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

Leading the Turnaround – 12 Traits of Leaders

The economy continues to have many companies in turnaround situations. Companies today, more than ever, need effective leaders.

Are you an effective leader? Not only do we ask this question of ourselves, but our organization is also asking it about us every day. And they are evaluating us. Here are the key traits that leaders must have and exhibit if they are going to be successful.

1. Mission setting ability. A mission defines the reason an organization exists. It sets the business apart. Have you created one for your company? Is this readily understood across the organization?

2. Visionary. This identifies where the company wants to go and what it wants to be when it gets there. Has the long term opportunity for the company been developed and provocatively communicated?

3. Smart. Leaders are analytical, creative and thoughtful. They have the brain power to understand situations and find the right path of action.

4. Competitive. Leaders want to win and they do. Leaders understand that competition is a good thing for personal and professional growth because it sharpens skills.

5. Positive Attitude. There are many quotes from famous people in all walks of life that support the importance of attitude. Success in life is based more on mental attitude than mental capacity. The leader's attitude always seeps through. Positive or negative.

6. Tenacity. There are going to be rough spots in any organization’s progress. In fact, the rough spots may be disasters that must be overcome. Leaders have the ability to not only stay the course despite the difficulties, but also to inspire others to do so as well.

7. Improvement orientation. Businesses must grow in terms of getting better and better or they will stagnate and die. A leader has to be in a state of continuous improvement and that comes from a combination of learning and executing.

8. Decisiveness. Leaders are action oriented. They gather the facts and they come to well reasoned, fact based decisions. They make the decision and do not delegate it or put it off.

9. Courageous. Leaders take risks – smart, educated risks. They choose a course of action and make it happen.

10. Motivating. Leaders find the good in opportunities and the good in people and cause people to find the means of capitalizing on opportunities and overcoming the hurdles.

11. Sense of humor. In order to survive, the leader has to have a good sense of humor, both for their own good and the good of the team and the organization.

12. Honest and ethical. This goes without saying. Leaders must have good values or their followers will leave them quickly.

How did you do on this check list? Contact us if we can help you with any of these.

Thanks,

John

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

Social Responsibility – Kingdom Assignment

Social responsibility is an important Core Value for every company. Not only is it the right thing to do, it makes good business sense. It tells and shows employees that the company cares about them, their lives and the community in which they work and live. As a Core Value, it becomes part of the company’s culture and work fabric, causing behavior that has positive outcomes.

Corporate social responsibility (CSR) is the business responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise. It may be difficult to quantify, however, a number of studies have shown a correlation between social/environmental performance and financial performance. The benefits can be any or all of the following for example:
1. Revenue and profitability: Often the implementation of these ideas can lead to new sources of profitability either through new revenue opportunities or cost avoidance. Company after company has documented these benefits.
2. Human resources: It can be an aid to recruitment and retention. CSR can help improve the perception of a company, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering.
3. Brand Differentiation: Companies strive for a unique selling proposition that can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values. You will note the sweep of “green” products that have been introduced in almost every industry.
4. Risk management: Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption, scandals or environmental accidents. Building a genuine culture of 'doing the right thing' within a corporation can offset these risks.

The Maver Management Group has long been a supporter of social responsibility. We have been active with a number of area organizations and ministries as part of our giving back. We are currently involved in a “Kingdom Assignment" of raising money to pay for Bibles that will be used by new churches established by CityTeam, San Francisco. CityTeam works to help the economically disadvantaged in San Francisco and is working diligently using a productive formula to establish new churches and reach many, who desperately need the love, caring, guidance and help. We are blessed to be involved in this good work.

As we reach out to others to tell them of this program, we consistently find that the real benefit comes to us. Not in terms of new business or profitability, but in terms of being of significance in what we do. It is a Core Value for this company and the impact is far reaching.

This type of assignment may not fit your needs or desires perfectly. However, another one will and we encourage you to include social responsibility programs in the activities of your company, both on a personal and corporate level.

Contact us if you want to be part of our efforts or if we can help you with yours in some way.

Thanks.

John

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

Turnaround Management - It’s time to stop watching and get into the game

The Bowl games are on for college football. There seem to be more each year. Perhaps this is indicative of our population becoming more and more watchers of the events rather than actually participating in them. We sit at home in our easy chairs with our favorite snacks and beverages and just watch. Similarly, watching the Rose Bowl Parade on TV is the only way to see it for most people but those that have been at the parade or better still actually in it, say that there is a world of difference in the experience.

Are you a watcher? Are you a watcher at your company? I don’t mean are you alert to all that is going on around you. I mean, are you just watching the company game or parade?

There is a big difference between watching the game and actually playing it. You have to get your hands dirty for one thing and you actually feel the intensity of the moment. You get the satisfaction of the contact with the world and not just the sound bites. You do it and learn from it and don’t have the replay to live it again and again with the armchair quarterbacks. You learn from doing.

