Monday, November 19, 2018

7 Questions Every Leader Must Communicate To Employees

Engaging and mobilizing employees can feel like an overwhelming challenge. But it doesn't have to be that way. There are many simple strategies to engage and mobilize employees. Most cost almost nothing to implement, can be put into place immediately, and have huge impact.

The benefits of an engaged workforce are numerous. Among them are:
  • Committed employees
  • Increased productivity
  • Lower turnover
  • Higher performing workforce

As well, the cost of an unengaged workforce can detrimentally affect your bottom line. Among these disadvantages include:
  • Increased turnover and associated costs
  • Lower morale
  • Decreased loyalty, creativeness, and energy 
  • Reduced productivity

This is a topic that goes well beyond one blog post and I will be addressing it more in future blogs. But for now let’s look at some questions to ask.

There are seven simple questions every leader must answer and communicate to employees. Do it often, it matters. Small, informal conversations about performance go a long way – especially when they include teachable moments about different situations and details.

The questions include:
1.      Do you understand what I expect from you?
2.      What are you doing well?
3.      What, if anything, can you be doing better?
4.      What, if anything, do I want you to do better?
5.      (If appropriate): What will happen if you improve (e.g., more responsibility, more time with leadership, more desirable assignments)?
6.      (If appropriate): What will happen if you don’t improve?
7.      How can I help?
While all of these questions are important, and certainly not the only questions to be asking, the last question is especially important. It shows the employee that the leader cares, and is not merely relinquishing responsibility or shifting blame.

The KEY to successfully engaging employees is getting to know each employee – not engaging a “them”. The truth is, engagement is easy. Committing to improve engagement is where it gets hard. Make employee acknowledgement and recognition part of the fabric of your leadership.

For more information about engaging and mobilizing employees, and to take our free self-assessment about how well you are engaging and mobilizing, or to see how The Cobalt Group can help you with this or any other business or leadership challenges you are facing, Contact us.

We want to hear what you think. Leave a comment and let’s start a discussion.

Copyright © 2018 The Cobalt Group LLC. All rights reserved.

Friday, July 6, 2018

The 1% Changes That Will Grow Your Business

Too often, business owners view growth of their business or bottom line as a major, complex challenge. Granted, there are some complexities involved, and some moving parts that must be managed to expand your business, but there is a simpler way to make a quicker, positive impact on your bottom line.

Make 1% changes.

Let’s take a look at how.

Our client is a manufacturing company that does $4M in revenue a year. Annual expenses run about $3.7M. So they’re netting $300K per year, or about an 8% profit margin. For any business I would think that an 8% margin would be a good thing. But the owner wants to expand and needs more available cash to do this. They do not want to take out a loan.

The company runs fairly efficiently but in reviewing their numbers there were many areas that they could do better in. Recall from Looking Within While Looking Without that the easiest part to control between revenue and expenses are – the expenses.

So we discussed this and I suggested a bite-sized course of action. What if we were to reduce our expenses by 1%? What impact would that be? We looked at all of the expenses and focused on the line items that we felt were the easiest to control. Among those were:
  1. Utility costs.
  2. Find lower cost materials without sacrificing quality.
  3. Lower the unplanned downtime to manufacturing.
  4. Labor costs – not in wage reductions but through stronger retention. Training a new hire takes investment in time and money. The more that employees can be retained means fewer that will need to be trained.
With expenses around $3.7M, a 1% reduction would bring expenses down to $3.663M, or a savings of $37K. To most businesses, saving $37K is a good thing.

Next, what we looked at was how a 1% increase in revenue could be made. The obvious answers were to look at the following avenues:

  1. Small increase in prices.
  2. Increase the number of customers.
  3. Increase the rate of transactions per customer.
  4. Increase the size of the average transaction.
A 1% increase in revenue would mean and increase from $4M to $4.04M, or an increase of $40K. Again, I cannot think of a business that would walk away from an additional $40K in revenue each year.

But these two 1% changes are not stand alone. They are cumulative. When revenue for our customer is increased by $40K, and expenses are reduced by $37K, we have a growth to the bottom line of $77K.

What that means is that our customer grows the bottom line from $300K to $377K, or a little over a 25% increase in their profit margin from making 1% changes. This is just in the first year.

