Work Horizontally

Why working across departments adds value to your bottom line…Logo

As you grow your company, one of the pitfalls is that departments slowly but surely form into silos. Once that silo mentality is established, it is harder to break them down. A big piece of this is failing to recognize the importance of the interdependency of the various functions or departments. Working horizontally begins with the CEO who understands that the four business elements: Sales, operations, finance and the organization need to be on the same page in understanding the critical challenges of the company.

Collectively the four business elements are the engine that makes your business run. Each relies on the other three and if one is underperforming, it drags the others down, hence the interdependency. Working horizontally also implies that each business element understands what the other three need. Rather than compete internally for your budget dollars, lead them to a more collaborative approach where they view themselves as a service internally to the other departments. This is where the alignment of course comes in and is so important.

Clearly share and communicate your strategy with the department leaders. What are the opportunities to grow the business? Minimize risks and simultaneously increase the value of the business. Create a culture of continuous improvement.
How can each business element contribute to continuous and long-term improvement? The collaborative effort will help you uncover key business issues facing your company. Today’s market is swift and trends and competition change at a faster pace. Teamwork, communications and collaborations are essential to run your business in an agile fashion.

So begin your journey by focusing in transforming your business with Best Practices, step by step. This will be vital to your company’s success and profitability. For a start here are the Best Practices areas and questions to ask yourselves:

Organization: Culture set for change through leadership, culture and communications.
Have you clearly defined your mission, vision and supporting core values?
 Have you set key metrics to measure well-defined growth objectives?

Sales: Business market assessment and related risks in sales, marketing and business development.
Do you have a well-defined process for collecting and analyzing market                                    intelligence for potential growth opportunities?
 Do you gather customer requirements and measure customer satisfaction?

Operations: Growth and operations strategies in the areas of manufacturing, R&D, distribution and business services.
Do you have a written strategy for continuous improvement?
 Have you identified scalability issues of existing resources?

Finance: Your overall financial health in terms of finance, IT, risk management and capital raising.
Do you include in your financial reports an analysis of contribution margins for                      each of  your business segments?
 Does your finance team meet regularly with other departments to understand                        their needs?

Having procedures and policies in written form and shared with employees is another important step. Working horizontally in a collaborative manner will bring you great results. The era of silos is the thing of the past and letting each department run their own show will hurt your business. Starting with a benchmark assessment around best practices is a good start. Focusing on continuous improvements and empowering your employees to find efficiencies and drop anything that is not a value add to the customer will affect your bottom line in a positive way.

My book “Stop Compromising” has its own chapter on this topic and includes a benchmark assessment around the four business elements

Let me know what has worked for you in working across departments and in leading with a collaborative style! Did you see a direct result on your bottom line?

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

 

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.

Every CEO Faces Agility Issues

Our 3rd CEO Leadership Event of our 3-part Series at the Lanam Club, Andover

Wed, May 18th from 12noon – 2pm- JOIN US!

HOW DO SMART COMPANIES GROW?

What can we learn from fast growth businesses and why you need to know?  What is the fundamental path to growth in a fast paced business environment? Here are the 3 Reasons:

  1. The economic picture will continue to change, both internationally and nationally, affecting all businesses small and large. EVERY business needs to understand how to become more adaptive and agile against this volatility to survive.
  2. How do fast growth businesses adapt daily to these external changes and how do they keep their businesses agile? The CEOs will describe the different stages of growth and how it affects their culture; how they go about finding the right people, a challenge we all face.
  3. Come and hear how the digitized world helped them and what YOU can apply to your business today!  An industry agnostic approach.

REGISTER TODAY TO HAVE A SEAT AT THE TABLE!

PANELISTS:

CloudLock   Gil Zimmermann, CEO & Co-Founder, CloudLock

Mobiquity   Bill Seibel, past CEO, Mobiquity

CTP   Chris Greendale, Founder & CEO, Cloud Technology Partner

MODERATOR:            Rudi Scheiber-Kurtz, Founder & CEO, Next Stage Solutions, Inc

WHERE:  The Lanam Club, 260 N Main Street, Andover, MA 01810

Register Today!

Rudi Scheiber-Kurtz of Next Stage Solutions, Inc. | 617. 449. 7728

Andy Snider of Snider Associates | 617. 947. 1170

SniderNSS

How Fast Growth is Achieved

Addressing the Challenges of Succeeding the 21st Century

Spiral Wednesday, May 18th  12-2pm   Part 3

Approaches that worked in 2000 are not enough to succeed in 2016.  Digitization of things is upon us. What can we learn from fast growth businesses who live and provide the latest technology and what opportunities can we create when we are ready to embrace the new state of doing business?

PANELISTS:

Mobiquity   Bill Seibel, past CEO, Mobiquity

CTP   Chris Greendale, Founder & CEO, Cloud Technology Partner

CloudLock   Gil Zimmermann, CEO & Co-Founder, CloudLock

MODERATOR:   Rudi Scheiber-Kurtz, CEO, Next Stage Solutions, Inc.

Learn about techniques that the most advanced companies are using to achieve extraordinary results and to make their organizations more adaptive.