Leadership is about not just getting involved but also setting the direction and getting the rest of the organization involved and playing. It is being the team leader on the field. It is standing shoulder to shoulder with your colleagues and putting all your energy, intelligence and talents into the game. You are a player not a spectator.

Here are some tips on how to get involved:

1 What the game plan?
Do you have a written business plan that you and the rest of the organization know and are following? Can you imagine playing a game without a game plan?

2 How good are your players?
Take a look at the executive team and the colleagues around you. Are they "A" players? You can’t win with sub par players. Evaluate them vs. the plan requirements and trade up in caliber.

3 How good are you?
When was the last time you took some refresher courses or honed your skills? Do you have a coach? All game players have at least one and all successful “C “level people do as well.

4 Have you focused on the right targets?
Do you have the right clients and customers? Have you identified their unmet needs and have you positioned your services or products to meet those unmet needs?

5 How are you using your resources?
Successful teams harness their resources to maximize the ROI on them. Resources are scarce and can’t be wasted if you expect to win. Cull through the project lists and prioritize. Eliminate the low potential or high resource constraints.

6 How are you measuring your progress?
Football teams always have the yard markers which tell them exactly where they are and how they are doing? What are your “yard markers”?

If you are finding that you have negative answers to the tips above as you reflect on your company, you need help. Contact us. We can help you and your company.

Don’t let the parade pass you by. Get in the game!!

Its time to stop watching and get actively involved.

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

Turnaround Management – Focus

CEOs and companies are charged and in fact forced to do more with less. That means greater results using fewer resources. The advent of our technological advances was meant to streamline our work processes and make us more productive. In fact, when the first desktop computers came out, there were predictions that most people would be working less than a one day work week. It hasn’t worked out quite that way. Life and business have become more complex and there are more and more demand on us, our resources and our time.

Focus has become more and more important. How do we target our activities and how do we use our scared resources?

As a simple case in point, the most common complaint in companies at all levels is about e-mail and the inbox. How to handle it is a good example of what successful executives must do to be able to survive in turnaround times. E-mail and the inbox seem to be controlling our lives.

Each day we have entries, sometimes many entries, into our inbox. They come from a wide variety of sources. Some are quite important. Others may be jokes or inspiration notes that are passed from person to person. Some are promotional messages trying to sell us something. Some are spam and get moved without our help to the discard file.

Which ones do you open first? Do you open the “special” ones from friends and family? Do you go for the ones which you know you can get rid of immediately? Do you start with the most important ones and use your best time on them? How do you choose?

Do you read the emails and handle them as you read them or do you read them all and then have to re-read them to decide how to handle them? Do you delete the emails once handled or do you leave them in your inbox to further clutter your life and cause you to make some decisions over and over?

Life is like an inbox. It constantly presents demands of one sort or another. If you have a predetermined way of sorting the demands and activities you can speed the review process. You can make yourself more productive.

The way in which we choose to handle e-mail demands is indicative of our focus. If you take all the fun ones first, you are left at the end of the day with the problem ones and that causes stress, since we generally are not at our best at that time of day. We may even be mentally and physically exhausted. If you take all the easy ones, you can increase the number completed, but that may not mean anything if you didn’t work through the important ones that will really impact the business.

Or alternatively, do you focus on the most important ones and make the tough decisions? Do you send them off to get the advice and council you need along with the facts that will help your decision making process? Do you do this while you and your support staff are fresh and therefore can be at your best for these decisions?

Of course, this is a simplistic example of a very complex job that you have. Running a company is not an easy task. Many executives will answer these questions with their egos in mind and choose “the right answer”. But they will miss the point of the lesson.

Think about it. How are you choosing? What is the impact on your business and your life from the process you use? Whatever your process make sure that it brings you satisfaction and success.

If you need help to identify the really key issues and focus the right resources on them for maximum effect, contact us. We can help.

Thanks

John



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

Cost Cutting for Companies– Bullet Points

We have written a number of articles about cost cutting for companies. The articles have covered companies in a variety of industries and situations. They have summarized best practices and you can read each one of them here on this blog. Cost cutting has become a major focus for most companies.

I am often asked for some bullet points about cost cutting. I could say:
***Plan
***Do
***Review
***Regroup

These are bullet points but not very helpful.

Cost cutting is not about bullet points. You need a much fuller understanding. Bullet points, like those mentioned, are like giving you some general comments about how to build a house and expecting you could go off and actually build one.

You need a much deeper understanding, along with a mentor, advisor, coach, consultant etc. who really knows what they are doing

What is the most appropriate direction to give to you regarding cost cutting? That will depend upon your company’s objectives, what is needed to achieve those objectives and where you currently are in both the business and the costs you have already cut. It has to start with the plan.

