Superhero strategic planning

When to be Bruce Banner and when to be the Hulk

It seems like the rate of change in business today is often making your strategic plan outdated by the time your team returns from the annual three-day retreat where you set it.

How can you adjust? Here are three possible ways to modify your strategic planning process to make it more durable in these changing times.

1. Shorten the time span between planning cycles

We’ve all worked on annual plans and created elaborate goals and targets just to watch those plans become irrelevant the first time a major change occurs.

Instead of setting your plan each year, try adjusting it each quarter. Review the original plan and ask two questions:

  • What do we know now that we didn’t know when we set the plan originally?
  • How does that information change how we would like to proceed?

Many times, your adjustments will not be a complete reversal of previous decisions, but significant enough that it gets you much further ahead than you would have been if you had waited until the end of the year to course correct.

2. Think of your staff as superheroes

One of the greatest challenges we’ve seen companies face when implementing a strategic plan is how to focus on large strategic projects when most people in the company are already doing more than a full-time job in their core role? Our answer was to use the analogy of superheroes.

Most of the time, our VPs of operations are like Bruce Banner. He has a well-defined role, executes it well and creates very little commotion. Other times, the business needs him to summon the Hulk and become disruptive and loud, focused on short-term execution on strategic projects that would otherwise never be attempted. Sometimes there’s a little mess in his wake, but he makes progress.

Shortly after, he reverts back to Bruce Banner and all is calm again. It is in his superhero persona that we know we can always create some time to make progress on specific strategic objectives.

3. Stop ideas that aren’t working

Everyone hates when a strategic project falls short, yet we all see that occur more often than we’d like. If you’re only planning once a year, the temptation to hang onto a project long after it was clear it was unsuccessful is high. Encourage your team to shut down projects when you know they are not successful.

Great strategic planning is hard. Successful strategic execution is even harder. Be quick, find your superheroes and stop what isn’t working. It might just take a little pressure out of one of the toughest aspects of running your business.

Sam Falletta has developed successful customer acquisition and retention strategies for some of the largest brands in the world, including Microsoft, Ford, Honda and the American Red Cross.  

How Timothy Yager led a strategy to get Revol Wireless winning again in the prepaid provider space

Timothy Yager, President and CEO, Revol Wireless

Timothy Yager, President and CEO, Revol Wireless

When Timothy Yager started at Revol Wireless in the fall of 2011, the company had been losing customers every month for an extended period of time. Late 2009 through the first half of 2011 were tough years for the organization — rumors of bankruptcy and new ownership were being floated around and the wireless communications provider was in desperate need of change.

“The company was having some financial issues,” says Yager, president and CEO. “So my arrival was a chance to hit the reset button for Revol, not only for our customers, but for our employees and say, ‘It’s a new day. The ownership change has happened and they’ve brought in new management and we’re going to focus the company on winning.’”

When Revol was first launched, it was a more than 300-employee, $100 million company. It had a reputation as being on the cutting edge of the prepaid wireless industry.

“Revol had a lot of success early on because it offered unlimited voice and those kinds of things on a prepaid platform,” Yager says. “They were the only provider in the footprint offering that type of service.”

In 2008 and 2009, other prepaid providers started moving in and the competitive forces grew. In a hypercompetitive industry such as wireless, Revol wasn’t as competitive as it should have been and it quickly began to fall behind.

“They needed some help getting the business turned around,” Yager says.

Here’s how Yager reinvigorated Revol Wireless with a strategy to get the prepaid provider winning again.

Evaluate the business

Prior to Yager’s arrival, Revol’s strategy and day-to-day operations were hindered by its capital structure, which brought about a slow-to-react atmosphere. Once the company was free from that structure, there were a lot of people who were looking for strong guidance, enthusiastic leadership and setting of general objectives to get the company back on track.

When Yager was first introduced to the team, it was a transformation in enthusiasm, direction and general motivation. Everybody suddenly had a place to go and a job to do. Yager brought a lot of that enthusiasm and direction to the table, and that’s exactly what people needed.

“Those first few days and weeks were really about analyzing the team that was here and where the strengths and weaknesses were,” Yager says. “The other thing was trying to change the focus and mindset of the company.”

Yager wanted to instill a strategy that said the company was in it to win it. It didn’t happen overnight, but employees started to recognize that there was a new philosophy.

“Revol had gotten mired in the minutia and a lot of times in companies that are struggling, people retreat from making decisions,” he says. “One of the biggest things I did was come in and start making decisions.”

Simple things like “yes and no” decisions went a long way toward starting to improve morale and helped employees realize there was a new sheriff in town. Yager represented new ownership, new direction and new thought.

“I think people started to feel empowered to be successful,” he says. “In a turnaround situation, one of the biggest things you’ve got to do is make decisions. So often companies get polarized with the fear of making the wrong decision that they make no decision, and I firmly believe that sometimes a wrong decision is better than no decision.

“If people are just constantly treading water and they don’t know whether they’re going up, down, right or left, it zaps the life out of a company.”

People respect leaders who come into a company and lay out a plan of attack, are upfront about the plan and who are forceful.

“I can remember that first meeting and saying, ‘I’m not going to do everything right and I’m not going to pretend to do everything right, but we’re going to make decisions, have short meetings, focus on what needs to get done and we’re going to get it done,’” Yager says. “In our wireless industry, where it is so competitive, we don’t have the luxury of taking six months to analyze everything.

“Sometimes you’ve got to look at the facts, make a decision and move on.”

Be decisive

Revol started 2012 losing customers every month, just as it had been the year prior, but with Yager on board the wheels were in motion for the company to move forward.

“When I came in, one of the first things I did was put some extra incentives out there to our dealers to sell some phones,” Yager says. “I was trying to buy some enthusiasm from our partners to get reinvigorated about selling the Revol brand.”

Another key decision Yager made was to get out in the field and visit a lot of the company’s owned doors and indirect doors to help get the message across that it’s a new Revol and a new day.

“Those were things that didn’t cost a lot of money, but helped move the business forward because it put a face with a name they were starting to see on emails,” he says. “It also gave them a chance to meet me and realize that I’m a relatively aggressive guy.

“When you’ve got five to eight competitors in a marketplace, you’ve got to be aggressive, and by people meeting me and realizing that I wasn’t just saying we were playing to win, they could tell by meeting with me that we want to win the game.”

