By Fred Leeb, Leeb Partners, LLC
This is the perfect time to take two very important management actions. First, focus on your most important, highest return, highest priority projects. Don’t fall into the procrastination trap of working on your lowest priority projects just to stay in your comfort zone or wait until you clean up all your other loose ends. Second, take a fresh look and crank up the value of all your assets–bring in new perspectives and get the resources you need to improve your business now. With proper management, the hidden resources you already have can be the key to getting your highest priority projects done now.
During our 25+ years of consulting with many small, medium and large businesses we have been able to identify and take advantage of many significant hidden opportunities to help CEO’s bring their major projects to fruition. We are often their turbocharger to get more out of all of their assets to help them realize their goals. We have often found that many of our clients have unrecognized and underutilized assets that they already have paid for and we help them to increase their returns significantly, as follows:
- Fully utilizing your employees’ knowledge: the employees frequently know more about the business, on a collective basis, than the CEO and are a tremendous source of untapped valuable information. But it is extremely difficult for a CEO to unlock this goldmine to find out what the employees are really thinking. Barriers often are built up over the years because of fear and distrust that never can be addressed internally.
- The right outside expert, however, can work to give employees their one-time opportunity to have their cake and eat it too. Through the consultant, they can have a pipeline to the top and be heard but they also can maintain their confidentiality to be able to speak honestly and forthrightly.
- By bringing an outside consultant to work on a confidential basis to team up with employees, the CEO is telling the employees that: he/she respects the employees’ expertise, is serious about wanting their input, and that there are new opportunities for employee advancement and visibility (by providing new ideas). This new communication channel often is the chance the employees have been waiting for and can bring up to the surface years of good ideas that have been pent up. The employees know this will work for the benefit of the company and themselves. Tremendous value can be generated in many areas.
- Employees will provide their knowledge on issues that go far beyond their current role. For example, they frequently have a storehouse of untapped information from having many face-to-face/first-hand meetings with your customers and vendors. During these meetings and discussions, they get valuable feedback on product pricing, quality, delivery timing, product features, packaging and potential add-ons.
- Staff employees, working in well-organized teams, can take some of the burden of innovation and implementation off of the CEO. They will pull together and commit to achieving success instead of pulling in different directions.
- Employees don’t like to use a suggestion box. They want someone to discuss their ideas with them to try to implement them in a practical manner. With a demonstration from the CEO that each idea will be taken seriously, they will often come forward with great ideas for potential innovations, cost reductions, new efficiencies, decreases in “shrinkage”, better usage of inventory and methods of collecting receivables.
- Breaking through your managerial constraints: Inadequate middle management resources may be limiting your company now more than a lack of cash. This is because CEO’s frequently are afraid to give much more responsibility and authority to their management team members. This is a constraint, however, that often can be broken quickly.
- With the help of an experienced consultant, these managers could succeed more easily and free-up more of the CEO’s management time too. They will take on more work and help you complete your high-return special projects.
- This also would cause the rest of the business to be managed much more effectively. Without this boost, however, it will continue to be very difficult to get more out of your existing management team.
- Increasing your return on professional expertise: Your company probably already has paid to educate at least four outside advisers about the inner workings of how you do business (your banker, accountant, attorney and insurance broker). They have gone up the learning curve on the intricacies of your business by working on your transactions and key issues. After working on your company’s investments, business plans, financial projections, acquisitions, divestitures, real estate, financial statements, tax returns, audits, employee disputes, benefit plans, collections, etc., these professionals are a tremendous storehouse of knowledge and ideas about potential business improvements.
- With a small amount of guidance and coordination from an experienced management consultant experienced in working with other professionals, a CEO could use these professionals judiciously and much more effectively. On the other hand, keeping them at bay to reduce cost is often ‘penny wise and pound foolish’. Prudently involving them could significantly improve your return on your investment in these professionals. You already have made a major investment in these professionals and they shouldn’t just be your often-overlooked assets.
- Not involving them in major decisions is the equivalent of buying a large, expensive and flexible piece of equipment for one application and then purposely trying to never use it again.
- Strengthening knowledge of your competition: Salesmen, engineers and others in your company have a substantial body of knowledge about competitors’ product features, pricing and upcoming new developments. They also have many contacts outside the company through which they could get highly valuable additional information. If you seek out this intelligence and communicate it across departmental boundaries as an integral part of your business planning process, your management will be much better informed and your investments will generate much greater returns.
- Tapping your customer and vendor relationships: CEO’s frequently miss opportunities to gain assistance from two of their most important stakeholder groups, their customers and vendors. This is because CEO’s jump to the conclusion that customers and vendors will abandon them in a heartbeat at the first hint of trouble. The reality is that this is not the case–customers and vendors also have developed a strong reliance on you because you, in turn, are one of their stakeholders too.
- Vendors know that many other customers, particularly in this economy, also go through business cycles and they know that it would be hard for them to replace you. They also may have tailored their company to meet your needs and it might take a long time before they can substitute another customer, produce the necessary goods or services and then collect. It often can be much better for them to help you achieve your goals.
- Your customers also have come to rely on you and trust your processes and quality. Their personnel may have built strong relationships with your employees and they may not want to change to a different vendor.
- Momentum is on your side with both your customers and vendors. They generally want to help you. For example, they can slow their collections of receivables from your company and can speed up payments of payables to your company, etc. This additional credit may not be available to you anywhere else, particularly with no additional interest expense. But, you must communicate with your customers and vendors properly and build their confidence and trust. If they think that you are taking advantage of them they will run the other direction as fast as they can.
- Freeing up wasted resources in your underutilized buildings and equipment: Buildings and equipment often are much larger and more sophisticated than needed now because they were sized and priced based on your previous needs and older technologies. They are likely to remain too large than needed for years. This means your sorely needed cash could be trapped in these assets. Through effective planning and negotiation, you often can eliminate this cause of waste and free up valuable resources.
Now is the perfect time to focus on your most important, highest return, highest priority projects. Don’t fall into the procrastination trap by staying in your comfort zone. Second, take a fresh look and work to extract the maximum value from all of your assets. They must work as hard every day as you do. By using the six ways described in this article, your business is likely to be much more successful and you could end up with a big bonus for yourself—cash left over even after accomplishing your highest priority goals.
Call Fred Leeb at Leeb Partners, LLC today at 248-514-3262 for a free initial meeting to begin to tailor these methods to your company. The meeting will be completely confidential and without further obligation.