What is your business plan? What are you working to achieve and what are the key elements required to enable you to achieve the goals? What are the interactions, such that costs that are cut in one area do not negatively impact other areas? Often changes can cause unanticipated consequences in other functions and processes that cause even more damage. Without a practiced eye to monitor the changes, many companies end up worse off after the cost cutting than before and they spiral down in revenue and financial measures.

What is the impact on your organization? What skills and talents are required and what do you give up in cost cutting? Most companies start their cost cutting with cuts in employees. They often go for the older employees since they tend to have higher salaries. The problem is that the companies are also cutting experience and knowledge that can drastically impact efficiency and effectiveness throughout the organization. Once the “internal IP” that is in the mind of the seasoned employees walks out the door, much is lost and it is very expensive to regain it.

Cost cutting alone is never the correct way to right size a business. Thought and planning must also go into reigniting the growth of the business. That is why the plan and the organization are so critical. Without them the company will continue to flounder.

If I were to comply with the original request for bullet points on cost cutting, I would offer just one.

*** Contact me and I can help you.

Thanks

John

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

Veterans Day

Today is designated as Veterans Day in the United States and Remembrance Day in Canada. In other countries it is known as Armistice Day. It was originally set aside to mark the end of the Great War (World War I) on the eleventh minute of the eleventh hour of the eleventh day of the eleventh month. This was to be the last great war. The fact that there is now a I behind the name and there has been a WWII as well as many other major conflicts, says that we are not very effective in learning from our past mistakes.

That isn’t surprising since for most people there is no memory of the war, let alone the reason for the designation of the day. Only a few mark the event or the time. While some have a holiday on this day, they don’t use it in memory but rather as a vacation day. As time has passed, we give less and less attention to the memories. When I was a youth in Canada, school stopped for an hour and all the students gathered around the flag pole, where the flag flew at half mast, for a ceremony to honor those who had fought and those who had died for us. There were hymns, songs, readings and poems and it was meaningful. We wore “poppies” that were sold by the Veterans and the bright red made a sharp contrast to the earth tones of the clothes. Remembrance Day was a time for remembering!

Today, it appears that a few veterans get together and remember. Families of the fallen remember and the rest of us just pass by. We just won’t learn and so we are destined to repeat and we do.

You may very well ask what has this got to do with business? The answer is simple. If businesses don’t stop and reflect on what has happened, learn from it and reformulate their plans, they too will be destined to repeat the failures.

As turnaround experts, we see this far too frequently. Executives continue blindly on, doing the same activities over and over and expecting better results. Insanity, right?

Let me encourage all of you to stop today and reflect. Have a moment of silence for the fallen and those who have fought for you and your freedom.

Have another moment of silence for you. Reflect on your life. Reflect on your business. Reflect on what you could be doing differently to get more success. Reflect on the successes and what can bring you more successes.

To the fallen, thank you!

John

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

Turnaround Consulting - Turning an Organization from Mediocre to Exceptional

How good is your company, organization or division?

The answer is very important because the companies that will come out of the recession and do well are going to be able to answer this in positive terms. Book stores and office shelves are full of books that chronicle the practices of high performing organizations. This list includes “Built to Last,” “The Breakthrough Company,” and “Good to Great.” The problem is that most companies don’t last, don’t breakthrough and don’t make the leap from “okay to fair” let alone “good to great” because these organizations maintain a focus and culture that insures mediocrity.

A colleague, Sandy McMahon who runs Renaissance Executive Forums of Silicon Valley, recently wrote an article about why organizations stay mediocre and never reach their full potential. What stands in the way is “a culture of status quo.” This is a very important concept and yet so simple. As a result of it, organizations do things that will guarantee they will remain mediocre. That may be happening, at least to some extent, in your company and you will want to turn that around.

However, there are some ways that can help you turn mediocre into exceptional. With proper guidance, most companies are capable of achieving vastly more than their current results. Here is my advice.

1 Create and share a single, simple strategic focus. As we have written often, many companies have no strategic plan and if you don’t know where you are going, no road will lead you there. Too many companies have a strategic focus to improve profits. There is no argument that profit is important - it is! In fact, mediocre companies focus too much on revenue and not enough on profit. But what the mediocre companies fail to do is to energize and rally employees, vendors and clients around a short and focused reason to support the company for the long haul. Work with your team and identify a simple basis that will cause all of your organization and stakeholders to work for a goal that is meaningful to them.

