Hawkeye Consulting Advisors News

What’s New at Hawkeye Consulting Advisors?

1) Meeting with Chicago small business to identify cost reduction options. Find savings that will not adversely affect throughput. So far, one solution will bring 10% operating expense cost savings.

2) Met with another company near Chicago developing business plan strategy increasing throughput, reducing inventories and reducing operating expenses moving the organization to 10% EBIT.

Contact us to uncover additional profits in your business. We welcome your referral.

Sincerely,

Allen Pratt

Hawkeye Consulting Advisors, Ltd.

www.HawkeyeConsultingAdvisors.com

630-800-7545

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5 Steps to Turning Around a Business

5-step cycle

Former Continental Airlines President and CEO, Greg Brenneman, wrote a 1998 Harvard Business Review article about how the airline was saved from a third bankruptcy. The article outlines the five steps they used to achieve the turnaround:

1)       File your flight plan and track your progress

2)      Clean house

3)      Think “money in” not “money out”

4)      Ask the customer in seat 9C the right question

5)      Let the inmates run the asylum.

Congratulations to Mr. Brenneman and his associates for leading the company through those difficult days. The company eventually merged with United Airlines and together has formed the largest airline operating today.

Not every company has the size and resources to implement these five steps. Most companies require a process of improvement to address their changing competitive environment.  Mid-size companies must rely on a practical solution when there’s financial or operational trouble with the business. Over the years, I’ve implemented a different five steps that work well for many companies:

1)       Identify / set your focus on the most important issue

2)      Exploit / clear the way to produce results

3)      Subordinate / coordinate the improvement with the rest of the organization

4)      Elevate / if not yet, eliminate the obstacle now

5)      Start over / go back to #1

These five steps will work in any organization and may have been at the core of Continental’s recovery. I’ve used this improvement model in many companies from small businesses to organizations over $1 billion with success.

I’d like to explain this approach to your team. During the presentation and discussion, you will identify an action plan that will help your company implement its own ‘turn around’.

I invite you to read about this process in my book, 5 Steps to Continuous Improvement: http://www.amazon.com/5-Steps-Continuous-Improvement-ebook/dp/B00BUH27GC/ref=sr_1_1?ie=UTF8&qid=1365117754&sr=8-1&keywords=five+steps+to+continuous+improvement.

I’d like to hear your feedback. Let’s talk about how we might turn around together.

Building a Family Business to Last

Build your enterprise to be around for a long time; construct a foundation of passion, good relationships and clear communication.

Stressed-out-businessmanIf you want your family business to endure, strengthen it from the foundation up.  Making a conscious choice to create a long-lived company is the first step in building a strong foundation.  It takes some luck to survive for generations, certainly, but these things don’t happen by accident either.  It starts with your intentions.

Passion Needed

Building an organization that lasts generations requires a love for the business that passes from the founder to the second, third and other generations.  Having a passion for the business is one of the most important characteristics of business with a longer life.  Ask yourself whether you truly want to commit yourself and your company to the goal of a long and independent life.

Once you’ve made the decision, building passion should be your next objective.  Determine how you will mentor the younger generations and engender passion in them.  Start by exposing children to your business.  Take them to work with you.  Tell them about the things that you love in your business.  Mentor them to have a love for the enterprise.

Make sure they have the training and experience needed to give that passion balance.  Encourage and enable them to get appropriate continuing education, a college degree and experience at another company will provide them with balance and perspective.  Broad and deep preparation, both mental and emotional, is required for leaders of long-lived family businesses.

Good Relationships

At the same time, make sure your business has good governance in place. This means creating a board with a number of outside directors.  It means building long-term relationships with non-family advisers who are both expert and independent, and won’t just tell you what you want to hear. It means having policies that create accountability.

Don’t allow the board to simply be a rubber stamp for family wishes and desires.  There are too many employees and their family who are depending on quality decision making to ineffectively manage the business.  Hold the company’s executive accountable for performance metrics that matter for the long-term benefit of the company.  Diminish the role of non-performing family members, if necessary, when objectives are consistently unfulfilled.

Be on guard for younger generations taking charge of the company before they’re ready.  One of the worst actions by the next generation will be to force out older family and non-family members who are key to the success of the business because the younger ones are too impatient to take their turn.  If the next generation thinks running a successful business is ‘easy’, then they are Not ready to take charge.  More grooming is critical in these cases to avoid financial disaster.

Communication is Vital

Keep your company healthy with prenuptial agreements, employment policies and other corporate documents defining the strong and lasting business structure that you desire.  Communication is required to build a strong business foundation.  Get others to buy-in to the founders’ vision by effectively expressing the commitment, passion, accountability, and rules guiding your business.  If you don’t understand the extent to which others have accepted your commitment and vision as their own, then you are building blind and headed for trouble.

