Monday, June 12, 2017

Who is responsible for profit in your company?


 Who is responsible for profit in your company?

They say it’s lonely at the top. For many CEO’s it can be very lonely when it comes to responsibility for profit. At a recent presentation for a group of CEOs, I asked the question, “Who is responsible for profit in your company?” The answers were not surprising. While several said it was the CEO, CFO, or the senior leadership team, the overwhelming majority responded that everyone in their company is responsible for profit. While the CEOs believed this, when we begin working with companies this is one of the questions we ask a cross-section of employees. We rarely get a consistent answer.

“Everyone is responsible for making a profit.” Is that really true? We all like for our co-workers to be thinking about profit, but are the pieces in place to support this grand idea?

  • Profit Must Be Clearly Defined, Visible, and Understood

Can employees clearly see how profit is generated? In many organizations, profit is the “mysterious” remainder of the monthly aggregation of revenues less the aggregation of costs and is not known until after the month is over…too late for co-workers to do anything about it. How can we expect them to affect something that seems too complex for any mere mortal to understand?

  •           Is the Company Organized for Profit Management?
Decisions need to be made close enough to the customer to impact profit on a daily basis.

  •           Metrics
Are you measuring and reporting against profit at an individual customer or individual product level on a relatively frequent basis? These metrics need to be visible to the entire company? At least the pieces they can affect!

  •           Are Compensation and Rewards Aligned with Net Profit?
There’s an old expression: “You get what you pay for!” In the world of compensation it is very true. If you are compensating the sales and marketing departments for revenue generation and operations for achieving AVERAGE product cost, the expected outcomes may surprise you. Even though revenues may increase, being on the incorrect extreme of those average costs can cause you to have very poor results. Compensation plans need to directly reflect the achievement of NET PROFIT PER CUSTOMER.

THE RESULTS CAN BE COMPELLING
One client company that now has a clear view of customer profitability and an employee group reorganized around responsibility for profit has seen dramatic change. In the first full quarter of implementation, this wholesale distributor saw customer net profit margins grow by FIVE PERCENTAGE POINTS in the targeted customer groups.
On an annual base business of $10 million, that’s a $500,000 increase in net profit; at $70 million in annual revenue, that could be a $3.5 million increase in net profit.

The Mead Consulting Group has a proven process that helps clients to develop customer profitability analysis to focus on the customers that drive increased revenue growth while reducing the impact of unprofitable customers. You can see an overview on our website. Contact us for a free consultation.

Monday, May 22, 2017

WHAT KEEPS CEOs and CFOs AWAKE AT NIGHT?



WHAT KEEPS CEOs and CFOs AWAKE AT NIGHT? 
[Editor''s Note: At a recent presentation to a group of CEOs and CFOs of mid-size companies, we had an open discussion about what keeps them awake at night- what most concerns them about the present... and the future. After the issues of national security, terrorism, and football, the focus turned to their businesses.   -dpm]
 1. Is my company too passive? Have I spent too much time being internally focused? Is it time to take control and chart a new strategic direction for the business? If so, what is it? Are we missing opportunities?
 2. How do I grow? Where do I find new growth...new profitable growth?
 3. How do I maintain a focus on profit and cash flow, not just sales growth?
 4. How can I gain a real sustainable competitive advantage?
 5. Winning the talent war: How do I put and keep the "right people in the right seats on my bus?"
 6. Where will I find the time to develop new ideas, new products, new sources of revenue?
 7. What are my exit alternatives? How do I maintain my lifestyle if I choose to exit the business? What do I need to do to be prepared to sell? What will I do after I sell?
 8. We've made great progress...How we do take this business to the next level?
9. What are the issues that are keeping you awake at night? Let me know your thoughts? Email me or comment here

Clients of The Mead Consulting Group are finding answers to these exact questions. They are positioning themselves to achieve clear competitive advantages over their competition. History tells us that amazing success has been achieved by those companies that are ready. Are you ready?
 
 The Mead Consulting Group has been helping middle market companies for over 25 years to focus strategies and execute well so that they get the results they desire.
If you would like to discuss how we might help your company begin the process of adding value and moving your company to the next level of performance, please contact me.