2 Provide the “Big Picture” to the organization and not only to the top. In mediocre companies, there is a belief that the rest of the organization are not capable of thinking independently but need to be told what and when to do something. Leaders practice the “mushroom theory of management”, keeping employees in the dark, under a layer of fertilizer. The slave ship scene from the movie “Ben Hur” says it all: “Row well and live.” Now it has been updated to “when we want you to know something we will tell you.” This undermines the initiative of the rest of the organization and does not take full advantage of their potential contribution. Share the plan with them and turn them loose within guidelines. They will dramatically add to the acceleration potential.

3 Expand from single minded top down management. Mediocre companies believe ideas for improvement come only from the top. Ideas from anyone else are dismissed because they come from people who don’t see the “big picture.” While many people in an organization can say no to initiatives, changes and improvements, there is only one person, the one at the top, who can say yes. With every decision resting on just one or perhaps two at the top, it is clear that no one else really has any authority. Both business and employee participation stagnate. Driving down decision making, once the plan is shared, enables all to participate. Progress and profit driving ideas are accelerated.

4 Hire “A”s not “B” and “C” players. Many hiring managers shun bringing in new people with more education, more experience and impressive backgrounds simply because new employees of this caliber are threatening to them. As a result, the organization misses out on the best people and it is always the people that make the difference in an organization. Go for the best and let them teach you too.

The caliber of the organization is also hindered by ignoring training and education. The mediocre company believes that it knows everything it needs to survive, and sees no need for continuing education for anyone. Our surveys of such companies show a consistent lack of development initiatives for employees. The only way to improve is to start with outstanding employees and feed them education and training so that they get even better. Check out the top companies and see their hiring and training principles.

5 Encourage people to step up to new responsibilities and initiatives. In a culture that fosters the status quo and believes “this is the way we have always done it,” those who step up are agents of change and systematically hindered and eventually forced out. If a company follows the sharing of the plan and the decision making with high quality employees, the result will be a dramatic change from the status quo and top management will be very pleased with the results.

There are two corollaries to the reluctance to step up. They are:
a) Nodding heads. In meetings, only a few say anything of substance. The rest simply nod their heads in compliance. There is fear about risking their job by saying anything that could be construed as being disloyal. There is no serious discussion on how to have a better business. Employees must be encouraged to participate and share their ideas. Effective managers operate as gatekeepers in leading their meetings so that all participate and feel comfortable doing so.

b) Resistance to change. This virus, manifested in meetings filled with people who simply nod their heads, moves to the department level once the meeting ends. Managers will take no risks and make no moves without written direction. This is never possible in any organization that hopes to compete in the current fast paced world. Managers must have clear objectives and guidelines within which they can use their own judgment and decision making for improvement. They must be supported and held accountable to make those changes.

6 Institute for pay-for-performance. Mediocre firms believe that if they offer a nice place to work with a steady paycheck and solid benefits, they are serving all the needs of those who work there. This simply is not true! The best people strive for increased responsibility and company and personal progress. They resent having lower performers reap any rewards from the contribution of the top performers. They will look elsewhere for employment and continue the circle that causes mediocre companies to stay mediocre. Set some targets that stretch your employees. Give them the training they need and the motivation to reach the targets. Then watch the acceleration.

The mediocre organizations are easy to spot as well. You won’t find anyone coming in early or staying late because there is no benefit to doing so - no reward for success or the effort that goes with it. Also most often these days, they have signs that say “Out of Business”.

You can turn your company from mediocre to exceptional with some help. Contact us. We have the experience and have helped turn around many companies. You will like working with us.

Thanks.

John

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

Chief Operating Officer (COO) Core Competencies

There are many books and articles written about CEOs, their responsibilities and what they need to do to be successful. We have published a number of these articles here based on personal experience as a CEO. However, despite the critical role that the Chief Operating Officer (COO) plays in company operation, there are very few articles written about them. As Director of the East Bay Northern California Chapter of the COO Business Forum, I have become intimately acquainted with COOs who are very effective in what they do. This purpose of this article is share some of the insights that have been gleaned from interactions with COOs and some of the articles that have been found.

The COO position entails running the day-to-day business operations of the company, freeing up the CEO to fulfill responsibilities as specified by the Board of Directors. In functional respects, the COO will be a vital member of the CEOs core staff, working with the CEO to develop and implement Company’s long-term strategy. The COO will also interact extensively with department heads to provide leadership and direction for all business activities and will be responsible for all major operational decisions. In many companies, the COO is responsible for making the numbers via the business units.

CORE COMPETENCIES
1. Vision: With the CEO, the COO leads strategic, long-term planning, vision and goal-setting using the ability to “look around corners” to anticipate future opportunities or problems. They take strategic and pre-emptive action.

2. Develop and Leverage Relationships: Possesses exceptional relationship-building and interpersonal skills, since diverse functions report to them and the smooth interworking is critical. High emotional and social intelligence makes the COO function more effectively.

3. Communication: Communicates passionately, effectively, and persuasively across a diverse set of stakeholders. The COO must also be able to create processes and structures to facilitate effective communication both internally and externally.