Year two, all things being equal, would bring an additional $37K in expense reductions and an additional $80K in revenue. This is a net of $117K. Combine that with the $77K from year one and there will be $194K in net profits over two years.

Changes don’t have to be always have to be major to make an impact. 1% changes can make a positive impact too!

Contact us to see how The Cobalt Group can help you with this or any other business issues you are facing.

We want to hear what you think. Leave a comment and let’s start a discussion.

Copyright © 2018 The Cobalt Group LLC. All rights reserved.

Tuesday, May 15, 2018

Why Hire a Business Consultant?

Typically, most small to mid-sized business owners find themselves involved in every aspect of their business, from running the business to doing the brunt of the administrative duties. They are required to be great multi-taskers out of necessity. I have found that most business owners struggle to delegate many of the tasks needing to be done, even when they have access to the resources to do so. The upside of that, by their logic, is that they know it is getting done the way they want it done. That doesn’t always mean it is getting done correctly, just that they know it is getting done.

There is a downside to this as well. If as a business owner is spending too much time on the back office work and not on the core business activities (those that run, operate, and grow the business), it is probably time to ask the question - do you need to hire business consulting services? This is not limited to just smaller companies. It applies to businesses and organizations of all sizes.

The challenge for a business owner is to recognize when they should consider hiring a consultant, understand what the role of a business consultant in their business is, and to determine when it is cost-effective to hire one.

What does a business consultant do?
A business consultant is basically an outside expert you hire to solve an internal business problem. A consultant brings knowledge, skills, experience, and expertise to improve their client’s condition. Unlike in-house employees, consultants are hired on a contract/project basis.

Business consultants are there to help you achieve your business goals. A consultant can help you with determining a business strategy, the associated planning, and operational process development and/or improvements required to achieve those goals. They can help with setting a marketing and sales strategy. A business consultant can help with business expansion and other improvements. And while the list is consulting services is virtually limitless, a business consultant can also help implement and execute their ideas and recommendations.

Why hire business consultant?
Most business owners hire consultants as an economical way to bridge a gap in knowledge and/or skills within their company, or a as a way to bring an objective and professional perspective to the company.

Here are the main reasons for which I have seen most businesses hire consultants:

  1. Help finding the problem(s): A consultant has only one focus and can come in observe your business objectively, and determine the root of the problem(s).
  2. Help crafting the solution(s): Perhaps you have a goal that you can’t achieve because there is a skills gap or because it is simply not within your company’s core competency. Hiring a consultant can bring those missing skills and, in the end, help achieve the desired outcome.
  3. Managing future business growth:  Every business owner wants to succeed for the long term. But where does your future growth come from? How do you get there? Hiring a business consultant can get you pointed in the right direction.
  4. Improving operational processes: Let’s say your company has grown very rapidly and there are lots of things you know could be done better. Maybe you don’t know where to start, or don’t have the resources to start. A consultant can bring in some fresh perspective, evaluate any or all areas of your business, and determine the processes and procedures to increase operational efficiency.
  5. Your strategies aren’t working:  When things don’t seem to work out most people will either go for quick, often wrong solutions, or they go ask for help. Businesses are no different. They can either keep going down the road they’re on and continue to lose revenue and market share, maybe go bankrupt, or they can hire a business consultant who can be a game changer that can analyze the strategies and make changes that benefit your company.
  6. You need a certain expertise:  A business consultant is an expert in business strategies. They possess the expertise that your business may not have in order to identify problems, find solutions, create new strategies, and they can even implement those solutions or the necessary changes to your overall business structure.
  7. You’re short on expert staff:  Companies that are short on expert employees hire business consultants who can do both jobs – be an employee and be an adviser to the company. Hiring a business consultant is usually less expensive and more cost-effective because consultants don’t require benefits or withholding.
  8. You’ve lost focus:  It’s not unusual for business owners lose their focus whenever an unforeseen situation arises. This is where you need a business consultant that can adjust your focus towards your goals and objectives and help you make the right decisions.
  9. Help save you time and money:  If you’re still doing too many of the non-core business activities a consultant can take over some those tasks and save you money. They are there to deliver their service and help you run your business more efficiently, effectively, and profitably. A consultant can also provide insight that can enable you to seize new opportunities while avoiding spending time and money on activities that could derail your success.

