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Tagged ‘October, 2013’


Douglas Frank PhD

Organization Design:  A Key to Mergers, Acquisitions, and Divestitures

Mergers, acquisitions, and divestitures continue to trigger organizational restructurings.

Worldwide merger volume in the second quarter of 2013 was half a trillion dollars, with 40% of that in the US alone. While merger activity is highly cyclical and is well off pre-crisis peaks, the overall trend is up and we can expect it to accelerate as economic conditions improve.

Yet one consulting firm estimates that 70 percent of mergers fail to increase shareholder value. This may be due to the fact that mergers often bring together two organizations with distinctly different designs and cultures, and harmonizing these is a serious challenge. This may be one reason why companies typically experience high turnover after a merger.

Careful attention to the organization design can help ensure that mergers achieve their intended results, and may even flag mergers in the future that have a good chance of failing due to fundamental organizational incompatibility.

Sources:

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Philip Bouchard

Disrupting Management Consulting

(Part 3 of 3)

DISRUPTING MANAGEMENT CONSULTING: A truly disruptive model offers immediacy, breadth, consistency, predictability, recognition of interdependencies and focus on client success.

I’m hearing a lot of noise these days about new business models that are disruptive to management consulting. So far, these purported “new models” and what they have to offer have underwhelmed the business world.

This much I know: The Internet is changing the knowledge economy. It can make high-level experts available to companies all over the world. And it can match expertise to need in way that is timely, targeted and efficient. 

The experiences I’ve had as a CFO, COO and CEO – not as a consultant – have taught me that what businesses really need is consultancy-on-demand with the right experts

Here is my definition of an expert: Experts have years of experience in their industries and have seen and solved business problems at all stages of a company’s life cycle. They know the best practices and can help businesses identify and implement solutions quickly.

Successful organizations will embrace a technology that matches needs with experts to gain competitive advantage.

This disruptive model has the following characteristics.

  • It provides immediate access to a vetted expert perfectly matched to you, your industry, your company’s stage of development, your operating function and your specific expertise need.
  • It covers the full breadth of problems you face – whether you need a second opinion, have an operational process problem, need to understand a new technology or market, want to validate an existing approach or need to risk-assess a compliance requirement.
  • It delivers with consistency in an ongoing relationship, with persistent data that is confidentially maintained.
  • It offers a predictable cost and a line-of-sight timeframe to problem resolution.
  • It recognizes that your issues are not functionally siloed, but are interdependent across internal and external areas of your business.
  • It is a model focused on your success and not on the consultant’s success.

In short, the disruption of management consulting has begun.  It’s about the right expert, right now.  That’s why I started TrustedPeer.

If you need consulting on Business Development, contact TrustedPeer Expert and CEO Philip Bouchard.

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Rick Smith

Elements of Sales Compensation

Companies vary significantly on the structure of their sales organizations depending on their business model.  Understanding the business model is critical to developing sales compensation plans that will drive the goals of the company and excite the entire sales organization to meet or exceed corporate financial targets. 

But keep in mind that sales compensation is probably the most important compensation plan in the company. It needs to be clear in its components and transparent in its implementation. Every company should have a sales compensation governance process for developing and managing the sales compensation plan. (See Best Practice #5.)

In constructing a sales compensation plan, begin by determining its key elements. Always include these four components:

  1. Base salary
  2. Commission
  3. Bonus
  4. Sales incentives

Then, make sure it accomplishes the following:

  • It motivates everyone.
  • It sells the products or services you've developed, marketed and can deliver.
  • It is clear and easy to calculate, track and pay out.
  • It ties directly to corporate financial targets.

You also have to consider the types of sales distribution available to your company. There are different sales organizational structures you can use to maximize market penetration.

These first two groups will need a compensation plan and they should vary in some aspects: 

  • Direct sales group and field and national sales management, with a major focus on new customers.
  • Inside sales groups and management, with a focus on existing customers, targeting renewals, upgrade sales and customer satisfaction.