4. Building and Managing Teams: Inspires, motivates, coaches, and develops others. Listens well and continuously learns and seeks advice and feedback from others.

5. Results Oriented: Relentlessly pursues improvement and results. Flexible, with a strong work ethic and an entrepreneurial spirit to accommodate high level of responsibility and multiple priorities. Creates a culture of mutual accountability.

6. Analytical Skill: Analyzes and problem solves at highly developed level. Outstanding organizational skills and high attention to detail are critical to success.

7 Management style: Demonstrates an ability to manage conflict, build consensus, and facilitate problem-solving and collaboration among various parties.

ESSENTIAL DUTIES AND RESPONSIBILITIES:
• Advise the CEO on strategic business development and key corporate planning issues and make recommendations on major business decisions.
• General oversight of all operational and business functions, including manufacturing, research and development and regulatory affairs administration and operations.
• Keep the CEO informed about business activities, potential threats, opportunities, and recommended actions.
• Follow-up on decisions made in management meetings and ensure proper execution.
• Take charge in high-priority crises of an operational nature.
• Shape and develop department strategy and organization. Ensure proper staffing and report structure within departments. Help determine resource allocation among departments. Facilitate resolution of issues between departments.
• Encourage managers to evaluate and take actions that are consistent with company’s overall strategy which will lead to high performance. Challenge basic assumptions underlying each department’s operation. Act as a sounding board for department managers.
• Set performance goals which are tailored to each department. Develop operational goals for each department which are aggressive and tied to long-term goals.
• Monitor department performance against performance goals to ensure that progress is being made and collective action, if necessary, is taken. Ensure adherence to annual budgets.
• Lead program to build organizational capabilities. Develop a group of well-rounded, capable managers in each department.
• Institute processes that facilitate effective and efficient work flow.
• Travel, as required, to customer locations, supplier facilities and other executive matters.

The COO's job is quite extensive and good ones make the CEO's life much more pleasant and the company much more profitable.

Thanks

John

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

Turnaround Cost-Cutting Techniques

While it appears that the economy is starting to show signs of life, we are a long way from health. Many businesses are struggling and we are providing turnaround expertise. Some will take the advice and be saved. Others may not make it. More than ever, cash is king. Businesses don't go bust, they simply run out of cash. We have written before about cash flow and its importance. Cost cutting has to be effectively married with good planning and effective investment in revenue.

Here are turnaround, cost cutting techniques for you to employ as you bring your business back to health.

1 Start with the plan.
Review your business plan and make sure that it is concise and focused. Build on your core competencies and be ruthless in insuring that only the projects and resourcing in the plan are being pursued. Do not allow business plan creep.

2. Cut cost from the top down.
Starting your cost saving strategies with directors and above first is imperative. This is much more than eliminating bonuses or perks. It is eliminating directors. Each senior person brings with them a set of projects and priorities that need to be resourced if the director is going to do their job. Take a judicious look at what actually has to be done and how many senior staffers are required. Each one removed will take with it significant other savings. But make certain that the cuts follow the plan above. These steps are tough but it sends the message loud and clear to the rest of the company.

3. Get staff buy in.
Cost-cutting is unpopular with staff at all levels. By now, they have been faced with it, not only within your company but with family, friends and others that they know in other companies. There can not be a series of continuing cuts. Follow your plan and make this one last cut and tell the employees that it is the last one. Get them to participate knowing that it can mean solid employment for all who remain. Treat those that must leave with respect.

4. Improve your forecasting accuracy.
Being able to accurately forecast sales by unit keeps inventory levels low and cash free. Many companies forget that as business improves it requires inventory increases to satisfy the new demand and that will tie up cash. Accurate forecasting also enables you to be able to budget for revenue generating spending. This is critical in the turnaround period.

5. Reduce Accounts Receivable.
You are not a bank. At least most of you are not banks and therefore having your customers using your money in the form of unpaid invoices for products in their hands is unacceptable. They are in effect using your cash! Do not hesitate to ask for your money. Clearly, this may be awkward at times but persistence and creativity can pay off. You don’t want to lose the customer but you do want to lose the debt. Get your cash.

6. Cut the Cost of Debt.
Your company may have been forced to extend its debt load during this recession. Now is the time to review it and determine how you might reduce the payments and conserve cash. Credit is still very tight but it is available. Go talk to your banker.

7. Capitalize on technology.
Be open with your clients and establish if your attendance in person is really required. Many companies are using video conferencing or webcams for both client meetings and internal work. Not only does this save travel expenses, it increases the productive hours of each employee.

8. Upgrade processes.
Many companies are still doing business in the manner that they did pre the recession. That won’t work any more. Review your basic processes and streamline them. Eliminate ones that no longer bring a high value to the organization. You will be amazed at the “deadwood” that exists. Automate wherever possible. Better business and better cash flow will result.

