Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
Michael Vinje,
Trissential:
952.595.7970
mv****@*********al.com
www.trissential.com
THE RECESSION OFFERS management opportunities to improve profitability and be ahead of the competition when money starts flowing again. During the downturn, proactive management will revamp mission-critical systems and processes and redeploy personnel so they do more with less waste.
This will reignite morale, spark innovation, and position the company to come out of the downturn with a leaner and more agile organization primed for growth. The first step in this transformation is to overhaul critical systems.
One of the tenets of the quality movement is that every obstacle to providing a quality product or service presents an opportunity to improve. Every quality improvement, large or small, reduces waste, which lowers cost, time and resources, and improves both customer satisfaction and competitive standing.
The recession may be the biggest obstacle to business success in 80 years. It may also be this generation’s opportunity to look inside the enterprise, examine key processes, and implement improvement projects that make the delivery of goods and services as efficient and effective as possible.
Consider the strategy of improving a company by reducing headcount in response to declining revenue. What process improvement does a headcount reduction accomplish? Has the headcount reduction done anything to help position the organization in terms of the most competitive products, services and delivery?
A company does not improve the quality of a product by making the same product with fewer people. The quality of the product is improved by attacking all the causes of variation, which in the process lowers waste and cost. Headcount reductions may be necessary, but reductions should be recognized as a strategic dead end unless tightly linked to improved performance.
Refuse to participate in the recession by looking at strategic systems and improving them. These systems may be involved with enterprise resource planning, customer relationship management, information technology, transportation, accounting, order fulfillment, inventory, manufacturing or human resources. Benchmark where those systems are today in terms of performance. Assign teams to perform a business analysis of those systems. Task these teams with identifying obstacles that if removed will reduce waste, time and cost as well as improve performance.
For example, many organizations have an overhead cost for software applications consisting of maintenance by IT staffers and recurring licensing and support fees. One of Trissential’s clients inventoried its software applications, discovered a significant number that had no current relevance, and discontinued them. This client now saves millions of dollars annually.
Once the stem-to-stern process inventory and system analysis is completed, take the best and brightest people and assign them to implementing improvements. The client that is saving millions by eliminating obsolete software has reassigned IT staffers to focus on improving the applications that remain.
These improvements are not limited to IT. The sales force, and human resources, accounting and purchasing personnel can all be enabled to do their jobs faster, better and cheaper. Purchasing, for example, can further its ongoing work with suppliers to lower inventory and improve just-in-time delivery. Logistics can work with third-party transportation companies to improve load utilization and decrease shipping and receiving costs. Sales and order fulfillment can work to shorten delivery time. Every organization on the planet would benefit from deploying personnel to focus on removing the obstacles to greater performance.
A guiding principle is that all improvement initiatives must be aligned in some way with the organization’s mission and vision. Furthermore, ensure that improvement initiatives are under the supervision of experienced project managers – people trained to finish projects on time and within budget. If the organization does not have this homegrown talent, then hire interim people. Experienced project managers will pay for themselves by implementing successful programs and by raising the maturity of employees to run improvement programs on their own.
When employees engage in making the business better, morale reignites. People working on mission-critical improvements know they are contributing to the organization’s future as well as their own. They see their work is not only to preserve, but also to enhance.
The teams will almost surely have suggestions for additional improvements. For example, Trissential consultants asked management for an intranet. They wanted one place where all the tools they required to do their jobs were accessible anywhere, any time. The intranet was an insightful suggestion. Management pushed back on the team, however, and asked for cost/benefit figures upon which to make an informed decision. The outcome of this process is that Trissential is actively considering a major new productivity-enhancing tool and the company’s consultants are absorbing management skills. Everyone wins.
Trissential has a client with revenue down about 30 percent. This client has inventoried critical systems, jettisoned outmoded practices, reassigned personnel to be involved in more value-adding work and is engaged in improvement projects. The downturn in revenue has been roughly offset by internal performance improvements. The company is more nimble and responsive than at any time in its history.
When the upturn comes, the organization should be much better positioned for growth than its competitors. Not only does it have revamped systems in place to serve its constituencies, but the company is also more fully in control of the processes and systems that contribute to profitability.
