Turnaround Requirements – More CEO Ousters Underscore the Need for Better Strategizing

The recent ousters at GM, Bank of America and scores of other companies should be a warning to other CEOs that they have to strategize differently. Running a company is like driving at night in unfamiliar terrain on a winding road. You may know your long-range objective, but you can only see up to the range of your headlights. Beyond that is a mystery. So while the company’s objective may remain constant, the plans must be flexible enough to withstand rapid modification to meet market conditions and still be successful.

Many CEOs who don't want to step aside still rely on an antiquated strategic-planning process that often doesn't help them make better decisions faster. Once a year, they require the head of every business unit to compile a strategic report that includes three-to-five year financial forecasts. A fraction of this data is used to decide budgets, but most ends up in forgotten files. In most cases, the data is outdated before it is used.

So that once-a-year strategic plan is next to useless. It slows the decision-making process and is too detailed to be valuable to the units trying to manage the business.

It is difficult to believe that this still exists, assuming the company has a plan in the first place and many don’t. In this economy, no wonder so many companies are in trouble and its not just Chrysler and the auto makers that are filing for bankruptcy.

Clearly a much more flexible plan is required. In order for it to have a chance to work, managers below the executives must be engaged in quicker, more continuous decision making. Monthly full reviews of the plan are required with weekly updates and adjustments.

What is worse in these times is the cost cutting that has been done without an overall game plan. In many cases, this has undercut the company’s ability to execute the programs it does have in place. Many turnaround executives can strip out the costs, but it is important to also identify opportunities, harness resources, and create the plans that can build the business back. Just being a numbers person isn’t enough.

CEOs need turnaround experience these days. If they don’t have it, their tenure as a CEO is going to be short. “It has been my experience that just like in white water rafting, without the right expertise, you will be tossed out and the venture doomed,” says Walter Shill, managing director of the strategy practice at Accenture.

Three questions for you.

1. Do you have a plan that is flexible and works in today’s dynamic economy?
2. Do you have the cost reductions and the plans that identify opportunities to build the business back now and when the economy turns?
3. Do you have the turnaround expertise required to keep your “white water raft” from flipping or do you need to get it?

Contact us. We can help.

Thanks
John


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

What’s the issue? Business planning or just doing?

The recession continues and more and more businesses are failing - failing and being forced out of business, failing enough to have significant losses despite large layoffs and a desperate focus on cost cutting or failing through having little idea of how to turn the business around and keep a meaningful cash flow.

What’s the issue? Is it too much planning or too much action?

Are they failing because they have spent so much time creating the mission, vision, objective, goals and measurements for their strategic business plan that the opportunities have passed them by? Or are they locked in to outdated plans, programs and spending? Or is it more a case of having leadership that is unable to cope with the realities of today’s dynamic marketplace?

On the other hand, is it because they do not have a basic business plan that they are following and are just winging it? In this case, everyone is going full speed, but not in the same direction, no matter what you may think and certainly not toward a specific goal.

Or worse still, is it because they are faced with analysis paralysis and actually doing nothing? This cause a company to seize up and the organization grinds to a halt.

Actually, the failing may be the result of some or all of these elements. Business plans are a MUST for every company. However, they need to be actionable. And they need to be acted upon, adjusted and acted upon again. They shouldn’t be binder thick. In fact, we recommend that they be kept to one or two pages. Otherwise, they are not read, used properly or followed.

What are you doing in your company? If your company is struggling, is it due to over-planning for the business with concentration on the theoretical plan and not taking the appropriate action? Or is it all action and no known overall plan. Clearly, it can’t be an either/or if you are going to survive in today’s economy. It is a reasoned combination of both planning and action.

Do you have a written business plan? Is it simple and understandable to all? Has it been communicated to others?

Are they taking action on it? Are you adapting the plan based on the ever new market feedback? Do your customers know what you are trying to do and the benefit in it for them? Are they supporting your direction?

What are the results and what needs to be changed?

So many companies are focused on cost cutting that they are not generating revenue that is desperately required for cash flow and support and also undermining all future efforts. Now, and when the economy turns, it is going to be the company with the successful plans put into action and market honed that will prosper.

Managing in today’s turbulent times isn’t easy so don’t think you can do this on your own. Get some help from experts who have been there before and can help lead you through the problems.

This can be a time for you and your company to actually prosper but you have to do it smartly.

Thanks.

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

Don’t Blame the Plan… Blame the Boss! Turn it around!

My friend Lewis Green wrote an article on this subject in 2007, part of which is included in this article. Since that time, the economy has tanked and many businesses have tossed out their strategic plans. Some have even tossed out their bosses. As companies struggled to stay alive, they have focused on cost cutting. Some bosses have been smart enough to lead the development of a plan that is in tune with their current realities while others have just cut. The “cutters” are and will be in trouble

Lewis asked “Is there anyone in business foolish enough to claim strategic planning always achieves your goals and results in success?” Certainly, having the plan alone will not result in success

Management consulting firm Marakon Associates and the Economist Intelligence Unit surveyed senior executives at 197 companies. Respondents said their firms achieved only 63 percent of the expected results of their strategic plans. And in a white paper entitled Three Reasons Why Good Strategies Fail: Execution, Execution, Execution, which carried the above research, Wharton management professor Lawrence G. Hrebiniak says MBA-trained managers know a lot about how to develop a plan but very little about how to carry it out. “Most of our MBAs receive great training in planning but far less in execution,” explained Hrebiniak.

Based on my experience, these findings are correct. When a plan is developed and that is missing so often, the failure comes from poor execution. Execution with brilliance comes with experience.

Some say that executives can not always be held entirely responsible. As long as shareholders and board members insist upon short-term results, only the most powerful and fearless executives will reap the long-term rewards and margins that strategic planning can deliver. But isn’t that the challenge for CEOs. That is what is causing the lifespan of CEOs to become shorter and shorter and the need for turnaround executives to come in and rescue the company.

So how do we as CEOs, executives and senior managers most effectively use strategic planning and get the desired results from it?

• Do annual strategic planning to provide overall direction but make monthly adjustments to stay current. You will be amazed at how quickly your business plan can be outdated. This applies to all businesses—whether a sole proprietorship or a mega multi-national corporation. While this provides a longer term direction, it takes advantage of flexibility and resilience.
• Be confident. Set high goals, short and long term. Don’t be intimidated by the Street or the Boardroom or your own fears. Those who merely set goals they can easily make never get around to stretching the business to achieve higher margins and outstanding profits.
• Use metrics to measure every goal in every functional area.
• Align every department, function and employee so that every ounce of the business’s energy is directed at achieving the goals set within the business plan
• Tie pay and benefits directly to success or failure.
• Do not focus on cost cutting. Make the focus of the plan marketing and sales. Companies have to operate cost effectively, but without revenue there is no company,
• Communicate, communicate, and communicate! If you want your plan to succeed, every member of your culture must be engaged and informed.

Turnaround management is about identifying the issues and opportunities, creating winning plans and then executing to satisfy both the short and long term objectives. So stop blaming the plan and the boss and start turning the business around.

Let me know how you are doing or how I can help.

