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From the mind of Don Turner – “Creating Clarity in a World of Complexity’
We are in our last installment of “Company Restoration in the New Normal.” I hope you are finding it informative and it is prompting some of your own thoughts about what to expect as we conduct business in this new world, we have found ourselves. Again, I invite you to leave comments on your thoughts so we can all learn together.
“The capacity to learn is a gift; the ability to learn is a skill; the willingness to learn is a choice.”
~ Brian Herbert
In Part 3 we introduced this mind map of the “5 C’s Restoration Strategy” and discussed the first three. In this final Part 4, we finish introducing the last 2 “C’s” and talk about the future.
5 C Restoration Strategy
COMMUNITY
“Alone, we can do so little; together, we can do so much”
~ Helen Keller
Your business operates within a community of Suppliers, Customers, Lenders, Local Government, and more. In “normal” times there is always a level of dependency with each member of this community. I know many companies like to talk about “partnerships” over “vendorships”, but the reality is that there is always a recognition that if needed there are options to replace one member of your community with another – i.e., the “law of supply and demand.”
Given the increased requirements of conducting business in the New Normal, you will be forced to have more detailed, more transparent, and more involved “heart-to-heart” discussions with everyone in your Value Chain. You will certainly need them to be accommodating to your liquidity pressure as they will require the same of you.
If there ever was a need for commitment over-involvement, the New Normal is the time.
With all due respect – and somewhat “tongue in cheek” – you and your business community need to embrace the “swine mentality.”
What does this mean?
For Suppliers associated with some form of fabrication, you may have to jointly work out the flow of raw materials with the flow of cash. As mentioned in the last installment, this will likely have several characteristics to it:
You may have to interactively negotiate cash flow terms between your Supplier and yourself and with your
Customer and yourself. This will require a level of trust
AND transparency that all parties are most likely not accustomed to. Expect to have honest discussions around “normal” margins and temporary New Normal margins – i.e., “I’m working at 20% less margin, can you sell to me for 20% less?” Who knows? In the short-term, you may have to “open the books” to negotiate with your Suppliers and Customers.
If – and that is a big IF – this is done successfully, would fully expect these relationships to evolve into strong “shared goal” partnerships as we evolve into later stages of the New Normal.
For service Suppliers, the challenges maybe even more difficult given that in tough times cutting back on outside services is typically one of the first burn rate reduction initiatives. With this in mind, there will be a renewed focus on monetarily quantifying your value-add to your Customer. This will be a rude “wake up call” for many Service Providers who have ignored this service-providing fundamental for way too long – i.e., paying “lip service” to it in promotional literature without routinely reviewing, refining, and enhancing their value to the marketplace.
You may have to provide a partial service to your Customers for a heavily reduced amount just to keep the business. In this case, you may have to significantly broaden your Customer base providing a narrower focus of services for heavily reduced prices.
All this said, with either fabrication or service Suppliers, I would expect that those business communities that survive and evolve into the New Normal to represent phenomenally stronger entities. This should serve them well in the future.
We addressed “Customers” as a stand-alone item in the 5C Restoration Strategy but it deserves some additional discussion in the context of your business community.
Customers should be open to discussing mutually beneficial arrangements where you can offer a temporarily reduced price and in turn, they will give you a long-term commitment to continue purchasing as the market becomes healthier. As with your Suppliers, you will likely have discussions that involve an entirely new level of transparency.
Again, everyone is simply trying to engage in commerce again. Communication, creativity, transparency, and commitment are the ground rules for the New Normal.
Lenders have always been willing to talk about helping in a distressed situation. Trust me, they don’t want to see you fail – costs them money, time, and a whole lot of paperwork. In the New Normal, there may not be much new capital available through traditional lending institutions (ED: we will briefly address the role of Private Equity at the end) but that is likely not your issue. Early in the New Normal, businesses will most likely be looking to “buy time” in dealing with existing institutional debt.
Relative to new lines of credit, I don’t see this as an impossibility if the Lender is brought into the interactive and integrated discussions that you are having with your Suppliers and Customers. At the risk of repeating myself ad nauseam, this will require complete transparency and a commitment by all members of your business community to work together. “Good and Services” move on the current of “Cash Flow.”
COMMERCE
“When only one party makes a profit that’s robbery; when all parties make a profit that’s business.”
~ Amit Kalantri, Wealth of Words
Last but not least is the business itself. An involved topic but the key points are:
New Normal Marketplace Ground Rules – you must take an honest, fresh look at your value proposition into the marketplace. Think through the real value your offering has to your Customers. If you can’t answer the following four questions succinctly then you have a true “value proposition problem” with your business:
“Why should the Customer listen to you?” 2. “Why should the Customer listen to you now?
“Why should the Customer buy from you?”
Why should the Customer buy from you now?”
There is a “brave new business world” coming via the New Normal and I see only quantifiably value-offering businesses surviving, much less thriving.
SHORT-TERM GAME PLAN – the first step in your Restoration is to deal with all of the aforementioned. In addition, have a Restoration Game Plan that you look at EVERY day, THROUGHOUT the day. Each day should involve laser-focused attention to balancing:
Delivery Cycle Excellence – if your offering is still relevant in the marketplace then there will always be Customers for those who can deliver real value quickly, cost-effectively, and with superior quality.
Liquidity Management – in the early stages of the New Normal, liquidity hiccups can be deadly. Constant vigilance and constant communication backward and forward in your Value Chain is critical.
Culture – remember your employees are no longer coworkers. If you have made the management to leadership transition effectively they are your “Battle Buddies”, your
LONGER-TERM GAME PLAN – obviously the longer we look into the future the less clear our “crystal ball” will be. However, looking into the future is something we all must do – the alternative is to face the professional ignominy of being a “Reaction Manager” versus a “Proactive Leader.” Note, this “looking into the future” is where the art and science – and trust me it is clearly both – of Strategy comes into play.
