Improve To Survive And Thrive

Improve to Survive and Thrive                                   

Private Companies Can Be Better Served Increase Your Corporation’s Value My Turning Point in Business Leadership A Checklist to Really Increase Value Clarify Root Causes of Poor Communication Four Questions Spotlight Your Company's Needs Improve Business Education on the Job Edwards Deming and Simple Points Who helps your company? The Clearer, The Better Ideas Come to Life with Action Business Model Innovation The All Important Business Model Empowering Vision Organization Must Align With Strategy Leadership Drives Organization Use a checklist to audit for improvement opportuni... A Company’s Working Core CEO’s Must Improve the Business More than Products, Services or Technologies Ask Clients Questions and Manage Expectations Collaborate to better serve corporate clients Academic Exercise or Real Results? Critique, Commend, Complain, Correct - Improve Look and Listen Well Don't Get Railroaded by Thoughts Not Business As Usual, But.... Gaining Confidence Shine a Light on It Capital Structure and Brain Work Faith Overcomes Fear and Doubt Breadth and Depth of Experience What IS Improvement? The Physics of Improvement Choose to Improve & Chinese proverb

Private Companies Can Be Better Served Many private companies, including closely held, owner operated, family-owned, current or potential ESOPs, often plateau in the mid-tier range of $5-500M, 50-5000 employees. They have a bank, an accounting firm, an attorney, etc., but are typically not served as well by a business improvement adviser.

Edwin G. Booz determined that companies could benefit from the expert, impartial advice of someone outside their own organizations. This led to management consulting. Arthur D Little, Accenture, Booz Allen, McKinsey & Company, The Boston Consulting Group, and Bain & Company advise leading corporations (Fortune 1000 companies for the most part), but these consulting firms tend not to match the needs of the numerically larger tier of higher-growth potential smaller companies with employees of 50 to 5000 or annual sales of $5-500M, whose owners tend to be more independent and distrustful of outside professionals who charge highly for their time, not necessarily for their value. Michael Gerber/e-myth targets this tier with educational information. George S. May offers a service that has been characterized as “one-size fits all” approach. Other service offerings come from Vistage, IIB, and a variety of boutique consulting and coaching firms and individual specialists. There is an opportunity to improve how to provide (for a more modest retainer plus value-based incentive compensation) highly customized value improvement services especially for private companies in the high-growth-potential mid-tier. Advances in best practices in some industries, e.g., Agile project management and Scrum in software development, can be adapted for much wider application in other industries. In a time of increased government regulation, those dedicated to private enterprise have an opportunity and obligation to help our national and global economy by doing more to improve the value of private enterprise. New roles that help management teams and their private companies improve might evolve out of improvements made in the traditional roles of members of boards of directors, advisers, consultants, educators, etc., leading to a more hands-on applied role with their corporate “clients.”

Increase Your Corporation’s Value I can help a private company CEO improve cash flow and corporate value. With an aptitude blending business, science, math, economics, psychology, coaching, etc., experience with business turnarounds, growth, and improvement, and alertness to advances in the world of business, I will share insights learned from years of playing this “greatest game,” to help a CEO do his best to reap the consequences of circumstances and timing. In “the fog of war,” it helps to have a variety of past experiences to draw upon. All can see more clearly in hind sight than in the maelstrom of the moment. As a former CEO, I can provide insight to help the CEO do better under fire. Accumulated wisdom can help identify the few most important decisions to be made out of the many –- improving leadership and organizational culture; trusting, but verifying; questioning collaboratively, challenging supportively; experimenting and failing fast; focusing laser-like on what matters most.

I have worked closely with technologist geniuses, scientists, mathematicians, electrical and mechanical engineers, and a host of other professionals and all kinds of workers. I am mindful of widespread opportunities for software and Internet enabling, but am not wedded to any industry. I offer fresh and creative thinking to almost any business. My role is to focus ON the business, to improve how the business works, to improve its value. People working at or in the business usually know where it hurts, but can use help with clarification, diagnosis, treatment options, and follow through to make things better. I will help the team get everyone more focused and motivated (incentives) to generate more cash and increase overall value – selling better, fulfilling better, improving quality, reducing costs – doing more to bring out the best in each person, improving capabilities and contribution. I will foster thoughtful problem-solving for improvements in the business model, strategy, marketing, sales, fulfillment, operations, products, services, quality, finance, and every other vital part of the business. I will help clarify and instill an updateable improvement vision in the minds and hearts of everyone needed to bring it about, for the benefit of all participants. Like in sports and medicine, vital core metrics will be selected to set goals, measure progress, and fulfill the vision. The improvement vision may include one or more bold strokes, a series of vital drives, and/or many small advances. Effectively instilling the vision stimulates actions to fulfill it. Focused persistence on what matters most brings it about. Leadership can always be improved, operations strengthened, organization developed and staff better trained, products improved and better ones developed, sales and profit increased, all to increase cash flow and corporate value. Putting combined insight and energy to productive and efficient use produces desired results. As a facilitating, expediting leader adviser, I can help and get help to follow through to improve things, to achieve goals, and bring about the desired vision. In the process, the team will: 1. Review the business model, cash flow, P&L, balance sheet, etc. to pinpoint focus points, explore options, and follow through with positive action. 2. Clarify what is needed to improve confidence, credibility, communication, and innovation for mutually improved relationships with customers, employees, and suppliers to increase the financial value of the company. 3. Connect the dots on how each person affects results, using practical metrics to achieve goals; improve business through better information sharing, problem evaluation, research, planning, target setting, incentives, etc. – to fire better on all cylinders. 4. Clarify priorities and how better to organize and follow through to achieve them. We will look for areas of frustration or vagueness, and other red flags, to clarify and

prioritize improvement opportunities. We will spark initiative by asking: “What would you change or improve? What help do you need? What’s the next step?” Like a team of business doctors bent of getting the best results, we will start with careful observation, listening, questioning, and root-cause diagnostics, with an eye to prevention as well as cure, to achieve specific goals for greatest gain. Each situation is unique and the approach must be customized according to discernment of need and opportunity, based on combined experience and judgment, adapted to changing circumstances and priorities.

