Posts Tagged ‘productivity’

Will Telecommuting Increase Business Cash Flow ?

June 24, 2010

by Doug Smith, President, The Woodhaven Group

It seems like business owners and CEOs wake up everyday trying to find a new way to increase business cash flow, productivity and sales.

A tool being used more frequently these days to achieve those goals is telecommuting. 

Telecommuting is the process of an employee working somewhere other than at the office.  Usually this means the employee is working from home.  The increased utilization of the Internet has allowed this alternative workplace to become much more popular.  For many businesses it has turned out to be a win-win situation for both the employer and employee.  The telecommuting employee is typically referred to as a teleworker.

Is it something your company should be doing?

Most researchers and business consultants will advise you that it is the right thing for your company to do.

My answer to that question is that yes, teleworkers are going to become a larger percent of the workforce in the future and your company needs to include them as a part of your employee mix.  However, for the program to be successful, your management team must do their homework first or the concept could fail.  There are benefits and concerns that must be addressed.  Here are just a few of them:

Benefits:

  1. Improved Productivity:  There are university, corporate and government studies that show the teleworker operating out of their home is a more productive employee than the employee in the office.  Reasons often given are fewer interruptions, less stress, and a fresher employee ready to work due to not needing to deal with the issues of commuting  to the office. This may be true but, frankly, I am not sure how much more productive the employee working from home really is. There are distractions at home also.  Laureen Miles Brunelli had interesting comments on this subject in a 2009 blog post on About.com  You can read Laureen’s blog post here.
  2. Less Office  Space Needed:  This can be a real cash flow savings for the company.  Less space needs to be leased, no utility or phone cost, and office and workstations can be eliminated.  Those are all real measurable savings.
  3. Flex Time For the Employee:  A real benefit for the teleworker is the opportunity to utilize flextime in their day.  The day can be broken up allowing the teleworker to take time to address home and family issues and still get the job done.
  4. Can Reach High Quality Candidates:  I have seen individuals with advanced degrees who, due to family commitments, have to stay at home.  Yet they still want to realize their professional ambitions.  If they were required to come to an office this high quality candidate would be lost to the company.
  5. Can Utilize More Part Time Employees:  Depending upon the scope of work, the teleworker may not need to be a full-time employee.  For instance, two 20 hour part-time data entry workers might be the best solution for both the company and the stay at home employee.
  6. Opportunity To Employ Handicapped and Retired Workers:  There are some excellent handicapped workers and retirees who choose not to work in an office environment.  They become a real asset to the company working out of their home office.
  7. Improved Morale:  Studies have shown that teleworkers have  higher morale  than those in the office environment resulting in less turnover.  Not having to commute to and from work would be a morale booster by itself to many workers.
  8. Bad Weather Is a Nonissue:  No problem with snowstorms.  While the regular office may be closed for the day, the telecommuting employee carries on as if nothing happened.
  9. Geographic Location Is Not a Problem:  Working remotely allows the company to hire the best candidate regardless of where they reside.  I once hired a telecommuting employee from 600 miles away because she was the best candidate available.  Also, if the spouse is relocated to another city, your company’s teleworker can follow the spouse and continue on as if no move occurred.  

Concerns:

  1. Lack of Social Interaction:  This might be the biggest concern.  The teleworker operating from home does not participate in the “water cooler” conversations or have the opportunity to have a lively discussion at break time with others about the ball game on TV last night.  There must be a process in place to engage the work at home employee if they are the type that requires a lot of social interaction.  A behavioral analyses of the telecommuting candidate might be a good idea to use during the hiring process.
  2. Can the Worker Stay Focused:  Is the  teleworker self disciplined, organized and have the ability to manage their day?  If not, the productivity issue becomes a concern not a benefit.
  3. Is There Buyin From the Manager:  A work at home employee has to be managed differently than the one down the hall from the manager.  Goal setting with specific measurable results and deadlines is critical.  Managing to results is the way to make the teleworker accountable.
  4. Could There Be a Culture Problem:  Not all jobs are a good fit for the telecommuting program.  If there are employees in the office that perceive the teleworker as a slacker that does not pull their weight, then the productivity concern might shift to those employed in the office.
  5. Promotion May Not Be An Option:  If the employee wants to move quickly up in the organization, then working from home may not give them the opportunity to develop and show off their people management skills.  A manager career path training program might necessitate the employee only being in an office environment.
  6. Security Can Be a Problem:  If the teleworker has access to the company database and confidential documents, it is imperative that steps are in place to protect these valuable assets of the company.  A disgruntled employee working remotely can do serious damage.
  7. Are There Savings In Office Equipment:  If the company reimburses the teleworker for a computer, fax, printer and other office needs then how much savings were actually realized?  In some companies the teleworker uses their own home computer with no reimbursement.
  8. Overtime Can Be An Issue:  A happy productive at home employee can easily surpass 40 hours per week.  While managing to results is good, the company still must be in compliance with all labor laws.  This includes not only overtime but also making sure workmens compensation is paid. 