The fact is that we may not make strategic decisions daily, but in a lifetime of developing and executing strategy, I guarantee you that you are exposed to “strategically-relevant” information EVERY day, throughout the day.
If you don’t have the processes and tools to capture in real-time you should at least set aside some time at the end of every day and ask yourself, “what did I learn today that may impact my long-term direction at some point in the future?” This observation can involve the market in general, Customers, Competitors, Offerings, or the underlying technology that is part of your marketplace. Sometimes it is nothing more than a “tidbit” of news – you need to learn how to identify “potentially” important strategic data (ED: it is a sad testimony to our Business School educational system that many professionals have never been taught to be “Strategic Thinkers”).
An additional observation based on a little bit of experience on the topic is to understand what is becoming LESS important in the marketplace. Many professionals only try to understand the emerging or growing trends – remember how we said that is the “essence” of strategy – and that is a good thing. However, what is often ignored from a resource planning perspective is also trying to understand what is becoming less important. It is amazing how many times I have found organizations still investing significant resources – time, personnel, and capital – on items that are becoming less relevant in their marketplace.
Bottom line, the objective is to gather and organize strategic information in a way that it is useful when you formally sit down with your Team to refine your strategy – whether that be monthly, quarterly, semi-annually, etc. (ED: timing is a function of the “velocity” of your particular marketplace).
“It’s amazing how a little tomorrow can make up for a whole lot of yesterday.”
~ John Guare, American Playwright
FINAL RANDOM THOUGHTS
Given that in recent years I have worked with a lot of Private Equity organizations, a comment or two about how they will play and play into the New Normal seems appropriate.
First and foremost, they will be laser-focused on the survival of their current portfolio companies. They always hold back extra capital – i.e., “dry powder” – to further invest in their portfolio companies when either things have not gone as planned or there is an opportunity to grow even faster. Obviously, nothing prepared them for this economic calamity of a global scale. It is likely that some “fire sales” will be taking place as they identify portfolio businesses that simply aren’t relevant in the New Normal and need to be jettisoned.
That said, once their portfolio is relatively stabilized, expect them to be on a “rollup” frenzy – where a “rollup” is when an investment firm buys multiple smaller companies in the same market with the intent of developing economies of scale and becoming more of a dominating force in that particular marketplace. With the expected business casualties of the New Normal, it is likely to be what we refer to as a “target-rich environment” for buying distressed companies.
As a business professional, it would be to your benefit to follow these rollup activities and look for opportunities for your own business. Ahhh, but that is a topic for another day.
SUMMARY
As we come to a close on our look at restoring companies in the New Normal, let us review what we discussed:
We are NOT going back to normal, there will be foundational changes in our society, our culture, and the manners of how we conduct commerce.
Surviving – much less thriving – will involve far more involved techniques than normally associated with “Restructuring” or “Turnaround” – though the actual stages remain the same
Successful business Restoration will require innovative approaches to managing Cash, Customers, Culture, Community, and Commerce itself
So. we are headed for a New Normal – of that, I have no doubt. Here is to hoping that we can use these “interesting times” to our advantage and make a better world for all.
Particularly in challenging times, success is NOT about knowing the answers to tomorrow – few have that prophetic ability.
Future success is based on asking the right questions today.
Good luck. May you and yours be safe and healthy.
Don Turner, 24 Apr 2020
Don Turner
Don Turner is a serial growth and turnaround executive with success in a broad range of marketplaces and business situations. He is also an internationally recognized Strategist who has deployed his VOGI® Strategy Methodology in over one-hundred organizations ranging from startup to NYSE and NASDAQ public companies. Routinely called in to deal with some of the most difficult business problems, one executive summed it up as, “everything Don touches is better as a result.”
From the mind of Don Turner – ‘Creating Clarity in a World of Complexity’
I hope you enjoyed our point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.
Your feedback helps me continue to publish articles that you want to read. Your input is very important to me so; please leave a comment.
In Part 1, we identified some of the more important characteristics that will be driving the New Normal. In this discussion, we will focus on how business professionals should be looking to respond to the New Normal.
First and foremost, it is clear that many companies are and will be faced with survival, pure and simple – doing whatever they can do today to ensure they are in business tomorrow. This is a reality that must be dealt with. Some will make it, many won’t.
That aside, if the company has enough “liquidity runway” to reenter the marketplace than the question is “how?” As we return to the world of commerce, it will be clear to all involved that is not going to be “business as usual.”
Given the current situation, the natural tendency is to turn to the methods that fall under the topic of “Turnaround” or “Restructuring” in an attempt to return a company to prosperity. Even so, I believe we will quickly find that these traditional ways of “fixing” organizations are insufficient. I believe these Restructuring/Turnaround approaches must be modified and evolved to reflect the realities of conducting business in the New Normal.
To differentiate this new perspective,
I’m suggesting that conducting commerce in the New Normal will require a “Restoration Strategy” mindset. We aren’t simply “restructuring” companies, we are “restoring” them to going entities. We aren’t simply “turning around” companies, we are “restoring” their business models modified for the realities of the New Normal. Restoration will require answering questions, developing approaches, and executing tactics that have never been part of a “typical” Restructuring or Turnaround effort.
I’m suggesting that the fundamental difference between Restructuring and Restoration will be the underlying environment. In a Restructuring situation, the company itself is distressed. In a Restoration environment not only the company, but it’s a marketplace – Customers, Suppliers, Lenders, everyone – are distressed also. This extra level of calamity will force us to conduct commerce in entirely new ways with new levels of focused cooperation.
TYPICAL RESTRUCTURING
To understand the concept of “Restoration” – which builds on “Restructuring” and “Turnaround” methodologies, let’s make sure we understand what is typically involved with the Restructuring/Turnaround.
Please note, we are taking the concept of “Workout” out of the equation here. In my distressed company lexicon, a “Workout” is when a company is already in or close to some form of receivership and it is likely no longer a going concern. In this case, the focus is working with Banks and Creditors to maximize asset monetization. Workouts in the New Normal will clearly be common, but the focus of this article is with businesses that have the potential to restore themselves and prosper.
