Check out my colleague Adam Hartung's new e-book: "The Fall of GM" at
http://www.thephoenixprinciple.com/ebooks/thefallofgm_adam_hartung.pdf.
In 1000 words, Adam points to GM management's disregard of alternative industry scenarios as key to the company's downfall. Since Scenario Planning is a growing Meridian practice area, I am pleased to promote this new e-book. Also, you might be as intrigued as I was by Adam's compelling points about GM actually being on the right track during the Roger Smith era.
Diane M. Meister
Founder and Managing Director
Meridian Associates Inc.
www.meridianAi.com
Friday, July 10, 2009
Sunday, June 14, 2009
If You Are Going to Downsize
If you decide to downsize, a few suggestions.... Too many companies simply choose a percentage (across the board) of their labor force that they are going to let go without really thinking through the process, ending up with an overworked staff, "holes" that others have to be filled, an inability to adequately service current customers (thereby, aggravating the very people on whom your business depends), losing talent that you need, etc.
A more reasonable and equally cost-effective approach is, first, to review your customer base to see who are the most profitable both currently and potentially, categorize them in terms that reflect how you sell to them (e.g., long-term relationship building, phone call-ins, through reps, etc.) and then determine the contribution departments make in servicing each group.
Second, analyze the process which the departments utilize in servicing each of your customer groups. This is where a great deal of overlap and redundancy are to be found, as well as processes that can be automated. In reducing redundancy and automating what now may require several people to achieve, the savings will surprise you. (Even if automating may require capital expenditures, a cost-benefit analysis can ease your mind and show a handsome ROI in a brief period of time.)
Third, both the first and second steps should involve as many employees as feasibly possible. Too often downsizing decisions are made by top management who really are not on the floor where the action occurs. The objection to this approach is that people will not "fire" themselves. The fact of the matter is that, when carefully managed by managers, the downsizing that is done is viewed as reasonable and needed. Further, this approach conveys to all staff, those who leave and those who remain, that management is not the "bad guy", but rather is conducting business in a fair way.
When this approach is utilized, the whole downsizing process is seen as more humane, as well as equaling the cost savings that a flat percentage can effect.
Bernard Liebowitz, PhD CMC
A more reasonable and equally cost-effective approach is, first, to review your customer base to see who are the most profitable both currently and potentially, categorize them in terms that reflect how you sell to them (e.g., long-term relationship building, phone call-ins, through reps, etc.) and then determine the contribution departments make in servicing each group.
Second, analyze the process which the departments utilize in servicing each of your customer groups. This is where a great deal of overlap and redundancy are to be found, as well as processes that can be automated. In reducing redundancy and automating what now may require several people to achieve, the savings will surprise you. (Even if automating may require capital expenditures, a cost-benefit analysis can ease your mind and show a handsome ROI in a brief period of time.)
Third, both the first and second steps should involve as many employees as feasibly possible. Too often downsizing decisions are made by top management who really are not on the floor where the action occurs. The objection to this approach is that people will not "fire" themselves. The fact of the matter is that, when carefully managed by managers, the downsizing that is done is viewed as reasonable and needed. Further, this approach conveys to all staff, those who leave and those who remain, that management is not the "bad guy", but rather is conducting business in a fair way.
When this approach is utilized, the whole downsizing process is seen as more humane, as well as equaling the cost savings that a flat percentage can effect.
Bernard Liebowitz, PhD CMC
Thursday, May 14, 2009
I have an interesting research piece on Bank Credit Markets which I will e-mail to anyone interested. JPMorgan Research. e-mail is bbdevane@bear.com
-Brian Devane
-Brian Devane
Wednesday, May 6, 2009
You Have to Earn the Right
In the Sales Training courses I conduct, I ask participants to describe the worst sales person they ever dealt with. They reply the sales person didn’t know his product, didn’t care about them, only worried about his commission, was not genuine, didn’t follow up and seemed desperate. In contrast, I’ll ask them to describe the best sales person they ever dealt with. They’ll reply with the opposite of the qualities they just described, the sales person listened, understood their product, was likeable and engaging, cared about them, followed up intelligently and genuinely cared about a positive result. My summary is “sales is easy, act like the second person you described not the first.” If you do so, you will be head and shoulders above your competition.