These next two groups reach markets where it would be too expensive to have a direct sales force, but a manager is needed to give support and direction:

  • VARs, or value added resellers, and regional dealers, which can target markets that may be too costly for you to cover with a direct sales group. A manager will be needed to drive and monitor their efforts.
  • Corporate partners, which sell your product or service to supplement their product or service. The manager for VARs and regional dealers can also oversee corporate partner relationships.
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Edie Goldberg PhD

Has Your Business Got Talent?

Talent Management is a strategic and deliberate approach to attracting the best people to an organization, managing and retaining them once they are in, and developing their talents as they move through the business. The approach needs to be linked closely to an organization's culture and strategic direction.

In today's competitive business environment, it is increasingly difficult for companies to find ways to outperform their peers.  In the past, reliable processes and execution were the keys to an organization's success.  Today, it is much more about an organization's ability to innovate quickly to meet the changing needs of a fast-paced world. Managing talent is now the key to enjoying a long-term competitive advantage.

The essence of Talent Management is:

  • Harnessing the collective abilities of the right talent for the organization.
  • Motivating that talent to provide their best efforts.
  • Enabling that talent to bring their full capabilities to the workplace.
  • Ensuring the right talent is in the right roles at the right time.

Having a Talent Management strategy that aligns with the business strategy enables the organization to proactively manage its workforce to make certain it is developing or acquiring the talent needed to succeed. 

Talent Management begins with defining the critical knowledge, skills, behaviors and values that drive success in the organization. It organizes human resources programs to attract people who have those skills, then it motivates and enables them to maximize their capabilities. Finally, it develops them for future roles, creating new leaders for the organization.

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Richard Butterfield

The Persuasive Power of Corporate Storytelling

The need for story runs deep in our species.

Cultures define themselves through stories called myths. Religions embody their values and beliefs in stories. Nations rely on stories – the Trojan War, the six wives of Henry the Eighth, the Great Depression – to conceptualize, understand, and pass down their histories from generation to generation. Parents tell stories to teach their children. Stories are what we use to try to make sense of the world and ourselves.

As the philosopher Kenneth Burke said, “Stories are equipment for living.” 

Stories are also highly effective equipment for professional communicators. Stories help us compare notes about being human.  In contrast to the proofs of logic or appeals to reason, stories speak to the heart and to the imagination. Stories go to our core. Stories drive home the point. Stories persuade. 

You can claim that your product or service is superior, but you can demonstrate its superiority through storytelling.

You can spell out your company's principles or cultural values, but you can illustrate and validate them through storytelling.

You can describe what differentiates your brand, but you can make your brand both unmistakable and unforgettable with stories.

You can suggest that people act or change, but with a well-told story, you can jolt them into action.

PUBLISHER'S NOTE: Some portions of Richard Butterfield's Corporate Storytelling were previously published on his website, www.butterfieldspeaks.com, or in his book, Richard Butterfield's Power of Persuasion: Communication and Presentation Skills for Every Profession.

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Denis Mehigan

Hidden Corporate Real Estate Brokerage Fees:  What It Could Be Costing Your Company

Companies are increasingly questioning whether to out-source transaction management functions or keep them in-house.

The decision to outsource transaction management functions to vendors, or to assume them in-house, is receiving increasingly thoughtful attention from top management. Historically, companies have perceived transaction management as external to their core business and in many cases they are not even aware of the amount they pay to brokers to clinch a deal.

Take the case of a venture capitalist firm in Palo Alto, California. When asked if they knew the amount paid to the broker for the lease they had just signed, they shook their heads “no,” adding that because the landlord paid it separately it didn’t really affect them. The reality is that the commission amounted to nearly half a million dollars, and in some way, shape or form these dollars were coming out of their rent! In this case the money was gone and there was nothing they could do.

But other companies are starting to wake up and understand that insourcing, or at the very least better managing of the outsourced party, is going to be a far more profitable and cost effective approach.

If you need consulting on Commercial Real Estate, contact TrustedPeer Expert Denis Mehigan .