In contrast – as someone who has been involved in a few turnarounds over the years – I view a Turnaround as a situation where the company is distressed and clearly in trouble but there is a possibility of “fixing it” and making it a healthy, growing concern again. I would be the first to admit that it doesn’t always end that way but the difference is the intent going in. That intent drives what you immediately do in a Turnaround situation.
As a common discussion point, let’s all reacquaint ourselves with “Turnaround 101” by discussing the four major stages – as shown in the following exhibit:
Let’s briefly review each stage.
Stage 1 – TRIAGE – this first stage is the most critical and essentially represents a “GO” or “NO
GO” decision. You must quickly assess the company in terms of liquidity, resources, operations (ED: “processes”), and its marketplace. Note, a comment on this last item. Some turnaround efforts ignore an effective look at the marketplace and after fixing the company find out that it should not have been fixed in the first place because of an unattractive market based on size, growth, competitors, profitability, etc. – i.e., remember to look at the external marketplace during Triage. Back to this initial assessment, you are trying to answer the question, “do I have something worth saving as a going entity?” Your focus is on items such as liquidity, burn rate, and Customer communication (i.e., read “retention”). The bottom line, you are focused on what we call “stopping the bleeding.” Further, what is often not realized is that in this early stage of triage, you must simultaneously start developing a “vision” for the future of the Company that can be communicated to Customers and Stakeholders (i.e., employees, board, investors, creditors).
Stage 2 – STABILIZE – this second stage is focused at creating consistency and predictable operations – particularly in terms of burn rate. That is Revenue less Expenses on a cash basis. One of the fundamental tenets of Japanese Total Quality Management developed back in 1954 is that to “fix something” you must do whatever you are doing – no matter how badly you are doing it – in a consistent manner. Starting your “fixing”, your initial focus is outward-looking – repairing/improving any and all Customer-facing activities such as product quality and delivery. At the same time, you communicate to Customers the actions you are taking to assure them of the company’s health and ongoing vitality. Internally, you concentrate on those items in the “Delivery Cycle” – specifically Sales, Delivery, and Customer Service. Generally, these can all be fixed relatively quickly. As the “Delivery Cycle” is stabilized you can then later turn your attention to the “Development Cycle” that includes Marketing/Development/Engineering (ED: this latter cycle has a slower “velocity” or “cycle time” and requires more time to change). In stabilizing the company, your greatest focus is on those items that can make an immediate, positive impact on Cash, Customers, and Delivery. During this stage, you also begin communicating the “vision” that was developed in Stage 1 to Customers, Shareholders, and Employees. Particularly with Employees, you must encourage your top employees to stay and embrace the vision (ED: in a typical distressed situation your best employees most likely already have their Resumes “on the street.”)
With Vision, there is clarity of purpose. Without Vision, there is chaos of existence.
Stage 3 – PROFITABILITY – If you have effectively stabilized the company to some form of consistency than the next stage is focused at profitability – generating EBITDA and a cash stream that ensures sustainability. There are countless techniques Turnaround Professionals use – dependent upon the situation – but some of the more obvious ones might include: product line rationalization, Customer attractiveness prioritization, revenue-generating Customer service, alternative Delivery approaches, cycle time reduction, product testing improvement (ED: product quality may take longer), etc. At this stage, you are also starting to work the “Development Cycle” including the product roadmap for new offerings that might be more attractive to your Customers. The bottom line, at this point you have a going concern and your next focus is how to put the company on a healthy growth track.
Stage 4 – GROWTH – with a going, profitable, concern you are now looking more strategically to the future in terms of markets and offerings. You are addressing questions such as: “Do I have the right offerings and business model for my current market”; “What else can I sell to my current Customers”; “Can I use my offerings or core competencies to expand to other markets” – i.e., generate new Customers. Generally, most of these questions all fall under the auspices of the Ansoff Matrix – which represents an effective framework for identifying growth/risk opportunities (ED: have used this framework dozens and dozens of times to help identify, evaluate, and select growth initiatives for an organization). The final, bottom line “big question” is “What company focus – i.e., “strategy” – will generate the maximum return for the Investors?”
These are the basic stages of a typical Turnaround. Given the many possible problems and the many possible solutions, Turnaround approaches are almost always modified as needed for a specific distressed situation.
HOW IS RESTORATION DIFFERENT?
What is different about a “Restoration” versus “Restructuring” as it relates to the New Normal? The actual stages of a Restructuring remain the same, but the underlying conditions are significantly more formidable – creating greater requirements and likely entirely new requirements to successfully “restore” the company to a healthy status. You can think about these requirements in four major categories – Environment, Personnel, Liquidity, and Emotional Intangibles. I am sure we could address more, but let’s focus on these for now.
ENVIRONMENT – as mentioned, in a typical Turnaround the Company is in a distressed state whereas in the New Normal almost every business surrounding the Company will be in some form of distressed state – i.e., everyone is “in the same boat.” The good news is that everyone around the table will be acutely more focused and amenable to “making something happen.” This reminds of the quote from the 18th century English writer, Samuel Johnson, who said;
“Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.”
The environment in the New Normal will be characterized as a fierce determination to survive that will force business professionals to develop and consider new approaches to keeping their business alive – particularly through the early stages of the New Normal. Expect less long-term relationship development – “survival timing” simply won’t allow. Discussions between marketplace partners will be one of “putting your cards on the table” and asking “what can we make happen between us that will be a win-win?” Golf course discussions will become lifeboat discussions.
