Posts Tagged ‘recession’

Looking to sell your company? Don’t be in a hurry…

by Steve Popell on March 18, 2010

The merger & acquisition market has gone quiet. If your instincts are telling you to wait a while before trying to sell your company, give yourself a nice round of applause.  Your instincts are right on the money – pun intended, sorry.

Here is a list of 5 solid reasons for keeping your powder dry for three or four years.

  1. Buyers themselves are generally not doing particularly well.  Therefore, they will have less money to spend, and will be more risk averse.  Both factors drive lower offers.
  2. Your earnings are probably not especially robust.  How could they be in this kind of economy?  Projections of future profitability are all fine and good, but they have considerably less credibility in today’s market.  Even if the buyer believes your forecasts, why should s/he have the same truly reflect in the offer?  Better to negotiate from a position of relative strength.
  3. Companies that come out on the other side of this economic situation in one piece will find that many of their competitors will have disappeared. That means that you will have fewer rivals for the buyers’ attention and acquisition dollars once we are done with the recession… or better, when the recession is done with us!
  4. Every seller wants to differentiate his or her company from all the others in the industry.  If you have used this time to transform your company into a prime strategic acquisition candidate, it may be the #1 choice for buyers seeking acquisitions in your industry.
  5. This position as the “only game in town” (or close to it) could allow your broker to conduct an “auction” among a number of highly desirable buyers. This puts you in control of the acquisition process, and can yield enormous financial rewards.

What you need is a process that is designed to help your company to become a highly attractive strategic acquisition candidate by delivering to you the picture of this candidate as painted by people who really know – key acquisition executives in prospective buyers. What comes next is fascinating

You decide which strategic assets to acquire and/or enhance in order to get your company’s strategic profile as close as possible to what the market has identified as ideal. Like most strategic decisions, these will turn on four key elements of your business environment.

1. Money
2. People
3. Time
4. The fit with your company’s vision, mission and core values

You should begin this process at least two years before you intend to put your company on the market. Three years is preferable. Why?  Because development of solid strategic assets takes a minimum of two years and, often, longer.

Once you have made these decisions, it is time to incorporate them into a strategic plan that also includes provisions for enhancing your earnings growth and financial condition.  The standard plan, including Vision, Mission, Long-Range Goals, Short-Term Objectives, Task Assignments, Action Items gets the job done.  You should involve all personnel who will play a key role in implementing the plan.

Conduct periodic comparisons of plan and action (no less often than quarterly.) Such follow-up is critical to ensure that you maintain momentum.  The strategic plan is a living document that must remain front of mind.  Otherwise, it will gather dust, and you will have wasted a great deal of time and effort.

Go for it!

PhotoPopell This article has been contributed by Steven D. Popell. Steve has been a general management consultant since 1970. Steve is a Certified Management Consultant, business valuation expert, and inventor of ExiTrak®– a process designed to assist the privately-held company owner/manager to build an attractive strategic acquisition candidate

Quality #8: Best Practices are Contextual

by Tanmay Vora on November 18, 2009

Welcome to the eighth post in this 12-part series on QUALITY, titled #QUALITYtweet – 12 Ideas to Build a Quality Culture.

Here are the first seven posts, in case you would like to go back and take a look:

  1. Quality #1: Quality is a long term differentiator
  2. Quality #2: Cure Precedes Prevention
  3. Quality #3: Great People + Good Processes = Great Quality
  4. Quality #4: Simplifying Processes
  5. Quality #5: Customers are your “Quality Partners”
  6. Quality #6: Knowing what needs improvement
  7. Quality #7: Productivity and Quality

#QUALITYtweet The best practices are contextual – they

worked well for someone in a given context. Are you

applying them in the right context?

Imagine a doctor prescribing a standard medicine based on common symptoms without carefully analyzing other ailments and patient history. A doctor knows the best medicine to cure a particular ailment, but he would look at a patient’s context and then decide if the “best medicine” is really best for a particular patient.

Process managers play a role of doctors for the organizations. They have to identify all possible problems (symptoms) and then suggest a solution (medicine). Best medicines for different types of ailments are termed as “best practices” in business.

Best practices are a set of processes that, in a given context, have the best likelihood of delivering quality products or services. In equation of context identification, some of the variables are:

  • Your goals as an organization
  • Market segment you operate in
  • Your target customers
  • Nature of your product / services
  • Types of customer you already serve
  • Team capabilities and internal alignment
  • Management commitment and sponsorship to improvement initiatives
  • External market pressures (e.g. recession)

The list can go on. Best practices often tend to ignore these variables because they worked in past for someone in a particular context. Their context may be different, but never a static one. Implementing best practice without considering organization’s context is like prescribing a standard medicine without looking into symptoms. Both can be equally dangerous!

