Bosses, Now It’s Your Turn: 6 Ways to Get Ahead
By Jeff Haden | August 22, 2011
Bosses spend the vast majority of their time helping others succeed: Employees, customers, the business itself… the list goes on and on. That’s your job — but it’s also your job to focus on yourself, at least part of the time, if only because your success can create success for others.
The problem is that even though performance, not persona, is what matters most, getting ahead is at least partly based on getting noticed — and getting noticed means being different.
Here are six ways you can get noticed through actions that make you stand out from the pack.
1. Be known for something worthwhile. Meeting standards, however lofty those standards may be, often won’t help you stand out. Go above the norm. Be the supervisor known for turning around struggling employees. Be the manager who gets a higher percentage of employees promoted. Be the business owner who makes a few deliveries a week to personally check in with customers. Pick a worthwhile mission and put in the extra effort required to excel at that mission — while still meeting all your other responsibilities, of course.
2. Be first… with a purpose. Lots of bosses are the first to arrive. Great — but what do you do with that time? Organize your thoughts? Get a jump on your email? Instead of taking care of “personal” tasks, do something visibly worthwhile for the organization. Take care of unresolved problems from the day before. Set things up so it’s easier for employees to hit the ground running when they arrive. Chip away at an ongoing project that others have ignored. Whatever you choose, do it consistently. Don’t just be the person who turns on the lights — be the person who arrives early and gets things done.
3. Create your own project. Excelling at an assigned project is expected. Excelling at a project you create helps you stand out. The key is to take a risk with a project, and do it on your own time so your company or customer doesn’t share that risk. For example, (many) years ago I decided to create a Web-based employee handbook we could put on the company intranet. I worked on it at home, showed it to a few managers, but the HR manager hated it so it died on the spot. I was disappointed but the company wasn’t “out” anything — and partly as a result a few months later I was assigned to a high-visibility, company–wide process improvement team. The same works for business owners: Experiment with a new process or service with a particular customer in mind. If nothing else they will appreciate the extra effort you put into trying to better meet their needs — and you’ll stand out.
4. Put your money where your mouth is. Lots of people take verbal stands, especially in meetings. Fewer take a stand and volunteer to put effort behind their opinions. Say you think a project has gone off the rails; instead of simply showing everyone how smart you are by pointing out its flaws, volunteer to help fix it. Or if you think an employee deserves another chance, don’t just pay lip service — ask to have him transferred to your area. It’s easy to talk about what’s wrong, what should be changed, what could be improved… the people who stand out are the ones who do something about it.
5. Show a little of your personal side. Personal interests help other people to identify and remember you, an especially important advantage in large organizations or crowded markets. Just make sure your personal interests don’t overshadow professional accomplishments. Being “the guy who ran a marathon” is fine, but being “the guy who is always training and traveling to marathons” is not. Let people know a little about you; a few personal details add color and depth to your professional image.
6. Work your butt off. Nothing — nothing — is a substitute for hard work. Look around: How many of your coworkers or competitors are working as hard as they can? Very few, if any. The hardest way to stand out is to out-think and out-work everyone else.
It’s also the easiest — because you’ll be the only one trying.
http://www.bnet.com/blog/small-biz-advice/bosses-now-its-your-turn-6-ways-to-get-ahead/3924?promo=713&tag=nl.e713
Wednesday, 24 August 2011
Saturday, 20 August 2011
How To Create a Personal Brand
How To Create a Personal Brand
By Geoffrey James | July 14, 2011
Contrary to popular belief, personal branding is not complicated. It’s relatively easy, even in today’s hyper-connected world, to create a recognizable “brand” for yourself. It takes about a day, at most. Here’s exactly what you do:
STEP #1: Define your exact name. Decide what version of your name that you’re going to use. If it’s similar to a famous person, you’ll probably want to use an initial or something to prevent confusion. If you have an unusual name, if it’s memorable, embrace it (e.g. “Zig Ziglar”), but if it’s just difficult, simplify it. If it’s just a plain awful name (e.g. “Lipshitz”) change it, even if the change annoys your parents.
STEP #2: Define your exact product. Decide what value you provide to the world and come up with an appropriate “product name” for what you do. This can be as simple as a job title, but if you want people to remember you, you’ll need to articulate — in a few words — why you’re different from everyone else. For example, I position myself to clients as “world’s only sales fanboy.”
STEP #3: Create your public image. There are two parts to this: your public photos and the way you present yourself in person or on video. Have a professional photographer take a professional portrait that “fits” your product. Avoid anything outre or sexy, unless that’s what you’re selling. Same thing with how you dress. Your face-to-face appearance must reinforce your brand.
STEP #4: Standardize your messages. Go through ALL your social networking sites and change your name, product description and photos to match what you defined in Steps #1 through #3. Remove as much as you can all personal and career data that’s irrelevant to your brand. Then change your business card, stationery, website, etc. to match.
STEP #5: Deliver on your “brand promise”. While branding gurus talk about brand as if it’s the be-all and end-all of business, the simple truth is that brand is largely a reflection of the product. Once you build up a track record of success, it will be that success that creates your person brand, and the stuff above won’t matter so much.
It’s really that simple. So simple, in fact, I’m amazed that so many people have confused and confusing personal brands.
By the way, you CAN have a Facebook page for your friends and family, but you should use some other moniker so that it doesn’t create brand dissonance. And never, ever link to it on your business sites.
http://www.bnet.com/blog/salesmachine/how-to-create-a-personal-brand/16670
By Geoffrey James | July 14, 2011
Contrary to popular belief, personal branding is not complicated. It’s relatively easy, even in today’s hyper-connected world, to create a recognizable “brand” for yourself. It takes about a day, at most. Here’s exactly what you do:
STEP #1: Define your exact name. Decide what version of your name that you’re going to use. If it’s similar to a famous person, you’ll probably want to use an initial or something to prevent confusion. If you have an unusual name, if it’s memorable, embrace it (e.g. “Zig Ziglar”), but if it’s just difficult, simplify it. If it’s just a plain awful name (e.g. “Lipshitz”) change it, even if the change annoys your parents.
