Measure So You Can Manage

Having the right performance metrics helps you drive growth. Let me share with you six steps to implement effective measures to manage. Keeping a competitive edge in today’s marketplace requires ongoing investment in the transformation of your business. As Mark Twain said:  To stand still, is to fall behind.

1)      Clearly define your corporate goals

Without a clearly defined and documented strategy, it is impossible to set expectations and monitor performance. You can only manage what you can measure, so if you lack such a strategy, begin to brainstorm and evaluate opportunities for continued growth.  Understand what your weaknesses and strengths are and begin documenting so that when it is finalized, you can share it with your employees. You may think that everyone knows where you are going, but don’t’ assume.  No one has ever over communicated!

2)      Identify short-and long-term operational goals

Take your strategy and identify what you want to accomplish short-term (3 mos) and what needs a bit more time (12 mos).  This would include approaching the weaknesses and turn them into strengths. In operations you want to evaluate each step taken and whether it adds value or not to the final product or services.  Think lean here and optimize the process.

3)      Establish milestone, deliverables and tasks to support your goals

Now you may be ready for the roadmap.  Establish milestones, deliverables to be achieved and identify tasks and who performs them.  Now that you have documented and shared the strategy with your employees, it is important to listen to them and get their input.  Agree on goals, objectives and timetables.  Evaluate whether you have adequate resources, so you have a better chance of succeeding.

4)      Develop and implement metrics for all key activities

This is where the measuring starts. Make sure you engage your employees in setting performance metrics.  Here are some examples: Customer retention rate, supply chain rate of return, funnel conversion rate or call center support metrics. Be proactive and pay attention to leading indicators in your industry and pay less attention to lagging ones.  Clarify expectations with your executive team and staff, empower your employees and boost their engagement. Set some incentives in advance and make sure that all metrics are objective and not subjective.

5)      Monitor progress and make improvements as needed to stay on course

Now you have a roadmap in place that you can begin to monitor and manage. Your employees understand what is expected of them and how they can help the company grow.  Making a difference goes a long way in terms of talent retention.  There needs to be purpose and connection to the larger scheme as participation can give them a better understanding of how they personally can affect the business.

6)      Assess the effectiveness of metrics and modify if necessary

Close the loop by evaluating regularly how the metrics are working.  What is the assessment of your staff and how well are they adhering to these metrics?  Do you need to change them, are they giving you information that is meaningful to the future of your business?

Start the conversation today regarding how you can drive results with the right performance metrics. Transparency and accountability will be on your side as you seek a way to measure and manage. This is an ongoing process and of course, if your business changes, so do your performance metrics.

My book “Stop Compromising” has its own chapter (chapter 5) on this topic and explains ways to think about KPIs and performance metrics.

Let me know what KPIs and performance metrics have worked for you and what particular leading indicators you use for your roadmap.

 

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?

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

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

Why Lose Money with a PMI?

No Need to Lose Money with an Acquisition!

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

We know that Post Merger Integrations (PMI) never grab big headlines, yet the PMI phase is a critical element to the overall success of any acquisition and therefore needs to be on Management’s agenda long before consummating the merger.

Merger & Acquisition activities will continue to be strong and move at a rapid pace. In 2014, there were over 40,000 deals announced in the US and this year will most likely match it as well. Many of these deals also bring challenges and high risk to the acquirer. What can we learn from past failures and how can we get a clear understanding of which factors can impact an integration negatively?

According to a Deloitte Integration Report in 2015, a survey with over 800 executives sharing their post-merger success stories, almost 30% responded that their integration fell short.

Empirical data and predictable risk factors are often ignored by executives in developing an acquisition strategy. Successful companies have a clear understanding of which factors can impact the merged organization, assess the likely causes for potential failure, and focus intensely on their elimination throughout the process. By identifying them before completing the deal, you can realize the Maximum VALUE of the Merger.

Based on our experience, the three most overlooked areas and those which executives say they would approach differently in the next M&A event, are as follows:

  1. Under budgeting the integration process

Properly plan for the PMI from the beginning. Clearly outline the phases, properly budget the event, and thoroughly review the process at the outset. Ideally, an Integration Champion or Team should be appointed to oversee the entire process from the beginning of negotiations through the end. Additionally, it would be most beneficial to have Integration Managers who work closely with the Integration team in implementing all elements.

  1. Lack of Communications

No one likes uncertainty. The key is to strike a balance between budget, time, team size, and level of expertise. Appoint a Communications Champion responsible to Management who can lead the entire process. In a PMI, employees will either lose their jobs or their functions will change. It is essential the Champion and Management communicate the Integration Process to all employees of both organizations. It is generally agreed that town hall meetings are more effective than emails.

  1. Lack of Back Office Support

The back office offers large amount of value capture if planned and executed properly. It is also the backbone of a successful integration. IT, Finance and HR are consistently undervalued in planning a transaction of this magnitude.

The interdependency of these back office support systems is critical to the overall success of the deal. Frequently cost synergies of a transaction come from eliminating duplicate functions making back office support the number one source of cost savings. Therefore it is important to understand that reliance on staff that will be made redundant at the end of the process, is a risk that needs to be mitigated at the beginning of the process. Financial rewards for successful completion of the integration can often overcome a reluctance to assist.

IT in particular is not a priority to most Executives, when in fact; adopting a one-system integration (ERP and CRM) will be a crucial outcome in how you bring transparency to the new entity. Real- Time Information flow to all decision makers is the true measure of a successful merger. Evaluate what systems are available to each business unit and choose the best and most optimal way to support the business. Estimate the resources you will need to successfully integrate the systems, including training and educating of staff. It is all about execution and achieving desired results.

Financial rigor with strong financial reports and KPIs are extremely important in order to measure and validate the true value of the merger. Track all activities over a specified timeline. Poor financials are often blamed for the failure of merger activities, rather than poor planning and execution of the integration process. Assure that you have both in place.

HR is the other back office support that often gets ignored. Have strong HR capabilities that can manage the talent retention of critical assets, and assist in developing plans to address staff redundancies. This process has to begin very early on to ensure that you retain key talent. Especially when operating in new markets, states or countries, retention of local intellectual capital is imperative.

By focusing on these three Most Overlooked Aspects of a Merger, you can avoid losing money at the point of integration. Plan and budget accordingly; in doing so, you will have a better success rate than the average merger. So go and change the statistics!

Need help along the way? NSS has participated in numerous PMIs combining finance, operations and IT to assure seamless integrations for our clients.

We have a short RudiTuesday Video with more information. Take a look!