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TURNAROUND MANAGEMENT: Do Your KPIs Tell You It’s Time?

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The Point: – The compilation and coordination of Key Performance Indicators (KPIs) are taken very seriously by numerous companies for good reason. They often determine the business strategy the company will accept, and the strategies that should be rejected. Their compilation acts as a tool that differentiates the company from other competitors. So if you ask some business owners, they will tell you that the essentiality of business KPIs can never be over-emphasized. When your company needs turnaround management, business KPIs can help you drive back your sales, profits, and even make your company’s growth surpass previous levels. Nonetheless, if they are not managed appropriately, they can be detrimental to your business strategy. So in this post, we’ll explore the topic of Turnaround Management: Do Your KPIs Tell You It’s Time?… Enjoy!

TURNAROUND MANAGEMENT: Do Your KPIs Tell You It’s Time?

DO YOUR KPIs TELL YOU IT’S TIME?

Your Key Performance Indicators (KPIs) tell you whether it’s time to make changes in your business or not. Basically, the reason why companies rely on KPIs is to know if the things that are being done in the company are having a real effect on the business, measuring performance in a variety of categories. You can invest all your time and energy in getting so many tasks done by your company, only for your business KPIs to tell you that your performance needs improvement. You may think you have the best business strategy, but unknowingly to you, it is not effective enough. KPIs can indicate to you that there is need for turnaround management before the problems of the company present themselves (And if you’re like most of the organizations I consult with, there typically are one or two problem areas present regardless of how smoothly run the operation is!) Companies that track their KPIs and take it with seriousness rarely face worst state issues.

IT’S ALL ABOUT BUSINESS STRATEGY!

Measurement of business’ KPIs indicates to the leader how much, or the number of something, there is and allows for compare/contrast analysis between the different measurements taken (i.e.. total revenue last month versus previous month, year-to-date average, last year same month, etc.) The metrics and measurements however tell managers that it is time to add something to the business strategy or remove something.

KPIs FOR BETTER PROJECT/RESOURCE/TEAM MANAGEMENT

A company that does not rely on business KPIs will find it more difficult to manage projects, resources, and massive teams, when compared to a company that tracks and measures KPI. This is the advantage of companies that rely on KPIS that makes them rarely face issues in the worst situations. Every business owner should see the measurement of KPIs as a perspicacious idea, and use it to decide “next steps” for their business.

WHO SHOULD COMPILE KPIs?

Since your KPIs tell you it is time to make changes in various aspects of your business, it should never be taken as a trivial tool. If possible, employ a qualified person that can measure KPIs with data integrity/consistency, and at the same time decipher it for you. Your KPIs will guide you positively in so many ways, so it should be measured regularly, and followed-up properly to avoid unnecessary and superfluous turnover of processes/procedures/management.

SUMMARY

In this post we’ve explored the Turnaround Management topic of KPIs, namely if they are telling you it’s time to move your business around. Your KPIs are a toolkit that shares a lot of important metrics by which you can drive your business forward with from analysis. Not measuring leads to not managing, and may cause you to miss out on important turnaround opportunities!

Sam Palazzolo

PS – If you/your organization has challenges as a result of Turnaround Management activity, please don’t hesitate to drop me a line and request future post titles! Here are a few other titles that are currently in the works:

 

 

Mergers & Acquisitions – Six Diversification Questions

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The Point: A standout amongst the most difficult decision an organization can face is whether to expand/diversify – rewards and dangers can be exceptional. There have been examples of success stories, and more similarly, numerous stories of infamous and exorbitant failures. What makes expansion such an erratic, high-stakes amusement-like game? A typical reason is that organizations, for the most part, confront the decision in an atmosphere that is not helpful for clear decision-making. The truth is that diversifying shouldn’t be such a roll of the dice. There is an abundance of literature about how to approach it! So in this post we’ll discuss Mergers & Acquisitions along six diversification questions that must be asked… Enjoy!

Mergers & Acquisitions - Six Diversification Questions

Six Questions Leaders Must Ask/Answer When Considering Diversification

If managers consider the following six questions, they can push their reasoning somewhat further to lessen the bet of diversifying. Note that the inquiries won’t prompt a simple Go/No-Go decision. However, the activity can enable administrators to survey the probability of successful achievement.

Question #1: What Can Your Company Do Better Than Other Competitors?

