E-commerce and the rise of dimensioning
With e-commerce’s dramatic rise in popularity, how products are packed and shipped is becoming more and more important. Shipping costs for eaches can quickly eat away at your bottom line if you don’t monitor your dimensions. Click here to view the video.
Why leaders need to understand every behavior has a purpose
Behavior is what humans do, and it’s observable and measurable. Whether it is to walk from one place to another or to crack one’s knuckles, behavior serves some type of function and provides a consequence or reinforcement for the behavior. When leaders successfully identify the function of their organizational behaviors, one can reinforce an alternate, acceptable behaviors that will replace them. When an employee has a particular need or function fulfilled by an alternate means, the mal-adaptive or unacceptable behavior is less likely to reappear. For example, if an employee seeks attention and a leader gives them attention in an appropriate way because of appropriate behavior, employees tend to cement the appropriate behavior and make the inappropriate or unwanted behavior less likely to appear. While this sounds fairly clinical, and maybe even simply common-sense, it is often overlooked and underutilized by organizational leadership. We assume since we are working with experienced adults, that behavioral reinforcement isn’t really necessary – that’s only required for children. However, the opposite is quite true. Consider an employee who continually skirts deadlines, or avoids taking on tough projects – even if they are directly assigned to them. Does the manager address this behavior, or simply avoid conflict? When these behaviors aren’t addressed or corrected, it’s a way of validation – stating that the behavior is acceptable. In addition, those leaders who aren’t attuned to their employees’ behaviors can miss many red flags. Has an employee who once was hard working and positive, recently tuned-out or disconnected from the group? This can be an indication of a problem, whether personal or professional. It could be an indication of anything from harassment in the workplace, all the way to problems at home such as an ill family member, adding stress to their day-to-day. While we often don’t want to cross the line into these deeper personal areas, an employee’s behavior is sending a signal nonetheless. Every behavior has a purpose, and these behaviors usually indicate a bigger, underlying issue. They often aren’t simply mood swings. As leaders, we need to take more time to tune into employee behaviors, listen, observe, and take action. Leaders, whether consciously or not, are always shaping organizational culture with their behaviors, or lack thereof. If you want to build a strong, healthy and productive team, don’t simply ignore changes in employee behaviors, or fail to reinforce healthy and productive behaviors. It’s the job of leaders to develop people, and a key part of that role is understanding behavioral signals. About the Author: Andrea’s 22-year, field-tested background provides unique, applicable approaches to creating more customer-centric organizations. A 4-time ADDY® award-winner, she began her career at a tech start-up and led the strategic marketing efforts at two global industrial manufacturers. In addition to writing, consulting and coaching, Andrea speaks to organizations around the world on how to craft effective customer-facing operational strategies to effectively differentiate and build healthy, efficient organizational cultures. Connect with Andrea to access information on her books, workshops, keynote speeches, training or consulting. More information is also available on www.pragmadik.com and www.thecustomermission.com.
U.S. Manufacturing Technology Industry generally optimistic about 2020 despite decrease in November Orders
U.S. manufacturing technology orders fell 15 percent in November from the previous month to $320 million, according to the latest U.S. Manufacturing Technology Orders report published by AMT – The Association For Manufacturing Technology. For the first 11 months in 2019, manufacturing technology orders were $4.1 billion, down 19 percent from $5 billion in 2018 which was an especially strong year. “This figure is in line with expectations we’ve had since January that 2019 spending would be about 20 percent lower than in 2018,” said Douglas K. Woods, president of AMT. “Given how strong a year 2018 was, current dollar volumes are still healthy compared to the average over the past ten years.” He continued: “November’s drop in the dollar value of orders by 15 percent while units fell by only three percent reflects an aggressive move by sellers to reduce inventory before the end of year. The dollar volume would have been lower if not for the growth in orders for complex machines as larger manufacturers returned to the marketplace. “Another contributing factor to lower November orders was the tax reform enacted in 2017, which established a clear set of rules on tax incentives through 2022. This created a stability that has leveled investments in capital equipment across the year and eliminated the year-end rush to place orders. “We expect to see the manufacturing technology market pick up in the second half of 2020 for several reasons. The U.S.-China trade deal, which will significantly increase Chinese imports of U.S. agricultural products, will lead to increased investment for agriculture equipment. Anticipated approval of USMCA will increase trade throughout North America and lead to new investment in key capital-intensive industries.”
Military Special Operations skills that drive Success & Innovation through engaged teams
People inside and outside the military are constantly fascinated with Special Operations Forces (SOF). People love the high-tech equipment, silent weapons, dangerous scenarios, and thrilling missions. Any military force can have great weapons, great equipment, and great physical fitness and remain unsuccessful. What makes SOF soldiers successful is their teamwork, planning, and leadership skills that are augmented with great weapons, technology, and supporting systems. SOF soldiers pride themselves on their high levels of planning, performance, and their simultaneous dedication to mission accomplishment and team members. Importantly, SOF soldiers at all levels have an unquenchable zeal on learning, improving, and teaching other team members. SOF soldiers, through heavy participation in creating, improving, and approving their final mission plans, have high level of engagements in mission success. Adopting these SOF planning and leadership skill sets for your organization drives employee performance, innovation, team work, and engagement. Use the Backward Planning Process for Smooth Plan Implementation. The backward planning process is a core military planning sequence that STARTS at the completed project and works back to the present. The backward planning process aligns resources, different organizations, activities, and synchronizes everything to ensure the entire organization works together. If my project is to supply materials to help build a bridge, my project plan starts when the bridge is open and works back from the bridge opening to the present. The week before the bridge opens; I should be part of the final bridge inspection and clean up the construction site. This backward planning logic goes to the 1st week of the project where I inspect the construction site and complete the list of needed supplies. The simplicity of this process is that when you start with success and work back, you incorporate all the critical steps necessary to get you to the planned success. The War Game Process Adds the Challenge of Competition to Perfect Good Plans. War gaming is the next step in creating a great plan. War gaming is the process that tests and adapts battle plans against the expected (and unexpected) actions and reactions of the enemy. As a battle plan is developed, military planners have a separate team role-play the “enemy” to ensure the plan is challenged against the full range of what the enemy will and can do. Once the war game is complete, the initial plan is updated and re-written to ensure all the predicted enemy actions are mitigated. The war game process is when you put a draft plan against expected challenges and potential problems to ensure that your plan will be successful. From a store opening to a new product launch to the hiring process, the war game process works everywhere. Rehearsals Make Good Plans Great. Innovation for any type of improvement in any industry needs constant testing, improving, followed by reevaluation. This ability to perform, test, and improve is a critical aspect of the innovation mindset and one that SOF soldiers excel. SOF excel at this process because the act of perfecting individual skills is a critical aspect of military excellence. The setting up of a machine gun by a weapon’s team quickly and under all weather conditions is a key aspect of success. Military convoy teams constantly rehearse and re-rehearse how to react to an enemy attack, treat an injured team member, or recover a stuck vehicle. The ability to know how to practice, improve, and practice again that SOF soldiers know at a fundamental level is critical to innovation and plan success. A Post Event Review Captures & Implements Lessons Learned. SOF uses the US Army’s After-Action Review (AAR) to review, capture, and learn from mistakes. The purpose of the AAR is to help an organization and individuals understand what happened, what worked, what did not work & why. Once the team understands and agree on what needs to be fixed, then the team acts together to discuss, experiment, find, and agree upon a solution. In the military, the AAR process is used daily and it is used in the same manner from unit’s sized 3-5 people to units consisting of thousands of people. One of the most valuable areas for the AAR is that a well-run AAR creates engagement by participants because it asks and listens to feedback from ALL team members regardless of rank, position, or experience. Never Expect A Perfect Plan – Create Back Up Plans. Another Special Operations planning process is the P-A-C-E plan. P-A-C-E stands for Primary, Alternate, Contingency, and Emergency and its used to create four independent and effective ways to carry out critical battlefield processes such as casualty evacuation, ammunition resupply, or leaving an objective area. With P-A-C-E, Special Operations ensure success because they plan and expect problems and find ways to surmount obstacles to ensure the mission is a success even if the first three plans fail. Success is not by accident and success is never guaranteed. PACE is a critical SOF planning process to make back up plans a key element of success. Create Team Members That Can Both Follow & Lead. Does an innovation process need leaders or team members? The answer is yes to both. On great teams that foster innovation, a team member must be able to perform as both a leader and as a follower. The ability to know when to jump in front to lead, gather information, and take the initiative is just as important to know when to support the current leader, help the leader succeed, and help the leader be successful. A vast majority of people think of themselves as either a leader or a follower. SOF members know how to be both leader and follower. The ability to jump back and forth between leader and follower makes a SOF soldiers a dual asset because they can contribute 100% in either capacity. Military SOF teams succeed through hard work, rehearsals, extensive training, extensive planning, thorough use of intelligence, and technology. However, the greatest asset to any team is the individual skill sets working together to enhance, train, teach,