Excellent communication begins with listening and demonstrating how to put the founder’s vision into practice.  By carefully mentoring and consciously hearing the thoughts and feelings of the people you want to influence, gain the knowledge you must have to cast your expressions so that they are understood.  Echoing or restating the statements of others is a good basic tool for reassuring them that you are listening, as well as alerting both of you to potential miscommunications or misunderstandings.

Go for Clarity

After you have listened and understood what others believe is the company’s vision, mission and values, you are ready to express yourself.  Find opportunities to teach the next generation what the company’s vision, mission and values means to you.  When things don’t go well, teach, coach and mentor; strive to be clear.

You don’t want people signing up for one course of action when you intend another. And you don’t want anyone on board who doesn’t know where you are headed. Be simple, be brief, and be clear.  All the speeches, memos and mission statements in the world won’t amount to much if your behavior doesn’t exemplify the values and objectives you want to promote.

Family businesses grow into all sorts of enterprises. Some are simple and never expand beyond a single location.  Others span the globe and have interests in a broad variety of fields.  Whatever your business grows into, it will benefit from having a strong foundation. Build a robust footing for your business with passion, good relationships and clear communications.

What’s Chapter 11 recover experience worth?

Hawkeye logo newMost companies never go to bankruptcy court for a restructure.  I hope you never go through that experience in your company.

Earlier in my career, I had an ‘opportunity’ to help my employer (at the time) work out of a very difficult financial and operational transition.  Sustaining cash flow was not available, customers were very angry and competitors were having a field day with us, the distressed industry leader.  Within 12 months, financing was secured and my team had significantly returned the company’s credibility with customers restoring predictable cash flows.  Since then, I’ve helped other companies find financial improvement avoiding this difficult chapter.

With this experience, we stabilize the cash flows and develop strategies to address the main threats to the company’s performance — whether playing active roles in delivering high quality due diligence, 120-day plans or turnaround activities, use us in periods of stress where our solid execution capabilities bring maximum value.

Through our direct, hands-on leadership, we have successfully consulted companies away from financial difficulty to Chapter 11 recovery.  Our people have operational, advisory and financial backgrounds with broad experience throughout the corporate lifecycle and maintain a focus on leadership, workforce engagement, incentives and execution in each assignment.

Formulating a turnaround plan and working on site, we make objective recommendations and implement decisions based on the company’s best interest.  We drive implementation of restructuring plans that rebuild company strength and value to the company’s new investors.

When traditional improvements don’t work, we find new methods that do.  By implementing our 5-step improvement process, we’ll uncover the solutions that deliver breakthrough results.  We complete the job.

If your company is in trouble contact us in time to resolve the underperforming operations. Chapter 11 experience can make all the difference in resolving a difficult and financially stressful situation before its too late.

Hawkeye Consutling Advisors, Ltd.

13079 Fairway Drive, Lemont, IL  60439

Allen@HawkeyeConsultingAdvisors.com

www.HawkeyeConsultingAdvisors.com

3-Point Evaluation to Improvement

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I recently met with the Chairman of a struggling, former mid-size company.  Three years earlier, the company made a poor hiring decision with their, now, former President/CEO.  The results were nearly fatal for the company but the worst may not be over yet.

During my discussions, I learned that the company is moving into a new, highly competitive market with a service that offers lower margins than their core business.  Their future is not certain.

How does a trusted advisor help a company like this? Here’s how to start…early in the process three areas must be determined:

1) What are the current issues the company is facing?  Develop a clear understanding of the present state of the business.

2) Establish objectives for the business.  This is a critical step that cannot be taken lightly.   What’s the most important obstacle to greater success?

3) Develop a strategy that will deliver on the established objectives.  This is where hiring experienced talent can make a big difference.

Do you know a company that’s struggling to recover from the current economic recession?  I’d enjoy having a no-obligation meeting with the key executives through this 3-point evaluation process.

Sincerely,

Allen Pratt, MBA

Hawkeye Consulting Advisors, Ltd.

(630) 800-7545 | allen.k.pratt@gmail.com | http://www.allenpratt.com

Increasing earnings now and in the future

Since early 2012, I’ve addressed the following question at small to mid-size family businesses: Is it possible to increase profits when sales remain flat?  The answer is yes, yes it is.  For example, I’ve helped one business increase earnings 43% and another increase EBITDA 80% over the previous year’s results.  In both cases, sales have increased by less than 15%.

During this difficult economic climate, helping small to mid-size companies increase earnings when sales are not growing strong is challenging.  But it can be done.  The ROI on the investment can be very favorable.

