In turbulent economic times, companies are faced with difficult decisions; including where to cut costs. Although an executive’s first instinct may be to reduce staff, there are many options available. With a few creative strategies, your business can identify opportunities to maximize efficiency while minimize job loss.
Sustainable Cost-Cutting
Sustainable cost cutting starts with looking at your company’s organizational chart. This allows you to brainstorm what options are on the table. To accomplish this, determine which activities each business unit performs, and how these tasks are adding value to revenue production. Then, determine which activities can be streamlined or discontinued without effecting productivity or sales.
For example, evaluate the Human Resources department and determine which activities are contributing to hiring and retaining valuable employees. You might find that employees are bogged down with a cumbersome system that does not efficiently handle candidate information. Solving this issue would increase efficiency, and allow staff to concentrate on other company initiatives.
Maximize Process Efficiency
When a company grows, sometimes old processes get in the way of becoming more efficient. Identifying processes that are outdated and need an overhaul will boost your overall efficiency.
There are many options for revamping processes that are not efficient. For example, you can change which employees handle the process if the task is not appropriate for the department. Also, in some situations, you may have the option of automating the process. Automating does not just make the process faster, it frees up employee time to focus on other projects.
Another option to consider is outsourcing functions that can be achieved more efficiency than handling in-house. This can include support functions that need to be more flexible to accommodate the organization’s growth.
Balance Cost-Cutting with Growth
Cutting costs should be balanced with investing in the company’s future growth. That is because cutting costs too deeply can paralyze a company’s ability to plan for growth; jeopardizing their market position. To accomplish this, focus heavily on efficiency while simultaneously planning for future growth.
Creating Customized Solutions
Using a one-size-fits-all approach to cutting costs can hamper your company’s ability to succeed. That is because each product you produce has a unique set of customers, with individual needs.
Implement effective cost-cutting strategies by examining your customer’s priorities. If price is a priority, you will need to examine options that will drive the price down without compromising quality. If value is a factor, consider offering special discounts to loyal customers. And if quality or brand image is an issue, make sure to avoid cuts that will affect these factors.
Customizing cuts based on the customer’s needs will preserve your profits and boost productivity.
Cut Duplicate Services
As an organization grows, sometimes functions are duplicated. Identifying these areas is an important opportunity for cutting costs.
For example, you might examine back office functions to determine if two employees or business units are doing the same thing. And if so, determine how those processes can be consolidated to maximize efficiency.
And remember to always consider technology solutions when cutting duplicate services. For example, if two business units are collecting the exact same information, it would make sense to create a centralized system; minimizing the duplication of work and increasing efficiency.
Connect with Front Line Employees
Since front line employees are in direct contact with customers, it is important to carefully analyze their activities. This is because these employees have a huge impact on your company’s ability to produce revenue.
Examine how much of their time is spent selling versus completing paperwork or administrative functions. Brainstorm ways to shift more of their time to sales and less time on paperwork. This could include delegating paperwork tasks to a support person, or streamlining processes to require less paperwork.
Also, it is important to motivate employees to connect with the customer. This can be achieved with incentive programs or special recognition for a job well done.
Look for Opportunities to Increase Sales
Saving your organization money is important. But it is just one strategy in a muti-faceted approach to success. It is important to understand other opportunities for success – like making contact with customers more effective.
For example, if a customer contacts a bank call center to order checks, what other opportunities exist for that customer? You might train call center employees to discuss the benefits of receiving online statements; which saves paper and is better for the environment. This cuts the organization’s mailing costs and improves efficiency. Analyze how to make points of contact more effective and entice employees to grow business.
Even in financially difficult times, it is important to look deeper when cutting costs. Take the time to create strategies for maximizing efficiency without tabling plans for future growth. This will allow your company to save money while maximizing market share.
Resource:
Hernan Saenz and Darrell Rigbyi. “Winning in Turbulence, Streamline G&A.”
Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy,” “Selling Your Business the Easy Way,” “Enhancing Your Business Value…The Climb to the Top,” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or email him.
Thursday, April 23, 2009
The Power of Managing Complexity: Streamlining Business in a Turbulent Economy
In difficult economic times, it is important to minimize your company’s exposure to loss. This can be accomplished by evaluating which products are making money and which processes can be simplified. Evaluating these components will allow you to determine if there is a way to streamline production and ramp up revenue potential.
Simplify Production Costs
In good economic times, companies are growing and more layers of complexity are added. However, increased complexity can create higher costs and decreased production. In addition, in a difficult economy, evaluating these areas can help your company save money.
When evaluating costs it is important to par down spending without hampering innovation. Plus, you will need to consider the benefits of staying close to important markets. That is because having operations in local markets will keep you in touch with what customers want. This is especially true during a recession when competition is fierce and being connected to your market is essential.
According to the article “Winning in Turbulence” by Mark Gottfredson and Darrell Rigby, using a Zero-Based Approach can help simplify costs. This approach suggests that you imagine a time when your company only produced a few products without all of the complexities. This will allow you to brainstorm ideas on how to simplify processes and cut out unnecessary costs.
Evaluate your Product Offerings
Although it is nice for customers to have choices, if you have a small customer base seeking a product, this might be a place to cut. This is especially true if the profit margin is narrow. Plus, expanding your product line to include too many choices may even dilute your company’s brand if the new products are not perceived well.
Evaluate How Production is Achieved
When producing products, it is most cost effective to have large runs of products; versus small batches. Although many companies do small runs for convenience, you can achieve streamlined production with a few steps. First, implement a higher order minimum for customers – which will cut down on small batches. Also, implement longer lead times on production so you can combine orders and minimize costs. You may also want to consider outsourcing production when it makes sense for your company.
Evaluate the Productivity of your Equipment
If you have a product line that has a high percentage of scrap, evaluate those costs compared to how profitable the product is. In these situations, it might be worthwhile to consider not producing those products anymore. Also, make sure that low-volume projects are not being run on equipment that is designed to run high-volume projects. Making these simple changes can increase your efficiency and profits.
Streamline Decision Making
Streamlining the decision making process can reduce costs by increasing accountability and speeding up decisions. According to the article “Winning in Turbulence” by Mark Gottfredson and Darrell Rigby, this can be achieved by making a list of how many managers a decision needs to go through before arriving at the CEO. Evaluate if there are layers in this hierarchy that can be reduced or eliminated. Making these changes can save your company substantial operating expense each year.
It is also important that managers have clear direction on how decisions should be made (with appropriate accountability). Without these components, decision-making can be disjointed and time consuming; paralyzing a company that is struggling to stay afloat in a poor economy.
Controlling Costs
As organizations become more complex, costs often become difficult to manage. Without cost accountability, your company can face serious issues in a poor economy. To enhance your company’s performance, create a system for evaluating the validity of all costs; even the small ones.
Focus on Fixing Short Term Challenges
When you are evaluating the complexity of your organization, you may find many areas that need improvement. Unfortunately, in a poor economic environment, it is not practical to fix all of these areas at once. Instead, evaluate which processes will yield the best results in the short term. This strategy will produce quicker results; helping your company weather a difficult economy. And once you have survived the hard times, you can focus on the larger issues that need attention.
Evaluate Data Collected
Having good data can help executives make decisions and plan the future of the company. However, having too much data can bog managers down and decrease productivity. To solve this problem, evaluate what data is currently collected. Then, par down the data to include only what managers need in the current economy. Also, evaluate the data collection processes to determine if there are opportunities to streamline those functions.
Managing and improving your company’s complexity can help streamline processes and improve your bottom line. Plus, you will benefit from enhanced productivity and increase revenue – which can turn your company around in a difficult economy.
Resource:
Mark Gottfredson and Darrell Rigby. “Winning in Turbulence, The Power of Managing Complexity.”
Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy,” “Selling Your Business the Easy Way,” “Enhancing Your Business Value…The Climb to the Top,” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or email him.
Simplify Production Costs
In good economic times, companies are growing and more layers of complexity are added. However, increased complexity can create higher costs and decreased production. In addition, in a difficult economy, evaluating these areas can help your company save money.
When evaluating costs it is important to par down spending without hampering innovation. Plus, you will need to consider the benefits of staying close to important markets. That is because having operations in local markets will keep you in touch with what customers want. This is especially true during a recession when competition is fierce and being connected to your market is essential.
According to the article “Winning in Turbulence” by Mark Gottfredson and Darrell Rigby, using a Zero-Based Approach can help simplify costs. This approach suggests that you imagine a time when your company only produced a few products without all of the complexities. This will allow you to brainstorm ideas on how to simplify processes and cut out unnecessary costs.
Evaluate your Product Offerings
Although it is nice for customers to have choices, if you have a small customer base seeking a product, this might be a place to cut. This is especially true if the profit margin is narrow. Plus, expanding your product line to include too many choices may even dilute your company’s brand if the new products are not perceived well.
Evaluate How Production is Achieved
When producing products, it is most cost effective to have large runs of products; versus small batches. Although many companies do small runs for convenience, you can achieve streamlined production with a few steps. First, implement a higher order minimum for customers – which will cut down on small batches. Also, implement longer lead times on production so you can combine orders and minimize costs. You may also want to consider outsourcing production when it makes sense for your company.
Evaluate the Productivity of your Equipment
If you have a product line that has a high percentage of scrap, evaluate those costs compared to how profitable the product is. In these situations, it might be worthwhile to consider not producing those products anymore. Also, make sure that low-volume projects are not being run on equipment that is designed to run high-volume projects. Making these simple changes can increase your efficiency and profits.
Streamline Decision Making
Streamlining the decision making process can reduce costs by increasing accountability and speeding up decisions. According to the article “Winning in Turbulence” by Mark Gottfredson and Darrell Rigby, this can be achieved by making a list of how many managers a decision needs to go through before arriving at the CEO. Evaluate if there are layers in this hierarchy that can be reduced or eliminated. Making these changes can save your company substantial operating expense each year.
It is also important that managers have clear direction on how decisions should be made (with appropriate accountability). Without these components, decision-making can be disjointed and time consuming; paralyzing a company that is struggling to stay afloat in a poor economy.
Controlling Costs
As organizations become more complex, costs often become difficult to manage. Without cost accountability, your company can face serious issues in a poor economy. To enhance your company’s performance, create a system for evaluating the validity of all costs; even the small ones.
Focus on Fixing Short Term Challenges
When you are evaluating the complexity of your organization, you may find many areas that need improvement. Unfortunately, in a poor economic environment, it is not practical to fix all of these areas at once. Instead, evaluate which processes will yield the best results in the short term. This strategy will produce quicker results; helping your company weather a difficult economy. And once you have survived the hard times, you can focus on the larger issues that need attention.
Evaluate Data Collected
Having good data can help executives make decisions and plan the future of the company. However, having too much data can bog managers down and decrease productivity. To solve this problem, evaluate what data is currently collected. Then, par down the data to include only what managers need in the current economy. Also, evaluate the data collection processes to determine if there are opportunities to streamline those functions.
Managing and improving your company’s complexity can help streamline processes and improve your bottom line. Plus, you will benefit from enhanced productivity and increase revenue – which can turn your company around in a difficult economy.
Resource:
Mark Gottfredson and Darrell Rigby. “Winning in Turbulence, The Power of Managing Complexity.”
Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy,” “Selling Your Business the Easy Way,” “Enhancing Your Business Value…The Climb to the Top,” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or email him.