Thanks

John



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

Theme from Mahogany

Diana Ross sang this a number of years ago and its words fit today’s economy better than ever. Most of us do not like what life is showing us.

Do you know where you're going to?
Do you like the things that life is showing you?
Where are you going to? Do you know?
Do you get what you're hoping for,
When you look behind you there's no open door?
What are you hoping for? Do you know?

Now looking back at all we've had,
We let so many dreams just slip through our hands.
Why must we wait so long before we see,
How sad the answers to those questions can be?

Do you know where you're going to?
Do you like the things that life is showing you?
Where are you going to? Do you know?
Do you get what you're hoping for,
When you look behind you there's no open door?
What are you hoping for? Do you know?

Revenues have plunged and profits are non existent. Layoffs are common and so are business closings. Employees are frightened about their job security and almost all are over worked. Businesses and employees do NOT know where they are going to.

Why is that?

Most of these businesses either do not have a workable business plan or have discarded their plan in the confusion caused by trying to remain profitable. They have moved away from the very aspects of their business that made them successful in the first place. The dreams that they had have evaporated and they are left with struggles.

What can you do about this? Here are 7 ideas.

1 Bring your executive team together and analyze your current situation and the opportunities that exist for you.

2 Use the information to develop a business plan that will work.

3 Focus your efforts so that you harness scarce resources.

4 Stay on top of cash flow. Cash is king!

5 Stop just cost cutting and work on driving revenue and profitability. There is a difference.

6 Engage your employees on focused business building within the scope of the business plan that you have developed.

7 Invest in some expert help. You don’t self medicate, so don’t do it to your business.

You may not like the things that life is showing you, change them. Make sure that you and your entire organization know where you’re going to.

Thanks

John
Maver Management Group



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

Keeping Your Strategy “Live”

Michael Port in his book “Book Yourself Solid” wrote

"One day, there was a blind man sitting on the steps of a building with a hat by his feet and a sign that read: 'I am blind, please help.'
A marketer was walking by and stopped to observe. He saw that the blind man had only a few coins in his hat. He dropped in more coins and, without asking for permission, took the sign and rewrote it.
He returned the sign to the blind man and left. That afternoon the marketer returned to the blind man and noticed that his hat was full of bills and coins
The blind man recognized his footsteps and asked if it was he who had rewritten his sign and wanted to know what he had written on it.
The marketer responded: "Nothing that was not true. I just wrote the message a little differently." He smiled and went on his way.
The new sign read: Today is Spring and I cannot see it.

Sometimes we need to change our strategy and positioning. If we always do what we've always done, we'll always get what we've always gotten. That used to be the case. In today’s economy, we will not get what we have always gotten. We are going to go out of business. Companies must change the way that they do business.

We have written often that many companies either don’t have full written business plans or have ones that are very loosely constructed. Some companies, even well run companies are wedded to the once a year strategic planning process. This is not only cumbersome, but also causes the company to miss out on many opportunities. The same holds true on positioning and the way that companies communicate their message. In trying to save costs, old materials are being used and the positioning in today’s economy just won’t resonate with customers. The example above is a very good illustration.

Is your business plan a “live” document?

How often do you review the basics of it?

How relevant is your company and brand positioning? Is it working? How well and how do you know?

We are now into Spring and you may be able to “see it” better if you check out the business plan and the positioning.

Thanks.

John

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

Twelve Turnaround Tips for Companies

Most companies have spent the last several quarters cutting and cutting and cutting costs. The focus is on minimalization. Unfortunately the tough economic climate is continuing and is expected to remain for some time. Now what? What focus do the company and the employees have and what are you going to do to actually bring in revenue?

Here are twelve tips to not just survive but thrive in the midst of tough times.

1. Re-examine your business plan and recheck your business fundamentals. You may be surprised at the opportunities that will be presented.

2. Do what it takes to remain profitable. Negative numbers become an excuse for almost anything and you will not only lose focus but you will lose more business. That doesn’t mean just cost cutting. It means being smart about what you are doing.

3. Focus! Cut what's non-core. Invest in what is. Know who and what you are and BE THAT!

4. Simplify something – it will help cut costs. Complexity equals expense. Take a look at all of your procedures and find simpler methods.

5. Look outside for good partners both as alliances and suppliers. Leverage relationships to save money or make money. Others are looking for help too, so work together.

6. Do what you already know is right -- only this time, really do it. Many companies know the right path but continually choose not to take it for a variety of reasons. Stop doing what doesn’t work and reallocate the resources.

7. Go talk to your customers. They are hurting too and want your love and leadership. They will remember you when things turn around.

8. Keep some investment in your R&D. You'll need it. This can give you the competitive advantage when the sales start to flow again.

9. Look for technology-based efficiency. Use the Web to cut costs and boost productivity.

10. Enlist your employees' support. Ask them for ideas. They are closest to the action and will have more good ideas than you could possibly execute

11. Believe in your own business and your future. There will be brighter days ahead and you want to be part of them

12. Hire a good consultant. Their experience and objectivity can show you ways to accelerate your positive business progress. They are not an expense. Good ones are an investment. The ROI can be astounding.

Contact me and let me know how I can help you.

Thanks

John

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

Company Turnaround Needs More than just Cost Cutting

It seems like every company is heavily into cost cutting and layoffs as a means to turn around their business in these economic times. In fact, many turnaround leaders are financially oriented and focus on stripping out costs. They leave the bare bones and the company continues to operate, apparently profitable, in the short term. Unfortunately, many companies are left weak, unbalanced and defenseless to further market changes or competitive moves. They ultimately struggle and fail. Recessions have a way of weeding out the weaker companies. On the flip side, if you do things right, you can come out of the recession a lot stronger than your competition with more customers and more opportunity. Here are some best practices ideas that will enable you to win now and even more so when the market changes to be more positive. The key is to play to win, not just survive.

1. Understand the Opportunity
Business is about competition in meeting your customer’s needs. To succeed, you have to do things better than your competitors. In recessions, companies tend to lose focus on everything but cutting costs. Among other things, they stop thinking about customer satisfaction, which obviously leads to customer dissatisfaction. This gives you the opportunity to capture market share. To keep your customers satisfied, you must continue to deliver great products and services. Focus on your customers. They are probably hurting too and want your attention and leadership. They will remember you when things turn around. And if your competitors have let their relationships slip, the customers will certainly remember that too.

2. Playing to win means having a winning plan
Many business leaders measure their success by how hard they work and whether there is enough money to cover payroll. That’s not enough, particularly in tough times. You have to have a solid plan that is working and is known and understood throughout the company. Re-examine it and make certain that it is built on the right fundamentals. You may be surprised at the opportunities that will be presented. Most organizations have layers of bureaucracy that impede the flow of ideas and slow down the approval process. Remove as many of those blocks as you can so that your organization is able to react quickly when new developments or changing trends warrant. Prioritize projects that address core business goals to avoid knee-jerk reactions to cutting expenses like headcount reduction.

