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Archive by topic: Renee’s Rules™

Renee’s Rule™ – Results! Results!! Results!!!

July 26th, 2015

Last week, the Business Journals ran an article, “3 qualities to look for when hiring a consultant.”

The three qualities were:

1. No ties to the company (that might create a conflict of interest)
2. Depth and breadth of experience
3. Trustworthiness

All three qualities are important, but none is more important than “Track record of producing results.”

Renee’s Rule™ – When interviewing consultants and/or checking their references, be sure to ask, “What improvements did the client company achieve as a result of the consultant’s work?”



Open Table + Renee’s Rules™

June 13th, 2014

Unless you were asleep today, you know that Priceline is acquiring Open Table.  My main concern about the acquisition is that Priceline might muck up one of my all-time favorite companies!

Why is Open Table a favorite?  Because they follow one of the most important of Renee’s Rules™:  Make my life easy!

In case you have not used Open Table

• It is easy to make a meal reservation
• It is easy to change a reservation
• If you don’t yet know where you want to go, it is easy to decide which restaurant to choose
• It is easy to read reviews, read the menu, find the location, and visit the restaurant’s website
• It is easy to write a review
• They never bug you with unwanted emails
• The site never malfunctions
• After you make a certain number of reservations, you actually get money back to use at an Open Table restaurant
• BEST OF ALL: I have never, ever wanted, needed, or had to contact their tech support!

So many companies send follow up surveys asking you to tell them about your most recent tech support experience.  The question they never ask but should is, “What should we change so that you would not have had to spend your valuable time contacting us?”

 



Reference checks 101

May 1st, 2014

The following questions are too often missing from lists of questions to ask when checking references for prospective management employees:

  1. What was the situation when he/she began?
  2. What results did the company expect?
  3. Did he/she achieve those results?
  4. If so, how?
  5. How was his/her overall performance  measured?
  6. Did he/she meet or exceed those measures?

It’s great to ask things like, “What was his job? What were his duties? Would you hire her again? Describe her management style.  How does he respond in stressful situations?  etc.,”  but  if you have a job to be done, targets to be reached, you want to hire someone who has a track record of actually reaching targets, achieving desired results.

Objective? Process? Results?

Renee’s Rule™:  Results matter.



Healthgrades.com: What’s missing

December 14th, 2013

First, because healthcare is a hot topic, let me be PERFECTLY clear:  I am not an expert on “Obamacare” and do not know whether it will prove, overall, to be a good or a bad thing.  My comments here focus solely on a missing piece at healthgrades.com and NOT any legislation.

If you have followed my blog, you know that I am a strong advocate for results-based hiring and results-based management.  Many bad hiring decisions have been made because decisions were based on “industry experience” rather than results.  Many companies have failed because management was not evaluated or rewarded based on results.

Physicians, too, should be evaluated based on results, and healthgrades.com has an opportunity to help with that.  Currently, their review criteria (somewhat edited) are:

  • Ease of scheduling urgent appointments
  • Office environment
  • Staff friendliness
  • Total wait time
  • Level of trust in doctor’s decisions
  • How well doctor explains
  • How well provider listens
  • Spends an appropriate amount of time

What’s missing?  Level of satisfaction with results.

To illustrate my point:  Although I do care about how long I have to wait, how good a listener my physician is, etc., my main concern is results.  Almost 10 years ago I had a problem with my foot.  I saw a well-known orthopedic surgeon/foot specialist.  His office was exceptionally well-organized; he did not keep me waiting;  he was VERY nice, a VERY good listener, took time to answer my questions, but his recommended solution was a surgery that would have kept me off my feet for 3-6 months.  For a second opinion, I saw a different orthopedic surgeon/foot specialist. His office was not as well-organized, and he was gruff, to say the least.  Bottom line:  He recommended a change in orthotics instead of surgery.  Ten years later, I am doing well and have not had to have surgery, thank you very much!  As you might imagine, I prefer Dr. Gruff-who-got-results-without-surgery to Dr. Nice!  (Of course, the dream doctor is the one who is both nice, etc. AND gets the best results.)