9. Outsource.
Outsource when it is not a core competency. There are many other companies in various parts of the world that have the core expertise and can do it faster and cheaper than you can internally. Look for these opportunities and make them part of the business plan.

10. Increase use of consultants.
Many articles advise companies to cut or eliminate consultants, believing that they can be a false economy. This is not necessarily true. We recommend bringing in consultants to do a specific job and capitalizing on their expertise. They can get things done faster and less expensively and make a positive impact on your cash flow. Don’t go for the big names with a lot of overhead. Find the smaller, less expensive but well experienced consultants that fit your budget.

This is turnaround time for companies. The wise will survive and will apply these cost cutting techniques effectively.

Let us know how we can help you improve your cash flow and bring your company to health.

Thanks.

John



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

Cost Cutting - Scalpel or Chainsaw for Turnaround Success?

Is your company still in the cost cutting mode? I don’t mean are you still concerned about controlling costs, since that should be an ongoing mantra in good times as well as bad. I mean, are you focused on cutting costs to continue to survive?

By now you will have cut out the obvious excesses and are down to the hard choices. What will you use for turnaround success, the chainsaw method or the scalpel?

The chainsaw method sees this as a relatively simple solution to a tough problem. Is there a plan? Yes! Generally it is a simple one. Either take a percentage of cost out of all functions or look at the largest expenditures and cut them. Large “chunks” of cost are cut away and the rest stand as it may. In terms of a quick fix, this method works. Costs are very quickly reduced. However, generally there are severe consequences for both the short term and long term.

In the short term, there is chaos since the cuts have been done without a fully developed plan. What is left may not be able to function effectively or at all due to the elements that have been removed. Employees with specific skills have been lost and others with lesser or without those skills are required to take their place. Processes will not function efficiently. In the long term, the company may have cut the resources and programs that are going to be required to turn the company around and enable it to survive in the upturn. Once the people or the initiatives are lost, regaining them will be very difficult. It is also a major challenge to ignite the organization to achieve and repair the damage to the culture. If your company has used the chainsaw method, you will be able to add many other consequences to the list from your personal experience.

The scalpel method starts with the business plan which reflects the current pressures from the economy but also capitalizes on the core competencies and the requirements for longer term success. The total cost reduction target is identified and employees throughout the organization participate in identifying areas that can be cut, postponed or done more cost effectively to reach that target. In doing this, the consequences of how the company will function post the cuts are reviewed and plans made. This much more orderly cost cutting process not only reaches the targets in the short term, it also sets the company up for success longer term.

Both of these methods benefit from expert assistance. The chainsaw method needs analysis and solutions as to how to recover from the damage done in getting to the lower cost level. The scalpel method benefits from help in the planning and implementation process.


As a turnaround expert, I have worked with companies and both methods. In the chainsaw method, I am brought in after the fact to resurrect the company and help breathe life back into it. Additional help is generally required to execute the plans, since key company people have either been laid off or quit. This can be expensive. In the scalpel method, I am brought into analyze the challenges and the opportunities in reaching the cost saving goals and then create and execute the business plan that delivers. This is a much more productive exercise.

If your company has used the chainsaw method, contact me. I can help you pull out of the consequences. If your company still requires additional cost savings, contact me and I can help you use your scalpel.

Thanks,

John


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

Company Turnaround – Not a Children’s Story

Many of us remember the fairy tale of the Little Red Hen. This story is known not only to our USA readers but many of you around the world, who are reading these articles. Little Red Hen lived on a farm with her five chicks. On this farm, there also lived a dog, a cat and a duck, along with a number of other animals. Red found some seeds and then asked for help in planting, harvesting, grinding and baking but got the response “Not I” from all. However, all were around to eat the bread when it came out of the oven. They didn’t want to do the work but to share in the rewards.

To some extent, that is the way it used to be in business too. Many employees were focused on their own department and responsibilities and built larger and larger organizations. Teamwork and extended productivity were only a subject for meetings and discussion and not actually practiced. However, the employees were there to share in the bonuses and promotions as the business grew.

NO LONGER. Turnaround for companies isn’t a children’s’ story but the basic idea still works.

Here is how the story could go today and why bringing in an expert on turnaround is such a smart idea before it is too late and you are out of business. It is told in the form of a children’s story to make the point without setting up defensiveness in the readers.

The financial pressures on the farm (this could be any business, but for purposes of this story it is a farm) were getting more and more severe. Prices of eggs, the output of the farm, had risen but were now at a level that further increases were not possible. Demand was falling. Profitability plunged. Much of the days’ activities in all departments centered on what the farm was going to do. There were going to be severe budget cutbacks. Some would have to lose their jobs and.

