Logistics Is Making a Comeback in the Inland Empire

January 27th, 2011

Logistics has been making a comeback in the Inland Empire in the last 6 months! The port activity is up, employers are beginning to look at projects to improve operations and hiring is on the rise.

Earlier this week, I attended Norco College’s Logistics Advisory Committee meeting for their Logistics programs. Interestingly, Norco College is rated #1 in Google search engine results for these types of programs, and according to their students interaction with students from well-known, top notch universities who specialize in logistics and supply chain, their Norco College education is excellent.

It was also interesting to interact with logistics experts in the Inland Empire from organizations such as DMA (Distribution Management Association) and APICS (the Association of Operations Management) and companies such as Schneider, OHL, MIO Logistics, and OPC Trucking Co. There’s no doubt that logistics is key to the Inland Empire, and it is on the rise in early 2011.

There are several ways to improve productivity and profitability in logistics. I am working on a survey of the top 10 logistics trends for 2011, as it is an opportune time to take advantage of the recovery to improve your business. There are endless options – warehousing efficiencies, innovative transportation strategies, innovative material handing solutions etc.

Employees: Your #1 Asset

January 19th, 2011

Although there is a lack of a robust recovery, companies are emerging from the recession. We are in a “new normal” business environment. Gone are the days of easy sales (in essence, what could be easier than answering the phone?). Gone are the days of relatively easy profitability. Instead, it will require more expertise and creativity to thrive in the “new normal”. Much to my excitement, substance has again triumphed over form! Pragmatic is back in style.

Succeeding in today’s business environment will require a well-thought out and fundamentally different strategy than it’s been in many years. What are the keys to success for 2011? As always, understanding your customers is bedrock. Without customers, there is no business. Understanding your company’s strengths and unique advantages is another key. Who is best equipped to understand and leverage these advantages? Your employees. Adding these two together, my question is as follows: Have you ever seen a company with unhappy employees with happy customers? Me either. As my HR mentor used to say, “The ‘right’ employees are your #1 asset”.

I could discuss this topic for days; however, I’m sure no one would read a 500 page newsletter, and so I thought we’d address a few keys to success with employees. 1) Find your stars. 2) Focus on your stars. 3) Be an effective leader.

1. Find your stars: Your star employees will make the difference between surviving through 2011 and THRIVING during 2011. Thus, you must begin by identifying them. Many times, these employees are overlooked – heads down, delivering results, leading projects etc.

Since they aren’t typically focused on politics, they are likely to be under the radar. And, worse, since they are focused on delivering results, they are likely to bring up uncomfortable topics and ask for tough decisions. Thus, they might not be considered a star – in my experience, leaders tend to think stars are those who are liked, agreeable and hard-working (in terms of hours, not necessarily productivity). In times of easy growth and profitability, it won’t mean the difference between profit and loss; however, it will now.

Look for those leaders and employees who consistently deliver results. You’ll have to look hard, as they might not have time to promote their results since they are focused on ensuring they occur. Who is not complaining? Typically, when employees complain, we immediately wonder about the person being complained about. Why? The deviation from standard is the person complaining. It’s fascinating how we can chase our tails without considering the facts. Look for informal leaders. If someone has an issue (not a complaint), who do they go to for help?

2. Focus on your stars: I cannot tell you how often companies make the HUGE mistake of ignoring their star employees. What could be easier to deliver your growth & profitability numbers than leveraging already-existing assets? Why must leaders jump to the conclusion that they can solve “all the company issues” by replacing star leaders and employees? Sound ridiculous? Absolutely; however, it occurs every day. And why do they treat the leaders and employees delivering results poorly? In my experience, it’s because the pragmatic approach to management is uncomfortable.

First, it hasn’t been the typical approach for many years, and so it’s understandable that there is confusion. And, beyond that, it requires hard work, commitment and integrity. Unfortunately, there are no short cuts. For example, instead of focusing on understanding roadblocks, emphasizing results and being an example, isn’t it easier to say “we need to replace Sally, and that will solve our problem”. After all, is it more comfortable to want to spend time in meetings with those who will agree with everything you say and appear supportive than those who push back and bring up potential roadblocks?

Those companies who THRIVE during 2011 will be those who not only identify their stars but also focus on them. Find out what they think. Ask for their ideas. Promote them. Appreciate them. Explain how their value contributes to the company’s success. Invest in them. The bottom line: Treat them like your #1 asset.

3. Be an effective leader: Last but not least, star leaders and employees crave effective leadership. I could write another 500 pages on effective leadership; however, a few musts include: 1) Establish goals and discuss. Both easy goals and unrealistic goals are not only ineffective but are also a de-motivator. Goal setting isn’t simple but its core to success. 2) Provide support, tools and appreciation on an ongoing basis. The hard work begins. These cannot be empty promises with your star employees. You will work harder than ever before to succeed. 3) Continually work together to find opportunities and evolve in a way to ensure success.

My passion surrounds delivering bottom line results with people. Not only does it not require vast cash and capital resources but people will be your single best vehicle to thriving in 2011.

M&A – Organic growth in 2011

January 16th, 2011

I recently read an interesting article about M&A in the M&A Advisor. In 2010, there was a 22.9% increase in M&A activity over 2009. Emerging markets accounted for 33% of the increase. The energy and power sectors led all industry sectors with 20.6% of deal transactions of the total volume.