While those are the most common reasons I have seen, the list above is my no means all inclusive. There are many ways for you to work with consultants throughout your business lifecycle. Perhaps most importantly, business consultants can be cost-effective resources that can give you the valuable time needed to focus on what you do best: developing and growing your business, and being an expert at whatever it is that led you to start your own company.

The Cobalt Group can help you with this. Ask us how.

We want to hear what you think. Leave a comment and let’s start a discussion.

Copyright © 2018 The Cobalt Group LLC. All rights reserved.

Monday, May 7, 2018

People as a Primary Growth Area

In the course of my week I talk with a lot of businesses at various stages and sizes about where they want to grow. It’s not unusual to hear things like:
  • I want to grow into a new market.
  • I want to increase my offerings.
  • I want to add a new location.

The list goes on, and every one of them are good goals and good growth areas. Most of these business leaders have a good strategy to reach those goals, too. But as I talk with them about those strategies there is one common denominator that I don’t hear them talk about growing – their people!

So I want you to change your approach to business growth and think of your People as a Primary Growth Area! While this is true for all of your people, it is especially true for your leadership team. After all, if you’ve read my blog on the 3 Ds of GoodLeadership, then you know that these are the people to whom you will entrust to one of the DsDelegate.

Your people are the most important asset you have in your business. Even if you are self-employed, taking care of yourself will benefit your business.

It’s the people that take your vision and direction and help you achieve your goals. They are the ones that make things happen. You have those people because your business grew enough that you could not do it all yourself.

Don’t overlook your Primary Growth Area. Invest in your people. Make sure they know what to do, and have the tools and training to do it. Sure, better benefits help when they are affordable but what I am saying is to make sure they understand what the mission and vision are, and what their role in it is. Seek their input into your plans and they’ll feel like they have ownership, and with that they will want to succeed even more. And when you’ve achieved results in that Growth Area, you’ll be better positioned to grow your business in other areas, and be able to do so with your people as part of that strategy.

The Cobalt Group can help you with this. Ask us how.

We want to hear what you think. Leave a comment and let’s start a discussion.

Copyright © 2018 The Cobalt Group LLC. All rights reserved.

Wednesday, April 11, 2018

Looking Within While Looking Without

About 3 years ago I took a sabbatical from Cobalt Group to be the Executive Director for a park and recreation district that employed about 60 full and part time staff. It was a fantastic job and a great experience.

When I started I discovered that the district had been running at a loss for the previous six years. Even though the district was supported by an operations and maintenance tax levy (about 58% of total revenue), I knew that I had to treat it like a business and start making it profitable. My first approach was to start looking within and control the controllable. In my experience, the easiest thing to control is the expense side of the P&L. The harder thing to do is be looking without because revenue is harder to control than expenses because, while no business can make customers come in, they can have more control over their operating costs. So I began looking at what the expenses were and where savings could be made.

The first thing I did was to determine what the cost of operating the district was. This had not apparently been done before but I figured out what it cost to open the doors every day. From there I looked at all the items on the expense side of the P&L and began working with my senior staff to understand what those expenses were and what they really needed to be. We looked at labor costs, vendor contracts, regulatory expenses, maintenance, utilities, cost of goods sold, and every other expense category to get an idea of where we could shave those costs.

Some tough decisions were made but I made sure that my staff understood what we were doing and why we were doing it. They knew their departments better than I did and by making them part of the process they now had ownership in the outcome. We met frequently to see how costs were tracking, and made adjustments where we felt it was warranted.

The staff performed wonderfully and at the end of my first full fiscal year, with only one fee increase made to only one program, we ended up with slightly over $20K in profit. This was the first profitable year the district had achieved in six years. We kept up the cost controls and at the end of my second full fiscal year we had a profit slightly over $50K. This occurred because my entire staff understood what we were trying to do, they were invested in the outcome, and they worked diligently to make it happen.

Getting back to profitability provided many lessons learned that I will share in future blogs. But going back to the basics was key. For any business, if you want a better chance at increasing your margin, start where you can have the most control – expenses. But don’t neglect the revenue side of the equation either. Start Looking Within While Looking Without.