Maintaining a leadership EDGE in turbulent times
Why is it that some people seem to weather any business storm or crisis without appearing to break into a sweat? How is it that they always seem able to recover from a stumble and move on to even greater success? Are they immune to failure because they have won the Success Lottery? No. Those who achieve success during turbulent times do so because they have an EDGE to their approach to leadership: They understand the value of external information. They establish a framework for their decision-making. They develop goals to provide a focus for accountability. They also take advantage of outside experts to provide them with additional insight. External information is essential Leaders who have an EDGE in achieving success no matter the situation understand the value of using external information. They know it is vital to understanding what is going on with the target markets they serve, especially when they are in a distressed situation. These leaders continually reassess their assumptions about their circumstances and they look for deeper insights to help them understand the complexity of the distressing situation. EDGE leaders focus their time and energy on asking the hard questions that help them go deeper into understanding the alternatives available for resolving their situation. They do not hide in their office with the door closed when they are working through a challenging situation. They get out of their day-to-day bubble and look outward to gain new ideas. EDGE leaders leverage abundant external information to provide them with insights to use for reviewing their own situation. This external information is often the catalyst for a new beginning. They adapt and take advantage of evolving circumstances and emerging opportunities to provide a foundation for even greater future success. Decisions use a framework of critical criteria Leaders who have an EDGE always develop a solid framework for making critical decisions. They understand that this framework will help them manage their emotions as they deal with the anxiety and pressure brought on by a business crisis. A solid decision framework provides focus for the criteria that they will use to evaluate their options. They also use their decision framework to consider the implications of each choice available to them. Leaders with an EDGE use the questions they asked during the information gathering phase to ensure they consider a wide range of alternative solutions. Yet they drive their decision-making by using their decision criteria to help them establish a framework for their priorities. They are attentive to the nuances each option provides. They prioritize the value of each element of their decision criteria. They use their decision framework to determine what they need to do to reclaim their success as they sort through their various decision options. Knowing the boundaries for their decision-making gives them a more objective sense of how to evaluate their options. It moves them to a more detached and impartial view as they go through their evaluation process. These leaders do not avoid making decisions. They use decision criteria to control their emotions and stay focused on the most critical decisions that need to be made. They consider the consequences of implementing each option and are laser-focused on the elements that matter the most to resolving the critical issues. Goals focus on daily accountability Leaders who have an EDGE set high goals for themselves. When circumstances collide to put up barriers to their achievements, they reassess their goals and then create new ones. Their goals stretch their leadership capability and provide them with clarity for their on-going learning to expand their excellence. They establish metrics to measure their goal achievement. They use data and information to measure their performance. Everything they do is focused on moving through the tough time to seek out options for resolving the situation. Yet these leaders take it further by pushing themselves to achieve even more. They view a difficult time as something that tests their abilities. They embrace the challenge this provides and they trust themselves to succeed by using thoughtful processes. They know they have the tenacity and focus to reach their goals each day and throughout their careers. EDGE leaders view their role as one in which they need all hands-on deck to solve the problem. They share accountability with other members of their team which helps to deepen team bonds while creating stretch challenges for them too. The best EDGE leaders hold their teams accountable but they never abandon their team or the challenge. They work collaboratively to resolve it. Experts provide additional insight Leaders who have an EDGE use outside advisors to augment their understanding of their options and to serve as an objective sounding board. The best advisors are the ones that challenge the leader’s thinking and help move them beyond the status quo. Seasoned advisors have seen challenging situations like this countless times. These leaders take advantage of outside expertise to gain deeper insight and move more quickly to understand and implement their available options. Outside advisors may bring forward alternatives that had previously been dismissed because they were not fully understood or how to tweak them for effective implementation. Once the array of options is on the table, working with outside advisors helps EDGE leaders assess the real benefits of each alternative while supporting them as they deal with the overload and pressure of a distressing situation. These leaders don’t feel so alone or isolated from deeper insights. Outside experts also provide a buffer so they can maintain their leadership authority in front of their employees. Final thoughts Using the leadership EDGE to achieve success in turbulent times is not easy. It requires discipline, laser focus and daily effort. Those who continue to achieve success even after surviving a crisis recognize that they have to change and adjust to the evolving situation. When they do, they create opportunities to develop a real strategy for enduring success. When you thoughtfully look at your own circumstances, you can develop your own leadership EDGE to evaluate
MHI names Christian Dow Executive Vice President of Membership and Industry Leadership
MHI announces that Christian Dow has been named Executive Vice President of Membership and Industry Leadership. In this role, Mr. Dow will lead all membership and the 16 MHI Industry Groups member value initiatives. Mr. Dow brings over 25 years of experience in the material handling industry to MHI. His most recent role was President of MHI member Panther Industries. He also served as a Director for the Material Handling Education Foundation, Inc. and as a member of the MHI Roundtable Advisory Committee. “Christian will leverage his extensive experience and skill set to drive deeper engagement with MHI members and widen our thought leadership to the overall manufacturing and supply chain industry,” said George W. Prest, MHI’s Chief Executive Officer. “His experience will be a tremendous asset to MHI as we advance our efforts to meet the demands of MHI’s growing business model.” “Christian will be a great addition to the MHI team. His leadership and industry experience will help take MHI to the next level of member engagement as we continue to expand our membership, our Industry Groups and to promote the many values of membership in MHI,” added John Paxton, MHI Chief Operating Officer and CEO Designate. “I’m honored to be joining MHI at this pivotal time of rapid growth and innovation in our industry,” added Dow. “I look forward to working closely with the MHI team and our members to continually deliver member value. Dow served as an Education Committee Member for the Association for Packaging and Processing Technologies (PMMI) and serves as an Advisory Board Member for the STEM School Highlands Ranch and for Arapahoe Community College. Dow earned a BS, Communications from Northern Illinois University.
MHI announces new Leadership Appointments for 2020
MHI is pleased to announce four newly elected Roundtable Advisory Committee members who began their terms January 1, 2020. Kevin Reader, Director of Business Development of KNAPP, Karen Norheim, President & COO for American Crane and Equipment, Melonee Wise, CEO of Fetch Robotics and Brian C. Neuwirth, President of UNEX Manufacturing, Inc. They will serve four-year terms. Additional members of the MHI Roundtable Advisory Committee include: Kevin Ambrose, CEO, Wynright/Daifuku Doug Bouquard, VP and General Manager, East Penn Manufacturing Bryan Carey, President, Starrco Co., Inc. Brian Cohen, Chief Executive Officer, Hanel Storage Systems Sal Fateen, CEO, Seizmic, Inc. Bill Ferrell, CICMHE Liaison, Clemson John Hill, Emeritus, Director, St. Onge Company David R. Lippert, President, Hamilton Caster and Mfg. Co. Brian McNamara, President & CEO, Southworth International Group, Inc. Brad Moore, VP of Sales, viastore SYSTEMS Inc. Dan Quinn, Emeritus Paul Roy, General Manager, AutoStore Bill Schneider, Jr., Vice President , Sissco Material Handling Sebastian Titze, YPN Liaison, Business Development & Marketing Manager, BEUMER Corporation Jim Vandegrift, President, R&M Materials Handling, Inc. Colin Wilson, President & Chief Executive Officer, Hyster-Yale Group 2020 MHI Officers MHI also announces that Bryan Jensen, Chairman & Executive Vice President, St. Onge Company has been elected to become the MHI Vice President. Brett Wood, President & CEO, Toyota Material Handling North America serves as the MHI Chairman and Kevin O’Neill, President of Steele Solutions serves as the MHI President. 2020 MHI Board of Governors: Chris Becker, President G.W. Becker, Inc. Steve Diebold, President WireCrafters, LLC. Rick Fox, President Fox IV Technologies Gregg Goodner, Board Member Hytrol Eddie Murphy, Owner/President SpaceGuard Products, Inc., George Prest, CEO MHI Brian Reh, President & CEO Gorbel Inc. Larry Strayhorn, President Pulse Integration Dave Young, President EGA Products, Inc. General Counsel Arthur H. Stroyd, Jr., Partner Del Sole Cavanaugh Stroyd, LLC The Board of Governors consists of the Officers and Board Governors of MHI plus the Chief Executive Officer and General Counsel of the corporation. The Board of Governors serves as the Board of Directors for MHI. MHI is an international trade association that has represented the material handling, logistics and supply chain industry since 1945. MHI members include material handling, logistics and supply chain equipment and systems manufacturers, integrators, consultants, publishers, and third-party logistics providers. The association sponsors trade events, such as ProMat and MODEX to showcase the products and services of its member companies and to educate manufacturing and supply chain professionals on the productivity solutions provided through material handling and logistics.