According to Roger Aguinaldo in “Predictions: What’s Ahead in M&A for 2011”: Expect organic growth to continue in 2011. Long-term growth still yields the best shot at higher valuations over time. This of course is achieved through the entrepreneurial mindset, global market expansion and technological and service innovations. No matter the financing challenges – and believe me, there are a lot of them — a good company and business model (revenue and profitability) is still the best opportunity for prosperity.

Thriving in 2011’s will require thriving in the new normal – driving revenue and profitability. I’ve written articles on thriving in the new normal for more details – click here for “Thrive in 2010’s New Normal Business Environment” and click here for my Industry Week article, “How to Thrive in 2010’s New Normal Business Operations Enivonment”. And if you are in the midst of M&A, here’s an article on integrating successfully – click here for “Merger & Acquisition: Integration Key to Success”.

Tips for the New Year

January 14th, 2011

1. Re-connect with your vision – where are you going and why?
2. Relationships are #1 – no matter what business you are in, valuing relationships is key to success. How can you develop enduring relationships? Re-connect? Nurture?
3. Prioritize – undoubtedly, you can have 1000’s of tasks at any one time. It’s the optimal time to re-evaluate and prioritize.
4. Remember the value of execution – talk is cheap unless it ‘happens’.
5. Be contrarian – why stay part of the pack? The way to leapfrog competition is to make your own path.

2011 Trends

January 11th, 2011

The stock market is over 11,500 and the economy seems to be picking up with solid holiday sales, even with big ticket purchases like cars. Who would have thought GM, Ford and Chrysler’s sales would rise in December? It’s clear – we’ve emerged from the recession and have entered the new normal. As businesses and people have more confidence, spending rises. And, as spending rises, confidence rises, as spending is over 70% of GDP. And the circle starts.

Yet we are long from the go-go days of the past decade as businesses remain cautious, credit remains tight, and customers’ expectations are elevated – standing out in the crowd remains a tall order. However, since every business that has survived the recession is anxious to grow sales and take advantage of the recovery, it is no easy feat to stand out in the crowd of competitors. Understanding the latest trends can help you develop strategies to leverage your strengths in a way that helps you to leapfrog the competition.

In discussions with clients, service providers and other academic and economic experts, several trends emerge. However, as any successful business executive will tell you, setting priorities is key, and so I’ll narrow it down to three of my favorites: 1) Pragmatic is back in style! 2) Insourcing is also coming back in style. 3) People & the bottom line.

1. Pragmatic is back in style: As my clients and colleagues know, this is one of my favorites, as I’ve found that pragmatic triumphs fancy and fads every time. For example, I’ve worked with several organizations who have spent outrageous amounts of money on fad concepts (such as Kaizens, “best practice” ERP implementation models etc.), and they were severely disappointed. It’s not that all fad concepts are poor. In fact, many contain bedrock philosophies which I write and speak about frequently. Instead, it’s the belief that the fad will “solve the organizational issue”. Hire a fad expert, and all is solved. Not!

In today’s new normal, pragmatic is back in style. Businesses are interested in ideas and implementable solutions which yield a return on investment. Even better from my perspective, the return must be proven. Metrics and scorecards matter. However, don’t get carried away with anything, even a vital component such as metrics. How many organizations do you find countless people developing reports never reviewed, or more importantly, acted upon? Make them meaningful.

2. Insourcing is also coming back in style. If you missed the outsourcing craze, don’t despair as insourcing is coming back in style. As my consulting practice typically focuses on manufacturers and distributors, there’s no doubt that we’ve been in an outsourcing craze during the last decade. If it wasn’t nailed down, it was outsourced – regardless of whether it made sense.

As one of the tenants of the new normal is elevated customer expectations, customers and clients are clamoring for exceptional service. To some degree, we’ve forgotten how to provide an effective customer experience. In the go-go days of the early 2000’s, it was easy to get used to taking orders – not much effort required. The largest challenge was keeping up with business. Then, during the recession, businesses struggled and, frequently, customer service suffered. Everyone was focused on their world; not their customers.

Now, to leapfrog the competition, you must not just provide immediate, friendly, and technically competent customer service, but you must also provide proactive service. What does your customer or client need that he/she hasn’t thought of yet? Does the customer leave feeling special? Many times, the answers are not acceptable with outsourcing.

There are many reasons: Perhaps product is delayed due to circumstances outside of the company’s control. Although the customer feels bad about a war or natural disaster that occurred somewhere in the supply chain, it doesn’t matter to the customer’s customer. Or perhaps the outsourced customer service department follows the script expertly but does not demonstrate empathy or empowerment to resolve the issue. And the list of customer dissatisfaction opportunities and hidden costs rises.

3. People & the bottom line: I’ve written countless articles on how bottom line results are driven by people; not the latest fad, technology, process or sacred cow. Do your employees, customers, suppliers and other partners feel like they are a part of your business vision and its success?

To risk sounding like a broken record, have you ever seen a company with unhappy employees provide exceptional service? No! To succeed, begin with your people. The right people are your most valuable asset. Forget about the net present value and internal rate of return on various capital projects. Have you spent even half as long considering your return on investment of your people?

Although I think this concept is still a bit ahead of its time, it’s beginning to gain traction. After all, how is pragmatic achieved? With people.

Think about not only the big picture trends but also the trends within your industry and organization. Understand them. Find ways to leverage your strengths in a way that gets you in front of the trends. And then watch cash flow to your bottom line.