3. Upgrade the team
People build businesses. Good people build strong businesses. Recessions free up people with extraordinary talents. Either they have been caught in large scale RIFs and are looking for opportunities or they are left after a RIF and are no longer doing what they do best, as other jobs have been laid on top of them. Seek them out and hire them. Up grade your talent. This is the opportunity to get “A” players. You may actually be able to decrease your payroll in this current economy. Teams with strong benches win in the long term.

A second point is to use downtime to build skills. A recession can result in less work for your staff. They may end up spending more time on lower priority jobs. Give them the opportunity to use their downtime to increase their skills. Although training is expensive, it’s not nearly as expensive as losing good employees. When the projects come back, those employees will be able to do them better and quicker, creating opportunity and saving you money in the long run.

4. Engaging Your Customers
Get out of the bunker. Everyone is “hunkering” down and turning inward looking for excess. This is the time when you must get out from behind the desk and concentrate on building and nurturing relationships. Go and see your customers face to face and get an in-depth understanding of their situation and how you can be of assistance to them. This doesn’t mean giving everything away, but rather finding opportunities to help them and in turn help you.

Make your employees customer-centric. Make them ready to engage the customer when there are contact opportunities. Everyone must be in “sales”. Too often the customer is viewed as a nuisance and their demands are unreasonable. While that may be true, they also pay the bills, so help your organization understand and meet their needs. A lot of business campaigns fail not because the message doesn't get out, but because it doesn't get "in." Before you launch any new marketing initiative, be certain that everyone in your organization knows about it, understands their role in it, and realizes the importance of that role. Poor internal communication is bad marketing practice in any economy, but in tough times it can be devastating.

5. Focus on what is vital today.
Your business plan must be built on your core competencies and prioritize projects that will have an impact today. This is making sure that you do what is important and do it most cost effectively. Find new and different ways to achieve the results at lower costs. Many businesses just cut. This causes revenue problems, now and in the future. Simplify something. It will help cut costs. Complexity equals expense. Operate with a bootstrap mentality. Capital is going to be hard to find and “cash is king”. This is where having the best people with creative minds will really pay off. The one caveat is to keep an investment in R&D since it is the lifeline to the future. But make certain that your projects are focused and tightly controlled.

6. Out-Thinking Your Competition
A recession tests business models. Many of your competitors will be scrambling to cut costs and then regain their balance. You can have a greater plan. Anywhere in the world, basic needs of people remain the same, but people are cutting their spending. This demands more cost effective solutions. How can you provide better value than ever before? How can you meet these basic needs? How can you reach more people without increasing expenses? You have to become more efficient and effective, finding creative ways of supporting the business. If you are able to optimize your new value proposition, you can secure an increased share of wallet and market that will pay off in both the short and long term.

Here are three ideas:

* Do a lot of little things right. The tendency in tough times is to search for the one magic bullet that will make everything better. But magic bullets are hard to come by. Most positive turn-arounds come about as the result of finding a number of small solutions, not one big one.

* Fix the leaks. When times are good, it's easy to overlook the problems caused by letting things slide. If mailings aren't done on time, if data entry gets behind, so what? When cash flow is sufficient, the income leaks these practices create just seem like trickles. It's not until times get tight that we realize we've actually created gushers. Stop the leaks and save the cash.

* Selectively, step up your marketing by doing more of what works best. Marketing is often the first to be cut when money gets tight. However, studies have shown that in previous recessions, companies that kept their marketing focus came out ahead. The key is to do this selectively by focusing on what works best. Do an in-depth analysis of your programs and focus on the top ones. When times are tight, it often makes more sense to replicate than it does to reinvent.

7. Get some help.
Invest in someone short term who can help you navigate through these tough times and keep your business profitable. Hire a good consultant. Their experience and objectivity can show you ways to accelerate your positive business progress. The ROI can be astounding.

Let us know how we can help.

Thanks

John


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

What’s Happening Boss?

The question echoes through the halls of every company, big or small and across all industries. What’s Happening Boss?

Almost every day now we read about a company shutting its doors. Unfortunately, that is only the tip of the iceberg. Many close and go unreported. Isn’it a shame to have built a company and have no one even notice it’s gone? Often in the closings, the employees are held in the dark until the announcement is made that the company is out of business and that the announcement day is in fact their last day. No notice. No notice at all.

Other companies are reducing their work force. Again the employees get little, or no notice. The uncertainty in this current economy and the potential for job loss is paramount today. Almost every family is affected, either directly or through a relative or close family friend. The jobless rate is at a high.

Ironically, internal communication between managers and employees tends to decrease as business declines. Many times managers themselves don’t know what is happening. When they do they don’t discuss it for a variety of reasons. The result is that it increases the fear and feeds the rumor mill.

We have been recommending over communicating to our clients and in our published articles. Human Resource experts recommend that a company, quickly and specifically, tailor communication to key employee groups. Upper managers and the HR team should pull together the top 5 percent of employees to discuss the business plan and to outline their commitment to these key employees. It is important to engage them early and express their value to the company. Making it clear to top performers that you want them to be a part of the solutions now and in the better times ahead, can go a long way in keeping the best and brightest. Keeping lines of communication open helps develop the supportive organizational culture and an uncommon willingness to sacrifice for the company in tough times. This culture-building focus helps leaders find alternatives to layoffs and win support for labor-preserving, cost-cutting moves. This is the win-win solution.

We continue to recommend that companies have specific plans that cause them to protect the core elements of the company and enable them to continue in operation. We have recommended many ways of best practices cost cutting. In this article we are strongly recommending that companies communicate effectively, regularly and often with all employees, particularly the key employees. Make them part of the solution.

Let us know how we can help.

Thanks

John


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

50 Cost Savings Tips to Use NOW!

The Maver Management Group has been working with many companies to help them, not just cut costs, but to get and stay profitable. Here are some of the tips that we have gathered on cost cutting and a few on revenue generation that can be implemented TODAY without jeopardizing the integrity of your programs and services. You may have some of these already in place. Consider the rest of the tips.

Planning = Survival
• Develop a game plan that brings your cost saving activities in line with your overall business plan.
• When an employee leaves, evaluate whether the position is still needed, or whether it can be filled by a part-time person or outsourced completely.
• Conduct an internal business process review and streamline operations.
• Outsource all non-core functions (accounting, information technology
• support, printing/mailing, etc.).
• Get aligned with the processes of your suppliers and your customers to take duplication and waste out of the system.

Cash is King!
• Develop cash flow budgets and invest unused cash.
• Consider leasing versus buying your office equipment.
• Interest rates are at all time lows. If you have the credit refinance any outstanding loans.
• Adjust investment strategy to allow for more interest income in the short term.
• Renegotiate your credit card discount fee at least annually as credit card volume increases.
• Look to other associations and corporate credit cards for discounts on office supplies, equipment, delivery services, etc.
• Delay capital purchases.
• Require multiple bids on all products/ services above a certain threshold.
• Meet with your banker to review your monthly account analysis statement for potential cost savings.

Payables and Receivables
• Don’t undermine the relationships with suppliers or customers, but realize you are not their bank.
• Change payment cycle to twice per month or every two weeks.
• Stretch payments terms and pay no earlier than 30 days out, unless you can save on payment discounts.
• Calculate the average age of receivables outstanding over the past 6 months. Work it down despite the economic pressures on your customers.
• Change your policy to require prepayment for all product purchases and meeting registrations.

