How to Create Value

Create ValueCreating and building value for your business is something you want to bring up high on your agenda and at an early stage of your business! Of course, but…“generating value is one of the most misunderstood tools of innovation” according to Fast Company. Why is that?

It may well be that it’s a misunderstood concept. So how do we define value creation? It’s aiming towards best practices with an ongoing focus on continuous improvement. Value creation is something you create both internally and externally with a heavy focus on customer services.

We also know that value creation directly correlates with the future valuation of the business. The external customer focus, something that a business owner relates to, is a necessity if you want to stay ahead of competition. However, the internal focus on value creation often falls short to the detriment of the future worth of the business.
So again, why is not more emphasis put into this part of running a business? In my experience, the CEO or business owner fails to make the time to work ON the business on a regular basis. Another reason may be that you don’t have enough resources. Maybe you are managing instead of leading and are running out of time. We also know, just like with any new technology or software, you have to invest in an upfront effort to plan and execute accordingly.

Improving organizational capabilities is an intangible aspect of value building. This activity examines its own leadership, talent, accountability, collaboration, speed, mindset and learning. It is a longer term view and effort. Getting your ducks lined up just before you are ready to sell, or transfer the business over to a family member, is going to be too late. Value creation happens over time and is continuous.

Let me share with you a big picture view and a starting point in how to address the Value Creation Process and how you might begin the process. Start with these three disciplines:

1) Operational Excellence
a. Efficiency
b. Streamline Operations
c. Supply Chain Management

2) Product & Services Oriented Leadership
a. Strong marketing and innovation
b. Dynamic Markets
c. Development – short time to market with high margins

3) Customer Intimacy
a. Exceed Customer Expectations
b. Tailor Products and Services
c. Deliver on time

Behind the three disciplines listed above are no doubt a lot of details. Let’s assume you have focused on customer intimacy (3) and it is well established. If not, create a benchmark or baseline around these activities and set a new standard so you remain competitive. Operational excellence (1) and leadership (2) is where many companies fall short. The art of business is to balance both external and internal value creation over time. Planning these activities is essential and will take some time and effort, however, no matter what your next stage, it will be worth your while.

I know as the leader of your company your demands are never ending. Begin your process one step at a time, just like writing a book, one chapter at a time. Begin to identify the low hanging fruit, something that is easy to fix and has the most positive outcome. Maybe it is shortening the number of phone rings for a receptionists. Achievable with immediate positive outcome for you, the employees as well as the client or vendor.

If you find your business experiencing a reduction in market share or have difficulty in keeping costs down and you are doing it all alone, consider an outside group of advisors by establishing an Advisory Board. More private companies are investing in creating an Advisory Board to help them with their strategic intent and guidance in how to plan and implement such goals.

I hope this is a good first step for you. Begin to work ON the business for at least 4 hours a week (in one block) and things will begin to happen. I will be speaking on the topic of Value Creation and Finding the Right Advisors in the next two weeks. You are more than welcome to attend.

My next blog will be on “Working Horizontally” discussing how to aim for organizational collaboration addressing the first discipline of this blog. If you want to receive these blogs directly, please click the button on Follow Rudi’s Blog.

Make comments on this blog or get in touch with me with any ideas or thoughts. You can find my contact information on my new website Stop-Compromising.

With gratitude, Rudi

I am back with a book!

Front Cover Book

A year ago I wrote a blog on Transform, Transition and Change.

I  have missed engaging with you, and yes, it has been a busy year!  Looking back I accomplished some of the goals I set and others are still incomplete! Maybe as a reader you affiliate with this dilemma?

All three actions above have affected me in a very positive way.  I am very proud to announce my newly published book. It is available on Amazon if you would like to purchase it.

It would mean a lot to me if you would take the time and write a review.  See Sample Quotes for Rudi you may want to incorporate at the bottom. Either way, send me a line or two with your feedback and what you think.

The book is written for CEO’s as an instructive business guide that leads them through the myth of finance. Providing a fiscal navigator to embrace operational finance more positively, it’s a holistic perspective to overcome typical business challenges and to experience sustainable growth.

The book now has a dedicated website Stop-Compromising where you can find more details about the book, speaking ideas and board role qualifications, all part of my transition to Business Advisor, Thought Leader and Board Member.

