Top Challenges Facing Organizations – Part Two

Posted on November 30, 2012 by in Blog, Strategy

Reality Check

We’ve now discussed or listed many of the top challenges that significantly affect an organization’s performance. But are there consistent underlying causes relating to many of these problems? It turns out that while each problem will have a unique twist to that particular organization, there are a number of likely related causes. Let’s discuss a few that may be pertinent.

Not Having a Well-Defined Big Picture. For a variety of reasons, some organizations just don’t have a well-thought-out, actionable strategic vision and plan. We often hear “We’re too busy to plan.” Studies show the most successful executives and leaders commit to at least five percent of their time to strategic planning. An effective means for improving productivity.

Not Having the Right People in Right Positions. Strategy is important, but you also have to have the right team. In his book Winning, Jack Welch stresses this very point. Everyone on the management team needs to be competent at what they do, executive responsibilities, work closely with each other, and hold each other accountable to what they’ve promised to do.

Poor Communications and Teamwork. Teamwork and communications are closely linked to performance. In his book Just Be Honest, Steven Gaffney discusses this in detail. There are a variety of excellent assessment tools that can help in this area, including Birkman, StrengthFinders, and Myers-Briggs.

Not Employing Best Business Practices. Another critical component for optimal performance is ensuring continual improvement occurs throughout your organization.  Continuing to search out and employ these practices, tools, and techniques is absolutely necessary for ensuring your organization remains competitive. My book Blueprint for Strategic Growth discusses an effective approach for strategic planning and business development.

Not Emphasizing the Importance of Delighting the Customer. A lot of organizations think they do this, whereas in fact they don’t really do it. To really focus on delighting the customer, organizations need to have this as a core component of their mission and strategy, and a well-thought-out means to develop and maintain key relationships.

Top Challenges Facing Organizations

Posted on November 27, 2012 by in Blog

In today’s challenging business climate, executives and managers of organizations must be continuously aware of all the factors that could impede profits and performance. This is an extremely difficult proposition, considering all the uncertainties organizations face, including economic, legal, regulatory, competition, globalization, emerging technologies, and extreme cost competitiveness.

Let’s begin by discussing the biggest and most common challenges that organizations face. Then we’ll discuss some of the tools available for diagnosing the root causes of the problem, and means fordeveloping actionable solutions.

The Six Top Challenges

Weak Organization Focus

Perhaps the greatest inefficiency in an organization is not having everyone aligned to the same vision and set of objectives. Without a cohesive, coordinated strategy, good managers will develop their own, which causes each of them to pursue their own agenda. This results in some components of the organization making progress, some floundering, and creates tremendous inefficiencies. Developing and implementing a well-thought-out strategy, updating it on a regular basis, and involving key players in the process, is vital to propel the leadership team in a direction that is aligned with the corporate vision and objectives.

Stagnant Growth

Business growth often starts slow, then ramps up, then levels off again. Some firms will sit for long periods of time, even years, leveled off with no real growth. Stagnant periods can mean less profits, loss in business opportunities, and few if any opportunities for employees to move up the ladder, and lower overall employee morale. Moving back into a growth mode can be extremely difficult, and risky. The alternative is stagnation or declining growth, and high employee turnover.

Low Win Rates

There’s no doubt that competition has been steadily rising for most industries. This results inorganizations seeing their win rate on proposals dropping or at least not where it should be. When win rates begin to drop lower and lower, a vicious cycle can begin. With fewer wins, work reduces, and there’s less budget for new proposals unless you raise your overhead rates. Raise your overhead rates, and you become less competitive. Further reduce your number of bids, and you win even fewer proposals. A decline in win rates is almost always an indicator that something is systemically wrong with your business development process, capture planning process, corporate strategy, or some other related factor.

Difficulty Being Cost Competitive

Recent trends show much heavier weighting towards cost competitiveness rather than equally balanced with management approach and technical ability. Not being cost competitive will put you out of the running if you’re bidding as prime, or eliminate you from being considered as a teammate if you’re a subcontractor. To make matters worse, bids are moving more towards “multi‐award” or “firm fixed price” contracting rather than “cost plus” or “time and materials” contracting. These approaches, especially “firm fixed price,” can add considerable risk to the contractor. For example, not successfully delivering on a single firm fixed price contract could cause both significant financial impacts in addition to a sudden drop in past performance ratings.

Weak Client Relationships

Highly successful companies realize that long-term, strong client relationships are by far the most beneficial. Many of the reasons are obvious: repeat business, less business development required in many cases, and more trusting relationships. In tough economic times, these benefits have become much more magnified. Some firms have lots of contacts in their database, sending out numerous flyers and mailers, but never establish really close customer relationships. Without strong relationships, clients are not likely to reliably prefer your services or products over those of your competitor’s.

Poor Strategy Execution

Developing the organization’s strategy is a great first step. The next step, really a much tougher step, is to then successfully execute the strategy. Too often, organizations will develop a well-thought-out strategy but then will not commit to the effort it takes to fully implement the strategy. Or, which is more often the case, will make significant progress in only a couple of their initiatives or strategies. When this occurs, the result can be big losses in lost opportunities, profits, and productivity.

Other top challenges that will significantly affect organization profit and performance include:

  • Poor business development strategy
  • Lack of succession planning
  • Limited service or product offerings
  • Limited core competencies
  • No strong differentiators
  • Not having the right people in the right positions
  • No long-range capture planning
  • Internal conflict, poor communications, lack of teamwork
  • Executive team spread too thin

November Band Jam in Photos

Posted on November 16, 2012 by in Band Jam, Blog

The Economy and Your Retirement

Posted on November 13, 2012 by in Blog, Planning, Retirement

Given the current state of the economy, many small business owners are finding it challenging to sell their businesses.  A recent article by The Wall Street Journal explains the challenges affecting the business owners’ retirement.

