankers must be convinced that your company is in control of its future before they will lay their money on the line. A comprehensive plan, aimed at sustained growth in sales and earnings, can be very convincing.

As we work with our clients we have found that sound strategic planning provides the following benefits:

• Provides strategic direction to the entire company.

• Translates corporate objectives into actionable plans.

• Causes alignment, prioritization and focus.

• Allows clear simple communication throughout the organization.

• Provides resource optimization.

• Assigns responsibilities and timelines.

• Enables forecasting of revenues and expenses.

And most importantly, it DRIVES RESULTS.

Contact us if we can help.

Thanks,

John


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

Seven Significant Factors in Business Turnaround

The global economic crisis has many companies still feeling the pinch. The Maver Management Group has worked with a number of clients and helped them turn around their business situation. We have also seen and reviewed other companies that continue to struggle. There are some common factors that differentiate the successful from the non successful other than the fact that one set has worked with us.

Seven of the most important elements are:
1. Ability to prove business viability. Your business plan must outline clearly the expectations and how you will specifically deliver those expectations.
2. Ability to manage key stakeholders. Once you have the plan that proves viability, you must be able to communicate it clearly and persuasively to all stakeholders.
3. Management credibility. A key element of instilling confidence in the plans is the credibility of the management group. It all starts with the top group. If they can’t generate respect and confidence, the plans will never happen.
4. Business reputation. Positive branding not only brings higher margins, it also contributes to the selling of the company’s viability and the products to the clients and customers. And to the Board, the banks and the suppliers!
5. Maintaining supplier credit. As businesses restart their growth, they require inventory build and funding in advance of the revenue they generate. You need to utilize the credit and payment terms with suppliers to generate the float.
6. Securing internal and external funding. Companies must have the funding required to support the business building initiatives. Without the funding plans, progress will stall.
7. Quality of the people. All progress eventually traces back to the people. Companies with the best people tend to rise to the top. Assess your people and make sure that the top ones are in the most critical positions. They will make the turnaround happen.

Some businesses are unsure whether they need assistance in turnaround management. Others find their company’s problems too hard to face and leave it too late, which often ends in insolvency. So how do you know when to call for help? The key warning signs to call in a turnaround management specialist are:
• If you continue to experience a substantial decline in sales and/or margins or have lost a major customer
• If you are struggling to refinance, raise additional capital or are likely to breach your banking covenants
• If cash flow is becoming harder to manage and creditor pressure is building
• If you are experiencing an increase in turnover at the senior management level

If you have any of these elements, you need turnaround help. You are not going to be able to do it yourself. Generally, companies in this situation have neither the expertise nor the bandwidth to be successful in turning the business around.

Contact us. The Maver Management Group can help.

Thanks,

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

Business Tips for Successfully Coming out of the Recession

We are finally seeing signs that we are coming out of the recession. Consumer confidence is turning around and companies have generally reached the bottom of their layoffs and resizing. Too many are still in the cost cutting mode and will struggle for some time, if indeed they make it at all. Others are planning on what they should be doing to fully take advantage of the recovery.

Maver Management Group has been working with a number of companies to assist them in their survival and turnaround and they are now positioned for growth. Based on our experience and the lists we have reviewed from various sources, we offer the following to you for successfully coming out of the recession,

1. Review Your Strategic Plan. Make certain that it is relevant for today. Examine your objectives and goals and then insure that the strategies you will follow will deliver those desired results. Importantly, make certain that the resources you have will support the strategies and are focused so that you get maximum impact from each.

2. Identify and Maintain Your Strengths. Identify the strengths that have driven your success to date and those that will be important in the future. Which capabilities and skills are most critical? What distinguishes your ability to serve customers most effectively? Focus on these and invest in them heavily.

3. Identify Your Best Customers. This doesn’t mean your largest customers necessarily, but your best customers. Identify your highest-margin customers, and understand what you are "doing right" for them. Develop a game plan to protect and build on the strengths that have allowed you to be indispensable to these customers. Rather than cutting costs across the board, think about how you can shift resources to retain these high-margin customers, and attract more customers like them.

4. Capture Market Share. Recessions reshape industries faster than good times, creating opportunities for those with the vision and ability to seize them quickly. Studies have shown that companies have twice the opportunity to change their relative position in an industry during a recession, compared to growth times. Keep an eye on competitors, and stand ready to capture market share as other players allow cost cutting to damage their service and quality or fail outright.