Let me know about your transformations, transitions and changes. Call for getting together over a cup of coffee or send me an email at                                                            stop-compromising@nextstagesolutions.com

A-Team Outside the Box

Outsdie the boxYour ‘Outside-the-Box’ A-team

Every business has its challenges, yet most private companies do not engage a board of advisors. So let’s look at your options a little more carefully to see how you might want to set up such a board. Creating an Advisory Board (BoA) is making use of a group of outside experts, in other words, an “A-Team outside the box”! I am playing a bit with words here, but I want to emphasize that you should try to think unconventionally and gain some perspective by adopting an approach that’s essentially “outside your business.”  Have this group bring you business knowledge that you don’t currently have access to, information of the sort that will encourage profound questioning and probing.

An advisory board will provide you with non-binding strategic advice. This option gives you greater flexibility in how you might structure and manage this group than a traditional board of directors. Your selection of senior-level business leaders, experts and thought leaders to serve on your BoA will be very important. It might be easy to ask your accountant, lawyer or best friend to serve on your board, but that will be a mistake. A board with a completely outside perspective will bring you a refreshing new way to view your challenges and problem-solving, and get you out of your four walls to help you concentrate on working ON your business.

You’ll want to have high-level advisors who can advise you on all things business.  Every one of them should have an appetite for forward-looking opportunities and bring a strategic mindset to the tasks at hand. The BoA should have a good cross-section of expertise, such as talent retention and acquisition, strategic finance, sales and distribution, leadership coaching and operations/productivity, to name just a few of your BoA’s skill sets.

Starting the process, you’ll need to focus on 4 steps:

  1. Selection of Advisors

You want advisors who complement your own skill set, but also understand the need to keep the conversation strategic and “big-picture.” Look for advisors who are excited about your business and industry and see in it the potential and opportunities.

  1. Commitment and Compensation

Decide what the rate of compensation for your BoA hires should be. For a lower middle-market company, make an investment based on the frequency of meetings. An advisory board member may earn between $1,000 – $5000 per meeting.

  1. Discovery Process

At the first meeting, introduce your company to the board. Give them a good background summary of how you have built the company, where you are today and where you may want to be in the next three years.

  1. Deliverables

For the first meeting, draw up an agenda yourself.  After that, the chair should create an agenda with specific action items for each meeting. Discuss deliverables in each session, whether they were achieved or not, and if not, why not. Based on that information, make appropriate adjustments and identify additional resources and support if needed.

Advisory board work is a long-term solution for your business and your executive team. View it as a long-term strategy to help ensure the future health of your company. The benefits of such an investment are that you gain access to a group of thought leaders and business experts who will brainstorm, help you define a better solution and add to your thinking power. If they are effective, they will hold you accountable for finding solutions and applying them to your business.

Several times in my work with business owners and CEOs, I’ve heard them tell me they don’t want to pay for “thinking.” I always tell them that while they might consider themselves as being very strategic and smart risk takers, having another set of brains on hand might just get them “outside the box” in terms of ideas and problem solving that will help them advance beyond their competition.

Developing an advisory board to support the future of your company is one of the best investments you can make, as long as the goals and deliverables are clearly stated and you see yourself and your company making progress. Never under-estimate the power of outside the box thinking and advising. You have an opportunity to assemble an A-team to help you sort out your priorities and challenges, all for a relatively small investment of $30-$75,000 a year. The return on this investment is a factor of many, not excluding the fact that you are becoming a true leader for your business.

Want to know more?  Contact Rudi Scheiber-Kurtz for more details at 617-449-7728

 

Transform, Transition & Change

Transform ▲ Transition ▲ Change

by Rudi Scheiber-Kurtz

Words we are all very familiar with yet simultaneously love and hate!!  Everywhere you look you witness major shifts from status quo, whether it is politics, global warming or in fact our business models.

Mostly likely you will agree with me that the option to remain status quo is not a sustainable one.  One of my favorite words is A-G-I-L-I-T-Y because it hints at not standing still.

How are you going to transform, transition or change your business to provide your customers continuous value with optimal agility?

