Thursday, April 2, 2009
7 Cost-Effective Ways for Business Leaders to Improve Communication and Collaboration
The Silo Effect
Some business leaders may argue that it's not important for every employee to be involved in, or even informed about the company's business strategy, financial position or other seemingly "executive-exclusive" information. But, my experience tells me that when companies strangle, or in some cases, sever the critical lines of communication and collaboration amongst its employees, the result can be catastrophic.
Poor communication and collaboration causes employees to become disconnected from the business altogether, which places a company at a severe disadvantage. What's truly unfortunate is that those same employees, who are robbed of vital information and opportunities to collaborate, generally prefer to have more involvement, empowerment and accountability.
Employees are often found entangled in a web of silos and barriers when denied open lines of communication. As a result, those talented and skillful employees have very little, if any, knowledge of what actually happens outside of their specific area; they become true victims of the Silo Effect! Although many companies acknowledge silos exist, they often struggle in breaking down the barriers.
Costly Work-A-Rounds
In the case of most silos, departments tend to develop their own unique set of 'work-a-rounds' and creative processes to get the job done. When this occurs, it generally takes employees more time and resources to complete the work (greater operating costs). In addition, it often takes departments much longer to realize internal problems, errors and missed opportunities, which lead to increased costs and negative impacts on customer and client satisfaction.
Narrow-Focused Leadership
Some business leaders believe that the extent of their responsibility is to ensure their department runs well. They believe that it's up to their peers to achieve the same level of success within their department. This couldn't be further from the truth! In fact, it's that kind of narrow-focused leadership mentality that cripples 'great' companies, brings 'good' companies to their knees, and literally stops promising 'startup' companies in their tracks. Business leaders beware!
Here's the good news; it's not too late for business leaders to open the lines of communication and collaboration, here are seven cost-effective ways to improve communication and collaboration to get you started.
7 Ways To Improve Communication and Collaboration
1. Develop a "top-down" culture that encourages and rewards open communication and collaboration.
This is where the C-level executives come in! It starts at the top, and then must be driven down throughout the entire organization. Without sustainable top executive commitment and support, steps 2 through 7 will be difficult to achieve.
2. Share the corporate strategy and vision with every employee.
Don't just send one email... create posters, add it to company newsletters, etc. For employees to truly catch on, and most importantly, believe that their company is serious about success, the message has to become ingrained within the culture.
3. Regularly communicate corporate initiatives, expectations, and results to every employee.
Don't just limit this vital information to employees within a particular department. Share it with every employee. Develop a corporate scorecard; one that lists the top 3-5 goals or initiatives, and then share it. Insure middle managers are helping hourly employees connect their job and goals with the corporate initiatives.
4. Align division and department goals with your corporate strategy.
This is a vital step, and one that requires some quality time and focus. In some cases, you may realize that some department-level goals must be modified or eliminated all together. Remember, if your department is focusing on the wrong goals, your company will have a tough time realizing its full potential.
5. Share financial results (both good and bad) with all employees.
Many leaders are afraid to share financial information with employees at all levels. However, if you truly want your workforce to perform less like employees and more like entrepreneurial-minded, strategic partners, then share your financials and explain how they apply!
6. Create and deploy a department-level balanced scorecard.
The balanced scorecard must effectively align merit, bonuses and other monetary reward systems to performance, quality assurance, operational efficiencies and customer delight results...at a minimum. Explain the connection, and then share the results on a consistent basis.
7. Celebrate successes (both big and small)!
This helps to reinforce the company's commitment to the strategy as well as its importance. Be sure to promote a culture that encourages learning from mistakes, and rewards calculated risk-taking.
Closing
In today's competitive global marketplace, business survival depends upon the effort, commitment and drive of the entire organization. That organization, fueled by every employee, every division, every goal, every objective and every strategy, must encourage and maintain a constant flow of information to truly realize its full potential.
With so many businesses downsizing, outsourcing, and running excessively lean operations, it's often utter chaos and seems virtually impossible to get employees together. And, with department leaders and hourly employees wearing so many hats just to keep the business running, making the transition to providing greater communication and collaboration won't be easy. But, business leaders can, and must overcome these barriers to remain competitive, increase customer satisfaction, and meet the growing demands of today's marketplace.
Author
Greg Jerralds is the author of the book, "The Leader's Guide to Performance Management" and co-author of "The Best Kept Profit Secret."
