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Build Company Value Thru Transformational vs Tactical Cost Management

Generate new team thinking by looking at your time/cost consuming work streams

As we continue to navigate Corona-geddon, many company owners and CEO’s still have great uncertainty around what inning of this bad baseball game we’re in.  This uncertainty for many businesses means the leadership team must continue to look for how to effectively manage their costs to ensure they can maintain positive cash flow.

What I’m hearing from owners and CEO’s is that most are confident in the cost adjustments they’ve made up to this point to support the downturn in revenues. But what’s also clear is many of the cost cutting is tactical. What I mean by this is it’s reducing the cost of materials and supplies by reducing the volumes being purchased or reducing direct labor costs by eliminating overtime or even reducing headcount. And then of course there is lower travel and entertainment expenses or deferring R&D or capex investments or even deferring facility maintenance expense. All great actions to take but very tactical because none change the fundamental way the company conducts its business for the longer term.

The question I’m encouraging owners and CEO’s to be asking is what business transformational changes are being considered that could change how you conduct your business to not only find further cost reduction opportunities but also better ways to create a stronger customer experience for the future. The tactical cost cutting is great but it’s not really helping you build long term value or worth in your business.

Transformational change can mean many things but one definition is looking at key work streams in your business to see where there is need/opportunity for strategic changes to how you conduct these aspects of your business. Are your big costs incurred on the front end of your business in selling your product/service or are they on the back end in terms of how you process and deliver your product/service? Where can you identify these large cost centers and revisit how you perform them?  Many of your company work streams were probably designed many years ago and may no longer be efficient for you or your customers.

To rethink your business work streams and related costs, identify what these key work streams are in the front and back end of your business. Take each of these work streams and flow chart the process and identify with each step in that process the total labor hours needed to deliver on that work stream. Looking at each step and the number of labor hours required to achieve may help you see areas that highlight inefficiencies. You might be surprised when you look at various work streams to see the number of labor hours your company is spending money on.

Anytime with my businesses that we looked for more than just tactical cost improvements, we looked for transformational ideas and found them in looking at work streams. Don’t let a competitor expose an inefficiency, find it yourself by thinking about transformational changes to your business. Looking at work streams and related labor hours never failed to help my teams find new ways to create new value or worth in our business.

Use Greenpoint Testing to Achieve Your Desired Exit Valuation

It only takes 106 questions, scanning 10 essential business functions, to stress test your readiness for a successful exit.

However, these questions require thoughtful commitment to achieve your desired exit valuation.

During this up to hour-long online testing, you'll see questions such as the following.

Sample Question 02

After internalizing each question, select among three answer options – Agree, Unsure and Don’t Agree – choosing the answer which best describes you and your business.

Then, complete the Greenpoint questionnaire to unlock your personalized report, which will reveal any gaps in your planning, pointing to the action steps needed to maximize your desired exit valuation.

Format: Digital

Delivery method: Email

Report included: Your Greenpoint results

Stethoscope Frees You to Work On Your Business, Beyond In It

120 questions, scanning 10 essential business functions, free you to work ON your business, rather than solely IN your business.

With each question requiring thoughtful commitment to identify opportunities to further your success.

During this up to hour-long digital Q&A, you'll see questions such as the following:

Sample Question 02

After internalizing each question, select among three answer options – Agree, Unsure and Don’t Agree – choosing the answer which best describes you and your business.

Complete the Stethoscope questionnaire to unlock your personalized report, which will expose gaps [if any] in your planning, and tips for future growth, resulting in action steps needed to maximize your thinking as a business leader.

Format: Digital

Delivery method: Email

Report included: Your Stethoscope results