One of the most crucial issues that Revol and Yager identified that needed to be changed was their network.

“Revol was still operating on an older technology called 1X and had slower data speeds,” he says. “In today’s world of smartphones, Androids and everything else, data is key.”

Shortly after Yager joined the company, the board approved a plan to upgrade the network to a 3G network.

“Our key initiative in 2012 was the company deploying 3G,” he says. “We launched that service in September last year and noticed an immediate uptick in our sales to customers as well as a stickiness of our existing customers.”

Move forward

Yager’s key to helping Revol right the ship was his ability to deliver on his decisions. He was careful not to promise too much.

“I came in and made a few simple promises — two or three key things and then I spent a year beating the drum on those things to do it,” Yager says. “Too often people come in and make a laundry list of 26 items they’re going to promise. No one can get that done in a reasonable timeframe and you lose credibility. Pick and choose what needs to get done and then deliver on it.”

In 2012 Revol was all about getting 3G launched. In 2013 the company is all about selling phones and keeping customers happy.

“When we launched our 3G network we saw an immediate turnaround to our gross sales and our net sales,” he says. “We have more than doubled our sales in January 2013 from January 2012. We’ve really seen that the successes are bearing out.”

Everyone at Revol had to put in the hard work to get the pieces in place, but now that that’s done, the company has seen noticeable improvement. To continue to see those sales and revenue numbers increase, the company has to keep a focus on growing its customers.

“I’m happy to report they are growing,” Yager says. “I’m excited about what we can achieve this year. Last year we had a hard time competing from a sales perspective because we hadn’t upgraded the network. This year we’ve got those key ground-level type things in place, so I’m looking forward to being able to execute and win.

“We have almost a singular focus in 2013, which is to grow the business. There’s really only one way to grow the business, and that’s to be successful in adding new subscribers and keeping existing subscribers.”

How to reach: Revol Wireless, (800) 738-6547 or www.revol.com

How Steve Bilt positioned Smile Brands to give patients the best dental care they can get

Steve Bilt, co-founder, president and CEO, Smile Brands Group Inc.

Steve Bilt, co-founder, president and CEO, Smile Brands Group Inc.

There are lots of ways to run a successful dental practice, which became one of the biggest challenges facing Steve Bilt and his leadership team as they contemplated the future of Smile Brands Group Inc.

“Defining a simple agenda that supports what your customer wants and needs, understanding who that customer is and then delivering that value has been a big challenge,” says Bilt, the $600 million company’s co-founder, president and CEO.

“I could look inside the 400 different units we support and say, ‘OK, you can find every model under the sun in some way, shape or form working. But if we’re going to continue to expand and refine our services and systems to better serve and support those units, there has to be more consistency in what we do.’”

It’s a question that any business with units spread across the country or around the world must answer for itself. Bilt says it’s only getting harder to come up with the right answer because the market and customer needs are constantly evolving.

“So what may have been a focused-enough strategy five years ago is a path to doom five years from now,” Bilt says.

But as the members of Bilt’s team began to wrap their minds around what needed to be done for the company’s 3,800 employees, more than 1,300 affiliated doctors and hygienists, and their patients, they kept coming back to one philosophical belief.

“There’s no one absolutely right answer, but the right answer is one answer,” Bilt says. “If you think that through, it’s not saying my way is better than your way. You don’t have to make that call. You just have to say, ‘Look. We have to decide on one way, which might be a hybrid of models with each of us bringing something to the table.

“‘But what we have to do as a team is decide on one way and pursue that one way and make sure our systems support that one way and our talk and our attitude and everything we do down to our DNA supports that one way of us adding value into the marketplace.’”

Provide the best service

The operational evolution at Smile Brands was a four-year process that included a number of different opinions, ideas and suggestions. But one of the core ideals that the group settled on was finding the best way to harness all the dental skill that existed in the organization in order for customers to receive the best care.

“We used to say let’s just create a cocoon of support around this doctor so they can just be a doctor, period,” Bilt says. “Don’t have any other level of resource for them other than the fact that they get all the freedom to be a doctor.”

The problem with that type of practice in today’s world is it wastes so much potential to share expertise and solve problems.

“Any peer group is going to have some people who excel at one thing and have a lot of experience,” Bilt says. “But if you’re out in the dental office by yourself staring at a problem you haven’t seen before, you say, ‘Oh boy, I’ll figure this out by trial and error,’ which is what you would do 15 years ago. Or you’d pick up the phone and say, ‘Here’s what I’m looking at. What do you think?’”

Bilt felt Smile Brands had the capability and thus needed to make it possible for dentists who encountered these unique problems to be able to connect with a colleague in real time and reach a solution in minutes.

“There’s this opportunity in this digital age to create an incredible peer group in a lonely profession,” Bilt says.

The ability to use technology to solve problems or even for training purposes was just something that was too good to pass up. And the best part, Bilt says, is that the integration of the right technology at Smile Brands would also reduce expenses.

“The customer has somebody who has access to stuff that is so much more powerful,” Bilt says. “That gives the doctor the ability to charge less, which is great for the consumer as well. The combination of doctors being able to be just dentists so that they can see more patients means they have an ability to charge less because they have higher volume, and all the technology helps them lever their cost structure down.”

Stay focused

You get a great idea for your business and everyone is energized to make it happen. It’s at this point where trouble can be lurking.

“We all love that rush of the initial front-end strategy planning and brainstorming session that we all do,” Bilt says. “What we don’t tend to love is the concept of change management and how do you get from here to there?”

It takes work and effort to make a change happen and some of that work can be painful. This can very easily lead to the drifting of attention away from one project that has suddenly become a lot of work to another project that seems so much more fun to talk about.

“You allow another shiny strategic initiative to start while the change management and implementation of the prior one is incomplete,” Bilt says. “You don’t go back and measure whether the first shiny initiative did what it was supposed to do and then you get distracted with the next one and forget about ever measuring the prior one. That cycle can go on for decades. That gets people into a lot of trouble.”

One key to avoiding stress and keeping your organization focused is to let people who have expertise in certain areas apply that skill to get the work done and isolate the flaws before full implementation.

Listen to their needs, their suggestions and their feedback on the best way to implement your new system.

