Case Studies

Strategic business partnerships

Thinking Outside the Box
Most strategies involve some type of competitive assessment and figuring out ways to be better at the key success factors than the competition. Some of the best strategies, however, are ones that solve problems in a different way than the traditional competitor. Sometimes companies are able to.. Read more

 

 

Businesses in Trouble

Board Members, Lawyers, Accountants and Other Trusted Advisors should act quickly with management to position them properly for some potentially rough times ahead.

Problems won’t go away and management will have to make rapid decisions, even faster than before. Although good companies get into tough positions for understandable reasons, not all companies have the wisdom or foresight to successfully react.

Plan for a Crisis:

At this point, many companies do not feel the impact of recent events directly on their businesses. If they never do, they will likely be the exception rather than the rule. If they wait until they do feel the impact, it may be too late. Planning for possible contingencies is the first critical step that could save a business.

Not “Business as Usual”

Business rules that are established in good times can cause problems in times of trouble. Credit policies, entertainment budgets, accounts payable policies, inventory management, among others, must all be reevaluated with an understanding of the implications for overall survival. Leading an organization in a troubled environment requires an understanding of the possible levers that influence performance.

Though important in good times, it is even more critical in a stressed environment to focus on:

Early warning signs: look for indications that trouble is ahead and establish metrics to monitor them. Don’t accept traditional explanations to rationalize problems (e.g. – declining sales). Look for:

Focus Management’s Attention: get rid of management distractions

Know where the Money is: understand your options

Focus on Liquidity Today!: don’t wait for trouble to hit before you take action

Create a Stressed Budget: stay optimistic, but plan for the worst

Communicate to all Constituents: let all stakeholders understand the process you are in. Silence is your biggest enemy. Communicate effectively and often:

Deliberately plan for problems: this is not the time for the ostrich to put his head in the sand

In today’s economy, the likelihood of forces outside of management’s control has just increased significantly. As business leaders or trusted advisors, it is your responsibility to ensure that everything is being done to eliminate potential problems.