NYSSBA recognizes Raymond and Sidney Central School District on collaboration
The program, based in the Raymond Welding Production Center at Sidney High School, was recognized for helping students prepare for careers in welding The Raymond Corporation and Sidney Central School District was honored by the New York State School Boards Association (NYSSBA) for their collaboration on the Raymond Welding Production Center, which opened last school year. The welding center helps students prepare for careers in welding. NYSSBA recently initiated a program called “Champions of Change for Kids,” which gives the organization a chance to recognize school districts for meritorious programs and projects throughout New York State. “We congratulate Sidney on receiving this prestigious recognition for their support and collaboration in the Raymond Welding Skills Development Program,” said Tony Topencik, director of operations at Raymond. “It’s an honor to be part of a program which educates the next generation of welders. By learning continuous improvement principles and advanced technical skills, we are confident that these students will succeed in their future careers.” “We are extremely grateful that NYSSBA has honored our district and this program,” Sidney Superintendent Eben Bullock said. “Our partnership with Raymond continues to grow and blossom and we are very proud of how far we’ve come and are excited for the future.” NYSSBA representatives presented the district with a banner at a recent board meeting held on Tuesday, January 14, 2020. The banner will be on display at the Sidney Central School District in Sidney, New York. During the holidays, Raymond offered a unique opportunity for students to create a fabricated piece to accompany the Raymond annual holiday tree display at the Roberson Museum and Science Center in Binghamton, New York. Seven Sidney students from the welding center accepted the challenge and worked together to create a holiday display which included a large welded present. The holiday display will remain at the Sidney Central School District in Sidney, New York.
Eight things leaders can do to cut out “Noise” at work (and why we must)
Information overload and endless digital disruptions are crippling your employees and harming your business. Joe McCormack shares strategies to help employees manage the “noise” so they can stay focused and give you their best Remember when we thought “more” was better? In a more innocent time, leaders really believed the more information people had, the smarter they’d be, the better decisions they’d make, and the greater success they’d have. Now we know how wrong we were: Nonstop e-mails, endless meetings, and 24-7 connectedness are crippling employees’ ability to think, focus, solve problems, and do the deep work a company needs to stay competitive. And here’s the real question: What are we going to do about it? Too often, the answer is “nothing,” says Joe McCormack. Too many companies let what he calls “noise” squander our most valuable resource: our employees’ time and attention. “It’s ironic that we’ll go to great lengths to protect our intellectual property and physical property, but don’t think twice about allowing a deluge of digital disruptions erode our employees’ ability to perform,” says McCormack, author of the new book NOISE: Living and Leading When Nobody Can Focus (Wiley, January 2020, ISBN: 978-1-119-55337-3, $25.00). “Employees are so distracted and inundated with so much empty information they don’t know what to focus on—or even how to focus.” This is a problem for many reasons. When people can’t focus, performance suffers. There’s less of a sense of accomplishment because it’s hard to get things done. All this cuts into employee engagement and work fulfillment. It’s impossible to create the kind of culture that attracts and retains good talent. McCormack wants leaders to stop accepting the status quo and start protecting workers’ minds from noise. He says we can and must get conscious and intentional about the type and amount of information we’re letting into our workspaces and on our desktops. It’s not that McCormack is anti-tech. Not at all. But he says most businesses are using tech in a way that impedes good work instead of enabling it. “Right now, we’re taking an incredible high-end, intricate tool and using it to bludgeon our minds and our lives,” says McCormack. “We obviously can’t disconnect from technology, and we shouldn’t. But we do need to be more discerning about what we allow in.” Read on for some simple and practical changes to break the noise cycle and help your leaders and employees regain their focus. First, get clear on why noise is a problem. Noise hurts our attention span, impacts our brain and working memory, and eventually causes us to stop caring and listening, says McCormack. For example, consider the interruptions (digital and otherwise) that break your employees’ concentration multiple times a day. Now consider that it takes 25 minutes to get back into the swing of things when you’ve been interrupted. Now multiply this by every person on your team. “That’s a lot of time and money lost,” says McCormack. “Businesses that help their people mitigate constant disruption—in its many forms—will have a leg up on the competition.” Make sure everyone is aware of the issue. Narrate the consequences of unchecked noise, not just to leaders but to everyone in your company. This is job one. Once people are consciously aware of what noise looks like (and—obviously—sounds like), they’ll get more intentional about minimizing it. “Just calling it ‘noise’ goes a long way toward helping people see that it’s a problem that needs to be dealt with,” says McCormack. “By naming, framing, and claiming it, we make it real.” Turn off the firehose of information (or vastly reduce the output). Leaders, in the name of transparency, may bury their teams in excessive information, says McCormack. When there’s a steady stream of e-mail blasts, town hall meetings, social media posts, video tutorials, and cascading messages, employees get confused, frustrated, and finally they tune out. “While you can and should keep employees informed, don’t force them to consume so much information that they can’t decipher the message,” he says. Get brief in your communication. When trying to inform, explain, update, and convince, simplicity goes a long way. Focus on being lean, clear, and concise, whether you’re speaking or writing. Ask yourself: What is the single most important thing I want to convey in this conversation or communication? Then, tailor that e-mail, voicemail, phone call, or presentation accordingly. Help employees grasp the concept of single-minded focus. Juggling too many balls at work is awkward and counterproductive, and constant distractions can be so irresistible that people end up saying “yes” to everything. Make single-minded focus one of your company’s core concepts. Allow your people to concentrate on one task at a time. A good trick to teach them: Write one task on a Post-it note and throw it out once you’re done. Check the trash can for all the little things you accomplished by doing one thing at a time. Commit to running better meetings. On average, business professionals spend 23 hours a week in meetings. Unfortunately for everyone involved, few meetings are run well, with a stated purpose and a defined agenda. They’re often painful and unproductive. First, be mindful of the number of meetings going on. Ask yourself if you really need to hold a meeting in the first place. When a meeting is justifiable, invite only those who are essential to attend. Set your objectives for the meeting ahead of time and state them at the beginning of the meeting. Get people involved and ask questions so you can get the feedback of the people in the room. Finally, use your time wisely so you won’t lose people’s attention. Design your office space around quiet and focus. If you’ve ever worked in a building with few to no offices, at first it seems so inviting, creative, and collaborative. Yet, the day-to-day reality is that these environments breed distraction and literal noise, and people have to fight to stay focused and do their work. “In general, open floor plans are a bad idea for anyone who needs to focus
How do we stack up?