Monday, March 23, 2009
Performance Improvement Initiatives: Boosting the Success of Your Project
Companies often struggle with taking a project from concept to execution. According to an article written by Booz Allen Hamilton titled “Performance Improvement Initiatives,” a staggering 40% of these projects fail to deliver on their promises. But there is good news for companies interested in boosting their success on project implementation. Making a few changes on how you approach your projects can improve your implementation success rate.
For example, companies can improve their success rate by strategically planning implementation, partnering with front line employees, assembling a team of employees to monitor the plan’s success and responding quickly to challenges.
Struggles with Implementation
Successfully implementing a project is one of the most difficult challenges. This is because once ideas move from the concept phase to implementation; there are many opportunities for challenges. For example, current processes, employee functions and technology capacity can all create issues.
Companies can also experience issues with communication; resulting from disorganized leadership. And if your company operates in silos (where employees aren’t fully aware of their connection to other business units) this can pose an additional set of problems.
The solution to these issues is using a systematic approach to bringing your project from concept to implementation. Booz Allen Hamilton’s article suggests focusing on implementation in a strategic order to drive up project success.
Successful companies use a three pronged approach; focusing on the order of implementation, controlling front-line employee behavior and developing successful project management techniques.
Focusing on Implementation Order
The first step in designing a successful implementation strategy is focusing on which steps need to occur to implement your project. Carefully develop each actionable step, to understand any potential issues with project implementation plans.
Once you’ve created a list of actable steps, carefully evaluate each step to determine which actions should happen first. To make your implementation plan most effective, talk with affected business unit leaders. Discuss any potential challenges that may occur during a given step. And if challenges are present, discuss what solutions are needed before implementation. Then, move the actionable item further down the timeline; allowing the business unit manager to resolve the issue while your are working on other steps.
Your plan also needs to be flexible to change. During the implementation process, changes will occur – threatening to put a halt to your project. Design a plan that is flexible enough to accommodate these changes – allowing you to work around the issue. This will assist in avoiding delays on your project delivery date.
This process allows you to identify possible issues, such as staffing or technology capability challenges, and create a plan for resolving those issues without bogging down the entire implementation process. It also allows communication to flow between those managing the project, and the business units affected by the implementation plan.
Front-Line Employee Behavior
Anticipating your front-line employee behavior will allow you to design rewards for desired behavior. Since front line employees play an integral part in a company’s success, you need them to be on board with the project.
Determine what steps are needed to get these employees up to speed on the project and how to motivate them to achieve the desired result.For some employees, this may involve monetary compensation like a cash bonus tied to performance. While other employees are motivated by winning extra vacation days or having public recognition of their achievements. Exam your group to determine which types of rewards are most appealing.
On the flip side, you’ll also need to consider consequences for undesirable reactions to the project. Anticipate these behaviors and devise plans to deal with these issues if employees decide to be resistant to change – and how to ensure compliance for new procedures or protocols.
Project Management
Busy executives don’t have time to monitor the daily implantation of a project. For this reason, it’s important to designate a project manger or entire team devoted to implementing the project.
The team should have a project manager, capable of driving action and delivering success. Avoid choosing leaders that are easily persuaded or distracted. Instead, select a leader who has excellent negotiation skills and a proven record of driving results.
Also, choose project team members that represent different business units of your organization. This will allow you to gain collective insight into any project challenges. These individuals can also assist in working across business unit borders for successful implementation.
Making a few simple changes to how your company approaches project implementation can allow your business to increase the percentage of successful projects. And once you’ve modified current strategies, you’ll become more efficient in project implementation and enjoy the benefits of increased performance.
Resource:
Eser Becer, Brian Hage, Matt McKenna and Herve Wilczynski. “Performance-Improvement Initiatives.” Booz Allen Hamilton.
Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy,” “Selling Your Business the Easy Way,” “Enhancing Your Business Value…The Climb to the Top,” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or email him.
For example, companies can improve their success rate by strategically planning implementation, partnering with front line employees, assembling a team of employees to monitor the plan’s success and responding quickly to challenges.
