strategy essential in current economy
Ninety percent of the business leaders Christopher S. Anbari has had contact with lately are “waiting for something to happen” in the current economic situation.
What they really need, he said, is a proactive strategy to reinvent their business — and most companies today are lacking a strategy.
Anbari is president and CEO of Result Global Ltd. of North America, a consulting firm based in Grandville that he founded 25 years ago to help businesses reinvent themselves. He spoke last week at a Business Reinvention Exchange held at The Rehmann Group in Kentwood, which has been a Result Global partner for the past year. Result Global has served almost 600 companies, including manufacturers, banks, retailers, distributors, legal firms, nonprofits, tech firms and transportation.
The Business Reinvention Exchange is a monthly event offered free of charge to representatives from a wide array of companies and organizations. Attendees last week ranged from bankers to a drywall company owner to the proprietor of an online travel agency and a representative from Michigan Public Radio.
Anbari said a strategy for reinventing one’s business starts with a complete understanding of "where you are, where you're going." His advice is to set measurable goals pertaining to sales revenues, margins, employee involvement, customer retention and customer base expansion. If the goals are not measurable, he said, it's impossible to prove they are being met.
Anbari recommended that each manager keep his/her own scorecard.
One of the attendees, Chad Swain, later added his own recommendation: Make it a weekly scorecard and keep it simple.
Swain, CEO/president of Argus Security Technologies Inc., said his company, founded in 2005, has 20 employees, and they all know how the company is doing on its sales goals on a weekly basis, whereas many companies only measure sales on a monthly basis.
Anbari made some pithy but humorous comments about the inflexibility of some very large corporations and the huge salaries and bonuses of CEOs whose names have been very much in the news lately. He said the $24 million demanded by Alan Mulally last year to accept the top job at Ford Motor Co. demonstrates "how ludicrous we are" in America.
Anbari emphasized the necessity to "engage employees," which can be aided by practicing "emotional intelligence" and embracing diversity. A good old boys club is a total turn-off to female employees, he noted. The employee who "goes that extra step" on the job, even when no one is watching — "that's engaged," said Anbari.
On the other hand, the guy who seems immobile most of the work day but at five o'clock runs to his car in the parking lot is "disengaged."
Raises can be counter-productive when the best employee gets the same raise as the worst, noted Anbari. He said discretionary raises should be replaced with "E.V.A.P." incentives: "economic value added, performance-based."
Eliminate dysfunctions and indifference within your organization, said Anbari, and alter your attitude.
One major type of dysfunction is waste, he said, adding that America is only one-thirty-third of the world population, but uses one-sixth of the world’s resources — and much of that is wasted.
"We can't continue to do it," he said, especially in view of the present world economy.
"Challenge your habits. Do things differently," he said.
One of Anbari's PowerPoint presentations was headed "Manage Lean Finance." He listed three major components of that theme: Reduce cost of service by 25 percent; trim salaries, benefits and fixed expenses; and prevent future receivables from "aging."
He mentioned a company that lost millions within one year, while the husband and wife who were among the principal owners still drew huge salaries. Professionals hired to help the company recover decided to trim the officers' salaries by 40 percent, which wasn't easy but absolutely necessary, said Anbari.
He elaborated on the point about not letting future receivables age.
"Be very aggressive in collecting your money," he said, because many are going to go under in the current economy. Focus on the consistently late payers, because it is no longer safe to assume they will eventually pay you what they owe.
Company leaders have to stay ahead of market trends and then make "audacious" moves to prosper.
"We have forgotten how to kick the butt of the competition," he said.
Diversification is another key element of survival from here on. Anbari spoke about an acquaintance who had run a small company for 25 years, relying on a large furniture company as his primary customer. One day the furniture company acquired its own source for those needs and dumped the small company overnight, which broke it and forced it out of business.
"You have to be smart; you have to be selfish," said Anbari, urging businesses to expand their niches and their customer base. "Don't belong to one industry ever again," he said.
Following the group session, Anbari told the Business Journal that the No. 1 question he is asked by people in business today is: "How can I weather this economy and prosper in the next five years?"
"You have to have a strategy," said Anbari. "Get your team together" to help develop the strategy, he added — the team being customers, employees and other stakeholders.