This January marks the 15th year of Next Stage Solutions offering strategic finance and operations to midmarket companies.  I am humbled at the hundreds of conversations with clients and prospects around sustainable growth, profit optimization and value creation.  I am proud to say that we have

The past 15 years have led me to a cross roads myself today, both professionally and personally.  I am in the middle of transforming. Transitioning and changing.  With that in mind I am working on the following:

  • Write a book/guide for CEOs on Value Creation. Each chapter provides hands-on tools and check lists for the busy CEO.  Looking to publish this spring
  • Transition NSS to an online digital platform for CEOs and CFOs to access finance and operational tools, proven methodologies, charts and guides
  • Develop a new online platform called Finance Beyond Numbers to establish a presence of forward-looking finance with a horizontal approach to leading
  • Lead XPX New England as the newly elected President of this 3 state chapter. It is an active and engaged group of professionals who help owners build valuable businesses and assist them in preparing and executing successful transitions.
  • Support my daughter Natasha with her brand new business that has the grand opening scheduled for January 16. It is a barre3 studio in Bedford, MA.  I have been taking her classes for over two years and I love the concept and work out. Words cannot describe how very proud I am of her for pulling this off single handedly.

Now that I have shared my five examples on transform, transition and change, what are yours? You may have heard me quote one of Yogi Berra sayings:  “If you don’t know where you are going, you’ll end up someplace else.”

I imagine that you do not want to be in that situation, we all want some kind of predictability.  More important than ever is for you to be WORKING ON the business, this way you have a chance to get to where you want to be.

Make it part of your culture to transform, transition and change and agility will be your friend.

 

 

Happy Thanks to Many Givings

My Favorite Thanksgiving Poem

Let Us Give Thanks by Max Coots

Let us give thanks for a bounty of people:

For children who are our second planting, and, though they grow like weeds and the wind too soon blows them away, may they forgive us our cultivation and fondly remember where their roots are.

Let us give thanks:

For generous friends…with hearts as big as hubbards and smiles as bright as their blossoms;

For feisty friends as tart as apples;

For continuous friends, who, like scallions and cucumbers, keep reminding us we had them;

For crotchety friends, as sour as rhubarb and as indestructible;

For handsome friends, who are as gorgeous as eggplants and as elegant as a row of corn — and the others — as plain as potatoes, and so good for you.

For funny friends, who are as silly as brussels sprouts and as amusing as Jerusalem artichokes, and serious friends as complex as cauliflowers and as intricate as onions.

For friends as unpretentious as cabbages, as subtle as summer squash, as persistent as parsley, as delightful as dill, as endless as zucchini, and who — like parsnips — can be counted on to see you through the long winter;

For old friends, nodding like sunflowers in the evening-time, and young friends coming on as fast as radishes; 

For loving friends, who wind around us like tendrils, and hold us despite our blights, wilts, and witherings;

And finally, for those friends now gone, like gardens past, that have been harvested — but who fed us in their times that we might have life thereafter;

For all these we give thanks.  Happy Thanksgiving to All!

thanksgiving

Linear Solutions Not Adequate

This week’s Boston Globe article by Jeffrey Sachs “Beyond the Bottom Line” makes an attempt for the reader to understand better the complexity of our Federal Budget.  Policy debates, he states “are designed to obscure rather than reveal the truth.”  I am truly fascinated with his view and outline for change, an out of the box view, yet so essential if we want to make real change in how we run our businesses and governments. I know, it is easier said than done as change is ever so difficult.  It does take a different mindset to leadership that is both nonlinear thinking and a bit outside the norm.

This reminded me of an effort from 12 years ago, that I am still very passionate about today.  My friend and neighbor Ravi, a retired CEO of a large alternative energy company, and I discussed the services of our local transportation system of small buses called ‘Lexpress’.  The inefficiencies around fiscal ineptness and ridership let us to investigate further as we began a conversation with the local town officials on a volunteer basis.

bus  We gathered all the business intelligence available to us on current costs and revenues. We found 3 problems facing the sustainability of these services:

  1. 1. Services offered from 7am – 6pm nonstop only had two time slots a day where demand was extremely high, that of beginning and ending of the school day. Students in fact were often left behind because the buses were full, making parents quite upset.
  2. Low to NO demand the rest of the day, as buses were running around town empty.  Our diligence discovered that only about 2% of elderly in town used ‘Lexpress’ in addition to an occasional rider. Very different of what town officials estimated.
  3. Annual loss of $350K to the town, including state grants.

