Blog: Larry Turner

 

Recovery…what recovery?  Technically the recession is over now that we have had a quarter of economic growth, but that does not mean we are through with the ugly economy anytime soon.  It does mean there are some things you can do today without investing huge amounts of money to start preparing your company.  Look to the following areas to start positioning your company for growth:

 

Your Markets

Get out of the office and start visiting with current customers, and while you are at it join your sales people on sales calls.  You will hear firsthand what is going on with your customers and prospects, which will allow you to make adjustments to your marketing mix. 

 

A quick refresher on marketing mix… it is your products, price, promotion (marketing and advertising), and placement (distribution).  These are the key ingredients to the products and services your company sells.  A miss in any one of these areas can be the difference between success and failure.

 

Your Leadership

Review your leadership team and assess their knowledge, skills and ability (KSAs).  Are they in the right position for their KSAs?  Did they get to the position they are in just because they have been with you a long time?  Are they effective? Are you effective in letting them lead their part of your business?

 

This is a difficult task, since we all work very closely with our management teams.  Review your team objectively and get outside help.  This is the one critical success factor in your business growing.

 

Your Employees

You need your employees to help dig out of the situation the economy has put your company.  They have firsthand knowledge of your customers, processes, and products.  Get them helping by increasing your communication efforts. 

 

You may think you communicate enough, but you do not.  In difficult times you need to step your communication to make sure your employees understand the situation.  With a void of information your employees will make up scenarios of what is happening and in all cases these scenarios tend to be worse than reality.  Communicate through a variety of media to include regular (monthly) all-company meetings, one-on-one discussions, departmental meetings, emails, bulletin board postings.  Anything all allows you to reinforce your message.

 

Diversity

Diversity is one of those words that I learned to hate in corporate America because it meant reviewing affirmative action reports from HR and adjusting my hiring decisions based on the makeup of my department or company.  In reality, it means getting the right person in the right job and not hiring in our likeness – this means diversity of thought, background, ethnicity, age, etc. 

 

Not only does it mean to hire the best person for the job, but include them in decision making and respect their point of view.  Remember… the whole is smarter than the individual.  ALWAYS!

 

Conclusion

You can start working on your business today, with a little work during this period before the economy takes off.  Use this period to get employees engaged, put the right people in the right positions, provide training where training is needed and learn yourself to delegate and get out of the office.   

 

 

To hear more about how you can get your company ready, join us for Prepare for the Recovery executive briefing on November 13 in Lakewood.  For more information, visit www.roundhouseadvisors.com/prepare.htm 

 

Larry Turner is CEO of Roundhouse Advisors, Inc. and has over 25 years experience growing, starting up, repositioning, and revitalizing organizations.  Roundhouse Advisors is a business consulting practice focused on helping businesses increase enterprise value by managing pain, growth and owner exits.  Larry is a consultant, public speaker, and the author of “Owner Exit Planning: Leave On Your Own Terms”.  For additional information visit www.RoundhouseAdvisors.com

Most of us accept the fact that networking is a great way to grow a business and secure our next position, but we do a terrible job of staying connected when we are working.  I find it disturbing when looking back at the times I needed to network for a new position – The realization that I had lost touch with my network over the past 3, 5, or 10 years because I did a terrible job of keeping up with my contacts while employed.  Just as your employees are the most valuable asset in your firm, your contacts are your most valuable personal asset when needing to build your business or network for a new position.  Take advantage of your network to grow your business and work through challenges in your company.  The following are some tactics that can be used while you are gainfully employed as an executive, business owner, or front line employee to maintain an existing network and add new contacts that can help you with your goals.

1.)   Network every day – It can take as little as 15 minutes at the beginning of each day to call one of your network contacts and catch up.  Don’t wait until you need something… see how they are doing and explore any ways that you can be of assistance to them.  By doing this you can reconnect with 20-30 of your contacts each month, and feel good doing it.

2.)   Pay it forward – I take the approach of helping those in my network anytime possible.  While it would be nice to have reciprocity in the relationship, it is not realistic that everyone in you meet and help will be able to immediately provide you with support.  I have found that a “pay it forward” approach has come back to help me in the future.  It may not be next week or next month, and in some cases it has been many months later, but it does come back in the future in most cases.