The Cobalt Group can help you with this. Ask us how.

We want to hear what you think. Leave a comment and let’s start a discussion.

Copyright © 2018 The Cobalt Group LLC. All rights reserved.

Wednesday, January 14, 2015

Your Value To Your Customer

Most companies have a value proposition. They have some product(s) or service(s) that they believe will benefit their customers. While this value proposition is a great thing to be able to articulate, it isn’t what your real value to your customer is or should be. The customer, on the other hand, wants to believe that they will see value from those products or services. But is that what they really want? My experience is that the value that they see comes more from how you do business with them rather than the actual product or service you’re providing.

The key is to go beyond a value proposition statement and do what you can to help the customer solve their problems. So how do you do that? To begin with, your value begins by getting to know your customer. Get to know them deeply. Know what they do, why they do it, and how they do it. Know what their strategic plan is; learn what their problems are. Many of the problems you can help solve are based in them getting from where they are to achieving their goals. Knowing those goals and why they are important is key here, and will differentiate you from the competition that doesn’t try to understand them.

To do this you have be in there talking with them. Find out what they are trying to do and why. Be an Excellent Listener. Try to get to know their problems before they become a business opportunity. Help shape the way they want the solution to look. For this to happen it will require an investment of your time so that you can understand what they are trying to solve.

The truth is that what customers really want are partners that can help them solve problems. They have plenty of vendors trying to sell them something. So what this really means is that you must move beyond the transactional sale of a product or service and become a business partner and a trusted agent. If you are able to do that then you will increase Your Value To Your Customer.

We want to hear what you think. Leave a comment and let’s start a discussion.

Copyright © 2015 The Cobalt Group, LLC. All rights reserved.

Thursday, January 8, 2015

The Hot Wash

Almost every evolution that occurred in my Navy career was hot washed. That is a military term for reviewing the lessons learned. We debriefed every flight, every exercise, and almost every evolution. We looked at what we did right and what we did wrong. It never made us perfect at what we were doing but when those lessons learned were incorporated into the next event, it made for fewer and fewer mistakes. This especially helped in the planning phases.

Since joining the corporate world I have not seen that done very often. In my first job as a sales rep I went to my boss after the first win to see if she wanted a debrief. She asked me if we won and I said yes. Then she asked what there was to debrief. Being new to the corporate world, I guessed that winning meant not needing to review things. I was used to hot washing everything so I figured it was how things were done. After my first loss I went back with the same thing and the response was about the same with the exception of her asking what I would do differently the next time. That was the extent of the hot wash.

In successive jobs I have had much the same experience. Most of these were not small companies but big multi-billion dollar corporations. Even the company that had a process for what I call a hot wash did not enforce it, nor did it ever really even ask for one. I offered to do one and while they did agree to it, I would have thought that they would have been more interested to know why we lost a $30M+ opportunity. So I put the presentation together and gave it. They were grateful and said all the right things, but nothing really changed.

So why should you do a hot wash? That could be a rhetorical question, but worth addressing nonetheless. All of our lives we should learn from our mistakes. We all make them and nothing is perfect. But, if we don’t take a look at what we are doing right and what we are doing wrong we will set ourselves up to possibly repeating the same mistakes again. And in business, those mistakes make us look bad, at best, and can cost a lot of money, at the worst.

Hot washes shouldn’t be finger pointing exercises either. Establish a formal process to review every bid you make. Look at what you did right. Reinforce those actions. Give praise to those responsible for it. Next, look at what you did wrong. Don’t adopt the zero defect mentality over these errors. Figure out what you need to do to keep from doing it again the next time. No phase of any business venture goes perfectly. Some mistakes may not have had any impact this time, but it doesn’t mean that they may not hurt you the next time.

Take the time to establish a process for reviewing your business successes and losses. Be objective and be honest in your critiques. Leave your egos out of it too. That is the only way to get better. And in the long run, doing a hot wash will pay big dividends.

Happy New Year to you all and our wish is for much success for you in 2015!

We want to hear what you think. Leave a comment and let’s start a discussion.
Copyright © 2015 The Cobalt Group, LLC. All rights reserved.