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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
An effective, long-term strategy for maintaining corporate growth, profit and competitive edge Depicting a progressive emergent framework for long-term growth, profitability, and success, Business Restructuring: An Action Template for Reducing Cost and Growing Profit employs an integrated approach incorporating several of the most popular methodologies and best-in-class practices into a single proven framework. Beginning with an overview of restructuring and what is needed up-front to be successful, this "How to Cookbook" helps you * Understand business restructuring and cost reduction techniques * How to transform any organization into one that is high performing * Realize efficiencies through the reorganization of resources, improving processes, and identifying outsourcing opportunities * Sustain results and achieve continued efficiency, profitability, and growth * Describes the right leadership team dynamics to make sure the changes stick Whether you are a business leader or manager, Business Restructuring takes you through a logical series of steps that will provide you with immediately useful tactics to apply on a regular basis to achieve immediate results, as well as a long-term roadmap to deliver performance excellence and increase shareholder value.
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Seitenzahl: 238
Veröffentlichungsjahr: 2009
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Table of Contents
Cover
Title
Copyright
Dedication
Foreword
Preface
Acknowledgements
Chapter 1: Restructuring for Success: The 10-Minute Check
Why You Need to Restructure
Are Your Key Financial Indicators Telling You Something?
Notes
Chapter 2: The Playbook: A Comprehensive Approach
Creating a Foundation for Success
Flexible Platform for Achieving Results
Chapter 3: Putting the Playbook into Action
Building a Winning Team
Equipping Your Team with the Necessary Tools
Note
Chapter 4: Setting the Baseline
Moving from Unconscious Incompetence to Conscious Incompetence
You Are Here
How Fit Is Your Organization?
How Robust Are Your Processes?
Notes
Chapter 5: Ready to Launch
Kicking Off Your Restructuring Project
So You Think You Can Change?
Chapter 6: Executing the Framework
Moving from Conscious Incompetence to Conscious Competence
Business Process Improvement
Business Process Outsourcing
Business Process Outsourcing as a Key Enabler for Restructuring
Notes
Chapter 7: Leadership Essentials for Success
Do You Have What It Takes?
Plans versus People
Keirsey Temperament Sorter
Implication 1: Certain Leaders Have Certain Talents
Implication 2: Changing a Leader to Fit
Implication 3: Assessing and Aligning for the Right Roles
Case Study: Can We Compete in This Arena?
Notes
Chapter 8: Continuous Improvement
Moving from Conscious Competence to Unconscious Competence
CI Organization Structure and Roles
CI Dashboard
Training
Knowledge Management
Linkages to CI
Note
Chapter 9: Summary of Lessons Learned
Glossary
Index
End User License Agreement
List of Illustrations
Chapter 1: Restructuring for Success: The 10-Minute Check
Exhibit 1.1 Conscious/Unconscious Chart
Exhibit 1.2 Year-Over-Year Financial Indicators
Exhibit 1.3 Year-Over-Year Financial Indicators with Graph (SG&A versus Employees)
Exhibit 1.4 10-Minute Checklist
Chapter 2: The Playbook: A Comprehensive Approach
Exhibit 2.1 NexGen’s Holistic Framework ©2009
Exhibit 2.2 Governance Chart
Exhibit 2.3 Restructuring Timeline
Exhibit 2.4 Success Factors and Derailers
Chapter 3: Putting the Playbook into Action
Exhibit 3.2 RASCI Model
Exhibit 3.3 Data Mining and Validation Process
Chapter 4: Setting the Baseline
Exhibit 4.1 Strategy Road Map Funnel
Exhibit 4.2 Strategy Road Map Element
Exhibit 4.3 IT Balanced Scorecard
Exhibit 4.4 Self-Assessment Scorecard (all improvements are year-over-year)
Exhibit 4.5 Organizational Diagnostic Assessment
Chapter 5: Ready to Launch
Exhibit 5.1 Stakeholders’ Analysis
Exhibit 5.2 Elevator Speech
Exhibit 5.3 Status Update, Week of June 16, 2008
Exhibit 5.4 Burning Platform
Exhibit 5.5 CEO Restructuring Communications Calendar
Exhibit 5.6 Pulse Survey
Chapter 6: Executing the Framework
Exhibit 6.1 OE Work-Out Process
Exhibit 6.2 Organizational Diagnostic Assessment
Exhibit 6.3 U.S. Focus Group—People Issues
Exhibit 6.4 U.S. Focus Group—Cumulative People Issues Percentages
Exhibit 6.5 Fishbone—What Needs to Be Improved?