“The docs are our thoroughbreds, and we’re the plow horses,” Bilt says. “If we’re doing it right, the plow horses plow and the thoroughbreds run. That’s really the point of the model. Let them be the thoroughbreds they are and let us plow the fields or build the track. That’s what we’re supposed to do.”

Define what you want to accomplish and get it into a plan that everyone understands and agrees to. Make sure they are aware that while there will be highs and lows along the way, the end goal will make it all worthwhile.

“My role is to help provide some vision for what we’re trying to do,” Bilt says. “What do we hope to accomplish? I try to provide support for people executing it so that they can do it properly to make sure the phases are properly led, staffed and resourced to have some level of establishing accountability for the results of each phase.”

Be a good communicator

Another major step in the transformation of Smile Brands was figuring out how to roll out the changes at each of the 400 locations. Who goes first? Who needs the upgrade most? Which locations will be the hardest to change?

Bilt says there’s no perfect way to roll out a big change. But he says communication is always the key to making it work.

“Most people are less attached to the outcome that they want in terms of where they are in the order of priority than they are in understanding why you made the decision you made,” Bilt says. “I love to know why you’re doing what you’re doing. That shows respect for me. Then I want to know how I’m impacted. Are you getting to me and if you are, when? What should I expect?”

Bilt poses a scenario in which somebody might feel strongly that his or her location should be the first to be upgraded because it is the company’s most profitable unit.

“You could say, ‘You know what, I agree with you,’” Bilt says. “‘That’s why you’re going last. You are the best market. You want to go first because you’re the best. I’m saying you go last because I’m not going to mess with you. I can’t afford it and it’s too risky.

“‘So I’m going to the worst market because if we screw it up, it costs us the least.’ We could have the exact same rationale and the exact opposite conclusion.”

Explain to people your thought process behind the implementation of change and they’ll be much more likely to be onboard with you.

“You have to do it multiple ways,” Bilt says. “I always say the rule of three when it comes to communication. If you have a new concept or an important concept, you better give it three passes to get it communicated because there is always a gap between what we think we’re saying and what people are hearing.

“It just takes multiple passes to get it right and allow them to process it and understand it.”

As Bilt looks back on the process, he says there are always things that could have been done better.

“Everything is a journey,” Bilt says. “So how did we go along that journey and how did we carry ourselves and how did we perform and how did we pick ourselves up and dust ourselves off when it got tougher than it was supposed to get? Those are the stories that make a career.”

How to reach: Smile Brands Group Inc., (714) 668-1300 or www.smilebrands.com

The Bilt File

Steve Bilt

co-founder, president and CEO

Smile Brands Group Inc.

Born: New York City

What was your very first job?

Delivering The Denver Post in the snow. Back then, it was a crazy job for a kid. You took capital risk. You had to buy your newspapers from the newspaper. You had to deliver them, collect your own money, then pay back your cost of the newspapers and you kept your margin. So if a grumpy old neighbor didn’t want to pay for the paper, it was the 13-year-old kid losing out and not the newspaper. So I learned a lot of lessons on that job.

Who has been your biggest influence?

I have to give a lot of early credit to my dad. He helped me when I was going to fall down too far in the newspaper job by helping me fold the Sunday paper or pull the cart through the snow when it was too deep to physically move it. He did help with that job to make sure I had some success or at least got that job done.

The other thing is he was really good about not knowing all the answers to the stuff he was dealing with in business. He’d actually bring up a lot of the questions he was facing at the dinner table and let me opine.

I got this notion that a business is a living, breathing thing that had to be managed and cared for and fed. It was very formative from that perspective to be able to hear and listen and participate in some of those conversations about what makes a business go and how does it go and how do you do it and how do you care for it?

Takeaways

Don’t try to do it all.

Communicate at every turn.

Finish the job.

Rick Bennet and CCA Global Partners have strength in numbers

Rick Bennet, co-CEO, CCA Global Partners Inc.

Rick Bennet, co-CEO, CCA Global Partners Inc.

With more than 2,700 locations and 800 independent retailers, Rick Bennet oversees a cooperative that has significant strength in numbers. In fact, CCA Global Partners Inc. has more purchasing power in its floor covering business than Home Depot.

Founded by two independent retailers in the floor covering business in 1984, Howard Brodsky and Alan Greenberg, CCA Global Partners’ primary business is Carpet One Flooring & Home. CCA is a cooperative of 14 independent brands in the home improvement industry with more than $10 billion in aggregate gross sales and more than 100 consecutive quarters of profitability. Its retail floor covering stores and its non-floor covering businesses each see annual revenue of about $5 billion.

“These people have come together with our management and our infrastructure and are able to bring scale to their business and compete with big box and other large retailers by banding all of their purchases and resources together,” says Bennet, co-CEO at CCA.

Despite that ability to band together, the downturn in the housing market had an impact on CCA and its independent retailers.

“We entered the downturn early and I would suggest that we’re coming back out of it later,” says Bennet, who was formerly president and CEO of Kauffman’s and vice chairman at May Department Stores. “These guys are small independents and so they have been really rocked. The biggest challenge we continue to face is just keeping people up and moving ahead.”

Bennet has had the task of helping his retailers cope with the downturn, push through it and now move forward.

“We are not exclusively floor covering, but it is at the core of our business,” Bennet says. “Many of the things that we have opened up are things like cabinets or lighting, but they are all home improvement, so we are closely tied to the housing business and the economy has been tough out there and housing has been the worst of it.”

Here’s how Bennet and CCA Global Partners Inc. have helped independent retailers through a tough time and as a result, repositioned them for the future.

Face the facts

In a tough economy it is very hard to have to start rationalizing business and look at cutting costs. When times get tough it comes down to basic math, and you can’t spend what you don’t have.

“You do what you’ve got to do,” Bennet says. “The tougher challenge has really been the emotional one. When you go through five or six years of downturn and you’re waiting for things to bounce back, the drag on people’s patience and emotions is really tough and much more problematic than just the cost cutting that had to happen a couple years ago.”

During those years Bennet often found himself on the phone with owners of their business facing such challenges as having to fire a friend or relative.

“I get calls from guys saying, ‘I need your advice. We’re under a cash flow press and I’ve shed all the workers that I can and I’m now down to family and I’m facing firing my brother-in-law. What do I do?’” he says.

At that point, tough business decisions have to be made.

“You have to save the business first, because if the business is saved and things get better then you can re-employ,” he says. “If the business dies, then you’ve got no chance.”

