Tag: Entrepreneurs

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COMPANY RESTORATION IN THE NEW NORMAL ©2020 Donald H Turner From the mind of Don Turner – PART 2 NOT YOUR DADDY’S RESTRUCTURING, BUT RESTORATION

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.

Jim Weber – Managing Partner,  ITB Partners

 

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A Compelling Story Is Your Launchpad!

Compelling Stories Matter

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

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.

Jim Weber – Managing Partner,  ITB Partners

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The Bridge to “There!”

March 15, 2020

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

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.

Jim Weber – Managing Partner, ITB Partners

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UNITE: “WEE WILL…” EXPERIDIGM Enable “E”cosystems; by Mark Grace

Overview

We humans and “E”cosystems (Es) must unite as WeE to preserve and foster the ability to joyfully experience a natural and healthy life. “Es” sustain We with natural air, water, soil, and healthy food, but “Es” are dying from human poisons/pollution and intentional “T”yrant taking. WeE must unite and build meaningful WeE experidigm group rights to ensure WeE ability to survive and pursue healthy experiences. Learn how to create lasting WeE experidigm group rights. Unite and joyfully WeE experidigm together. Live healthy and experience Amness joy. Use Part 4 as a Field Guide to help WeE and “E” successfully survive and experidigm together.

Description

The future of humanity depends on the human ability to better live together and do activities together – I call this experidigming. Our future does not depend on how well we work together in business. We are pretty good at that now. We are poor at living together with and supporting all living entities in ecosystems (“Es”). Over 7.8 billion people are consuming “Es” at an unprecedented rate. Left unmanaged and unchecked, people may consume all “E.” Our future depends on how well We humans respect, steward, and support all living entities in “E.” This book describes how to have We humans and “E” living entities experidigm together as WeE, building a sustaining and thriving relationship for all within the WeE experidigms. One fact is certain – humans cannot survive without the life giving power of “E” to deliver clean air, water, alive soil, and trillions of living entities that share healthy food with humans. WeE experidigm groups can protect, sustain, and foster “E” while defending WeE using experidigm group rights. We and “E” must unite as WeE to sustain life and create the necessary balance of life to sustain daily living. Join a local WeE experidigm group to do activities and receive joy. This book describes how to UNITE and participate in the joyful experience of We and “E” combined WeE.

About The Author

Mark Grace

Described as a rainmaker and innovation leader, Mark Grace lives by the adage, “Aim higher, achieve more!” For Grace, “There will be setbacks, but the good side just points upward and you go upward to better. You might not see better right away, but better is there if you keep looking and seeking. You can avoid, deflect, and ignore the bad people who try and stop your growth.” As an inventor, Grace has received over 18 patents, many trademarks and has been honored with international technology awards. He is the author of a series of personal and corporate “how to grow” opportunity books: 1) Elements of Visual Talking, 2) Soaring to Awesome-Turd Throwers Beware, 3) Choosing Up, 4) Avoid Takers, 5) NEXT: “I Am…” Experidigmer 6) MORE: “We Am…” Experidigmers, 7) GO: “We Will…” Experidigm, and 8) UNITE: “WeE Will…” Experidigm. Grace earned his MBA from Washington University and Chemistry degree from St. Louis University. He is the founder of the growth advisory firm, Beyondvia Technologies. Beyondvia.com offers practical better ways to liberate individuals and organizations to grow and evolve their visions and value. Grace regularly advises global organizations and contributes to leading journals across a myriad of industries. Experidigm.com is the signup gateway to participating in Applied Experidigm Zones (AEZ) and building personal experidigms.

Contact:

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The Laws of Growth

Growing up on a small farm in South Georgia, I learned at an early age there were laws that governed the growth of crops and animals. Now as an adult I hear everyone talking about growing a business, growing a family, growing a political party, growing a church – it seems like everybody is trying to grow something!! It has occurred to me that the Laws of Growth I learned on the farm about growing an organism might also apply to grow an organization.

