JACOBY BLOG
Here’s an early career lesson I learned about some of the advantages and disadvantages of succession planning:
Many years ago I worked for a large privately held company whose number two executive was the presumed heir apparent for many years. Then, the aging founder and CEO had a change of heart despite very successful performance by that person and named his daughter to be the successor to run the firm. The company was then split into two large independent corporations with the number two person as CEO of a new entity that was no longer owned by the original firm.
Since then, I’ve learned other important lessons about the advantages and disadvantages of succession planning, which I am going to share with you here throughout the rest of this post, but first…
Quick Summary
Key Advantages
The advantages of succession planning include the opportunity to:
- Conduct a SWOT analysis of the business to determine its leadership needs now and in the coming years
- Develop a strategic Leadership Human Resource Plan that includes comprehensive position descriptions, needs analysis and plans to bridge the gaps
- Build relationships with and carefully study the performance and behavior of successors over a long period of time
- Provide a sense of direction, stability and expectations for all key stakeholders: employees, customers, shareholders and vendors
- Retain a critically important employee who might otherwise leave if not formally recognized as the successor
Key Disadvantages
It’s difficult to think that there might be disadvantages to succession planning but here are some things to consider:
- Appointing the wrong person can lead to a variety of problems that result in poorer company performance and turnover
- Pulling the trigger too quickly to appoint someone only to have a better candidate appear later on
- Engaging in succession planning when the business is immature may lead to erroneous conclusions about leadership needs
- A poorly conducted succession planning process will lead to poor decisions, disharmony and ultimately poor company performance as well
Let’s take a second to look a little closer at these key advantages and disadvantages of succession planning.
Advantages (Cont.)
The business SWOT analysis paints a picture of the opportunities and threats in the market, importantly including, what the future of the market looks like and what the special characteristics are that effective leaders will need.
The strategic Human Resource Plan is where the rubber meets the road for solving your leadership needs. It includes understanding your leadership needs, creating an organizational plan, developing comprehensive position descriptions to fill those needs and then comparing that to the experience and attributes of internal and external candidates. Internal successor candidates would then receive training to help them become the leaders they will be needed to be.
The ability to monitor the performance of internal candidates closely and external candidates to a lesser extent is a great advantage of succession planning. Generally speaking, the availability of more data regarding a person’s performance in a variety of situations, the better we can predict their success.
Advantages and Disadvantages of Succession Planning (Cont.) More »
Looking for some free SWOT analysis examples to use?
Well, depending on your purpose, the free examples may or may not be relevant to you. One of the most important reasons to analyze a market, a business or a project or process within the business is to come up with information that allows you to make the best possible decision.
Feel free to keep reading for some more details, or just check out some free SWOT analysis examples now.
What is a SWOT Analysis For?
A SWOT analysis–strengths, weaknesses, opportunities and threats-–is a very useful way to evaluate a variety of business issues. It’s a good method because it helps you take a disciplined approach to collecting and organizing information, weighing the information and making decisions based upon what you see. A SWOT analysis is also easy to share with others, such as your advisors, to see if they reach the same conclusions with the information. More »
Here’s how the following SWOT Analysis of Tata Motors came to be:
With the bailout of General Motors underway I’ve been doing some research on other automakers to see if there are any interesting stories out there. Tata Motors is a manufacturer that is relatively unknown in the U.S. yet has a compelling story. And a SWOT analysis of Tata Motors offers lessons for every business owner.
More than 800 million automobiles and light trucks are on the road worldwide with more than 70 million new vehicles sold in 2008. Tata Motors, founded in 1945, ranked 19th in global production with 798,265 vehicles. India, as a region, is experiencing one of the highest growth rates in the world.
Tata has been actively acquiring and joint venturing with other companies during the past five years. The purchase of Daewoo Commercial Vehicles (2004), a minority investment in Spanish bus and coach manufacturer Hispano Carrocera (2005), an alliance with Fiat, a joint venture with Brazilian bus and coach manufacturer Marcopolo and with Thailand’s Thonburi Automotive Assembly Plant Company (2006).
2008 heralded two major events: the purchase of Britain’s icons Jaguar Land Rover and the launch of the Tata Nano, the “People’s Car” for 100,000 rupees or approximately $2,100. Seating 4, the Nano is a mere 10 feet long and has a 4 gallon fuel tank. These events have given Tata Motors its “15 seconds of fame” or … will we see more?