Budgeting and Cost Allocating
• Require all program managers and department heads to justify every line annually.
• Revisit budget assumptions quarterly to determine if upcoming projects are still necessary or if they can be postponed.
• Allocate all costs (direct expenses, personnel and overhead) to each major program area. Pull the plug QUICKLY on non-performing programs.

Un-Fix Fixed Costs
• Renegotiate contracts.
• Don’t be afraid to ask existing vendors for help.
• Cut down on hours/usage.
• If you lease your office space and plan to be there long term, consider renegotiating your lease well before the expiration date to lock in a better rate.

Telecommuting
• Consider telecommuting to offset the need for additional office space.
• Utilize office/cubicle sharing to save space.
• Consider subletting excess space.

Make use of brokers
• Analyze all telecom costs (local, long distance, internet & conference calling).
• Get a better deal on health, disability, life, property and casualty and D&O through a broker
• Ensure that the broker’s commission is paid by the provider and not you.

Use the Web
• Learn and use social networking to drive business
• Find impactful means of delivering your sales message electronically vs. snail mail.
• Use the web for booking airline tickets and ordering supplies where there is an on line discount.
• Move printed materials to your website (e.g. Annual Report, newsletters, member communications, meeting brochures).
• Utilize e-learning or CD-ROM based learning for staff.
• Use audio/web conferencing versus in-person meeting. Archive for later use (sales to members).

Administration
• Ensure that someone in the office is monitoring supplies on a weekly basis.
• Prepare inventory sheets of essential items. Charge programs/departments for supplies used as a direct expense for their area.
• Buy supplies in bulk to get discounts.
• Buy last year’s models.
• Choose quality and replace less frequently.
• Use “store brands” since their quality is usually very good.
• Closely track FedEx, UPS, Airborne and local courier usage.
• Consolidate carriers for volume discounts or use Priority Mail for non-essential items.

Get staff involved!
• Make cost savings everyone’s business! Convince them why they should care!
• At least annually, review the association’s financials with the entire staff.
• Develop a program where staff receives a percentage of the cost savings.

Find “Low-Cost” Experts
• Get expert advice that pays for itself and takes the pressure off you.
• Rely on existing vendors for training and retraining.


Contact us, we can help.

Thanks,

John


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

Group Sales Cost Cutting Best Practices – Some Specifics

This is a continuation of the article written with Janice Bays, President of Meeting Management Associates and provides some specific cost savings ideas. This is particularly applicable to smaller companies who do not have a large contingent of full time convention or meeting staff. Although those companies should feel free to keep reading as a refresher.

Exhibit Cost Cutters
1. Plan ahead. - If you make comprehensive plans long before your shows, you will avoid costly rush charges for graphic design, production, show services and freight.
2. Upgrade your existing booth. - If you think an exhibit facelift will provide you with a good-looking, effective result, it could be much less expensive than starting from scratch. Design and build in-house if you have a talented crew. You can do the work in-house and save some hefty design and construction fees. A caution here, if not done to specifications and codes, there could be substantial liability if someone gets hurt with your exhibit on show floor
3. Buy a modular exhibit. - The design costs are not necessarily lower, but the costs for shipping and installing/dismantling these exhibits are considerably less. One company reported saving $10,000 to $20,000 per show in installation fees. Also modular allows for ease in moving to different configurations or upgrading.
4. Buy and recondition a used exhibit. - Exhibit brokers, as well as some exhibit houses, offer a variety of used exhibits. The cost of buying used is typically 20 percent to 50 percent of the cost of building new. Remember to factor in the cost of any alterations the used structure will require to meet your specific needs.
5. Consider renting. - Renting an exhibit saves you the costs of building and warehousing. It may be the ideal choice for one-time or infrequent exhibitors.
6. Go portable. - Lightweight, modular booths can have the look and feel of custom exhibits, while reducing significant operating costs for freight, drayage and storage. In a 10-foot booth space, a portable exhibit is often the best choice. These exhibits are usually inexpensive to buy and ship and they can be set up by almost anyone on your staff, thus eliminating installation and dismantling charges.


Keynote Cost-Cutters
1. Hire local. - Look for a speaker based in the same city as the event. Not only will you avoid the speaker’s additional travel expenses, but many road-weary veterans will jump at the chance for a local gig and just may cut you a deal in the process.
2. Find out if the speaker has something to sell. - Speakers with books or videos to sell may be willing to accept lower fees if allowed to peddle their wares. A simple table and chair outside the meeting room (rather than a mid-speech plug) may suffice. Many motivational speakers make the bulk of their living from selling their products.
3. Share costs with another group. - Check with the hotel or local convention and visitor’s bureau for other meetings scheduled for the same day. You might be able to share a speaker’s cost and services.
4. Consider a politician. - Some speakers do not accept fees, such as public officeholders. If your event is in or around Washington, DC, a member of Congress might speak to your group.
5. Above all, - See the talent in action and check references. Don’t be surprised.

Multimedia Cost Cutters
1. Know the story you want to tell. - As with any other marketing medium, it saves time and money, if you can give producers clear directions from the start. Know the audience you want to reach, and the message(s) you want to deliver.
2. Incorporate as much existing material as possible. - Reuse video footage, photographs, slide presentations, brochures and any other visual elements that are already part of your marketing campaign. You can save thousands of dollars over the cost of creating new materials.
3. Don’t overspend on hardware. - The hardware should be a relatively inexpensive part of any interactive system. The presentation itself should be dazzling, but the workhorse equipment controlling your system doesn’t need to be. Work with a knowledgeable professional to choose only the necessary hardware components.
4. Make your message multipurpose as well as multimedia. - You can still have detail-intensive modules in your presentation, but the overall sales pitch should be broad enough to suit other trade show and marketing needs. For example, you could set up your interactive system in your corporate lobby or use it as a training vehicle for new employees. With this approach, you can amortize the cost over more than one venue.
5. Use the expertise of your professional companies. - Sit down with your AV company and work out the least expensive way to set up. Use LCD panels instead of video projectors. Use as few microphones as possible. This will eliminate labor and the need for sound-mixing equipment. When you expect to have extensive AV requirements, book a conference center, most of which include equipment in the cost.

Travel Cost Cutters
1. Airfare - Analyze the cost savings of airfare requiring a Saturday-night stay. It may not be cheaper than paying for the extra room night plus applicable per diem. Travel during off-peak hours (early morning or late evening). Ask for additional frequent-flyer points from your official air carrier.
2. Ground transportation Shuttle service - Ask hotels whether they provide a complimentary airport-shuttle service and book with those that do. Instead of meet-and-greet services, distribute vouchers for airport shuttles and/or fare for public transport. While negotiating for your hotel or resort, request complimentary limousine service for VIPs. Transport delegates within a four to eight-hour window to cut back on bus transfer costs.
3. Parking - Inquire about reserved and complimentary parking. Ask that your special guests and staff get reserved parking spaces close to the hotel entrance.
4. Meet and Greet - Use the carrier's VIP lounge for the group's meet and greet.
5. Around town - Ask the local taxi company for discount coupons for local shows, restaurants, and sightseeing attractions.