Sometimes, people make decisions–selecting doctors, treatments, etc.,  based on how they feel rather than on results achieved.  If healthgrades.com added “Satisfaction with results” to the list of criteria, it would likely help both physicians and prospective patients focus more on outcomes.

Renee’s Rule™: Results matter.



My most recent post….

May 19th, 2013

As you can see, I haven’t “blogged” since March 7th.  The reason? I’ve simply been inundated on both the business and personal fronts (most of it good!).

Recently, however, someone whom I respect criticized my most recent post, so I decided to clarify its purpose:

  • In several prior posts, I have made the point that poor customer service and lack of attention to operational excellence can lead to lost customers, lost sales, lower profits–poor financial results.
  • I have also written about “the paradox of choice;” i.e., when companies offer too many choices, people may avoid making purchases and/or may buy from a competitor that provides fewer choices–poor financial results.
  • In my most recent post, I was making the point that not only can poor customer service and too many choices lead to undesirable financial results, but they can also lead to undesirable societal results; e.g., increased stress; wasted time; anger and frustration.

If I were a researcher, I would conduct a study and write a book about the impacts of disorganized, inefficient businesses on society as a whole.  To me, that is a topic worth exploring.

 



Office Depot/Office Max

March 6th, 2013

As you may recall, one of Renee’s Rules™ is “Two sick companies do not make a healthy one.”  

Based on my in-store and on-line customer service experiences with both Office Depot and Office Max, I predict that my rule will prove true for their upcoming merger UNLESS–and this is important–they hire a new, capable CEO for the combined entity. Although it is true that some of their troubles are attributable to the changing environment, the bigger problems is that these two companies simply are not well managed.

I rarely visited the Office Depot store in downtown Portland.  Store layout was horrid.  It simply took too long to find anything.  (Apparently, others felt the same.  The store is a ghost of its former self.)  The last time I tried to do business with Office Depot, I tried to use a coupon I received in the mail to make an on-line purchase.  The website would not recognize the coupon, so I tried calling.  When the customer service rep was unable to solve the problem after 15 minutes, I said, “Thank you very much” and have never bought anything from them again.  I really do “vote with my feet and/or my fingers.”

Office Max seems slightly better, but when I recently returned home from buying supplies at Office Max, I found a coupon that had started that day.  Really?

In the big picture, I am a teeny customer, but the examples above are symptoms of the kinds of problems that affect larger customers, too.

These companies–like too many others (ToysRUs comes to mind.)–simply do not pay adequate attention to operations and to detail.  They do not think about what it is like to be their customer.   The merger will extend life but is unlikely to produce a healthy entity.

 

 

 



Renee’s Rule™: Check references.

May 6th, 2012

As you probably know by now, the CEO of Yahoo, Scott Thompson, misrepresented his educational achievements on his resume.

Verifying the accuracy of educational claims is easy.  Really easy.  Evidently, however, no member of the Board of Directors asked whether any one had verified all of the statements on Thompson’s resume.

How could this happen?  Apparently, board members “assumed” that basic due diligence had been done when, in fact, it  had not.

Why does this happen?  My personal theory is that many CEO’s and board members have never been intimately involved in or had responsibility for the details of running a business.  They focus too much on the big picture and not enough on the details that can spell the difference between success and failure.

If you have time, I’d love to know your theory!



Call centers off shore

November 26th, 2011

The New York Times today has a story, “A New Capital of Call Centers,” which focuses on the fact that many  companies with US customers are moving their call centers to the Phillipines or back to the U.S. because personnel in the new locations speak better English than, say, their counterparts in India.

Evidently, these companies believe that customers’ primary concern is the quality of the language used by the call center agents.  My primary concern, however, is whether or not the call center agent is actually able to answer my questions, solve my problem, and/or take my order accurately.  Overall,  I’ve had much better luck with the hard-to-understand foreign agents who seem to know what they are talking about than with US-based agents who are poorly trained and/or work in call centers in which no system is in place to help callers actually get their questions answered.

In brief, I wish companies would pay more attention to this Renee’s Rule™: Make my life easy.