Why do people find this so difficult? My theory is there are two reasons: 1) laziness and 2) fear. We all like a quick and easy solution. Unfortunately I haven’t found any magic bullets to any successes. I suppose if I had one I could give the solution a fancy name like “The Quick and Easy Way to Make a Million Dollars Overnight!” and sell a lot of books for a while. The truth is less glamorous and is aptly described by Thomas Edison:
“Most people miss opportunity, because it comes dressed in overalls and looks like hard work.”
I’m having a cocktail party in June. There are friends I will not invite because they don’t separate work from social events. They will use the opportunity to be in my home and meet with my friends and family to promote their product or service. That’s uncomfortable for everyone. They haven’t earned the right to sell. Ever go to a college reunion and meet a bunch of insurance agents and financial planners? If you have, then you know what I mean. They are actually taught in sales training courses that alumnae are a good target and they should attend the events to prospect.
This behavior does not build trust or engage people. It pushes them away. The sales person has much more to gain by enjoying the party, engaging people and if there is any appropriate opportunity to follow up, to do so at another more time.
People now are looking for jobs and opportunities. Use the time you meet with people wisely. Engage them, connect with them and earn the right to discuss your services with them in more detail, if appropriate. If it is appropriate keep detailed records in your CRM system so you can remember how you connected with this person when you do follow up.
If it's not appropriate, enjoy the party and save your work for working hours.
Alicia Dale, www.fullcirclemgmt.com
Why do people find this so difficult? My theory is there are two reasons: 1) laziness and 2) fear. We all like a quick and easy solution. Unfortunately I haven’t found any magic bullets to any successes. I suppose if I had one I could give the solution a fancy name like “The Quick and Easy Way to Make a Million Dollars Overnight!” and sell a lot of books for a while. The truth is less glamorous and is aptly described by Thomas Edison:
“Most people miss opportunity, because it comes dressed in overalls and looks like hard work.”
I’m having a cocktail party in June. There are friends I will not invite because they don’t separate work from social events. They will use the opportunity to be in my home and meet with my friends and family to promote their product or service. That’s uncomfortable for everyone. They haven’t earned the right to sell. Ever go to a college reunion and meet a bunch of insurance agents and financial planners? If you have, then you know what I mean. They are actually taught in sales training courses that alumnae are a good target and they should attend the events to prospect.
This behavior does not build trust or engage people. It pushes them away. The sales person has much more to gain by enjoying the party, engaging people and if there is any appropriate opportunity to follow up, to do so at another more time.
People now are looking for jobs and opportunities. Use the time you meet with people wisely. Engage them, connect with them and earn the right to discuss your services with them in more detail, if appropriate. If it is appropriate keep detailed records in your CRM system so you can remember how you connected with this person when you do follow up.
If it's not appropriate, enjoy the party and save your work for working hours.
Alicia Dale, www.fullcirclemgmt.com
Saturday, March 14, 2009
DO More in 2009
As many of you know, I teach At the Illinois Institute of Technology. Here’s a quote from Dr. Keith McKee, head of the Industrial Technology and Management Department, in his year end newsletter:
“The normal response to an economic crisis is to do less – drive less, consume less, …spend less, etc. From a professional point of view, that is exactly the wrong action. As the economy becomes more challenging, you will be best served by doing more.”
Most companies have spent the 4th quarter focused on reducing expenses and headcount. I do not know of any company that has managed to shrink to greatness. Here are some purchasing and inventory suggestions on how your company can DO MORE in the first quarter that will positively impact profitability:
Commodity prices have fallen dramatically. There is excess capacity in many industries. These represent big opportunities for Purchasing. Has your company reviewed your raw material, component, and service prices to be sure all “escalators” have been removed?
Some of your key suppliers might be at risk. Have you met with their management to discuss their current business status (and yours) with the idea of collaborating more in 2009 to reduce total cost?
Have you had service or cost issues with any of your suppliers? Now is an ideal time to seek out and develop business relationships with new companies.
Did you do a year-end physical inventory? Perhaps it satisfied the auditors, but it did nothing to improve inventory accuracy. Start cycle counting in the first quarter so you can avoid the cost of next year’s physical and really improve inventory accuracy.
How much excess and obsolete inventory did your company have at year-end? It will cost at least 25% to carry that inventory through 2009. There are several tactics that can be used to turn it into cash.
Have you reviewed the sales forecast with purchasing, inventory, and key suppliers? What actions should be taken to avoid future excess inventory?