One of the biggest problems CCA deals with is assuring its independent retailers that it’s OK to ask for help.

“If you’re in trouble as a small business, the best thing you can do is ask for help earlier, because then there’s time to do some of the tough decisions and save the business,” he says. “If you wait until your balance sheet is totally upside down and you’re facing bankruptcy there’s very little that can be done.”

The other challenge CCA faced was market attrition. About a third of the independent retailers in CCA’s space have shut down over the last eight years.

“Our store count is down only fractionally,” Bennet says. “Now that the pendulum is starting to swing, people actually get under more cash flow pressure because they’ve got to invest in buying product as the business starts to turn up.”

Today, business is starting to turn around for CCA and its retailers. Some of them, however, are hesitant to invest in the business, to rehire people and spend money on advertising and marketing.

“It’s tough to cross that line because you’re worried about the next customer that’s going to come in the door or when the next downturn is going to be,” he says, “and you’re nervous about launching a new ad or hiring a new person.”

But that’s where CCA’s decades of experience come in. CCA tries to provide incentives, coaching and a sounding board for people who need to make those tough decisions. The message — the time is now to switch to offense.

“Their brain tells them, yes I should, but their heart tells them, I’ve just been beaten up so badly I’m not sure I can make that investment,” he says. “The market has definitely shrunk, but it’s time to start investing in the business and get market share and it’s hard for an independent guy to step across that line.”

Reinvest and branch out

The first step in getting CCA’s independent retailers back on track following the downturn was to have them reinvest in their businesses to take advantage of new opportunities in the market.

“You first start with people whose basic business is in pretty good shape,” Bennet says. “If somebody still hasn’t made the tough decisions, then you’ve got to make the right business adjustments to your expense model before you go making investments.

“If you’re dealing with a small business that has operated with some discipline, made those cuts and their basic business is in good shape, then you have to start investing in people and advertising to move forward. If the business is growing, then it might be time to push them into the next step, which is to open an adjacent business. If they’re even stronger, then you may suggest that they open a branch.”

CCA itself made similar moves to advance its brands over the years. CCA was originally Carpet Co-op of America. The first strategic change for the company was to move from a carpet co-operative to a floor covering business. What was originally the Carpet One business became Carpet One Floor & Home.

Today, CCA is making the next strategic shift, which is to spread out beyond floor covering into all aspects of the home improvement field, as opposed to filling only one part of it.

“We’ve moved into the kitchen and bath business with cabinets,” Bennet says. “We have a lighting business, and we continue to contemplate other additions to that. We’ll try to engage in anything that involves home improvement so we provide synergies and leads to our dealers, as well as synergies with the customer.”

When looking to break into new markets you have to ask yourself, what’s the value that you’re providing? As you answer that question you determine where you can add on.

“For us it’s a service equation,” Bennet says. “We’re in the customer’s home and we’re providing the service. What other products can you add to that? It’s the question of what do you do well and how do you do more of it rather than trying to add stuff that’s irrelevant to your business.”

Even CCA had to learn the hard way that going too far outside your core area is a difficult undertaking. A number of years ago it tried its hand at tuxedo rentals.

“It was out of our space,” he says. “You get out of your sweet spot and you’re operating a little bit more in the blind, and you bring less expertise and value. It taught us to stay close to home.”

It comes back to that core question of, where do you add value and what are you good at. You have to make sure you get honest answers to that question.

“When you go into a new business, make sure you’re leveraging things that might work for you,” he says. “Whenever it came to standing something up that was brand new because you thought it might fit, you have to second guess it. You can dream up things that you might add to any of those business structures, but if it’s outside of the core of what you do, you have to be careful.”

CCA keeps asking the question, ‘What do we do well and how do we add to that?’

“If it’s small business, it has to do with the home and we can provide scale, then it’s an open place for us to work and we’re always looking for those places,” Bennet says.

“The world of housing has gone through a lot of attrition, so as that bounces back we’re in a terrific position to pick up a lot of share, and being able to bolt on these different extensions of what we do is a lot of fun to work on. We feel better today than we have in five or six years.”

How to reach: CCA Global Partners Inc., (800) 466-6984 or www.ccaglobalpartners.com

 

Takeaways

Don’t be afraid to ask for help in a tough situation.

Make the necessary efforts to save the business.

When good times return, be ready to invest for the future.

 

The Bennet File

Rick Bennet

Co-CEO

CCA Global Partners Inc.

Born: St. Louis

Education: He has a degree in business from University of Central Missouri and a MBA from Washington University.

What was your first job and what did you take away from it?

I was a short-order cook for a little drive-in restaurant called Carl’s in St. Louis. I started working for Carl himself at 90 cents an hour. It was all about good relations with the customers.

What is the best business advice that you’ve ever received?

I had a mentor once say to me, ‘If it is to be, it is up to me.’ That stuck in my head very strongly, and I really believe in the power of self-determination. I try to impress that in our company. If you’re going to spend time trying to figure out how somebody else screwed it up, you’re not going to get anything done.

The second one is Peter Drucker’s advice, which was managing your strengths. So many people spend all of their time trying to correct their weaknesses. You have to know what you’re good at and what you love to do and leverage that. I try to live by that.

If you could speak with someone from the past or present, with whom would you want to speak with?

Abraham Lincoln.

If you were going to redo some flooring in your house, what product would you use?

This new product line of New Zealand wool is exceptional. It’s beautiful. I got out ahead of the launch and put some of it into my home, which we just remodeled. The brand name of it is Just Shorn, as in shearing a sheep. I love the distinctiveness of wool and the softness and warmth under your foot. It’s an exciting addition to what we do, and it’s a terrific product.

Bill Onion: Plan of attack

Bill Onion, managing director, Briteskies

Bill Onion, managing director, Briteskies

As the business partner who remained in the office, leading the company and being charged with keeping the train on the tracks, I developed my own critical advice to plan for and survive an unexpected crisis like this one.

I had no idea that a phone call saying, “Mike’s in the hospital with a fever,” would turn into a four-month absence, leaving the company we had run together for 12 years solely in my charge.

Here are four valuable lessons I learned:

Over-communicate

Once I knew that Mike was going to be out for a significant amount of time, possibly weeks, months or years, I needed to take action. We pride ourselves on a culture of commitment and transparency, so it was only natural that I began to communicate to the team on a regular basis, sharing whatever latest information I knew about his condition and updates on what was happening across the organization.