Here is my SWOT Analysis of Tata Motors
Strengths
The Nano is Tata’s iPod. Great engineering and design in a rules-breaking product that has generated global awareness and admiration More »
Business consultant prices are something that come up a lot in my line of work, and they are important. But what’s more important than the price you pay is what you will be getting in return.
Investing in the assistance of outside advisors is a key decision for you. Your time is very valuable and you want to make sure that you get a high ROI.
The most important decision you’ll make is WHO to engage. And to make that best decision work for you, you want to approach it with a good understanding of business consultant prices and how to assess how much you should be willing to pay.
What determines the price?
As in most industries, business prices are determined by a number of factors, none more important than the reputation and track record of the consultant.
Generally speaking, if the track record is there and can be verified by satisfied customers who have been the recipient of tangible results, your ROI will be secure. If they’ve performed before in similar situations, there is a much higher probability that they can perform for you.
Other factors besides reputation and track record weigh heavily as well. Rates vary by
- Size of customer,
- Markets served,
- The degree of specialization,
- The potential value of the work and
- The marketability of the consultant.
Let’s take these factors determining business consultant prices one at a time.
Larger companies tend to pay higher consulting fees than smaller companies. The consulting firms that serve them have high marketing costs and overhead and therefore have a higher rate structure.
Certain markets allow higher rates and this is closely tied to the level of specialization. For example, heavily regulated industries such as financial institutions and technology generally prefer to work with consultants who have specialized in understanding their issues.
Specialization can also be a differentiator that rationalizes the price you should pay for business consulting services. For example, there is a strong demand for intergenerational consultants to help companies understand their multigenerational workers better in order to motivate and retain them.
The potential value of the work is a key determinant of price. If your potential gain from every additional sale is $100,000 profit, you will pay more for consulting advice that wins that business than another company who gains $100 from an additional customer.
Unfortunately, the ability of the consultant to market themselves is another key variable in determining price. I say unfortunately because ultimately what you care about is getting results, not in being wowed. Unless they are a pure genius who stands out dramatically from the crowd, consulting fees will be higher for those who market themselves well.
So, how much should you pay?
The key to making a good decision is to calculate the ROI on each consultant you interview and choose the one that delivers the highest ROI. You’ll have to make some assumptions to do this but that is the rigorous thought process that gets you the best result. Its not the business consultant prices in isolation that matters, it’s the RETURN on them that’s the key!
With a now thorough understanding of how prices are determined, ask the consultant to provide you with an ROI projection. A simple ROI calculation would be to take the total incremental earnings you will receive because of the assistance of the consultant and divide it by the total cost of the consultant.
A better calculation is to time-adjust and risk-adjust the rewards and the cost using a net present value calculation.
So, calculate your ROI on your consulting options, choose wisely and prosper!
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Local companies approach me frequently asking which small business consultants in Baltimore would be the best fit for their organization. This post aims to address most of the frequently asked questions involved in selecting a small business consulting firm and points out common roadblocks and pitfalls that can be easily avoided if you know what to look for.
What type of help does your company need most?
Perhaps the most important question to answer from the outset, whether you’re looking for small business consultants in Baltimore, Washington DC, Northern Virginia (or pretty much anywhere in the world, come to think of it) is what type of help you need. More »
During periods of market slow down, the executive leadership of a business is able to make choices about how they will react to the future, and the position where they would like to be once the economic down turn ease and the market begins to bounce back to what it was before.
By changing their perspective and strategy planning to have a long term perspective instead of realizing only the production of a short term positive uptick to the profit statement, it is possible to grow a business even during tough economic times. A foundation to success in this area, however is that the management in charge are true leaders and are prepared to look beyond the short term prospects and work toward positive change for the future. It goes without saying that if the company is in a strong position before the downturn begins, combined with good leadership during the period of recession, that venture has a better chance of surviving the challenges with not only streamlined processes, but with a greater market customer base, due mainly to it stepping into the space left by companies who go out of business in the meantime.
The attitude toward a long-term business growth strategy needs to be a part of managerial mindset in times of plenty as well as times of hardship and needs to result in the implementation of changes which will be advantageous over a period of economic cycles and not only from the short-term stance. The ability to handle recession in this way is the mark of true leadership abilities and the trademark of success.