This question will help you decide on the nature of strengths accessible – which are, by and large, vital resources. When confronted with the choice for diversification, managers need to ponder on not only what their organization does, but also about what it does better than its rivals. Pinpointing vital resources is a market-driven way to deal with business definition and identify unique selling propositions.

Question #2: What Strategic Assets Are Needed To Succeed In The New Market?

The late 1970s diversification misfortunes of various oil companies highlighted that it is unsafe to go up against a royal flush when the total of what you have is a couple of jacks.

Just like the game of poker, the lesson for organizations considering to diversify is the same – You need to know when to hold them and when to overlay (fold) them. If an organization is holding just a couple of key resources in an industry where most players have a superior hand, there’s no reason for putting cash on the table.

Question #3: Can We Catch Up To OR Leapfrog Competitors With What They Do?

If a company is considering diversification without all the required strategic assets in hand, specific assets must be obtained by possible means. If this is not done, moving forward into new markets may backfire.

Question #4: Will Diversification Break-Up Strategic Assets?

This is where managers need to ask whether the strategic resources they plan to export are transportable to the new industry. Many organizations erroneously expect that they can separate bunches of capabilities or abilities that, only work because they are together, strengthening each other in a specific competitive setting.

Question #5: Will We Be Simply A Player OR Emerge A Winner In The New Market?

To accomplish a sustainable favorable position, diversifying organizations need to come up with something unique. An organization’s upper hand will be short-lived if rivals in the new market can emulate the organization’s moves more rapidly and cheaply.

Question #6: What Lesson Can Our Company Learn By Diversifying, and Are We Well Organized For It?

Managers who are forward thinkers, will not only be worried about accomplishment but just as similar to great chess players, they will also be thinking about few moves ahead. They will ask themselves about this last question while considering diversifying further.

SUMMARY

In this post we’ve explored the topic of Mergers & Acquisitions – Six Diversification Questions. Diversification is not an easy task, it is therefore important that managers examine their cards painstakingly. It takes shrewd players to know when it’s best to raise their wagers and when it’s best to fold.

 

Sam Palazzolo

PS – If you or your organization are challenged as a result of M&A activity, please don’t hesitate to drop me a line and request future post titles! Here are a few of the other M&A titles previously published/in the works:

– Will Your M&A be a Success of Failure?

– The Importance of a M&A Strategic Plan – 3 Tips!

– How to Successfully Survive Mergers & Acquisitions

– M&A: Creating Shareholder Value

– M&A: Should You Go For Stock or Cash?

 

Improving Business Development Leadership Skills – 3 Tips!

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The Point: In any business development effort, the leaders are the key elements of any organization to increase the number of sales. Effective business leadership gives direction and defines the framework to achieve the expected objectives, all the while attempting to avoid inefficiency and misuse of resources. So in this post, we’ll explore improving business development leadership skills and share 3 tips… Enjoy!

Improving Business Development Leadership Skills - 3 Tips!

Business Development Leadership… Lonely at the Top?

Business development leadership is the driving force behind efforts to achieve best sales, innovation and productivity. In my years of consulting, it shouldn’t come as a surprise that I’ve identified that there is a strong correlation between leadership development and business performance. So why are so many organizations reluctant to invest in leadership development training for sales leadership? The answer may surprise you!?!

The Best 3 Tips for Improving Business Development Leadership Skills

A leader with a vision ensures that people understand not only where the company is at, but where it plans on going (and how the people listening play a vital role in how the organization will get there!) The sales leadership in the company can, and should, be seen as the engine that powers the business. The business development leadership role is to be an influential person who motivates their troops and displays a natural positivity.

The following are what I consider to be the top 3 tips to achieving a good sales leadership dynamic:

Tip #1: Be Transparent

Good communication skills are essential for leaders to perform well.

The first step is to be totally transparent with the employees and to tell them exactly where the business is and what their role is.

I often see Sales Leaders that lack authenticity (Be yourself!) attempt to hide behind a proposed leadership mask. People, especially salespeople, will know if you are sincere or not. Your salespeople need all the information they can get to help you achieve your business development goals. Not disseminating information can only provide you confusion/trouble along the way.

