Archive for the ‘Operations’ category

Has Your Business Stalled? Better Rethink Your Strategy

October 12, 2009

By John Riley

Rethink Your Strategy

Rethink Your Strategy

It’s axiomatic that a business plan or business model should be a dynamic document, i.e. revisited periodically and revised as necessary to reflect new realities. When its neglected, bad things happen such as the business may stall and the market share tumble.

 When a company stalls, there is usually more than one reason and its essential all the reasons be quickly identified.  If the problems linger too long, the company will find it increasingly difficult to restore its position in the marketplace. The concept of continuous improvement needs to be instituted and ingrained in employees as a normal part of the business process.

 First,  analyze the competitive situation to see if any of the players have changed their strategies or if any new companies have entered the arena.  Most often, new players will cut prices to establish themselves and gain a toe hold in the market.

 \Next, core customer relationships need to be examined to make sure customers have not found fault with your products, services or pricing. Because they are core accounts, you want to make regular contact at the management level so you can quickly determine any change in attitude.

 You also want to be sure existing products and services are continually being upgraded and new products are being introduced. You never want to be without a new product/service development program. New products are emerging continuously to replace products whose normal life cycle has not expired and you want to be ready to replace your own current product/service with a new and improved product/service rather than letting a competitor do it.  That will make life more difficult for the newcomers and enable you to preempt the established competition.

Finally, there needs to be a recognition of the critical skill jobs in the company. You want to be sure you have your best people with the right skills in those jobs. You also need to recognize the competition may buy a few of your good people so a succession plan should be in place to insure competent replacements are ready to step into those jobs. Finally, there may be a need for training of the other incumbent employees and provisions should be made for them.

 Any or all of these issues can affect how well your business is performing and when a stall occurs, that’s a danger signal that cannot be ignored. Swift remedial action can often restore your lost position, but any delay may create irreparable damage. It’s an easy choice to make.


Need to Hire a Consultant? Its not Complicated

September 22, 2009

By John Riley

As one who had hired consultants and practiced the consulting trade, it does not seem all that complicated to hire a consultant. Yet, many employers seem to struggle with a plethora of techniques to find the right person/firm.

 A commonly used approach is to find a trusted business associate who has hired a consultant and obtain a referral from him, assuming he had a successful experience. While that can offer a degree of confidence, the fact a consultant has been a success with one company does not mean he will be successful at your company.

 I suggest an interview that probes chemistry, culture and credentials in detail will be the most revealing of the personality you are dealing with and at the same time give you the insight necessary to make a sound judgment. Other issues may also be covered, but they are unlikely to provide as much insight into the consultant as the three C’s.

  1.  You want to determine if there is chemistry between you and the consultant. That’s important because it helps to build trust which is critical to a good client-consultant relationship. It is a matter of being able to communicate easily and freely with both parties exhibiting a common understanding of the subject being discussed.
  2. You want to determine if the consultant will be able to fit into your company culture and values. This isn’t easy and is illustrated by a number of cases where a consultant has failed because of an inability to integrate himself into a company culture and work harmoniously with the employees. However, since a company culture and its values are primarily influenced and shaped by the CEO or President, the consultant may have a good chance to succeed with the culture if he has succeeded with the CEO or President
  3. Credentials are important, but more important is the need to know if the consultant has worked on, and solved, any problems similar to the problems you want solved. And you want to know how innovative he has been dealing with those problems. Otherwise, credentials or not, doubts may remain. But, further probing of his experience may overcome any doubts and justify giving him a chance.

 With this emphasis on chemistry, culture and credentials, the interview process can be simplified and the CEO or President can feel more confident of his eventual choice.

Companies would be better served if consultants were not discouraged from making contact and presenting their credentials. Usually, the company already has a consultant or two and doesn’t want to be bothered by others. Nevertheless, the current consultants will not always be on the job. As new problems emerge, the company will probably need to talk to consultants with different skills and experience.

To prepare for that day, management should interview a few consultants to gain an understanding of the talent available in their market even though it is not hiring at that moment. Develop a list of the three or four that have the skills you might one day need. Management, always under time pressure, is reluctant to spend the time, but considering the cost of picking the wrong consultant, it’s a good investment.

When the time comes, you will be well prepared and the process of selection will be much more manageable as well as rewarding.

France Pursues Web Pirates

September 21, 2009

The French National Assembly has approved some of the toughest anti-internet piracy legislation in the world.

If it becomes law, the so-called Hadopi Bill, named after the new agency it would create, could allow the authorities to freeze the internet connection of illegal downloaders, impose fines of up to $441,000 and even jail repeat offenders for two years.