5. Manage Cash Flow. Your company has been dealing not only with negative growth but also with liquidity constraints. During good times you may not have obtained sufficient lines of credit to sustain your company through economic adversity. Trying to maintain liquidity on a smaller revenue base can be crippling. Your cash flow has been positively affected by reduced Accounts Receivables and lower inventory from the lower volume of products being sold. Now you will need to plan for increases in both probably at a rate in advance of your revenue growth. Build on the new processes that you have put in place during the downturn so that you keep inventories tight and maintain faster collections of AR.

6. Keep Core Activities In-House, and Outsource Everything Else. Build and protect those "core" capabilities that differentiate you, while aggressively outsourcing anything non-core. Depending on your business, non-core activities may include IT maintenance, human resources administration, benefits and payroll, accounts receivable and payable, manufacturing, distribution or sales. You'll get the benefit of service provider expertise and economies of scale and will pay only for services you need. The biggest benefit of outsourcing, however, is that it shifts your focus, resources and capital toward serving your clients' higher value needs and building your competitive advantage.

7. Create New Metrics and Manage by Them. Tight economics put a premium on your ability to understand the relationships between revenues, costs and margins. Think about metrics that focus on the building blocks of revenue and sustaining market share, including sales pipeline, customer satisfaction, pricing and market penetration. Metrics should look beyond core financials to provide management with insight into market dynamics, such as market share trends.

8. Communicate and Reenergize. The recession has been a time of turmoil for all of the company stakeholders. You now need to begin the process of re-energizing your employees and creating new trust among all your constituencies. Frequent and honest communication will go a long way toward maintaining a calm and motivated workforce. Studies show that employees are motivated far more by a sense of shared purpose than by compensation. Create that shared purpose and reinforce it daily.

The changing economic climate has created many opportunities. It has also created many potential pitfalls. Contact us, if we can help guide you to success in capitalizing on the opportunities and avoiding the pitfalls.

Thanks

John

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

Company turnaround before it’s too late

Maver Management Group works with many companies and senior executives. As a result we see first hand how companies have responded to the recession and the early signs of recovery. Many companies have failed. Some were so poorly run that failure was inevitable despite the economy. However, a significant number could have been saved if they had sought the right help early enough.

As turnaround experts, we do not just work with businesses in trouble. Many clients seek our advice for general profit improvement. Companies must be willing to admit they need help. The earlier we get engaged, the more options we have to improve the business.

The key is to critically assess the troubled entity’s business plan and review profit and loss to determine the causes of underperformance, such as rising production costs, loss of customers or increased competition. In some cases, it is simply the lack of a business plan at all. The work focuses around improving cash flow, stabilizing operations, communicating with key stakeholders to re-build their support, exploring all strategic options and developing a comprehensive turnaround strategy.

While the ways companies can get into trouble are many, there are common themes:
•Not having a solid business plan
•Not having the right management team depth of skill
•Overly focusing on across the board cost cutting
•Attempting to grow revenue without considering the impact on margins and profit
•Not having the right systems and controls in place to manage their working capital
•Not having specific measurements that track key business results or reviewing financial and operational performance regularly

The following is a summary of the 6 essential elements required in our view to achieve a successful turnaround:
1. The ability to prove business viability by demonstrating the various initiatives that will restore earnings and cash flow. Cash flow is key.
2. The ability to manage “all” key stakeholders and keep them all moving in the right direction. This can’t be done without a strong strategic business plan.
3. Strong and credible management, which might mean making certain replacements.
4. An ability to maintain or enhance the reputation of the business. Branding is critical.
5. An ability to maintain supplier credit and terms. This drives quality and cash flow.
6. An ability to release internal working capital and secure external funding. Without the funding, there can be no growth initiatives.

Turnaround management requires expertise. If you need help with any of the above items, contact us. We can turn your business around and help it thrive.

Thanks

John

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

Stop Cost Cutting and Start Building Your Business

The recession, financial crisis, turmoil in consumer confidence, credit restrictions and a host of other factors have caused companies, all companies, to review their use of their resources, both human capital and financial. Some companies didn’t make it and are out of business and some of these are major corporations, not just the little guys. Many companies have been forced to restructure completely. You and I, the US tax payers, own some large financial institutions. All companies have cut back on expenditures, many to the detriment of their future.

Faced with rising expenses, companies often focus on cost cutting initiatives. Companies dealt with this issue as their business models became more complex, and operations weren't experiencing any efficiency gains. But as many cut costs, profits suffered because of service and reliability issues. Customers became dissatisfied, with some even pulling their business altogether.

It is now time to stop cost cutting and to start building your business. The economy is starting to turn and you have to be ready to capitalize on it or once again you will be faced with the “Out of Business” sign on your door as your competition enjoys success.