Struggles with Implementation
Successfully implementing a project is one of the most difficult challenges. This is because once ideas move from the concept phase to implementation; there are many opportunities for challenges. For example, current processes, employee functions and technology capacity can all create issues.
Companies can also experience issues with communication; resulting from disorganized leadership. And if your company operates in silos (where employees aren’t fully aware of their connection to other business units) this can pose an additional set of problems.
The solution to these issues is using a systematic approach to bringing your project from concept to implementation. Booz Allen Hamilton’s article suggests focusing on implementation in a strategic order to drive up project success.
Successful companies use a three pronged approach; focusing on the order of implementation, controlling front-line employee behavior and developing successful project management techniques.
Focusing on Implementation Order
The first step in designing a successful implementation strategy is focusing on which steps need to occur to implement your project. Carefully develop each actionable step, to understand any potential issues with project implementation plans.
Once you’ve created a list of actable steps, carefully evaluate each step to determine which actions should happen first. To make your implementation plan most effective, talk with affected business unit leaders. Discuss any potential challenges that may occur during a given step. And if challenges are present, discuss what solutions are needed before implementation. Then, move the actionable item further down the timeline; allowing the business unit manager to resolve the issue while your are working on other steps.
Your plan also needs to be flexible to change. During the implementation process, changes will occur – threatening to put a halt to your project. Design a plan that is flexible enough to accommodate these changes – allowing you to work around the issue. This will assist in avoiding delays on your project delivery date.
This process allows you to identify possible issues, such as staffing or technology capability challenges, and create a plan for resolving those issues without bogging down the entire implementation process. It also allows communication to flow between those managing the project, and the business units affected by the implementation plan.
Front-Line Employee Behavior
Anticipating your front-line employee behavior will allow you to design rewards for desired behavior. Since front line employees play an integral part in a company’s success, you need them to be on board with the project.
Determine what steps are needed to get these employees up to speed on the project and how to motivate them to achieve the desired result.For some employees, this may involve monetary compensation like a cash bonus tied to performance. While other employees are motivated by winning extra vacation days or having public recognition of their achievements. Exam your group to determine which types of rewards are most appealing.
On the flip side, you’ll also need to consider consequences for undesirable reactions to the project. Anticipate these behaviors and devise plans to deal with these issues if employees decide to be resistant to change – and how to ensure compliance for new procedures or protocols.
Project Management
Busy executives don’t have time to monitor the daily implantation of a project. For this reason, it’s important to designate a project manger or entire team devoted to implementing the project.
The team should have a project manager, capable of driving action and delivering success. Avoid choosing leaders that are easily persuaded or distracted. Instead, select a leader who has excellent negotiation skills and a proven record of driving results.
Also, choose project team members that represent different business units of your organization. This will allow you to gain collective insight into any project challenges. These individuals can also assist in working across business unit borders for successful implementation.
Making a few simple changes to how your company approaches project implementation can allow your business to increase the percentage of successful projects. And once you’ve modified current strategies, you’ll become more efficient in project implementation and enjoy the benefits of increased performance.
Resource:
Eser Becer, Brian Hage, Matt McKenna and Herve Wilczynski. “Performance-Improvement Initiatives.” Booz Allen Hamilton.
Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy,” “Selling Your Business the Easy Way,” “Enhancing Your Business Value…The Climb to the Top,” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or email him.
Leadership of the Future: Strategies for Success
Talented leaders are the backbone of a company; developing strategic initiatives to grow and preserve the business. However, with competition in the marketplace growing fiercer than ever, companies need to focus on creating management programs that develop leaders with the necessary skills for success. Building in-house programs to train and develop leaders will result in enhanced performance and increased revenue potential.
According to the McKinsey Global Survey Results, six important leadership skills are essential to a company’s future success. These areas include challenging assumptions, encouraging risk taking, inspiring employees, clearly defining expectations, rewarding achievements and participative decision-making. Focusing on these areas can assist with positioning your company for future success.