The new bill, already approved by the Senate, is also known as the ‘Three-Strikes Law’ for its graduated response to web piracy. The first step is to send a suspected illegal downloader a warning email and this is followed up with a letter. If an offender persists in downloading content without the permission of the copyright owner, their internet connection could be cut off for a year.

The bill also requires that wi-fi users block non-authorised users from accessing their connection.

Printed with permission of World Advertising Research Center

5 Tell Tale Signs to Know if you’re buying a Good Business From a Business Seller

September 18, 2009

ByTed E. Sanders

When buying a business there is really no way to tell if you have gotten the deal you expect from the seller until after closing. You can do all the due diligence in the world and the seller could still be hiding major latent defects. Heck, unless you can tell the future you really don’t know the outcome of your business purchase until after closing. Due diligence, research, and a proven management team help increase your chances of success, but they don’t guarantee it. I’ve found after good and bad experiences in buying businesses you can actually read the sellers by closely studying how they react close to closing. Please be aware that these “telltale signs” by no means should be considered a substitute for due diligence, however if you see these signs you know you may have a good seller.

1. The seller repeatedly expresses concern over the employees – I’ve worked with some business sellers that frankly do not care about the employees. I’ve also worked with some business sellers that are selling the business because they want what’s best for their employees. If the seller is seriously concerned about the status of the employees that is a GOOD sign.

2. The seller has remorse shortly before closing – If the seller begins to seriously question the sale before closing then you may have a good deal. I had a really bad experience where the seller was trying to get to the closing table faster than we were (the buyers) because the bank was about to call the credit lines due.

3. The business broker has done a large carry back of a commission – Any experienced business broker is going to try to get as much cash down on a business sale as possible. The logic behind this is that if the buyer (you) chooses or is unable to fulfill your obligations on the purchase then obviously the business broker may never get paid. An experienced business broker that has enough faith in the buyer to carry back a large portion of their commission contingent on the buyer’s completion of the purchase is a GOOD sign.

4. The seller continuously negotiates the post closing priorities- I feel have the business seller involved post closing through a carry back of the purchase price or involved in management (either permanently or temporarily) is imperative for your success. If the seller’s first priority is to get as far away from the business as possible, you may want to double check everything. At times sellers will use retirement or new ventures as a reason to get away from the old business. This doesn’t mean the seller has done anything fraudulent; however you may want to make sure you have all the accurate contact information for them.

5. The seller cries at the closing table – I’ve never personally experienced this, however I heard this from another business buyer. He stated that the seller felt more attached to his business than he did his own children! Handing the business over to a new owner was definitely an emotional process for this seller.

Do you want to learn more about how to buy a business? I have just completed a brand new guide in buying a business “The Corporate Raider’s Guide to Creatively Financing Your First Business.” Download it free here:

Management Loves Teams; You Should Too

September 18, 2009

By John Riley

On October 17, 1994, the Wall Street Journal ran an article talking about Frito Lay’s use of teams to resolve various plant problems. That story captures the reasons managements everywhere have become instigators of teams to deal with their most vexing issues. The thrust of the article:

 “Since pushing most of its Lubbock (TX) plant’s work, and accountability to teams in 1990, Frito Lay has reduced the number of managers from 38 to 13 while its hourly workforce has grown 20%. Despite less supervision this plant has seen its costs cut dramatically and quality jump. Teams are responsible for everything from potato processing to equipment  maintenance, cost control, and service performance.”

 Using teams to tackle problems and find solutions can be traced back to the late 1920’s when the concept grew out of a research study to determine what happened to workers under various conditions.

Researchers found workers built a sense of group identity, developed social support and cohesion brought about by worker interaction.

 Today, the degree of team sophistication has advanced significantly. And yet, some learned souls have expressed an occasional reaction to working on teams, “I could have done this project by myself in a third of the time.” It can be a valid critique when a team is not properly organized and led. Therein is the opportunity for managers and supervisors to step in and demonstrate their leadership skills.

 It’s very important the individual selected to be the team lead insist on training for that role if training is not offered at the time of his/her appointment. Receiving guidance on such things as conflict resolution, process and proper communications can make a big difference in the team lead’s performance.

 Another key consideration is the decision on whether the issue should be referred to a team. Complex and important issues and decisions lend themselves to team approaches. It is also true when the potential for conflict is great and there is no time pressure.

 Establishing sharply worded and concise objectives for the team is essential. It isn’t easy because various departments of the company will probably be represented on the team and each representative may have a different set of interests.

 Once meetings are underway, the Team lead’s most important responsibility it to generate and maintain good relations among members. People and problems need to be separated and options explored by the whole team. When conflict arises, persuasion is needed to restore harmony and direction.