STEP #2: Define your exact product. Decide what value you provide to the world and come up with an appropriate “product name” for what you do. This can be as simple as a job title, but if you want people to remember you, you’ll need to articulate — in a few words — why you’re different from everyone else. For example, I position myself to clients as “world’s only sales fanboy.”
STEP #3: Create your public image. There are two parts to this: your public photos and the way you present yourself in person or on video. Have a professional photographer take a professional portrait that “fits” your product. Avoid anything outre or sexy, unless that’s what you’re selling. Same thing with how you dress. Your face-to-face appearance must reinforce your brand.
STEP #4: Standardize your messages. Go through ALL your social networking sites and change your name, product description and photos to match what you defined in Steps #1 through #3. Remove as much as you can all personal and career data that’s irrelevant to your brand. Then change your business card, stationery, website, etc. to match.
STEP #5: Deliver on your “brand promise”. While branding gurus talk about brand as if it’s the be-all and end-all of business, the simple truth is that brand is largely a reflection of the product. Once you build up a track record of success, it will be that success that creates your person brand, and the stuff above won’t matter so much.
It’s really that simple. So simple, in fact, I’m amazed that so many people have confused and confusing personal brands.
By the way, you CAN have a Facebook page for your friends and family, but you should use some other moniker so that it doesn’t create brand dissonance. And never, ever link to it on your business sites.
http://www.bnet.com/blog/salesmachine/how-to-create-a-personal-brand/16670
When Not to Hit 'Reply All'
When Not to Hit 'Reply All'
By Dave Johnson | August 18, 2011
Now that email has been around for 30 years or so, you’d think that common messaging activities — like using the Reply and Reply All buttons — would just be common sense. Alas, based on all the pain I see at work, in email from BNET readers, and out there on the Web in general, it’s clearly not the case. Here’s my take on when and how you should use Reply and Reply All to avoid causing problems in the office.
Use Reply All
In general, all the time. What? That’s crazy, right? Nope. Someone crafted the addressees in the email you are reading for a reason, and respect that. I’m referring, of course, to typical email threads with a small group of people — there are exceptions, and I’ll get to those in a moment. But if you click reply to a mail with a bunch of addressees on it, you identify yourself as either clumsy and thoughtless or someone who doesn’t respect the people on the CC line enough to include them in the conversation. Which of those would you like to be known as?
Use Reply
When an email has an extremely wide distribution — such as to an entire division. Don’t ever reply all to a request for information from an admin, for example. You’ll annoy hundreds of people and probably start a firestorm of “stop replying all” messages that will only make matters worse.
When you need to narrow the focus of the conversation. If there are a half-dozen people on the thread and you want to branch the subject or interject something confidential or sensitive, be highly aware of whom you are cc’ing.
Don’t Use Either
If you’re inclined to make a joke at someone’s expense, say something impolitic, or be otherwise insensitive, don’t. I’ve heard advice like “be sure to narrow the audience if you’re going to say something at the expense of someone cc’d on the mail,” but that is just dumb. Remember that email lives forever, and it can be forwarded — accidentally or intentionally — without your permission at any time. Don’t risk it.
http://www.bnet.com/blog/businesstips/when-not-to-hit-reply-all/12229?promo=713&tag=nl.e713
By Dave Johnson | August 18, 2011
Now that email has been around for 30 years or so, you’d think that common messaging activities — like using the Reply and Reply All buttons — would just be common sense. Alas, based on all the pain I see at work, in email from BNET readers, and out there on the Web in general, it’s clearly not the case. Here’s my take on when and how you should use Reply and Reply All to avoid causing problems in the office.
Use Reply All
In general, all the time. What? That’s crazy, right? Nope. Someone crafted the addressees in the email you are reading for a reason, and respect that. I’m referring, of course, to typical email threads with a small group of people — there are exceptions, and I’ll get to those in a moment. But if you click reply to a mail with a bunch of addressees on it, you identify yourself as either clumsy and thoughtless or someone who doesn’t respect the people on the CC line enough to include them in the conversation. Which of those would you like to be known as?
Use Reply
When an email has an extremely wide distribution — such as to an entire division. Don’t ever reply all to a request for information from an admin, for example. You’ll annoy hundreds of people and probably start a firestorm of “stop replying all” messages that will only make matters worse.
When you need to narrow the focus of the conversation. If there are a half-dozen people on the thread and you want to branch the subject or interject something confidential or sensitive, be highly aware of whom you are cc’ing.
Don’t Use Either
If you’re inclined to make a joke at someone’s expense, say something impolitic, or be otherwise insensitive, don’t. I’ve heard advice like “be sure to narrow the audience if you’re going to say something at the expense of someone cc’d on the mail,” but that is just dumb. Remember that email lives forever, and it can be forwarded — accidentally or intentionally — without your permission at any time. Don’t risk it.
http://www.bnet.com/blog/businesstips/when-not-to-hit-reply-all/12229?promo=713&tag=nl.e713
Why You're Wasting Your Time Trying to Limit Social Media Use
Why You're Wasting Your Time Trying to Limit Social Media Use
By Jessica Stillman | August 16, 2011
Recently, when Ken Wisnefski, the CEO of WebiMax, an online marketing firm, wrote in to BNET’s Ask the Expert’s column complaining that his employees were wasting too much time on social media, two out of three responding experts took a hard line on the issue. Beth Schroeder, a partner at Silver & Freedman, for instance, suggested that if employees needed to use social media for work, bosses set up dedicated computers or try “looking over their shoulders.”
Christina Stovall, director of HR at Odyssey One Source, had a similar take on the issue, saying, “While you may not be able to restrict these sites completely, you can proactively use available technology — firewalls and web-filtering services — to limit access. In extreme cases, have your managers or the IT department note which employees are abusing their access to personal sites and handle those situations with disciplinary action.”