Tip #2:   Know Your Strengths and Weaknesses… Then Delegate

In good business development leadership the particular leader must be aware of his or her skills and personality. Make sure you know your strengths, weaknesses and gaps. You can focus on what you do the best, while knowing where you are likely to need help. Furthermore, you could reinforce a weak point in your skills by hiring an external consultant.

The inability to delegate is probably one of the biggest challenges for many leaders who often practice micromanagement (or mismanagement). Sales leadership should recognize the strengths of other members of their team in order to benefit from them. It is important to learn how to surround yourself with competent staff, but you must provide them with the opportunity to prove that competency.

By delegating you also develop your employees, which would be essential to the long-term growth/stability of both the individuals and your organization (People are generally up to the challenge!)

Tip #3: Networking

Another effective business development leadership tip is business networking. If ABC stands for “always be closing,” then the sales leader should employ ABN (Always Be Networking!)

Business networking is a leader’s best friend, regardless of business size (but especially for small and medium-sized businesses). Leaders often need to connect with other business owners, so as to share experiences and learning from each other. Effective leaders know how to build relationships and build beneficial partnerships/alliances.

Networking is also a way to keep up with trends and maintain your visibility in a highly competitive market.

SUMMARY

In this post we’ve explored how improving business development leadership skills can be beneficial. Effectiveness in business development leadership often results in improved performance and improved the sales in the organization. The 3 top could create wider opportunities in business development. These tips have benefited from actions that have had a lasting impact on their business growth.

Sam Palazzolo

 

The Tough Work of Turnaround Management – 4 Tips!

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The Point: If you’re like me, you love CNBC’s “The Profit” staring Marcus Lemonis! Week after week Marcus seems to not only identify, but successfully partner with organizations looking to turn their business around. But does reality really work out this way off of television? The Profit makes turnaround management look so damn simple/profitable! So I started thinking, “What is the tough work of turnaround management?” So in this post, we’ll explore the tough work you’ll need to employ in order to achieve success in your turnaround endeavors… Enjoy!

The Tough Work of Turnaround Management!

Wait a Second… This is NOT so Easy!

Are you a businessman or a prospective businessman who is just curious to know how tough turnaround management can be? You may not want to feel too inquisitive, and therefore keep your curiosity to yourself (or as my old-boss used to say, “Kid, don’t quit your day job!”) If truly you belong to this category, then you are currently perusing the right post. Turnaround management and business change are important for new developments in an organization’s business strategy, and should be done with adequate seriousness, regardless of how tough they seem. Although I won’t say it is elusive to achieve success, it can require some special dedication and seriousness to achieve desired outcome (Value creation, profitability, etc.)

The Tough Work of Turnaround Management!

Here are four (4) tips to help keep you aligned for success in a turnaround based on the most common failures I’ve seen/experienced:

Tip #1 – The Toughness of Taking Charge: Factually, you have to learn to be a leader before you can finally lead. For an effective business change, you must be ready to take charge. Among the members of your business, there will be some that appear hard to control. However, know this much that you must do it! Having an excellent business strategy but zero leadership is like having a good car with no one willing to drive it (or no engine!) (If you’re looking for leadership development while encountering a turnaround scenario, I’ve established a new offering just for you. Drop me a line at selections@tipofthespearventures.com).

Tip #2 – The Power of Confrontation: Some people need confrontation before they can get things done. Confrontation is not really bad as people perceive it to be, and it can be highly effective! You have to apply pressure sometimes to get people to work. Some people always try to avoid confrontation so they don’t look cruel, but this notion should be erased when it comes to business change. Confrontations do not always mean lambasting a person, and if you are the kind that confront this way, you may have to change completely. Every statement uttered by you when confronting a team member should be positive, so as not to dispirit them.

Tip #3 – Building a Culture of Success: It takes more than a well-designed business strategy to metamorphose from a business that has gone sideways/down completely to a business that everyone wants to liaise with. If you do everything possible by you for turnaround management, but don’t get success, it is equivalent to you doing nothing. A business owner who has lost superfluously may even dash his hope in business change, and feel it is no longer possible to recuperate all that is gone and go back to normality. It is tough for you to lose too much, and still believe you will be successful, but it is paramount to believe so.

Tip #4 – Choosing the Right People: Choosing the right persons is also a challenge in going back to normality. Developing a new business strategy to bring back you company to normality may entail you dismissing wrong people, and retaining or recruiting the right people. This is a difficult task, compounded by the fact that it is difficult to differentiate between the right people and the wrong people.