What do you wish?

 

 



Steve Jobs made my life easy.

October 5th, 2011

There have been many analyses written about what made Steve Jobs great, but the articles I have read have missed the key ingredient:  Steve was able to make things easy for his customers.  He knew instinctively that people would be more likely to use products that were intuitively easy to use, and his genius was that he was able to turn the idea of easy into the reality of easy.

My sons have saved my Apple IIe and the floppy disks with the  games they played.  We all love our iPhones, iPads, and Macs…..

I’ve been thinking about the  issue of “easy” because I had two “high-end” ovens installed in my kitchen this week.  Really, I just want to be able to put something into the oven and cook it, but the display is so complicated and the instruction book so inadequate that what should be intuitively easy, will take hours.  Will I love my ovens when I finally figure them out?  Of course, but the manufacturer has missed the boat by failing to provide the “customer delight” that results when something is actually easy to use.

Today, most of us feel that it has become increasingly difficult to get things done, so “easy” is now more important than ever.

As you may recall, one of  Renee’s Rules™ is:  Make my life easy.  This was one of Steve Job’s Rules long before it was mine.



Renee’s Rule™: You can’t have two captains on the same ship.

June 6th, 2010

One of the headlines today in the New York Times reads, “In Gulf, It Was Unclear Who Was in Charge of Oil Rig.”

If “who was in charge” was, in fact, unclear, it is scary, but, in my experience, too often the case.

Example one: Several years ago, in the process of considering whether to accept a family-owned business client, I interviewed 7 family members, most of whom were in the upper echelons of the business.  Because the company had no organization chart, I asked each person to draw one for me.  No two charts were the same.  The mother-in-law thought the son-in-law was running the company; the son-in-law thought the mother-in-law was running the company.  No wonder the company was on the brink of bankruptcy.

Example two: A 25-year-old, FDA-regulated company with operations in both the US and Canada had been cited for FDA infractions before my arrival.  Unlike the company in example one, this company had a detailed organization chart and job descriptions for every position, so when I met with the Director of Government Compliance and the Director of Quality Assurance,  I asked which one was in charge of ensuring FDA compliance.  The two looked at each other. Neither could answer.

You will not be surprised to learn that I solved the non-compliance problem by simply designating one person who had both the responsibility and authority for compliance. As a result, during the first FDA inspection following my departure, the company received  its first-ever absolutely “clean” bill of health.

The lesson: Imagine a ship with two captains, each issuing different orders—a symphony, in which the conductor is “conducting,” while the concertmaster is directing the strings.  No one would ever consider creating either of those scenarios.  That’s  Management 101.  Why, then, do companies, from small to gigantic, allow that to happen?

Renee’s Rule:  You can’t have two captains on the same ship.



Renee’s Rule™: Two sick companies don’t make a healthy one.

August 4th, 2009

When revenues decline, and profits are non-existent, companies often believe that if they buy or merge with another company, the increased revenues will solve their profitability problems.  In my experience, however, these “solutions” often exacerbate the problems.

To be successful, all companies need the essentials:

  • A capable leader
  • A carefully conceived plan
  • A system for ensuring accountability

When these pieces are missing, a joining of two financially and operationally troubled companies is destined to fail.

An example from one of my clients:

  • Company A was in an FDA-regulated industry
  • The industry was experiencing both intense pricing pressure and consolidation.
  • Company A, with multiple manufacturing and distribution facilities, was not only losing money but was also experiencing both product contamination and delivery problems.
  • Company A, which was bleeding cash, bought Company B, which was also bleeding cash.
  • Neither company had any of the three essentials listed above.
  • After the acquisition, the expected “economies of scale” did not materialize; costs for the combined entity actually increased as a percent of revenues.
  • The already stressed delivery system was now even more stressed.
  • Expected  revenues did not materialize because frustrated customers switched to other suppliers.
  • Chaos ensued.

We were able to save the company, but it was a close call…..a very close call…..

Two wrongs don’t make a right, and two sick companies do not make a healthy one.



Renee’s Rule™: Make my life E-A-S-Y!