My Turning Point in Business Leadership After getting a Master of International Management degree and then MBA, I joined a fast-growing computer company in Texas and was initially given assignments that groomed me for general management. One particular learning experience changed my entire outlook. Two higher level bosses took me along with them to meet with a Japanese company to explore a proposed joint venture between our Texas-based company and their Japanese company. I was there mostly because my office was in the Bay Area where the first meeting was held, and my bosses had flown in from Texas, one originally from Boston, the other from Texas - both had strong accents. From the start the four Japanese men on the other side of the table looked at and talked with me more than my bosses. This frustrated one of my bosses enough that he asked why they talked only to me and not to the others, indicating I was junior to either of them. The Japanese men expressed apologies for any offense, saying that they were more familiar with California English than Texas English or Boston English. I was given responsibility for the liaison after that meeting. I tell this story for what subsequently happened. We all went back to our respective companies for more detailed planning. My boss’s boss assigned responsibility for this project to the general manager of our Fort Worth operation, who in just over a week produced a "well written" plan for our American end of things and sent it to me to follow up with the Japanese. As weeks went by waiting for the Japanese to “get their act together” my bosses grew increasingly frustrated. After two months, I was told to tell them “if you can’t make decisions, we’ll find someone who can,” etc. I was told to call it off with them just as they finally submitted their plans. I was initially put off by how much “paperwork” they provided, feeling like they had made it all way too complicated. We considered our plan succinct and to the point. But the tables turned as planning was followed by implementation. Virtually everything

the Japanese had said they would do they did as promised or better, while our American end fell into disarray. The Fort Worth general manager had prepared his plan on his own. All that mattered was that his bosses had approved it. He had not involved the many others in his organization in the planning process. People were fired, and confusion reigned, and finally after six months, the Japanese told us they would go on without us and ended our relationship. In a position to see this episode up close, I was embarrassed for us and marveled at the Japanese. In answer to my personal queries about why and how they did things, I was introduced to the work of Edwards Deming. This was 1979 and I had never heard of him. But I was captivated not by his SPC so much, but his 14 points. I began to apply them in my business leadership roles. Deming’s points turned me into a "turnaround specialist” focused on improving corporate value, not just making quick fix "slash & burn" cosmetic changes.

A Checklist to Really Increase Value Don't overlook the obvious. Eliminating whatever contributes to employee apathy, fear or cynicism will increase corporate value. Apathy, fear and cynicism can be caused by many things, including inconsistency. Deming's 14 points: 1. Create constancy of purpose for continual improvement of products and service to society, allocating resources to provide for long range needs rather than only short term profitability, with a plan to become competitive, to stay in business, and to provide jobs. 2. Adopt the new philosophy….We can no longer live with commonly accepted levels of delays, mistakes, defective materials, and defective workmanship. Transformation of Western management style is necessary to halt the continued decline of business and industry. 3. Eliminate the need for mass inspection as the way of life to achieve quality by building quality into the product in the first place. Require statistical evidence of built in quality in both manufacturing and purchasing functions. 4. End the practice of awarding business solely on the basis of price tag. Instead require meaningful measures of quality along with price. Reduce the number of suppliers for the same item by eliminating those that do not qualify with statistical and other evidence of quality. The aim is to minimize total cost, not merely initial cost, by minimizing variation. This may be achieved by moving toward a single supplier for any one item, on a long term relationship of loyalty and trust. 5. Improve constantly and forever every process for planning, production, and service. Search continually for problems in order to improve every activity in the company, to improve quality and productivity, and thus to constantly decrease costs. Institute innovation and constant improvement of product, service, and process. It is management's job to work continually on the system (design, incoming materials,

maintenance, improvement of machines, supervision, training, retraining). 6. Institute modern methods of training on the job for all, including management, to make better use of every employee. New skills are required to keep up with changes in materials, methods, product and service design, machinery, techniques, and service. 7. Adopt and institute leadership aimed at helping people do a better job. The responsibility of managers and supervisors must be changed from sheer numbers to quality. Improvement of quality will automatically improve productivity. Management must ensure that immediate action is taken on reports of inherited defects, maintenance requirements, poor tools, fuzzy operational definitions, and all conditions detrimental to quality. 8. Encourage effective two way communication and other means to drive out fear throughout the organization so that everybody may work effectively and more productively for the company. 9. Break down barriers between departments and staff areas. People in different areas, such as Leasing, Maintenance, Administration, must work in teams to tackle problems that may be encountered with products or service. 10. Eliminate the use of slogans, posters and exhortations for the work force, demanding Zero Defects and new levels of productivity, without providing methods. Such exhortations only create adversarial relationships; the bulk of the causes of low quality and low productivity belong to the system, and thus lie beyond the power of the work force. 11. Eliminate work standards that prescribe quotas for the work force and numerical goals for people in management. Substitute aids and helpful leadership in order to achieve continual improvement of quality and productivity. 12. Remove the barriers that rob hourly workers, and people in management, of their right to pride of workmanship. This implies, among other things, abolition of the annual merit rating (appraisal of performance) and of Management by Objective. Again, the responsibility of managers, supervisors, foremen must be changed from sheer numbers to quality. 13. Institute a vigorous program of education, and encourage self improvement for everyone. What an organization needs is not just good people; it needs people that are improving with education. Advances in competitive position will have their roots in knowledge. 14. Clearly define top management's permanent commitment to ever improving quality and productivity, and their obligation to implement all of these principles. Indeed, it is not enough that top management commit themselves for life to quality and productivity. They must know what it is that they are committed to—that is, what they must do….Support is

not enough: action is required!