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Philip Bouchard

Avoiding Management Mistakes

(Part 2 of 3)

AVOID BONEHEAD MANAGEMENT MISTAKES: We all make mistakes. But many of them could be avoided if business professionals had easy access to the right expert at the right time.

In my business career, I’ve made my share of regrettable, bonehead mistakes.  What made them regrettable was that they could easily have been avoided – because these were known common problems with known best practice solutions.  

It wasn't like I was creating a new technology or developing a breakthrough business model. I didn’t need to reinvent any wheels. These were operating problems.

Any of these sound familiar?

  • I built out an entire sales team before the company could support it.
  • I didn't follow my gut instinct and confront the board because I wasn't confident enough in my position.
  • I shipped a product before it was market-ready.
  • I brought on board a nightmare VP (more than once).
  • I entered a new market too late. And also one too early.
  • I purchased a new ERP system that didn't make sense for our stage of development.

In each case, I lacked an expert who knew my industry and had seen and solved my problem many times before.

Imagine conferring with the perfect expert who can quickly assess your situation, discuss the factors driving your business need and provide you with a clear, concise action plan to get you on track.

Now imagine that same expert following up with you and being available to make sure you don’t drift from the plan.

That’s the essence of TrustedPeer.  

We’ve all had a great consulting experience – and a terrible one.  Please leave your story in the comments.

Next Up:  What's This All About? (Part 3 of 3):  Disrupting Management Consulting.

If you need consulting on Business Development, contact TrustedPeer Expert and CEO Philip Bouchard.

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Rick Bragdon

MiO and the World Language of Branding

Increased use of names beyond the United States require "world language" naming techniques, international trademark search and language analysis in multiple countries.

Successfully creating names to be used internationally requires familiarity with multiple languages and the idiosyncratic ways in which letters and letter combinations are pronounced by speakers of these languages. Not only that, but some words and names may have meanings that are positive in one language, but pejorative in another. "World language" is a way of naming that significantly increases the likelihood that a name will appeal to and be pronounceable by target audiences in many countries.  MiO, for example, is a name created by Idiom to identify a popular new water enhancer from Kraft Foods.   "Mio" means "mine" in Italian, but is readily recognized in America and all of the Romance language-speaking countries. So the name helps to communicate the product's position ("my water, my way") while transcending language barriers.

To read more by Rick on Brand and Product Name Development, click here

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Scott Ware

In Baseball and Business, Don't Run Afoul of OFAC

THE OFFICE OF FOREIGN ASSETS CONTROL: In the highly-regulated environment of U.S. government sanctions, baseball teams, Cuban players and businesses large and small face serious penalties if they don’t play by the rules. This is no game. 

Baseball fans need no introduction to Yasiel Puig and Yoenis Cespedes. Both have been in the post-season spotlight – Puig as the dynamic rookie for the Los Angeles Dodgers and Cespedes in his second year as star slugger for the Oakland A’s.

Puig and Cespedes are two of 21 Cuban-born players in Major League Baseball. Next season, Jose Abreu, the most recent Cuban defector seeking big money to play baseball in America, will likely join their ranks. A bidding war this winter could land Abreu a contract in the $60-70 million range.

The emergence of these players and the huge sums being spent on them also call attention to an off-the-field story: the maze of political and financial regulations that teams and players must navigate because of the U.S. economic embargo with Cuba.

The New York Yankees, for one, have run afoul of the rule, but it is not just sports teams: Businesses from Walmart to ESPN to Playboy Enterprises have found themselves subject to large fines and reputational damage because of missteps involving Cuba or other U.S.-sanctioned countries.

The U.S. government agency that enforces economic and trade sanctions is the Office of Foreign Assets Control, better known as OFAC. As government agencies go, it is not exactly a household name. But its rulemaking has a broad reach. As TrustedPeer’s Saskia Reitbroek notes in OFAC Compliance and Sanctions, OFAC enforces laws that apply to all U.S. businesses, large or small, in regards to:

  • Countries and regions targeted for sanctions by the U.S. government.
  • Companies owned, controlled or acting on behalf of targeted countries.
  • Foreign individuals or entities targeted because they are involved in terrorism, narcotics trafficking or weapons of mass destruction.