The First Law of Growth is that Growth is the NATURAL RESULT of a healthy organism.  We did not go out every morning and wake the cows up and encourage them to grow! We kept them fed and watered and they just grew!  For those of you who have children, you never had to go in the baby’s room and tell Junior it was time to start stretching so he would grow! You just had to keep him fed and watered and he grew!

May I be so bold as to suggest that if we have a healthy organization, it too will naturally grow?  If we build an organization where people want to work and contribute, they will not want to leave and will become a brand ambassador for other people looking for a healthy work environment. And our clients and customers will benefit from their loyalty and will want to purchase as many of our products and services as they can use, and they too will become brand ambassadors for others needing what you provide!

So how do you go about creating that healthy organization?

The Second Law of Growth is you must Plant the Seeds to Reap a Harvest. You can’t just lay the seeds on top of the ground and expect to reap anything on the farm, and you can’t just talk about what you’re going to do, you must actually DO something!

You have to break up the fallow ground, plow it up, loosen the soil, allow it to breathe and accept rainwater! When is the last time you took a long, hard look at how you do what it is that you do? How long have you been doing the same old thing the same old way? Are there parts of your organization that needs the refreshing of a good plowing?

Now, this is not the “just change something to be changing” mantra, but would any of your key people benefit from some additional training or a motivational seminar?  Are there processes that could be changed to produce better outcomes? Would it help to have a consultant or outside advisor come in and give your organization a complete evaluation top to bottom? What would happen in your organization if you pulled your salespeople into work in operations and sent your operations people out to make sales calls – even for a short period of time?

It has been said that a RUT is just a grave with the ends knocked out and ruts can be deadly in an organization if not plowed up!

The Third Law is you REAP what you SOW! This could be a book in itself!  You will reap the ATTITUDE you sow! You will reap the employees you hire! You will reap the character you develop! You will reap the policies you implement!

On the farm, it didn’t cost much more to purchase the BEST seeds, and, in the long run, they always gave the best yield. Might I propose that hiring the best people will, in the long run, be your best bargain? Hiring less than the best is a false economy – you will always get what you pay for!

The Fourth Law is that your Harvest is directly proportional to the care you provide your crops. You have to make sure your plants are receiving adequate water and fertilizer, and your employees must be receiving adequate compensation and training!  Your clients and customers must be receiving high-touch relationships and quality products and services! Start being stingy and your organization will react.

The Fifth Law is you must PULL the WEEDS! If there is someone in your organization that is not contributing, either motivate them, train them or fire them.  If there is anyone sowing discord, fire them immediately. Crops cannot compete with weeds for water and fertilizer and your employees are not going to thrive with negativity in their world.  And dare I say sometimes a client or customer can become a weed.  Don’t be afraid to fire one of them if they are creating more problems than they are worth.

The Sixth Law is you will always reap MORE than you sow!  For every seed of corn you plant, you will reap 2 to 4 EARS of corn come the harvest!  There should be a positive ROI on every employee and every customer, and that ROI is going to be influenced by how well the leader leads. Unfortunately, this law also works in the negative – reaping more grief than was sown.

The Seventh Law is you reap LATER than you sow! There is no magic wand to instantly create a healthy organization.  It takes time for the efforts you put in to produce the results you are wanting, but don’t let that discourage you from starting the process. Consider it motivation to start NOW!  Get a sense of urgency about creating a great organization.

So, in closing, I recall the words of Kevin Costner in The Field of Dreams, you build a healthy organization and they will come! Employees will come! Clients and customers will come! Profits will come!

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.

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.

Jim Weber – Managing Partner, ITB Partners

 

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The 7-R’s of Resiliency

Doug Reifschneider

Building portco resiliency right now 

The current COVID-19 crisis is already changing the economy in extraordinary and unexpected ways. But there are steps private equity firms can help their portfolio companies make to help weather the storm, and recover when the clouds lift, according to Doug Reifschneider, a CMO with Chief Outsiders.