Clarify Root Causes of Poor Communication “What we have here is a failure to communicate.” (repeated by the oppressive prison warden in "Cool Hand Luke") Clarifying and overcoming root causes of poor communication will increase cash flow and corporate value. Poor communication is wasteful and counterproductive. To not be dealing with reality is a killer of time and resources. Total truth is more than just random facts of differing value; it requires the added clarity of insightful priorities. "Talk" about how to improve company efficiency, productivity, or effectiveness, much less profitability, cash flow, and corporate value, must take into account the reality of human communication within the company. Not just from management to employees, but from employees to management and the multitude of timely and truthful messages needed from any one person to another that can improve business value. The human communication factor in the world of improvement can be either negative (obfuscation - fuzziness, muddiness, avoidance) or positive (clarification - truthfulness, completeness, priority valued). Obfuscation is more than conventional lies, denials, & deception. To obfuscate is to disguise, conceal, confuse or complicate, even by avoidance (passive resistance). The antonym is to clarify. What exactly is confused, disguised, concealed, or complicated by obfuscation? We can call it the truth or reality. Synonyms for truth include fact, reality, certainty, accuracy, genuineness, exactness, legitimacy, veracity, honesty, candor, integrity, etc. Antonyms include fiction, falsehood, error, dishonesty. Obfuscation may be due to any mix of: (1) seeking potential gain from promoting error, (2) fear of the consequences of communicating the truth, and (3) apathy, ineptness, mental impairment, and accident. The more sensational category of seeking gain through fraud, demagoguery, and other forms of abuse gets the most press, and is the cause of highly costly attempts at regulation. The other categories are more hidden, but probably even more common and costly. Overall, the concealment of truth, deliberate or unintentional is a major barrier to improvement which can be reduced by improved leadership, management style, and resultant company culture and organizational design and development. Truth is knowledge of things as they really are, as they really were, and as they really are to come. Knowledge that is filtered by fear, covered up, denied, or misrepresented for any reason is less visible. Visibility is the first and most important level of clarity.

Improvement requires clarity about base line conditions. The truth must be clearly described and accurately revealed by those who know so that all affected can make needed improvements. Truth is more than appearances. Symptoms are appearances. Truth that matters most to improvement has to do with root causes, which are identified through increasingly deeper levels of clarity. Common thread root cause clarification has immense potential to increase cash flow, corporate value, and everything else good in and about the company. Because the barriers of fear, apathy, cynicism, ineptness, mental impairment, and accident are massively costly, clarifying and overcoming their root causes is enormously profitable.

Four Questions Spotlight Your Company's Needs Jack Stack and the Great Game of Business spotlight four questions: 1. How well do your employees understand cash flow, profit, how your business makes money, and how they can help it make more? 2. How strongly do they personally work to achieve business objectives and the critical numbers? 3. How well do they know the rules of the game of business? 4. How well do they follow the action, keep score, and work together to win against the competition? These questions get the ball rolling in a way everyone can appreciate. Every company is unique and can best be described by the players themselves. Don't over complicate it. Get started and learn. Identify needs, prioritize them, and keep improving things. As momentum increases, you'll figure out even better ways to improve your most important knowledge/skill base.

Improve Business Education on the Job Improve business education to further improve business. How can people who make a living educating people on business improve their profession? What business model improvements are possible? Look for ways to move from classroom theory to work place reality, get closer to the action, the real world providing the ultimate case studies, on the fly, to be realistic, practical.

Hands-on workplace "teachers," whether called consultants or advisers or coaches or something else, are often outside professionals. But there are others like senior managers, who have the added benefit of already being much more familiar with the company, who, with appropriate tutoring where needed, could be even better, and certainly more permanent teachers than outside professionals. There is always value in having an outsider's out-of-the-box point of view, but all teachers certainly don't have to be outside professionals. Any organization's master leader is ideally positioned to be master teacher. Even better as servant leader. Since "teachers learn more than the students," give everyone an opportunity to teach with the protection of teamwork, support, and appropriate collaboration. Teaching is a learn-able, cross-trainable skill, and worthy of being an ongoing part of overall company leadership, which is also learn-able. Look for teaching and self-learning moments and seize them as improvement opportunities.

Edwards Deming and Simple Points I didn't see Deming's 14 points until 1979, yet they were familiar to me, reflecting what I'd grown up with, consistently embracing a philosophy of improvement, leadership, training, education, teamwork, eliminating fear, removing barriers, avoiding showiness, teaching correct principles to encourage more self-management. Practical principles captured in simple comments like "Be wise" and "Be nice" and "Do good" and "Do better" and "Don't quit" make points without being complex, but watch out for window dressing. Be wise - really think, observe, clarify, evaluate, act, learn, repeat, don't quit. Be nice - it works better. Not being nice adds negative emotions with attendant complexity and vagueness. Negative emotions are an underground drag on progress. Positive emotions are powerful for adding value. Act - be wise, think, be nice, do good, do better, plan, prototype, test, implement, assess, keep learning, keep improving, don't quit. Patient persistence in pursuit of perfection will lead to better practices and more profits, allowing greater rewards for all concerned.