I have assisted many companies in acting upon these ideas and improving profitability as a result. Yes, there is a cost to do that, but there is also a much larger cost to do nothing. If you are concerned about your organization’s capability to deal with these topics, give me a call. Let’s DO SOMETHING in 2009. Herb Shields, hshieldsconsulting.com
© 2009 HCS Consulting – all rights reserved
“The normal response to an economic crisis is to do less – drive less, consume less, …spend less, etc. From a professional point of view, that is exactly the wrong action. As the economy becomes more challenging, you will be best served by doing more.”
Most companies have spent the 4th quarter focused on reducing expenses and headcount. I do not know of any company that has managed to shrink to greatness. Here are some purchasing and inventory suggestions on how your company can DO MORE in the first quarter that will positively impact profitability:
Commodity prices have fallen dramatically. There is excess capacity in many industries. These represent big opportunities for Purchasing. Has your company reviewed your raw material, component, and service prices to be sure all “escalators” have been removed?
Some of your key suppliers might be at risk. Have you met with their management to discuss their current business status (and yours) with the idea of collaborating more in 2009 to reduce total cost?
Have you had service or cost issues with any of your suppliers? Now is an ideal time to seek out and develop business relationships with new companies.
Did you do a year-end physical inventory? Perhaps it satisfied the auditors, but it did nothing to improve inventory accuracy. Start cycle counting in the first quarter so you can avoid the cost of next year’s physical and really improve inventory accuracy.
How much excess and obsolete inventory did your company have at year-end? It will cost at least 25% to carry that inventory through 2009. There are several tactics that can be used to turn it into cash.
Have you reviewed the sales forecast with purchasing, inventory, and key suppliers? What actions should be taken to avoid future excess inventory?
I have assisted many companies in acting upon these ideas and improving profitability as a result. Yes, there is a cost to do that, but there is also a much larger cost to do nothing. If you are concerned about your organization’s capability to deal with these topics, give me a call. Let’s DO SOMETHING in 2009. Herb Shields, hshieldsconsulting.com
© 2009 HCS Consulting – all rights reserved
Thursday, March 12, 2009
Maintain Business and Justify Rates
As the owner of a Sales Practice companies are surprised when I tell them we are doing OK in this economy. We had a strong business model when the market was fat. We use the same business model now that the market is challenged. The companies we work with that are really suffering right now did not have a strong sales foundation 3 years ago and nothing's changed today. If you're pricing is based on value there is no need to offer steep discounts in this market. I worked with a company that is offering 15% discounts to existing customers because they are asking for it. The company is scared of losing customers so they are giving the discount. I can tell you, there is not a 15% margin to give away. Selling against the Price Objection is covered in Sales 101. If the sales person has listened to the needs of the customer and provided corresponding value, rate will generally not come up at all. If it does, here are some tips on how to handle it:
Prospect: "your competition is cheaper". Sales Person's response: "that's more than likely true. I'm very familiar with that company. They've changed their pricing model several times over the years and as a result the customers that came to us from them complain about inconsistent delivery."
Prospect: "your competition is cheaper." Sales Person's response: "they also offer less. We provide local customer service, 24 hour access, a return policy, what would you like me to eliminate from our service offering to match that price?" (Note: you may be able to negotiate away a no cost service that you provide that the customer is not interested in anyway).
Prospect: "your competition is cheaper". Sales Person's response: "Really? It's hard to believe they can be that much cheaper. I know this industry pretty well. We all have certain hard dollar costs and overhead to accomdate. Sometimes there are hidden fees in a quote to make it look artificially cheaper. Do you mind if I take a look at it for you?"
If your sales people are selling against price and losing, please give me a call. Alicia Dale, http://www.fullcirclemgmt.com/; 312.697.0885
Prospect: "your competition is cheaper". Sales Person's response: "that's more than likely true. I'm very familiar with that company. They've changed their pricing model several times over the years and as a result the customers that came to us from them complain about inconsistent delivery."
Prospect: "your competition is cheaper." Sales Person's response: "they also offer less. We provide local customer service, 24 hour access, a return policy, what would you like me to eliminate from our service offering to match that price?" (Note: you may be able to negotiate away a no cost service that you provide that the customer is not interested in anyway).
Prospect: "your competition is cheaper". Sales Person's response: "Really? It's hard to believe they can be that much cheaper. I know this industry pretty well. We all have certain hard dollar costs and overhead to accomdate. Sometimes there are hidden fees in a quote to make it look artificially cheaper. Do you mind if I take a look at it for you?"
If your sales people are selling against price and losing, please give me a call. Alicia Dale, http://www.fullcirclemgmt.com/; 312.697.0885
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