Challenging Assumptions
A company can become “stuck” when leaders are not willing to challenge current assumptions. This can hamper the creative process; discouraging the growth of new ideas that are outside of normal assumptions. Encourage leaders to think beyond the constraints of traditional assumptions. Incorporating this management strategy can foster both manager and employee innovation.
Encourage Risk Taking
Future leaders should be trained to incorporate strategies for risk taking. This is because taking the right risks can payoff with increased revenue and market share. Train your executives to get out of the “safe zone,” and consider new opportunities – like considering an acquisitions or a merger to break into a new market; or expanding products and services to reach underserved market segments.
Inspiring Employees
Once a leader has designed innovative strategies, it is important to inspire employees to get behind implementation efforts. In most cases, managers will need to reach out to front-line employees who personally serve customers. These employees are a key component to success because of their ability to impact customers directly.
Employees need to feel empowered by their ability to drive the company’s success – and managers must inspire them to want to put forth the effort. This requires unique strategies designed to forge a partnership between employees and management.
You can also inspire employees by creating a desirable work atmosphere to boost morale and foster a team environment. Also, consider designing a plan to reward valuable employee contributions. This could include a special employee recognition program tied to performance.
Clearly Define Expectations
When designing successful leadership strategies, it is important to clearly define expectations for employees. When employees understand what is expected of them (and have the tools to achieve the desired goals), job satisfaction is greatly improved. Also, provide a clear roadmap to success, and tie rewards to desired results. This will reinforce employee expectations. Even making simple changes, such as scheduling regular annual reviews, and creating individual benchmarks, can impact a company’s success.
Rewarding Achievement
Successful leaders also need to focus on rewarding employee achievements. Successful incentives take into consideration what motivates a group of employees. For example, some employees will be motivated by monetary compensation or gift cards. Moreover, other groups of employees will be most satisfied with extra vacation days or a more flexible working schedule. Some employees will prefer personal recognition in front of their peers, or a special lunch with their manager. Choose a plan best suited for your working group to drive up job satisfaction and motivate employees to want to meet company goals.
Participative Decision Making
Future leaders of successful organizations should focus on cultivating a participative decision making environment. Participative decision-making is an effective strategy because a leader does not always have the foresight to anticipate all challenges when making a decision. Engaging others in the decision making process allows the executive to tap into an individual's unique talents. For example, a direct manager of the affected business unit may have valuable insight the senior manager has not anticipated.
A participative decision maker will consider all input, then make the final decision; accepting full responsibility for any consequences resulting from that decision.
Creating a Corporate Training Plan
According to the McKinsey Survey, companies interested in maximizing their success should consider implementing a corporate management-training plan. This allows executives to teach management principles that are most effective in their environment. Although these principles may deviate from an individual’s management style, those who participated in the McKinsey Survey reported that when implementing these strategies, they became better managers.
Management Style to Avoid
When creating a corporate management program, avoid individualistic decision-making strategies. This type of strategy tends to be less successful and does not foster a team environment. Instead, focus on creating a team environment by encouraging the upward flow of communication.
Developing managers who encompass the leadership qualities of the future will allow your company to gain momentum and rise above the competition. In addition, employees will appreciate consistency among managers, and enjoy a team driven work environment.
Resource:
“Leadership for the Future.” McKinsey Global Survey Results.
Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy,” “Selling Your Business the Easy Way,” “Enhancing Your Business Value…The Climb to the Top,” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or email him.
According to the McKinsey Global Survey Results, six important leadership skills are essential to a company’s future success. These areas include challenging assumptions, encouraging risk taking, inspiring employees, clearly defining expectations, rewarding achievements and participative decision-making. Focusing on these areas can assist with positioning your company for future success.
Challenging Assumptions
A company can become “stuck” when leaders are not willing to challenge current assumptions. This can hamper the creative process; discouraging the growth of new ideas that are outside of normal assumptions. Encourage leaders to think beyond the constraints of traditional assumptions. Incorporating this management strategy can foster both manager and employee innovation.