Who helps your company? Every company has owners, stockholders, public or private, many or few. Every company is comprised of all who work within the company as management and/or employees. Owners may or may not work within the company, and management and employees may or may not be owners. The greatest, most improve-able help available to a company are the relatively permanent people who "work for the company" as employees and management. They become immensely valuable especially when cross trained in various areas of responsibility. Their value and ability to contribute to improvement increases as they "understand the company" and "compete for the company" and "think for the company" and "collaborate within the company" and "act for the company." When their hearts and minds, as well as their bodies, are working for the company, the rewards will be greater for all. No other asset of the company has as great a potential for return on investment than the people inside the company. Externally, companies get their most vital help from their customers and potential customers, which in the aggregate is the source of all demand for the products and services of the company and therefore the source of all operating cash needed to acquire all assets and pay all expenses and costs associated with survival and growth of the company. Companies are customers themselves as they in turn depend on their suppliers (1st source, 2nd source, etc.) to provide whatever the company adds value to and sells to customers. Suppliers can provide all kinds of help to companies beyond the obvious. And the company can benefit from cross training insights from being both a supplier and a customer. Companies also make use of other professional service providers, sometimes including a corporate attorney, an accounting firm, an auditor, insurance, public relations and advertising, recruiting and HR services, equipment maintenance, facility maintenance and custodial service, etc. Most of these service providers are engaged to either help keep the company out of trouble or help attract more customers. As part of the working network familiar with the company, they can often provide helpful insights for improvement. Another type of service provider that can help improve the value of the company includes management consultants, coaches, and advisers, including members of boards of directors and boards of advisers. Companies are wise to recognize that all their networked helpers can be of value in improving the company and not neglect potentially valuable insights.

The Clearer, The Better

We all want improvement, greater cash flow, more value, better quality. We all have problems to solve. Vagueness, while a subtle enemy, is a greater enemy than complexity. Simple is good. Clarity is better. As helpful as simplifying complexity seems to be, clarity that a child can understand is better. It might just be a subtle aspect of vagueness or complexity that is the root cause opportunity for improvement. While simplifying might overlook something subtle, clarity spells it out. Important difference. When things aren't going well, life gets more complicated, especially whenever and wherever we are not clear about why, what, and how things aren't going well. When things are going well and things are all clear we can sleep well at night even during storms, and life is better. The "simpler" that is desirable has the uncommon clarity of common sense without missing anything meaningful. Getting things clearer might take more thought initially but more complete and accurate clarity is apt to yield better, faster, lower cost results overall. Many forms of obfuscation (concealment of meaning) foster vagueness and can happen for sometimes subtle, but almost always knowable reasons. Root cause clarification for obfuscation will reveal meaningful improvement opportunities. Key performance measurement, monitoring, and management systems, personality and behavioral profiling, practices of advanced science and improvement programs applied to business are potential power tools in the hands of those who are suitably enlightened in the vital basics of business and appreciate the perpetual advantage of clarity.

Ideas Come to Life with Action One of my heroes, Spencer W. Kimball, was fond of saying "Do it." I liked framing those words within "Don't Quit." Improvement ideas create value only when action bears some fruit of value. To ever get anywhere on anything, one must act. That's the simple cycle of the improvement process: think--act-->result--think again--act-->result--think again--act-->result My father's version was "plan your work and work your plan" and keep it up with an eye for overall improvement. Action makes something of ideas. Results may be desirable or undesirable, sufficient or insufficient. Keep up the "think, then act" cycle to continue learning and improving. You will get one item polished well enough, but what more in the bigger picture can be improved? Move on to more.

Look for situations where "obviously" needed action has not been taken to produce improvement, think it through, especially why action has not been taken, then determine what action can and should be taken, and do it, and don't quit until its done. Learn fast, fail fast, change course in your direction as needed for overall betterment. Most of the time, only real action has any possibility of producing positive results. But there are certainly times when "no action" is either called for or is at least the best choice for now. Making that wise discernment carefully, but also plain old luck, can often make all the difference. Since you most often never know unless you try, there is a reasonable bias for action, all things considered. Where many ways can be tried (many ways to skin a cat), but none are assured of success, get on with it. You may have to try all the ways to get something to work anyway. Overcome resistance with pleasant persistence. One chronically unprofitable manufacturer supplied 60% of its product to one large OEM through a multi-year contract for pricing that was simply not profitable. It took the action of 11 separate, creatively unique, and pleasantly orchestrated attempts over several months, asking for a higher price in spite of a "fixed contract" before the OEM finally agreed to a 20% price increase which immediately made the manufacturer acceptably profitable. Simple minded determined, but pleasant persistence made all the difference. Another severely unprofitable manufacturer had spread its existing resources over 14 product lines as a result of prior mergers in an attempt to provide a complete family of products and diversify risk. Acting upon the idea to focus on 3 of those products produced a 20% pre-tax profit. We all know stories like these. It takes courage to act. Risk of loss assessments are not to be overlooked, but fear of failure is a familiar beast to be beaten.

Business Model Innovation Even things as important as cash flow, profit, growth, continuous improvement, and innovation can become tiresome if just harped on. Even the concept of maintaining balance can be made monotonous. Whether or not we have a psychological need for cycles, they are everywhere. Fashions come and go because sameness is stifling, variety being the spice of life. Vicissitudes keep us on our toes. Nature, replete with cycles, always exhibits natural tensions, pros and cons, ever present opposition in all things, ebbs and flows in various forms, all giving rise to opportunities. So it is with markets. Maintaining, if not improving, market and business health and well being is a practical necessity of business life, to survive, much less grow through the many life cycles of business. Choices to follow a product or business life cycle without innovation lead to business failure, death or recycling. Innovation is creation of a new cycle, a new wave,

new growth potential. Many innovations fail, but no innovation, like no seeds and no cultivation, yields no harvest. Product and service life cycles are well known and better studied in the world of marketing. The cycles of all the other elements of a company's business model are less familiar, but no less real. Contracts make an attempt to counter some cycles, but ultimately cyclic pressures, like all market forces, will be manifest in some way, like all laws of nature. Business survival, much less thriving in hard times, requires business model innovations that produce more cash flow and profit improvement, the life force, life blood, of business. Pricing is often paramount, but any of the factors in the equation, any of the ingredients in the recipe, any of the elements of the business model can be problematic, and therefore opportunity-laden. And business model innovation doesn't have to be as radical as Google, WalMart, wireless communications or online stores. Sometimes seemingly minor tweaks can open doors to exciting new horizons. The key is to open minds to see a bigger picture of possibilities and fail fast in figuring out what's going to fly. Times of economic upheaval can give rise to business model innovation as leaders within interdependent engines of private enterprise interact and adapt to meet their needs. Uncertainty is inhibiting, but optimistic team-leading visionaries who initiate experimentation can discover new solutions that add value and accrue benefits to all participants and the greater whole.