In a vacuum of information, people will fill it, and the last thing you need is for employees to start thinking that the business is falling apart because they’re not hearing anything from the top.

Cross-train

This may seem like very basic business advice, but it’s amazing how often it’s overlooked in today’s fast-paced environment. In general, as owners, we have a lot of key client and project knowledge in our heads. Assuming that we’ll always be around, this information is rarely shared with others, much less documented. This is a bad idea.

This goes for other employees as well. There shouldn’t be just one single person capable of doing any mission-critical tasks. At the same time, key customers should have multiple points of contact. Key company accounts like banking and insurance shouldn’t be in one person’s name, as it creates a problem when trying to gain access during a crisis.

Get comfortable with uncertainty

About three months into Mike’s absence, I faced a choice about a critical hire for the organization. If Mike were going to return, I would not need to make the hire. If he were going to be out for even a few more months, I would need to make the hire. I had no idea what would come next.

I looked at my internal resources and determined whether we could keep picking up the slack for just a little longer. We did, and he returned soon enough. The bottom line is that you have to be OK with trusting your gut and rolling the dice.

Prepare for re-entry

During Mike’s absence, by necessity, life had moved on — people had new roles, and there were new ways of doing things. One thing I wish we had done was to have a minimum two-week grace period after he returned dedicated to his transition back.

We could have had a summit with the entire organization about what had happened, who picked up which roles and what had changed. Then we could have scheduled individual sessions with each person who now owned a piece of Mike’s role and allowed them to take him through that on a specific level.

Every business is only one phone call away from a crisis. The company should be set up and prepared to perform under uncertain circumstances. At the same time, when a crisis does strike, remember to trust your team, because they are more talented than you may think. They will rise to the challenge and will be willing to help out.

 

William Onion is the managing director at Briteskies, an eCommerce design, development and integration firm, and can be reached at (216) 535-4099 or www.briteskies.com.

Marc Hill used his brand launching knowledge to take the best-known playing cards into new markets

Marc Hill, Jarden Corp.

Marc Hill, Jarden Corp.

Marc Hill has held numerous sales and marketing roles responsible for launching brands and products in new markets around the world for power tool companies such as Black & Decker and DeWalt. Two years ago, he left the power tool industry to take a role working at Jarden Corp. and the U.S. Playing Card Co., more specifically.

So why did he leave a career in power tools to come to the world of playing cards? It was an opportunity to be the boss. Hill became president and CEO of U.S. Playing Card Co. in April 2011.

Just as Hill had worked with well-known brands like Black & Decker and DeWalt, he would now be working to boost legendary brands such as Bicycle, Bee and Hoyle playing cards.

“It’s about developing great products and working with great people,” Hill says. “That is what drives it. Having a strong brand is also supportive. Those are the drivers that make me go in a new direction.”

Hill had the opportunity to take the knowledge gained over his career and lead a company.

“I have a chance to put my thumbprint onto an organization to lead strategy, lead people, and lead the culture,” Hill says. “I wanted to take that opportunity.”

U.S. Playing Card Co. has been around since 1867 and with 500 employees, it produces some of the best-known playing cards in the world. Hill was now responsible for growing the company’s many brands, as well as furthering its strategic goals.

Evaluate the business

As a first-time president and CEO and as a leader entering a new business and industry, Hill had to make sure he took the time to understand what U.S. Playing Card Co. was all about.

“First, you want to get to know the people,” Hill says. “At the end of the day, you can have great strategies, but you have to have great people to execute. So I spent time meeting the people and meeting the team. Then I spent time understanding the company’s current strategy and understanding where we have been and where we want to go.”

That is how Hill spent his first couple of weeks in the business. He wanted to understand who was doing what in the company, what talent U.S. Playing Card had, and what made this company great.

“This company has a long, long history of having great products and great people, so I wanted to make sure I understood what their DNA was,” he says.

The next step for Hill was really evaluating what strategies were in place and how they could be improved.

“I said, ‘Let’s formulate a strategy that puts us into meeting the objectives of our corporation,’” Hill says. “How do we continue to have a sustainable business? Where do we need to grow? Where do we need to peel back a bit?”

Hill spent his first 30 days in his new role learning where the company was, what it had and what it did in terms of products, people and processes. His next 60 days were spent developing a strategy with his team to say where the company could go over the next two to five years.

“We have not deviated from that strategy, and we will continue to push that forward,” he says. “We will tweak it here and there if we have some challenges on one side or another, but the overarching strategy that we set forth we have not deviated off.”

Implement your strategy

With such well-known products, Hill wanted to see where he could expand the reach of U.S. Playing Card’s brands as part of his new strategy.

“With the history that we have in North America and the customer base we have today, we felt that the U.S. just had to be tweaked, but we really had to invest in our international business — South America and Asia,” Hill says.

The current Macau market for gaming in Asia is growing by leaps and bounds.

“It almost dwarfs what Vegas is doing as far as the amount of revenue that’s being poured into Macau and also Singapore and the Philippines,” he says.

With his focus set on new markets for the company’s products, Hill says that keeping an open mind about strategy was helpful as an incoming CEO.

“You have to come in with open eyes and look at what you have,” he says. “Don’t come in with preconceived notions because sometimes you might just need to tweak something versus making wholesale changes.”

As the leader of the organization, people are looking to you to lead them. If you’re not clear in what you’re trying to do, they’ll have a hard time following you.

“You have to be very clear on what you’re trying to do and make sure that you rely upon the great talent that you have,” Hill says. “Don’t live on an island and stay in your office and come out and say, ‘Here’s what we’re going to do,’ because you’re not as smart as eight people in a room that challenge and trust each other.”

U.S. Playing Card Co.’s strategy to penetrate new markets revolved around having resources in those geographies.

“Our strategy was about resources, so we opened an office in Macau,” Hill says. “We hired a sales organization in Macau to go and develop our sales opportunities, not just in Macau, but also throughout the Asian region, which includes Singapore, Korea, the Philippines and other markets.

“You want to skate where the puck is going to be and that’s what we have done,” he says.

Hill made investments in order to further U.S. Playing Card Co. as the No. 1 name in casino playing cards in the U.S., Latin America, Europe and Africa. The new strategy continues to drive that momentum into the Asian market.