Incorporating telecommuting into your employee strategy can be a real source of additional business cash flow.

It is just important to do your due diligence to assure yourself that the program will be the success that you expect it to be.

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Make A Personal To Do List To Increase Productivity

June 16, 2010

by Doug Smith, President, The Woodhaven Group

Have you ever gone home at the end of the day and wondered why nothing got accomplished?  Sometimes it seems like our time is consumed with urgent but not important tasks that don’t contribute to increasing sales, profit, cash flow or the net worth of the company.

We have all been there.  So, what do you do? 

It’s not really anything magical.  I go back to creating lists of the most important things that have to be done today to move the company forward.  It is nothing more than setting priorities on how you will spend your day.  It is important for me that I rank top to bottom the order in which I want projects accomplished.  As I finish an item I make sure to cross it off the list.  Not only does it make me feel good but it shows how much progress I am making getting through that day’s list.

When issues come up during the day that are not on my list, I make sure to delegate those to a manager and then follow-up later to make sure everything turned out well.

If you want or need a more structured approach to laying out your day the best source is Stephen Covey’s book First Things First.  You can read more about it here.

A successful CEO or owner must be productive and setting priorities using daily lists is one tool to achieve that goal.  Use this tip the next time and that ride home will be more enjoyable.

Top 10 Tips To A Better Business Meeting

June 11, 2010

by Doug Smith, President, The Woodhaven Group 

One of the best ways to increase business cash flow is to improve productivity in the day-to-day operations of your company.

Unfortunately, for most businesses one of the least productive events is the meeting.  We all attend meetings.  Some of us have multiple meetings every day.  I believe it is safe to say that most of us would agree that a lot of our meetings are unproductive.  An unproductive disorganized meeting is a waste of time.  And time is money.

Here are 10 ways to improve the meetings in your company:

  1. Hold fewer meetings.  Can a weekly meeting be held every other week instead?  Can 2 meetings be consolidated into one?  If 2 meetings per week could be eliminated that were attended by 5 individuals, that would free up over 500 man hours per year.  Could those hours be put to better use?  Don’t get in the habit of holding a meeting for the sake of holding a meeting.
  2. Distribute an agenda prior to each meeting.  The agenda needs to clearly identify each topic to be discussed.  List the time allocated to the topic and who is responsible for leading the discussion on the topic.  This assigns accountability for a portion of the meeting to different participants.  It also allows others to prepare questions or comments on the topics to be discussed. 
  3. Have a set starting time and a set ending time.  This is mandatory and allows everyone to organize their day around the meeting.  Nothing kills morale quicker than drawn out meetings.  The overriding message that comes out of long meetings is that the company is disorganized.  A characteristic of legendary UCLA basketball coach John Wooden that all his players and coaches appreciated was that practices would start and end on time.  If he could do it so can you.  If you only take away one suggestion on improving your meetings let it be this one.
  4. Identify who needs to be at the meeting and eliminate everyone else.  Do you really need assistants or multiple managers from the same department in attendance?  I have found one positive result of smaller meetings is more active participation by those in attendance.
  5. The chair of the meeting  should spend the last few minutes summarizing the takeaways from the meeting.  This communicates that there really was a purpose to the meeting and allows those in attendance to deliver a consistent message back to those in their departments.  Without an organized summary the chair runs the risk of each participant communicating their own interpretations of what transpired.  To reinforce the importance of the conclusions coming out of the meeting, a follow-up email summarizing the key points should be distributed to all participants within 24 hours of the conclusion of the meeting.
  6. As part of the summary,  assign responsibility for specific actions at the end of the meeting.  This designates accountability to certain individuals and reinforces that the purpose of the meeting is to achieve results.  It also creates an expectation that the person assigned the action is to report their steps taken at the next meeting.  Future meeting agendas are also created by doing this.
  7. Everyone should review notes and summaries from prior meetings and come prepared to contribute.  An effective meeting should be a two-way street.  If a participant is not prepared and silently sits there then why do they need to be at the meeting?
  8. All electronic devices need to be turned off or eliminated.  The priority must be on the agenda and presenter.  There should be no texting to the person across the table editorializing about the comments just made.  The chair of the meeting must enforce what should be a hard and fast rule.
  9. The chair needs to make sure all attendees participate in the meeting.  First of all, everyone’s contribution is needed for the agenda to be successful.  Secondly, if participants know they will be called upon to contribute it will maintain everyone’s focus and assure the energy level is high.
  10. A completely different type of meeting may be held that is different from those discussed above.  If there is a small group that needs to meet daily at the beginning of a shift, consider holding a stand up meeting.  This type is literally held standing up (no chairs allowed).  It is informal but still needs structure.  Generally, a quick snapshot of 3 topics are covered: 1) a quick review of yesterday’s results, 2) any goals set for today, and 3) any pressing issues.  If a major issue comes up then finish addressing it after this meeting is finished.  The length should be 5-10 minutes and always finish on a high energy note.  I used this approach with a small group in a manufacturing plant and it was extremely successful in increasing output.  At once we saw hourly factory workers taking ownership of the results of their shift.   