Exhibit 6.6 Pulse Survey
Exhibit 6.7 Business Core Competency Model
Exhibit 6.8 OE Organizational Design Example
Exhibit 6.9 Global Sales OE Work-Out Case Study
Exhibit 6.10 APQC Process Classification Framework
SM
Level 1 Categories
Exhibit 6.11 BPI Process
Exhibit 6.12 APQC Process Classification Framework
SM
Level 1, Subprocesses 2-3
Exhibit 6.13 Typical BPI Team Structure
Exhibit 6.14 Common Interview Questions
Exhibit 6.15 Voice of Customer to Critical to Quality Tree
Exhibit 6.16 SIPOC
Exhibit 6.17 BPI Process Map
Exhibit 6.18 Data Capture Template
Exhibit 6.19 BPO Process
Exhibit 6.20 Key Dimensions to Assess Process Suitability for Outsourcing
Chapter 7: Leadership Essentials for Success
Exhibit 7.1 4 Temperaments and 16 Character Types
Exhibit 7.2 4 Preference Scales
Exhibit 7.3 Talents of the 4 Temperaments and 16 Character Types
Exhibit 7.4 Sample Temperament Map 1: Strategy Consulting Firm
Exhibit 7.5 Sample Temperament Map 2: Retail Operations Team
Exhibit 7.6 Sample Temperament Map 3: Humanitarian Aid Organization
Exhibit 7.7 Sample Temperament Map 4: Entrepreneurial Start up
Exhibit 7.8 Case Study Temperament Map: OCM Consultants
Chapter 8: Continuous Improvement
Exhibit 8.1 Restructuring Team Transitions to Continuous Improvement Organization
Exhibit 8.1 Restructuring Team Transitions to Continuous Improvement Organization
Exhibit 8.2 APQC Process Classification Framework
SM
and Operations Alignment
Exhibit 8.3 Continuous Improvement Organization
Exhibit 8.4 Continuous Improvenment Dashboard Governance Tool
Exhibit 8.5 Process Training for Large Groups
Chapter 8: Summary of Lessons Learned
Exhibit 9.1 What Is In and What Is Out
Guide
Cover
Table of Contents
Begin Reading
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Business Restructuring
An Action Template for Reducing Cost and Growing Profit
Carla Zilka
Copyright © 2010 by Carla Zilka. All rights reserved. An additional copyright is held for Chapter 7 of this book “Leadership Essentials for Success” Copyright © 2010 by Keirsey Group, LLC. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, or online at www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty:While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
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Library of Congress Cataloging-in-Publication Data
Zilka, Carla
Business restructuring: an action template for reducing cost and growing profit / Carla Zilka.
p. cm.
Includes index.
ISBN 978-0-470-50368-3
1. Corporate reorganizations. 2. Reengineering (Management)
3. Organizational change—Management. I. Title.
HD58.8.Z548 2010
658.4’06—dc22
2009025217
To my parents, Jenny and Carl Zilka, who always told meI could do anything I put my mind to, and to standup for what I believe, no matter how difficult it may be.
Foreword
As Chairman and Chief Executive Officer of an investment brokerage firm involved in the equity capital markets, I am acutely aware that Wall Street, and companies in general, are in trouble. For most firms, revenue is slumping and profits are nonexistent. In my industry, brokers and brokerage firms are exiting the business at a record pace. There are many reasons why firms and individuals fail, but one thing is certain: There is no such thing as “Business as usual” on Wall Street. The brokerage industry has changed more during the past several years than it has changed over the last quarter century. Although my firm, FTN Equity Capital Markets, is one of the most well-respected research firms on Wall Street, having a high-quality product is no guarantee of success.
Running a small firm such as ours, or any small-to midsized company, does not provide management with the luxury of hiring and retaining a consulting firm at a time when profitability is under pressure. Still, management must adapt to this rapidly changing environment and both restructure existing businesses to match the paradigm shifts in the marketplace and simultaneously develop new businesses and strategies to leverage core competencies. Ultimately these adaptations will decide whether companies such as ours survive. From personal experience, adapting is no small task. The market is increasingly creating winners and losers … and the winners need advice. Carla Zilka’s new book, Business Restructuring: An Action Template for Reducing Cost and Growing Profit provides me with that advice.