Regularly the funding of this service would come up for discussion and eventually get funded again.  Ravi and I looked at alternative models in how the town could serve its customers better and with a lesser fiscal burden.  We talked with a local taxi service to offer a point-to-point service for a flat, slightly subsidized fee from the same state grant, and one that elderly actually would use.  We proposed to double the am and pm runs for student and then recommended ‘Lexpress’ for other services outside of town. Our financial model predicted a reduction of loss by 85% or $300K to a $50,000 per year loss based on existing usage, not including the huge potential uptick in ridership to bring it to break-even or even a slight profit.

You see where I am going, long story short, they literally laughed at us and told us not to come back.  Today and 12 years later the buses are still running EMPTY with accumulated loss of $5Million, not nothing for a small town. Adjacent towns implemented similar on-demand services that we recommended which have been very popular.

Now, moving over to your private business!  You could not possibly run with a loss over a long period of time, eventually it catches up with you.  What are some of your processes and customer needs that have been neglected simply by doing it the same old way?  Should you take the time to evaluate your processes and whether every step is a value add step?  Have you been working with your customers the same old way or could you improve in how you serve them better, benefitting both sides?  We indeed get stuck in the way we do things and change is often viewed as a threat and unattainable.

However, automation and robotics are here to stay.  The Wall Street Journal today has a great article on Target and the long term investment they are making in hiring a Massachusetts company Symbotic, LLC  in setting up a new distribution center.  Autonomous robots that travel unattached within the storage space.  According to the article, “distribution-center labor costs will be reduced by 80% operating in warehouses that are 25-40% smaller”.  With other words, 100 robots will replace 20 humans who currently walk 20 miles and lift 50,000 pounds during one shift.  This is the new future.

Could and would you want to look for such savings in your business? In our experience working with midmarket businesses, we found that a good first step is to move the business from an annual budget process to a Rolling Forecast.  This alone can save you up to 50% of budget preparation time. This is a first step in changing the culture and the mindset and a Rolling Forecast can be the culprit of looking for ongoing solutions in running your business faster, better and cheaper.

budget

Let me encourage you to step outside the box.  Call us to start the conversation in how we may partner with you to take you through a transition.  You may be amazed what you and your employees come up with and the real changes you can begin making.  You know darn well, if you don’t, the competition will.  The complexity that Jeffrey Sachs is talking about may be “outside the political mainstream” but not for you, the private midmarket business who must be looking into the future for sustainable growth.  Simple linear solutions will no longer be good enough.

Dog Day Afternoons

BrunsliSmallMy dog Brunsli is not fazed by the hot and humid weather, she just sleeps it away in the cooled house! Hope you are staying cool! Lots responded to my Lemonade request and it has been great to catch up with so many. It is still hot enough to have Lemonade, so don’t be shy….

This has been a summer of many distractions and also points to pause. Europe with its Brexit, multiple terrorist attacks, Deutsche Bank possibly in need of a bail out and overall currency fluctuations. This may indeed affect your business if you are doing business in Europe.

Here we are in the middle of the US presidential campaigns. It is not politics as usual……or is it?

Last week I attended the funeral of a client and dear colleague, Kevin Gosnell. Kevin was the CEO of T&K Asphalt Services, loving husband of Kathleen and father of three handsome sons. He died of ALS after a 15-month battle. What is so remarkable about Kevin is that once he was diagnosed with the incurable disease, he pulled out all plugs and decided to use his leadership skills from running his company and the Vistage group we shared, and bring the fragmented medical community together to pool funding and speed up research through ALS One with the hope to eventually have a cure. Take a look of the videos and support this great cause. Kevin is a hero in my eyes in how he took is death sentence public and made an incredible difference in a very short time. RIP Kevin and healing thoughts to his family.

Life intertwines with business as we all know. I am sure you are looking for the balance the way I have and figuring out where to draw the line. Take a moment these last few days of summer to reflect on where you are, what is good and what is possible to change.

Have you taken a closer look at the internal and external risks of your business? Most internal risks you can actually eliminate. What succession plans do you have in place?

Externally, mitigating risks for your business can be tricky, but being aware of the potential economic risks and implementing some buffers into your financial plans is a good strategy to consider.

Here is a blog post that may help you get started
https://nssblog.com/2015/11/09/de-risk-your-business/

Want to have a conversation over lemonade call me at 781-929-9125.
In the meantime, stay cool, Rudi