PERSONNEL – in a normal Turnaround situation your best employees have ample opportunity to go elsewhere – that is why they are your best. However, in the New Normal their prospects of leaving are diminished – that is the good news. The bad news is the increased challenge to motivate people when they feel they are “trapped.” That said, I envision this as an opportunity to build an esprit de corps in your company culture like never before. In our next installment where we discuss “Culture”, we’ll explore this a bit more. Suffice it to say that the New Normal will create the “potential” environment where coworkers become akin to “battle buddies” and all that implies – ask anyone who has been in armed conflict about this significance. Note, an important point is that leading battle buddies will require a far more effective leadership than supervising coworkers.
LIQUIDITY – in the New Normal everyone has limited liquidity, not just you but your Customers, your Suppliers, Your Lenders, etc. Everyone wants to conduct business but everyone also has limited buying power to purchase goods and services. Surviving and then prospering – relatively speaking for at least the short-term – in the New Normal will require creative ways of using limited capital to conduct business. I fully envision the barter system to be resurrected for certain types of transactions – particularly in the service sector – as well as creative consignment approaches for getting product in front of potential buyers. Payment terms will have to be negotiated almost simultaneously along the entire supply chain.
EMOTIONAL INTANGIBLES – by their very nature normal Restructuring efforts place tremendous stress on everyone in the business. Be that as it may, in Restoration – under the New Normal – we can expect a higher level of emotional stress throughout the organization than we have never seen before. The options we face under the New Normal are limited and with limited options comes an accompanying realization that this is truly a “do or die” situation. Decision-Makers will agonize over their choices more than they ever have – as will everyone in the organization whose livelihood is impacted by those decisions.
As we can see, these underlying factors of the New Normal will place tremendous pressure on every business professional to get creative. I believe one positive outcome – and I actually think there will be many – of these pressures is for a greater level of transparency in transactions between parties. The urgency of “restoring” business in the New Normal simply will not allow for the typical “games” often found during the sales and negotiating activities.
In many ways, the Restoration of companies in the New Normal can be viewed as “Restructuring on Steroids.”
What should businesses do in trying to respond to the New Normal? In Part 3 we’ll discuss some thoughts about specific actions.
Dpm Turner
don@turnerworld.com
678.361.3313
www.turnerworld.com
Thank you for visiting our blog.
Jim Weber – Managing Partner, ITB Partners
I hope you enjoyed our point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.
Your feedback helps me continue to publish articles that you want to read. Your input is very important to me so; please leave a comment.
“I’m not Chinese. I thrive in interesting times.” ~ Charles de Lint ~
In both culture and commerce, we live in what many would consider “interesting times” – as stated in the old Chinese proverb. A proverb, by the way, that is intended as a curse, not a blessing.
Our “interesting times” have officially decimated the worldwide economy, ravaged social norms, and rattled the psyche of many. As we come out of this pandemic-driven calamity we face a truly “new world.” Whether it will be a “brave new world” is yet to be seen – but a “new world” it will most certainly be.
I have learned in a career-focused at disruptive technology marketplaces – often leading edge – is that change is a threat to the meek but an opportunity for the bold. Navigating the New Normal will take – as we will discuss in future parts of this Article – an intrepid head and an empathetic heart.
As a serial CEO and Business Strategist, I have also learned that identifying change is part and parcel to an effective strategy. In its simplest form, the “essence” of strategy is to “look over the horizon” and identify macro trends – i.e., read “change” – that justifies the investment. The need to understand what is over the horizon and see those macro trends that merit the investment of manpower, capital, and time is more important than ever.
With this four-part article – that will be published over the next several days – I thought we would explore what the future holds for all of us. The four parts are Part 1 – The “New Normal” – No Going Back to Normal Part 2 – Not Your Daddy’s Restructuring, the Idea of Restoration Part 3 – 5 C’s Restoration Strategy – the first 3 “C’s” Part 4 – 5 C’s Restoration Strategy – the final 2 “C’s”
Writing is a cathartic process for me that forces me to think more thoroughly through ideas and concepts. It is my hope with this article to prompt some productive discussion about what the New Normal will be, how companies can start moving from isolation to the New Normal, and finally, what the long-term implications are for conducting business.
Thank you in advance for taking the time to read this and even more so to comment – I am interested in everyone’s opinion since that is how we all will learn and move forward together.
I keep hearing from both mainstream and trade media talk about “when things will get back to normal.” From my perspective, that is simply wrong thinking. There is NO getting back to normal after this global disruption of – in our lifetimes – unprecedented scale.
As business professionals, we are being forced to take a fresh look at the fundamental societal changes that exist now and will be occurring in the future and understand how they will drive new ways of conducting business.
Simply put, we must prepare for the “New Normal”
After giving it considerable thought over the past several weeks, I’ve developed four observations that I’ll share here as fodder for discussion.
FIRST, the New Normal will NOT come all at once. It will evolve in phases over the next six to twenty-four months as we move from isolation to controlled distancing to an environment that – once vaccines are readily available – will allow us to interact face-to-face again on a safer basis. One thing I know for sure is that many individuals throughout our society will be permanently “scarred” from this pandemic and never embrace face-to-face interaction as they did in the past.
SECONDLY, the New Normal will certainly contain “holdovers” from our current isolation phase that will represent – in some cases radical – changes to our lives in general and how we conduct business specifically. Yes, we will make more use of, be more comfortable with, and find ways to enhance the virtual experience that we have been forced to at the present moment. One individual I recently read said, “We’re currently in the epicenter of the biggest remote-work experiment in history….” Clearly, there will be part of the population that permanently embraces “electronic presence” over “physical presence” and will want to continue to live and work that way.
THIRDLY, the New Normal will change the commerce landscape – there is simply no getting around that. Some products and services will simply become irrelevant, while others become more important. Of even more interest are the new solutions that will arise to support – if not enable – the New Normal. Will movie theaters ever enjoy their historical attendance as many find they have enjoyed in-home entertainment more? Will discretionary “claustrophobic” air travel ever reach traditional levels as many will value individual travel freedom in a car? Will this drive more travel domestically versus overseas? Will office space ever be viewed with the same attractiveness? How will relationship-building evolve as we simply don’t have the same level of physical interaction as in the past? What will take its place? Will we focus less on the trappings of a business environment and focus more on what individuals are saying? Answering these questions and many more are all part of trying to understand the New Normal.