The median selling price for U.S. small businesses during the first half of this year was $150,000, down 25% from $200,000 in the first half 2008, according to BizBuySell.com, an online small-business marketplace. The firm’s findings, reported by business brokers, are based on listings and recent sales in 70 major U.S. markets.

In the first half of the year, 3,332 small businesses exchanged hands down 40% from the first half of 2008, it found.

Andy Birol, a small-business consultant in Pittsburgh, says many of his older clients are at a crossroads: “They either have to sell for far less than they need or deserve to get out, or they have to muster up the energy to recommit themselves to the business,” he says. “They’re conflicted.”

Times are tough. Many business owners feel like they may never retire.  However, if you begin planning now with the right team of advisors, you will be prepared when the time is right to sell.

What is your number?

Posted on November 12, 2012 by in Blog

Here is the presentation from our October lunch and learn. This presentation by Joe Birkofer gets to the bottom of how you find the number you need to reach upon the sale of your business to accomplish your goals.

What's your number? Forward Results

The Market’s on the Move

Posted on November 9, 2012 by in Blog, Planning, Retirement, Strategy, Taxes

The Market’s on the Move – Are You?

Approximately 78 million boomers are expected to exit the workforce over the next 10-15 years, many of them entrepreneurs who will be looking to cash in on their successful businesses to enjoy the fruits of retirement or other endeavors.  In comparison with previous generations, the sheer number of boomers will create the largest transfer of business equity our country has ever seen in an age-driven cycle.

In particular, 2012 could initiate a wave of transfers as it holds additional motivation for those looking to sell their business. “The Bush era tax cuts are set to expire,” says Gary Cooper, an exit adviser and owner of Gary N. Cooper, CPA, PC. “Everything is temporary in the tax world, right now the capital gains rate of 15% could end this year and the increase could be from 20% upwards to ordinary tax rates.  So from a tax point of view, many boomers may consider exiting the market in 2012.” 

Matt Register, who is the investment banker of Forward Results, says, “Another promising factor for boomers looking to sell is the amount of private equity that is still sitting on the sidelines following the recession of 2008. While this is excellent news for sellers in the near term, boomers should be aware that over time as more and more exit, the demographics imply there will be tipping point with supply outweighing demand sometime in the future. The leverage would then shift to the buyers and latecomers to the market will find themselves in a less favorable negotiating position.”

If you are like most entrepreneurs, you haven’t spent much time thinking about your exit strategy.  After all, why plan today for something that‘s not on your immediate radar. But the undeniable fact is that someday you won’t be running your business anymore.

A Quick Fix to Improve Your Bottom Line

Posted on November 6, 2012 by in Blog, Human Resources

Financial loss due to Unemployment Compensation (UC) can be completely avoidable and, if addressed, a quick win for a company’s bottom line.

Not all former employees who file for Unemployment Compensation are actually qualified to receive it.  In these cases, it is worthwhile to appeal Unemployment Claims that are undeserved:

General Eligibility Requirements state that the former employee was:

1. Involuntarily terminated through no fault of own, and

2. Willing and able to work full-time.

Former employees who file UC claims are generally ineligible if even one of the following is applicable:

• Too ill to work

• No means of transportation

• Unwilling to forfeit retirement benefits

• Let go for cause (generally misconduct, poor performance, or policy violation)

• Voluntarily leaves (or reduces work hours)

So, maybe you knew this already–and you have already appealed to UC claims accordingly, but you still end up losing the appeal. Why does this happen?

Here are a few reasons companies lose money to UC claims and some suggested quick-fix remedies:

 

AVOIDABLE UC CLAIM LOSS REMEDY
Missing separation information Establish clear accountability and communicate throughout company: 1. Identify specific focal point to handle unemployment claims, including:

  • responding to states’ requests for separation information,
  • appealing UC claims where appropriate,
  • attending follow-up hearings scheduled by the state (usually conducted via phone)

2. Communicate above across company,

3. Communicate to managers that they are responsible for submitting separation information for their direct reports to the UC claims focal point promptly (at the time of separation).

Not responding by the state’s required deadline upon notification of UC claim.  (Each state has a different response time requirement.) 
Not responding at all to the state’s request for separation information 
Company representative specifically requests no further appeal (on behalf of company) Establish and communicate the circumstances where this is justified 
Employers miss scheduled hearings after filing initial appeal—by default, the company loses The state schedules the hearing–if focal point is unavailable to attend, find an appropriate backup! 
Insufficient Documentation to justify an appeal, (e.g., no proof of misconduct, poor performance, policy violation)  Hold managers accountable for and maintaining any/all documentation related to the separation (e.g., emails, conversation notes/dates, performance improvement plans, etc.) 

Amy Rozelle Williams, M.S.
ProvsiHR

Deloitte: One in 10 U.S. Employers to Drop Health Coverage

Posted on November 2, 2012 by in Blog, Planning, Strategy

Since the latest ruling on Obabmacare, many have been speculating about the effects of the new health-care laws.  This article covers some of the questions we now face:

Around one in 10 employers in the U.S. plans to drop health coverage for workers in the next few years as the bulk of the federal health-care law begins, and more indicated they may do so over time, according to a study to be released Tuesday by consulting company Deloitte.

The majority of Americans under age 65 who have health insurance get it through an employer. A big question about the law is whether companies will continue to offer coverage after a slate of changes starting in 2014 will give Americans more options for buying coverage without the help of an employer.

Most companies currently offer coverage voluntarily because they say it helps them recruit and retain workers. Critics of the overhaul argue that it could encourage companies to drop those plans if they become more expensive since the law requires them to provide a set level of benefits or pay a penalty.