July 27th, 2009

Recently, I sent an email to key business contacts letting them know my turnaround client needed a new CFO.  I received approximately 160 resumes.

The quality of the  emails most candidates sent was appalling.  Based upon what arrived in my inbox, here is my advice to those looking for work:

  1. Read the job announcement. If you send a lengthy email in response to an ad that includes the word “turnaround”, you should  assume you will not be considered.  Turnaround experts are looking for people who can cut to the chase and won’t waste their time.
  2. Use bullets not paragraphs. Time is money. Cash is king.  Make my life E-A-S-Y.  I am getting hundreds of emails a day.  Which emails do you think I am likely to read? Those with 5 lengthy paragraphs or those with 5 concise bullets?
  3. Make sure that the file name of your resume includes your name. If your resume does not have your name in the file name, you are out-of-the-running with me because I have to take time–my time–to change the file name before I save it.  Please, make my life E-A-S-Y.
  4. Don’t be a pest. If the job announcement says “send email to,” please don’t call.  If you do, it appears that you have no respect for my time.

Renee’s Rule™: Think before you respond. If you were in my shoes, what would you want to know?

  • What has the applicant DONE?
  • What is he/she LIKE?
    • Will he/she be able to work in a highly charged, fast-paced environment?
    • Will he/she be the kind of employee who anticipates what his/her supervisor needs?  who will make my life E-A-S-Y?

Renee’s Rule™: Make my life E-A-S-Y!



Renee’s Rule™: Know what you don’t know.

July 19th, 2009

Over the years, I have had the pleasure of working with many wonderful CPA’s who truly put their clients’ interests ahead of their own.  They ask the key questions.  They know what they don’t know.

I have also, however, seen some CPA’s do some really appalling things; e.g.,

  • Providing inappropriate advice  ( When I arrived at my very first client, the company was on credit hold or COD with all vendors, bleeding cash, and faced with a threatened shut-down by the IRS.  The CPA, blissfully unaware of the severity of the problems, was billing the customer for business planning assistance.)
  • Being unwilling to recommend a change of CFO when that CFO was clearly unqualified  (I’ve seen this multiple times and don’t know whether this happened because the CPAs did not realize the failings of the CFOs or because the CPAs did not want to risk losing their clients.)
  • Recommending consultants based on industry or turnaround “experience” rather than on RESULTS   (For the dangers related to this, please visit my post, THE EXPERIENCE FALLACY.)
  • Giving false assurances  (Several years ago, I had as a  client a third-generation family-owned business.  The company had experienced increasing losses for three years straight.  The CPA had told the elderly majority shareholders, “Everything will be all right.”  When I arrived, however, the company was at Death’s Door.   The company survived, but it was  an extremely difficult situation.  We had to implement an out-of-court Chapter 11.)
  • Preparing unrealistic financial projections because the CPA did not understand the business

It is really important that CPA’s–and other professional advisors–know what they don’t know.



Renee’s Rule™: There’s more to customer service than being nice.

July 11th, 2009

I have concluded that the vast majority of companies today either do not agree with and/or do not care about and/or are clueless about how to implement the above Renee’s Rule™.   There is a good chance you have reached the same conclusion.  It has become incredibly difficult to get anything done.  The simplest tasks have become complicated.

There seems to be widespread recognition that being nice is an important part of customer service, but the other piece–making things easy for customers–has somehow been lost in translation.  Personally,  what this customer wants/needs is for the companies I deal with to make life really EASY for me.  What do you want/need?

As you may have guessed, this post is the result of a my experiencing a  spate of bad (abysmal) customer service over the last few weeks.  Everyone is NICE; nothing gets DONE--or gets done only with much wasting of time…..I know that you, too,  have “been there; done that;” e.g.,

  1. You are required to enter your phone number to get to tech support, but the first thing the person asks is, “May I have your phone number?”
  2. You call for repair help.  You provide a description of your problem in infinite detail, but the details somehow do not survive the distance between customer service and the people who actually do the repair work, and it takes forever to get the problem solved.

