The COVID-19 pandemic has changed our lives in ways that seemed
unimaginable just a short time ago. Within a matter of weeks schools have been
shuttered, sporting events and conferences have been canceled, air travel has
ground to a halt, over 16 million workers have been laid off, and those able to
work from home are now doing so almost exclusively.
Commentators are already proclaiming that coronavirus will
permanently change the world. Many of the expected shifts, however, are hardly
new. They were nascent prior to coronavirus and emerging stronger than ever due
to the pandemic-led paradigm shift.
Nowhere is this more evident than in the migration to remote
work and the technologies that enable it. In the United States almost a quarter
of employed individuals already were working remotely, and
while this trend has steadily increased over the past decade, with coronavirus
forcing millions to work remotely, we may have reached a tipping point.
If remote work is indeed the new normal, how can businesses embrace it? Alonso Vargas and Andrew Andrews-Ramirez provide digital transformation, helping organizations with everything from ERP implementation to outsourcing, to migrating to cloud technology, utilizing platforms including NetSuite, SAP, Salesforce, Hubstaff, and Office 365. They have seen a shift in how organizations are operating and have keen insights into how companies can get ahead in the digital curve.
After spending years or even generations building a successful family business, some of the toughest conversations circle around succession planning. What happens when an owner steps down from the business? Will it be passed down to family members, and is that individual ready to lead? Will it be prepared for sale, and will an owner get the value they want from an exit? What are the benefits of succession planning and are they worthwhile? How do you write a succession plan? The list of questions can make your head spin.
Family-owned businesses in the US generated 64% of the national GDP and created 78% of new jobs in 2018 while employing more than half the country. Family businesses of all sizes are vital to our economy yet in a 2016 PricewaterhouseCoopers survey, only 23% of family businesses had a full succession plan in place.
Healthcare spending was projected to increase by 5.4 percent annually from 2017 to 2022 according to the US and Global Health Care Industry Outlook compiled by Deloitte. That’s over $10 trillion by 2022.
The United States continues to outpace other countries on projected spending — both in public and private healthcare — with a grand total of $5.7 trillion projected from 2017 to 2026. Yet with nearly double the spending compared to similar countries, the positive health outcomes are worse in the United States.
Healthcare organizations who want to stay competitive must deliver positive outcomes while running a sustainable, profitable business. Many healthcare providers are now opting to outsource the expertise of interim Chief Financial Officers (CFO) to steer them toward a healthy financial future.
In a merger or acquisition, discord of company cultures and disparate systems can cause the demise of a once-promising partnership. About 70% of acquisitions fail when post-acquisition results don’t meet pre-closing expectations. Many of these M&A failures are caused by poorly executed integration.
What’s surprising is that M&A failures are avoidable with careful integration planning and strategic post merger integration. Pre-acquisition, it takes a lot of forethought on how company cultures might clash and how their systems will integrate. Post-acquisition, it takes a ton of strategic elbow grease to rapidly align systems (and eliminate some), retain productive employees, keep customers, and make stakeholders happy.
Lose weight. Exercise more. The new year’s resolutions are in full gear right now. Whether it’s getting to the gym, reading more, or eating more greens, January usually begins with a reflection of how we did and what we can do more, better, faster this year.
We focus so much on being proactive in our health and personal care. But what about our business health? Is it just business as usual, again? Or do we have bigger business goals for the year ahead?
Talking to company owners and investors over the years, we have discovered a lot less proactivity than you’d expect and a lot more complacency. We don’t mean activity – everyone has lots of to-do lists – where busy work mask over big or growing problems.
We often get calls when the house is on fire: cash is draining away from the business, employees are jumping ship, frustrations are mounting, or lack of fresh thinking, innovation and true leadership have led to stagnation in the market. Owners say to us my ‘business is failing, what do I do’.
It’s hard not to think how many sleepless nights could have been avoided for an owner if they would have just acted sooner. We mean solve the issues not just by trying to dive in themselves or harangue the management team more, but instead through resources or tools that could extend their capabilities and help make vision a reality.
No organization is immune to challenges, not if it has any ambition. But how do we as owners and leaders put our strategy hat on to see down the road, or attempt to see, to predict where markets will go, how customers will act and react? To play the great game of chess in the real world – which is strategy.
Sometimes that is easier said than done. The eloquent Mike Tyson put it so well when he said, “everybody has a plan until I punch them in the mouth.” We would do well to remember how limited our brilliant strategies in fact are, how fragile in the face of ambiguity, uncertainty and future black swan events.
Just look to history to see how companies have been blindsided with the punch they never saw coming. Kodak invented the first digital camera in 1975, but put launch on hold in fear of cannibalizing their film business. We all know the story from there….Kodak who? Or take Blockbuster – which failed to pivot when Netflix showed up. And then Borders and Barnes & Noble, crushed under the Amazon onslaught. And the examples of business strategy gone wrong go on…
Interim management has arrived, and it only took 50 years, from a specialty that started in the Netherlands and moved slowly around the world. And its first and best incarnation is the interim CFO.
A good Chief Financial Officer will help a business catapult to the next stage of growth. Whether public, private or private equity backed, a CFO leads and implements strategy that ultimately creates value for shareholders, increasing EBITDA and cash flow. The means to get there may look different for each organization, but companies choose to bring in an Interim CFO because they are looking for transformation:
Operational Improvement and Strategic Planning
An Interim CFO will streamline accounting and financial reporting, helping owners, board members, investors and the management team get a clear look into the state of the business.
The best, truest, and most bleak line I’ve heard from a mega-successful company founder was Dave Becker telling me: “we have all had the sleepless nights, when it’s 2am and you’re staring at the ceiling.” Dave is the founder of a number of companies including First Internet Bancorp (Nasdaq: INBK), the granddaddy of online banking.
From the outside, we see a successful entrepreneur with multiple home runs and think they must be sitting on easy street. What could possibly go wrong?
The answer is: everything. It always appears easy or obvious once a company has made it, but what we often don’t hear about are the trials and tribulations that happen at every stage of a company’s growth from young and unknown, to in between, and then big and ambitious. The sleepless nights. The questions of can you make payroll. The we-almost-went-bankrupt moments. This is real and it’s no surprise that many of our inquiries for help from owners show up in our inbox after the 9-5 employees have gone home.
I was having a conversation with company founders in a healthcare startup who made the comment: “we’re new to being entrepreneurs.”
That was their opening for free advice. It’s hard building and scaling a business when most startups fail or have a tough time and that’s not celebrated enough. Instead we just marvel at the likes of Mark Zuckerberg and aspire to be like Uber, Facebook, Google.
The truth is that most every new businesses – it’s a slog. A grind. A tough battle at some point in their existence, if not in fact for many years. Steve Ballmer of Microsoft had a phrase for this: the long middle. He said its fairly easy to be creative, think up a brilliant new product, and decide to charge forward. Then comes the middle: the long slog.
How many owners or executive teams are truly confident that their organization is operating at it’s best? How many have a true action plan for the future? And how many of those can actually execute on the plan?
Donald Sull, a lecturer at MIT and an expert on strategy execution surveyed hundreds of companies on how strategy is executed and found that many lack agility or have difficulties adapting to market circumstances. In a HBR article he reported that most organizations either “react so slowly that they can’t seize fleeting opportunities or mitigate emerging threats or react quickly but lose sight of company strategy”.
These fears are echoed by executives across companies and industries.