All businesses need a clear direction and a vision for the future. Without that, they tend to meander and fail to achieve the results they want.
Start your journey to future success. Watch the fifth chapter of It’s Not Hard, It’s Business.
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Generating metrics in your business will help you to better understand your financials and to develop trends that will allow you to ask better questions in order to make better decisions.
It’s critically important in business to understand the financials or the numbers that drive your business towards success. It is also necessary to dive deeper into your financial numbers to allow you to ask better questions in order to make better decisions. What you will learn in today’s podcast:
Listen to Gary explain the importance of developing metrics in your business.
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Strategy is about an intentional focus on meeting your customers’ needs and organizing your business to meet those needs. It is fundamental to business success.
Start your journey to future success. Watch the fourth chapter of It’s Not Hard, It’s Business.
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Business was humming along in one of the longest economic expansions in U.S. history until COVID-19 brought it to a screeching halt. Most businesses have been negatively impacted from the rapid shutdown of the country.
Although these past months have been discouraging, as you restart your business, it is critical to have a positive mindset. This mindset lays the foundation for success. When you program your mindset for the future you desire, it makes all the difference.
Start your journey to future success. Watch the third chapter of It’s Not Hard, It’s Business.
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Without cash flow in your business, you do not have a business. Listen as Gary explains six important steps to improve your cash flow.
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Recently the Hertz rental car agency filed for Chapter 11 bankruptcy protection. The company was unable to meet their $11 billion financial agreement to their secured lenders. In addition, the company listed more than 100,000 creditors that they owed money to.
Hertz was a $25 billion company that was highly leveraged. It was dependent on operating revenue to service its debt and maintain the business; with the recent dramatic drop-off in travel due to COVID-19, Hertz went rapidly into decline.
Corporate bankruptcies are not unusual. Typically, when a company gets into serious trouble with no visible path toward solvency, they either file for a Chapter 7 or Chapter 11 bankruptcy. Chapter 7 bankruptcy liquidates the company’s assets, while Chapter 11 allows the business to continue to operate under a reorganization plan.
But let’s look closely at the case with Hertz. A few days prior to filing for bankruptcy protection, the Hertz company paid out more than $16 million in bonuses to senior managers, including their new chief executive (according to the Wall Street Journal, May 27, 2020). And Hertz is not the only company to pay out bonuses just before filing for bankruptcy protection. J.C. Penny paid out $10 million to top executives just before filing. Chesapeake Energy paid out $25 million to senior executives. These companies refer to these bonuses as retention bonuses. I guess that allows them to justify the payments while their creditors are left on the sidelines hoping to get paid.
The law doesn’t allow companies to pay out such bonuses after they file for bankruptcy, and by doing so prior to filing, they are essentially evading the law. Companies who participate in these tactics state that they need to do so to keep top executives from jumping ship.
My contention is that the creditors who worked with these companies in good faith that they would get paid are getting the short end of the stick. Many of these companies are small to mid-market companies that cannot afford to take such a hit, getting pennies on the dollar while the executives reap big bonuses. If a business is unable to pay its creditors in a timely manner and is in such financial trouble that they need to file bankruptcy, then they shouldn’t be paying out large bonuses to their executives. This is not much different from the federal government bailing out the auto industry during the recession and the auto manufacturers turning around and paying their executives large bonuses for their less than stellar performance.
I am interested in what you think about this topic. Write me and let me know your thoughts: garyfurr@garyfurrconsulting.com
If you would like help navigating your way out of the ramifications of COVID-19 on your business, call us. We can help you come out on the other side of this—heathier and more profitable. We are experts in business growth. 503-312-3145
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There are some fundamental principles that apply to all businesses and help to generate success.
Business growth acceleration is like driving a stick shift on a car: You have to start your car in first gear before you can shift to the other gears, accelerate, and gain momentum.
Start your journey to future success. Watch the second chapter of It’s Not Hard, It’s Business.
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Business has taken a big hit lately due to Covid-19 and the government response. Many businesses won’t survive because they did not have good fundamental business practices in place when this pandemic started. Other businesses will struggle to get restarted. But sound business practices can still help you navigate the relaunch of your business after Covid-19.
In my book It’s Not Hard, It’s Business I outline some of the fundamental principles to business success. In chapter one I introduce you to some important thoughts to get you started.
Start your journey to future success. Watch the first chapter of It’s Not Hard, It’s Business.
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Early in March I had the opportunity to present to a group of twelve bankers at a local commercial bank here in Portland, Oregon. I discussed how applying value stream and process-mapping tools to your business can help to streamline processes and procedures and increase efficiency.
A value stream is a sequence of events or activities required to deliver goods and/or services to customers, both externally and internally. It includes all the activities that start when there is a request and a deliverable. These activities occur hundreds of times a day within businesses; unless they are examined, there are often disconnects, redundancies, and unnecessary complications and confusion as to how work gets accomplished on a day-to-day basis. This confusion and complication tends to cause chaos—the enemy of efficiency. Without examination, this tends to get worse rather than better.
To eliminate these impediments to efficient flow within a work system, it is necessary to understand the current state or conditions. This is done through value-stream and process-mapping tools. Mapping the current conditions allows everyone in the organization to see the truth about how work gets done and how they are performing. It also tends to create a sense of urgency for improvement and helps reduce resistance to change.
Value stream and process mapping provide the opportunity to redesign the workflow to increase efficiency and eliminate unnecessary actions and steps. Those extra actions and steps tend to get added in to systems and processes over time.
The bankers I presented to were able to see how value stream and process mapping could be applied within their bank to increase the flow of work through the various systems—without increasing costs. The result is an increase to bottom line revenue. They also recognized how value stream and process mapping could help their customers improve top-line revenue, reduce costs, and improve bottom line results—reducing the risk to the bank in the process.
If you would like a deeper understanding of how these tools can help increase your efficiency on the shop floor or within your office, give me a call. It costs you nothing to have that first conversation to discuss how we can help you increase top-line revenue and bottom-line profits. If not now, then when? 503-312-3145
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There are many ways to improve your relationship with your banker, and there are also some missteps to avoid if you want to impress your banker. The bankers I interviewed offered some insight into the issues that give them pause. Consider these pointers as things you should avoid if you want to cultivate a good relationship with your banker.
EXPERT TIP | Gary Furr, Organizational Development Consultant:
There were a number of things the bankers I surveyed mentioned that cause them grief when dealing with customers. Hubris and ego getting in the way of common sense was a big one; listening to the advice of the banker was another major issue. Dishonesty, the lack of understanding of risk, and taking too much out of the business were all issues that caused the banker to rethink their relationship with their customer.
Success requires advice and guidance. Not only do you risk your relationship with your banker if you choose not to listen, you risk the ongoing success of your business. Rarely is anything of great significance accomplished alone; it always takes the help of others.
Business owners often are so caught up in the day-to-day of their businesses that they cannot see what is really going on; input from another source, one with emotional involvement, is invaluable.
With over 40 years of C-level business experience and an MBA in organizational development, I am uniquely qualified to help you achieve success in your business. Give me a call to set up a free consultation: 503-312-3145.
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