Tuesday, April 11, 2017

Are 'doing what you say you'll do' and 'flawless execution' old-fashioned values


The Mead Consulting Group has been focused on execution and getting results for businesses for many years. It is the key to our success as a business and has become essential component of our brand. Execution is not only important to the business, but also very important to me personally in everything I do. People who have worked alongside me in nonprofits, community, or public service areas certainly understand this.
At a gathering of a group of top emerging professional services leaders in the Colorado community - the question was raised: "Is meeting your commitments and 'doing what you say you'll do' as important today as it was 20 years ago?
It's an interesting question. I was quick to respond that "Absolutely! Meeting your commitments is just as important today as it was a couple of decades ago."
However, as I thought more about it, I have had reason to question whether that is really true. Is it really as important today? In the last few months, I have been faced with a number of iterations of businesses and people not executing, not meeting their commitments, not doing what they say they will.
Do what you say you'll do. Business on a handshake. Mead Consulting has numerous marketplace partnerships with the better providers of a wide array of services that our clients need (training, recruiting, managed IT services, investment banking, etc.). We have had mutual agreements for many years with these providers - virtually all on a handshake agreement. We have had only one negative issue with a partner over 20+ years with this program... until recently.
In the past two years, we have had two new partners (one a Managed IT Services firm, the other a marketing firm) not live up to their word. It has given me pause to question why. Is this a sign of desperation due to tough business conditions? If that is true, does integrity only apply to good times? Did we compromise our standards by working with these firms? Or, was it just the luck of the draw over time?
Don't over-commit and under-deliver. There have always been situations of over-committing and under-delivering in business and community. Sometimes it is a miscalculation or unintentional. Sometimes people can't say NO and get overloaded. However, recently I have begun to see a pattern with people who routinely accept more and more roles and then can't perform. The same people repeat this in organization after organization. For a number of years my mantra for nonprofit and public service organizations has been "alignment, commitment, flawless execution." In other words, do something that is well-aligned to your business, personal, professional interests, bite off a manageable amount, and then execute flawlessly. If you then find you can take on more tasks and responsibilities, that's great, but meet your commitments first.
As a board member and leader of several organizations, I have been forced to have tough conversations with people who love to add titles and items to their resume ("Check a box"), yet don't deliver or meet even the minimal standards of performance or execution.
Don't accept mediocre performance. Hold yourself and others to high standards. I have had occasion to work on a program which is a government - private industry collaboration. The program which has tremendous potential to assist companies and create jobs has unfortunately been sub-optimized. Even as it has been falling short of its potential, it has been very instructional to watch the self-congratulatory behavior of the committee and board. Committee members who have repeatedly failed to meet their commitments cheer each other as "awesome" and "fabulous" while rejecting or ignoring suggestions for improvement. I certainly understand that government entities have not always been shining examples of stellar performance or accountability, but it is disappointing none-the-less. We see signs of the same applauding of mediocrity in the school system as well as we seek to promote high self esteem for every student and teacher regardless of achievement or effort ("Everyone gets a medal"). Has acceptance of mediocrity become the norm? Is it old-fashioned to set high standards and expect strong performance or yourself and others?
Don't find excuses or blame others for substandard performance. When I was a young boy growing up, my father would say, "Be a man! Own your mistakes." I wonder what he would think if he were alive today to observe the business and government scene as people look for anyone they can to blame when they fail or don't deliver on commitments.
Some may say that I may just be getting cranky and crotchety. But, I ask you to think about this: Is 'meeting your commitments' passé? Is 'doing what you say you'll do' your grandfather's mantra? Is 'flawless execution' an old fashioned concept?
Let me know your thoughts?
The Mead Consulting Group has been helping middle market companies for over 25 years to focus strategies and execute well so that they get the results they desire.
If you would like to discuss how we might help your company begin the process of adding value and moving your company to the next level of performance, please contact me. 

Leadership Luncheon - Colorado Mentoring Summit - We are proud to be a sponsor of this important event advancing youth mentoring in Colorado








Be a part of the Corporate Network in Colorado that is creating a mentoring movement to increase the number of quality mentoring relationships for young people!

The 2017 Colorado Mentoring Summit will feature a Leadership Luncheon that will engage corporate and nonprofit leaders in a keynote presentation, discussions and networking opportunities that explores the progress, future and value of joining the mentoring movement for young people.

Individual Tickets Now Available


Keynote Speaker: Dave Stalls
Learning to Walk

Dave Stalls graduated from the University of Northern Colorado with a B.A. in zoology and chemistry, and has traversed a variety of occupations and industries including 9 seasons of pro football with the Superbowl Champion Dallas Cowboys and Superbowl Champion Los Angeles Raiders.  After football he worked in marine biology, veterinary medicine, investment banking, professional public speaking, telecommunications, recreation management, and nonprofit youth development. 

Dave Stalls will share highlights of his career as a professional athlete and in youth development and will discuss ways to walk toward a more inspiring life and meaningful company.

Click here to read more about Dave.


Honoring Mayor Michael B. Hancock with
a National Recognition as a Mayor for Mentoring 

Michael B. Hancock is Denver's 45th mayor. During his time in office, Mayor Hancock and his administration have eliminated the city’s budget deficit, fostered a diverse economy and restored much needed services that were lost during the recession. With a drive toward increasing opportunity for every resident, he has prioritized innovative solutions to investing in increasing mobility options, affordable housing and services for the homeless; supporting economic mobility, entrepreneurs and small businesses; and making government work smarter for residents. Most notably to the mentoring movement in Colorado, Mayor Hancock has been a key advocate for children and youth, supported mentoring agencies at numerous events and lead the My Brother’s Keeper Initiative in Denver. Prior to becoming mayor, he served on the Denver City Council for eight years and was President of the Metro Denver Urban League.



 Founded by the passion and vision of a number of grassroots mentoring organizations in Colorado, Mentor Colorado leads initiatives that will strengthen communities through mentoring.  Whether mentoring programs are impacting violence prevention, improving academic performance or developing career readiness, the research supports what we intuitively know, mentoring works.  To amplify the impact of mentoring, Mentor Colorado supports the growth and development of over 60 mentoring agencies throughout the state resulting in greater collaboration, more high-quality mentoring programs, better use of resources, and most importantly, more young people matched in quality mentoring relationships.


2017 GOLD SPONSORS


2017 SILVER SPONSORS


For more information on the Colorado Mentoring Summit click here