Hotel Cost Cutters
1. Know the value of your business. - Keep a detailed history of all your events. You could be far more important to the hotel or the chain than you realize. This can produce extra discounts. Of course, if you are effectively using a professional outsource management company like Meeting management Associates, they will be able to negotiate better rates, based on their combined larger business levels.
2. Locations - Use local destinations or smaller cities that can offer you more for your money. Most have exceptional attractions and don’t have the overpopulation that causes congestion and costs.
3. Room rates - Research the rack rates, as well as group rates. Call the toll-free line or reservations desk of the property or chain. This way you will know the "worst case" pricing. Always give conservative room blocks. If you block too many rooms, you will end up paying for them.
4. Managing the spending - Communicate your budget information to the convention services manager. His or her role is to work with you. Meet every day with your hotelier to review the master account. This will allow you to catch errors on-site. Always budget at least 10 percent of your expenses as "contingency." This will take care of unforeseen costs such as labor strikes, bad weather, overtime, extra postage and mailings, phone and computer hookups, cancellation insurance, speaker substitutions. Limit authorized signatures, and don't accept charges signed for by unauthorized people.

Food & Beverage Cost Cutters
1. Deal with the chef directly. - In addition to the F&B manager talk to the chef. Challenge him or her to work with your meeting's goals and concept. The chef will know what is in season and what is grown or produced locally, and can be very creative if given the opportunity.
2. Ordering - Order as much as possible "by consumption." Uneaten food and drink can be returned and not charged. This works well with soda and packaged foods, like potato chips. Buy your coffee, tea, and decaf in bulk or by the gallon, if at all possible.
3. Breakfast - Instead of hot breakfast, serve an extended continental breakfast by adding fresh fruit, yogurt, and cereal to the regular offerings. Cut down on portions. Cut danishes and doughnuts in half. Offer mini-muffins, mini-doughnuts, mini-danishes.
4. Lunch and Dinner - Use sit-down meals, which can cut food preparation labor costs as much as 20 percent. Skip the dessert, salad, or soup. Dessert can be served at breaks. Consider box lunches instead of holding a formal, sit-down lunch.
5. Other - Ask which other groups are using the hotel at the same time. You may be able to have the same menu, thereby gaining economies of scale that can be passed on in cost savings to you.

Sales is the engine that drives the revenue and companies are always looking for ways of making that engine more efficient. Group selling offers the huge advantage of being able to address multiple customers through one presentation and still be in a face to face situation to sell each one individually. During an economic downturn, reducing group selling costs helps your company's bottom line. These tips can reduce your costs and make your events more successful.

Please feel free to contact Janice Bays or me if you have questions.


Thanks

John

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

Group Sales Cost Cutting Best Practices – The Overview

Sales is the engine that drives revenue and companies are always looking for ways to make that engine more efficient. Group selling offers the huge advantage of being able to address multiple customers through one presentation and still be in a face-to-face situation to sell each one individually. Reducing group selling costs and becoming more efficient helps your company's bottom line both from the revenue and the cost aspect. The group selling situation can be defined as anything from a luncheon or a face-to-face meeting with several key customers to a major exhibit at a convention. The principles are similar, only the execution changes.

The Maver Management Group has been working with Janice Bays, President of Meeting Management Associates, Inc for over 20 years. We have benefited from her expertise, as have all of her clients. Janice has worked with Fortune 500 clients, down through startups with very limited budgets. Janice has contributed her thoughts to this article and she knows her stuff. If your company has a full meeting/convention planning staff, these tips may be a good refresher. For those companies who do not have the staff, these tips can cut your costs. In either case, after you read this series of articles, feel free to contact Janice and learn what her company can do for you to make your group selling situations more efficient and effective.

Strategies That Save Dollars
1. The Plan - As in all cost cutting and program effectiveness, it starts with the plan – the right plan. How is the company’s overall business plan best executed in the group selling situation? Having the right plan enables you to understand up front what is required to be successful and what can be eliminated. This is the essence of best practice cost cutting. We have published a number of other articles on this blog for help in creating the right plan.

2. The Target Audience - Who is the target audience and exactly what do you need to motivate them to take the desired action? If you are looking at national conventions, you could define your audience as all the convention attendees. Don’t! Look more closely and identify the high potential people or companies within the group and find the means to target them.

3. The Message - This flows from the company’s overall strategic plan and positioning. That will keep the message consistent and will avoid costly graphics changes. In the group setting it has to be concise and crisp and is part of the overall “atmosphere” that you are creating. Research show that it takes on average 7 selling presentations to make a sale. Your audience will not tire of your graphics, display or message, since they are not exposed to it continuously. Sales personnel may tire of the message and if so rotate the sales personnel so they don’t wear out.

Outsourcing – Expertise and Cost Savings
1. To use or not to use - Both large and small companies use outsourcing for group selling as a means to increase effectiveness and keep costs under control. Meeting Management Associates (MMA) is one of the full service planning and meeting/convention management companies. They help translate the overall business strategy into the group selling strategies and then handle the management of all aspects of the meeting or convention. There are other suppliers who handle specific elements of the process and will need to be co-ordinated.

2. Single source or bid - Companies like MMA provide the best results when used as a single source supplier. It enables them to be completely open and in lockstep with your needs, as an extension of your company. Of course, they bid out services for hotel and travel and are able to negotiate high value and lower cost alternatives. Cost is definitely an issue, but not the only factor to be considered. You want the best value and what meets your goals and objectives rather than the cheapest.

3. Communication - An important element in all of this is good clear communication. Time must be spent with your outsourcing partners so that they understand your objectives and the role that they play in achieving them. Then their expertise can come into play more fully. Implement a check list that causes you and your outsource partner to communicate on a regular basis.

Contract Cost Cutters
1. Your value - Develop long-term relationships with properties and chains you use often. Negotiate volume discounts. Prepare a detailed request for proposal. Communicate the value of your meeting.
2. Negotiation - You may feel that the hotel holds all the power, but that is not true. Everything is negotiable. Negotiate sliding-scale rates with the hotel. Negotiate no deposit - or at least that the deposit will be placed in an interest-bearing account. Ask for everything and anything that you want right up front, such as 1 per 40 rather 1 per 50 for comp rooms or a number of upgraded rooms at the negotiated rate for your VIPs.
3. Timing - Work with hotels to fill their "hot dates," or meeting space "holes." Though the low season seems to be getting shorter, try to schedule meetings in the least busy times of the year for that specific area. Be flexible with your arrivals and departures.
4. Cancellation - Make sure the contract's cancellation clause is reciprocal. What if the hotel is undergoing major renovations during your event? Or if there is a change in management?
5. Signing - The biggest risk to your company can be in the contract signing. Never sign a contract unless you agree with it in its entirety. Cross out or edit clauses with which you do not agree, initial them, and get the supplier to initial his or her agreement. Pay attention to cutoff dates and attrition clauses. Keep in regular contact with suppliers even after the contract is signed. Things and events can change the meeting opportunity drastically.

These tips provide an overview of some cost cutting ideas for group selling situations. There is a follow up article that details more specifics. It can help you and your company achieve better results and cut your costs.