Collectively, the individuals and companies targeted by OFAC are called "specially designated nationals," or SDNs. OFAC publishes a list of 6,000 SDNs worldwide. OFAC prohibits transactions with these SDNs, no matter where they are. Consider these examples:

  • A U.S. insurance company issues a property insurance policy to an international corporation that maintains a factory in Iran.
  • A U.S. broker-dealer opens a margin account and executes trades for a new customer and subsequently learns the customer is a "specially designated national."
  • A U.S. exporter sends licensed goods to Myanmar, but pays a dock fee not allowed under the sanction program.
  • Employees of a U.S. magazine paid for their hotel and other expenses while on a photo shoot in Cuba, but without the license OFAC requires for certain activities or business dealings.

For Cuban baseball players, the sanctions means they cannot sign with an American team unless they defect and establish citizenship in another country, such as Mexico or Haiti. Then, they can petition OFAC to be "unblocked" national. Once under contract, they face tight restrictions on money they can remit to Cuba. Then, they can petition OFAC to be an "unblocked" national.

For U.S. teams, it means they must carefully abide by restrictions on contact with players still on Cuban soil. This summer, Cuba’s national sports agency relaxed its rules to allow Cuban players to sign contracts in Europe and Asia. But not in the United States.  

That’s where the big money awaits, but only for defectors willing to leave their native country with the door firmly shut behind them.

Read more on Cuban players and their paths to the big leagues in America here.

Learn more about OFAC, read OFAC Compliance and Sanctions, by TrustedPeer Expert Saskia Rietbroek here.

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John Carter

Who's Driving Your Product Roadmap?

Our clients are finding that Product Roadmaps can attempt to serve two masters and fail both. For example, we’ve seen Sales teams insert a customer’s pet feature into the product plan in order to close a sale. At the same time, Product Management uses the roadmap to assure the CEO that they plan to support her vision even though Engineering has not even seen it. To use Product Roadmaps at cross-purposes misses the point of the tool.

In other cases, Product Roadmaps are cartoonish and made to satisfy eager B2B customers. They lack real meaning or vitality for an organization that desperately needs the strategic clarity that they foster.

A Product Roadmap is a visual representation of a company’s product strategy. It helps orient Engineering, Marketing, Sales, support, and the C-suite towards common product development goals. Its benefits include:

  • Inspiring the organization to see how they might get operational leverage by creating derivative products off of platforms
  • Setting expectations for when the organization will deliver products/services to market
  • Serving as an organizing principle for decisions around technology requirements, resource allocation, and product positioning
  • Moving the organization to think about conflicts in resources and potential bottlenecks.

A Product Roadmap spans two product cycles (about 24-36 months) with a monthly granularity at most. The vertical axis is the most important strategically. It represents the products, how they relate to each other, and how they might relate to the competition in ways that matter. Although cost is the most common value for the vertical axis, it can also plot speed or the key-feature parameter.

Articulating a common vision for success is hardly a new concept, although it is rarely the case that all stakeholders and contributors comprehend the vision fully. What is new is the emphasis on how product differentiation supports competitive advantage. When product innovation is more important than distribution strategy, or financial engineering, the Product Roadmap is your most important planning document.

Your company can generate a product plan from a variety of sources. Some, however, are based on a functionally-focused view of the problems you are trying to solve: Engineering sees it one way, Marketing another, and Sales yet another. Such views rarely incorporate sufficient inputs. They tend to be neither reliable nor comprehensive.

A robust Product Roadmap is driven by Marketing, but created cross-functionally and reviewed and approved by the C-suite. You should not communicate it outside of the company unless it is sanitized and approved by management. Rather, use it to focus the organization on the sequence of products you will develop over time.

The Product Roadmap is a living document that serves as a repository for project ideas that are ready to enter the product development process. Review and update it on a quarterly basis at a minimum.