FOURTHLY, we – as a country and more specifically as a consumer population – are going to be taking a harder look at our trade with foreign powers. Yep, you guessed it – specifically China. China has managed to reposition itself in the global mindset from one of historical suspicion to blatant cynicism. At this point, I don’t believe anyone knows the real origin details of the coronavirus and who is responsible – or is it simply a force majeure of epic proportions. That said, this we do know:
China delayed letting the world know about the coronavirus – there was a government-driven movement to suppress information about the coronavirus – even threatening the doctor who warned his colleagues about a possible outbreak. On 3 Jan 2020, Wuhan police summoned and admonished him for “making false comments on the Internet” – forcing him to write a retraction. Unfortunately, this ophthalmologist, Li Winliang, later personally contracted the virus and has since died at the age of 33.
U.S. healthcare found out quickly that too many of our critical supplies – including pharmaceuticals – were made in China. Our healthcare supply chain was negatively impacted by the virus in China, creating significant problems in the U.S. Furthermore, as China rushed to provide us with needed supplies like N95 respirators, ventilators, and other medical supplies we found out they had serious quality problems and were all but unusable. There is already a movement to take a fresh look at what we allow to be manufactured in China versus in the good ole USA. Hopefully, we will recognize that having a stuffed toy being made in China is of far different importance than from having a life-saving medical device. I am all for a global economy but I’m also all for prioritizing our supply chain and identifying those items that independent of the cost are best manufactured at home.
China has both misrepresented and misreported coronavirus statistics to the world. There has always been skepticism about information from China, but now it has become blatant. In a world where we are seeing in the hundreds of deaths per million people – e.g., Spain 455, Italy 399, France 310, UK 241, with the US at 129, etc. – China reports “3”. That is right, in the country where it all started and I would suggest doesn’t have the Healthcare System of the aforementioned countries, they are reporting 3 deaths per million people. In case you’re curious about what other countries of importance are reporting numbers similar to China you don’t have to look any further than Russia – another bastion of information transparency – which is also reporting “3” deaths per million people. The bottom line, it is difficult to do business with someone you can’t believe and simply don’t trust.
So, these observations beg the question, “what does all this New Normal mean for business?”
In Part 2, we’ll address the idea that managing in the New Normal will require an approach that goes beyond what we have typically referred to as Restructuring or Turnaround. It will call for an approach that I’m referring to as “Restoration.”
Dpm Turner
don@turnerworld.com
678.361.3313
www.turnerworld.com
Thank you for visiting our blog.
Jim Weber – Managing Partner, ITB Partners
I hope you enjoyed our point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.
Your feedback helps me continue to publish articles that you want to read. Your input is very important to me so; please leave a comment.
Ron Weinstock of Weinstock Marketing and ITB Partners lands New Client, Disinfect Group.
Disinfect Group USA, offers a variety of systems to allow retailers, offices, venues to reopen safely. Total flexibility of units depending on the size needed. All manufacturing is in the USA. Disinfect Group USA’s product has the ability to:
Disinfect people and their belongings safely – 99.9999% effective
Take thermal temperatures
Count capacity in/out
On product branding
Offer LED sponsorship opportunities
Disinfect Group – Sanitation Tunnels
SANITIZING TUNNELS
Dry Fog is an innovative new product that creates an invisible “haze” in our tunnels which are completely safe and approved for use on humans against viruses and bacteria. It works using electrolyzed water technology.
Available with 1 to 5 tunnels and comes as a fogger or a misting sprayer.
SANITIZING FOG
Each visitor and worker pass through a completely safe dry fog before
gaining access to your facility.
THERMAL IMAGING SCANNER
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DIGITAL CAPACITY COUNTER
Add a Body counting camera that helps you know exactly how many people are in your venue or facility at all times.
NO-TOUCH SANITIZER DISPENSER
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STAY CLEAN. STAY SAFE. RETURN TO WORK.
Contact Ron Weinstock for more information.
(310) 663-7669 | ron@weinstockmarketing.com
Ronald D. Weinstock
Ron Weinstock is an experienced restaurant and retail industry executive, consultant, and entrepreneur.
Over thirty-plus years of successfully launching, building, and revitalizing national and regional brands have positioned Ron Weinstock as a business and marketing leader in industries that include restaurants, financial, health, entertainment, and retailing. Ron is a business and marketing executive with a proven track record and a passion for team building, which/that includes leading cohesive & purpose-driven teams that consistently deliver exceptional results.
Jim Cichanski, CEO of FlexHR will present HR Trends 2020
Distress in the workplace? You’re not alone. This Human Resources trends discussion will focus on the essentials business owners must know in today’s’ world, as well as to stay compliant with labor and IRS laws during current times. This review takes a deep dive into policy, best practices, and HR operations.
We’ll guide you through tangible situations and how the repercussions can cost tens of thousands of dollars to your organization. Next, we will review the “Risk Factor” of actions that are critical for managing the human side of your enterprise.
This session will include COVID conversations, details on how to stay out of trouble and reduce risk factors, clarifying policy, laws, handbook communications, managing millennials, and how to hire and fire employees in a social distancing environment. And finally, we will open the forum up to go through questions and answers.
Your presenter is Jim Cichanski, the founder and CEO of Flex HR, Inc. and a Preferred Partner of VSG. Jim also spent 27 years in the Army National Guard achieving the rank of Colonel, was inducted into the Officer Candidate School Hall of Fame, and received numerous awards including the Legion of Merit. Jim holds a BA in Applied Behavioral Sciences, is a graduate of the Department of Defense Equal Opportunity Institute, has served on the board of HealthSource of Georgia, and was an inside board member for 17 companies. He is an ongoing active member of various HR and Angel Investor professional organizations.