Encourage Risk Taking
Future leaders should be trained to incorporate strategies for risk taking. This is because taking the right risks can payoff with increased revenue and market share. Train your executives to get out of the “safe zone,” and consider new opportunities – like considering an acquisitions or a merger to break into a new market; or expanding products and services to reach underserved market segments.
Inspiring Employees
Once a leader has designed innovative strategies, it is important to inspire employees to get behind implementation efforts. In most cases, managers will need to reach out to front-line employees who personally serve customers. These employees are a key component to success because of their ability to impact customers directly.
Employees need to feel empowered by their ability to drive the company’s success – and managers must inspire them to want to put forth the effort. This requires unique strategies designed to forge a partnership between employees and management.
You can also inspire employees by creating a desirable work atmosphere to boost morale and foster a team environment. Also, consider designing a plan to reward valuable employee contributions. This could include a special employee recognition program tied to performance.
Clearly Define Expectations
When designing successful leadership strategies, it is important to clearly define expectations for employees. When employees understand what is expected of them (and have the tools to achieve the desired goals), job satisfaction is greatly improved. Also, provide a clear roadmap to success, and tie rewards to desired results. This will reinforce employee expectations. Even making simple changes, such as scheduling regular annual reviews, and creating individual benchmarks, can impact a company’s success.
Rewarding Achievement
Successful leaders also need to focus on rewarding employee achievements. Successful incentives take into consideration what motivates a group of employees. For example, some employees will be motivated by monetary compensation or gift cards. Moreover, other groups of employees will be most satisfied with extra vacation days or a more flexible working schedule. Some employees will prefer personal recognition in front of their peers, or a special lunch with their manager. Choose a plan best suited for your working group to drive up job satisfaction and motivate employees to want to meet company goals.
Participative Decision Making
Future leaders of successful organizations should focus on cultivating a participative decision making environment. Participative decision-making is an effective strategy because a leader does not always have the foresight to anticipate all challenges when making a decision. Engaging others in the decision making process allows the executive to tap into an individual's unique talents. For example, a direct manager of the affected business unit may have valuable insight the senior manager has not anticipated.
A participative decision maker will consider all input, then make the final decision; accepting full responsibility for any consequences resulting from that decision.
Creating a Corporate Training Plan
According to the McKinsey Survey, companies interested in maximizing their success should consider implementing a corporate management-training plan. This allows executives to teach management principles that are most effective in their environment. Although these principles may deviate from an individual’s management style, those who participated in the McKinsey Survey reported that when implementing these strategies, they became better managers.
Management Style to Avoid
When creating a corporate management program, avoid individualistic decision-making strategies. This type of strategy tends to be less successful and does not foster a team environment. Instead, focus on creating a team environment by encouraging the upward flow of communication.
Developing managers who encompass the leadership qualities of the future will allow your company to gain momentum and rise above the competition. In addition, employees will appreciate consistency among managers, and enjoy a team driven work environment.
Resource:
“Leadership for the Future.” McKinsey Global Survey Results.
Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy,” “Selling Your Business the Easy Way,” “Enhancing Your Business Value…The Climb to the Top,” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or email him.
Tuesday, February 17, 2009
New Book Teaches Business Owners to Drive Business Value despite the Economy
The recession is spawning concern from business owners regarding business value. Driving Business Value in an Uncertain Economy, a book by Mark Jordan, offers business owners the key factors that drive business value in any economy.
FOR IMMEDIATE RELEASE
PRLog (Press Release) – Feb 16, 2009 – The recession is spawning concern from new entrepreneurs, executives and seasoned business owners regarding their business value. Driving Business Value in an Uncertain Economy ($11.95, ISBN-13: 978-0-9816572-4-0) offers business owners the key factors that drive business value in any economy.
