Tag Archives: Growth

How Do You Stay Focused While Building? Five Suggestions

Interview with G.K. Sally Solis-Cohen, President, CEO Intronet

Situation: An early stage company is simultaneously undergoing geographic expansion and broadening its network to include new audiences. This mandates finding the right people to run the new opportunities while staying focused on existing operations. How do you stay focused on core operations while building new opportunities?

Advice from Sally Solis-Cohen:

  • First and foremost, understand your own limitations. Know what you can do, what you can’t, and delegate what you can’t do. This means choosing the right people to whom you can delegate important initiatives. As a start-up you have few people to whom you can delegate. Make sure that they see the opportunity as you do and have the skill and personality sets to handle their responsibilities. The choices that you make in selecting your core team will be critical to your success.
  • Make sure that your team talks back to you – your need their perspective and feedback, especially when their perspective differs from your own. Listen openly to their ideas. At the same time listen to your customers; they will keep you focused on your business and marketing plans. Focus more on listening, thinking and doing than speaking.
  • Have a very clear set of priorities and a to-do list. Focus on your A priorities. Delegate the rest. When you’re growing it doesn’t double your work, it quadruples it with travel and extra distractions.
  • Stay focused on your core value proposition. Keep reminding yourself why you started the business. Observe the validation that you receive from your customers and users. Live your value proposition.
  • If you are talking to nay-sayers, you’re talking to the wrong people. Surround yourself with positive people who are heading in the same direction that you are and who can present alternate points of view in a positive tone.

You can contact Sally Solis-Cohen at ssoliscohen@ceointronet.com

Key Words: Growth, Expansion, Right People, Opportunity, Focus, Operations, Limitations, Delegate, Feedback, Listen, Priorities, Distractions, Validation, Positive

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How Do You Fund Growth? Five Points of Focus

Interview with Hannah Kain, President & CEO, ALOM

Situation: While funding from banks and institutional sources has been challenging in recent years, growing companies need to fund their growth. How have you funded your company’s growth?

Advice from Hannah Kain:

  • We focus on frugality and prevent wWhile funding from banks and institutional sources has been challenging in recent years, growing companies need to fund their growth. How have you funded your company’s growthasteful spending. However we invest in tools that enable staff to purchase wisely and stay ahead of customer demands. We also collaborate with vendors to manage costs.
  • As a result, the last two years have not forced us to change how we fund growth. We are getting large contracts and work globally to solve customers’ logistics challenges. Our challenge has been moving from centralized distribution to strategically placed centers around the globe, increasing inventory costs and cash needs.
  • Where we have changed is in how we negotiate terms and credit with our customers. We manage vendor accounts payable to maximize cash flow while treating them as business partners. This requires close vendor communications to assure that everyone’s needs are met.
  • We have been cautious with our banks and seldom dip into credit lines. Managing vendor payments has been more effective.
  • Essential to vendor communications are open sharing of information and goal setting. We work to create a team atmosphere. This is similar to what we do in our offices. In our experience, instilling the right culture is far more powerful than financial incentives.
    • We share information through all-hands company meetings and regular updates so that everyone gets the full picture.
    • We also share information with our vendors so that each side is aware of the other’s needs.
    • We create an annual one-page business plan for the company, and parallel plans down to the supervisor level. Performance against plans is updated regularly to assure that we remain on top of situations.
  • We focus training on new tools. Our staff gets technology they need to be successful.
    • We generously provide technology to our employees, provided that they give a logical business rationale. This includes home computers, iPhones or Applets to help them do their jobs.
    • Similarly, when a vendor or customer asks for a service improvement or a new service with a good business rationale, we invest to support this.
  • These methods have allowed us to finance most of our growth internally.

You can contact Hannah Kain at hannah@alom.com

Key Words: Funding, Bank, Institutional, Growth, Spending, Tools, Empower, Customer, Demand, Costs, Vendor, Cash, Needs, Terms, Credit, AP, Partner, Payment, Information, Sharing, Goal, Culture, Performance, Technology, Service

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What Have You Done to Manage Rapid Growth? Five Foci

Situation: A company has experienced rapid growth. This is creating stress for the staff and CEO, who finds it difficult to break away from the day to day to focus on strategy. Employees are not keeping pace with the evolving needs of the company and turnover has increased. What have you done to manage rapid growth?