Jim Cichanski – CEO FlexHR
Flex HR, Inc. was selected Best of Johns Creek Award in the Business Human Resources Consultant category by the Johns Creek Award Program last year, and this year was inducted into the Johns Creek Business Hall of Fame. The Atlanta Journal-Constitution awarded Flex HR “Best of Atlanta Business Profiles” while Outsourcing Gazette magazine listed Flex HR as the “Top Most Promising HR & Staffing Service Vendors.” For 3 years INC Magazine recognized Flex HR as an Inc 5000 “Fastest Growing Privately Held Companies in America”. Jim was also recognized by the North Fulton Chamber of Commerce as the “Small Businessperson of the Year.” Catalyst Magazine acknowledged Flex HR as 1 of 18 Companies CEO’s in Atlanta would like to own. Jim is married to his wife Eldeen for 40 years, has two daughters and 4 grandchildren. He recently served on the Board of Directors for HomeStretch and is an active board member and investor in several Human Resources related ventures.
Successfully-Returning-To-Workplace: by Jim Cichanski and Jamie Sieja
The past few months have been unpredictable as the pandemic has taken a toll on most businesses. Almost all small to midsize companies have learned to adapt to these arbitrary and varying new working environments. However, it seems the change is actually going well for workers. 57% of U.S. employees think COVID-19 has changed the way we work for the better.*
Workplace Flexibility Moving Forward After Coronavirus
Therefore, it’s time to start looking ahead and getting businesses back on track by implementing updated work policies as the economy restarts. It’s imperative that Human Resources communicate their restructured plans to ensure a healthy and safe operational environment. Jim Cichanski, CEO of Flex HR states “we are working with hundreds of clients to bring back the workforce into their offices. The one key message I urge companies to convey to their employees encompasses the measures you are taking to keep them as safe as possible upon returning to the office. Conversely, be careful not to over promise-keeping your workforce completely safe. The research is still unclear as to exactly how an individual can catch, and spread, COVID-19; therefore, there is no way to create a perfectly protected environment while at work.” While some organizations have begun opening their doors for staff to return to physical locations, the majority of businesses are acclimating toward a remote workforce. Consequently, this means companies are fully transitioning to flexible working arrangements in the foreseeable future.
“If workplace flexibility is an expected employee perk, then employers will continue to offer that benefit to hire and retain quality people, which should be a prime the goal of the employer,” says Karen M. McGrath, assistant professor of finance at the Freeman College of Management at Bucknell University. “So as long as productivity remains strong, and employees experience greater job satisfaction, then I do not see things changing.”
Employers and Staff Returning to the Workplace
“HR executives should be the leaders in transitioning employees back to the workplace,” says David Osborne, chief executive officer of Virgin Pulse, a wellness company. Several employers are phasing employees back into offices, staggering workdays, moving office spaces (or cubicles) 6 -10 feet apart, and conducting temperature screenings before entering the building. Furthermore, other companies are asking their workers to self-administer temperature checks at home and attest that they have no COVID symptoms before entering their workspace each day. All of these transformations throughout the organization need to be relayed to all employees to ease their anxieties and to provide peace of mind. In short, companies are being trusted by their employees to do the right thing, follow the right guidance, and bring them back safely.
Overcoming New Office Challenges During The Pandemic
As the impact of Coronavirus across the country is lingering, one new challenge that organizations are experiencing is navigating day-to-day productivity efficiently. Thus, it’s essential to design a return to work plan that is sufficiently adaptable to evolving recommendations, guidelines, and orders issued by federal, state, and local governments, such as the Families First Coronavirus Response Act (FFCRA). Additionally, employers should reference guidelines published by the U.S. Centers for Disease Control and Prevention (CDC) and the Occupational Safety and Health Administration (OSHA), which summarize key considerations for preparing workplaces when bringing back employees.
Human Resources Is Vital Right Now
Business owners need to invest in the proper HR expertise now more than ever to successfully strategize and manage the modifications of new office policies. Businesses around the nation are trending towards outsourcing their human resources. Companies like Flex HR, Inc., a full-service HR firm headquartered in Johns Creek, GA, oversee these adaptable transitions all while mitigating possible liability risks for the employer. HR professionals have become the principal leaders of positive change; inventing new ways to work, altering job functions, developing new learning and communication methodologies. “The HR profession has taken on a heroic role. I am more inspired and energized to support the HR profession than ever. HR leaders are rolling up their sleeves, partnering with IT, facilities and legal functions, and figuring out how to react, respond and re-engineer all aspects of work,” notes Josh Bersin of Human Resource Executive.
Streamlining business complexities during the COVID crisis is perplexing in itself. Leadership is currently overwhelmed in making effectively-balanced valuable decisions for both staff and the organization. Simultaneously all while trying to enforce the company’s core values and safeguarding the well-being of employees. To ease the burden of management, HR companies, like Flex HR, have created “helpful tips for managing the Coronavirus crisis” online, specifically addressing COVID-19 business impact concerns. For checklists, sample return to work letters, and other essential information for having your staff return to work, contact Flex HR now.
Jim Cichanski, the founder, President, and CEO of Flex HR, Inc., has 30+ years of experience in human resources, holding senior-level positions in companies that were privately held, pre-IPO, foreign-owned, joint venture, Fortune 50 and one labeled the “fastest-growing F1000 in America.”
Jim Cichanski Flex HR, Inc. President and CEO Flex HR, Inc.
Thank you for visiting our blog.
Jim Weber – Managing Partner, ITB Partners
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2020 is an election year, and as we get closer to November, I expect this to replace COVID-19 and the recession at the top of investors’ minds. The makeup of Congress may influence stock market performance, and how stocks and the economy perform prior to the election may forecast who will win.
THE MAKEUP OF CONGRESS IS VERY IMPORTANT
Although all election years feel different, 2020 no doubt may be one of the most unique election years ever. We have a pandemic, a deep recession, extremely heightened partisanship, a mail-in ballot controversy, an unpredictable president, and the oldest presidential candidate ever.