Please feel free to contact Janice Bays or me if you have questions.

Thanks

John

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

10 Ways for Nonprofits to Cut Costs

Nonprofit World published an article on Ways to Cut Costs. We have adapted some of those suggestions based on the work of Maver Management Group with a number of ministries in the San Francisco Bay Area.:

1. Make maximum use of your Board of Directors.
Make sure that your Board helps you raise money and also save it. Ask them to make use of their own contacts to find individuals and businesses that may be willing to donate the goods and services you need or to be sponsors for your projects and events.

2. Make extended use of your volunteers.
You provide them with an opportunity for significance in their lives. Let them enjoy that to the maximum. This will mean allowing them to go beyond just the simple tasks that they might ordinarily do to reach out to others.

3. Piggyback with local businesses.
Ask businesses in your community if you can include your fundraising appeals in their mailings. It gives them a chance to do some good and provides your organization with leverage and cost savings for your fundraising.

4. Reduce cost of mailers.
The paper you use in your mailings can represent up to 30% of the cost of your print job. Switch to inexpensive paper. Use lower-weight paper to reduce your postage costs. Bundle with other non profits to take advantage of multiple lists and combinations.

5. Adopt teamwork, cooperation, and collaboration approaches.
You can team up with other organizations to buy supplies and even insurance. You might decide to share office space and equipment. You can hold joint meetings and programs.

6. Seek out low-cost marketing and public-relations techniques.
Write letters to the editor or provide guest columns on important issues that your organization addresses. Find local ad agencies to see if they will create public service announcements for you.

7. Seek out donation of materials that you need.
Companies are cutting back and there are surplus items that can directly offset many of your expenditures.

8. Save money on training new people.
Use your volunteers and their connections. Use videotapes, computer based training programs, books, and a personal mentor to cut down on training costs. Most people enjoy self-paced learning and they will get a lot from a mentor assigned to help them.

9. Save energy.
Set back temperatures during times when your facility is unoccupied. Turn off lights and equipment when not in use. Install more efficient lighting. Indoctrinate employees with the importance of saving energy. Monitor costs and let everyone know how much is being saved.

10. Audit the necessity of every activity your organization does.
What would happen if you stopped doing it? Does the reason you started that activity still make sense? Can someone else perform that activity at less cost?

Non profit companies face a different set of circumstances and often rely on help from the outside. If you need help in identifying opportunities within your company on how to impact your bottom line through improved productivity or cost cutting, contact us.

Thanks

John


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

HR’s Role in Cost Cutting and Controlling Costs

People drive the business. They provide the ideas, the plans, the execution and the energy, along with a lot more. Getting and keeping a talented employee base is critical for future success.

The HR function, if it is used properly, is a tremendously important resource in the business equation of getting and keeping a company profitable. It directly influences the twin goals of increasing productivity and minimizing expenses.

Executives focus primarily on their core competencies since that has been what has made them successful personally. In order to make the company successful, this has to be extended across the organization. Some of the best practices for HR’s role in increasing productivity and controlling the human capital costs are below.

1. Hire the right person.
Jim Collins in Good to Great says, “Think of the small amount of investment involved here compared to what it costs if you hire the wrong person.” Most companies hire based on skills listed on the resume and interviews by inexperienced interviewers. That’s a mistake. To find top talent, first you have to define superior performance. Then you’ve got to take that definition and apply it to performance-based behavioral interviewing and other strategic recruiting techniques to attract the best candidates. You can teach the job but you need to hire the talent.

2. Incent improved performance in productivity and cost control. Both negative and positive reinforcement will motivate people to perform. But as the saying goes, you get more with sugar than you do with spice. The “sugar” you offer can take many forms, such as:
• Implement pay-for-performance programs.
• Eliminate the guesswork on competitive compensation—use compensation surveys.
• Offer flexible work schedules.
• Ask your employees for ways to cut costs. Generally speaking, employees know their jobs better than anyone else.

3. Retain good employees through competitive benefits, communicated effectively.
Like most executives, you want to know that you aren’t paying more than you have to, but enough that your employees feel motivated to perform. Offering the right benefits package can help you achieve this goal. Benefits differ between small and large employers. The standard list of benefit categories may look the same, but the plans, features, and services offered can be very different and so can the costs. The standard list would include insurance coverage for medical, dental, and vision care as well as short and long-term disability, life, accidental death & dismemberment (AD&D), and more and more frequently, long-term care. Get some expert advice on what is needed for the basic plan and how to cost effectively customize it to your employees.

4. Plan and work smarter. Make sure in the execution of your plan that the focus is on the high leverage areas. Even out customer demand whenever possible, so that you can eliminate all overtime and the extra costs. It is amazing how many “extra” non-revenue adding activities exist in all companies.

Above all, communicate, communicate, communicate! This may come as a shock, but even the people who write benefits materials don’t read their own materials. Why? Because traditional benefits booklets tend to have all the appeal of cardboard. Invest in a communication program that includes well written, succinct, compelling, and palatable descriptions of your programs as well as four or two-color professional printing. In addition, hold regular employee meetings to roll out new plans or just help employees understand the value of their benefits and how to use them, including how to keep costs low for themselves and the company.

Once again, while people are important, having the right people doing the right activities in your business plan is critical. If you need help in identifying opportunities within your company on how to impact your bottom line through improved productivity or cost cutting, contact us.

Thanks,

John



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

Cost Cutting Tips when laying off employees in a social media world

The economic downturn has resulted in a number of companies being forced to use layoffs as a cost cutting measure. In a world where anyone has access to the internet and can publish negative feedback about their former employer, and does, how you manage this process is critical. It takes just a second after someone has walked out the door for them to post negatively on Twitter, facebook or their blog, and it spreads from there. This will have major impacts on employers for years to come. Blog posts, tweets and video content all remain in search engine caches for a very long time, if not forever!

Here are some tips to avoid these potential problems in a social media world:
1. Make sure you have a plan and that the plan ties directly to the overall business plan for the company. You don’t want to lay off the wrong set of people.
2. Remember the jobs you are cutting have people in them. Treat them with respect. This could be you one day and if you don’t do the lay off correctly, it probably will be you and soon.
3. Be open and fair from the start. People want to feel valued particularly in tough economic times.
4. Do it quickly. It only causes pain to the employee and the company to drag it out. It also provides more time for the former employee to publish negative articles or posts.
5. The employee reaction may not be rational or logical, based on information given to them. They will instead fit the layoff to their own experience or what they have read elsewhere. This usually means they will react poorly, initially. Providing the employee with additional support can also make the experience more positive.
6. Provide employees with some advice about being careful if venting online. The perspective can help avoid legal battles in the future.
7. Expect things to be blogged, tweeted, and generally discussed by current and former employees. Monitor the internet to see what is being said. Allow people to vent but if needed, gently correct the messages if they are blatantly wrong.
8. Communicate with the employees who are leaving as well as with those who are staying, but do so honestly and openly.
9. Setup an internal wiki to allow the people leaving to document their knowledge in a central location. This way you might collect some of the knowledge that is leaving before it leaves.
10. Communicate to your customers, suppliers, media, analysts and blogosphere what is going on and why.
11. Highlight the other cost cutting measures that the organization is taking to show layoffs are one of the last resorts.
12. Make sure you pay severance packages fairly and on time. If you fail to do this, you can guarantee that the company and you, personally, will have VERY negative press.