If you need to increase the business  cash flow of your company start by holding more productive meetings.

The result will be a more energized, focused, and appreciative employee group.

Save Time And Cash With A Few Good Performance Measurements

May 27, 2010

by Doug Smith, President, The Woodhaven Group

Next to more sales and more cash most owners and managers would list a desire for more time in their day.

How does an owner keep track of what is happening in the company when he or she is consumed with meetings, addressing emergencies and fulfilling commitments outside the office?

It is a challenge to say the least!

I have found there are a few measures of performance I can access daily and weekly that quickly tells me if things are going as planned.  These measures almost act as early warning signals that a small problem may be about to become an all encompassing issue the whole management team will have to address.  I refer to them as “How are we doing” metrics.

Every manager and every company is different.  I encourage you to identify a few key metrics that will work for you and your business.  My suggestion, however, is to not overdue the number of measurements you are tracking.  If you are having to dedicate staff to just preparing a few indicators for your review then you are probably looking at too many.

The measurements should be easily accessible and help you improve the company.  If they cannot aid in increasing sales or cash flow then maybe you can review that data later.

Over the last 20 years there has been a mini industry created in performance measurements.  Many PhDs and consultants have made a career in marketing  “Balanced Scorecards”, “Strategy Maps” and other indicators of productivity.  I find most of them interesting but often too costly to prepare and sometimes ignored by management teams.  If you use these and they work for your company then by all means you should continue.

The measurements I use appear to be obvious ones but that is OK.  They have worked for me.  Maybe they might work for you:

Cash Report:  This is a daily report that  shows the bank balance, deposits made, payments transmitted and ending balance or float.  I never want to be surprised on cash, whether it’s coming or going.

Daily Sales:  I know my sales plan and this tells me if we are tracking to hit it.  If it is a company that issues leads daily I will want to know conversion rate.  If there are multiple locations, product lines, or divisions I will want to know if all of them are tracking to hit their monthly sales goals.

Accounts Receivable Aging:  I want to see this weekly and determine who owes us money and if the  amount is increasing.  In my opinion, we deserve to be paid for the quality work we did and I am very aggressive in wanting to be paid on time.  I will also do a mental calculation of days of sales outstanding.

Accounts Payable Report:  I want to see this weekly and compare the balance owed against cash on hand, jobs moving through the system and new sales being generated.  In the event I get a call from the CEO of my top supplier, I always want to know what we owe and if we are current.

Marketing Percent to Net Sales:  This is normally a monthly report that tells me if we are overspending to create sales.  Many companies have gone out of business from spending too much in this area.  If sales are trailing the plan dramatically during the month I may cut back some area of marketing before the month is over.

These are the key performance measurements I stay on top of.  There are many other reports that I will review from time to time such as Revenue per Employee, Revenue per Visitor on a website and, of course, monthly financials.  But these 5 performance measures are important to me.  You may have different ones that work for your business.

Regardless what metric you use there are 3 important elements to keep in mind with each report:

  1. Establish a beginning baseline from which to measure results.  All measurements need a starting point.
  2. Always look at  trend over time of any performance measurement.  Are the current results just a blip or is there a pattern occurring?  Some management teams like to illustrate trends with a graph for impact.
  3. Take action.  Unless the results were a blip then, at a minimum, you need to ask more questions or look at additional data.  Is there a problem with pricing, a promotion, or a key account?  Are there quality issues preventing collection of money due?  Information is only good if you do something with it.

A few good performance measurements can save time, increase your personal productivity and improve cash flow and profit.

Make sure they exist in your company and are used.

Pay For Performance Can Increase Productivity And Business Cash Flow

April 27, 2010

by Doug Smith, President, The Woodhaven Group

When a company improves productivity a positive result should be an increase in business cash flow to invest to grow the business.  Pay for performance compensation structured properly can be a driver of productivity.

There has been a trend for some time to reward those individuals who deliver the best results by shifting from straight salary to a lower base pay with some kind of incentive attached.

The intent is to not over pay nonperformers and give the top performers an opportunity to earn more than they were making before.

Many sales forces are used to being paid 100% commission.  That means no sales, no pay.  That also means reduced overhead for the company when sales are slow.  But what about other areas of the company that traditionally are not on pay for performance?  My experience has shown that you can often direct the outcome you desire by compensating an employee on results they can impact.