As you know, I have been involved for many years in the material handling industry, the construction equipment industry and the equipment rental industry. It has been a very interesting and educational ride leading me to totally respect all the players in these industries. What I find so interesting about the material handling business is how many dealers respond to competitive and economic headwinds and still survive to fight another day. There is no doubt in my mind that a material handling dealer is working a business in a tough industry. One of the toughest to manage, and to manage successfully. I say that because you compete in a competitive market with excessive OEM options available, at least five profit silos to manage, managing capital intensive products and services, and to top it off, finding yourself in a very competitive situation for personnel to operate the business. With a lack of qualified techs and most sales candidates coming in with a non-compete agreement they signed, being able to attract and keep quality people must be one of the major stumbling blocks you face. All in all, a tough business to work in and still produce above average profits and cash flow. Consequently, I often wonder how a business such as yours, in such a very competitive industry with major capital and personnel needs, stacks up against other industries in terms of investment potential. So, when I came across an article outlining how to measure potential investments, I could not resist the temptation to see how the material handling business measures up against the expected “results” of the four test categories noted in the article. These four calculations are used to evaluate the quality and value of almost any business or industry. Doing the calculations and reviewing the results will help quantify exactly what makes a given business great, average or poor. #1 High Profit Margins The question is how much cash you generated from operations, which is different than total changes in cash balances. The goal is to produce cash flow from operations against total sales of at least 20%. You can get “Cash Flow from Ops” right off your year-end financial report. Then run the calculation CASH FLOW FROM OPS/ TOTAL SALES = %. A 20% result puts you in World Class Business status #2 Capital Efficiency This could be a tough one. Let’s see. Capital efficiency is defined as how much capital the business needs to maintain its facilities and growth of its revenues. A capital efficiency company generates excess cash for distribution to owners or to support growth. What is expected is more excess cash available for owners and growth compared to Cap-X requirements. In other words, cap X of less than 50% of Cash Flow from Operations. In your case Cap-X covers rental assets, facilities and other long-term assets such as delivery equipment, shop machinery and technology. It does not include inventory as Cap-X. Using this definition makes it easier to attain. And remember, transferring inventory to rental assets should be considered Cap -X at that point. #2 Goal is to keep at least 50% of Cash Flow from Ops net of Cap-X for the year. #3 Return on Invested Capital This one is easy to calculate. Again, I would use the year-end report. It is a metric to determine the value and power to shelter your business from profit-eliminating competition. Calculate as follow: Equity plus LT Debt / net income. Goal is to shoot for 20% I suggest that any calculation using net income be normalized to eliminate “personal” expense as well as one-off transactions. The same type of adjustments you would make valuing the company for sale. I know some dealers use unclassified balances sheets, especially if they have large rental fleets, because the short-term amount of the fleet debt creates negative a working capital which must be explained to banks and other financial institutions. If you have an unclassified Balance Sheet, you may want to run this calculation both ways. #4 Return on Net Tangible Assets This is not as complicated as it sounds unless you have a material “goodwill” amount on the balance sheet. This calculation gives you the best overall measure of the quality of any business. It is known as ROE. The calculation is as follows: Total Assets – (Total Liabilities, Goodwill, Trademarks, other non-tangible assets) / normalized net income = Return on net Tangible Assets. Goal is to shoot for 20%. In other words, it is a return on equity net of intangible assets or ROE. I have mentioned in the past about the need to properly depreciate the rental fleet. My goal is to produce a net book value of the fleet at OLV (orderly liquidation value). If you write it down to zero book value, you have overstated expense as well as undervalues your fleet asset. For this calculation I would make the adjustments to adjust fleet value to no less than OLV. ROE combines brand impact, capital efficiency and quality of earnings and considers the results from the prior 3 tests. It also rewards companies that can borrow most of the capital they need. For a dealer, that is important. To summarize: Cash Operating Profit should be 20% or more No more than 50% of Cash Operating Profit used for Cap-X Return on Invested Capital should be at least 20% Return on Net Tangible Assets should be at least 20% Hit most of these goals and you have an above average company when compared to other industries. You can also use your normalized EBITDA number to compare to other industries as well. So, how do you think your industry fared in terms of these financial metrics? Great? Average? Or Poor? To get an answer to the question I reviewed the latest MHEDA DiSC report and find that the TOP 25% QUARTILE can meet or get close to the minimum percentages required for each metric. Surprised? I was to some extent. On the other hand, seeing
This place couldn’t survive without me…Not!
When I was 19, my dad made me production manager of his 75-employee kitchen cabinet manufacturing factory. Before I officially took the job, I worked in the shop at each job, and set production standards based on what I could produce at each station. On my first official day as boss, Ozzie, our superstar cabinet assembler (main guy in the most important position), came to me and asked for a 25 cent per hour raise. I went to my dad for advice and he said, Give it to him, son. So, I did. A week later Ozzie returned and demanded another 25 cent raise, and he said he would quit if he didn’t get it. I went back to my dad for advice and he said, Fire him, son. I went nuclear, you can’t fire Ozzie, I pleaded, the place will fall apart. Fire him, son, he repeated. So, I did. I dreaded the next day. But to my everlasting surprise, four guys came forward to claim Ozzies position. We had a contest to see who would get it. Production was up 25% and Mr. Irreplaceable was replaced in less than 24 hours – and was never missed. How irreplaceable do you think you are, Ozzie? I have heard sales people boast on hundreds of occasions: If it wasn’t for me this place would fold. If it wasn’t for me, we’d be out of business. This place couldn’t survive without me. I do all the selling so this place can operate. My sales built this place. Those are warning chants that the end is near. Here are 9.5 early warning signals that your sales brain has stopped functioning: You think sales reports are a waste of time. Everyone else does wrong things except you. You get blamed for things you’re certain are someone else’s fault. You think your sales production could be better – if you just got a few breaks. You don’t listen to sales information in the car, or do anything to further your sales education. You’re way too cocky, cynical, and critical. At night you socialize or watch TV instead of read and plan your next day. You go to sales calls unprepared (no personalized ideas for the prospect or information about the prospect). You think most prospects and customers are dumb (or at least not as smart as you). 9.5 You think your boss is stupid. Many salespeople are failing or doing poorly and claim they don’t know why, or blame everyone and their dog. Many more salespeople get fired and claim or blame the same way. Truth is they can’t or won’t face themselves. They blame others and things instead of taking personal responsibility. If you’re doing poorly and you blame circumstances, — take a look in the bathroom mirror. If you get fired and you leave thinking it’s someone else’s fault – you’ll likely repeat the process at your next job. If you get blamed and you think it’s someone else’s fault – think again. It may take one face down spill in the gutter to wake you up. But it’s a whole lot easier (and less costly) to catch yourself before you fall. Success Strategies Here are a few positive steps that will lead to better personal and team responsibility: Look at your belief system. To succeed at sales, you must believe that you’re the best, your company is the best, and that your product is the best. All three are needed to succeed. Rededicate yourself to be more customer focused— not me focused. Customer dedication eliminates a lot of the ego problems. When you’re busy helping customers, your time to brag and complain diminishes. Rededicate yourself to get more educated.Listen to attitude and sales information an hour a day. Work longer hours.Get there an hour before everyone else. People who struggle to get to work on-time never seem to make it. Get more help oriented.Help others get sales. Help others succeed. Help customers get what they want and need. Transition from cocky to self-confident.Show it with deeds, not words. Transition from blaming others to taking responsibility.Most of the time when things go wrong, you could have done something to prevent it. Admit fault. Take the hit without a bunch of defensive whining. Read (re-read) How to Win Friends and Influence People, by Dale Carnegie, and Think and Grow Rich byNapoleon Hill. The two bibles of business and sales success. Rededicate yourself to those success principles. Admit the truth to yourself.Admit fault. Then document what you could have done to have prevented the problem or made things better. Then make a daily (morning) plan to make a change for the better. In order for the things and circumstances of your life to change — you must change first. Not much will happen without a change in your thought process, your attitude, and maybe eating a piece of humble pie. Admit it — it starts with you. About the Author: Jeffrey Gitomer is the author of twelve best-selling books including The Sales Bible, The Little Red Book of Selling, and The Little Gold Book of Yes! Attitude. His real-world ideas and content are also available as online courses at www.GitomerLearningAcademy.com. For information about training and seminars visit www.Gitomer.com or email Jeffrey at editorial@mhwmag.com.
Quarter One: Here we come.