Advice from the CEOs:

  • The first task is to improve forecasting of business growth, and the infrastructure needed to support this growth. This includes:
    • Regularly updating your sales and production forecasts.
    • Updating staff and training plans to meet growth forecasts.
    • Updating infrastructure and support plans.
    • Without these, the organization will whipsaw in response to market demands.
  • Take a critical look at your staff development plans and staff training.
    • Look at those areas that are most impacted by business growth. Determine whether you have the right managers and support in place.
    • Evaluate whether you have the right people and whether they have the skills to handle new demands of their positions.
  • Critically evaluate each now job that you take on. Assure that you have the staff and infrastructure to meet client demands.
    • Always assure that you deliver on your company’s integrity, reputation and core values.
  • In addition to addressing immediate needs, look at long-term plans strategically. Ask where you will be in 10 years. Articulate this vision in detail, and drive plans down through the organization. Make sure that everyone is on the same page, aligned with the same values, aiming at the same targets.
  • Also differentiate your vision from your mission:
    • You vision is a 10 year time frame, not one year.
    • Your mission is what you will be doing this year and in 5 years – the activities you will undertake to realize your longer term vision.
    • Fine tune your vision and mission and drive these through the organization. This will give you clarity on how you wish to do business and will help you to make hard choices as you handle rapid growth.

Key Words: Growth, Rapid, Stress, Focus, Turnover, Forecast, Infrastructure, Training, Support, Values, Staff, Development, Skill, Plan, Align, Vision, Mission

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What are the Best Ways to Manage Cash Flow in a Recovery? Six Suggestions

Situation: As business improves the Company needs to manage cash flow to support growth. How are you managing your cash flow in the recovery?

Advice from the CEOs:

  • This is a common challenge following a down period. You’ve reduced personnel and used up cash reserves to survive. As demand resumes, you may need to add resources as you increase production. It’s important not to let accounts payable get ahead of your receivables.
  • Ask customers for deposits on orders – giving you up-front cash. Give priority to those who do.
  • Redesign the work flow:
    • Add independent contractors on a project basis.
    • This requires good cost estimates and well-defined deliverables.
  • Work with your bank and Line of Credit:
    • An LOC should cover 1-3 months of operation.
    • Ask for a lot, and shop different banks for favorable lines and rates.
    • An LOC is a short-term obligation whereas debt may be long term. Watch your debt covenants for restrictions on obligations to assure that you stay in compliance.
    • LOCs are frequently Prime plus 1-2%
  • If you have a broker, see what rates they will offer on a business credit line to keep your brokerage business.
  • The best alternative is to plan ahead and develop a strong relationship with your banker – including a reliable credit history – so that when need arises, the banker will help you based on your past performance and the confidence that they have developed in you and your operation.

Key Words: Cash Flow, Recovery, Growth, Deposits, Contractors, Project, Estimates, Deliverables, Line of Credit, Bank, Covenants, Credit History

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How Do You Improve Company Competency to Support Growth? Eight Thoughts

Interview with Scott Dodson, CEO, AirXpanders, Inc.

Situation: Both in the case of a start-up, and when an existing company adds a new business unit, one of the biggest challenges is supporting rapid expansion during market launch. Talent necessary during the product completion phase may not be sufficient to support this growth. What can you do to improve company competency?