The use of redundancy is an obvious example of knee-jerk reaction to company failures in a declining market. While it’s immediate effect is to release cash flow into the company which may be sorely needed, the long term result is that once the recession passes, the company then needs to re-establish the knowledge and experience base that it has just discarded. Across-the-board axing of staff positions may seem like the obvious thing to do, however it will be undesirable in the long term vision.
Realise that the wider social implications of major redundancies such as those that we are seeing in the international economy currently, actually makes a recession last longer, as it affects the entire status of a country’s economic infrastructure.
It is far more beneficial to reduce your cash flow by optimising processes than getting rid of people, particularly if you want to grow during or immediately after a recession. This way you retain the human resource necessary to quickly and effectively respond to opportunities in the market.
The techniques brought in by consultants can usually help you identify quick wins in this area, and the money thus made available can be used to fund growth related activities such as buying your competitors stock or developing new market offerings.
The old proverb of buying when the market is depressed is most applicable in this situation, and businesses should be preparing for this situation when the going is good.
In a March 9, 2009 article entitled “IBM chief upbeat on growth potential”, Kevin White writes about IBM’s optimism that it can parlay its 8 million square feet of data center resources into a virtualized, cloud based computing infrastructure that dynamically manages business services. “In an upbeat letter to shareholders, chairman and CEO Sam Palmisano outlined how the company would develop smart, digitally aware, networked and intelligent systems with pervasive instrumentation and interconnection, as well as build out cloud computing services. ”
IBM’s Willy Chiu, VP for IBM’s Cloud Labs described how the company is working to be able to string them all together through virtualisation and cloud-based provisioning so as to be able to dynamically manage business services. “Ultimately, it’s all about changing the economics of enterprise computing. It’s all about boosting efficiency. And it’s about doing more with less.”
Before Twitter, before Google, before Microsoft there was IBM. The gold standard of corporate excellence was a proud organization and the “men of IBM” wore blue suits with white ties. IBM stood for reliability and innovation. It was the “go to” equipment choice – don’t bother considering the alternatives.
But dominance led to complacency and IBM lost its way. This loss of prestige and power was personified by its inability to understand young Bill Gates who clearly outmaneuvered IBM in Microsoft’s early days. Since then, the proudest of U.S. corporations has been quiet for a long time. Its biggest news was its 2004 $1.75B sale of its PC business to the Lenovo Group. IBM once dominated this business but failed to keep pace with Dell and Hewlett Packard.
Can IBM rise once more and be king? Stay tuned.
–Art Jacoby
Every business wants to grow, and there’s a good reason why. Continued, sustainable growth is important for the survival of your company and for your well being. However, it can be hard to figure out what to do to get your business beyond the level of basic subsistence. Here are a few corporate growth strategies that others have successfully used to get their businesses where they need to go.
1. Take a look at your existing markets.
Getting new customers is something than many businesses focus on when they want to grow. However, your existing customers can be a much better place to look for more sales. After all, they’re already buying from you. It’s a lot easier to get them to buy again than it is to convince new customers to buy.
2. Referrals are valuable.
Your existing customers can also help you find new ones. By referring you to their friends and relatives, they can help your business grow and your reputation improve. However, you shouldn’t assume that just because you do a good job, your existing customers are passing on the word. Seek referrals actively to get the best results.
3. Find new uses for your services or products.
One way to find new markets and get more purchases from existing customers is to discover new, innovative uses for your service or product. After all, many things have multiple uses – you just have to find them. Diversifying what you offer is another version of this that can be very effective.
4. Find new customer pools
Extending your reach to new customers can be a big help. This can include opening new physical or virtual locations so that you can reach more people, or by increasing your advertising. Choosing to advertise in media that targets a new market can be very profitable.
5.Look for niche markets.
If you’re capable of dominating a small, unique sector, it’s a lot more effective than being a small fish in a big pond. Specialization can be a very good idea if you can find needs that aren’t being met.
6. Trade shows are valuable.
Trade shows can be an extremely effective way of helping your business grow, by drawing in people who already have an interest in what you do. Your bottom line can improve significantly. Just make sure that you choose your shows with care and find the ones that go best with your company.
7. Keep costs down.
Remember that growing your business is actually about improving the bottom line. If you can reduce costs and make things more efficient, things will improve.
Of course, these are just a few ways to help your business grow. There are plenty of others that’ll help you increase your bottom line and become a real success. Use these tips with a smart strategy to keep on expanding.