I am composing this month’s column after opening the presents Santa left for me. All I can say is he must have enjoyed the shot glass filled with 30-year-old Scotch I left under the tree. Also been wondering how you reacted to last month’s column which did not express much hope for 2021. Adding another six weeks of data to the thought process has not changed my mind much, and in fact, I came up with another risk or two that need attention. After listening daily to numerous financial gurus I am intrigued by the consistent theme that “Your business will not be the same when we come out of this Pandemic period”. But upon pondering this question for a couple of weeks I am starting to put together a picture of what may change, why it will change, and how it will impact companies selling equipment, parts, and service. So, what are the new threats I uncovered in the last six weeks? It has to do with an event that will prove negative no matter how your customer base performed for you in 2020. It has to do with the Stock Market, and the bubble the market finds itself in the middle of a major RECESSION. How does that work? And I think we all know what is on the horizon. Think back to the late 1990’s or 2008-09 period. Looking at some of the S&P Valuation Factors (and believing we are in a major recession) the factors are a little hard to believe. Median EV to Sales 4.0 US Total Market Cap to GDP 170% Median Price to Sales 2.8 Median Price to Book 3.9 Median EV to EBITDA 15 Average Price to Earnings 25 Think you could sell your company based on these factors and being able to fund the purchase debt. NO WAY! The buyer could not get the financing to finance the deal because post-purchase cash flow would not support it. Another source covers 1945 to 2025 and calculates that the average PE ratio over this period is 17. But we are at 31 which is higher than all past bull market peaks during this period. The risk here is we know what is coming in terms of a market correction. It is only a matter of time. The point is that even if you had a banner year because your customer base represented the right distribution streams or non-exempt companies, a major market correction (similar to the big ones in the past) will put all companies in a pinch. In other words, no matter how well you did in 2020 with the expectation to repeat in 2021, I would consider this market risk (very seriously) and avoid new major fixed commitments. So even if you were a high-flyer in 2020 you are not exempt from running different risk profiles to see how you would have to adjust if revenues fell by 50%. Dig out my prior column for additional risk analysis. Now let us spend a few minutes considering how your company will emerge on the other side of the Pandemic. Think about it. Have your management team think about it. Because no matter how big or small your company is, or how profitable it was in 2020, there are changes coming you have no control of, and changes required to remain competitive meeting customer needs (which will also change) 18-24 months from now. After considering the options available regarding the industry I see two trends resulting from this Pandemic period, caused by the new paradigm shift in the ways you did “Business” and the patterns developing in the industry forcing changes in the way dealers to operate post Pandemic. One is Technology and all the changes available therefrom The other is changes in customer needs and the ability of current dealers to meet those needs As a result of these shifts, two types of dealers will be created. The first looking like the status quo, who if they remain with the status quote will find revenues falling, margins decreasing and company value shrinking. At the other end of the spectrum will be the TOP 25% dealers who will grow during this period, pick away at competitor’s customers, have much higher sales per employee numbers, higher margins from current revenue silos as well, and new revenue silos. And they will do this with manageable fixed costs, with the ability to shift the business model to meet customer needs and solutions to more than they are providing currently. This latter group will embrace technology in all its forms, and as a result employ fewer people in most departments, except maybe in the service department depending on what services are being offered. Every transaction will be digitized where the system does the work with management reviewing the results in real-time. We will get into this further next month. TAX NOTE Round 2 or PPP2 is on the horizon and after reviewing the first drafts of the program, it appears the amount available from the PPP2 would be similar to the PPP1 amount. There is a major difference, however. With Round 1 recipients filled in the application and received a loan. This time you need to prove you need it. What the publications state is if you have one quarter in 2020 that was 25% less than the same quarter in 2019, you qualify. This is tougher than it sounds. There is also an SBA benefit available. If you are funding a business mortgage via the SBA you can receive a pass for three months (last I heard). Not sure how they will handle it, but you would get the break when you need it. PPP2 forgiveness will be tax-free (this is what they said last time). And there is the noise that PPP1 will be tax-free, eventually. See you next month. Garry Bartecki is a CPA MBA with GB Financial Services LLC. E-mail editorial@mhwmag.com to contact Garry
Three key positions filled on NREL leadership team
New deputy director and chief operating officer, chief human resources officer, and chief counsel to join team guiding the strategic direction of the laboratory. The complement of leadership roles at the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) is complete now that three vacant positions have been filled. “Whenever I have the opportunity to add a member to our leadership team, my goal is to not only bring on an individual with unique skills and expertise, but someone who will embrace our mission and guide our operations as we grow the NREL family,” said NREL Director Martin Keller. Julie Baker is now deputy laboratory director and chief operating officer for the lab. She succeeds Bobi Garrett, who retired at the end of 2019. Already employed at NREL as associate laboratory director for Facilities and Operations, overseeing the Site Operations; Environment, Safety, Health, and Quality (ESH&Q); Security and Emergency Management; and Information Technology directorates. She joined NREL in May 2016 after 27 years at Idaho National Laboratory (INL), where she most recently served as director of business at INL’s Materials and Fuels Complex. “The entire leadership team knows Julie well, and we’re thrilled she’ll be leading our daily operations as we begin a new decade as the leading laboratory in the advanced energy space,” Keller said. Carin Casso Reinhardt will join NREL as chief human resources (HR) officer. She steps into a position held in an acting capacity by NREL’s Kris Green since mid-July. Her most recent position was as the executive head of HR at Kroenke Sports & Entertainment. Casso Reinhardt’s extensive career as an HR leader also includes nearly two decades at ASRC Federal, a federal government services contractor operating in the technology, engineering, sciences, and professional services business spaces. “Carin brings deep expertise in human resource management to our laboratory leadership team,” Keller said. “We look forward to leveraging that expertise as we seek to acquire and retain the best talent necessary to accomplish our mission.” John Stolpa is now NREL’s general counsel. He fills the position vacated in September with the retirement of Steve Silbergleid. He joined NREL in 2008 as a senior counsel in intellectual property (IP) and has served as deputy general counsel since 2018, managing compliance related to IP and procurement law, as well as technology transfer and export control. Before coming to NREL, Stolpa was a patent attorney practicing at IP law firms in Washington, D.C., and Denver, Colorado. “I have had the opportunity to work frequently with John in his previous roles in our Office of General Counsel,” Keller said. “I know that we are in good hands as he takes on this larger role here at NREL.” NREL is the U.S. Department of Energy’s primary national laboratory for renewable energy and energy efficiency research and development. NREL is operated for the Energy Department by The Alliance for Sustainable Energy, LLC.
PTDA 2020 Leadership Development Conference offers valuable learning for Emerging Industry Leaders
The Power Transmission Distributors Association (PTDA) is now taking registrations for the PTDA 2020 Leadership Development Conference to be held on March 25-27 at the Omni William Penn Hotel in Pittsburgh, Pa. The PTDA 2020 Leadership Development Conference is designed for emerging power transmission/motion control (PT/MC) industry leaders who want to build their leadership skills and more experienced leaders looking to enhance their skill set. This year’s conference will focus on the Four Pillars of Leadership facilitated by industry veteran, Randy Disharoon. Participants will learn to lead themselves as the first step to becoming an effective leader of others. Randy offers a fun and interactive approach to leadership development as he challenges participants to find their career purpose and create their road map. This workshop coincides with PTDA’s Spring Meetings which provides the added benefit of networking with industry leaders during meals, receptions and a charity event. Registration is open to all employees of PTDA member companies. Additional information about the PTDA 2020 Leadership Development Conference is available on PTDA’s website at ptda.org/LDC. The Power Transmission Distributors Association (PTDA) is the leading global association for the industrial power transmission/motion control (PT/MC) distribution channel. Headquartered in Chicago, PTDA represents power transmission/motion control distribution firms that generate more than $16 billion in sales and span over 2,500 locations. PTDA members also include manufacturers that supply the PT/MC industry.