“You have to trust that everybody is trying to do the right thing and build a strategy that is not rigid where you can’t make tweaks to it, but you have to have a good strategy that people buy in to,” he says. “That’s what will make the company better.”

A key to making the company’s new markets successful is being on the ground in those areas so that you are face-to-face with customers.

“You have to see your customers,” he says. “You have to see what their issues are that you can resolve for them and you can only do that if you are on the ground. It’s hard for someone in the U.S. to fly to Singapore, fly to the Philippines, fly to Korea or Cambodia every six to 12 weeks and have a relationship. That’s why we have put those resources into those markets.”

Growth strategies give you a clear vision for what you’re trying to do. They help focus your energy, resources and spending in the right buckets.

“If you don’t have a strong strategy you’ll try a lot of different things,” Hill says. “For us, we know where we need to go and where we need to put our resources and we’re doing that. That’s why a clear, defined strategy is so important. Everybody understands where we’re trying to go.”

In April 2013, Hill left U.S. Playing Card Co. to head up another business within the Jarden Corp. portfolio. He now has another opportunity to put his thumbprint on an organization.

How to reach: U.S. Playing Card Co., (800) 543-2273 or www.usplayingcard.com

Is it time for you to optimize? Check out these strategies to help you maximize your firm’s patents

Michelle Rakiec, managing director, AdValum Consulting

Michelle Rakiec, managing director, AdValum Consulting

 

Stevan Porter, managing director, AdValum Consulting

Stevan Porter, managing director, AdValum Consulting

How can your company improve its business results? One way is by optimizing your firm’s use of patents. The right strategies for leveraging patent properties can provide long-term advantages and a leg up on the competition.

The following strategies are useful starting points for enhancing business outcomes through patents:

Consider patents’ financial qualities

The same analytical constructs that apply to financial asset management can be applied to patent management. When managing financial assets, it is prudent to consider things like expected future cash flows, return on investment and relative risk profile. Understanding this information helps businesses with limited resources to select the most profitable investments and manage risk.

Likewise, expected cash flows from internal commercialization of a patent or out-licensing royalties can be forecast, returns on patent research and development investments measured, and relative risk profiles of patents assessed. By considering these financial characteristics associated with their patents, companies can make better decisions and optimize value.

Understanding patents’ financial qualities, for instance, can shed light on which monetization route — commercialization, licensing or sale — is most desirable for a given patent or group of patents. It can also help a company strategically leverage its operations to support patent value and vice versa.

Recognize the risk profile of patents

All assets, including patents, carry risk. Importantly, the type and level of risks in patents vary according to a patents’ economic life, the technology it discloses and the industries touched by the technology. For example, certain patents in fast-moving industries may carry the risk of rapid technological obsolescence, while other patents’ technologies may face uncertain or very slow market adoption.

Holding several patents that relate to a steadily selling product may suggest financial stability but also may imply a high level of risk concentration since several patents’ values may be impacted by a single product’s market performance.

Evaluating risks associated with patents can lay the foundation for comparative risk analysis and superior strategy planning. By understanding the relative risk levels of patents in a given portfolio and how those risks align or differ from broader business risks, companies can efficiently diversify.

Effective diversification of a patent portfolio can be achieved by holding the right mix of patents and by utilizing the proper combination of monetization techniques for those patents. Notably, effective patent risk management can be done without straying from a firm’s core competencies since even patents with similar technological profiles may have substantially dissimilar risk profiles.

Execute strategic patent transactions with care

Due diligence in executing patent deals should be analytics-based, and care should be given to the broader business implications of any transaction. In this regard, appropriate qualitative and quantitative analysis should be deployed. Proper evaluation can help parties maximize value obtained through a transaction and ensure any deal comports with prevailing strategic initiatives, financial goals and desired competitive positioning.

Factors that should be considered in executing any patent deal include the following:

■  Values paid or received by others for comparable technologies.

■  Alternatives to reaching an agreement, including design-around cost/benefit analysis and assessment of the risk-adjusted outcomes of not executing a transaction.

■  Immediate and subsequent financial benefits, such as cash flow, “option” value and defensive patent aggregation security.

■  Possibilities for using the patent deal to foster broader strategic relationships or forestall undesirable competitor activity.

■  Value and risk implications of the contemplated deal on other patents in a portfolio.

When managed carefully and used cleverly, patents can be especially powerful tools for a business to enhance its bottom line. The right patent strategy can offer an excellent path to improved business results.

Michelle Rakiec and Stevan Porter are managing directors at AdValum Consulting, a premier provider of expert economic consulting services located in Chicago. They specialize in strategy, valuation and damages analysis in intellectual property matters. Rakiec and Porter can be contacted at (312) 623-3351 or [email protected] and [email protected], respectively.

Deborah Sweeney – Three things to keep in mind before you try to raise business capital

Deborah Sweeney, CEO, MyCorporation Business Services Inc.

Deborah Sweeney, CEO, MyCorporation Business Services Inc.

Your ability to attract investments can make or break your business. Extra capital allows companies to expand their operations and find new customers. Most business owners do eventually reach the point where they need some sort of outside investment — whether it’s from family, a bank or an actual investor — to help them make major purchases and grow.

One of the most common ways for a business to get extra money is by incorporating and then selling stocks. Unlike a loan, issuing stock allows you to raise money without taking on additional debt.

But there are a few things you need to know before you look at raising capital for your business:

You will have to give up some control of your business.

Incorporating a business turns it into its own, separate legal entity. Your ownership of that entity is dependent on how much corporate stock you own. As you sell off that stock, you dilute the ownership of the company. Furthermore, when you incorporate, you have a fiduciary duty to act in the best interest of the stockholders and the corporation.

The interests and desires of the stockholders likely coincide with your own — both parties want to see the business succeed and make money. Just remember that when you do begin to sell stock, you are empowering the holders of that stock to influence major business decisions. Before you begin selling stock, make sure you’re ready to take the opinions of your investors into serious consideration when you are running the company.

You will need actual data to back up your pitches to investors.

If you are at the stage where you are ready to start looking for investors to help you expand, chances are that your business has done pretty well. It’s not enough to point and say, ‘Look, we survived and made money!’ You need hard numbers and data — how much revenue is your business generating? What is your current revenue-to-debt ratio? How will this investment impact your future earnings?