By now if you haven’t already made the appropriate cost cuts and are down to the bare bones operating plan, you are probably out of business already. So start to turn your eyes upward. You need some turnaround help.

While the best plan is to bring us in and let us assist you, here are some tips if you are going to try to do this yourself. (You know there is a reason that the TV dramatizations always say “These are professionals. Don’t try this yourself.”)

Start with the Business Plan
If you don’t have a solid written business plan, get one! This above all else is the most critical step in not only staying alive but being able to grow. If you don’t know where you are going or how to get their, almost every road will bring disaster. You can’t afford disasters after the cost cutting you have done and the frail structure that remains.

Confirm your Core Competencies
In the market today, you may need to redefine your core competencies so they are relevant. It is on these core competencies that you will build your growth plans. These are your strategic planks that can lead to growth. They must be based off an in depth analysis of both internal and external factors. This is more than just a simple SWOT analysis. It looks at all aspects of your environment.

Stay Focused on Growth
Do not let your organization fall back into the cost cutting mode or the pure rebuilding mode. Profitable growth is your goal. Successful companies need to strike a balance between managing costs and fostering growth. While the focus has to be on growth, you can’t ignore the need for increased efficiency in your operations. Doing more with less is the constant pressure and that really means operating smarter. Never become so focused on controlling costs that growth and customer service is sacrificed. Growing your business is what provides long-term opportunity for increasing revenue and expanding market share.

Reassess market Needs of Your Clients and Customers
Do some research to understand how they are operating TODAY. Things have changed for them as well. Once you clearly understand their needs, you can adapt your products and services to best meet those needs. Simplistic as it sounds, if you want to find out what they need, ask them. They will tell you and appreciate the effort you are making to really understand them.

Make Marketing a Critical Element in Your Business Model.
Marketing is much more than just providing marcom materials. It starts with positioning the company/brand in the mind of the purchaser so that you are the first though when they are thinking about your market space and it enables you to receive higher margins for your products or services. It then builds on that positioning to create the right plans that keep your name in front of your target audience at the most opportune time.

Capitalize on Technology
With the rapid development of new technology there are many opportunities. This can be in automating processes and simplifying the reporting and measuring of progress. But it also can mean new ways of reaching clients. Social media is now a common way of life. It enables you to not only reach your clients and customers but also to have them reach you and to have a dialog. The social networking strategic and implementation company we us is Thought Labs (www.thoughtlabs.com).

Don’t Cut Sales – Upgrade It!
This is your revenue generating function. Measure them on results and not activity. We see so many companies that measure activity, see no results and them cut the function for cost reasons. Bad choices. Set the sales goals and hold the sales force to them. Give them the tools to be successful, including the senior executive support.

Evaluate Current Processes and Streamline Business Activities
To maximize growth and income opportunity, a company needs to carefully evaluate the existing processes. Consider how operation functions are carried out. This provides opportunity to identify and eliminate wasteful practices. Look for ways to simplify. Develop a common platform for your products to avoid unnecessary duplication. Once you have examined which areas need improvement, you can focus on streamlining current processes. Identify steps that don't add value and look for duplicate activities.

As we said in the beginning of this article, now is the time to stop cost cutting and start building your business. Don’t do this on your own. Get some professional help. Contact us.

Thanks

John


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

Turnaround Management – Focus on Five

There are a lot of pressures on CEOs and Executive teams these days. Greater pressures than ever before or at least it seems that way. They are being asked to do more with less, deliver the profitability to keep the shareholders or owners happy, keep the employees motivated and of course delight customers and clients.

The tendency has been to have a number of important initiatives underway so that the needs of all of the stakeholders are addressed. Instead of doing more with less, the result most often is to do less with less. Significantly less.

In 2008, the management of United Airlines made a decision to run a better airline. According to the Wall Street Journal, United’s program, “Focus on 5”, was an initiative for all employees to work to improve five key measures important to customers. The five include on-time performance, condition of the airplanes, courteous service, revenue and costs. Bonuses are paid to employees for months when on-time arrivals beat rival airlines. United Airlines improved on-time arrivals of flights to 80.5% in 2009, up from 71.3% in 2008. A solid start to long term improvement, but also this is clearly a turnaround.

There are several lessons here.

The first is that it started from a review of their strategic plan and what were going to be the most leveragable initiatives to deliver the company objects. Note, they had to have a strategic plan to start in order to do this. You and your company do have a written strategic business plan, right?

The second is focus. United didn’t try to do everything. They selected the most important initiatives and had everyone focus on them.