I have had the pleasure of knowing Carla Zilka, both personally and professionally, and have come to value her business acumen as well as respect her as an individual. Frankly, when you manage a business, you are responsible not just for the company’s performance but also for people’s lives, and your decisions have consequences. Making the right decisions during a volatile economy can benefit individuals and their families, while ill-conceived choices can have devastating effects for employees, their families, and their communities. Although Carla is a restructuring expert, I have also found a person that is more than just a cold-hearted consultant; she is someone who cares not only about the bottom line but also about people. This has come through loud and clear in conversations we have had about my business and also as she deals with the same realities of the financial and economic crisis and its impact on her own business, NexGen Advisors,
In Business Restructuring, Carla Zilka provides us with her insight from years as one of the most sought-after restructuring advisors to corporate America. She enables the small to midsize company to make educated decisions using methodologies she developed at Fortune 500 companies with which she has worked as an employee and an advisor. Like a good recipe that may be refined and tweaked to suit the tastes of the chef, Carla provides chief executives and their management teams with the “recipe” and the Playbook to execute, then teaches and trains an organization so they can adjust to an ever-changing industry within an ever-changing economic and political environment.
This book is essentially a do-it-yourself guide to restructuring. It should be required reading for CEOs, senior management, and even their employees as they try to “retool” in these challenging times.
William K. Bischoff Chairman/CEO FTN Equity Capital Markets
Preface
I began my journey of writing this book almost six months before the macroeconomic climate deteriorated and the financial crisis began. For me, this book represented a new way for companies to view operational restructuring as a means to reduce cost, increase profit, and gain a competitive advantage. By the time the book was half done, the market was declining dramatically every day, and companies’ fourth-quarter revenues and earnings were plummeting. Who knew a year ago the market would collapse and we would enter a recession that has instilled fear into the world? As the fear of failure becomes more prevalent in CEOs, Boards of Directors, and senior leaders, the result can be a paralyzing effect, or, worse, action that is short term tactics performed to meet quarterly numbers. For some, inaction seems safer than taking action, in the hope that they can “wait it out,”conducting business as usual. Others conduct hack jobs and cost slashing without a well thought out, long-term strategy.
In my mind, this is absurd.Those who understand the importance of taking action now and commit to a long-term restructuring program recognize that the sooner they get started, the sooner they will reap the benefits and, it is hoped, prevail when others do not. The idea of doing nothing, or sitting on the fence and not deciding whether to move forward or not, instills uncertainty in the organization you are leading. This uncertainty will hurt productivity and the engagement of the employees who are so valuable to making your company successful. Eventually, indecision will lead to stagnant numbers and cause you to fall behind your competitors.
This book is for those who possess the desire and confidence to perform restructuring the “right” way. It is the enabler to help leaders go from good to great, with the goal to change the business model, processes, and organization, to achieve their long-term strategy in the most efficient and effective way possible. It is not intended to be a quick fix or shortcut to reducing cost and growing profit; rather, it is a methodology, approach, and mind-set that should and can be embedded in your organization for long-term sustainable benefits.
In the next nine chapters, you will learn about what restructuring means to me and how my firm and I execute a restructuring program. The text will offer you a framework, process, visuals, and case studies to aid in comprehending what is a complex process. Additionally, I have provided “Quick Tips,” which describe things that may not be so visible but will help to facilitate a successful project.
My philosophy on business restructuring rests on the belief that it is a good thing … not the negative connotation it has become today. Even the best companies in the world need to assess their organization and processes on a regular basis to ensure their strategic goals can be met. In an effort to drive profit margins up, increase cash flow, and free up monies for capital investments, companies should actively analyze how they can become more productive and efficient to lower their cost structure.
Making your processes as streamlined and automated as possible, and building the right organization structure to execute those processes is crucial in today’s economy. You can have the best strategy in the world, but if you do not have the processes and people optimized to execute it, your results may not reach the financial goals you set for the company. And isn’t that the name of the game?
Acknowledgments
This book is something that I always dreamed of doing but never thought I would have the time for. But with an ever-changing economy, I figured this was the best time to write about a subject that can actually help the corporate world. When I set out to write a book about something I am passionate about, business restructuring, I thought it would be simple to put into words a methodology and process I have been developing over the past several years. I was wrong!