3.)   Attend Networking Events – Find a networking meeting that supports your industry or an interest you have.  There are many associations that provide great content during their meetings, and also provide an opportunity to network with likeminded people.  An example is the Association for Corporate Growth (ACG), which is a networking group focused on company growth through mergers & acquisitions as well as organic business growth.  The meetings tend to be over a lunch or after hours, so it makes it easy to schedule time to make meetings.  Focus on meeting a minimum of five new people at a monthly meeting and your network will grow by 60 contacts a year.  It is a great way of focusing on growing your networking and by attending different association functions you can diversify your network with contacts from a wide range of backgrounds and work experience.

4.)   Us a Social Networking Site – There are a large number of business related social networking websites.  One that I have used for years is LinkedIn, and it is a great tool to build an on-line version of your network.  Your online network allows you to search for contacts at companies you are focusing on for a job search or business development.  It allows you to see who in your network is connected to key people at the target company.  I only have a few hundred in my LinkedIn network, which provides an extended network of over 4.3 million people throughout the world.  Invite any new contacts to be in your network and you will be surprised how quickly your extended network grows.

5.)   Have fun – I used to dread networking events, because there were so many times that it just felt like I was interrupting a conversation.  Networking events are meant to meet new people and everyone at these events expects to meet new contacts.  Only spend a few minutes with each individual to explore areas of potential mutual interest, get a card and commit to a follow up meeting over coffee.

6.)   Follow up – If you tell someone that you will call them, then do it within the next couple of days of meeting them.  Make arrangements to meet at a coffee shop or for lunch within the next week.  You can learn a lot about someone in a 45 minute conversation and most people you meet at networking events will work their schedule to make a meeting possible.

Don’t wait until you need help to reach out to your network… be proactive and continue to develop your contacts.  Enjoy reconnecting with those you worked with in the past and take a “pay it forward” approach to networking.  You will find it a great way to build a business as well as developing a safety net.

 

Larry Turner is CEO of Roundhouse Advisors, Inc. and has over 25 years experience growing, starting up, repositioning, and revitalizing organizations. Roundhouse Advisors is a consulting practice focused on helping businesses increase enterprise value in all stages of company life cycle. For additional information visit www.RoundhouseAdvisors.com

Drastic measures are sometimes needed during these times of volatile economy just to have your company survive.  It is tempting to make across the board cuts in what is probably your largest expense category… human resources.  Be careful with across the board the headcount reductions.  A wrong move may mean a steeper drop in sales or an inability to invest in areas once the economy bounces back.

Tribal Knowledge

Tribal knowledge is that historical and company specific intellectual property that is key to maintain and growing your business.  This can be specialized product development talent that has knowledge specific to your company and industry that once lost would be very difficult to replace, or it may be that special person in customer service that knows all past issues and has a great relationship with key clients or distribution channel partners.  In any event, indentify these key individuals and do what is necessary to retain them.

Retaining Key Employees

Retaining key employees can come in many forms including retention bonus program, increased communication and soliciting input from these key employees.  A retention bonus that is tied to their performance along with the company emerging from this difficult economic position (probably late 2009 or early 2010) is a good way to preserve talent without adding additional cash flow burden on your company. 

Increased communication to all employees is important, but even more important to those key people with the tribal knowledge to move you forward.  Utilize the knowledge by soliciting input from these key employees and bring them into the fold as a part of the solution to the current economic environment.

An Example

I was appointed CEO of a company in August 2001… that’s right, one month before 9/11.  Not only did I need to maneuver in a difficult economic environment, but it was also a turnaround situation.  The best strategy and tactics used during the turn-around revolved around retention of key employees and using the talent in this group to help with company performance improvement.  The key employees came from all disciplines of the company and at all levels ranging from senior management to front line employees.

Communication to the entire employee base on a regular basis was key to keeping everyone engaged, but additional focused communication to the key employee group allowed me to utilize their skills and knowledge to manage small cross-functional teams to tackle the many tasks that needed to be addressed.  This got the employees involved with key turnaround activities, and kept morale up even with reducing the total employee headcount by 40% during the first 90 days.

The end result of the turnaround was an increase in net profits from a negative $6 million to positive $800,000 in the first full year on sales of $38 million, and an increase in EBITDA from 15% of sales to over 35% of sales.  I could not have done this on my own and enlisting the employees allowed us to accomplish this in a very short time frame.