 Leading a team successfully requires the kind of skills management is looking for in their future leaders, skills such as organization and planning, communication, problem solving and managing people.  That’s why the wise manager or supervisor who has an opportunity to lead a team should welcome the challenge and grasp it firmly.

Want That Big Contract? A Partner Can Help You Get it

September 17, 2009

By John Riley

All too often small companies hesitate to quote on large contracts because they don’t feel they have the capabilities or resources to fulfill the requirements.  That may be true, however partnerships can be the solution to grow when all other avenues offer limited opportunities.

 Management attitudes toward competitors in the past have created barriers to keep competitors at a distance .  Not any more. Today, the word is connectivity and building a more formidable means to sustain competitive advantage.  This process broadens the executive’s view so she/he can scan the horizon for larger business opportunities rather than focusing exclusively on the smaller niche markets.

 Transitioning to a business partnership starts when a large purchase requirement  appears  and you want to pursue it.  That’s when the capabilities and resources needed to  handle the order are defined. Once the requirements your company can provide are noted, the balance of capabilities and resources are what a partner will need to provide.

 For example, one partner may have special skills in software and hardware selection and compatibility. The other partner may have expertise in managing computer networks worldwide.  The combination of skills significantly elevates the partnership’s  qualifications beyond either company’s individual capabilities.

 Another example could be a public relations firm and an advertising agency.  

 Values are very important to a successful partnership. There needs to be an exchange of views to make sure there are no conflicts that might disrupt a good working relationship. Occasionally, this is an area overlooked by business owners and executives in forming partnerships, joint ventures and mergers and when that happens, problems occur frequently.

 Another area where understanding and agreement is necessary is defining  the purpose of the partnership.  Usually partnerships, like joint ventures and mergers, are undertaken for more than one reason. To avoid working  at cross purposes, the potential partners need to discuss what they want to gain from the cooperation.  If there isn’t agreement, then its best to start looking for another partner.

 The confidentiality of information shared in the partnership needs to be protected. A confidentiality agreement should be consummated between the two companies early in the discussions.

 Sometimes one or both partners will take for granted who will do what if they get the contract they are pursuing. That’s a bad idea. It’s important to determine the responsibilities of each partner at outset of discussions. 

 Properly structured, partnerships can be very effective, save time and increase productivity.  In effect,  partnering gives you competitive advantage by accessing your partners skills and resources.  Don’t overlook this avenue to growth.

Microsoft Under Pressure From China

September 11, 2009

 Microsoft, the IT giant, is seeing the online stranglehold previously enjoyed by its Internet Explorer platform in China gradually erode under pressure from a number of domestic rivals, the latest figures suggest.

According to estimates from iResearch, Microsoft once held a 96% share of the web browser market in the world’s most populous nation, but this has now declined to 57.8%, and the exact total could be lower still.

Ding Li, an analyst at iResearch, said “according to my research, nearly 96% of China’s internet users have used an IE browser at some time in their lives, but only 50% of them keep to it regularly now.”

In particular, Microsoft’s share is being squeezed by three local alternatives with a combined market share of 31.1%, and which are “adopting advanced techniques and updating their products continuously,” Ding said.

Tencent has developed its own web browser, TT, and hopes to attract some of the 300 million people who are members of QQ, its instant messaging service, to switch to its new system.

“Its users are Tencent’s most prominent advantages. If TT can combine QQ software with its Tencent TT browser, it may become a browser with the biggest amount of users in the future,” Ding said.

Qihoo360’s360 Secured Browser, which is known particularly for protecting the privacy and data of its users, has increased its market share by 50% over each of the last three quarters, to 8.4% in all.

Qi Xiangdong, president of Qihoo360, argued “safety has become a top priority for people when choosing a browser. The 360 Secured Browser uses its ‘isolation mode’ to block any Trojan horse virus.”

Maxthon is another competitor to Microsoft, and offers a range of user-friendly features, such as tools allowing consumers to identify and access their favourite web portals from any computer.

Chen Jieming, ceo of Maxthon, said “most of our users were born between the 1970s and the 1990s and we are trying to attract those born before the 1960s to use our Maxthon browser.”

Chen said Google’s web browser, Chrome, has also struggled to make in-roads in the rapidly-developing online marketplace in China, for a mixture of technological and cultural reasons.

“Even though Google’s browser uses many of the most advanced technologies from all over the world, it still hasn’t gained popularity in China. Some Google Chrome functions aren’t even compatible with some Chinese websites,” he said.

Other multinational operators such as Firefox and Opera are also struggling to establish a substantial presence in the country as yet, according to Ding.
Printed with permisson of the World Advertising Research Center
Data sourced from Alibaba; additional content by WARC staff, 09 September 2009