Amazingly, 1940 was the last time the S&P 500 Index was lower during an election year with an incumbent in the White House. Historically, when a president has been up for reelection, it has tended to boost stocks.
Stocks were down big in 2008-but President George W. Bush had finished his two terms. It isn’t about Republican or Democrat-it’s about incumbents trying to boost the economy and stock prices by the time voters go to the polls.
I’m often asked if stocks perform better under a Republican or Democratic president. I take a different view and point out that stocks have tended to do their best when we have a split Congress. Markets tend to like checks and balances to make sure one party doesn’t have too much sway.
When Republicans have controlled both chambers in Washington, DC, on average the S&P 500 has gained13.4% per year and gross domestic product (GDP) has grown 3%. When Democrats have controlled both the House of Representatives and the Senate, the economy did a little better, with GDP growth of 3.3%, while the S&P 500 was up 10.7% on average. Some of the best stock gains in recent memory took place under a split Congress. Stocks gained close to 30% in 1985, 2013, and 2019, all under a split Congress. The average S&P 500 gain with a divided Congress was 17.2% while GDP growth averaged 2.8%, again suggesting markets may prefer split power come November.
WATCH THE ECONOMY
History shows that the US economy has had major bearings on the presidential election outcomes. If there has been a recession during the year or two before the election, the incumbent president has tended to lose. If there were no recession during that time, the incumbent tended to win. Incredibly, the economy has predicted the winning president every year going back to President Calvin Coolidge, when he won despite a recession within two years of the election. But Coolidge inherited a recession when President Warren G. Harding passed away, and by the time people voted in November 1924, the Roaring ’20s had started to take hold, and the economy was strong again.
My analysis suggests the 2020 presidential race is still up in the air. If the economy continues to open up, a vaccine is on the way, and the massive stimulus continues to drive asset prices higher, President Trump’s chances may improve. A weak economy struggling to come out of recession and weaker markets would likely favor challenger former Vice President Joe Biden.
AND WATCH THE STOCK MARKET
Since 1928, the stock market has accurately predicted the winner of the presidential election 87% of the time, including every single election since 1984. It’s quite simple. When the S&P 500 has been higher the three months before the election, the incumbent party usually has won; when stocks were lower, the incumbent party usually has lost.
Think back to 2016, when virtually no one expected Hillary Clinton to lose-except for the stock market. Stocks were quite weak leading up to the election, with the Dow Jones Industrial Average down nine days in a row. Copper (a President Trump play on infrastructure) was in the green a record 14 consecutive days.
POTENTIAL POLICY CHANGES
Markets tend to be volatile ahead of elections because of the uncertainty around possible policy changes. In this election, the stakes are particularly high for corporate America because a takeover of the Senate by Democrats and a possible Biden victory reportedly may lead to an increase in the corporate tax rate from 21% to 28% and unwind the corporate earnings boost the 2017 Tax Cut and Jobs Act delivered.
Other areas to watch that could impact markets:
* Tighter financial regulation could have some market impact.
* Healthcare should perform well regardless of the election outcome with “Medicare for All” off the table.
* Energy could be hurt by a potential blue wave, but prices may get support from lower production and higher production costs.
So in summary, as we get closer to the November election, how stocks and the economy are doing could be a big signal for who will win the election and be in office in January.
KEVIN GARRETT, AWMA, CFS
Integrated Financial Group
200 Ashford Center North, Ste. 400 | Atlanta, GA 30338
Phone | 770.353.6311
Email | kgarrett@intfingroup.com
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In mid-June, I received an email from my next-door neighbor asking for help with a project. Bob had just completed the first draft of a book and was beginning to think about the publishing process. He thought I could help sort out his options. Six months ago, Bob shared his idea for a book so I wasn’t surprised by his request. He wanted to tell a story about the challenges of becoming a Plant Manager, based on personal experience. His interest was to write a novel in the style of “The Goal,” by Eliyahu M. Goldratt and Jeff Cox. It appears that the Covid-19 voluntary lockdown provided him with the perfect opportunity to write his book. We scheduled a Beer Summit for 4:00 p.m. Saturday.
Bob arrived at our side door, off the kitchen, with a six-pack of chilled Pilsner Urquell. That was a pleasant surprise as I had just stocked our beverage center with a few of my favorite brands. He explained that Pilsner Urquell is a brand he came to appreciate while stationed in Germany. Always interested in trying a new brew, I thanked him and grabbed two glasses. After a brief toast, we exited the kitchen door to the deck and found seats on the shaded corner around the fire pit. The beer was a good choice. We began to talk.
He reminded me of his plan to write a book to help launch a consulting career. The opportunity presented itself, so he took it. Bob said that he had been talking to friends about their publishing experience. So far, the feedback he had received was about traditional publishing. He said he wanted to hear about my self-publishing experience. I told him how I had published my book on Amazon, and I volunteered to introduce him to colleagues who had significantly more self-publishing experience. Also, I suggested that he distribute his manuscript to ten or twelve trusted friends to gain their perspectives. Bob asked if I would like to read his draft. I happily agreed.
The following Saturday, we met again to discuss his manuscript. As with our first meeting, Bob supplied the beer, this time a six-pack of Guinness, one of my favorites. We found our spots on the corner of my deck and opened our beers. Small talk followed as we eased into serious conversation.
Bob had emailed his manuscript in MSWord format. I read it in ten-page printed chunks, making notes on those pages. Before handing Bob his marked-up manuscript, I explained that my focus was on the quality of the story, not the grammar, sentence structure, or syntax. I made notations of issues in those areas for his consideration, however.
As I handed Bob the manuscript I complimented him for creating a remarkable story and enjoyable read. I went on to say that my only recommendation was that he consider changing his opening chapter. Bob had used the first chapter to introduce Bud, the main character. My suggestion was that Bob presents Bud’s biographical information in a series of flashbacks to provide perspective as to how his experience informed his problem-solving and decision-making process. By doing so I believe it would generate stronger reader interest by captivating their imagination at a more dramatic part of the story.
