Tag Archives: Business

How Do You Get and Keep the Right People on the Bus? Four Solutions

Situation: A company is experiencing an employee turnover rate of 12%, vs. a company target of 6-7%. This has occurred due to a change in the company’s business environment during the recent downturn as they sought to optimize business practices. Long term employees no longer felt like the office was the “same place.” How do you get and keep the right people on the bus?

Advice from the CEOs:

  • Turnover has been a problem principally in the home office – the largest office – but has not been a problem across the rest of the country.
    • Has the company looked at what works in the other regions, vs. what has not been working in home office?
    • Could the problem be related to size and structure of the home office operation? The home office has 55 people whereas the other regions are composed of smaller working groups of 12-15 employees. Does it make sense to look at smaller working sub-groups within the home office, or some different structure that more closely mirrors the regions with low turnover?
  • What can be done to boost morale in the home office?
    • Try creating smaller working teams to mirror the smaller team atmosphere of the other regions.
    • Create a “small office” atmosphere. Build walls to visually separate subgroups – creating their own “space” to foster subgroup affiliation and bonding.
    • Increase the autonomy of the subgroups – and enhance the career path possibilities within the subgroups.
    • Focus on successes, what the “Teams” are achieving, and the contributions that they make to customers and the company. Express Team successes in terms of the impact that they’ve had on customers.
    • Look at the Olympic Team model – individual performers who support each other ferociously to accomplish Team performance goals.
  • Create a visual mural on a large wall representing – perhaps with some humor added – the vision of growth for the company and the opportunities that will accompany this growth.
  • Ask the home office team for input on how to build strong functioning teams or challenge them to define and build the teams.

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Do You Diversify or Stay the Course? Five Thoughts

Situation: A CEO seeks advice on the direction of her company. Her objective is to build a lasting company which is a wonderful place to work. She has a creative group of employees who have suggested options to expand the scope of the company. Should she maintain the current direction or entertain exploration of these options? Do you diversify or stay the course?

Advice from the CEOs:

  • With a solid, sustainable business model and the current level of revenue, diversification is not as important as it was when the company was a fraction of its current size. Current objectives could well be reached by just doing more of what the company does now.
  • The most important question to ask is: “What do we want from this or that option?”
  • Concerning the top opportunity under consideration, the group felt that:
    • It’s not the company’s core business and doesn’t play to the company’s strengths.
    • However, there are aspects of the opportunity that fit both the company and the existing client base. These represent an opportunity that fit’s the company’s culture.
    • Explore these aspects in small steps that do not detract from the current business.
  • If culture is a key ingredient of the company’s offering, how scalable is this, particularly into new markets? Look for ways to grow that are consistent with the strong culture that already exists.
  • Improve selling the full breadth of the company’s offering. The company offers many services that may be of interest to clients, but which are not mentioning in initial sales calls.
    • In sales presentations focus on the client, rather than a detailed description of the service offering. Offer clients a small brochure that covers the range of the company’s services.
    • By focusing on clients’ needs it is easier to selectively mention options that will serve these needs.

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How Do You Create a Good Lead Generation Campaign? Five Thoughts

Situation: A CEO wants to increase the company’s customer base. What have others done to generate leads in order to expand their customer base. What techniques have worked best? How do you create an effective lead generation campaign?

Advice from the CEOs:

  • One CEO who targets large customers used outside telesales at first but found them to be ineffective. They have since gone to an inside team. There is a learning phase, but with experience this can be an effective solution.
  • Another company uses an inside telesales team. This started with one individual and has become a team. Because this provides more control, one can hire for quality. This is often older callers who sound very professional on the telephone. It also provides the opportunity to tweak the telephone script for special promotions or circumstances.
    • For this company the number of calls per lead and closed account are high – up to 5% for leads and 1% for closed accounts. With a disciplined team and proper incentives, this is very doable.
  • Investigate the availability of local business lists such as Craig’s List or Rich’s Business Lists These lists are searchable by industry and business parameters.
  • Consider small professional conferences that attract target personnel of your key potential prospects. These are great networking and lead generation opportunities.
  • Make sure that there is a good link between the telemarketing and sales teams. This includes tracking, credit and rewards for landing accounts, and similar incentives.

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How Do You Find the Right Funding Source? Six Solutions

Situation: A company is short of cash and needs a source to fund their cash flow needs. Their needs are mapped out for the next four years and they can fund current operations for a few months. However, their bank will not extend their credit line. How do you find the right funding source?