“The common misconception among business owners is that economic and market trends are the only factors for determining business value,” states author, Mark Jordan. He adds, “When they encounter a scenario like this, fear paralyzes them. They ignore things they can do everyday to boost business value regardless of the economic circumstance.”
Jordan reveals that business value is, in fact, a combination of internal and external drivers. Chief among them is maintaining and improving sales, gross margin and earning trends. The author and Managing Principal of the middle market investment bank, VERCOR, also stresses the importance of leveraging a business’s best assets. The business advisor states a strong management team is an intangible and internal value driver. Finding new ways to capitalize on existing intellectual property is another way to boost business value. “Your management team and intellectual property are what makes your business unique. Any business can turn a profit. Your talent pool, and what they create, will set your business apart in the market,” Jordan shares.
Jordan complements the study of value drivers with frank advice based on his own experience aiding clients in their quest to boost business value prior to a business sale. Case studies and easy to follow action items serve as homework for readers ready to take the first step in growing their companies. Jordan states, “Business owners do not have to wait until the economy turns around to improve their business value, or get it ready for sale. They can do it right now.”
Driving Business Value in an Uncertain Economy (Decere Publishing, 2009) is available for purchase at major booksellers, or online at http://www.amazon.com/ or http://www.vercoradvisor.com/. Lightning Source, a subsidiary of Ingram Industries, Inc., is distributing the book.
About Mark Jordan
Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of Selling Your Business the Hard Easy Way (Decere Publishing, 2008), Enhancing Your Business Value…The Climb to the Top (Decere Publishing, 2002) and co-author of The Business Sale…A Business Owner’s Most Perilous Expedition (Decere Publishing, 2001). He is also the author of numerous articles on mergers and acquisitions. For more information about Mark’s books, visit www.vercoradvisor.com.
FOR IMMEDIATE RELEASE
PRLog (Press Release) – Feb 16, 2009 – The recession is spawning concern from new entrepreneurs, executives and seasoned business owners regarding their business value. Driving Business Value in an Uncertain Economy ($11.95, ISBN-13: 978-0-9816572-4-0) offers business owners the key factors that drive business value in any economy.
“The common misconception among business owners is that economic and market trends are the only factors for determining business value,” states author, Mark Jordan. He adds, “When they encounter a scenario like this, fear paralyzes them. They ignore things they can do everyday to boost business value regardless of the economic circumstance.”
Jordan reveals that business value is, in fact, a combination of internal and external drivers. Chief among them is maintaining and improving sales, gross margin and earning trends. The author and Managing Principal of the middle market investment bank, VERCOR, also stresses the importance of leveraging a business’s best assets. The business advisor states a strong management team is an intangible and internal value driver. Finding new ways to capitalize on existing intellectual property is another way to boost business value. “Your management team and intellectual property are what makes your business unique. Any business can turn a profit. Your talent pool, and what they create, will set your business apart in the market,” Jordan shares.
Jordan complements the study of value drivers with frank advice based on his own experience aiding clients in their quest to boost business value prior to a business sale. Case studies and easy to follow action items serve as homework for readers ready to take the first step in growing their companies. Jordan states, “Business owners do not have to wait until the economy turns around to improve their business value, or get it ready for sale. They can do it right now.”
Driving Business Value in an Uncertain Economy (Decere Publishing, 2009) is available for purchase at major booksellers, or online at http://www.amazon.com/ or http://www.vercoradvisor.com/. Lightning Source, a subsidiary of Ingram Industries, Inc., is distributing the book.
About Mark Jordan
Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of Selling Your Business the Hard Easy Way (Decere Publishing, 2008), Enhancing Your Business Value…The Climb to the Top (Decere Publishing, 2002) and co-author of The Business Sale…A Business Owner’s Most Perilous Expedition (Decere Publishing, 2001). He is also the author of numerous articles on mergers and acquisitions. For more information about Mark’s books, visit www.vercoradvisor.com.
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