 The world’s best epidemiologists only have models to predict the full depth and breadth of the COVID-19 pandemic, but companies are already feeling the weight of the economic fallout. They’re scrambling to find the best way to respond, and in many cases, survive, all the while being rightly concerned for the health of their families and communities. It’s not easy, and this is no time to pretend otherwise.

Some enterprises might be dusting off contingency plans for downturns or large-scale threats, but this moment requires more than that. It demands a resiliency program, one that’s clear-eyed and proactive. If the outlook is too bleak or too rosy, the result can be the same dangerous inertia. But Doug Reifschneider, a CMO with Chief Outsiders, has a series of initiatives that can counter that.

Building off his extensive experience in the retail and restaurant industries, Reifschneider has devised what he calls the “7 Rs of Resiliency Programs.” It’s a checklist that can help frame and direct the efforts to respond to COVID-19. “It’s based on a mental framework from the US Marines that is centered on three steps in coping with a crisis: improvise, adapt and overcome,” says Reifschneider. “Plenty of people are improvising at this point, but it’s time to look at more constructive ways to adapt and plan for recovery.”

Private equity firms would do well to look within each company of their portfolio and help guide them in executing each one of these steps.

Review costs. “Most people are already doing this, as they’d have to be asleep at the wheel if they weren’t,” says Reifschneider. Still, beyond canceling recurring services that are simply irrelevant, like window washing, it can involve hard calls about labor and supplies. A lot of restaurants, retail brick & mortar and even brand HQ’s are furloughing employees and the current stimulus will help alleviate that pain, but those cuts need to be executed without crippling the resiliency program.

Reassign tasks. Sometimes the best thing a company can do is focus on what it can give back. In the short term, that can be repurposing the business for strictly philanthropic purposes. He cites one restaurant that used its parking lot for a Red Cross Blood Drive. “It doesn’t address the bottom line, but it establishes the business as a partner in the community,” says Reifschneider.

Rethink offerings. For restaurants that never considered takeout or delivery options, this is the time to launch those. For retailers, this can involve more online ordering and curbside pick-up. But creativity is key here. Brazilian steakhouse chain Fogo de Chao was centered around its all-you-can-eat in-house dining experience. “So they became a butcher shop, offering their unique cuts of meat so folks could cook them at home,” says Reifschneider. “It’s a savvy way to redeploy inventory and keep sales from cratering completely.”

Another example is the company Wow Bao, that created a special licensing deal to allow other restaurants to produce and sell its dumplings by selling the ingredients and a few pieces of equipment to do so.

Reconsider sacred cows.  As businesses rethink their offerings, they can run smack into certain “sacred cows” that seem to be integral to their identity. That high-end eatery may balk at delivery options since that fish dish might be ruined in the thirty or forty-five minutes it takes to deliver it. “This is no time for those kinds of pretensions,” warns Reifschneider. “Find a way to make a meal pack, which are popular now, or focus on offerings that can be delivered successfully.” Several restaurants have created pop-up drive-throughs, with no more than a tent and a landlord’s blessing. And the likes of Home Depot have shifted to curbside pick-ups even as it prided itself on counseling customers in the store.

Reschedule Initiatives. Retailers and restaurants that had planned remodeling projects could move those up, but only if they have the resources to do so. “It would take only the best-capitalized businesses to embark on such remodeling projects, but if they can, it’s worth doing,” says Reifschneider. “Instead of closing for that week in August to remodel, do that now.” Of course, such initiatives can still be hindered by government directives that limit non-essential work.

Reconnect. Communication matters more than ever. “We may be keeping our distance physically, but we’ve never been more social,” says Reifschneider. “We have regular Zoom happy hours and contact clients regularly.” B2B companies will have closer relationships since they sell directly to their clients, but B2C companies shouldn’t go quiet either. They need to reach out every few days, so long as they are mindful of tone and content.

Reifschneider cites a recent study by Edelman that surveyed over 12,000 people across 12 countries on brand trust in the wake of COVID-19, which finds that 71% of respondents would lose trust in a company forever if that company is seen as putting profits before people right now.