I understand that many of the  companies we call could not care less about whether they are wasting our time…but do they have so many customers, and are they making so much money that they don’t want to improve their bottom lines by streamlining their customer service?   Think of all the personnel time and $ that would be saved if no one had to ask, “May I have your telephone number?” or if the technical person “on-the-ground” received enough detail from customer service to solve the problem on the first try.

Enough complaining for one day–you can tell I’ve had too much TERRIBLE customer service from too many NICE people….It may be time for a new Renee’s Rule™: Enough is enough!”

In future posts, I’ll share some examples from my personal experience about how companies can reduce costs AND provide better customer service.



Renee’s Rules™ for the Recession

July 3rd, 2009

Both national and regional bankers have told me recently that they expect a second wave of troubled companies…..For those companies that may be at risk, here are my key recommendations:

  1. Renee’s Rule™: Don’t sell to customers who won’t pay.
  2. Prepare worst-cast cash projections for each of the coming 6 months; if necessary, take action now to prevent a meltdown.
  3. Solicit ideas from employees and advisors; implement those that will have the greatest impact in the shortest time.
  4. Implement changes to company processes that will lower costs and improve customer service.
  5. Renee’s Rule™:  If you think you may need help, you probably do.
  6. Renee’s Rule™: The sooner, the better.


Renee’s Rule™: What gets measured matters.

June 28th, 2009

Every manager knows the axiom “What gets measured is what gets done,” but too often managers overlook key measurements.

An example: When cash is tight, and profits are lagging, managers, boards of directors and lenders often focus on reducing inventories.  Measuring dollar value of inventory and inventory turns can certainly be useful; however, if  there is no report that shows the AGE of the inventory (how old the inventory is and whether or not it is obsolete) and no report that measures stockouts, inventory reductions may produce undesirable, unintended consequences.

When a company holds old or obsolete items and reduces the size of its inventory, the dollars tied up in inventory do decline, but the % of  “bad”  inventory  increases, and the entity may find itself without  materials needed to deliver orders on time and/ or to stock its shelves with the products that customers want.

In addition, if a company does not write down old or write off obsolete inventory (and, yes, this still happens!), the company is inflating its bottom line.  Since financial statements are the scorecard of the business, if financial statements are not accurate, then management’s decisions are based upon misleading information.

Renee’s Rule™: What gets measured matters.



Pearl Ace Hardware: A beacon of hope in an ocean of dreadful customer service

June 6th, 2009

When I’ve abandoned almost all hope of ever finding good customer service anywhere ever again, I stop by Pearl Ace Hardware to reassure myself that there IS actually ONE place that really “gets it.”

Pearl Ace Hardware may be the best store on the planet. On-line reviews reflect this, and all of my friends and neighbors feel the same way.  I’ll bet that this is one retailer that  is profitable  in spite of the downturn.

Why? Because this store truly understands the marketing equation:

Renee’s Rule™:  Providing what your customers want/need + great customer service = loyal customers +  steady stream of revenue.

They ALWAYS have what I need.  They ALWAYS have knowledgeable, friendly staff available to help.   No problem finding what I seek; no trouble finding someone to answer questions; no long check-out lines; no surly clerks.   It is Customer Service Heaven on Earth!

When I check out, I inevitably find myself saying to the clerk, “I just love this store!”   (And trust me, Reader, I am P-I-C-K-Y.)

Some retailers compete by having the largest selection of merchandise–being a “one-stop-shop.”

Some compete by having great “customer service”–being super-nice to customers.

Too many businesses have neither; too few manage to have both.

If every cloud really does have a silver lining, perhaps the silver lining of this downturn will be that we will see a return to first-rate customer service.  After all, survival may depend on it.

Renee’s Rule™:  There is a connection between customer service and sales.



Renee’s Rule™: If you can’t understand what someone is saying, he may not be saying anything.

May 27th, 2009

I’ve seen some pretty scary hiring mistakes.  Here is an example in which “The Emperor Had No Clothes.”