So are these HR experts right to take such a strict stance on social media use at work? Not according to a recent Business Insider post. The piece is based on a simple and probably fair assessment: “Your employees are Facebooking and Tweeting at work. Face it. We’ve all learned to accept it as a fact of life.” Rather than dissipate your resources and antagonize your employees with an endless battle to snuff out social media use at the office, BI suggests you put employees’ love of Facebook, Twitter and the like to good use.
That employee who spends all day on Facebook? Put him to work setting up your LinkedIn account. That lady in sales that loves to Tweet may be able to teach you a few things. Set up a company Twitter account and create a presence for your company there.
And even if your company already has a flourishing social media presence and doesn’t need more contributors, fighting against social media use may still be misguided, according to the post:
Networking also can help with research. That project you assigned to the new intern? She had no idea where to find the information she needed, so she pulled up her Facebook account and posted the question to her 5,000 friends and family members. Within ten minutes she found out her friend from high school works with someone who would love to answer any questions she has. The end result of that project is far above anything you could have come up with on your own. All because of social networking.
Still sure your employees’ social media use isn’t directly benefiting their work? Who cares, says BI. It may be indirectly helping them keep their sanity.
For the most part, employees use social networking as stress relief. While some employees can get carried away, many of today’s workers are used to multitasking. At home they watch TV, surf the Internet, and talk on the phone, all at the same time. We, as a society, have grown restless when single-minded focus is required and cutting back and forth to social media throughout the day allows us the diversion we need to recharge.
Recent research supports this conclusion, finding that social media can actually improve productivity by helping the brain recharge, or can be harnessed with tools like Yammer to improve inter-office communication.
But perhaps there’s an even simpler reason to stop trying to micromanage social media use at your office — you’re pissing off your employees by treating them like children. Sure, if an individual employee isn’t meeting performance targets or completing tasks because they’re glued to Facebook, fire them. But if a worker is meeting the goals you set for them, is the anger and oppositional relationship your engendering with your social media paranoia really likely to improve their performance or increase the likelihood of them sticking around for awhile? Maybe if you can’t trust your employees to do their work without minute-by-minute scrutiny, you haven’t hired the right employees.
What do you think — does fighting social media use at work do more harm than good?
http://www.bnet.com/blog/entry-level/why-youre-wasting-your-time-trying-to-limit-social-media-use/5316?promo=713&tag=nl.e713
By Jessica Stillman | August 16, 2011
Recently, when Ken Wisnefski, the CEO of WebiMax, an online marketing firm, wrote in to BNET’s Ask the Expert’s column complaining that his employees were wasting too much time on social media, two out of three responding experts took a hard line on the issue. Beth Schroeder, a partner at Silver & Freedman, for instance, suggested that if employees needed to use social media for work, bosses set up dedicated computers or try “looking over their shoulders.”
Christina Stovall, director of HR at Odyssey One Source, had a similar take on the issue, saying, “While you may not be able to restrict these sites completely, you can proactively use available technology — firewalls and web-filtering services — to limit access. In extreme cases, have your managers or the IT department note which employees are abusing their access to personal sites and handle those situations with disciplinary action.”
So are these HR experts right to take such a strict stance on social media use at work? Not according to a recent Business Insider post. The piece is based on a simple and probably fair assessment: “Your employees are Facebooking and Tweeting at work. Face it. We’ve all learned to accept it as a fact of life.” Rather than dissipate your resources and antagonize your employees with an endless battle to snuff out social media use at the office, BI suggests you put employees’ love of Facebook, Twitter and the like to good use.
That employee who spends all day on Facebook? Put him to work setting up your LinkedIn account. That lady in sales that loves to Tweet may be able to teach you a few things. Set up a company Twitter account and create a presence for your company there.
And even if your company already has a flourishing social media presence and doesn’t need more contributors, fighting against social media use may still be misguided, according to the post:
Networking also can help with research. That project you assigned to the new intern? She had no idea where to find the information she needed, so she pulled up her Facebook account and posted the question to her 5,000 friends and family members. Within ten minutes she found out her friend from high school works with someone who would love to answer any questions she has. The end result of that project is far above anything you could have come up with on your own. All because of social networking.
Still sure your employees’ social media use isn’t directly benefiting their work? Who cares, says BI. It may be indirectly helping them keep their sanity.
For the most part, employees use social networking as stress relief. While some employees can get carried away, many of today’s workers are used to multitasking. At home they watch TV, surf the Internet, and talk on the phone, all at the same time. We, as a society, have grown restless when single-minded focus is required and cutting back and forth to social media throughout the day allows us the diversion we need to recharge.
Recent research supports this conclusion, finding that social media can actually improve productivity by helping the brain recharge, or can be harnessed with tools like Yammer to improve inter-office communication.
But perhaps there’s an even simpler reason to stop trying to micromanage social media use at your office — you’re pissing off your employees by treating them like children. Sure, if an individual employee isn’t meeting performance targets or completing tasks because they’re glued to Facebook, fire them. But if a worker is meeting the goals you set for them, is the anger and oppositional relationship your engendering with your social media paranoia really likely to improve their performance or increase the likelihood of them sticking around for awhile? Maybe if you can’t trust your employees to do their work without minute-by-minute scrutiny, you haven’t hired the right employees.
What do you think — does fighting social media use at work do more harm than good?
http://www.bnet.com/blog/entry-level/why-youre-wasting-your-time-trying-to-limit-social-media-use/5316?promo=713&tag=nl.e713
Easing the Squeeze: The 2011 Working Capital Scorecard
Easing the Squeeze: The 2011 Working Capital Scorecard
As sales revive and coffers swell, companies seem less intent on wringing cash out of working capital.
David M. Katz - CFO Magazine
July 15, 2011
For months after the Great Recession officially ended in June 2009, the need for cash trumped all else. With credit still scarce, companies continued to squeeze cash out of their supply chains. Finance chiefs led the charge to tighten bill collection, loosen their own payment terms, and dump inventory.
