Financial Crisis or Opportunity?

Who isn’t thinking about the financial situation from both a personal and business viewpoint? Many companies are shutting down normal operations and waiting to see what the markets are going to do. Others are completely revising their strategies and some are looking for those bargain opportunities. What are you doing?

While there is not one right answer, there are probably some prudent steps that should be taken. And quite frankly, should be taken continuously.

In the good times, businesses like people will become lax over their finances. And it is easy to see how when money is available and flowing well, most view the future through the glasses of today. Simply put, most of us see the future and base our decisions on what our economics are doing at the present.

Remember the markets of 2001? It was crisis time for all and the mantra was “we must never let this happen again” and “we will never see double digit market growth again”. Then, the markets recovered, corporations began making record profits, oil prices took off, everyone was buying a house…Life was good. And yes, we began to see this as the norm for the future.

So, where am I heading with all this? Simply put, risks are part of business; we all need/want to make solid profits. However, putting time proven basics into practice during good times help to prepare for the not so good times. And yes, there will continue to be good and bad times form an economic point of view.

One of the basics that I firmly believe in relates to continuous process improvement. Companies are constantly reorganizing, mergers and acquisitions are occurring, new systems are replacing legacy systems, new technologies are emerging, customers’ demands are evolving…change is constant.

If change is constant, process by definition must constantly be reviewed and optimized. Can change be managed internally? Of course it can, but I would offer that a change agent is most effective when they have a neutral or unbiased stake in the process.

Change is also uncomfortable and process owners/users can be protective and not see or embrace the need to review a process or change.

An independent party such as a consultant can assess the current environment without bias and determine the path to change and then lead the execution of that change. Many companies find it easier to simply ask the existing manager to add process improvement and project management to their already full platter of work. And are stunned when morale drops, benefits were not as robust as predicted and resistance to change becomes evident.

Someone that has experience mapping processes, charting the roadmap to change and having project management certification and is independent from the normal day to day work flow can be worth their weight in gold. Independence provides focus, shortens time lines and can provide management realistic reporting on status and issues.

These practices are needed every day and should be a part of normal operations in a company, and are needed in this economic market now more than ever.

No Line of Business Is An Island

Let me state the obvious; no line of business can survive long without partnering with the other lines of business.

Now what do I mean? I am talking about more than just good lines of communications; I am talking about a symbiotic relationship across LOB or divisional lines.

From my perspective there are three primary drivers to developing this type of relationship models. They are customer/client focus, profitability and the ability to stay focused on the corporate strategic direction.

Customer/client Focus

Today’s customer does not distinguish between the different lines of business or product lines within a single company. In this fast paced instant access world, it is more crucial that companies understand and relate to their customer base as a single point of contact. While many companies have made their web sites into a single portal, many have yet to apply the same principle to their distribution and service channels. For a pulse of the behavior of customers, one only needs to look at web usage.

Profitability

By leveraging information, human resources and technology between LOB, not only can expenses be optimized, but cross-selling opportunities should enhance. An example of the leveraging of information and technology is the Customer Relationship Management or CRM. By utilizing a single CRM system, not only can costs be optimized, but all customer information is in a single database. By having a centralized view of the customer, sales opportunities can be maximized.

Corporate Strategic Focus

Corporate strategic directions can and many times are not the focus of a line of business. There is nothing surprising here as most short term incentive programs by definition are not strategic. By developing deep and lasting relationships with the other units or LOBs and by sharing appropriate resources, a natural system of checks and balances can be developed. In the case of technology, competing priorities can be minimized when the LOBs are in one accord.

Rick Hart

Can back office operations bring value?

Many companies have multiple lines of business. Each is responsible for adding value to the bottom line. When a LOB has revenue generating potential, it is easy to measure results. But what about a cost center or the back office operations?

As a seasoned operations executive, I certainly have a bias towards the value that operations can (and should) bring to the bottom line. A well run operations group can not only shave expenses, but can be a strong partner in customer retention. And hopefully, everyone realizes that it is much more cost effective to retain a customer than it is to find a new one.

Metrics are an excellent way of providing consistent feedback to the company's executive team. But, do not get caught in the trap of counting widgets. While volume is important, it is extremely important to create service level agreements not only with your customer base, but within the company.

Pay attention to service and quality and retention surely will follow.

Forward to the basics

Over time processes evolve, new project methodologies emerge and the latest management style is published. You try to keep up and apply the latest trend, yet progress is minimal or actually gets worse.

What happened and why does it seem so good when you read about it, but the results just don't hold true?

Does this sound familiar? My guess is that it does. And if it makes you feel any better, you are not alone.

I am a firm believer that one should keep up with new ideas, new methods and new philosophies. There are a lot of really smart people that are constantly challenging the status quo. However, to blindly jump to the latest trend is a sure fire way to introduce confussion and even a high level of risk into the process. Take a deep breath and remember the basics.

Security Versus Usability

Unfortunately, in this day and age, the protection of our assets must become part of running our businesses. Whether it is customers' social security numbers, account numbers or access to corporate networks, there is a requirement or even an expectation that all is protected.

One of the worst barriers of truly protecting these assets is complacency. If a compromise has not occurred, there can be a false sense of security. And as all have finite resources (financial and human), security can easily take a back seat to a corporate strategic initiative.

As security is tightened, Information Technology professionals will many times rush to "lock the door", yet forget about the daily user of the systems. These users are both employees and customers.

It is a delicate balance between protection and usability. The protection of data is not solely an I.T. responsibility, but must be part of the fabric of and even personality of the corporate culture.