WHERE:  The Lanam Club, 260 N Main Street, Andover, MA 01810

Register Today!

Rudi Scheiber-Kurtz of Next Stage Solutions, Inc. | 617. 449. 7728

Andy Snider of Snider Associates | 617. 947. 1170

De-Risk Your Business

Why De-Risking Your Business is a Smart Move!

By Rudi Scheiber-Kurtz, CEO of Next Stage Solutions, Inc.

No matter what your next stage for your business is, whether you want to grow and acquire or sell in the next year or so, de-risking your business will only bring you benefits.

Business risk

Let me share with you parts of our methodology and structure that we use with our clients. We have defined 6 areas of Enterprise Risk included in our assessment tool and implementation plan.

Enterprise Risk is generally high among midmarket, private and public businesses, yet with the proper management and forecasting tools, they can be reduced or eliminated altogether.  Doing nothing will definitely hurt the value of your business. Having a process and a plan in place is a worthwile investment.

Here are the 6 areas of Enterprise Risk for your consideration:

  1. Lack of a Formalized Strategic and Operational Plan
  2. No Alignment with Goals & Objectives
  3. Underperformance with Low Productivity and Utilization Rate
  4. Silo Mentality and Thinking
  5. Inadequate & Antiquated Procedures, Processes and Policies
  6. Overreliance on Key Employees

Over the years, NSS has found patterns of hidden risks typical in midmarkets. These issues come to surface when the company typically wants to engage in a next stage, such as acquisition financing or planning to get their company to market, then are surprised when the realistic value does not match the perceived value.

The good news is that the above six factors are all internally focused and under your control.  With the right management tools, awareness and a relatively small capital investment, they can be fairly easily mitigated. Once implemented, it becomes part of an ongoing process/policy called Enterprise Risk Management or ERM.

External risks are also to be considered and should be incorporated in your ERM plan.  To start the process, talk with your CFO to get support with the following steps:

  • Look at 2 Types of Risks – External, mostly uncontrollable and    Internal, mostly controllable
  • Create a structured process to identify risks
  • Identify patterns of hidden risks
  • Recognize, understand and develop a comprehensive plan to mitigate these risks

Companies confront different types and levels of risks over time and there are many common threads that define risks and how they impact critical decisions routinely made by organizations.  Having an ERM plan in place will position you for greater strength and increased value no matter what your next step is for your company.  This is not fluff, but a necessity, so begin the discussion today.

For more details on the 6 areas of ERM, watch our 6-minute  RudiTuesday Video!  It will provide you with additional thoughts and criteria to consider. Yes, we have done it many times over and would love to help you, but most importantly to me is that you get it started!  It’s all about value creation and choices.

Enterprise risk

Call us if you have questions or if you need our support in de-risking your business! 

617 – 449 – 7728

NSS Launches CEO Mini Series

Spiral

A 3-part mini series for CEOs and Business Owners in how successful business leaders have grown their organizations.

Each of these programs is by invitation only!

Accelerated Growth Demands Critical and Innovative Shifts

Access ideas from CEOs and learn how they achieved accelerated growth from implementing the right infrastructure to effectively identify and develop new growth opportunities.

Sign up Pre-registration is required. Sign up for all 3 or 1 at a time.

PART 1: Building  an Organization that Can Thrive in a VUCCA* World  ( *Volatile, Uncertain, Changing, Chaotic, Ambiguous)

Thursday, January 21, 2016 12noon – 2pm at the Harvard Club, Back Bay

Learn about the importance of linking strategy, leadership, learning,  and accountability to create an organization with maximum flexibility to deliver positive results in changing environments. Come hear how 3 corporate leaders built organizations that have thrived in change and created lasting value, by getting the right people and getting them to do the right things at the right time.

PANELISTS:

  • Roger Berkowitz, CEO,  Legal Sea Foods
  • Pat Sullivan, CEO,  Game Creek Video
  • Dennis Slutsky, Former CEO,  American Dryer

Moderator: Andy Snider, President of Snider Associates

PART 2: Tomorrow is Here: Profitable Growth Requires Critical Assessments Tools for Effective Strategy Execution

Tuesday, March 29, 2016 12noon – 2pm at Waltham Woods, Waltham

Hear from successful CEOs in how they shifted their focus to achieve growth from implementing the right infrastructure to effectively identifying new growth opportunities. Join us to learn more in how CEOs have embraced qualitative and quantitative practices to address demands critical for future growth and longterm value creation.

PANELISTS:

  • Charlie Storey, President,  Harpoon Brewery
  • Kevin Young, President,  Mondi Group USA
  • Randy Nunley, CEO, Odyssey System Consult. Group

Moderator: Rudi Scheiber-Kurtz, CEO of Next Stage Solutions

PART 3:  Addressing the Challenges of Succeeding the 21st Century

Wednesday, May 18, 2016 12noon – 2pm at the Lanam Club, Andover

Approaches that worked in 2000 are not enough to succeed in 2016.  Learn about techniques that the most advanced companies are using to achieve extraordinary results and make their organizations more adaptive.  Panelists to be announced.

FOR MORE INFORMATION CALL 617-449-7728

Sign up