Related Articles
All in the Timing
Does Growth Require Cash?
Captains of Capex
To Cut Working Capital, Try Bonuses
Working It Out: The 2010 Working Capital Scorecard
Today, cash is no longer a problem, as corporate coffers are filled to the brim. But don't be too quick to credit working capital improvement. The 2% decrease in days working capital (DWC) last year qualifies as downright modest, some say, although it is certainly an improvement, given that DWC increased 9.9% the prior year, the worst performance in half a decade. (Remember that a decrease in DWC represents improved working capital performance.)
Many CFOs disavow any connection between companies' strong cash positions and an apparent lack of emphasis on working capital. How strong? One thousand of the biggest publicly reporting nonfinancial companies registered an 11.5% jump in revenue last year, according to the 2011 CFO/REL Working Capital Scorecard. (By comparison, revenue dropped by 12.1% in 2009.)
Mixed Signals
All three components of DWC showed similarly scant levels of improvement. Days sales outstanding (DSO) declined 0.1%, while days inventory outstanding (DIO) and days payable outstanding (DPO) each improved just 1.1%.
To some experts, such sluggishness bespeaks complacency born of abundant cash. "The energy and focus have now been placed much more on the [profit-and-loss] statement," says Mark Tennant, a principal with REL, a working capital consulting firm. "There isn't a continuous focus on cash flow and working capital."
If, indeed, bulging coffers are to blame for a new spirit of complacency, the result could be a false sense of security. Corporate balance sheets may not be nearly as impervious as they seem, says Stephen Payne, Americas leader of working capital advisory services at Ernst & Young. Despite an impressive recent comeback in corporate productivity, high unemployment continues to plague the economy, he explains.
To produce sustainable growth, companies will "have to hire people and invest via capex, and that's going to start depleting their cash hoards," says Payne. (However, few companies seem poised to do that — see "Treading Water.") In the case of U.S.-based multinationals, much of that cash is sequestered abroad and more or less unavailable domestically, thanks to the 35% tax on repatriated profits.
Nevertheless, the stress that led many companies to try to wring cash from working capital during the recession has been eased by some signs that consumer demand is beginning to rebound. If sales forecasts continue to improve, corporations are bound to put more resources into driving revenue than into process improvements.
At The Kroger Co., which recently celebrated its 29th straight quarter of growth in food sales, for example, there's little doubt where its priorities lie. Acknowledging that he sees an opportunity to derive as much as $600 million in cash via working capital improvements at the $82 billion (in revenues) supermarket chain, finance chief Mike Schlotman says he would only go about it gingerly. "As the CFO, I could easily get it out and say I've got a few hundred million dollars of cash," he says. "But if it hurts sales, that's not such a great accomplishment."
Industrial Strengths — or Weaknesses
A major determinant (some might say limitation) of how a company regards the relationship between revenue and working capital hinges on its particular industry. There are severe curbs on how much cash a company like Integra LifeSciences Holdings can generate by slimming down its supply chain, demanding payment on time from its customers, or taking longer to pay its suppliers, for instance. Because of that, working capital improvements take a back seat to efforts to boost sales, according to Integra CFO John Henneman.
There's very little excess to trim in the supply line for the surgical implants and other time-sensitive orthopedic products that are Integra's specialties. "An awful lot of inventory is either held by sales reps — so they can be ready for surgery on very short notice — or held in hospitals for the same reason on consignment," Henneman says. "That requires quite a lot more inventory than you would need if you were in a business that had longer lead times."
Further, the $732 million company is caught in a receivables/payables squeeze: its hospital customers insist on longer payment terms than Integra can get from its own suppliers. "There's really nothing you can do about that if you want to play in the market, because other medical-device companies will take your business [otherwise]," he says.
On the other hand, the company must buy parts like screws or plates in such small quantities that it carries little clout with its vendors in negotiations on payment terms. Further, it must overbuy its inventory to have the right parts for any eventuality, even though most patients fall into a narrow range of possible needs.
In addition to such limitations, the high gross margins of the orthopedics industry diminish the incentive to make supply chains more efficient. Because Integra and firms like it retain a big portion of their sales as gross profit, it's worse for them to lack the inventory to fill a back order than to pay for redundant supplies, says Henneman.
For competitive reasons, however, companies in industries where working capital improvements are hard to come by may still be moved to make them. For example, inventory-turnover ratios in the aerospace and defense industry "are not world-class," says Bob George, CFO of Esterline Technologies, a $1.5 billion specialized manufacturer that derives most of its revenue from those sectors. Yet, Esterline is working hard to bring that ratio down.
In 2010, for instance, the industry saw its median DIO rise to 53 from 52 and its DWC increase to 90 from 86. In contrast, the auto-components business recorded median inventory days of 29 last year, down a day from the previous year, and 29 days of working capital — more than 9 days less than it was in 2009.
Related Articles
All in the Timing
Does Growth Require Cash?
Captains of Capex
To Cut Working Capital, Try Bonuses
Working It Out: The 2010 Working Capital Scorecard
Indeed, given the length of time it takes to design and fashion a jet, just-in-time manufacturing "is not really a general concept that we wrestle with" as much as automakers do, adds George. Still, Esterline is striving to "crush lead times" in order to stay at the top of its class as a supplier, he says. The numbers appear to bear him out: between 2009 and 2010, the company reduced its DIO from 71 to 63, a 12% improvement compared with the 2% median deterioration of the industry as a whole.
Contrary to the theory that abundant cash leads to poor working capital performance, George sees the two spheres as completely separate. He says the incentive to streamline the company's supply chain is driven by the demands of its customers for shorter lead times and flexible terms. "They want to say, 'Look, I don't want inventory until I need it, and I want you to be able to respond,'" says George. Ultimately, it boils down to the promise of future revenue, since Esterline's major customers, which include Boeing and Airbus, want suppliers that can operate as leanly as possible.