Summary and Conclusion
Everyone likes a good story. It is human nature, part of our DNA so to speak. For millennia, humans have entertained themselves by telling stories around the proverbial campfire. One can imagine the origin of the first Fish Story, “you should have seen the one that got away.”
Things have not changed that much in the 21st Century as a good story is still the preferred way to sell a product and to keep one another entertained. In fact, I stress this point with my consultants and coaching clients. If one wants to be considered a Subject Matter Expert, (SME) or become recognized as a leader in their field, they must be able to sell themselves. In other words, we must be effective communicators. Our skillset must include mastery of the written word as well as verbal communication skills. A compelling story can be your launchpad for more effective networking, blogging, and speaking.
Thank you for visiting our blog.
Jim Weber – Managing Partner, ITB Partners
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I taught my grandsons there are only two places in the entire universe: “Here” and “There!”
When one would ask if I had seen his baseball glove, I would respond, “No, it’s not here. So it must be there!” They thought that was pretty neat and I would overhear them telling their brothers the same thing!
So as a business owner, you should know where you ARE – you have your numbers. But where do you WANT to be – say in 5 years? Where is your THERE?? What does it look and feel like? Why do you want to get there?
Having worked with hundreds of business owners domestically and internationally, I am always saddened to have a client tell me they don’t know or aren’t sure where they want to be in that time frame.
I remind them of what the Cheshire Cat told Alice, “If you don’t know where you’re going, any road will get you there!” But that “there” may not be the “there” where you intended to go!
No one disputes the necessity of planning, but the truth is that many business owners spend more time planning a vacation or a hunting trip than planning the future of their business.
I believe the primary reason is that the cares of the daily operation of the business choke out the priority of setting aside time to do the reflection necessary for a clear path forward. Stephen Covey wrote about the conflict in his seminal book First Things First, where he addressed the URGENT against the IMPORTANT.
In Quadrant I are the Urgent AND Important issues; these are the fires that have to be put out to keep the business running. Operational breakdowns, bad quality, customer complaints, delayed shipments, employee disagreements, and the list goes on!
Quadrant II is where the Important issues that are NOT Urgent reside. This is where ALL the important issues of life reside: date night with the spouse, attending the kid’s ballgame or dance recital, reading important literature, meditating/praying, planning, reflecting, taking care of our health. We all recognize the importance of these activities in our lives, but our spouse won’t divorce us if we miss a date night – – – the fires burn up our relationships.
The paradox of this is that the ONLY way to get control of Quadrant I is to camp out in Quadrant II! Do the planning necessary to PREVENT the fires in the first place!
Let’s be honest, charting the path for a business five years out can be a daunting exercise, but it is essential to arrive at our “There!”
Strategic planning is of paramount importance. If you would like more information, feel free to contact me for a FREE 45-minute “The Bridge to There” presentation in your operation. Get a high-level view of what your future path can be!
Ralph Watson
Ralph Watson has a varied and extensive career spanning 45 years of increasingly responsible positions in both sales and operations in a very diverse mix of industry specialties, including food processing, textile and apparel, financial services, and professional management consulting.
Ralph served as a Senior Executive Analyst with a number of international consulting companies focused on the family-owned, privately held market where he distinguished himself as one of the top analysts in a highly competitive field. In early 2014, he personally coached 10 businesses in Europe.
Ralph C. Watson, Jr. 404.520.1030
Thank you for visiting our blog.
Jim Weber – Managing Partner, ITB Partners
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Again, everyone is simply trying to engage in commerce again. Communication, creativity, transparency, and commitment are the ground rules for the New Normal.
then there will always be Customers for those who can deliver real value quickly, cost-effectively, and with superior quality.
The fact is that we may not make strategic decisions daily, but in a lifetime of developing and executing strategy, I guarantee you that you are exposed to “strategically-relevant” information EVERY day, throughout the day.
Given the current situation, the natural tendency is to turn to the methods that fall under the topic of “Turnaround” or “Restructuring” in an attempt to return a company to prosperity. Even so, I believe we will quickly find that these traditional ways of “fixing” organizations are insufficient. I believe these Restructuring/Turnaround approaches must be modified and evolved to reflect the realities of conducting business in the New Normal. 
Stage 4 – GROWTH – with a going, profitable, concern you are now looking more strategically to the future in terms of markets and offerings. You are addressing questions such as: “Do I have the right offerings and business model for my current market”; “What else can I sell to my current Customers”; “Can I use my offerings or core competencies to expand to other markets” – i.e., generate new Customers. Generally, most of these questions all fall under the auspices of the Ansoff Matrix – which represents an effective framework for identifying growth/risk opportunities (ED: have used this framework dozens and dozens of times to help identify, evaluate, and select growth initiatives for an organization). The final, bottom line “big question” is “What company focus – i.e., “strategy” – will generate the maximum return for the Investors?”
short-term – in the New Normal will require creative ways of using limited capital to conduct business. I fully envision the barter system to be 
change is part and parcel to an effective strategy. In its simplest form, the “essence” of strategy is to “look over the horizon” and identify macro trends – i.e., read “change” – that justifies the investment. The need to understand what is over the horizon and see those macro trends that merit the investment of manpower, capital, and time is more important than ever.
SECONDLY, the New Normal will certainly contain “holdovers” from our current isolation phase that will represent – in some cases radical – changes to our lives in general and how we conduct business specifically. Yes, we will make more use of, be more comfortable with, and find ways to enhance the virtual experience that we have been forced to at the present moment. One individual I recently read said, “We’re currently in the epicenter of the biggest remote-work experiment in history….” Clearly, there will be part of the population that permanently embraces “electronic presence” over “physical presence” and will want to continue to live and work that way.