In addition to the short term improvements to the business, we always kept the longer term in sight as we made employee and investment decisions.  This allowed us to reduce company debt by over $25 million in the next two years, and position the company in the industry as one that was sought out as a partner allowing us to grow sales and market share.

Managing in a tough economy is not easy, but can be rewarding.  Emerging from difficult economic times stronger than when you entered allows you to grow the business.  As business owners and leaders, it is your responsibility to manage the viability of your company.  Take that responsibility seriously and manage expense reductions diligently to focus on the near term while keeping an eye to the horizon.

Larry Turner is CEO of Roundhouse Advisors, Inc. and has over 25 years experience growing, starting up, repositioning, and revitalizing organizations.  Roundhouse Advisors is a consulting practice focused on helping businesses increase enterprise value in all stages of company life cycle. For additional information visit www.RoundhouseAdvisors.com

Even the best leaders hear their employees complain about the lack of communication in a company. I have heard this complaint even in companies where I had some communication effort reaching out to the work force on a weekly basis. This is an indication that the employees need regular communication to help them feel engaged in the company and move the company forward.

The employees will fill any void of information with their own assessment of the situation, and in most cases this information does not operate in reality. This informal communication channel then provides the wrong message for a broader employee base, which in many cases demotivates and disrupts the direction of the business.

A lack of internal communication is a problem in good times, and is detrimental in difficult financial times. Instead of focusing on the daily work at hand, employees get caught up in the rumor mill resulting in an atmosphere of fear and concern. The end result is a loss of productivity and more importantly a reduced level of customer service by those employees responsible for dealing directly with your client base.

The senior leadership of a company can prevent this from happening by implementing a proactive communication program. The tactics may be uncomfortable for those senior leaders that spend most of their day sitting behind a desk, because it requires them to get out of the office and spend time with their teams. A few tactics that I have used successfully with teams as large as 1,600 people include:

1.) All Employee Meetings -- I have found that a monthly meeting of all employees provides an opportunity to cover information ranging from progress on initiatives to financial results from the previous month. Even in privately held companies, where there is a need to keep financial results confidential, I have shared how the company had done compared to key financial targets. For example, "last month revenue was better than planned, but profit was short due to unexpected expenses related to..." This provides even the front-line employees with a feel on how the company is performing, and it also gives the senior leaders an opportunity to explain how the different departments contribute to the financial results of the company. I have never had an employee tell me they would rather not know how the company is performing.

2.) Employee Emails -- Take advantage of email to communicate with all the employees that have access to provide updates through the month. The information may be a new sale that just closed, progress on hiring a key position, customer feedback, or the company being highlighted in the press. Communicate the good and bad! Your employees will hear and see the bad, so take a proactive approach and communicate it up front with an explanation they can understand. Emails should be relatively short, and anything that takes more than a 4 sentence paragraph probably deserves an additional all company meeting to explain.

3.) Bulletin Board Posts -- Bulletin board posts allow all employees to share in the information outlined in the employee emails. Post everything that goes out in email as well as any company related articles in the press that did not get communicated in an email.

4.) Walking around -- I cannot emphasis enough the need to get out of your office and "walk" around the company. It may be walking through the assembly or manufacturing area, spending time in engineering, calling a customer, or making a sales call with your sales and marketing teams. This gives you first hand knowledge on what is happening in your company and allows you to talk to those employees closest to the process and closest to the customer. One of my favorite activities is dropping in to observe a meeting that is taking place (My management team in one business referred to this practice as a "drive by" -- if I was walking by a meeting and it looked interesting I would stop in to observe), which allowed me to hear the issues and observe how my teams were handling with topic.

Increasing communication with your employees will yield a more engaged and effective work place. This could be in the number of widgets produced, but more importantly improved customer interactions and workplace team dynamics. Improving the level of communication with your employees will position you to emerge from these tough economic times a stronger company. Hopefully the economy improves sooner, rather than later.

Larry Turner is CEO of Roundhouse Advisors, Inc. and has over 25 years experience growing, starting up, repositioning, and revitalizing organizations. Roundhouse Advisors is a consulting practice focused on helping businesses increase enterprise value in all stages of company life cycle. For additional information visit www.RoundhouseAdvisors.com