Most of these are common sense and you may already have done them. Good for you. If not, call us and we can help. We have experience in all of this.

Thanks

John

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

Merry Christmas

When I'm worried and I can't sleep
I count my blessings instead of sheep
And I fall asleep counting my blessings

When my bankroll is getting small
I think of when I had none at all
And I fall asleep counting my blessings

I think about a nursery and I picture curly heads
And one by one I count them
As they slumber in their beds

If you're worried and you can't sleep
Just count your blessings instead of sheep
And you'll fall asleep counting your blessings

Many of you will recognize the song above from the movie White Christmas. This has been a favorite movie of our family for many years. Among other elements it tells of love, loyalty, celebration and the ability to find a way through hard times. It encourages hope. We are thankful for hope. It is difficult to crush this feeling more than just temporarily. Somewhere, deep inside, is the belief and anticipation that things will get better. And while not everything works out the way we want, things do get better.

Although this year has been a tough one for many of us, looking ahead are better times. Hope!!!. We are grateful that our family members are all relatively healthy and that communication abounds, even though great distances separate us. We are blessed with amazing, wonderful children and grandchildren.

The Christmas season joyfully celebrates the birth of Christ. In addition to this miracle, it brings with it renewed friendships and the exchange of glad tidings among friends and family. We are thankful we live in a country with freedom, opportunity and almost unlimited resources. We are privileged to have strong family ties based on love and respect. We cherish you, our wonderful family and friends, who bring us spice and affection and we appreciate the magnificence of our lives more than ever before.

As we move from Thanksgiving to Christmas, our sense of thanks increases. We are also blessed with the greatest gift of all, Jesus. May the love of this gift surround you and all close to you during Christmas and throughout the coming year. God bless us everyone!



John

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

Cost Cutting Balance

Cost cutting, cost reduction, consolidation or cost management have become central planning topics in all competitive markets. Most companies have trimmed all the fat and are working “close to the bone.” New companies have either gone out of business or have cut back on plans, dramatically changing the business model with which they launched. An established company in a maturing market is likely to see the best return from cost cutting.

As we have written many times, having the right plan is critical for all companies.

While cost cutting and basic survival is at the top of each day’s agenda, it has to be balanced to some extent with spending/investments that will grow the revenue line. This is typically a mixture of selling more to existing clients (market penetration) finding new clients both locally and internationally (market development) and extending your brand’s equity creating new profitable products and services (product development). This isn’t new but is almost completely overlooked with the focus on cost cutting. Success in managing the costs can improve cash flows which can be used to invest in building revenue.

The news is full of stories about companies that have sought a major, single solution, with the obvious “nuclear” option of outsourcing and/or dramatic cuts in personnel. This has surface advantages, but often creates crucial competitive problems such as:
• Undermining core competence
• Decreased speed of response to market demands
• Increased problems of quality control
• Decreased customer service and resulting reduced customer loyalty
• Elimination of product support and upgrades

Often, companies by attempting to make big changes miss the advantages of applying a continuous cost management discipline. A step by step approach will create an environment where cost management is continuously incorporated in company decision making. By making cost cutting and then cost effective spending part of the culture, the resources can be much more effectively utilized to drive revenue on an on going basis.

We recommend developing the right plan, of course. The plan has to have a balance, using the funds to drive revenue. Without the revenue, the company is doomed.

Let us know how we can help. We are experienced in helping companies thrive and not just survive.

Thanks

John



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

Cost Cutting – How’s that working for you?

It’s not just Dr Phil. who is asking the question, “How’s that working for you?”

We see cost cutting almost everywhere as companies attempt to pare back to salvage some of their profits. We see the dramatic reductions in force and the increases in unemployment numbers. We see the projects and initiatives being half funded and abandoned and know that the result will be substantial revenue losses in the future. We see the scramble to reorganize with the lower level of resources. Yet, we see expectations of output remaining high.

And we ask, “How’s that working for you?”

For most companies, the people leading the cost cutting are the same people who have led the business and their expertise is not in the cost cutting and re-planning. The most notable in the news today are the big three automakers. They have great plans to cut people and shut down plants and are underway with their actions. How do you think they will do? Do you have great confidence that they will choose the right plan and put best practices into play? The stock market doesn’t think so and is hoping that when the government comes through with the bailout, a government oversight group will be appointed too. For those of us in the business world, that is clearly the blind leading the blind.

How’s that working for them? Not well!

It’s not just the huge corporations who are scrambling. Many small and medium sized companies are struggling too. They are doing their best to cut costs and stay alive and many are failing. Additionally, they have lost their focus and are no longer operating as a unified organization.

How’s that working for them? Again, not well.

With all of the money that is being spent in the cutting of costs, one would think that some of it would be allocated to bringing in some cost cutting expertise. These resources have the knowledge and the experience in cutting the right costs and then refocusing the company to use the remaining resources in the most effective and efficient manner. Unfortunately, this expertise is viewed as a cost in and of itself and cut first. In reality, it is the best investment that could be made since it can return its value many times over.

We have written a number of articles on best practices for cost cutting and the best implementation programs. They all start with setting up the right plan based on the company’s goals and objectives and scaled according to the resources available. It is this planning and then the execution of the plan that is so critical. Properly done, not only will the company be able to survive the economic downturn but be in a position, with its best people intact, to move forward when the economy improves.

How’s that working for you? If your response is not, “Its working well,” then contact us. We can help.

Thanks

John

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

Cost-Cutting Tips for the Small-Business Owner

Cash flow is important for any size business, but particularly so for small business. Small fluctuations can mean the difference between making payroll and going out of business. The downside penalties are severe. Hence, one of the keys to running a successful small business or home office is learning to control costs and in this economic climate, cutting costs. Even the smallest expenses can quickly add up, cut into profits and turn into losses. Many small business owners know where their money comes from, but are not as clear on where it goes. This can have a significant impact on their business cash flow.

Here are 7 tips for small business owners to control and cut costs.

1 Review your expenses regularly. You should do this in detail at least once a month and on the major areas once a week. It is critical that you do this personally. While your accountant or financial manager may assist, this is the lifeblood of the business and needs your personal attention. What gets inspected becomes what is expected.

2 Buy last year's model of furniture, computers, PDAs, phones etc. There is always something new with more bells and whistles. Be careful that you don’t get misguided into “needing” what is hot. With all the new models there will be something old. If you wait until the end of the year or for sales throughout the year, you can save on your office needs.

3 Buy in bulk and buy ahead. By buying commonly used items in large quantities, you can save a great deal. Replenish your supplies before you run out. Thinking ahead, and thus buying ahead, gives you a chance to comparison shop and take advantage of sales.

4 Buy store brands instead of national brands. In many instances, these brands are manufactured by the national brand companies but don’t carry the large marketing and sales overheads. Having spent the bulk of my business life with national brand companies, I can tell you that the current quality of many products is excellent. These can offer savings of 10-20%.