 

“Every enterprise should take that 71% seriously, and make sure their communications are exclusively about how they’re helping their communities, their customers and their employees cope with the situation,” says Reifschneider. “Striking a tone of generosity and support is crucial.”

Ready the relaunch. There is no reliable guidance for when any company will return to normalcy. However, Reifschneider notes this shouldn’t prevent companies from planning the steps for a reopening. Employees will need to be retrained with new procedures for interacting with customers, and in the restaurant business, there are likely to be new protocols for food prep and increased sanitation. Dining rooms and showroom floors will get dusty during the shutdown, so time needs to be allocated for a deep clean. “This also might be a great time to retrain employees in customer service, stocking shelves, or getting CPUs in line,” says Reifschneider.

However, no one should take any of these steps in a vacuum. Each needs to be tailored to the market reality facing a given enterprise. “At Chief Outsiders, we vet all assumptions, with hands-on research initiatives that capture how customers and peers are thinking and acting,” says Reifschneider. “And we do this even when the market is stable and growing, let alone during a crisis that can change everything overnight.”

So perhaps the first step in any resiliency plan is for a business to get its bearings, and understand exactly where it stands at the moment. It might be all the more important to listen before speaking, to ask, and use that feedback to gauge what to do next. The best private equity firms will already have open channels with their portfolio companies and that level of candor and sense of collaboration should be extended to all stakeholders.

In times like this, humility might be a secret weapon, provided it doesn’t stop a company from acting. Fortune may still favor the bold in times like these, but only if the bold is informed and willing to help.

Doug Reifschneider
Doug Reifschneider

https://www.itbpartners.com/doug-reifschneider/

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Jim Weber – Managing Partner, ITB Partners

 

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The Isolation of Ownership

Bottomline First: Owners don’t really have anyone to talk to about their problems. Reach out to those in your care.

Outside of a preacher in a small church, I don’t know of a more lonely calling than a small business owner.

I will often ask them, “Do you know what your friends think of you?”

They look at me with stunned incredulity since I had only met them a couple of hours earlier and know none of their friends.

I proceed to tell them, “Your friends think they have it made, they think you come and go as you please, hire people to do what you don’t want to do and write it all off on your taxes!!  They think you have the Life of Riley!”

Then they say, “You know, you are absolutely right!”

And I assure them if they try to convince their friends just how hard it is owning a business, they think you are pulling their leg!

And THIS is during the GOOD times!  The loneliness is only getting worse in the economic environment of the day!

Many times business owners will become overly friendly with their employees to cope with their isolation knowing they get the day-to-day stresses with which the owner is dealing. But that becomes a management problem within the business and makes it almost unthinkable to furlough them when times get tough.

Business owners are seen as “having it all together” not only by their friends and the public at large but also by their families.  I can’t tell you how many times I have interviewed a business owner during an analytical survey of their company who was showing a loss on their P&L only to discover he (or she) had not told their spouse. And let’s be honest, men, we are more guilty of this than our sisters-in-business. That stinkin’ EGO of ours gets us in trouble and then cuts off the support we so desperately need!

So to you advisors of these stalwart but hurting heroes of our economy, reach out to them! They need to know there are people and places that can be safe for them to unmask their pain.

Bankers, attorneys, wealth advisors, CPAs, insurance agents, consultants, accounting firms, HR firms – any trusted advisor in their life can just BE THERE for them and let them know it is OK for them to share anything that is bothering them.

If you are in a role they might not feel comfortable due to the business relationship (like their banker), try suggesting they might want to talk to a friend of yours.

As Charles Dickens wrote in the Tale of Two Cities, “It was the best of times, it was the worst of time…”  We have been brutally snatched out of “the best of times” and forced into what is arguably “the worst of times.”

As a man of faith, I would that all men and women would seek guidance from the Creator of us all to lean into Him and His wisdom for our individual and corporate deliverance.

Let’s all be there for each other as we walk through the valley of shadows.

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

Ralph.Watson@BeGreaterFaster.com

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The BEST Consultant!