Having a significant cash cushion has nothing to do with how hard the company works to turn around its inventory, says the finance chief: "Simply because we have cash on the balance sheet does not influence that focus at all."
Give It to the Shareholders
Bob Daleo, CFO of Thomson Reuters, maintains that companies that fail to manage their working capital are doing a great disservice to their investors. "So because we have more cash, we're going to let customers and vendors keep our cash longer? That's dumb," he says. "Instead of giving it to their vendors and customers, why don't they give it back to their shareholders?"
Thomson Reuters, a $13 billion information, data, and news provider, has little inventory to cut. With 40% of its revenues coming from outside the United States, the company is also geographically locked in to a mix of longer bill-collection times. Thus, it devoted its efforts to making working capital improvements in the area over which it has the most control: payment terms. The effort yielded an increase in DPO from 12 in 2009 to 15 in 2010.
As part of its focus on improving its working capital performance, Thomson Reuters consolidated its payment process in India, using a centralized payment-processing team to implement standardized policies," says Daleo.
In the current economic climate, however, the top line of the income statement appears to be a much higher priority than cash on the balance sheet. Yet while the focus on improving working capital performance may have dimmed, some companies are striving to sustain the gains they achieved during the recession.
Take Cytec Industries, for example. In the wake of the 2008 financial meltdown, Cytec, a $2.7 billion supplier of specialty chemicals and materials, was faced with debt and liquidity challenges. To make sure it had adequate cash on hand, the company embarked on a major effort to boost its working capital performance. As part of the push, Cytec curbed its past focus on net income and linked employee pay to the company's working capital goals.
By the end of 2009, the company's DWC dropped 27%, from 90 to 66. Although its revenues decreased 22% that year, it was able to offset the loss with the cash it had freed up by cutting working capital days. Spurred by the revival of the chemical industry in 2010, Cytec's revenues rebounded by 13% that year. With its incentive-compensation programs in place, however, the company was able to cut its DWC even further, to 61 days. The decrease in DWC improvement from 27% in 2009 to 8% in 2010 may simply mean that the company had made the most of its existing opportunities in 2009, says Cytec CFO David Drillock.
Still, the reduction in working capital days has produced enough cash flow to enable the company to reinvest in itself as well as restore dividend payments and launch a share-buyback program. "It really doesn't matter what industry you're in — if you have strong cash flow, you're generating value for shareholders," says Drillock. But if sales pick up in a big way, it may be hard for other finance chiefs to follow suit.
David M. Katz is New York bureau chief and senior editor for accounting at CFO.
http://www.cfo.com/article.cfm/14586631
As sales revive and coffers swell, companies seem less intent on wringing cash out of working capital.
David M. Katz - CFO Magazine
July 15, 2011
For months after the Great Recession officially ended in June 2009, the need for cash trumped all else. With credit still scarce, companies continued to squeeze cash out of their supply chains. Finance chiefs led the charge to tighten bill collection, loosen their own payment terms, and dump inventory.
Related Articles
All in the Timing
Does Growth Require Cash?
Captains of Capex
To Cut Working Capital, Try Bonuses
Working It Out: The 2010 Working Capital Scorecard
Today, cash is no longer a problem, as corporate coffers are filled to the brim. But don't be too quick to credit working capital improvement. The 2% decrease in days working capital (DWC) last year qualifies as downright modest, some say, although it is certainly an improvement, given that DWC increased 9.9% the prior year, the worst performance in half a decade. (Remember that a decrease in DWC represents improved working capital performance.)
Many CFOs disavow any connection between companies' strong cash positions and an apparent lack of emphasis on working capital. How strong? One thousand of the biggest publicly reporting nonfinancial companies registered an 11.5% jump in revenue last year, according to the 2011 CFO/REL Working Capital Scorecard. (By comparison, revenue dropped by 12.1% in 2009.)
Mixed Signals
All three components of DWC showed similarly scant levels of improvement. Days sales outstanding (DSO) declined 0.1%, while days inventory outstanding (DIO) and days payable outstanding (DPO) each improved just 1.1%.
To some experts, such sluggishness bespeaks complacency born of abundant cash. "The energy and focus have now been placed much more on the [profit-and-loss] statement," says Mark Tennant, a principal with REL, a working capital consulting firm. "There isn't a continuous focus on cash flow and working capital."
If, indeed, bulging coffers are to blame for a new spirit of complacency, the result could be a false sense of security. Corporate balance sheets may not be nearly as impervious as they seem, says Stephen Payne, Americas leader of working capital advisory services at Ernst & Young. Despite an impressive recent comeback in corporate productivity, high unemployment continues to plague the economy, he explains.
To produce sustainable growth, companies will "have to hire people and invest via capex, and that's going to start depleting their cash hoards," says Payne. (However, few companies seem poised to do that — see "Treading Water.") In the case of U.S.-based multinationals, much of that cash is sequestered abroad and more or less unavailable domestically, thanks to the 35% tax on repatriated profits.
Nevertheless, the stress that led many companies to try to wring cash from working capital during the recession has been eased by some signs that consumer demand is beginning to rebound. If sales forecasts continue to improve, corporations are bound to put more resources into driving revenue than into process improvements.
At The Kroger Co., which recently celebrated its 29th straight quarter of growth in food sales, for example, there's little doubt where its priorities lie. Acknowledging that he sees an opportunity to derive as much as $600 million in cash via working capital improvements at the $82 billion (in revenues) supermarket chain, finance chief Mike Schlotman says he would only go about it gingerly. "As the CFO, I could easily get it out and say I've got a few hundred million dollars of cash," he says. "But if it hurts sales, that's not such a great accomplishment."
Industrial Strengths — or Weaknesses
A major determinant (some might say limitation) of how a company regards the relationship between revenue and working capital hinges on its particular industry. There are severe curbs on how much cash a company like Integra LifeSciences Holdings can generate by slimming down its supply chain, demanding payment on time from its customers, or taking longer to pay its suppliers, for instance. Because of that, working capital improvements take a back seat to efforts to boost sales, according to Integra CFO John Henneman.