The All Important Business Model An old friend who has banked tens of millions of dollars over the years from a pretty simple business likes to say he's never had a so-called business model, adding that all he did was take care of customers. While talk about business model can be misguided, all businesses have a model, elements of which make them by definition a specific business. My friend studiously served his customers, but always profitably for consistent and very meaningful cash flow. His industry is very depressed right now, but he still produces positive cash flow. He has a good business model which he understands very well and executes wisely. Business model elements usually start with potential customer need which helps define product or service, then goes to demand which helps define volume and price, which multiply into sales or revenue. But the business model importantly includes cost which yields gross margin, then all other expenses required to incur the costs and produce the sales, which combine to produce the income or profit and that all important cash flow. I'll never forget hearing Al Shugart talk about cash being more important than your mother. Add capital requirements and necessary measures of ROI and you have the essential elements of the business model or business formula or recipe for success. Any one

element or factor can make all the difference for good or ill, but it is ultimately the combination that counts most. The cost factor includes the pivot point of supply. Volatility of supply volume or cost, like volatility of demand volume or price, can create major challenges to overcome. Quality of product and service relates to both cost efficiencies and price/demand effectiveness. The ultimate expression of the elements of the business model is the vision of the company strategically instilled into the minds and hearts of an enlightened leader-inspired self-directed organization.

Empowering Vision Knowing clearly what you want to say greatly affects your utterance. Knowing clearly where you want to go and what you want to be drives your strategy - how you plan to get there. Clearer vision not only helps produce clearer strategy, but unifies and intensifies confidence in both strategy and execution. Clear and vivid vision leads to more internalized imagery which taps inner emotional motivation. When you can really taste what you're after, you're even more likely to work to keep all systems aligned, to make progress more efficient and success more likely. The more everyone is on the same page, seeing and tasting the same vision, and tuned in for more effective teamwork, the more likely the success, by some combination of better execution and crucial changes in strategy. Vision development, clarification and internalization take time, but that time is well spent when it improves buy-in, motivation, productive creativity, and overall enthusiasm and resourcefulness for vision accomplishment. The more vividly the vision is instilled into every member of the organization, the more vibrant and productive the performance. Many common, but unnecessary, time wasting, resource-consuming problems never appear as greater overall alignment is achieved to take the shortest distance between two points to hit bulls eyes step by step until the vision instilled within is brought to reality.

Organization Must Align With Strategy Organizations develop, carry out, report on, and evaluate the strategy needed to achieve the vision of the business model. Strategy includes the high level overall and necessarily evolving plan that drives all subservient plans intended to accomplish the business objectives fulfilling the vision of fully executing the business model. Strategy can be sufficiently defined only if the vision of desired outcomes is sufficiently defined, and ultimately must take into account currently de facto realities of organization and even leadership. Aligning organization with strategy in an always imperfect and ever changing real world

is a practical ongoing iterative process, as strategy logically dictates organization, but inevitably evolves out of existent organization and perspective. Superior strategies executed to perfection is the endless quest, but as in so many things, there is a certain amount of choice and accountability associated with strategy and its execution via organization. Winners of many competitions have resulted from both superior strategies more weakly executed as well as weaker strategies more perfectly executed. While even the best laid strategies and plans are subject to change, the competitive difference can be decisive, wise discernment whether to persevere to execute better or to change strategy. An enlightened leader-inspired self-directed organization will continuously strive to be learning and gaining quickly from experience how to modify to improve both strategy and execution.

Leadership Drives Organization Leaders organize. Why? To bring about desired results. How? By gathering insights, clarifying desired outcomes, mapping out plans for action to be taken, breaking down responsibilities, recruiting and qualifying whatever help is needed, making assignments by delegating authority and discretion with responsibility and accountability, and incentivizing, training, and supporting in every needed and possible way to accomplish desired outcomes. Ongoing leadership maintains or increases the momentum of improvement. The style and quality of leadership determines whether the state of the organization improves or declines and to what degree. The quality of the organization in turn influences the level of attainment of desired outcomes. Organization must be "improved as required by ever-changing circumstances" to keep up, much less increase, the momentum of improvement of outcomes, especially to thrive in hard times. Organizations improve as new insights are more effectively gathered and evaluated, as successive desired outcomes are more clearly defined, and as plans are better updated and refined, as well as responsibilities, recruiting, qualifying, assignments, delegation, incentives, training, and support needed and possible to accomplish successive desired outcomes. This is a process of ongoing organizational development. Leader inspired self-directed organizations working in harmony and unity can achieve powerful improvement if enlightened by business knowledge and wisdom. All functions of a business organization require adequacy if not suitability in the vitals of

human and financial capital. The permanently imperative demand-side functions of marketing and sales drive the essential supply-side functions of design, engineering, production, and service to meet demand. Finance and banking functions provide essential fuel for the economic engine. Like all functions of business, including the other support functions of HR, IT, legal, etc., the scorekeeping accounting and auditing function is a primary source of insights into opportunities for business improvement. Failure to inspire and nourish enlightened self-directed organizations will lead to weak and diseased organizations. Adversarial bureaucratic growths of any kind, including labor unions, will debilitate a business organization like cancer. Improving the health and well being of any organization is required to thrive in hard times.