SUMMARY

It may not be stress-free for to turnaround a company, but I’ve found degrees of success can be achieved if you take charge, are willing to confront, looking to build a culture of success, and choosing the right people. Remember, real-life isn’t like a made to order television show! You’ll have to put in a great degree of dedication and seriousness in order to achieve the best outcome within a short period of time as possible.

 

Sam Palazzolo

PS – If you/your organization has challenges as a result of Turnaround Management activity, please don’t hesitate to drop me a line and request future post titles! Here are a few other titles that are currently in the works:

 

 

The Importance of a Mergers & Acquisitions Strategic Plan – 3 Tips!

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The Point: The thought of acquiring another company can be a very seductive strategic plan when CEOs wish to improve corporate performance and overall growth. Companies spend a huge amount of money every year on acquisitions – yet studies have confirmed that the rate of failure among mergers & acquisitions is at an all time high (peak!). What exactly are the causes of these failures (and more importantly successes)? In this post, we’ll discuss the importance of a Mergers & Acquisitions Strategic Plan and provide 3 Tips… Enjoy!

The Importance of a Mergers & Acquisitions Strategic Plan – 3 Tips!

What Leadership Does Wrong?

A large number of acquisitions miss the mark in regards to expectations since organizational leadership mistakenly attempts to coordinate candidates with the strategic aim behind the arrangement, neglecting to recognize bargains that may enhance current operations and those that could drastically change growth prospects of the company. These often make organizations pay the wrong price (i.e., overvalued) and integrate the acquisition wrongly.

There are two motivations behind acquiring a company, which most executives frequently befuddle. The first, and the most widely recognized one, is to increase your organization’s present performance – That is, to hold a superior position, while cutting expenses. The second, and less-known reason for acquiring a company, is to re-evaluate the mode of business operations through expense reduction – This is most likely to confound investors with spectacular pay off (especially when labor costs are slashed).

Integration often determines whether the acquisition will succeed or fail. You should be able to describe exactly what you are buying to foresee the way integration will play out.

One powerful way forecast effectively is to view the established targets/goals in its business model. Additionally, value is created and delivered through 4 interdependent elements of a business model:

– The customer value proposition is the first element

– The profit formula

– Available resources (such as technology, employees and cash)

– Lastly processes (including budget, R&D, manufacturing, and sales)

Three Tips of Having a Good Mergers & Acquisition Strategic Plan

Tip #1: Helps in Acquiring Resources That Command Premium Prices

Having plans to improve a new product or service is no guarantee to command a price premium. Buying improved components (compatible with their products) is a strategy that is routinely done by some companies to command premium prices.

Tip #2: It Helps to Lower Company Costs

Leadership often promise that an acquisition will lower costs, where in reality, it’s only possible in few scenarios, such as, and acquiring company with high fixed costs can expect higher profit potential. Most deals succeed using almost the same strategy.

The parent plugs some particular assets from the procurement into its current model, ejecting whatever is left of the acquired model and closing down, laying-off or offering redundant assets for sale. The execution help comes about because of utilizing the objective’s assets such that scale financial matters can drive down expenses. The strategic use of resources from the target will help in boosting performance and drive down costs 

Tip #3: A Disruptive Business Model can be Acquired

Disruptive business models and products have been proven to be the most reliable sources of massive growth in both margins and revenues. Disruptive companies typically offer simpler and more affordable products than what bigger players offer. Their footholds are well secured in the low-end of a market and gradually step up to products with higher margin and performance.

SUMMARY

In Mergers & Acquisitions, we all believe that success will be the end result. However, wrong companies are being purchased daily for the erroneous motive, wrong elements are integrated into the wrong business models, and wrong measures of value used when pricing deals (This is a mess that shouldn’t be!) You must be able to predict accurately if a company under acquisition consideration is a great deal, or just a debacle in the waiting!

 

Sam Palazzolo

PS – If you or your organization are challenged as a result of M&A activity, please don’t hesitate to drop me a line and request future post titles! Here are a few of the other M&A titles previously published/in the works:

– Will Your M&A be a Success of Failure? (CLICK HERE)

– How to Successfully Survive Mergers & Acquisitions

– M&A: Creating Shareholder Value

– M&A: Should You Go For Stock or Cash?