Research Triangle Business Advisors

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Research Triangle Business Advisors
July 2012 Newsletter

How do you find success in today’s difficult business environment? Have a tactical plan!

I see three things that need to occur to help you create a tactical plan: a) Recognize there is a problem, b) Make the necessary change to address the problem, and c) The CEO/Business Owner is a catalyst for change.

Especially in these trying economic times I help companies remove roadblocks to success by helping the executive team focus on the basics. We help our clients prioritize their efforts and stay focused on the highest priority items. Every company’s priorities are different; therefore our coaching is unique to each client and their individual needs. We bring our wisdom, not our extensive experience, to each situation – to each priority – whether it is operations, finance, sales, marketing, funding, or personnel.

This month’s newsletter highlights top problems facing businesses today and then provides some steps to follow for building your “back-to-basics” tactical plan.

Bob De Contreras

919-280-1307

Bob@rt-ba.com

www.rt-ba.com

Top Problems Faced by Business Today

1. Uncertainty – in the global economy and the current recovery (or not), uncertainty in the credit markets, uncertainty in environmental regulations.

2. Globalization – Consideration of foreign cultures and economies is essential to everything from the ability to penetrate new markets with existing products and services, to designing new products and services for new customers.

3. Regulation – The changing regulatory environment always creates anxiety in some industries, but unclear energy, environmental and financial policy is a chaotic distraction for nearly all companies today.

4. Technology – Technology innovation is expanding at an exponentially increasing rate. This has been true for decades, but the pace today makes capital investment in technology as much an asset as a handicap.

5. Complexity – Life and business have gotten more complex even as certain tasks and activities have become easier with modern information technology. The pace of change is accelerating. The global economy is becoming more connected, creating a larger and more diverse base of customers and suppliers.

6. Information Overload – In today’s business environment nothing is changing more, or growing faster, than information. The problem is how to convert the information into usable knowledge.

7. Supply Chains – Suppliers that can no longer get the credit they need to keep up with their customers’ demand exacerbate an already bad situation. The problem is to develop a supply-chain strategy that ensures the lowest costs, and minimizes costly supply-chain disruptions.

8. Problem Solving – The lack of a sophisticated problem-solving competency among today’s business leaders is limiting their ability to adequately deal with business problems. This is why executives tend to jump from one fire to another, depending on which one is burning hottest. These executives often don’t realize the fast-changing business environment is what ignites these fires.

What can you do to deal with these problems – get back to basics!

“Back to Basics” Problem Solving (Tactical Plan)

CEO/Business Owner

Communicate a 'triage' focus – focus on the biggest problems first
Assign work based on priorities (with due dates)
Track progress and refocus/redirect staff as required
Have consequences for poor performance.
Be decisive and quick/responsive
Consider outsourcing if resource constrained
Ask for help (including from your staff)
Walk the talk; set an example
Be a change agent who initiates required changes quickly

Finance

Drive improved cash flow with elevated revenue growth and cutting deep into expenses.
Impose expense control measures (hiring freeze, expense approval, travel restrictions, etc.)
Implement AR/AP standards to positively affect cash flow (collect early, pay late)
Dump unused, unnecessary assets (people and things)
Restrict expenditure authorization to highest level executives and lower authorization dollar limits.
Reevaluate and freeze pending capital projects

Sales

Compel sales personnel to exceed their sales quotas
Minimum sales staff productivity must cover the cost of their burdened compensation.
Ensure compensation plan drives correct behavior
Micro manage sales pipeline activity, status, and quality
Reduce travel & entertainment budget
Contact all existing clients for referrals

Marketing

Focus on lead generation only – drop branding, marcom, and product positioning
Drop marketing programs/campaigns that are not lead generation focused
Tightly couple marketing and sales activities
Cancel trade show participation unless there is a proven connection to lead generation
Use existing customer base for referral programs
Utilize lower cost tactics (i.e. viral marketing, blogging, social media)

Funding

Close any 'open' funding opportunities
Appeal to existing investors for additional funds
Ensure operating lines of credit are available
Consider non-traditional sources of funding (Sell AR, industry partner loans or equity deals, grants, existing assets, etc.)

Personnel

Cut personnel expense – if needed, possibly a 10% to 20% salary cut across the company
Don’t staff any position that does not cover its cost, use variable cost contractors in balance with fixed cost employees.
Re-evaluate marginal employees and reduce headcount when/where appropriate
Drop training programs and off-site meetings
Ensure bonuses and salary increases are in line with corporate performance. Freeze if necessary.
Reevaluate employee perks and don’t under value the power of the public “Thank You”

A Final Thought…

Lou Holtz’ (famous Note Dame Football coach) advice to businesses on how to find success…

1. Show up

Be at work, be fully present and engaged, be where you are expected to be, be doing what you are supposed to be doing, be productive.

2. On-time

Don’t keep people waiting, keep commitments, don’t waste time, keep committed appointments, keep meetings to allotted time, and allocate time to high priority items only.

3. Dressed to play

Be prepared, know your products and services, know your industry, be skilled, use your tools, always have your tools with you, always have the tools you need (anticipate).