There's very little excess to trim in the supply line for the surgical implants and other time-sensitive orthopedic products that are Integra's specialties. "An awful lot of inventory is either held by sales reps — so they can be ready for surgery on very short notice — or held in hospitals for the same reason on consignment," Henneman says. "That requires quite a lot more inventory than you would need if you were in a business that had longer lead times."
Further, the $732 million company is caught in a receivables/payables squeeze: its hospital customers insist on longer payment terms than Integra can get from its own suppliers. "There's really nothing you can do about that if you want to play in the market, because other medical-device companies will take your business [otherwise]," he says.
On the other hand, the company must buy parts like screws or plates in such small quantities that it carries little clout with its vendors in negotiations on payment terms. Further, it must overbuy its inventory to have the right parts for any eventuality, even though most patients fall into a narrow range of possible needs.
In addition to such limitations, the high gross margins of the orthopedics industry diminish the incentive to make supply chains more efficient. Because Integra and firms like it retain a big portion of their sales as gross profit, it's worse for them to lack the inventory to fill a back order than to pay for redundant supplies, says Henneman.
For competitive reasons, however, companies in industries where working capital improvements are hard to come by may still be moved to make them. For example, inventory-turnover ratios in the aerospace and defense industry "are not world-class," says Bob George, CFO of Esterline Technologies, a $1.5 billion specialized manufacturer that derives most of its revenue from those sectors. Yet, Esterline is working hard to bring that ratio down.
In 2010, for instance, the industry saw its median DIO rise to 53 from 52 and its DWC increase to 90 from 86. In contrast, the auto-components business recorded median inventory days of 29 last year, down a day from the previous year, and 29 days of working capital — more than 9 days less than it was in 2009.
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Indeed, given the length of time it takes to design and fashion a jet, just-in-time manufacturing "is not really a general concept that we wrestle with" as much as automakers do, adds George. Still, Esterline is striving to "crush lead times" in order to stay at the top of its class as a supplier, he says. The numbers appear to bear him out: between 2009 and 2010, the company reduced its DIO from 71 to 63, a 12% improvement compared with the 2% median deterioration of the industry as a whole.
Contrary to the theory that abundant cash leads to poor working capital performance, George sees the two spheres as completely separate. He says the incentive to streamline the company's supply chain is driven by the demands of its customers for shorter lead times and flexible terms. "They want to say, 'Look, I don't want inventory until I need it, and I want you to be able to respond,'" says George. Ultimately, it boils down to the promise of future revenue, since Esterline's major customers, which include Boeing and Airbus, want suppliers that can operate as leanly as possible.
Having a significant cash cushion has nothing to do with how hard the company works to turn around its inventory, says the finance chief: "Simply because we have cash on the balance sheet does not influence that focus at all."
Give It to the Shareholders
Bob Daleo, CFO of Thomson Reuters, maintains that companies that fail to manage their working capital are doing a great disservice to their investors. "So because we have more cash, we're going to let customers and vendors keep our cash longer? That's dumb," he says. "Instead of giving it to their vendors and customers, why don't they give it back to their shareholders?"
Thomson Reuters, a $13 billion information, data, and news provider, has little inventory to cut. With 40% of its revenues coming from outside the United States, the company is also geographically locked in to a mix of longer bill-collection times. Thus, it devoted its efforts to making working capital improvements in the area over which it has the most control: payment terms. The effort yielded an increase in DPO from 12 in 2009 to 15 in 2010.
As part of its focus on improving its working capital performance, Thomson Reuters consolidated its payment process in India, using a centralized payment-processing team to implement standardized policies," says Daleo.
In the current economic climate, however, the top line of the income statement appears to be a much higher priority than cash on the balance sheet. Yet while the focus on improving working capital performance may have dimmed, some companies are striving to sustain the gains they achieved during the recession.
Take Cytec Industries, for example. In the wake of the 2008 financial meltdown, Cytec, a $2.7 billion supplier of specialty chemicals and materials, was faced with debt and liquidity challenges. To make sure it had adequate cash on hand, the company embarked on a major effort to boost its working capital performance. As part of the push, Cytec curbed its past focus on net income and linked employee pay to the company's working capital goals.
By the end of 2009, the company's DWC dropped 27%, from 90 to 66. Although its revenues decreased 22% that year, it was able to offset the loss with the cash it had freed up by cutting working capital days. Spurred by the revival of the chemical industry in 2010, Cytec's revenues rebounded by 13% that year. With its incentive-compensation programs in place, however, the company was able to cut its DWC even further, to 61 days. The decrease in DWC improvement from 27% in 2009 to 8% in 2010 may simply mean that the company had made the most of its existing opportunities in 2009, says Cytec CFO David Drillock.
Still, the reduction in working capital days has produced enough cash flow to enable the company to reinvest in itself as well as restore dividend payments and launch a share-buyback program. "It really doesn't matter what industry you're in — if you have strong cash flow, you're generating value for shareholders," says Drillock. But if sales pick up in a big way, it may be hard for other finance chiefs to follow suit.
David M. Katz is New York bureau chief and senior editor for accounting at CFO.
http://www.cfo.com/article.cfm/14586631
10 Tips for Easing Information Overload
10 Tips for Easing Information Overload
By Wayne Turmel | July 18, 2011
As managers, you’re always told to communicate. But for many of us the problem isn’t not enough information, it’s too much. Handling all the email, messages, memos and stuff coming at us is like trying to drink from a fire hose. Here are some tips for getting a grip.
In his new book “Overload-How Too Much Information is Hazardous to Your Organization”, author Jonathan Spira says it’s not just personal productivity that suffers. Too much information to handle effectively costs the US economy $900 Billion a year in bad decisions, delays and wasted time.
The biggest challenges to productivity are also the easiest to abuse: Email and interruptions. Here are 10 tips he offers in the book for gaining some measure of control in your worklife.