Use a checklist to audit for improvement opportunities 1. What "legacy obligations" might now be unnecessary? 2. How might management be more streamlined? Are there still too many layers of management, … rigid job classifications, inefficiencies? 3. Are we making products customers want? How can we improve them? Anything new we should do? 4. Are there unintended consequences we don’t like or is there anything that stifles important activity? 5. How can we enhance competitiveness? Do we have anything like a “regulatory edifice created over the years” that has removed freedom needed to take responsibility? 6. How can we increase accountability? 7. Do we need any "change in culture, to a culture that answers challenges with innovation…" 8. How can we better “access their can-do spirit…?” 9. Do we need help to “surmount… inertia … (to) energize, (do) spring cleaning, realign, advance… removing shackles … (to) unleash untold resources and human energy?” (Quotes from “Let's 'Restructure' Washington While We're at It - Congress is at least as unresponsive to consumer demand as Detroit.” By PHILIP K. HOWARD, a lawyer, chair of Common Good (www.commongood.org), and author of the new book "Life Without Lawyers," published Jan 2009 by W.W. Norton & Co.)

A Company’s Working Core

1. Business model – products, services, pricing, costs, margins, volume, cash flow, profit, ROI 2. Vision – instilled, vivid, unifying, line-of-sight depiction of desired outcomes/goals 3. Strategy – how to fulfill the vision of the business model, credible planning 4. Organization – people, delegation, training, teamwork, I-O process & fulfillment 5. Leadership – style, attitude, ideas, energetic problem solving, desired results Get help from advisers who instill principles and practices that are enduring, and therefore work themselves out of a job, allowing them to move on to the next improvement opportunity. The best adviser’s price is a combination of hourly, project, and performance incentive.

CEO’s Must Improve the Business CEO’s have two jobs: 1. Manage the business 2. Improve the business A corporate business adviser can help CEO’s improve business, focusing where needed most, first to improve the internal well-being of the firm itself, then the health of the firm’s non-competing corporate customers and suppliers. Keep it simple, yet complete, working with appropriate company staff (permanent, fulltime) to set up an internal process (repeatable) to audit, evaluate, and clarify specifics to perpetually improve a company’s working core.

More than Products, Services or Technologies Opportunities for business survival and growth in ever changing times are seized by those who improve in core aspects of business: business model vision strategy organization leadership not just the products, services, or technologies temporarily defining the business.

Ask Clients Questions and Manage Expectations

List top customers (the 20% who provide 80%). Ask them what they don't like about us, what they wish we'd change or improve. Questions: -What are your expectations of us and how well are we meeting them? -What have we done for you that has gone well and why? -What has not gone well - what could we have done better? -What else could we be doing better to help you and your business? -What do you wish we'd do differently/better? -What else can we do to improve things? -Are you aware that we can also....? Give them some kind of simple score card. Visit them to review the scorecard in person. Get their honest thoughts on where we fall short, where we can improve. Determine what we will do and how we will measure progress in improving. Determine how we will continue to communicate. Really listen, do not over promise, really follow through to over deliver. Connecting candidly and thoroughly with customers will provide the best insights into how to make things better for them and us, to strengthen relationships, get more business, and increase overall value from our relationship. After top customers, extend to all others. Do the same in reverse with top suppliers. After top suppliers, extend to others. Always thank them for their business and their feedback.

Collaborate to better serve corporate clients All but sad cynics know the potential of "casting your bread upon the water." And anyone not familiar with the parable of the "Good Samaritan" has missed a lot of additional insights that make all the difference in life. Collaboration is pitching in to interact, listen, compare notes, initiate and cooperate to help wherever and however it can make the difference to all concerned.

Everyone in the business of serving the needs of corporate customers has a base of corporate clients upon which their business depends. It is in their/your/our self interest to do whatever possible to further the health and well being and level of success of clients. Whenever "our clients" can be improved by becoming a well served client of another non-competing company, we are better off and so are they. Call that win-win-win. "You," "us," and "they" all benefit from smart collaboration. Improvement, progress, the process of making things better, flows according to effort, energy, enthusiasm, effectiveness of results, etc. While it can be delayed by mistakes that end up being time consuming to recover from, it is far more often delayed by procrastination stemming from fears associated with either pessimism or the impatient demand for perfection. Is there anything that cannot be improved? Collaborate and find out. There might even be a new business model emerge from such an undertaking. Don't be shy, just start with some kind of feasibility testing: 1. Confirm interest of critical mass of initial participants and areas of interest/assignment. It's wise to begin with the demand side: 2. Collectively compile list of first contacts to all known potentially accessible sources of client bases (lists of customers) – someone known well personally who can move things forward. 3. Confirm best contact person (not necessarily first contact) for each client base for initial client-by-client assessment of potential needs (top 3-10). 4. Identify client access hurdles to overcome. 5. How best to overcome them, case by case. 6. Who will do what to clarify and verify clients’ needs. 7. Make initial estimate of aggregate client demand for specific advisory and transaction services. With some handle on demand, turn to the supply side: 8. Collectively compile list of first contacts to all known potentially usable service providers. 9. Clarify and verify distinctive competence of each service provider, including how to improve their competence. 10. Confirm initial capacity to meet demand. Nothing is real until action produces results through operations:

11. Clarify database utilities needed, availability, administration. Initial and ongoing business planning can make all the difference: 12. Confirm principal participation in profit center. 13. Name profit center and more succinctly describe it for maximum marketing value. 14. Clarify new profit center pricing, retainers, performance fees, etc. 15. Estimate volume, revenue, costs, expenses, cash flow and potential value of profit center. 16. Update implementation plan/timeline. "Closing sales" makes all the rest possible: 17. Overcome hurdles and engage clients to clarify and verify needs Superior "fulfillment" is the key to closing more sales: 18. Clarify and execute operations for growth and improvement.