 

Where no counsel is, the people fall: but in the multitude of counselors, there is safety.  Proverbs 11:14

I have a lot of professional friends who are consultants in a variety of fields of discipline, as am I. So this blog post is not intended to slam any of them or any other consultant or advisor.

I’ve worked with hundreds of business owners over the years and I came to the realization over time that businesses try to talk to their owners!

A business will try to tell their owner if someone is stealing from them, or if their scrap or rework is too high if their marketing isn’t working, which employees are most valuable, which customers are making the most of their profits if their productivity is slipping, and on and on – – –

The question I then ask these business owners is: “Do you have the ‘ears’ to hear what your business has been trying to tell you for the last 20  years?”

It’s humorous when they non-verbally shake their head side-to-side, acknowledging that in fact, they can’t!  Their business IS their VERY Best consultant, but they can’t understand what it is trying to tell them because they do not have it structured to provide its wisdom in an understandable “language.”

It’s like a radio station broadcasting EVERYTHING about the business 24/7, but the business owner doesn’t have their “receiver” set to the proper frequency!

You may have seen the NetSuite commercial where the founder says, “If you don’t know your numbers, you don’t know your business!”  And he is absolutely right!

Most business owners understand the fundamentals of a P&L – income and expenses over time. They can look down the expense sheet, see “Telephone” “$350!” “Got it!”

But put a Balance Sheet in front of them and the fog starts rolling in!  And most have never even heard of a Statement of Cash Flows!

But this “Three-legged Stool” is designed by CPAs to primarily do their taxes, and they are by design and utility, historical records – a ‘backward’ look at the business. In a sense, it is like driving down the road with the windshield of their truck painted black trying to steer by looking in the rearview mirror!

Business owners need FORWARD-looking management reports that can tell them on a daily, or even minute-to-minute, basis, where they are going.

One critical report is an Exception or Variance Report! But the business owner MUST have a BUDGET before they can have an “exception!”

I always ask the business owner if they have a budget, and if they say “No,” I assure them that they DO in fact have a budget, the only question is: “Who wrote it?”  Because if the business OWNER did not write the budget, the BUSINESS is writing it for them!  And it is an UNCONTROLLED Budget!!  Not one that drives increased profitability!

The other essential forward-looking management report is a KPI or Flash Report or a Dashboard report that captures all the data most relevant to the performance of the business. These must be custom designed from an in-depth analysis of the business and its processes.

In closing, many small to mid-market, privately held companies need help with their basic accounting package to get their Chart of Accounts cleaned up and a budget added to their system. Another sign that this has to be a priority is if there are maverick spreadsheets or other rogue financial reports being utilized in the operation OUTSIDE of the main accounting system.

So, take heart, my fellow consultants!!  Just get comfortable being the SECOND BEST consultant your client has AFTER you help them get their financial reporting house in order!!

Ralph C. Watson, Jr.  404.520.1030

Ralph.Watson@BeGreaterFaster.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.

Jim Weber – Managing Partner, ITB Partners

 

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ITB Partners February Meeting is on the 21st!

Paula Fowler will present the Six Disciplines Strategic Planning System: A Sumptuous Breakfast Buffet is included.

REGISTER NOW

About this Event

Join Us for the February ITB Partners Meeting featuring Paula Fowler

Whether you are an Entrepreneur, an Employee or in transition, Strategic Planning is important to your success. Get ready for 2020 and learn the fundamentals from Paula Fowler, Six Disciplines Coach, and Predictive Index Certified Partner, offering small business owners tools to align people strategy with business strategy to achieve business results. Paula will present:

“It’s 2020 – What’s Your Plan?”

About Paula Fowler:

Paula Fowler

Paula is a strategic leader with a proven ability to create a company-wide vision and drive business results. Over 20 years of management and consulting experience in small to mid-sized businesses across a broad range of functional areas, including sales, marketing, finance, manufacturing, software development, operations, HR and customer support. Skilled as an internal consultant in analyzing existing operations and implementing strategies, processes, and technology to improve company profitability. Uses Predictive Index talent optimization tools to develop an organizational design, hire, inspire and drive team performance. Linkedin

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Date And Time

Fri, February 21, 2020

7:30 AM – 9:30 AM EST

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Location

Bella’s Gourmet Kitchen

350 Embassy Row Northeast

Sandy Springs, GA 30328

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Don’t Become Entangled in Their Pathology!