The farmer, who was the CEO of the farm, had pressures from all around him. He had a lot of ideas given by the Board of Directors, the news, the executives and even his wife. All the ideas involved slashing costs in one way or another. In an attempt to meet the profit targets, which hadn’t changed despite the worsening economy, since there were shareholders and the bank and the other creditors and etc, the CEO give direction to his executives to reduce spending by 15% across the board and start laying off employees.

While this quickly cut some costs, the result wasn’t what had been expected as other costs had to increase to compensate for some of the lost activities. It also caused chaos in the company since there was no overall plan. Almost every process was affected in some way and productivity slowed dramatically.

That led to the need for further cuts in order to make the now reduced targets. The analysts on Wall Street had pulled their investments so the farm’s stock price plunged. Not only were bonuses eliminated, pay cuts were initiated. The layoffs continued and many seasoned farm employees were let go. As you would expect, revenue fell again and again. Soon cash flow dried up. Does this sound familiar as a real life story?

Since this is a fairy tale and not real life, there is a happy ending to the story. In real life, most of these companies would be put out of business.

The Little Red Hen convinced the farmer to bring in a turnaround expert. Not one of those expensive large consulting firms but one that had the expertise and a track record of success. The turnaround expert quickly analyzed the situation, pulled the CEO and the executive team together and led them in creating a business plan that was based on their core competencies and focused the remaining resources on the greatest opportunities.

Unlike in the earlier story where no one would help, here everyone had a responsibility and accountability for the results in their section. The plans were greeted with enthusiasm and soon the business had turned around and like in the children’s stories, all lived happily ever after. Well, perhaps not happily ever after since even in children’s stories there is the realism. If you don’t keep executing the right plan, you can fall back into trouble

Please do not think that turnaround work and plan was that simple to define and execute. It never is but with the right guidance and expertise your company can be turned around and you too can deliver a happier ending. The key is to get the right plan and get some help to turn the business around now. If you wait it will be too late.

If you don’t already have a turnaround expert, contact us and let us help. We have saved a number of “farms” and businesses too.

Thanks.

John


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

Turnaround – Are going to get your share of the recovery?

The economy is beginning to turn upward and while there are still major obstacles to its health, there are positive signs and consumer confidence is starting to return.

The all important question for you is “will you be participating?”

Will your company be participating? Have you positioned yourself and your company to get a share of the upturn or will the potential business pass you by?

Here are some questions to ask yourself to see if you are ready:

1. Have we focused solely on cost cutting in order to survive and if so have we actually undermined the opportunity to recover? Many answer this question quickly with a no and then upon further review find they are incorrect and are in trouble.

2. Have we maintained the strength of our core competencies through this downturn? Do we actually know, outside of the executive team, what our core competencies are?

3. Do we have the cash availability to fund the inventory increases that are going to be needed as we start to ramp up production?

4. Do we have the cash reserves to cover the short term increase in accounts receivable that will happen with the new sales? This recognizes that even though some customers and clients will pay within terms, we still will have increased AR. It also recognizes that some clients are going to be cash strapped themselves until they get their cash flow flowing and will delay payment to us and other suppliers.

5. Do we have relevant business goals that make sense in today’s environment?

6. Have we kept the right talent in our human capital to succeed? What is missing and where and when will we get it?

7. Have we upgraded to take advantage of the large, very qualified talent pool that is available and their willingness to accept more modest compensation?

8. Do we have a business plan that is actionable and known throughout the organization?

9. Are our business goals clear and communicated to all employees so that they can participate in driving the business ahead/

10. Have we identified the key issues facing the company in order to participate in the economic upturn and do we have a specific plan in place to address each issue?

11. Is our business progress starting to trend up and can we see means of accelerating our progress?

12. Do we have a clear customer focus across the organization? Are we committed to customer satisfaction and possibly delight? Customers are far more choosy now.

If you can answer all of these questions in the affirmative and have the facts to back them up then you are ready to take advantage of the prospective upturn and will be in a position of strength. If you have answered some or all of the questions in the negative, you may be in a great deal of trouble and need help.

Contact us and let us help you. We have helped many others be ready to get more than their fair share of the business to come.

Thanks

John


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

Turnaround Plans - Mission and Vision Statements

Many companies undertake turnaround execution without an in-depth, thought-out plan. They start with the realization that they have to cut costs to survive and they do so either aggressively or worse, tentatively. Tentative cost cutting just prolongs the process and speeds the downhill slide to out of business. But both are detrimental to the company’s health.

We write often about having a plan. We also recommend that in the development of that plan, companies start with a review of their Mission and Vision Statements. This is forgotten by 91% of companies in their turnaround activities according to recent studies. Yet this is the guiding star for direction setting and use in creating the strategic business plan that will successfully direct the turnaround efforts, as well as the rise again, once the economy improves.