Those in the healthcare business must be more diligent that ever when it comes to safeguarding their finances. One must be careful of overhead and project expenses that can get out of hand, costing millions of dollars to the business. The worst case scenario is that the business is hemorrhaging money but cannot quite understand why. This is where good healthcare business consulting can be of use.
The first thing a healthcare business must do is to take stock of its financial situation. The business managers must ask themselves tough questions about their salary, project and budgetary costs. They must question every aspect of the business to see where the problem may lie. If they have asked themselves all of these questions, and still cannot find why they are losing so much money, then it is time to hire in a healthcare consulting business.
Healthcare consulting businesses can enter an ailing business and figure out what is causing the business to decline. This can mean everything from looking at your payroll expenses to helping your practice define which projects or practices need streamlining in order to turn that loss into profit. It may be that there are certain initiatives the practice or hospital needs to abandon in order to recuperate their losses. Perhaps there are some new initiatives that would help the healthcare business increase their profit margin. You just never know until you actually speak to a healthcare consulting representative.
Healthcare consultants can help you focus in the following areas to help improve your revenue and cut costs. These areas often overlap and that’s where the experience of a good healthcare consulting business can come into play.
- Reimbursement/Accounts Receivable In-Depth Analysis
- Fee Schedule In-Depth Analysis
- Billing System Analysis
- Analysis Of Your Managed Care Contracts
- High Level Operations Analysis
Sometimes it is hard for a new practice to admit that they need a healthcare business consultant. Especially in the early stages of a private practice or in a hospital program that takes great pride in their work. That early in the game, it can make a doctor, dentist or hospital administrators question their overall game plan. The truth is that there may be something quite simple that is causing some budgetary problems. A healthcare business consultant can use their experience over many years with many different healthcare businesses to help your business find the holes and fill them.
If you cannot find answers to some hard questions about your practice or hospital, then it may be the right time to find yourself a healthcare consulting business to help put your practice on the right track. Rather than see this as a detriment, look at it more like an opportunity to put things in perspective and steer your organization to a successful end.
Do your research before hiring in a consultant, but rest assured that you will be making a great decision.
A good health care business plan is crucial to any startup business. Whatever enterprise you may be considering, the better your business plan, the more likely that you will be able to attract investors and isn’t this the objective of the business plan itself? A Health Care Business Plan is no different from any other business. You need to prepare a document that clearly outlines and describes the fundamental nature of your business, the goals of the business, and how you plan to run this business.
Where do you start?
- Like any plan or proposal, a good business plan must start with a summary or an overview of your project. This is like the introduction in a book or even the first scene in a movie. It is key in that its purpose is to grab the attention of the readers, peak their interest and make them want to read further.
- Once you have written your overview, you can start to get a bit more specific by stating your objectives. These should be succinctly stated and use clearly defined measurable goals.
- The next part of a good business plan is the part where you give what you think are the “keys” to your future success. Simply said, what will make your company or idea fly?
- After this, comes the mission statement of your company. This should include a value system of some kind relating to the treatment of both your patients and your staff. What are you committed to doing?
- A company summary follows this mission statement, which gives a history of the company, its employees, or founders of the company. It should stress all accomplishments and successes.
- A detailed account of the services that the company will provide is the next part of a well-written business plan. These should be listed using behavioral language telling clearly and precisely what the company will do or what services will they provide.
- A good business plan must demonstrate to the reader that you have done your homework; therefore a solid thorough market analysis summary must be included. What has your research told you about the need for type of business and the future prospects of your business? What is your competition and how will you compete?
- Once you have given all of the above mentioned background data, you need to give the hows. How will you go about setting up the company or implementing your ideas? What are your start up strategies?
- A managerial summary follows and lies out the administrative structure of the company. Who will be responsible for what and who are the overseers of the business?
- A financial plan is essential to a well-prepared business plan. What will be the costs – the startup cost, the cost of running the business, and additional sources of funds, including loan options?
- A well-prepared business plan ends with an appendix. This appendix gives detailed projections of all aspects of the business.
Remember, a solid well-written business plan is crucial to the future success of your Health Care Business. To read a sample of a well-prepared business plan, you may want to check out the following sites -http://www.hjventures.com/Health-Care-Business-Plan.html, http://articles.bplans.com/writing-a-business-plan.