Academic Exercise or Real Results? Inspiration flows as a few enthusiastic participants from diverse backgrounds get their heads and hearts into exploring what may be a subtle, but meaningful business model innovation. Teams have reason to be confident they can gradually determine the most promising overall arrangement, seeking the greatest benefit to all concerned. The extent of services needed by clients goes well beyond the few categories the team may themselves represent. Most participants may choose to remain focused service providers but affiliate with the new profit center operation while a few others will become a team integral to operating the new profit center. The entrepreneurial profit center (an appropriately named business entity) will be accountable for its distinctive facilitating function of identifying specific needs and referring specific services to fill those needs to achieve authentic improvement in client cash flow and corporate valuation. Fulfilling this ultimate purpose – real improvement in cash flow and corporate valuation – will require innovation in priority diagnostics, results accountability, and forms of compensation. Experience dictates the need to produce meaningful return on time, not just on capital. It is one thing to go through the motions and think someone has been taught how to fish. What counts most is that they actually catch fish and get others catching fish also. Valuable insights come from continuing interaction, hands on teamwork and real

experience over time. It is always better to think before we stretch, stretch before we walk, and walk before we run.

Critique, Commend, Complain, Correct - Improve Observing and evaluating the state of things consists of critique and analysis, required to some degree to ever deliberately bring about any improvement. Assessments may be either positive or negative. If positive, we commend, complement, praise, support, or merely comply, and then move on to other observations. Negative assessments have more complex outcomes. If we can see that there is something we can do about it, we have the choice to improve things. If we are impacted, but see little we can do about it, we either simply observe and ignore, or we complain in some way. When we are more severely impacted and at least seemingly constrained by circumstances beyond our control, we can experience varied degrees of frustration. Frustration can be an indicator of opportunity for creative problem solving or innovation. We can on our own or in concert with others figure out something we actually can do constructively about the situation. In so doing, we find a need and fill it. This is entrepreneurial endeavor at its most basic. When we find no solution, we have the choice of either persisting or setting the matter aside to give our attention to something else that we can do something about.

Look and Listen Well And ask the right questions. Just in the asking, answers will come. Further probing inquiry will help reveal more insights. Explore. Analyze. Evaluate. Diagnose cause of effect. This mental work done correctly, logical, common sense follow through action is almost inevitable.

Don't Get Railroaded by Thoughts Letting thoughts run wild can be effective in brainstorming to come up with creative ideas, but then post-brainstorm choices must always be made to go down a particular path, always subject to further brainstorms as new information is received along the path. All feedback and symptoms of distress are clues to evaluate progress along the path. We can get railroaded by the excessively obsessive thoughts of others or ourselves if our pursuit along the path is so single minded that we ignore feedback and symptoms and get trapped by blind ambition. On the extreme, we can get railroaded by diversionary or distracting thoughts if we are paralyzed by fears and doubts associated with risks of what might happen or for any other reason procrastinate progress. The best course is a blend of focus, determination, awareness, and assessment.

Not Business As Usual, But.... When cycles are down, when times are tough, business as usual or status quo is still always subject to change, adaptation, improvement. When sales activity diminishes as customers cut back, and cash flow declines, trading either stops or terms of exchange adjust to make a transaction. When companies as customers still need services, and companies as suppliers still need business, but neither can afford what the other normally wants, customary trading stops, unless price and terms and nature of the product and/or service is creatively modified to permit more, new transactions of mutual benefit. Bonuses paid even though bonus goals are not met is destructive if it is really true. The mockery of being rewarded for poorer performance is devastating to the integrity of the organization. A worthy leader will not be so self serving. Things can easily go wrong in spite of best efforts, but totally objective performance bonuses justly paid have the exemplary power of integrity that subjective political payoffs do not. People don't have to be rich to be greedy, but higher profile leaders by prominence set examples for good or ill. Those who follow the rule that "he who has the gold, rules" wreak havoc on an organization. "Do unto others as you would have them do unto you" yields the power of integrity for the benefit of all concerned. Those more concerned about themselves than "all concerned" feed the worst natural inclinations in others, adding fuel to foster the corrosive effects of class warfare.

Gaining Confidence

We check, we research, survey, sample, we test, we go for it, we learn, we adjust, tweak -- all in the process of gaining confidence. We do this individually as we learn anything new. We study, we practice, we perform, and keep working to perfect. This process of gaining confidence requires patience and perseverance. The same thing applies to entering into new relationships. We get to know prospective new hires or partners through a process of gaining confidence. Same for all new ideas to make things better. Gotta work at getting confidence. Also gotta work at maintaining confidence. Keep checking. Keep practicing. Keep perfecting. Patiently persisting.

Shine a Light on It Darkness, lack of visibility, confusion, go hand in hand. Sometimes all it takes to solve a problem is to shine a light on it. In the full light of day, some problems even go away. Stumbling around in the dark can be hazardous. People who want to hide things tend to work in the cover of darkness of some form. Shining the light tends to curb or combat nefarious temptations. That's the beauty of open book management. It can be very frightening for those with something to hide, but it really will produce better results overall.

Capital Structure and Brain Work To improve efficiency, growth and overall performance, leaders benefit from improved capital structure. This involves financial intermediaries and financially oriented turnaround specialists. Finance is fuel and the system for accessing and processing optimum types, blends and amounts of fuel. In addition to improved capital structure, turnarounds and ongoing improvement requires improved overall brain structure, brain work, team work, to make the most of the fuel, improving the improvement cycle of planning, design, development, operation, analysis, correction, etc. Fuel makes things possible, but doesn't think through, much less act out operation, direction, correction, etc. Fuel and fool are not a good mix; improperly attended fuel can produce dangerous outcomes. Brain structure considerations have breadth and depth dimensions. Breadth starts with experience, knowledge, skills and insights across organizational functions and industries. Depth starts with the working core of business by industry and company of pertinent details of business model, vision, strategy, organization, and leadership, the very process of improving brain structure and brain work.