Advice from the CEOs:

  • Try another bank. Ask friends and contacts about their banks and see if they’ll refer the company to their bank.
  • Explore renegotiating the company’s lease to ease the cash flow needs.
  • Explore renegotiating payment terms with suppliers. See what can be worked out. The bottom line – if the company goes Chapter 7 or 11, they get nothing.
  • Consider going to a larger company and working out an arrangement.
    • Ask that they allow the partners to operate as an “independent” entity retaining their titles.
    • In exchange for funding the company’s cash needs, the larger company shares in the profits.
    • Seek a temporary arrangement to allow the company can get back on its feet financially.
    • Use the friends and reputation that the company has developed over the years. The company is a good outfit and respected. Others may help if asked.
  • A similar tactic is to approach a larger company to negotiate an arrangement that will allow the company to survive. Start with a business plan.
    • Highlight the company’s reputation and the quality of its products. Use references from highly satisfied customers.
    • Highlight the company’s key strength – developing the critical path and plan for a successful project.
    • The thrust of the presentation: the partner gets a quality team and shares in the profits from projects completed. The partner provides the cash to fund the projects. Compare the risk and return on these funds compared with other investment options available to highlight the value of the proposal.
  • Other CEOs shared similar situations that have worked for them.
    • The financial realities were kept secret from staff, customers, and competitors.
    • All unnecessary expenses were cut.
    • The focus was on making money today.
    • Supplier payments were delayed as necessary to manage cash flow.
    • The process was managed creatively, sometimes with the assistance of friends, and the companies were able to prevail.
  • There is no shame in facing and dealing with this problem. Determination will pay off.

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What are the Pros & Cons of In-House Software Development? Three Points

Situation: A company used internal resources for a small in-house project – developing web-based time sheets. They had obtained bids for external development but found that internal resources could do the same time for about half of what external development would cost. The trade-off was slow delivery. What are the pros & cons of in-house software development?

Advice from the CEOs:

  • Why was delivery slow?
    • When faced with a choice in priority between the internal development task vs. responding to the needs of external customers, internal delivery was pushed back in time.
  • This is exactly what others have experienced when faced with the choice between internal and external software development. Look at the trade-off, not just in terms of “cost” quoted by internal developers, but also in terms of opportunity cost. The real cost is what these resources could have provided had the same time been spent to support external revenue-producing projects.
  • Just as the company did in the first place, get external bids. If the use of internal resources is an option, compare time to delivery forecasted using internal resources plus any other internal costs. Then analyze the opportunity cost of not dedicating these resources to revenue-producing activity. The sum of these costs should then be compared with external bids. Adding opportunity cost to the analysis can make a big difference.
  • Once the company has this information, make a business decision as to the best choice. Keep in mind that unless the priorities of the internal group doing the development work are changed, they may not respond to the needs of the internal project on a timely basis. It will be the CEO’s call as to whether the developers prioritize their time to support external projects or the internal project.

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How Do You Manage Growth in a Difficult Economy? Seven Suggestions

Situation: A CEO’s company has struggled due to difficult business conditions during the last year. Top among the challenges has been poor execution in hiring quality people, not because they weren’t available, but due to uncertainty. He is also concerned about infrastructure issues, particularly in IT. How do you manage growth in a difficult economy?

Advice from the CEOs:

  • Focusing on IT, a key element for success in IT is having a clear definition of company needs. How does IT serve the company? What are the goals and objectives of the IT system? What kind of load must it be able to handle? What aspects of the system are most critical to company success?
  • Finding quality talent with the necessary experience is a challenge; particularly if solid goals and objectives haven’t been developed.
  • One CEO shared success managing IT. The company hired two IT professionals and had them report to an internal committee. This committee then communicated effectively with management.
  • Another CEO observed that some IT people look at their job as a process rather than a function; they just show up and fix things. Management of IT was improved by establishing clear objectives and holding the IT staff accountable for their performance against these objectives.
  • Another CEO told the story of terminating their IT person due to lack of consistency. IT must operate under management oversight, with clearly defined goals and objectives, and accountability.
  • Outsourcing some IT functions can help if used with care. On-site staff can focus on system maintenance and fight the inevitable fires.
  • IT costs should be thoroughly reviewed. They can be expensive. Look at IT costs as a percent of sales and compare expenditures with others in the industry sector.
  • Take a similar approach with other functions needing attention.

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What Is Your Exit Strategy? Three Options and Approaches

Situation: Every CEO needs an exit strategy, if only for the good of the business because the future is uncertain. In this case, the Founder CEO wants to reduce her involvement in the business over the next 3-5 years. Her company has an offering that addresses domestic and international concerns about global warming. The CEO seeks help evaluating options. What is your exit strategy?

Advice from the CEOs:

  • The CEO sees several strategic options. Which option is more likely to yield results in a timeline that fits a 3-5 year exit strategy – a major international push, a partnering strategy, or leveraging current business to gain additional sales and market share by tweaking the current product line?
  • International Strategy.
    • The company needs international partners, not just a sales presence. This will require substantial time and upfront commitment from the CEO, not just a salesperson.
    • Where and who are the predominant businesses in the international markets under consideration?
    • Can an international strategy be executed and produce fruit in time to complement the exit strategy?
  • Partnering.
    • Partner with a hardware company to increase visibility and usage.
    • Partner with some of the top prospects for an exit strategy.
  • Focusing on the Product Line.
    • Employ customer shadowing to better understand how customers currently use the software and what challenges they encounter or opportunities they see – involve marketing, and R&D, not just the sales team.
    • Reposition the current offering to take advantage of opportunities.
    • Simplify installation and implementation.
    • Look at the product development strategy. Can revenue be bumped or upgraded from renewal customers? Are there options for “deluxe” versions with a premium price for upgrades, that become the following year’s standard upgrades?
  • Gather the company’s team and work through the scenarios for these options. Once this is done, prioritize them based of timeliness and potential impact on the bottom line and company valuation.
  • Also look at the Board structure – are there gaps in regulatory or sales and marketing expertise. What about adding someone who has connections to a key customer base?