In the 1990’s, I became  Interim CEO of a  company that was experiencing the worst production problems I had ever seen.  The company had hired a new Director of Materials Management.  He had been referred by a management team member who had worked with him elsewhere, and his references from former employers were excellent.  Everyone told me–and seemed to believe–that this guy was a genius.  During meetings, he typed on his own notebook computer (fairly unusual at that time), looked impressive,  and made “pronouncements.”

I, however, couldn’t understand a thing the guy was saying (plus, of course, materials management  was still totally out-of-control.).  I said to myself, “I have an MBA, am pretty darned bright, and  have run more than 10  companies.  If I can’t understand him, maybe he isn’t saying anything.  Something is wrong.”

HR had checked his references, but I asked them to contact the universities listed on his resume to verify his degrees.  Surprise, surprise:  this fellow had lied on his resume and had no college degree.   Needless to say, that was the end of his employment with the company.  (The company, by the way, was successfully turned around.)

The question in my mind remains:  Why in the world hadn’t someone else called his bluff?  (A question to be explored in a future blog..)

At least three of Renee’s Rules™ apply:

  • If you can’t understand what someone is saying, he may not be saying anything.
  • Too often, people are afraid to speak out when they think something is wrong.
  • Check references thoroughly.



Renee’s Rule™: “Bigger” may not be “safer.”

May 17th, 2009

When is it “safer” to hire a “big” professional firm rather than a smaller one?  This is a topic I’ll be exploring in several different posts.  For the moment, here is an instructional story. (The names and some details have been withheld to protect the guilty.)

Some time ago, a principal from PE (private equity) Firm A, with investments across the country, called me to take the place of the CFO they had hired because he was a consultant with a national (“big”) consulting firm.  Why was the PE firm replacing him?  When the portfolio company’s lender conducted its audit, guess what they found?  The “F” word: Fraud.  (I did not accept this engagement for a variety of reasons I’ll discuss in a later post.)

Several months later, PE Firm B interviewed me for a turnaround in an industry in which I had successfully turned around more than one company.  Did they hire me? No.  Why did they pick someone else?

  • He’s from a national firm, so that’s “safer.”
  • He has industry “experience.”
  • We know him.

Here is what I know about this person:

  • He IS a consultant with a national firm.
  • He was involved with a company but definitely did not lead a successful turnaround in the “industry.”
  • He was the person who was removed by PE Firm A because bank fraud occurred while he was CFO.  (Evidently, PE Firm B didn’t really “know” him.)

I also know that the company was not, in fact, successfully turned around.

Let me be clear:  There are some times that a bigger firm really IS safer; nonetheless, there are many lessons to be drawn from the above story.  Stay tuned for further posts.

In the meantime, remember these Renee’s Rules™:

  • When hiring, RESULTS are more important than “experience.”
  • Always check references.
  • There is no substitute for common sense.


Renee’s Rule™: Don’t sell to customers who won’t pay.

May 10th, 2009

I have been shocked by the number of companies I’ve met recently that have been placed on COD or credit hold by their vendors but have not put any of their own, troubled customers on COD or credit hold.

Whether you are the CEO of a company, a law firm, or an accounting firm: Stop selling to customers who can’t or won’t be able to pay.  There is no way to overemphasize this point.  When a company is faced with declining revenues and profits, uncollectible accounts receivable make the situation worse and—in extreme cases—can be the tipping point that causes the company’s demise.

Today, it is absolutely not safe to assume that customers who have always paid on time will be able to pay on time—or, for that matter, at all, so review your credit policies and procedures and define carefully

  1. Who can have credit?
  2. Who can authorize credit, and what are the guidelines?
  3. How does the company verify current credit worthiness of customers?
  4. Who is responsible for monitoring timeliness of accounts receivable collections?
  5. What are the company’s collections policies; e.g.,
    • What steps does the company take when payments are late?
    • At what point is a customer put on COD or credit hold?

I will provide additional information about sound credit policies in a future blog post.  In the meantime, another Renee’s Rule™ applies: “The sooner, the better.”



The Experience Fallacy

May 5th, 2009

Too often, people make hiring decisions based upon “experience” rather than “results.” A true story illustrates my point.