I have capacity to help another company make their own economic recovery.  Do you know a company head who’s searching for help?  I can tell you how to earn similar results at your company.

Sincerely,

Allen Pratt, MBA

Hawkeye Consulting Advisors, Ltd.

630-800-7545 mobile

P.S. You’ll find me and other great professionals at http://www.dnamanagementteam.com/home.html

Why Hawkeye?

What does it mean to be a Hawkeye? Raised on an Iowa farm, my background tells me to help where I’m needed. A boy scout, a Little League baseball pitcher/outfielder and a 4H member as well as doing my chores as soon as I could lift a 5 gallon bucket is how I grew up. A faith in God and a Christian tradition with a moral compass that points to “do unto others…”, you know the rest.

Like my father, my uncles and cousins, when someone in the community was in trouble, we ran to help; that’s how the farm community reacted when there was trouble – running into the fire. Today, it’s old fashioned to describe yourself as someone with morals, integrity but that’s how I was raised.

Getting an education in Iowa once meant a quality, well-rounded education. A graduate degree from the University of Iowa, an MBA from Tippie School of Business was a good start. During my early career, I studied Eliyahu Goldratt’s “The Goal” and his 5-step process of ongoing improvement. Over the years, I’ve applied these focusing steps and my Iowa education to solve problems. To me, being an Iowa Hawkeye means helping others solve difficult business issues, then starting over to solve the next biggest issue until I’m done. For example:

Case #1) I was invited to help turn-around a WOSB, woman-owned small business, a defense contractor that had lost its quality privileges for the Department of Defense. Eighteen months after the founder’s passing, the company had lost 90% of their government contracts and the company needed recovery help. The company was losing money for two years following 26 years of prosperity.

My mission was three fold: to re-establish the company’s quality credentials, maximize their operational performance and grow the business into new markets. Manufacturing improvements were introduced, new marketing brochures were created to highlight the company’s military contract and metals manufacturing capabilities. The company’s personnel was evaluated and upgraded where needed.

The result was a doubling of the new business pipeline to a three year high. The company earned ISO 9001:2008 certification within a few months and the negative earnings situation was turned-around to 10% EBITDA plus.

Case #2) I was invited to help turn-around a multi-million dollar parts and service organization of a billion dollar equipment manufacturer that needed Chapter 11 leadership. During the fall of 2001, the company filed for bankruptcy protection; 20% of the employees left the company and major customers were extremely angry since the company had 75% market share in an industry with daily deadlines.

The business unit required direction and leadership. Applying Goldratt’s 5-step process of ongoing improvement, our team identified and resolved the most important issues one after the other. During the Chapter 11 recovery, there problems were many; either bankruptcy related, from competitors taking advantage of the market leaders fall or managers within the company “helping” their customer friends find new competitors to my troubled company.

After more than a year, the company established new funding, exited from bankruptcy protection after dissolving the old company and forming a new one. Twelve months after a difficult reception from an angry large customer conference, my biggest critic lead a round of applause in appreciation for the operational turn-around. The leading industry’s editor planned to profile the company’s renewed status in the industry but the executive vice president told her “there’s no story” unless he was at the center.

Case #3) A machine and tooling company had implemented Lean manufacturing throughout the entire organization, reducing the waste and driving down operating expenses but the great economic recession meant that the company could not sell their excess capacity.

The business owner needed to increase positive cash flow fast. His bankers had survived the economic collapse but were applying pressure and threatening to call in his operational loan. He needed a way to convince the buyers at his prospective new customers that his company could earn new business now.

The buyers had troubled suppliers but they didn’t want to make any changes in the supply chain – too many procurement folks were losing their jobs and they didn’t want to risk theirs.

My mission was to help the business owner create a sales/marketing message that would guarantee success but could not easily be copied by his competition. After studying the industry and how his competitors went to market, I proposed a unique sales offer that was easy for the buyers to accept yet impossible for his competitors to match.

Four months after implementing my recommendation, the business owner declared his new business pipeline had improved by 40% and his business was on the road to recovery.

So what? What does Hawkeye Consulting Advisors mean?

To me it means helping a company make more money, now and in the future. It means taking what I’ve learned over my career and solving complex business issues. To apply a focused process of ongoing improvement. To solve operational problems that will lead to new business growth. To help out where I’m needed.

Hawkeye Consulting Advisors works with small to medium size companies, both public and private, either on a time and materials basis or to share in the improvements uncovered by an initial analysis and recommendation set. Call today to learn how an Iowa Hawkeye can help your company make more money now and in the future. Call (630) 800-7545.