© 2009 ProfitInnerCircle.com - All World Rights Reserved
****
American Business English BLOG URL
http://usa-business-english.blogspot.com/
********************************************************************************
Some business leaders may argue that it's not important for every employee to be involved in, or even informed about the company's business strategy, financial position or other seemingly "executive-exclusive" information. But, my experience tells me that when companies strangle, or in some cases, sever the critical lines of communication and collaboration amongst its employees, the result can be catastrophic.
Poor communication and collaboration causes employees to become disconnected from the business altogether, which places a company at a severe disadvantage. What's truly unfortunate is that those same employees, who are robbed of vital information and opportunities to collaborate, generally prefer to have more involvement, empowerment and accountability.
Employees are often found entangled in a web of silos and barriers when denied open lines of communication. As a result, those talented and skillful employees have very little, if any, knowledge of what actually happens outside of their specific area; they become true victims of the Silo Effect! Although many companies acknowledge silos exist, they often struggle in breaking down the barriers.
Costly Work-A-Rounds
In the case of most silos, departments tend to develop their own unique set of 'work-a-rounds' and creative processes to get the job done. When this occurs, it generally takes employees more time and resources to complete the work (greater operating costs). In addition, it often takes departments much longer to realize internal problems, errors and missed opportunities, which lead to increased costs and negative impacts on customer and client satisfaction.
Narrow-Focused Leadership
Some business leaders believe that the extent of their responsibility is to ensure their department runs well. They believe that it's up to their peers to achieve the same level of success within their department. This couldn't be further from the truth! In fact, it's that kind of narrow-focused leadership mentality that cripples 'great' companies, brings 'good' companies to their knees, and literally stops promising 'startup' companies in their tracks. Business leaders beware!
Here's the good news; it's not too late for business leaders to open the lines of communication and collaboration, here are seven cost-effective ways to improve communication and collaboration to get you started.
7 Ways To Improve Communication and Collaboration
1. Develop a "top-down" culture that encourages and rewards open communication and collaboration.
This is where the C-level executives come in! It starts at the top, and then must be driven down throughout the entire organization. Without sustainable top executive commitment and support, steps 2 through 7 will be difficult to achieve.
2. Share the corporate strategy and vision with every employee.
Don't just send one email... create posters, add it to company newsletters, etc. For employees to truly catch on, and most importantly, believe that their company is serious about success, the message has to become ingrained within the culture.
3. Regularly communicate corporate initiatives, expectations, and results to every employee.
Don't just limit this vital information to employees within a particular department. Share it with every employee. Develop a corporate scorecard; one that lists the top 3-5 goals or initiatives, and then share it. Insure middle managers are helping hourly employees connect their job and goals with the corporate initiatives.
4. Align division and department goals with your corporate strategy.
This is a vital step, and one that requires some quality time and focus. In some cases, you may realize that some department-level goals must be modified or eliminated all together. Remember, if your department is focusing on the wrong goals, your company will have a tough time realizing its full potential.
5. Share financial results (both good and bad) with all employees.
Many leaders are afraid to share financial information with employees at all levels. However, if you truly want your workforce to perform less like employees and more like entrepreneurial-minded, strategic partners, then share your financials and explain how they apply!
6. Create and deploy a department-level balanced scorecard.
The balanced scorecard must effectively align merit, bonuses and other monetary reward systems to performance, quality assurance, operational efficiencies and customer delight results...at a minimum. Explain the connection, and then share the results on a consistent basis.
7. Celebrate successes (both big and small)!
This helps to reinforce the company's commitment to the strategy as well as its importance. Be sure to promote a culture that encourages learning from mistakes, and rewards calculated risk-taking.
Closing
In today's competitive global marketplace, business survival depends upon the effort, commitment and drive of the entire organization. That organization, fueled by every employee, every division, every goal, every objective and every strategy, must encourage and maintain a constant flow of information to truly realize its full potential.
With so many businesses downsizing, outsourcing, and running excessively lean operations, it's often utter chaos and seems virtually impossible to get employees together. And, with department leaders and hourly employees wearing so many hats just to keep the business running, making the transition to providing greater communication and collaboration won't be easy. But, business leaders can, and must overcome these barriers to remain competitive, increase customer satisfaction, and meet the growing demands of today's marketplace.
Author
Greg Jerralds is the author of the book, "The Leader's Guide to Performance Management" and co-author of "The Best Kept Profit Secret."