Several years ago, at the beginning of what ended up being a very successful turnaround project, the CEO told me, “We have a new CFO who has experience in turnarounds.”    (I’ll call the CFO “Jill,” to protect her real identity.)

“Oh?” I said, “What kind of experience?”

To make a long story short, Jill had been CFO at company A, and it went out of business.  Then, she went to company B, and it went out of business.

During my tenure in this extremely troubled company, it soon became apparent that although Jill talked a good game (and, indeed, sounded very impressive!), she was simply unable to make needed changes.  She fancied herself a turnaround expert but was absolutely unable to fulfill even her most important job function; i.e., producing timely, accurate financial statements.   I replaced her with someone who could.

Not long ago, I read about a company that expected to have to shut down if it could not get additional financing very soon.  Guess who had recently been a financial officer for that company?

The companies that hired Jill undoubtedly made “experience” their key criterion.  Instead, they should have asked about and verified what RESULTS she had actually achieved.

Please note: Although Jill, who marketed herself as someone who could turnaround a company, was neither capable of doing that nor able to accomplish basic accounting functions,  there are many extremely capable CFO’s who have found themselves in distressed companies through no fault of their own.  I have had the pleasure of working with some of them.

Renee’s Rule™ – When hiring, RESULTS are more important than “experience.”



Renee’s Rule™: The sooner, the better.

March 22nd, 2009

Recently, I visited a potential client.  The company was at Death’s Door.  Their bank had not required any financial statements from them since September 30, 2008.  Their bank had not suggested they get any outside assistance–even now.

Over and over again, I am seeing companies whose lenders have waited entirely too long to get timely financial statements from their customers and to take action to help the companies.  Given the economy today, 3-6 months is entirely too long to wait to see how a company is doing.

In the case of the company above, I declined the engagement because these people were going to commit bank fraud because they saw no other way out.

There are some companies that can be saved–even with declining sales–but they need help at the earliest possible moment.



Renee’s Rule™- There is no subsitute for common sense

March 4th, 2009

It seems like every minute a new book with the “latest” business “secrets” hits the market.  In reality, however, running a business profitably and well boils down to taking care of the basics; i.e., having a well-conceived plan, having a capable leader, and implementing a carefully crafted management control system.  It is astounding to me that so many companies lack these basics—not just family-owned, but also publicly and private equity-owned (You know some of their names.)

Much of the information in this blog may sometimes sound like nothing more than common sense, but common sense and an attention to the basics are too often missing-in-action.

An example from my personal experience: In 2007, a private equity firm interviewed me for a turnaround project.  The company had been losing money for three years; there was no business plan; the president was clearly not qualified; and there was no effective management control system in place.  After I mentioned that the company needed these basics, the managing director said, “We know that.” (As in, “do you think we are idiots?”)  So…if they knew all of that, then where had they been, and what had they been doing for the past three years?  And these were people with MBA’s from prestigious institutions, who, presumably, have a fiduciary duty to their investors and definitely know better.

Find a way to step back from your business, to take a cold, hard look at where you are and what your real prospects are…Are you making money or losing money?



Renee’s Rule™ — It never hurts to ask.

February 26th, 2009

Approximately 20 years ago, I began compiling Renee’s Rules, which I will share from time to time on this blog.  (My son Jason created a great “talking” set of the original Renee’s Rules™.   If you would like a copy of the executable file, please contact me.)

Rule #1:  It never hurts to ask.

This true story illustrates the point:

Shortly after I began working as Interim CEO of a manufacturing company, it became apparent that the company was going to lose  its proverbial shirt on a large job.  The selling price was approximately half the direct cost of the job.  The company had not yet started the job.

We scheduled a meeting with the customer, explained the problem honestly, and told him that we could complete the job only if we doubled the price.

Instead of pulling the job, he agreed to the new price.

In these troubled times, cash-strapped companies simply cannot afford to sell below their direct costs.  They need to be better off–not worse off-on cash.  Period.

CEO’s of deeply distressed companies need to find a way either to reject cash-losing jobs or to increase the prices so that the company is better off on cash after the job than it was before.

It never hurts to ask.  For many companies, doing so may spell the difference between survival and liquidation.