One of the benefits of a healthy economy is that people seem more optimistic and happier. Clearly, this has been the case for the past few years, especially 2019. By and large, the people I met and interacted with last year were much more positive about the future for their businesses. They were busy landing new gigs and completing work for their clients. They were pleasant and easy to be around.

 

That’s not to say that I didn’t interact with people or learned of situations that were most disagreeable.  My friend Faith often speaks of a coworker she calls “hair on fire.”   This person has a special knack for surfacing a crisis near the close of business on Friday afternoons.  Faith finds this irritating, a waste of her time.  In this respect, “hair on fire” is toxic.

 

One of my clients wasted a significant amount of time working with a potential strategic partner who promised her the moon.  This person talked about entering a joint venture partnership whereby they would split the profits from their projects.  My client began working with him in good faith but continued to ask for a document to define their relationship. The more my client asked for an agreement, the more belligerent he became. That document was never delivered and my client realized that her counterpart was insincere.  In the end, he exploited her expertise without compensation.  Fortunately, her investment wasn’t exorbitant.

 

A vendor for another client put his business in turmoil by failing to show proper accountability to his minority partners.  He didn’t include them in important decisions and was not forthcoming.  Not surprisingly, his partners resigned, taking funds owed them out of the company’s bank accounts.  This resulted in additional problems for the vendor as those funds were designated for merchandise already purchased. The list goes on.

 

As my business is about helping my clients become more effective, it’s important to help them understand the warning signs of a toxic relationship.  There is great value in avoiding the cost of a pathological relationship, so understanding the warning signs is useful.  Toward this end, I invested time in reviewing articles that discussed the personal attributes shared by successful entrepreneurs.  A summary of the attributes promoted is listed below.

 

Attributes of a successful entrepreneur:  Passion, strong work ethic, strong people skills, determination, creativity, competitiveness, self-starter, open-minded, confidence, disciplined, salesmanship, communication skills, peacefulness, poised, intuition, adaptability, opportunistic, resilient, bold, management skills, focused, accountable, skeptical, and a listener.

 

I find it interesting that these attributes not only apply to success as an entrepreneur, but they are also relevant to an employee, a senior executive, or for one’s private life.  The best summary I found was from Brian Tracy who identified five qualities:  Self-discipline, integrity, persistence, clear sense of direction, and decisive and action-oriented.  Of the articles I surveyed, Mr. Tracy was the only author who identified integrity as a key attribute for success. I find that surprising, however, I agree completely.  From my perspective, poor temperament and a lack of integrity are the primary indicators of a toxic relationship.  If that’s the case, how can one minimize their exposure to toxic people?  How can one resolve that question before entering into a business relationship?

 

When coaching Independent Consultants, I advise them to create an entry-level vehicle as a lead marketing strategy. This is a small project with a short time frame, reasonably priced to present a low-risk profile to the prospective client.   This project will validate your capabilities as you work to establish a relationship with the new client. These entry-level projects are opportunities to build trust, the foundation for a longer-term relationship.  If a relationship cannot be established, neither party has lost much in the process.

 

I believe this is good advice for entering into any relationship. Begin with a small commitment to validate the benefits of a relationship.  It’s the best way to manage risk.  Of course, there is a lot of work you can do to ensure a viable working relationship even before landing that initial contract.  As your prospective clients are interviewing you, you should be interviewing them.  It is advisable to talk with the client’s vendors and or customers to gain further insight.

 

Many people have great ideas and want to be in business for themselves. If they lack a few key attributes those dreams will never materialize.  Be on guard so you aren’t caught in their pathology.

 

Thank you for visiting our blog.

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.

Jim Weber – Managing Partner, ITB Partners

Jim Weber – Managing Partner, ITB Partners