© 2009 ProfitInnerCircle.com - All World Rights Reserved
****
American Business English BLOG URL
http://usa-business-english.blogspot.com/
********************************************************************************
Labels: 7 Cost-Effective Ways to Improve Communication and Collaboration, Align goals, Costly Work-A-Rounds, Narrow-Focused Leadership, Regularly communicate corporate initiatives, The Silo Effect
Wednesday, February 4, 2009
Company Survival Depends on Bad Debt Detection
Timely Cashflow Tips
The early identification and control of potential bad debt losses is important to the very survival of a company.
During a recent phone conversation with the CEO of a national distribution company we were told about how one of their branch offices in Calif. had taken a $97,000.00 hit from a customer who was unable to secure needed financing in order to continue in business. The company's sales were down 18% in 2008 and the branch manager had exceeded the customer's credit line of $25,000 in his attempt to keep his sales figures up.
The CEO went on to say that at a 5% pre-tax profit the company will have to make close to $2,000,000.00 in new sales just to break even, and that's if they all pay on time. This company can survive one $97,000.00 hit but if any more like it are hiding in the woodwork it may prove too much to bear.
As to the branch manager, he's history along with the branch and all those who were once employed by the branch.
We are faced with a down stock market, reduced consumer spending, dropping wholesale prices and low business confidence levels. Financing is hard to get for everyone; manufactures, wholesalers, and the businesses that buy from them are all in the same boat when it comes to securing short term money while they make sales and wait for their customers to pay. Customers who use to pay on time are now paying 30, 60 or more days late...if at all.
Again and again companies hear from past due customers that once their customers pay them what they owe...if ever...they will pay.
A delay in getting paid has always existed due to nature of customers needing time to add value to whatever product or service they buy and then needing more time to sell to and to be paid by their own downline customers; now a growing problem is that those downline sales are down, they're not happening and the effect of that is being felt throughout the entire length of supply chain.
The house is on fire, or in the case of wholesalers the warehouse is on fire. This is not the time to form a committee to determine who's to call the fire department, it's time to man the buckets and for all hands to work together like never before...and this includes CEOs/MDs and senior managers.
A/R, accounts receivable, short term money due from the sale of products/services based on payment at a later date often represents one of the largest and most liquid assets of a business. On average the A/R is 40% or more of the total assets of a company. In addition to its size and liquidity, the management of A/R means dealing directly with customers and if not properly carried out can result in the painful loss of customer goodwill and a major reduction in repeat orders.
It's critically important to properly manage accounts receivable because keeping customers current leads to repeat sales. Companies can't afford to lose customers during tough times, and one way to keep them is by making sure they stay current on their accounts.
During an economic downturn, collecting on accounts receivable becomes more important than ever. At the same time, it also becomes more difficult as customers experience cash flow crunches of their own.
Strategies for improving your cashflow and repeat sales rate:
Start early. Contact all delinquent accounts within three to five days of becoming overdue. Waiting 60 or 90 days before contacting past due customers will have a strong negative effect on cash flow and repeat sales.
Call the largest accounts first. Most companies call their delinquent accounts in alphabetical order. However, 20 percent of your accounts usually represent 80 percent of the dollars. Forget about the alphabet, go after the customers that owe you the most money, then work your way down to the smaller accounts.
Keep a systems log to track process problems. Not only does this make it easier to collect your money, it also allows you to constantly upgrade your business processes and become more efficient.
Call at the right time. The best time to call commercial accounts is on Monday morning. Start calling personal customers on Thursday and go through Friday, when people usually get paid.
Get the right person for the job. Most companies hire accountant-types to handle collections. Unfortunately, those types tend to prefer holing up in their cubicles and working with numbers rather than people. Instead, hire outgoing people who enjoy interacting with others and talking on the phone.
Closing the sale. Contact the decision-maker, determine the type of customer, make your presentation based on the type, and close the "sale" and follow up. Get a firm commitment from the customer on when they will pay you and use a good contact management system to track.
And remember...
During this stressful time, we must all remember the importance of maintaining strong relationships with customers and with fellow employees who are also having to deal with painful external and internal challenges. Remember that many companies are asking fewer employees to accomplish more with fewer resources. We all must show more appreciation for the greater pressure and growing demands made on employees. We all must remember that customers, even past due customers, are our business partners and we must all work hard not to let our frustrations have a negative impact on our internal and external relationships.
Authors
Abe WalkingBear Sanchez and Davy J. Tyburski of Profit InnerCircle, LLC. © 2008 Profit InnerCircle™, LLC (more info at: www.profitinnercircle.com)
****
American Business English BLOG URL
http://usa-business-english.blogspot.com/
*******************************************************************************
The early identification and control of potential bad debt losses is important to the very survival of a company.