Ten ways to create a WOW Culture (and retain your best talent) in 2020
Are you creating what Deb Boelkes calls a “WOW factor workplace”? If not, watch out: You’re at risk of losing your best people. Here, she suggests ten things leaders should do—or stop doing—to turn your culture around this year January is the perfect time to start thinking about your workplace culture. A positive one produces happy, engaged employees who give their best efforts, challenge themselves to grow, and consistently meet goals and delight customers. A toxic one creates miserable, unmotivated clock-watchers and job-board checkers. Deb Boelkes says shoring up your culture—making sure your company is a place where the best and brightest can thrive—is probably the single most important thing you can focus on this year. “In a strong economy like ours, people have their pick of good jobs,” says Boelkes, author of The WOW Factor Workplace: How to Create a Best Place to Work Culture (Business World Rising, December 2019, ISBN: 978-1-734-07610-3, $19.95). “If your culture is one of disengagement and toxicity, your most talented workers will be looking to leave. You’ll be left with mediocre and low performers who have little incentive to do more than the bare minimum.” The bad news is that leaders often aren’t aware their culture isn’t what it should be. The good news is that they can change that. When leaders consistently motivate and inspire employees, fill them with purpose, challenge them, and make them feel safe and supported, what Boelkes calls the “WOW factor” manifests, grows, and permeates the entire culture. Any type of company can create a “Best Place to Work” culture—also known as a WOW factor workplace—when leaders commit to being role models who train and inspire employees to create extraordinary products and deliver impeccable service at a great value (regardless of the price). This creates an unparalleled experience for both employees and customers, making both groups feel special, appreciated, and respected. To start creating a culture of WOW in 2020, follow this advice. Stop allowing difficult people and idiots to thrive. (Hire slow and fire fast.) When your company is made up of talented, enthusiastic, hard working people, employees won’t want to leave. That’s why you should hire only people who will fit in with the culture you’re creating—and get rid of bullies and others who create a toxic culture. You may be reluctant to fire someone you yourself hired, but don’t wait till they do maximum damage. Fire him or her now. “I love the simple yet effective mantra of Todd Wilcox, chairman of Patriot Defense: ‘No assholes, no idiots,’” says Boelkes. “These no-nonsense standards guarantee that everyone supports each other, has the right attitude, and wants to do what’s best for the company.” Make adjustments and break things to make WOW happen. Adjustments are made all the time in WOW factor workplaces to make things even better than they already are. The adage “If it ain’t broke, don’t fix it” is NOT the way WOW factor workplaces become WOW factor workplaces. Sometimes you must break things intentionally to make continuous dramatic improvements that enable WOW to happen. “You may have to move an employee from one position to another, for example,” says Boelkes. “If someone isn’t thriving, you owe it to him or her and to the company to make a change.” Encourage your employees to interview elsewhere…really! Boelkes is a strong believer in a piece of advice she learned early in her career: Always be interviewing. While this applies to managers seeking the best possible job candidates, she says it also applies to employees. Everyone should interview elsewhere from time to time. This is one way to ensure neither the employee nor the business gets complacent. It’s crucial for employees to know their value to the outside world. “Likewise, organizations should be made aware if they are not keeping up with competitive marketplace opportunities,” says Boelkes. “You certainly don’t want to wait until your best team members have accepted another position elsewhere to finally offer them a raise or a promotion. By then, their hearts and minds are out the door.” Start mentoring in the moment. Mentoring should happen every single day, not just a few times a year during performance reviews. That’s why Todd Wilcox recommends that leaders should have a smaller number of direct reports—more like five or six instead of fifteen or twenty. With a smaller group, leaders can talk to their mentees every single day. “There are limited resources,” says Wilcox. “You don’t have enough time to talk to more than four or five or six people in a single day. If you’re not talking to people every single day, then I would argue you’re not effectively communicating, managing, mentoring, and developing them.” Set high expectations and hold your people to them. WOW factor workplaces have a well-documented set of behavioral standards and performance expectations. When someone isn’t meeting these expectations, leaders will collaborate with him or her to develop an improvement plan that spells out SMART goals (Specific, Measurable, Achievable, Reasonable, and Time-bound). Each party is responsible for holding the other accountable to his or her end of the bargain. The underperformer must either get his or her act together or move on to something else. “I have had to look dear friends in the eye and tell them they couldn’t keep a job because of something they’d done,” says Colleen Barrett, president emeritus and corporate secretary of Southwest Airlines. “Or I couldn’t recommend them for another, and I still retained the friendship. You know, that’s hard. But if you’re just honest with people, I think the worst disservice you can do is NOT tell somebody when they are not making the grade. That’s just ridiculous.” Refuse to tolerate excuses (from yourself and from others). Some people hold themselves back. They may think they aren’t as good as others or as prepared as others to assume a leadership role. Maybe they haven’t had as much education or they’re from a low-income family or any of a whole variety of reasons. Don’t let this happen. Tell employees
Forget the resume and pedigree. Focus on challenging and growing people
We frequently assume that if we hire someone with a great resume and a strong background of industry and competitor experience, we’ve found a gem. That this person will bring to the organization a breadth of knowledge that will help provide new insights on industry best practices and secret sauces. If we can get them at a reasonable cost, even better. But is this really a great hire? I’d argue, it’s quite wrong. Many companies are of this mindset – bring in people with the pedigree and experience that will elevate the organization to a new level. However, we’re looking at it through too shallow of a lens. Diversity of experience, ability to problem-solve and attitude can best a traditional pedigree almost any day. Take diversity of experience. A candidate that has experience in a variety of industries and roles, brings to the table a broader perspective of knowledge. They have a better understanding of how an organization operates and can draw from knowledge and processes from other industries from which your company can create a strategic advantage. If they have the ability to problem-solve, they can see unique solutions to chronic organizational challenges. If they have a positive and forward-thinking attitude, they will help shape and influence organizational culture to behave the same way. Another oversight that many organizations make is that they believe hiring someone who is ‘already trained’ means they don’t have to do any more training. This is also quite wrong. Training shouldn’t be perceived as a hassle and expense of getting a new employee ‘up to speed’. Training should be seen as an opportunity to create a strategic advantage. Just as an educated customer is a better customer, so is an educated employee. Employees that aren’t just on-boarded, but learn the processes and challenges of other departments, have hands-on time with customers, are continually encouraged to problem-solve, and provided opportunities to advance their skillsets, are better employees. People are also generally underestimated. As leaders, we need to change our perspectives on how we hire and build teams. We need to focus on not simply hiring someone who’s ‘out of the box ready’, but on candidates both internally and externally, who bring diversity, unique perspectives, problem-solving experience, and a culture-building attitude to the table. This can become a competitive advantage. Because even the greatest of companies started with (and frequently still have) a team that didn’t bring the pedigree to the table – just an array of experiences, a passion for problem-solving, and a challenge to rise to. About the Author Andrea’s 22-year, field-tested background provides unique, applicable approaches to creating more customer-centric organizations. A 4-time ADDY® award-winner, she began her career at a tech start-up and led the strategic marketing efforts at two global industrial manufacturers. In addition to writing, consulting and coaching, Andrea speaks to organizations around the world on how to craft effective customer-facing operational strategies to effectively differentiate and build healthy, efficient organizational cultures. Connect with Andrea to access information on her books, workshops, keynote speeches, training or consulting. More information is also available on www.pragmadik.com and www.thecustomermission.com.