Although this may not be deemed a technical book, the framework, approach, and tools are very technical in nature, and readers must be acutely aware of how to use them to gain their benefits. Breaking down the processes and providing a step-by-step blue-print to enable readers to implement the framework took input from several people.
First and foremost, I have to thank my Business Process Improvement Practice Leader and Senior Advisor, Paula Zilka Colbert. She also happens to be my twin sister, and I didn’t realize how easy it would be for us to collaborate. Our tone and writing styles are exactly the same, and her contribution of all of Chapter 4 and the entire BPI piece was more than I ever asked her to do. Being the overachiever she is, she exceeded my expectations, which is not an easy thing to do. Because she knows the processes as well as I do, she was integral in the review and editing process, looking at every single chapter and visual and providing feedback and comments. I could not have completed this book in the short time frame we had without her help.
Members of my team were also a big part of helping me stay focused on writing. Lena Yim and John Alvino, in true Guardian form, spent months managing the process, with a rigorous project plan, daily meetings, and lots of late nights. Dirk Jonker stepped up and managed the client projects and my firm’s operations better than anyone I have ever known, with an energy and passion that clients can’t get enough of. Like me, he is compulsively neurotic about getting things done quickly and efficiently, and he managed the firm exquisitely. Hats off to you guys for enabling this book to become a reality for me.
I would also like to thank the contributions from Edward Kim, Managing Director of Synergy Leaders, LLC, and Kaushik Bhaumik, VP & Global Practice Leader, Business Process Outsourcing, Cognizant Technology Solutions. Both Edward and Kaushik share my passion for making companies better and truly understand the importance of business restructuring to achieve this goal.
I would like to thank William (Billy) Bischoff, for writing the foreword that outlined the purpose of the book, and set the tone.
And my dad for his contribution to naming the book … who knew a nuclear scientist and engineer could be so creative!
Finally, I would like to thank my editor, Sheck Cho, for making this an absolutely pleasurable experience. I can’t wait to write another book for you!
Chapter 1Restructuring for Success: The 10-Minute Check
Why You Need to Restructure
What exactly is business restructuring? In most cases, the term refers to a turnaround tactic used by distressed companies in an attempt to correct a declining financial situation or climb out of bankruptcy. But business restructuring carries a variety of meanings in business. For a private equity (PE) company, it may mean “financial” restructuring, cleaning and reorganizing the financial books using certain methods of financing, loans, or debt structures. For a chief executive officer (CEO), it may mean cutting heads through reductions in force (RIF) to decrease selling, general, and administrative (SG&A) expense dollars. To me, and for NexGen, it represents a way to build a competitive advantage, which is a good thing, very different from the negative connotations associated with the phrase today.
NexGen is my advisory firm, and we operate by partnering with companies to deliver a vision, strategy, and “playbook” on how to effectively restructure an organization, take costs and waste out of its processes, and design a robust business model. Our patent pending framework drives companies to focus investments and resources on the business core activities, facilitating the reallocation of funds toward growth initiatives, resulting in an increase in revenue and profit margins.
When done correctly, business restructuring is transformational; it offers a way to right-size the company, improve business processes, allocate the right resources against the right activities, and create substantial self-investments geared toward future growth. The scope of this book focuses on “operational” restructuring, a way to fundamentally change your cost structure to deliver the highest value at the lowest cost to your customer. To achieve this, you will need to take a holistic approach and execute a rigid playbook; otherwise, you will not see optimal results. If this is something you cannot commit to for the long haul, do not bother getting started. It is a journey that can take years. It is not for the CEO who wants an instant fix, nor is it for the one managing the business quarter to quarter. There are quick wins when you restructure, but the most impactful changes happen in cycles, and that takes time. Fortunately, if you are dedicated to reading this book, you are already off to a good start.
How do you know if you need to undertake the long journey of restructuring? Well, there is no easy way to determine when you need to restructure, but general guidelines, based on events that may occur within your company, can help you answer that question. Every company, regardless of size or product offering, should take a hard look at itself every year using a rigorous self-assessment to determine what is working in its organization as well as what is not. It is also essential to understand the external environment and how that impacts your business today as well as in the future. Too often we are backward looking and fail to anticipate and properly prepare for crises before they occur. A proactive approach is critical when assessing external market conditions, competitors, and the state of your company.
Exhibit 1.1 demonstrates what I have found to be the natural continuum of a company’s thought process when it believes it needs to make improvements. Being cognizant of this cycle and knowing where you fit will help guide you to achieving sustained results.