Which Business Problems Does the Tool Solve?

Often individuals and managers in organizations say that there is no strategy, or if it exists, they say that it is poorly communicated. An often-referenced Product Roadmap allows for better strategic alignment and, as a result, greater engagement. It also helps the executive management team and product marketing to manage the inputs that feed the new product development process.

While a Product Roadmap should never preclude competitive reactions or innovation from “cutting in front of the line,” it does provide an active plan for what should be next in line for development. The active use of a Product Roadmap enables innovation in two ways:

  • It communicates what is important to the organization.
  • It provides a strategic context for engineers, researchers, and other creative individuals to create concepts that support, complement, and extend the strategic intent of the roadmap.

Finally, Product Roadmaps can communicate the international launch strategy. They enable the organization to plan the timing for entry into different markets and anticipate regulatory approvals, language, localization, and standards.

What Else You Should Know

The most useful Product Roadmaps anticipate and lead changes in the market, in channels, in the supply chain, and in the competitive landscape. “Shooting in front of the duck” is important because, in most industries, you have to anticipate what your competitors will have in the market when you launch your product 12 months from now.

Some Product Roadmaps are useless because they focus on the graphics. A meaningful Product Roadmap should be a two-axis graph showing, accurately and in detail, the timetable for launches and the relationships between products. The roadmap must show the delineated features of each product and how one offering differs from another.

PUBLISHER'S NOTE: The material in this blog originally appeared on John Carter's website, http://www.tcgen.com, as "Product Roadmap:  Clarifying Your Product Direction."

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Philip Bouchard

What’s This All About?

(Part 1 of 3)

YOU CAN’T ALWAYS GET WHAT YOU NEED: Immediacy and laser-targeted relevance are now management consulting requirements. What we in business need and what we get don’t match. That’s why I founded TrustedPeer.

When I face a business problem and don’t have the expertise I need, I want precise subject matter expertise very quickly. I have three options for finding it.  Each option is risky and inefficient, and the time to resolution is unpredictable.

  1. Conduct an Internet search. Internet search is time-consuming and unreliable. How can I trust content that is dated, anonymously written or is link-bait?
  2. Turn to a personal network. Personal networks are great if I have the perfect network with no gaps. In addition, it is not always easy to reveal shortcomings to someone who may be conflicted about how truthful to be in response.  If I ask you for advice, you may decide there’s no upside to saying what you really think. What if you give me good advice and I don’t take it? Or bad advice and I do? Either way, you lose. Better to equivocate, right? Or put me off hoping I’ll find a solution elsewhere.
  3. Contract with a large firm for a full-on consulting engagement. A McKinsey partner would be delighted to sell me on a plan to bring in a bunch of new associates (really smart, but with no professional experience) to camp out in my conference room and eventually, after some undisclosed time, deliver a strategy that I can't afford to implement.

Since none of these are satisfactory, and what I really need is targeted and custom, I decide to seek an experienced professional. I ask logical questions. Who is responsive? Who is the best? How do I select the right expert? How much should it cost? How long should it take? What about project scope, discovery, contract negotiation, price negotiation and resources required?

It all boils down to one question: How can I get an opinion I can trust from an expert who knows my industry and has seen and solved my problem many times before?

Before I post with more details, tell me, how do you find that trusted expert?  We welcome your comments.

Next Up: What's This All About? (Part 2 of 3): Avoiding Bonehead Management Mistakes.

If you need consulting on Business Development, contact TrustedPeer Expert and CEO Philip Bouchard .

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Dennis Lormel

Thinking Like a Bad Guy in Order to Do Good

When it comes to fraud and money laundering, can you think like a bad guy? The truth is, we all can. However, many of us do not realize this fact. More importantly, most of us possess a high level of personal integrity that precludes us from considering the temptation of accepting the opportunity to commit fraud. Unfortunately, a good number of people do succumb to the lure of fraud. The frauds these unscrupulous individuals perpetrate can be extremely devastating.  This was never more evident than it has been More

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