Buying stock in a company is already a gamble because if the company doesn’t do well, the investment could be lost. So be ready to show potential investors that your company is in a position where it can create a good return on their investment.

You will have to pitch yourself, in addition to your company.

Everyone is “passionate” and “committed” about what they do when they run a business — investors have heard those buzzwords plenty of times already. Investors want to know who you are, what your credentials are, and why they should trust you with their money. Sell them on your experience, and the experience of anyone else helping to run the company.

If they are confident in you, they will be confident in your business and be much more willing to invest. Issuing stock and finding investors can be a jarring experience. Once you start selling that stock, you lose some control of your business, and suddenly the needs and demands of your investors must be taken into account when you make major business decisions.

You also have to be ready to prove the worth of both your company, and of yourself as one of the company’s directors. If you are ready to let go, and are prepared to pitch the heck out of your business, your employees and your own career history, you will find investors willing to roll the dice and put some of their own money into your business.

Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. Follow her on Google+ and on Twitter @deborahsweeney and @mycorporation.

Doug Clark – How using outside experts can allow you to better focus on growing your business

Doug Clark, president, CEO and director, AmeriQuest Business Services

Doug Clark, president, CEO and director, AmeriQuest Business Services

There’s a good reason why the old adage, “a jack-of-all-trades, master of none,” has remained in our lexicon hundreds of years after it was coined. It’s because we recognize that almost no one — especially those of us in the world of business — can maintain an equal level of excellence across every single business function without some outside help.

That’s why the world’s leading corporations, even those with hundreds of thousands of employees, have embraced the concept of outsourcing many of their key business processes to cut costs, reduce overhead, conserve capital resources and focus on their core activities.

The good news is there’s no reason why midsized companies can’t enjoy the same benefits that larger corporations have in recent years.

Let’s look at the three platforms that are common to nearly any type of business and why they lend themselves in particular to outsourcing:

Supply management

This can comprise both procurement of goods and services and spend management, which focuses on when you buy and how much you buy. Unless you run one of those leading corporations I referred to above, you’re on your own. And even with your toughest negotiators, you’ll find it nearly impossible to get the same prices for supplies that those companies do.

By aligning your organization with the right business process outsourcing company (BPO), your firm and the other customers of the BPO can leverage your combined purchasing power, thus enjoying pricing consistent with national or global companies.

It’s important to look for a BPO that cannot only deliver the best prices, but also provide information on making smart purchasing decisions. Spend management tools can enable midsize companies to take a fresh look at strategically managing purchasing decisions that may have been previously based on the simple assumption, “That’s the way it’s always been done.”

Managed services

There are a number of non-core services that can usually be outsourced quite effectively while enabling your company to continue focusing its resources on its core activities. These include asset financing, remarketing and transportation. In each instance, the partnership with the BPO will elevate the level of activity to that of a much larger corporation.

For example, the right BPO often has access to flexible and multiple financing solutions that a smaller company on its own might not be able to capture. When it comes time to divest your company of inventory or outmoded company equipment, the same BPO should be able to handle the planning, marketing and execution of the sale, freeing up your employees to pursue core functions.

Financial process automation

Finally, by outsourcing time consuming back-office functions like accounts payable, accounts receivable and credit and collections, midsize companies can stay on the leading edge of technology without investing heavily in IT resources and talent, cutting down on labor, improving accuracy and dramatically improving customer service.

Cash flow is the lifeblood of businesses. The faster your payments, the healthier your business can remain.

Here is one final bit of advice to midsize companies considering outsourcing. Choose a BPO that takes the word “partner” seriously. Look for a BPO with a culture that aligns with yours. Look for one that can prove it can deliver exactly what it promises to do — reduce costs.

Doug Clark has served as president, CEO and a director of AmeriQuest Business Services, a business-process outsourcing company, since founding it in 1997. His professional experience includes stints in public accounting, investment banking and as a transportation entrepreneur. AmeriQuest Business Services assists more than 1,500 customers throughout North America. For more information, visit ameriquestcorp.com.

Jim Kudis has turned Allegheny Petroleum Products into a well-oiled machine

Jim Kudis, President, Allegheny Petroleum Products Co.

Jim Kudis, President, Allegheny Petroleum Products Co.

Jim Kudis and a partner started Allegheny Petroleum Products Co. for the same reason many people start a business — they loved what they did and saw a niche that their company could exploit.

While the company, a manufacturer of industrial lubricants and additives, was seeing annual growth of 20 percent in its early years, Kudis and his partner struggled with money and didn’t take a salary for the first year or two.

“Most small businesses are generally undercapitalized, which we were,” says Kudis, president. “We lived off whatever money we had, which definitely helped because it cut back on the expenses and some of the money going out the door.”

Starting a business is 24 hours a day, seven days a week. You have to live it and love it. You have to roll up your sleeves and do anything you have to do to run that business.

“If you don’t want it that bad, don’t do it,” Kudis says.

The company’s focus in the beginning was providing industrial lubricants to the various manufacturers in the Pittsburgh area. Back then the major oil companies were retreating from the marketplace, becoming very big and going through distributors. Most of the distributors didn’t have the technical know-how of what the lubricants do and how they work.

So Kudis saw a void in what the major companies used to be strong at and what the distributors couldn’t do and that ended up being the niche that Allegheny Petroleum jumped into.

“That was the big advantage to going into the manufacturing part of the business,” Kudis says.

Last August, Kudis and Allegheny Petroleum Products Co. celebrated 25 years in business. In December 2012, Kudis bought out his partner to become the sole owner of the 85-employee company, which saw 2012 revenue north of $110 million.

Here’s how Kudis has grown Allegheny Petroleum Products Co. from a start-up into a successful organization.

Bring in the right talent

While Kudis and Allegheny Petroleum struggled with capital early on, the turning point for the company came around its fifth or sixth year in business.

“We were supplying one of the plants in Cleveland and we made a proposal to do what was a new concept at the time, fluid management,” Kudis says. “We had to put in 125 bulk tanks, which are carbon steel, 500-gallon tanks that ran about $1,500 each.

“So we had to make a more than $200,000 investment to put these tanks in and put in consigned inventory, which ran us another couple of hundred thousand dollars. So we were about $400,000 into this.”