The three disciplines of strategic thinking
Do you get it? Translation: Are you strategic? How often have you overheard a group talking about a leader and saying, “She/he just doesn’t get it”? Do they say that about you? Well, are you tactical or strategic? Does it even matter? A survey conducted with 400 talent management leaders found that the #1 most valued skill in leaders today is strategic thinking. Unfortunately, research with 154 companies found that only 3 out of every 10 managers are strategic. So, yes, the ability to think strategically is essential. The real question is how can you continually hone your strategic thinking skills in order to thrive in today’s ever-changing business landscape? The fact is most managers are now required to be more successful with fewer resources. All managers have resources (time, talent and capital) to varying degrees within their organizations. So, technically, all managers are strategists. The reality, however, is that not all managers are good strategists. Herein lies the pearl of great opportunity: the deeper you can dive into the business and resurface with strategic insights, the more valuable you’ll become to your organization. Strategic thinking is defined as the generation of business insights on a continual basis to achieve competitive advantage. Strategic thinking is different than strategic planning. Strategic planning is the channeling of business insights into an action plan to achieve goals and objectives. A key distinction between strategic thinking and strategic planning is that the former occurs on a regular basis, as part of our daily activities, while the latter occurs periodically (quarterly, semi-annually or annually). Strategic thinking is using a new lens to view the business. It’s not about adding more work. It’s about enhancing the view of the work and improving one’s ability to perform it. To maximize your resources and profitably grow the business on a consistent basis, there are three disciplines of strategic thinking you can develop to continually ground your business in solid strategy: Acumen: generating key business insights. Allocation: focusing resources through trade-offs. Action: executing strategy to achieve goals. Discipline #1: Acumen One of the interesting paradoxes of strategy is that in order to elevate one’s thinking to see “the big picture,” one must first dive below the surface of the issues to uncover insight. A strategic insight is an idea that combines two or more pieces of information to create new value. One of the reasons most people don’t enjoy strategic planning is because the plans don’t contain any new thinking. They are repeating Albert Einstein’s definition of insanity by doing the same things over and over again and expecting different results. A key premise in business is that new growth comes from new thinking. Carve out time for you and your team to sit down and strategically think about the business, using the group’s insights to identify new approaches to the business. Acumen Question: What are the key insights you’ve learned about the business and how are you using those to achieve your goals? Discipline #2: Allocation While it’s one thing to have a neatly written strategy on paper, the truth is the actual or realized strategy of an organization is a result of the resource allocation decisions made by managers each day. Therefore, it is critical to have a firm understanding of resource allocation and how to maximize its potential for your organization. With multi-billion dollar companies going through bankruptcy on a regular basis, it’s obvious in today’s market that having the most resources guarantees nothing. It’s how we allocate resources that truly matters. The definition of strategy begins with “The intelligent allocation of resources…”. Resource allocation is at the core of strategy. Discussions of strategy boil down to how to allocate limited resources to maximize business potential. Where are you currently investing your resources—time, talent, budget—and are they focused on your goals and strategies? While everyone has a to-do list, only the best managers also have a not-to-do list. Remember that great strategy is as much about what you choose not to do as it is about what you choose to do. Allocation Question: What trade-offs will I make to focus resources? Discipline #3: Action How often has your team invested time in developing a plan for the year, only to see that plan slip by the wayside once the fire drills begin? Fire drills come in the form of customer complaints, competitor activity and internal issues that are urgent, but not important. The key is to let these fire drills flame out and stay committed to the plan you’ve developed by focusing on your priorities, not the flavor-of-the-month tactics. Action Question: What are my top 3-5 priorities and am I focused on them or fire drills? The most important level of strategy is not corporate, business unit, or functional group—it’s YOU. The individual level is where strategy is actually created. Unfortunately, 90% of directors and vice presidents have never had any learning and development opportunities on strategic thinking. The good news is that by developing the three disciplines of strategic thinking, you can elevate yourself from tactical to strategic. The better news is that in doing so, not only will you become more valuable to your organization, you’ll separate yourself and your business from the competition. Do you get it? About the Author: Rich Horwath is a New York Times bestselling author on strategy, including his most recent book, StrategyMan vs. The Anti-Strategy Squad: Using Strategic Thinking to Defeat Bad Strategy and Save Your Plan. As CEO of the Strategic Thinking Institute, he has helped more than 100,000 managers develop their strategy skills through live workshops and virtual training programs. Rich is a strategy facilitator, keynote speaker, and creator of more than 200 resources on strategic thinking. To sign up for the free monthly newsletter Strategic Thinker, visit: www.StrategySkills.com.
New Year career advice for workers of any generation
The start of the New Year is always a great time to pause and look for career advice. Career advice is relevant for any age and any stage of your career. Adapting your skills, career goals, network, and industry knowledge is more important as you age in the workforce. As the New Year starts, take some time to focus internally and externally how you can make the best career moves and actions for a great year. Be aware of your interpersonal and generational communication style Our experience, profession, industry, and education shape our interpersonal and leadership style in the workplace. I come from a military and midwestern background, so I have a direct, no nonsense, and “get-er-done” work style shaped from military deployments, the expectation to always “hustle” from coaches, and a family of farmers. Knowing this, I take special steps to walk around each day and talk face-to-face, use the phone, and engage co-workers to understand their challenges. In short, I force myself to “slow down” so I get everyone’s feedback. In today’s workforce, older generations must be aware and adapt to younger generations to enable an entire organizations success. Expand and maintain your network in a variety of industries Most of my career has been in Business-to-Business (B2B) Marketing for the logistics industry. Knowing that, I strive to develop contacts in Technology, Higher Education, Finance, and Manufacturing to improve my career portability. I absolutely hope that I never leave my current role. If I must leave my current role, then I want to have a large and broad network to find my next opportunities. LinkedIn has made keeping and building a network easier, but it still needs effort. Most importantly, do not forget traditional meet-and-greet, conferences, and other public events to meet other industry leaders. Keep yourself active in the public eye Google your name, what comes up? This is a very simple test to determine the image of your personal brand to the public. If your name is attached to press releases, news stories, public events, and education – awesome – keep it up. If nothing comes up, then start to determine how to position yourself in initiatives you personally value. Volunteering, helping at the local school, speaking in a college classroom, or helping military members launch their post military careers are all ways to do something good and build your digital brand. Today, everyone researches everyone’s digital footprint, ensure you have a positive one. Improve your formal education Who has the time? No one and that is why it needs to remain a goal for everyone. Possessing formal education and improving your educational credentials at all stages of your career is an effective method for your career to remain relevant. I just began a Master of Science in Data Science program that will take about two years to complete. The use of larger amounts of more disparate types of data to solve increasingly difficult business problems is becoming common in more industries. The speed and depth of change in business will continue to increase and it is always better for your career to get ahead of the change. A solid and continuously developing formal education helps ensure you stay at the top of your game. Live in a place with an active workforce Working longer has become a fact of business life over the past decade regardless of your level within an organization. Working longer helps maximize your retirement income, helps in providing healthcare and other benefits, and aids in overall life satisfaction. Geographic location is a significant factor to help in a long career. These locations have a high labor force participation rate and a low historical unemployment rate for workers aged 44 to 64. These cities, in five older worked sized population categories, are ranked by the workforce population, engagement level, and unemployment rate. The goal is to inhabit a city with high workforce engagement and low unemployment rate. Top 10 Locations – Large City Minneapolis-St. Paul, MN-WI Denver-Aurora, CO Washington-Baltimore-Arlington, DC-MD-VA-WV-PA Kansas City-Overland Park-Kansas City, MO-KS Boston-Worcester-Providence, MA-RI-NH-CT Dallas-Fort Worth, TX-OK Seattle-Tacoma, WA Indianapolis-Carmel-Muncie, IN Pittsburgh-New Castle-Weirton, PA-OH-WV New York-Newark, NY-NJ-CT-PA Top 10 Locations: Medium Large City Salt Lake City-Provo-Orem, UT Harrisburg-York-Lebanon, PA Milwaukee-Racine-Waukesha, WI Cincinnati-Wilmington-Maysville, OH-KY-IN