So how are best practices useful? Studying best practices can give you some very useful insights on possible solutions for your business challenge. They offer alternative perspectives on ideas that can minimize your risks.

For process improvement experts, having access to best practices can be their biggest asset. But their ability to apply those best practices in an organization’s context is absolutely mandatory for success. As a professional, there is no fun in having a best practice for everything and a solution for nothing!

As an organization, you can leverage best practices by carefully studying them and mapping with your unique business challenges. For this, improvement managers need to understand nuts and bolts of business. Once the context is understood, best practices can become your best guide so that you don’t have to re-invent the wheel. Depending on context, you can either implement a best practice as it is or select portions of a best practice that can be most useful for your context.

Simply believing that a best practice will work for you just because it worked for someone else in the past and applying them in vacuum can harm you more than it can help.

There are no silver-bullets in business and things like context and innovation does play a huge role. As one of the Dilbert comic says – “If everyone is doing it, best practices is the same thing as mediocre”.

Securing brand equity in Recession

by Deepika Bajaj on October 26, 2009

Girl ListeningWe all understand that customer is a priced asset. And most companies have tried to listen to the customer for forging innovation. The only caveat to this is – that how we have listened to the customer in the past is irrelevant now. There is new phenomenon that is emerging with social media. Pushing out “listening to them” campaigns alone is just not going to cut it. You need to adapt to the new skills to listen actively… and in doing so, you need to give up the old ways – because only the adaptive survive in the marketplace.

It is the recession that tests your listening skills. Many companies have suffered because they were not competent in listening to their customers – e.g GM, Linen N Things, Circuit City etc.

Here are some ways you can listen

1.   Engage in a continual dialogue:   A company needs to keep engaged through company’s own Web portals, blogs and experts’ blogs.  The rising chorus of social network users (4 out 5 US adults online interacted with a social site in ‘09 – Forrester) continue to up the expectation for brands and companies with respect to presence and interaction online. The 24×7 consumer and social technologies have enabled new-media users with an ongoing interaction cycle that necessitates attention from brands.

2.   React quickly. A new study that was just released from Cone reports claimed that among new-media users, a staggering 78% of them interact with companies or brands via new media sites and tools — up from 59% the year before… and that these users are conversing with brands more often: 37% say they interact at least once a week — which is up from one in four when Cone did the study last year. There are huge quantities of information and opinion people distribute on the internet. You need to be able to collect and process this information and respond quickly to any feedback or misaligned information that could potentially hurt your brand.

3.   Cut through the clutter: Segmentation and being knowledgeable about your target customer helps you understand exactly ‘who your customer is’. Their psychographic and demographic profiles can help you determine how to listen to them. Acknowledge the importance of cutting through the clutter to reach overloaded consumers.

Securing brand equity in the recession requires companies to add resources and capital to innovation and communication. This downturn will accelerate efforts of agile and smart companies to listen to consumers’ needs to keep their brands from slipping.

The NEW World!

by Deepika Bajaj on October 13, 2009

Our world has been continually evolving. With the advent of globalization, technology and internet, we are now embarking on the phenomenal growth of the virtual worlds. So, what are Virtual Worlds? Virtual world is a real-time, multi-player 3D environments in which the user takes on a specific role, represented on screen by an avatar. Obvious example is SecondLife. People who live in virtual worlds can buy homes, go shopping and play games with friends – this is the social networking element of it. With the current economic recession, companies are finding it cost-effective to hold meetings, recruit candidates and do promotions in virtual worlds. Offline events require hotel, travel costs and lost time in productivity – so why not meet your potential clients, employees and colleagues virtually  – Afterall they exist both in the real and virtual world.

Here is a brief intro of a what is a virtual world?

Where is the MONEY??

Virtual worlds reshape the real-life Retail:
With the rise in Virtual world, many small businesses are using it to interact with their customers. Many businesses are marketing their products and services in virtual worlds – you can hold events, do strategic placements for audience development and building relationships with their customers:

Where is my LOVE?
Virtual worlds are all about experience and community.
Want a cool girlfriend? Who needs a real deal? She is exactly what you want and is gone when you log off.

Our world has expanded – it has multiple dimensions….ARE you present Virtually?