During a recent phone conversation with the CEO of a national distribution company we were told about how one of their branch offices in Calif. had taken a $97,000.00 hit from a customer who was unable to secure needed financing in order to continue in business. The company's sales were down 18% in 2008 and the branch manager had exceeded the customer's credit line of $25,000 in his attempt to keep his sales figures up.
The CEO went on to say that at a 5% pre-tax profit the company will have to make close to $2,000,000.00 in new sales just to break even, and that's if they all pay on time. This company can survive one $97,000.00 hit but if any more like it are hiding in the woodwork it may prove too much to bear.
As to the branch manager, he's history along with the branch and all those who were once employed by the branch.
We are faced with a down stock market, reduced consumer spending, dropping wholesale prices and low business confidence levels. Financing is hard to get for everyone; manufactures, wholesalers, and the businesses that buy from them are all in the same boat when it comes to securing short term money while they make sales and wait for their customers to pay. Customers who use to pay on time are now paying 30, 60 or more days late...if at all.
Again and again companies hear from past due customers that once their customers pay them what they owe...if ever...they will pay.
A delay in getting paid has always existed due to nature of customers needing time to add value to whatever product or service they buy and then needing more time to sell to and to be paid by their own downline customers; now a growing problem is that those downline sales are down, they're not happening and the effect of that is being felt throughout the entire length of supply chain.
The house is on fire, or in the case of wholesalers the warehouse is on fire. This is not the time to form a committee to determine who's to call the fire department, it's time to man the buckets and for all hands to work together like never before...and this includes CEOs/MDs and senior managers.
A/R, accounts receivable, short term money due from the sale of products/services based on payment at a later date often represents one of the largest and most liquid assets of a business. On average the A/R is 40% or more of the total assets of a company. In addition to its size and liquidity, the management of A/R means dealing directly with customers and if not properly carried out can result in the painful loss of customer goodwill and a major reduction in repeat orders.
It's critically important to properly manage accounts receivable because keeping customers current leads to repeat sales. Companies can't afford to lose customers during tough times, and one way to keep them is by making sure they stay current on their accounts.
During an economic downturn, collecting on accounts receivable becomes more important than ever. At the same time, it also becomes more difficult as customers experience cash flow crunches of their own.
Strategies for improving your cashflow and repeat sales rate:
Start early. Contact all delinquent accounts within three to five days of becoming overdue. Waiting 60 or 90 days before contacting past due customers will have a strong negative effect on cash flow and repeat sales.
Call the largest accounts first. Most companies call their delinquent accounts in alphabetical order. However, 20 percent of your accounts usually represent 80 percent of the dollars. Forget about the alphabet, go after the customers that owe you the most money, then work your way down to the smaller accounts.
Keep a systems log to track process problems. Not only does this make it easier to collect your money, it also allows you to constantly upgrade your business processes and become more efficient.
Call at the right time. The best time to call commercial accounts is on Monday morning. Start calling personal customers on Thursday and go through Friday, when people usually get paid.
Get the right person for the job. Most companies hire accountant-types to handle collections. Unfortunately, those types tend to prefer holing up in their cubicles and working with numbers rather than people. Instead, hire outgoing people who enjoy interacting with others and talking on the phone.
Closing the sale. Contact the decision-maker, determine the type of customer, make your presentation based on the type, and close the "sale" and follow up. Get a firm commitment from the customer on when they will pay you and use a good contact management system to track.
And remember...
During this stressful time, we must all remember the importance of maintaining strong relationships with customers and with fellow employees who are also having to deal with painful external and internal challenges. Remember that many companies are asking fewer employees to accomplish more with fewer resources. We all must show more appreciation for the greater pressure and growing demands made on employees. We all must remember that customers, even past due customers, are our business partners and we must all work hard not to let our frustrations have a negative impact on our internal and external relationships.
Authors
Abe WalkingBear Sanchez and Davy J. Tyburski of Profit InnerCircle, LLC. © 2008 Profit InnerCircle™, LLC (more info at: www.profitinnercircle.com)
****
American Business English BLOG URL
http://usa-business-english.blogspot.com/
*******************************************************************************
Labels: accounts receivable, Company Survival Depends on Bad Debt Detection, control bad debt losses, delinquent accounts, economic downturn, manage accounts receivable, Timely Cashflow Tips
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American Business English includes vocabulary specific to accounting, finance, investments, logistics, administration, management, sales, marketing, public relations, communications, media, manufacturing, engineering, natural resources, information technology, HR and personnel both formal and informal.
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