Usually when my team and I go into a company that thinks it wants to do restructuring, we can already feel the sense of chaos in the environment. The CEO or PE firm has contacted us because the company needs help. Yet, at the topmost level, we get the sense from the leadership team that things are under control. At least that is what most of the leaders are saying. Why would the CEO say things need to be improved but members of the leadership team claim things are not that bad? Because their decisions and actions caused the problems in the first place! It is a direct reflection on them as leaders. This is even more prevalent in companies with long-tenured executives who grew up in the company. We call this “Unconscious Incompetence,” and it is the worst place your company could be on the continuum.
Exhibit 1.1 Conscious/Unconscious Chart
Slightly better, though not ideal, is the company that knows it needs help but also thinks it has the answers to most of the problems. Not really knowing what the root cause issues are, and therefore not being competent to make the correct systemic changes, is a drain on company resources and finances. The worst thing you can do is make assumptions about what you believe the issues are. I call it “intuitive analysis.” We had a client who told us the “superstar” finance person knew what was wrong and “where all the dead bodies were.” We discovered that she had assumed a lot of the issues, and the company had never done a thorough analysis using data to validate her recommendations. In the end, she was right about the surface issues but not about the root causes. If you do not fix the root cause and only fix the symptoms, you will enter a never-ending cycle of fixing the same issue over and over. If you have not identified the issues using facts, data, and analysis, you do not truly understand the root causes and therefore you are not ready to move down the continuum. This is what we call “Conscious Incompetence.”
The next phase of the continuum is “Conscious Competence.” Here you have conducted an assessment and understand the source of your issues, as quantified with data-driven evidence. During the assessment, as you peel back the onion and delve deeper into the organization, the opportunities and issues start to surface. Now that you understand the issues, you are conscious of them, but inept when it comes to implementing the changes. You need external resources to help you execute, as with all the continuum’s phases.
The final stage of the process is “Unconscious Competence.” When you move into action and are conscious of the changes required and have built a competency to make the improvements, you will be able to deliver results by lowering costs and growing profit. Continuous improvement becomes part of the way you run your business. You know how to identify root cause issues and you have embedded the improvement mind-set into the culture through training. You are efficient and effective and able to flex your cost structure. It is a way to gain an advantage over your competitors, prevail in a market downturn, or turn around your company when it is in decline.
Quick Tip
A quick 45- to 60-day assessment by external experts will help you focus on the right issues to attack and is well worth the money.
Are Your Key Financial Indicators Telling You Something?
Getting ahead of your competitors and gaining a competitive advantage is a key reason to perform restructuring. The ability to change cost structure and pricing strategies is an important driver of success in the competitive marketplace. When lower prices are necessary to gain market share, a flexible cost system allows you to change direction without negatively impacting operating margin. Having lower costs and superior service, being able to increase prices in a robust economy or lower prices in a market downturn, are paramount to increasing or maintaining operating margin. Both contribute to increased cash flows, freeing up funds for operating expenses, capital investments, and/or acquisitions.
If you struggle either to increase or to maintain operating margin, some key indicators related to your cost structure will point to common issues immediately. The two important financial indicators in Exhibit 1.2 outline some of the metrics you should be looking at carefully on a regular basis. The exhibit presents a couple of best-in-class benchmarks that you can use to compare against your own performance. How well do you match up against benchmark?
Exhibit 1.2 Year-Over-Year Financial Indicators
SOURCE: Aberdeen Group—October 17, 2007 A benchmark study by Aberdeen Group, a Harte-Hanks company, co-sponsored by Dundas, iDashboards, Insightformation, Corda, and Actuate.
Other indicators including cash flow, SG&A as a percentage of revenue, full-time equivalents (FTEs) as a percentage of revenue, and specific departmental budgets as a percentage of revenue (such as research and development [R&D] or marketing) will also give you an indication of how well you are doing against benchmark, if you can trend them monthly, quarterly, and annually. David Hatch, Research Director of the Business Intelligence practice at the Aberdeen Group, a premier research and analysis firm, said this about measuring key indicators:
Businesses thrive or fail based on their ability to identify, define, track and act upon key performance metrics/indicators (KPIs). Executives and line-of-business management are increasingly feeling the pressure to establish the right KPIs to enable timelier and more accurate decisions. The faster and more accurately KPIs can be accessed, reviewed, analyzed and acted upon, the better chance an organization has for success.1