Don’t email someone, then immediately follow up with an Instant Message, a phone call and a tweet. it wastes your time and interrupts them, maybe while they’re trying to get you an answer.
Don’t combine multiple themes or requests in a single email. It’s too hard to pick out exactly what you want and if they store the information somewhere they may not find it again.
Make sure the subject of your email actually says what your request or information is about.
Read your email over for tone and clarity before sending it out. One badly written email starts a whole thread of explanation. Get it right the first time.
Don’t overburden people with unnecessary replies like “Great!” and “Thanks”. And for heavens sake don’t reply to everyone unless everyone needs to know.
Don’t get impatient if people don’t respond right away. They may be, you know, busy.
Keep your status up to date on IM and email. If you’re out of the office and won’t be around, tell people so they don’t try to hunt you down.
Recognize that the intended recipient of your email or message isn’t a mind reader. Take the time to give them necessary information about who you are, what you want and what they need to know. This will prevent multiple inquiries.
Recognize that typed words can be misleading in both tone and intent. Strive for simplicity and clarity in your communication. This means we can even forgive an emoticon or two if it helps set the right tone :-)
Understand that as overwhelming as information overload is for you, it’s no easier for anyone else. Do your part to make your team’s life easier.
http://www.bnet.com/blog/virtual-manager/10-tips-for-easing-information-overload/1552?promo=713&tag=nl.e713
By Wayne Turmel | July 18, 2011
As managers, you’re always told to communicate. But for many of us the problem isn’t not enough information, it’s too much. Handling all the email, messages, memos and stuff coming at us is like trying to drink from a fire hose. Here are some tips for getting a grip.
In his new book “Overload-How Too Much Information is Hazardous to Your Organization”, author Jonathan Spira says it’s not just personal productivity that suffers. Too much information to handle effectively costs the US economy $900 Billion a year in bad decisions, delays and wasted time.
The biggest challenges to productivity are also the easiest to abuse: Email and interruptions. Here are 10 tips he offers in the book for gaining some measure of control in your worklife.
Don’t email someone, then immediately follow up with an Instant Message, a phone call and a tweet. it wastes your time and interrupts them, maybe while they’re trying to get you an answer.
Don’t combine multiple themes or requests in a single email. It’s too hard to pick out exactly what you want and if they store the information somewhere they may not find it again.
Make sure the subject of your email actually says what your request or information is about.
Read your email over for tone and clarity before sending it out. One badly written email starts a whole thread of explanation. Get it right the first time.
Don’t overburden people with unnecessary replies like “Great!” and “Thanks”. And for heavens sake don’t reply to everyone unless everyone needs to know.
Don’t get impatient if people don’t respond right away. They may be, you know, busy.
Keep your status up to date on IM and email. If you’re out of the office and won’t be around, tell people so they don’t try to hunt you down.
Recognize that the intended recipient of your email or message isn’t a mind reader. Take the time to give them necessary information about who you are, what you want and what they need to know. This will prevent multiple inquiries.
Recognize that typed words can be misleading in both tone and intent. Strive for simplicity and clarity in your communication. This means we can even forgive an emoticon or two if it helps set the right tone :-)
Understand that as overwhelming as information overload is for you, it’s no easier for anyone else. Do your part to make your team’s life easier.
http://www.bnet.com/blog/virtual-manager/10-tips-for-easing-information-overload/1552?promo=713&tag=nl.e713
Do You Have “Superstar” Potential?
Do You Have “Superstar” Potential?
By Penelope Trunk | July 12, 2011
It’s easy to know what the superstar looks like after the person’s star already is shining. But it’s much harder to identify that diamond in the rough. BusinessWeek reports that 90% of managers believe they are in the top 10% in performance.
This is hilarious. Until you are working with one of those people. And then you start to ask yourself: Am I like this? Am I delusional? How strong a performer am I really?
It’s hard to look at yourself objectively, but a while back, I noticed that I was good at recognizing talent. The last company that I founded,Brazen Careerist, focuses on identifying high performers for companies, and helping people early in their career reach their potential. So I have a lot of experience in this area, and I’ve noticed that there are a few telltale signs of “star” potential.
You bet big on yourself.
Today, I live on a farm, and Brazen Careerist is run by Ryan Healy, a guy I partnered with when he was just a year out of school. When I met him, our fights were mostly about me thinking he’s immature. After three years of working together our fights got really interesting because he was my equal. (There’s an extra piece of advice: you can judge your co-workers by how well they fight with you.)
One of things that made Ryan stand out to me was his willingness to take risks. He started a blog when few people were blogging. He left a great job at IBM to do a startup. He moved across country with no money in his pocket. He was willing to bet on himself, which made other people want to bet on him.
You take alternative paths.
Being great means being different from everyone else. So you are not likely to stand out if you are on that common path. Instead, you are likely to go to a common place.
The way you can tell if you are taking an alternative path is by how many people are telling you you’re an idiot. Today entrepreneurship is the new safety net, moving back with your parents is totally acceptable, and job-hopping is the default. So if those are your ideas of alternative, forget it.
Alternative is something people have no patience for because it sounds so self-destructive to the mainstream.
You’re overly focused.
The recent star-worthy twentysomething I’ve started working with is Melissa. She quit her high-flying job in Asian finance to be a photographer. While she was making a lot of money at finance, she decided she would never be truly great at it. Whereas she believes she does have a chance at being world-renowned as a portrait photographer. Maybe she will be, maybe she won’t. But part of being a star is taking a path that looks loony because it’s intrinsically limiting - you end up having a longer list of what you don’t do than what you do.
You were a mediocre student.
Stellar students spend their 20s in complete shock and indignation that school rewards rule followers but work does not. Life is not fair. (Luckily you can rescue your own children from this pitfall by unschooling them.) There is reams of evidence to show that good grades do not correlate to good careers. And, many mediocre students have a sixth sense about what matters and what doesn’t matter, and they kick into really high gear when it’s about what they are interested in and not about grades. It’s a sign that you have star potential in the business world if you did not have star potential at school.