The third is communication. United made it known throughout the company that these were the key initiatives and everyone’s role was defined as to how to meet these initiatives.

The fourth is measurement. They had simple measures that were easy to obtain, easy to understand and easy to tie directly to the results required.

The fifth is rewards. Employee compensation by way of bonuses was tied directly to the success against the key initiatives.

This article regarding “Focus on Five” key lessons from this turnaround management opportunity is a follow up to United’s internal program slogan and efforts. It doesn’t say that the program was the right one or even well run. It does say that their program was simple and focused. Do you have a program that is simple and focused, based on the key initiatives from your business plan? If not, contact us. We can help.

Thanks,

John



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

7 Tips for Turnaround Management in Healthcare

The business elements of healthcare have faced significant turmoil this past year. Hospitals, medical practices, groups, insurers and even their service companies have been forced to produce greater results with fewer resources. This has led to strained budgets and strained executives as well as strained staffing. Why have some healthcare businesses survived and done well and others struggled during this past year? Why have some built revenues and profits without sacrificing patient care while others have faced major internal and external issues?

We have worked with a number of healthcare companies and there is a consistent pattern between the best and the rest. This holds true no matter in what segment of the healthcare business the company operates. We aren’t using specifics in this article since they will vary by segment but the basic elements are unchanged. Look at your organization and see how you measure up on these.

Planning
The best create and work from a well thought out written plan. The plan is strategic in nature and includes an annual plan that all departments are responsible for executing. The rest have a semi-thought out or poorly conceived plan somewhere in the CEO’s or Executive Director’s head. This plan is impacted constantly by emotion, ability to communicate, level of trust, delegation skills, follow-up skills, a packed calendar and reliance on the top executive’s memory. You will note that for every article here that deals with the business, we start with a comment about the necessity of having a sound strategic plan. You can’t win without one.

Business Model
The best have strong business models that flow from their longer term strategic plans. They have clearly defined target markets, clients and customers. Their ongoing revenue streams are built on strong relationships with their clients. The relationship could be with the organization, the products and services or the people who work in the business. The rest have the “lets see what comes in” business model and they will continue to do what they have always done to win customers. There is no recognition that the world has changed and that in order to survive, they must change too.

Building The Organization
The best hire the best people. They pay more and reward more for higher performance. The best weed out poor and underperforming people at every level. The best organizations know that allowing people who aren’t working to a high standard lowers the standards for every employee. The best have clear priorities. Every day at the best companies, people focus on the vital few things that matter. These organizations understand the key performance indicators and keep a sharp eye on those measurements. The rest hire those that aren’t hired by the best and tolerate underperformers. At the rest, most of each day is filled with working on the trivial elements and nothing much gets measured.

Building The People
The best take their people responsibilities seriously, recognizing that only through their people can they succeed. Performance reviews in the best organizations are scheduled and held not for judging but for developing. Plans are set out to help employees obtain the skills and hone the talents they need for success. The better organizations see themselves as learning organizations. Continuing education is considered a sustainable competitive advantage. The people in these organizations know what is expected of them and they are motivated and incentivized to perform. When goals are achieved, rewards are given to reinforce performance. The rest don’t believe in performance evaluations because they take too much time, aren’t done well and don’t work. If a person is deemed to not have the skills, they are terminated and a new person is sought. Wasted resources from many standpoints are the result.

Involvement
The best delegate appropriate responsibility down into the organization and with that delegation they share the business plans, objectives and goals so all know what needs to be done. The people then can decide on the best way of doing it. All levels of management are trusted and empowered to get things done within established guidelines. In the rest of the companies, they suffer from underperformance because people lack the authority, responsibility and direction to guide their activities and must wait to be told. Without the written plan communication is spotty and the results are disastrous.

Accomplishments vs. Activity
The best don’t make or accept excuses. The best focus on results. At the end of the day, the best understand that intention, action and activity do not equal results. Trying doesn’t count, either. Nor does working hard, if hard work just means long hours without focus. When something goes wrong, the best take responsibility, learn from what happened and move forward. The rest spend their time focused on everything that keeps people from achieving results. They spend much of the time being caught up in the “blame game,” pointing fingers, resulting in punishment but not always of those responsible.

Operations
The best always try to find a better way. The best companies are never satisfied with how things are because they understand that to improve means they can continue to distinguish themselves for their clients and from their competition. The rest are satisfied with what they have; good enough is good enough. The rest don’t understand that fair, “Okay” and “good” are the enemies of great.

How is your business? How did you measure up? If you are not executing all of these elements very well, contact us. We can help and we have clients that are following these tips and they can help you too.

Thanks

John


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