Faith Overcomes Fear and Doubt Simple faith is a prerequisite to action. Without continuing faith, action lacks power to persevere.

Fear and doubt inhibit faith and therefore action, especially enduring action. Alternately, a sufficient increment (mustard seed) of faith overcomes fear and doubt. As faith ignites courage, boldness follows, the boldness needed to overcome barriers and hurdles to progress or improvement. Whether originating with Goethe, John Anster, W. H. Murray, or someone else, the famous statement about boldness epitomizes faith: "Until one is committed, there is hesitancy, the chance to draw back-- Concerning all acts of initiative (and creation), there is one elementary truth that ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one's favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way. Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it. Begin it now."

Breadth and Depth of Experience There is value in having greater than typical breadth of industry experience. Experience beyond one principle industry (e.g., electronics) or even sector (e.g., manufacturing) provides richer insights into how to make improvements in the world of business. Whatever the primary industry, valuable perspective can be gained from industry breadth whether it be the packaging industry, the hospitality industry, the food industry, the world of entertainment, and so on. In addition to a cross section of industry experience, a breadth of relationships with corporate clients, from artists to high tech companies, enriches perception for greater creativity, cross-application, and assessments of practicality. Depth of insight from the business life of a serial turnaround CEO can provide practical business knowledge related to analysis, design, and innovation to improve all areas of focus in the working core of any business -- the business model, vision, strategy, organization, and leadership.

What IS Improvement? While specific improvement, making something better, can occur in virtually unlimited ways, in every area of the company, at all levels, micro to macro, the ultimate common expression and verification of true overall improvement for the corporation is increase in the financial valuation of the company, typically a function of some multiple of a mix of increased cash flow, earnings, and net worth in the aggregate.

In this way, "improvement" can be quantitatively measured. The leadership challenge is to accomplish the set of specific improvements that will bring about this increased financial valuation. Choices made for short-term increases in value can affect long-term value. In one respect, appropriate small steps can add up to meaningful longer-term accomplishments. Improvement is incremental. The cumulative effects of many small improvements can be immense. Similarly wisely targeted improvements that portend greater resultant progress can be even more rewarding. On the other hand, it is possible to do things that just look good temporarily. Superficial improvement can be more cosmetic than enduring. So-called "slash and burn" tactics epitomized by "Chainsaw Al" Dunlap with Scott Paper and Sunbean can result from overemphasis on the numbers of business. Actual or virtual not-for-profit status can result from overemphasis on the people end or fantasy aspect of business. Effectively involving and educating the people of the business in the numbers of the business, addressing the working core of business model, vision, strategy, organization, and leadership, is conducive to improvements that result in enduring increases in value.

The Physics of Improvement Use the physics of progress. There is power in focus. There is strength in diversity. Harnessed, channeled energy yields power. Unchanneled energy tends toward entropy, dissipation, disruptions. Density, pressure, and temperature interact to effect flow. Combined flows of interactive elements effect outcomes. A physicist can do much more with this topic. Don't fight the laws of physics - use them for productive purposes.

Choose to Improve & Chinese proverb Improvement can happen serendipitously, but more often it requires a conscious choice because consistent, meaningful improvement requires consistent, meaningful effort. It rarely just happens. Entropy just happens. Things go bad, get worse, fall apart, deteriorate

pretty well on their own, through abuse, abandonment of stewardship, neglect, or inattention of some kind. The opposite of abuse and neglect is leadership, initiative to improve things. Desire or mental inclination is necessary, but just a start. It must be followed by words and deeds, communication and action to marshal whatever resources are needed to bring about the fulfillment of desire. Goals are all about improvement, making things better, but remember the Chinese proverb: GO to the people LIVE among the people LEARN from them LOVE them. START with what they know, BUILD on what they have. But of the BEST leaders, When their TASK is accomplished, Their WORK is done, The PEOPLE will remark, "We have done it ourselves."

Scott's Professional Background • 20 years as an entrepreneur, angel investor, adviser Advise private companies as needed, as requested Scrutinize business model, leadership, vision, strategy, training, quality, etc. to identify opportunities to improve business value Help companies with research, strategic, organizational, and business development Provide strategic guidance and financial resources to start-ups and established firms • 10 years as turnaround specialist: 4 companies - technology, consumer products, industrial services Amcomp – from $4M loss to $8M pre-tax profit Disctron – from $6M loss to $7M pre-tax profit Elan Products – from annualized sales of $1M to $5M Golden Bear Packaging – from co-founders infighting to self-managing ESOP

Leadership and Advisory Contribution

• "Business value growth" mind set and "servant leader" management style Complement a team immersed in industry and technology Nurture focused “get real” initiatives to increase cash flow and grow value • Industry outsider to work on the business to increase cash and corporate value Question collaboratively, challenge supportively, trusting but verifying Identify the few most important decisions to be made out of the many Focus intently and enthusiastically on what matters most Scrutinize business model, cash flow, P&L, balance sheet, key performance measures Pinpoint opportunities, explore options, and follow through with needed changes Improve confidence, credibility, communication, and constructive innovation Better relationships with customers, employees, and suppliers Connect the dots on how each person affects results Key individual metrics to achieve goals Spot frustration/vagueness – clarify to better instill practical improvement vision Spark initiative, asking “What would you change or improve? What’s the next step?” Upgrade traditional practices with value increasing improvements