Nashville-Davidson–Murfreesboro, TN Virginia Beach-Norfolk, VA-NC Raleigh-Durham-Chapel Hill, NC Oklahoma City-Shawnee, OK Hartford-West Hartford, CT Albany-Schenectady, NY Top 10 Locations: Medium City Omaha-Council Bluffs-Fremont, NE-IA Des Moines-Ames-West Des Moines, IA Madison-Janesville-Beloit, WI Portland-Lewiston-South Portland, ME South Bend-Elkhart-Mishawaka, IN-MI Wichita-Arkansas City-Winfield, KS Boise City-Mountain Home-Ontario, ID-OR Springfield-Greenfield Town, MA Syracuse-Auburn, NY Little Rock-North Little Rock, AR Top 10 Locations: Medium Small City Appleton-Oshkosh-Neenah, WI Cedar Rapids-Iowa City, IA Green Bay-Shawano, WI Fort Wayne-Huntington-Auburn, IN Davenport-Moline, IA-IL Springfield-Branson, MO Corpus Christi-Kingsville-Alice, TX Kalamazoo-Battle Creek-Portage, MI Asheville-Brevard, NC Erie-Meadville, PA Top 10 Locations: Small City Lincoln-Beatrice, NE Fargo-Wahpeton, ND-MN Rochester-Austin, MN Sioux City-Vermillion, IA-SD-NE Wausau-Stevens Point-Wisconsin Rapids, WI Eau Claire-Menomonie, WI Edwards-Glenwood Springs, CO Mankato-New Ulm-North Mankato, MN Midland-Odessa, TX Harrisonburg-Staunton-Waynesboro, VA Source: United States Census Bureau, American Fact Finder, 2017 American Community Survey, Table S2301 Employment Status – Calculations by Author. Take advantage of any offered education Any organization, business to government, always offers some type of free training to upskill workers at a variety of ability levels. Take advantage of these classes whenever they are offered. Focus on classes and skills that will make you unique, valued, and versatile within a variety of roles. Skills in data use, technology, data visualization, cost reductions, productivity improvement, leadership, business growth, and customer satisfaction are in demand in every industry. Teach the next generation of leaders Being an expert in your current role is good. Being an expert and a teacher in your current role is awesome. Teaching the next generation of leaders and co-workers within your organization clearly separates an employee as a leader and a highly valued participant. Generational teaching within the organization is also a way to learn new skills from younger employees and build inter-generational connections among employees. Understand the capabilities and shortfalls of the most
FedEx Freight sponsors Women In Trucking Foundation to assist in Scholarship Awards to Women pursuing transportation careers
Women In Trucking (WIT) Foundation, a 501(c)3 non-profit affiliated with the Women In Trucking Association, just announced FedEx Freight as a new Corporate Sponsor. FedEx Freight’s recent contribution of $24,000 to the WIT Foundation will support the mission of the Foundation in forwarding the careers of women in transportation through educational scholarships and career development opportunities. “Through this engagement with Women In Trucking Foundation, FedEx Freight is making a substantial commitment to affordable education and career development opportunities for women who are striving to make a career in transportation,” said Tracci Schultz, FedEx Freight SVP of Strategic Planning, Engineering & Operational Solutions and board director of the Women In Trucking Association. Since 2013, the Women In Trucking Foundation has awarded nearly $100,000 in scholarships to over 100 recipients, including nearly $20,000 awarded in the spring of 2019. “We greatly appreciate FedEx Freight’s generous gift as it will enable the Women In Trucking Foundation to increase the number of scholarships awarded this year and it affords us the ability to offer additional support to women as they seek careers in transportation or expand their knowledge base in our industry,” said WIT Foundation Chair Debora Babin Katz, VP, TrucBrush Corporation. “Corporate Sponsors, such as FedEx Freight, are making our mission possible in serving the transportation industry by attracting more women in the areas of CLD driving, technicians, safety and leadership through career support,” Katz added. The WIT Foundation recently awarded scholarships to the following women representing the following award categories: Shanika Hines (Driving, Ryder WIT Foundation Scholarship) MaryBeth Raddatz (Driving, Ryder WIT Foundation Scholarship) Lakesha Hoover (Driving), Kimberly Hook (Driving, WIT Foundation Scholarship) Katherine Flamang-Field (Driving, WIT Foundation Scholarship) Heather Pinter (Driving, WIT Foundation Scholarship) Monica Wellington (Driving, WIT Foundation Scholarship) Kathleen Larson (Driving, WIT Foundation Scholarship) Kristi Barron (Leadership, WIT Foundation Scholarship) Kenya Stewart (Leadership, WIT Foundation Scholarship) Esther Namatovu (Leadership, WIT Foundation Scholarship) Sabrin Godwin (Technical, Ryder WIT Foundation Scholarship) Sabrina Depue (Technical, Ryder WIT Foundation Scholarship) Adrianna Isbell (Technical, WIT Foundation Scholarship) Julia Mazza (Technical, WIT Foundation Scholarship)
Tax planning: Keeping it or giving it to Uncle Sam
Another year goes by and I hope 2019 operating results met your expectations and beat the budgeted profit as well. If that is the case pat yourself on the back because we all know the effort required to hit the numbers, especially after maneuvering the monthly ups and downs associated with the various departments throughout the year. I have always marveled at how equipment dealers balance all the balls they have in the air and still make the numbers work. That is one of reasons I LOVE this business, and the people in it. If your operating the business properly your Balance Sheet and Income Statements should be 90% cleaned up by the end of the year, awaiting a few final adjustments before the financial package is presented to your auditors with a March 15 deadline for their report. The same goes for the tax returns which should also meet the March 15 and April 15 deadlines so that all the tax issues are behind you and you can concentrate on 2020. The point here is that management needs to plan for 2020 starting in October or November of 2019. Waiting for the year end close to find out you did six months after the year end just does not cut it any longer. Department heads need to concentrate on what is working and fix what it not, with this process beginning on Day 1 of the new year. Some of the issues facing management on January 1 of every year are as follows: THE CASH BALANCE Is it adequate for what you have planned? Can we generate cash faster? Are invoices processed as quickly as possible? Are you using digital billing and collection methods to reduce the cash cycle? Are the credit and collection policies current for your business today? Is the cash flow from operations in the upper 25% quartile? INVENTORY We are talking new, used and parts inventories. How to the turns and GP% compare to the MHEDA Disc Report? Do you have a list of what to get rid of? Do you have an annual valuation of what the used units are worth in terms of OLV? Is there phantom value when the OLV is compared to the used book values, or perhaps a loss if units are overvalued. Knowing what to expect in profit from new, used and parts inventories is a must on Jan 1 of each year. The sales department need meaningful budgets that generate cash flow for the reporting period. RENTAL FLEETS Both long-term and short-term fleets. Are you ready for the new lease accounting GAAP rules that will have rental customers asking about their leases and how much of the lease payments are for the unit and how much for maintenance? Better be ready. The OLV comparison applies here as well regarding short-term rental units. Bankers need to know if OLV values exceed book value. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Are we shopping our purchases as often as we can? Technology is making purchases cheaper. Interest rates are down. Have we discussed rates with our lenders? I have encountered new ways to purchase company insurance. New ways to make money from Rental Equipment Insurance purchases that benefit both dealer and customer. Ways to offer value via certificate tracking programs that benefit both dealer and customer. Question every purchase. Find the hidden value in AP and ACCRUED EXPENSES. DATA DIVING Check your performance against competitors in your territory. Join a 20 Group and actively participate. Rouse Analytics has a program to compare competitors in a territory by getting access to member data files and working up averages for various profit and cash flow drivers so that they can compare each member of the group against the group data. This is an amazing tool. You can zero in on every line item in sales, costs and gross profits. 20 groups provide a similar comparison only with non-competitive locations. There is a lot that can be done to make money in the material handling business if you can operate in the upper profit quartile. Trying to catch up to dealers in that level is something else again. But, I have found a very competitive marketing and advertising program on the market that will (1) build your company a website and update it as need be; (2) help build your data base and flag it for certain type of prospects and products; and (3) get you up to speed on all media avenues required by your type of business. All for $350 a month! The dealer must supply what they want included in the website, email blasts and the social media account, but they will show you how to do that. This could be a great tool when trying to try out a new marketing program for a special profit or service. If you follow up on some of these ideas, you will find yourself making more money which brings us to the TAX PLANNING portion of this column. Make more money and pay more taxes. How about make more money and keep more money? I like the latter thought better and I am sure you do as well. At our One-Day Dealer Conference in September we had some of the brightest tax folks available with expertise regarding equipment dealers and rental companies. One portion of the presentation, which I mentioned last month has to do with the Wayfair decision requiring sales tax collections on goods shipped into a state even though the seller has no presence in the state. Needless to say, this gets a bit crazy, but the exposure is real even down to what is called the RESPONSIBLE PERSON RULES whereby personal liabilities may apply for any officer, director or employee who knows of and has responsibility to comply with individual state tax laws. As far as Wayfair is concerned, every company should get a report from their accounting firm (from a person with expertise in this area) to explain where