5 Take advantage of discounts. Professional and trade associations often offer their members discounts on insurance, travel, shipping and other common expenses. Similarly, some credit cards, like the American Express Corporate Card for Small Business, may get you discounts as well.

6 Save on direct marketing costs. Mail costs for your business can add up fast. To save money, use postcards or consolidate shipping. You also can buy or lease a postage meter or get a mail scale to eliminate overpaying. If you send out much direct marketing materials the savings can be substantial. There are also companies that pick up bulk mail, sort it and deliver it to the post office and still save you money. Check it out.

7 Save on employee costs. For most firms, this is the largest or second largest expense next to the product costs. Consider temporary help or contract help. While the hourly rate may be higher, you only pay for the hours you use. This can bring with it expertise that you don’t have and training that you don’t need to do. Finally, the benefit costs are eliminated.

If you run a small business, take a look at these ideas and let us know how much you save.

Thanks

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

Social Media and ROI

Traditional media broadcasts brand messaging to customers via interruptions in programming – TV and radio commercials, magazine ads, billboards. The expectation is that reaching customers enough times with a message will cause them to buy more products or services. While this has been the norm for a long time, it is based on one-way communication. It doesn't listen to or engage the customer by letting them participate.

Social media offers businesses an opportunity to start conversations with their customers about their brand. It lets them ask questions, get feedback, solve customer problems, and find new product ideas. It reaches the customers where they live on Facebook, MySpace, Twitter, Blogs, Wikis, RSS feeds and Podcasts. Social media allows business and customers to create a brand together. Hopefully guided by the company but not dictated.

Many companies are starting to get the message that social media is an effective way to reach more of their customers. MarketingSherpa shows that marketers are significantly increasing their spending on social media (Web 2.0) while at the same time drastically cutting their traditional media campaigns. In a down economy, the technologies in social media help companies cut costs and still see their customer base increase.

Every executive wants to know what ROI might be expected from diverting funds to social media instead of traditional media. My good friend Lewis Green of L&G Business Solutions has written a great article Don't Say ROI Unless You Mean It. It explains ROI and Value including the aspects of social media that contribute to them. We would follow that up with some data in support of it in the following Survey says: b2b marketers see ROI in social media. Request the full study.

Most executives are new to this medium. Most need expert help to get started and to create the right strategy and plans. We recommend Thought Labs, a technology innovation company, that has had great success with several social networking platforms such as Facebook and Bebo. They have translated their expertise into building a strong stable of clients who seek to utilize social media as a means to drive business success.

Social media is the wave of the present, not the future. In these tough economic times as companies struggle to get profitable and stay profitable, cost effectiveness is paramount. We can help your company cut their costs and improve the profit picture. Social media is just one way.

Thanks

John


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

Core Competencies of the CEO

What is required in a CEO in order to be successful? What enables the CEO to lead their company and drive profitability and company value in times of economic downturn?

CEO turnover continues to rise dramatically and this is especially apparent in times of market slowdown. CEOs are in office for a shorter and shorter time. A Booze Allen study in the 2,500 largest market cap companies has shown that in a decade, the average tenure has been cut by more than 2/3rds from 9.5 years to 3 years and the turnover is less and less at the CEO’s choosing. The non voluntary reasons for leaving have skyrocketed from 27% in 1995 to 70% in 2006. Now in 2008 with the crisis in our economy, the rates have grown even higher.

The reasons that CEOs are forced to leave are typically because they are weak at some of the necessary competencies and often have not been evaluated on them when they assumed the job. The difficulty in the CEO position is that a CEO needs to be fairly well rounded in a wide range of competencies. Flat spots will show up and can be disastrous.

What does a well rounded CEO look like? It goes without saying that leadership is a core competency and here are 10 additional best practice core competencies for CEOs:

1. Vision - The CEO, possibly with the help of his executive team, creates and communicates a compelling and inspired sense of core purpose. This is based on the vision of the future, not the reality of today.

2. Strategic thinking- Once the vision is created and understood, it is essential to put together a workable plan to get from current to the desired goal. The effective CEO can see ahead clearly and anticipate consequences and trends accurately, has broad knowledge and perspective and can translate this into a plan based on key strategies that will provide long lasting progress for the company.

3. Culture – The CEO is responsible for creating and maintaining the desired culture and environment. If vision is where the company is going, culture and values tell how the company gets there. Values outline acceptable behavior. Work gets done through people, and people are profoundly affected by culture. Culture is built in many ways, and the CEO sets the tone. His every action—or inaction—sends cultural messages.

4. Communication. This skill goes further than being able to articulate the company's values and vision. It is about aligning people to the right direction and the specifics of their role in driving the business forward.

The CEO must communicate effectively not only internally but externally too with the Board, the financial community, customers, suppliers and the community. Some may argue that effective communication with the Board is the primary core competency. Weakness here is certainly going to be trouble.

5. Building an effective executive team - Getting a management team and different functional areas in concert and working together is an important skill. The CEO's responsibility is to manage the business in such a way that departments and individuals work together to fulfill the vision. That requires putting the right team together, motivating them and providing development opportunities so that they grow as the business grows and they can handle increased responsibility. A CEO needs to be focused on how to optimize people.

6. Business acumen - The CEO must have the following attributes:
- Knowledge about trends, practices, and policies affecting the industry and business.
- A firm understanding of competitors and a good grasp of effective strategies and tactics that work in the marketplace.
- Continuous learning: A quick, relentless, and versatile learner. Can analyze both successes and failures and learn from the experience.
- Ability to sift through vast amounts of information, solicit opportunities and possibilities, and communicate effectively to others.
- Ability to blend intuition with analytical skills.

7. Flexibility and handling risk - The CEO has to embrace ambiguity and uncertainty, coping with and embracing change and using it to the advantage of the company. They are able to act without having the total picture and able to adapt to dynamic environments with ease and speed. CEOs take and manage appropriate risks and use them to the organization's advantage.

8. Customer focus - CEOs have a clear understanding of customers' needs, preferences, interests, timelines and decision-making criteria. Focusing on meeting those needs and doing so profitably means success for both the company and the customer. Long-term customer satisfaction builds loyal, repeat customers.

9. Financial acumen. While much of this often falls to the CFO, the CEO must have solid financial acumen, such that they understand the key leverage points in the Income Statement and the Balance Sheet as well as the critical aspects of ensuring short-term cash flow and long-term profitability. It is often said that cash is king and certainly cash flow is key to success.

10. Use of current Best Practices. This does not mean jumping on fads but rather the ability to capitalize on technology, outsourcing, managing the remote work force, and social networks for example. Included in this would be identifying and using resources such as specialists, consultants, etc. The great CEOs have always been able to bring in the right people at the right time to help drive profitability.

The CEO’s job is not an easy one. It is complex and calls for multiple skills. As you review the list above, how well do you meet the criteria? How does your CEO?

We can help. Contact us for best practice profit drivers from the above set of CEO Core Competencies. We can bring the earlier articles on this site to life and make the impact specific for you. See number 10 above again.

Thanks

John

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