A year later the global buyer for that company called Kudis and told him what a great job Allegheny Petroleum was doing managing their Cleveland plant. He offered Kudis the contract to manage the company’s remaining 70 plants.

“So off it went and today they are my largest customer,” he says.

From that point on, the business has had to function much differently and required new skill sets to keep the company growing.

“My biggest focus today is making sure my managers have all the tools and things they need to do their job, whereas 20 years ago I was doing it myself,” he says. “Now it’s managing people, keeping them excited, making sure they have ownership in the things that they’re doing, and have the tools to do the job that they need.”

Allegheny Petroleum has five fairly distinct areas and Kudis is in touch with each one of the people that manage those areas.

“I’m not trying to do their job, but I’m trying to help them so they can do their job and that’s the key thing,” he says. “It’s all about people.”

To find the right leaders for his business, Kudis chased those executives down and drafted them all.

“I handpicked them and coerced them into coming to work for the company,” he says. “I chose them because I saw the qualities they had. I saw a real desire in each one of them to do well, and that’s where my attention started.

“What I saw in my interaction with them was that they could handle themselves well and present themselves well in front of people. They were knowledgeable and wanted to be more knowledgeable.”

The first thing Kudis looked for in the people he brought in was whether they were good quality people and good solid citizens.

“That’s probably the common thread through most of the people who work here,” Kudis says. “Talent would be second after that — they can manage people and enjoy the ownership of their part of the business. They embrace it and treat what they’re doing like their own.

“It’s just looking in someone’s eye and seeing that they have a desire to do well, not only for themselves, but for the company too. A lot of people want to punch in, get a paycheck, punch out and go home, and that’s not the kind of people I want managing.”

Kudis gives his team the autonomy to do things on their own, which means they have the power to make decisions.

“I give them a free hand to do what makes sense,” he says. “My motto is to make the decision on your own and if you don’t think it’s your decision, then come to me. As long as you have an explanation about why you made that decision, you’re never wrong. You’ve got to be in the game and engage and make decisions.”

Decide how to grow your business

Making decisions is a very important aspect of running a business, especially when it regards growing your company to the next level. Kudis has had to make countless decisions over 25 years and each one helps the company continue its growth. Now those decisions rest on the shoulders of his managers.

“That’s what I expect from the people in a management role,” Kudis says. “In the dealings they have, there comes a point where maybe it’s beyond where they should make a decision on something. In involving putting part of the company at risk or something of that nature, every one of them knows where that line is, where that decision should not be theirs.

“All the other decisions whether they are small, large or whatever, I expect them to make it. It’s really easy to say three or four days later that you made a wrong decision, but to be in the game and make the decision right there, to me that’s important as long as they have an answer why they made a certain decision.”

Every month or every other month Allegheny Petroleum has what it calls a What’s Up Meeting to check in on the different areas of the business.

“I grab each of the managers and we sit down for about two hours and we go around the table while everyone exchanges what they’re doing,” he says. “You get so focused on the part of the business that you’re in and sometimes you have two different groups sort of working on the same things, or maybe they’re doing something that somebody in another group has worked on and knows the answers to help them out. So those meetings have been very beneficial.”

One of the biggest decisions Kudis has made for Allegheny Petroleum was to give the company a global presence. However, global business carries many challenges along with it.

“Learning how to deal financially in different countries has been a challenge,” Kudis says. “One thing you have to learn is what the tax implications are. Each country is different. You should do business with an accounting firm or law firm that can find out answers for you. That really makes it easy.”

Allegheny Petroleum didn’t utilize those resources in the beginning on the first two countries where the company launched its efforts and there were snags.

“Had I used our law firm or our accounting firm, it would have been a lot easier,” Kudis says. “Make sure you understand what it takes to do business in a foreign country before you start doing business there.”

Another big decision that has streamlined business for the company was using a global pricing index with its major direct customers.

“We now move our pricing quarterly as these prices move,” he says. “In the past every time there was an increase you had to go in and present everything to your customer and sit and argue about the pricing. Now that it’s indexed at the end of the quarter, it’s just a matter of how the pricing has moved and that has really streamlined the pricing.

“Our customers feel very good because they know it’s indexed to something that they can see. I feel good because as my raw material costs rise or drop it keeps my profits pretty steady. It really makes it easy to not worry about the pricing side of your business as much.”

Now that Allegheny Petroleum has streamlined business, entered into global markets and become a substantial player in its industry, Kudis is excited to find where the next level is.

“My vision is how do I double and triple the business,” he says. “Everything had been done organic and we might look at doing some acquisitions. The next level will also mean being more global.

“You have to think down the road and get out of the box to think about things that maybe you haven’t thought about in the past, because once you stop growing you’re done.”

How to reach: Allegheny Petroleum Products Co., (412) 829-1990 or www.oils.com

 

Takeaways:

Find the right talent for your leadership team.

Give the leadership team the autonomy to make decisions.

Constantly look at how to keep growing your business.

 

The Kudis File

Jim Kudis

President

Allegheny Petroleum Products Co.

 

Born: Homestead, Pa.

Education: Graduated from Penn State and received a bachelor’s degree in business logistics.

What was the very first job that you had and what did you learn from it?

I worked in a steel mill. I was a laborer so I drove a high lift and moved different things around. My dad worked there and he said, ‘This man is going to pay you, so you better work so that you make sure you earn every dollar you get.’ I still live by that today.

Who is someone that you looked up to?

My grade-school basketball coach. If we played bad we would come back and practice until 11 o’clock at night to make sure we did things right. We won the state championship that year. Hard work eventually pays off.

What Allegheny Petroleum product are you most proud of?

We make what’s called a backup bearing oil for the steel mills, which is called a Morgoil. When steel mills roll steel it goes between these rolls and on the end of these rolls there are bearings. They are huge bearings that get very hot. The oil goes through to lubricate the bearings and they also cool the bearings on the outside with water to keep them from getting too hot.

So the oil has to be able to accept water and kick out the water as it goes back to the tank and it gets circulated back through the bearings. You don’t want water lubricating your bearings, so our oil kicks out the water pretty good. That’s one of our hallmark products.

If you could speak with one person, whether from the past or present, with whom would you want to speak to?

Joe Paterno. I admired the way he ran the football program at Penn State. I’m not in total agreement with what happened at the end of his career. All through the history of what he did, he represented a class act. He was very well-respected. I enjoyed watching him and what he represented for the school.