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How Do You Build Channel Sales? Three Key Points

Situation: A company has developed a disrupting technology that allows OEM manufacturers to produce high-end machines at a fraction of their current cost. The challenge is that the company does not possess the capacity to reach producers of high-end machines.  The CEO seeks advice on how to efficiently focus channel development. How do you build channel sales?

Advice from the CEOs:

  • The dilemma is having a major disrupting technology in a market with a strong division between OEMs servicing the low/medium-end market and those servicing the high-end market.
    • This technology collapses the division between the low/medium and the high-end markets.
    • This shift disrupts the current business models of either group of OEMs, as well as their technology development plans. This is the source of resistance.
  • Therefore, the most promising channel development partner is either:
    • A low/medium-end OEM who is also a disrupter and who has the capability to develop a high-end sales and marketing effort; or
    • A high-end OEM that knows the market but who’s current strategy is failing and needs an entirely different solution to revive their prospects.
  • The near-term task is to gain market capability – both manufacturing and marketing/sales – and to use this capability to gain early market acceptance.
    • If, over the next 12 months, the company can begin to impact the market shares of the high-end OEMs, this is the surest way to gain their attention. Once the company starts to gain share, a likely outcome is that one of the high-end OEMs will buy the company to lock up their IP.
  • Another company used a similar strategy several years ago.
    • They entered a new market by way of a business collaboration with a high-visibility partner.
    • In one year, they took 30% market share from the market leader through this collaboration.
    • As a result, the market leader bought them because “it was less expensive to buy you than to spend the marketing dollars that we would have had to spend to compete against you.”

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How Do You Develop Current Managers to Support Growth? Six Suggestions

Situation: A CEO is concerned that the current management team is not mature enough to support planned growth. Sales skills are necessary to start an office, but there is a wide range of business acumen and people skills among the managers. How do you develop current managers to support growth?

Advice from the CEOs:

  • Company policy requires manager candidates to demonstrate competence in at least three of five areas: sales, technical skills, customer management, customer management, and business acumen. A coaching or mentoring process from senior management would be beneficial.
  • A minimum number of clients is required to start an office. There are important differences in the skills needed to grow and sustain an office. More evaluation of the managerial skills of manager candidates will help.
  • Another CEO shared story of a regional office with a manager who was technically competent but had poor business development skills. This created a growth issue. Clear, mutually agreed upon, written goals helped. Office growth requires good administrative performance as well as technical or sales skills.
  • Frequent group meetings with managers and a deliberate agenda help. There is merit in allowing the field people to contribute to the agenda, having a “round table” type of review, and peer dialogue. In addition to current individual weekly telephone conversations and quarterly operations reviews, there is an opportunity to modify the format.
  • Sometimes there is a double loss in taking a good individual contributor and making them a poor manager. For example, of a good salesperson may turn out to be a bad sales manager. The transition may not play to the person’s strength. A more rigorous selection process will help.
  • Another CEO shared a story of one of his plant managers who reached the limits of his competency and could not continue to grow the plant. He was moved to a support position and a new plant manager was hired. The former manager found new satisfaction in the support role and was successful sharing his knowledge and skill with the new manager and a broader audience within the company.

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Where Should You Focus for the Next Year? Three Points

Situation: A CEO has had to shift half of the company’s employees to part-time due to reduced business. This has hampered new product development. The situation has been exacerbated by slow payments from customers. Where should you focus for the next year?

Advice from the CEOs:

  • The company has a lot going on. Validate the company’s market potential for products in development, and start gearing up the marketing program so that it will impact this and next year’s sales.
    • Get a feel for how many customers want the new products in development. Invest in some market research to validate this.
    • The bottom line is that product development only pays if the company can sell a lot more product! The team needs to know whether customers for the new products exist, in what numbers, where and who they are, and their most critical needs. Without this market intelligence, the company is in no position to tell whether there is a market, nor is the company prepared to address it.
    • Assume that there is a market, that it can be quantified. Once the company knows who and where the customers are and knows their most critical needs, the next step is to prepare to attack this market. This is not something that is done in 1-2 months, after the product is ready to sell. The company needs to be starting now if marketing is to be initiated in 6-8 months.
  • Past practice has been to split R&D costs with the customer. The company has the expertise, the customer the money – this is close enough to 50/50. There is no need to show them the numbers. R&D should not be funded through future sales but should be making money now.
  • One project has been taking so much attention that it is hobbling the company. The company is so focused on getting this “just right” for the customer that sales and market development have been neglected.
    • For the next 3 months, focus on completing this project, getting it out the door, and getting the company’s focus back on growth. A sense of urgency is needed!

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