Advice:

  • Bring in “been there, done that” expertise to support the current team. In particular, you want to add individuals who have experienced both success and failure in similar markets, and in both larger and similar sized companies.  You want people who can be transformational to a company and not someone who can simply occupy a box.  Give them a chance to do more, add to their toolbox and they will in turn help the company achieve its goals.
  • A wide range of past experience with multiple employers is now seen as a benefit, whereas in the past it may have been a liability. It brings more knowledge to bear.
  • Among people with highly diverse resumes, how do you tell performers from non-performers?
    • Focus on what they did to transform their past company. Did they build alliances, make change happen or improve the organization during their incumbency? Look at ‘how’ they did it.  Chances are, this is a very leverageable skill.
    • Look for doers.  People who aren’t afraid to roll up their sleeves will make the biggest impact in the organization.
  • Look for people who possess “strategic humility.” Don’t be afraid of mistakes and foster an environment where the boundaries are continuously pushed.  The enemy of ‘good’ is ‘perfect’, and the best companies consistently make ‘good’ decisions.  If you make a mistake, own up to it, learn from it and move on.
  • Look for the ability to assess, develop, plan and mobilize resources to execute the plan.
  • Use LinkedIn to identify people with whom an applicant worked in previous jobs to conduct independent reference checks.
  • You can also use LinkedIn to identify candidates for open positions.
  • By adding resources with these traits to your team, you markedly improve your likelihood of success.

You can contact Scott Dodson at scottadodson@yahoo.com

Key Words: Ramp-up, Growth, Talent, Competency, Interviewing, LinkedIn, Reference Checks  [like]

How do you Respond Strategically to Market Uncertainty?

Interview with Kevin Moser, CEO, Dfine, inc.

Situation: The medical device industry faces uncertainty due to potential changes in reimbursement, increased regulation accompanying health care reform, longer FDA approval timelines and the economy. How does this impact strategy for an early stage medical device company?

Advice:

  • First and foremost it puts a premium on focus. We compete in a market dominated by large incumbents. When introducing new products in the past we would have blanketed the market to maximize early market share. Now we are being much more selective in terms of where we compete and putting more effort into targeted geographies.
  • This focus is accompanied by more caution and control of spending. We will only hire a new sales rep, for example, if we are assured that there is a significant customer base in the market that rep will serve.
  • Similarly, we are being much more cautious in our capital equipment decisions, and if an employee leaves we do not automatically replace that individual.
  • In terms of price planning, where in the past we would have counted on annual price increases, we now plan for the potential of prices decreasing over time to reflect new pressure on reimbursement and cost containment. As another example, in 2012 there will be a new tax on medical device companies. We assume that this will reduce our margins where in the past we might have passed it on to the buyer. Reduced margins will also impact our new product investment strategy.
  • The big change in long-range planning is that we are focused on slow, sustainable growth – maintaining both gross and net margins and profitability. This is a major change from five years ago when our focus was on maximizing rapid market penetration for new products. We want to be self-sufficient financially and thus avoid having to rely upon future fund-raising rounds.

You can contact Kevin at kevinm@dfineinc.com

Key Words: Medical, Device, Reimbursement, Regulation, Health Care Reform, FDA, Focus, Product Introduction, Spending Control, Hiring, Pricing, Growth  [like]

Micromanage – Me? Four Observations

Situation: The CEO is concerned about the performance of both the company and individual employees. The employees are good, but there are many minor details of day-to-day operation that the CEO feels are important. How involved should the CEO be in the details of the business?

Advice from the CEOs:

  • The answer to this question depends on you.
    • What is your own priority on the use of you time?
    • How much do you want to be involved?
    • How confident are you in the people whom you’ve hired?
    • Are you comfortable delegating?
    • Do you want to stay small or scale and grow?
  • The good and bad of involving yourself in details:
    • The Good Side – communicates that you are willing to roll up your sleeves and do what it takes to get the job done.
    • The Bad Side – don’t do your employees’ jobs for them.
      • This is demotivating and communicates a lack of trust in their abilities.
      • If the workload is so demanding and the benefit so great, then secure additional resources to enable employees to get the job done themselves.
  • More broadly, remember the lesson from many business gurus – you increase the value of your company by getting the “U” out of your bUsiness. You may enjoy the detail of the business. However, do not let this interfere with your long term objective of having others doing the “doing” while you mature your role as manager and leader.

Key Words: Manage, Leadership, Delegation, Confidence, Growth  [like]