Business Advisors Network Newsletter March 2009
Greetings!
 
We are living extraordinary times when every organization is rushing to adjust to a difficult economy.  Each decision feels critical to survival...and overwhelmingly urgent.  Right now thinking about long term prosperity seems a pointless luxury.
 
But is it really a choice between survival and long term success?  Many of the best solutions to short term pressure are exactly what will make a business successful over the long run.   It is easy  to forget that when everyone's attention is first on reducing costs.
 
Remember, however, that cutting can go only so far if the economic downturn lingers on.  You need other strategies to improve the bottom line and prepare the future, and you need the tools to evaluate them.   In this issue we explore how to get short term results and build the future at the same time.
In This Issue
Forecasting the Future
Springsteen and Wal-Mart
Meetings that Count
Business Growth Forecasting the Future
Mistakes are never a good thing, but when cash is tight they're not an option.  Managers are therefore highly stressed in this economy and the more so if they don't have the tools to evaluate the impact of their decisions 
 
How to price when competitors bid aggressively?  Where is the breakeven point?  Where is the cash breakeven?  Which variables have the most impact on the bottom line?  Many questions for which most businesses have no good answer.   As a manager you wish you could have a coherent picture of your business going forward.  How to get that?  Waiting for accounting numbers to tell you whether you were right or wrong after the fact hardly seems a good solution.  With tax season approaching, your accountant has little time to help you think through your decisions.
 
Time has come for you to develop your own tools to test scenarios and forecast your business.  This may sound daunting to most,  but it is not so difficult if you have a framework of what you are trying to accomplish.   The main challenge is to ensure that your forecast model is a good reflection of your business itself.  A few hours of planning will take care of that; a few hours more of programming in Excel and you will be getting some coherent information.  You will be able to test the impact various strategies will have on your cash flow and gain better information for your decisions.
 
Remember accounting is about your past, forecasting is about your future.

Another reason for creating a forecast is that whatever your long term plans are, whether a plan for expansion requiring financing or an exit strategy requiring a buyer, you will need a business plan anchored in a financial forecast.  The longer you will have been doing it, the greater your credibility, the greater the chances of success; any banker or business broker will tell you that.

We will work with you to get your forecasting model done.
Let's schedule a time to discuss how!

Springsteen and Wal-Mart
in the News
In case you missed it, the news is not that Wal-Mart sued Bruce Springsteen for  some stinging remarks in one of his songs; that would have been in line with what we expect from both the maverick singer and the litigious company.  No, the news is that Springsteen had to apologize for entering an exclusive deal with Wal-Mart.  Even though The Boss missed the gaff , his fans stepped in to enlighten him.

This particular deal with Wal-Mart, however lucrative it may be, is simply out of line with what millions of workers think Springsteen stands for.  Is Springsteen clueless about his audience?  Does he not care what they think?   It was neither according to him.  And there lies the real lesson in my view.  He and his business team just did not take the time to think it through because they had too many other things going on at the time and the deal sounded good.

We can be pretty sure Springsteen will be forgiven by his fans, particularly since he  admits it was  a mistake, but this is a good example of how one can put a business  at risk by trampling one's  own reputation in one mindless act.  Many a business would not recover so easily from  offending  the fundamental values and beliefs of its main customers.

Forget what your organization stands for, and you will jeopardize the trust of your clients and your employees.  In hard times as always, goodwill is a precious asset; don't squander your reputation in order to make the next sale.
Let us know your thoughts about this newsletter.
 
If you want to explore how we can be of assistance, please set up a time to chat with Scott Brumburgh or myself. 
You can go to our new scheduling page on our website. 

 
Sincerely,
 
 
Alain Bolea
Business Advisors Network
 
 
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 Meetings that Count

Making Commitments

If you are looking to improve your productivity quickly, take a look at the way you conduct management and team meetings. 

Most meetings  go on way too long: too much detailed information, too much updating on activities that are not relevant to everybody, too much time dealing with the latest crisis.  The results are almost always frustrating. 

To have more efficient and impactful meetings, the focus must shift from activities to performance.  What Robert Dunham of the Institute of Generative Leadership calls action meetings take about a third of the time, and can generate dramatic boosts in productivity.  Time and attention are spent on what results need to be achieved and what actions are needed to achieve these results.  An action meeting is about what needs to happen from now on, not about what was done until now.
 
Action meetings are structured differently and have very different roles for participants.  Three key differences:

- Attendees come solely to report on whether they can successfully fulfill their particular work commitments, what they are accountable for.  They do not report on the activities they have been engaged in.  Their positions must be supported by facts, not just opinions.

- Everyone's top concern is the overall objective; therefore participants are there first to examine, question and assess what each one reports and second to arrive at a common agreement of what impact, if any, problems have on the overall objective.  At that time, new actions are requested, negotiated, and agreed to as necessary.  Anything needing more than 5 minutes discussion is taken off line.  Commitments made for new action are documented as action items.

- If any new commitments will affect the ability of the group to achieve its larger objective the team leader leads a conversation to assure understanding and alignment behind  those actions.
 
With a little practice, meetings of 5-8 participants can be completed effectively within 30 minutes or less, with members finding themselves becoming better, more efficient and more motivated performers  because they  are committed to achievable, realistic goals.
 
Scott Brumburgh
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