You read. A lot.
It doesn’t matter what you read. But unproven hotshots spend a lot of time reading because they have a natural curiosity and level of engagement. It’s true that not everyone is a reader, but this is an odds game, and you make your odds of being a workplace hotshot by reading a lot. You can read comics, car specifications, Garden &Gun magazine - you can read anything. (Also, click that last link. I love that magazine. I subscribed because the title sounds so ridiculous. I keep reading because the writing is totally great… actually, maybe Melissa should take photos for them.)
Your goals align with your Myers Briggs score.
You can only be a star in a field that matches up with your Myers Briggs score. (You can check out your own Myers Briggs score here.) If you’re an ENTJ, for example, you absolutely must have people to lead. There is no way around it. There are no ENTJs who are hotshot designers locked up alone in a room lit only by a disco ball. That doesn’t happen. Or at least it doesn’t happen without some long-term psychic cost to either the worker or the co-workers or both. People need to do what their personality was born to do.
Another no-go: An INFP can’t manage other people. You might envision your great ascent up the corporate ladder, but if you’re an INFP, managing corporate goals and mediating other peoples’ interpersonal issues, will eventually drive you to insanity.
So you lack star potential?
You might not actually have the temperament to be a star at work. Your star power might lay somewhere else - like home with kids. But that’s okay. You can only be who you are. It’s just nice to know who you are while you work toward becoming it. You know how your kindergarten teacher told you the whole class is full of bright stars? It’s true. It’s just that some of you were meant to work the monkey bars.
http://www.bnet.com/blog/penelope-trunk/do-you-have-8220superstar-8221-potential/524?promo=713&tag=nl.e713
By Penelope Trunk | July 12, 2011
It’s easy to know what the superstar looks like after the person’s star already is shining. But it’s much harder to identify that diamond in the rough. BusinessWeek reports that 90% of managers believe they are in the top 10% in performance.
This is hilarious. Until you are working with one of those people. And then you start to ask yourself: Am I like this? Am I delusional? How strong a performer am I really?
It’s hard to look at yourself objectively, but a while back, I noticed that I was good at recognizing talent. The last company that I founded,Brazen Careerist, focuses on identifying high performers for companies, and helping people early in their career reach their potential. So I have a lot of experience in this area, and I’ve noticed that there are a few telltale signs of “star” potential.
You bet big on yourself.
Today, I live on a farm, and Brazen Careerist is run by Ryan Healy, a guy I partnered with when he was just a year out of school. When I met him, our fights were mostly about me thinking he’s immature. After three years of working together our fights got really interesting because he was my equal. (There’s an extra piece of advice: you can judge your co-workers by how well they fight with you.)
One of things that made Ryan stand out to me was his willingness to take risks. He started a blog when few people were blogging. He left a great job at IBM to do a startup. He moved across country with no money in his pocket. He was willing to bet on himself, which made other people want to bet on him.
You take alternative paths.
Being great means being different from everyone else. So you are not likely to stand out if you are on that common path. Instead, you are likely to go to a common place.
The way you can tell if you are taking an alternative path is by how many people are telling you you’re an idiot. Today entrepreneurship is the new safety net, moving back with your parents is totally acceptable, and job-hopping is the default. So if those are your ideas of alternative, forget it.
Alternative is something people have no patience for because it sounds so self-destructive to the mainstream.
You’re overly focused.
The recent star-worthy twentysomething I’ve started working with is Melissa. She quit her high-flying job in Asian finance to be a photographer. While she was making a lot of money at finance, she decided she would never be truly great at it. Whereas she believes she does have a chance at being world-renowned as a portrait photographer. Maybe she will be, maybe she won’t. But part of being a star is taking a path that looks loony because it’s intrinsically limiting - you end up having a longer list of what you don’t do than what you do.
You were a mediocre student.
Stellar students spend their 20s in complete shock and indignation that school rewards rule followers but work does not. Life is not fair. (Luckily you can rescue your own children from this pitfall by unschooling them.) There is reams of evidence to show that good grades do not correlate to good careers. And, many mediocre students have a sixth sense about what matters and what doesn’t matter, and they kick into really high gear when it’s about what they are interested in and not about grades. It’s a sign that you have star potential in the business world if you did not have star potential at school.
You read. A lot.
It doesn’t matter what you read. But unproven hotshots spend a lot of time reading because they have a natural curiosity and level of engagement. It’s true that not everyone is a reader, but this is an odds game, and you make your odds of being a workplace hotshot by reading a lot. You can read comics, car specifications, Garden &Gun magazine - you can read anything. (Also, click that last link. I love that magazine. I subscribed because the title sounds so ridiculous. I keep reading because the writing is totally great… actually, maybe Melissa should take photos for them.)
Your goals align with your Myers Briggs score.
You can only be a star in a field that matches up with your Myers Briggs score. (You can check out your own Myers Briggs score here.) If you’re an ENTJ, for example, you absolutely must have people to lead. There is no way around it. There are no ENTJs who are hotshot designers locked up alone in a room lit only by a disco ball. That doesn’t happen. Or at least it doesn’t happen without some long-term psychic cost to either the worker or the co-workers or both. People need to do what their personality was born to do.
Another no-go: An INFP can’t manage other people. You might envision your great ascent up the corporate ladder, but if you’re an INFP, managing corporate goals and mediating other peoples’ interpersonal issues, will eventually drive you to insanity.
So you lack star potential?
You might not actually have the temperament to be a star at work. Your star power might lay somewhere else - like home with kids. But that’s okay. You can only be who you are. It’s just nice to know who you are while you work toward becoming it. You know how your kindergarten teacher told you the whole class is full of bright stars? It’s true. It’s just that some of you were meant to work the monkey bars.
http://www.bnet.com/blog/penelope-trunk/do-you-have-8220superstar-8221-potential/524?promo=713&tag=nl.e713
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