The Mission Statement is a brief statement of the purpose of an organization or company. It outlines the organization's broad reason for existing; what it does and for whom. It tells you what the company is today. A mission statement should say who you are, what you do, what you stand for and why you do it. It is not a slogan, goal, business plan or public relations piece.

Mission Statement examples:
• "Provide society with superior products and services by developing innovations and solutions that improve the quality of life and satisfy customer needs and to provide employees with meaningful work and advancement opportunities and investors with a superior rate of return." - Merck
• "To enable people and businesses throughout the world to realize their full potential." - Microsoft
• "Organize the world's information and make it universally accessible and useful." - Google

The Vision Statement outlines what a company wants to be, where the organization hopes to go and it provides clear decision-making criteria. It concentrates on the future. It is a source of inspiration; its dream. The best ones are direct and powerful. Try to relay somewhere in your statement that you understand the future of your business depends on delivering increasing value and quality to your customers, accounts and clients. This delivers a clear message of your priorities.

Vision Statement examples:
• “To experience the emotion of competition, winning and crushing competitors.” - Nike
• “To make people happy.” – Walt Disney
• “To give ordinary folk the chance to buy the same things as rich people.” – Wal-Mart
• “To solve unsolved problems innovatively.” – 3M

In today’s world, many ask about time frames for both of these statements particularly in turnaround situations. The answer is that the statements can hold true for many years and continue to provide guidance. Clearly, the plans that will flow from these statements have to be adjusted on a much shorter time frame to reflect current opportunities and challenges.

Why are these important?

First, they set the direction. If you don’t know where you are going, any path will take you there. Turnarounds are about focus, - focus on direction and focus on plan elements and resource utilization. These statements provide the guidance.

Second, despite the well publized loss of employee and company loyalty in the market today, people are not motivated by dollars alone. They want to work in organizations that inspire them and cause them to feel good about what they do at the end of the day. These statements should provide inspiration and motivation.

Third, it keeps the company grounded in values and not every day exigencies. It will make your life simpler and will help keep away the firefighting.

If you do not have Mission and Vision Statements for your company or are not using them in your turnaround efforts, let us know. We can help you.

Thanks

John


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

Turnaround Management – 11 Tips for Creating the Plan

In all of the articles we have written here, we have insisted that companies start with a plan so that they know where they are going and have a focused means of getting there. Just cutting costs isn’t going to turn a company around. There has to be a comprehensive plan. The plan doesn’t have to be complex. In fact, we recommend that it be relatively simple so that it can be easily understood and followed.

Here are 11 recommendations to make the planning successful:
1. Start with a clear, well-understood direction from the CEO. The process needs a champion and if not the CEO, there has to be another “C” level executive that will be responsible.
2. Do some research before the meetings. Sound information is required to make sound decisions in your meetings. Failures generally come from relying on bad or no information. Your SWOT analysis should provide information about your external environment as well as your internal operations. Do some benchmarking to determine the relevance of your strengths and weaknesses.
3. Don’t assume everyone thinks like you. Some like big picture visioning. Some like more concrete. Make sure that all types are handled and value the diversity. The key is to insure that all are working from the same set of data that you collected in point #2.
4. Get key players involved from the start. Spread the word to others in the organization. The plan affects everyone so let them know what is happening and what they can expect.
5. Use an experienced facilitator. Yes you can lead meetings too but this enables you to be fully engaged in the process and have an expert who can direct and guide you to do all the right things to get to the right plan.
6. DO NOT ignore the elephant in the room. If there is a large issue facing the company or within the group, forging ahead will cause disaster. Make sure that you surface the issue and allow all points of view to be heard before you solve it. Then proceed with the strategic plan.
7. Focus. Identify the top 5 strategic issues. There are generally only 4 or 5 things that are going to make a significant difference to the success of the company. In turnaround time there may be even fewer. Find them and concentrate on them. The rest will take care of themselves or will drop away as unimportant. Delete the fluff – less is more. Too many pages doom the plan to be put up on the shelf and never used.
8. Get out of the office. It doesn’t have to be at a resort. Get off site and shut off phones and e-mails. There is a need for focus in the mind as well as focus in the plan.
9. Use a scorecard or dashboard to monitor progress. Keep it simple and make changes to the plan specifics based on the measures you are tracking. This will keep you on course.
10. Executing the plan. Start implementing immediately because no plan is ever complete. Break it down into realistic chunks. Get some early wins and celebrate them. This will give the plan credence and traction.
11. Assign responsibility for each element of the plan and make that individual accountable. Provide them with the support and resources they need to do the job right.

If you follow these suggestions, you too can have a successful turnaround plan that can get your company profitable and keep it profitable. Let me know how I can help.

Thanks

John

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