While 100% pay for performance will not work with all positions, a portion of some of the compensation for certain key people can be based on incentives.  

A few examples:

  • Make 10% of a retail store managers pay tied to reducing shrinkage.  They cannot stop all theft but they can reduce paperwork errors, a contributor to shrinkage.
  • Tie 20% of an accounts receivable manager’s pay to a positive change in days outstanding of accounts receivable.
  • Make a portion of a marketing manager’s pay tied to a reduction in marketing  % against net sales.
  • If customer service has been a problem tie 15% of a fulfillment manager’s pay to a reduction in customer complaints or an increase in repeat purchases.       

You get the idea.  Once you start doing this a next step can be compensating a team of individuals sharing a common goal.

Certain key points need to be kept in mind:

  1. Clearly define measurable goals when using any pay for performance.  Do not make it subjective.  Make sure the employee agrees the goal is attainable.  If the goal is too far out of reach the employee will give up and morale will go down.
  2. Make it clear you are rewarding measurable results and not effort only.  While everyone’s extra effort is expected and appreciated,  it’s the cash flow from increased results that pays the bills.
  3. Show the employee how much he or she can make if the goal is attained.  Then work with them to identify tactics and action steps to be taken to hit the goal and earn the extra income.
  4. Have  meaningful inital and ongoing  coaching sessions  to help the employee hit their goals.  In the beginning some employees may think the company is using this type of compensation to just reduce pay.  Actually, a well put together  incentive compensation program is a win-win.  The company does better and the employee earns more.
  5. Attempt to pay the incentive compensation each pay period.  If that is not practical then pay at least once per month.  The faster you can pay for the results achieved the more motivated your employee will be. 
  6. If the employee challenges the accuracy of the incentive calculation stop everything and verify that it is correct.  If it is not, then cut a new check immediately.

Well structured pay for performance can drive productivity, increase cash flow and retain top performers.

Employees in successful pay for performance programs never want to go back to only a salary or hourly pay.

Give it a try to see if it works for your company.

Video Training Is A Great Cash Flow Strategy

April 19, 2010

by Doug Smith, President, The Woodhaven Group

I was on the debate team at Purdue University and thought I was really good.  That is until they decided to videotape a practice debate prior to the National Championship.  It was ugly.  No one had to say anything to me.  My introduction was bad, my counter arguments were bad, my conclusion wasn’t much of a conclusion.  My debate partner was not much better.  To make a long story short, we immersed ourselves into  practicing and changing our approach.  More video taping followed.  In the end we finished as National runner-up.

What did I learn from that experience?  Two important things:  1.) training is critical to achieving your goals, and 2.) using video can be the difference between success and failure.

As CEOs, owners, and senior managers we must drive more productivity into the selling process.

With video training sales people can critique themselves in role-playing situations.  You can be there to coach them.  They can make mistakes in practice without losing a sale.  I have successfully used video to train sales associates selling furs in department stores as well as in home salesmen pitching replacement windows.  In every case the employee was their own worst critic.  In every case they appreciated the opportunity to use technology to improve their performance.

There are many benefits to effectively using video training.  Here are just a few:

  1. The sales person can make more money and become more self-confident.  Having seen what they look like in a presentation removes a great deal of doubt in their mind.
  2. If you have successful people then you have less turnover in your sales force.  That translates into less cash spent on recruiting replacements.  More time can be invested taking the sales staff to the next level instead of training new candidates.
  3. When you do hire new sales staff (as you grow) personalized video training can be an added value that differentiates your company from the competition.  Top performers are always wanting to improve.  Finding a company with the tools in place to do that for them gives you a hiring advantage.
  4. Consistency in the execution of a successful selling methodology is important to closing sales.  You can put your #1 sales person on video, the trainee can watch and then record themselves and compare.  It will be obvious to them where they need extra work.
  5. You can have a more motivated sales team as a group since more members will be successful, sales will be increasing, and they feel good that the company is committed to their success as a team.
  6. Video training can identify a potential underperformer early on.  You don’t have to waste valuable leads to find out that maybe you made a bad hire.
  7. When a top sales person goes into a slump, they can record their presentation and compare against an earlier video of themselves. It will be apparent to them what needs worked on.
  8. Video training can be used in customer service for those employees who come face to face with upset customers.  Different situations can be role played on video.
  9. Training and, in my opinion, video training separates top companies from those who can’t succeed.  You can end up taking their marketshare.
  10. This type of training is not only effective but also inexpensive.  No need to invest big dollars in elaborate systems. Take a video camera and just start recording.  Put the results on CD or a thumb drive and play it back.
  11. Finally,  properly executed video training can increase sales, decrease % marketing cost,  increase gross margin, and increase average sale. 

What does video training have to do with cash?

All of the above combined improves the cash flow of the business.

Cash is a competitive weapon!

When it is invested in video training it becomes a great business strategy.