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Archive for July, 2012

Thanks, Admiration, & Respect to the Team…

July 20th, 2012 Comments off

     While I’ve certainly been enjoying the first few weeks of my “Summer break”, my recent increase in training miles have given me quite a bit of time to reflect on the closing of my experiences at DC. There’s no doubt that it was a pretty hard ride over the last 3-years. Between a relocation from Vista to HB where we lost a significant part of our staff, the achievement of growth plans, and our SAP implementation, it’s put huge pressure on the team. For those that know me and worked with me, they know I’m not a delegator and spent the majority of my days in the trenches. It was those times working so closely with each of the teams that I was able to develop strong relationships, learn the strengths of each individual, which in turn, allowed me to orchestrate the broader team to achieve our results. I was fortunate enough to work with a fantastic group of people that were sincerely dedicated to the brand and delivering on the goals we committed to. My goal each day was to earn the respect of the team. I never pushed the team harder than I pushed myself. In turn, we delivered.

     The philosophy I have always tried to work by is that respect is earned through your day-to-day actions with the team and isn’t automatically granted through the conveyance of a title. It’s critical to lead by example, to develop the team, and to ensure that all the players are clear on the goal and the tools available to them. I strived for this every day at DC, and in return, found myself the recipient of incredible support and thanks in the end. There’s nothing more I could have asked for as I start creating the next chapter. Those teams have nothing but my admiration, respect, and thanks for everything they accomplished.

Thanks for reading…

Jeffrey Ishmael

Categories: CorpFin Cafe, CorpFin Careers, H.R. Tags:

Are You Striving For Improvement or Optimization?

July 16th, 2012 Comments off

     As my prior colleagues can attest, my pursuit of improved financial performance has never been focused on our results versus a prior year, or even a competitor, but in striving for the optimal position for our business relative to our goals. While I will always report our position relative to a Budget and the promises made to key stakeholders, we know Budgets are a static view in the midst of market dynamics that are constantly changing. Improvement in an of itself can very often be characterized as mediocrity, while a sincere drive for optimization implies a focused drive on pursuing the highest caliber of result. You might say that’s a rather general statement so let’s put this in a more specific context.

     Let’s take one of the more significant categories relative to working capital management…Inventory. Let’s make the assumption that a company is growing at 15% and has determined that there is a goal to keep inventory growth to no more than 5%. In this situation, you’re essentially going to realize a higher velocity on that inventory, thus a lower amount of inventory days on hand, and theoretically, a more “optimal” position. Right? Not necessarily. You reach the end of the year, pat yourself on the back for achieving the revenue growth and keeping inventory growth to only 4%. Hitting your goals doesn’t imply that you’ve achieved an optimal position. It could easily be the contrary.

     Have you taken the time to run a more detailed analysis of your revenue stream, what those trends are in the most recent 4-8 Quarters, and how that compares to the anticipated growth in the coming year? Have you taken the time to run a more detailed analysis of your on-hand inventory relative to the revenue statistics to ensure that you have an appropriate pairing between the two? What’s even more challenging is to add the complexity of multiple seasons, product categories, demographics, or even regional elements, and you have a very challenging situation to manage.

     This is the analysis that is so critical when it comes to not only the management of working capital, but the management of resources throughout the entire organization. Whether you’re the CFO, CEO, or the Director of a key functional area, have you taken the time to analyze how headcount or marketing resources are allocated throughout the company? During my time with MGE, this would have been a question for not just our own operating division, but a question that Schneider Electric would have been tabling across all their brand divisions. These are the tough questions that need to be pursued when you’re really striving for optimized results.

Thanks for reading…

Jeffrey Ishmael

Strategy Is A Long Term Process, Not A Reaction…

July 11th, 2012 Comments off

     We’re at just about the mid-point of the Tour de France, and while I’m not a big fan of Bradley Wiggins, I can’t help but admire the progress he and his team have made over the last few years. I remember watching a “chunkier” Wiggins getting spit out of the back of the group on climbs and struggling to put together a decent result for any portion of the race that wasn’t designated as a “TT”.  Amazing how things have changed as he is in firm control of this year’s race and clearly the strongest rider in the peloton.

     However, Wiggins increased performance was not the result of a knee jerk reaction to infuse some new untested element into his training, bring in untested teammates, or driving his teammates into the ground at the expense of him securing the yellow jersey. On the contrary, Wiggins’ planning started close to 2-years ago where he aligned himself with a strong team, a strong team director, and ensuring that all the riders on the team were informed and shared a common vision. A vision that would essentially become the mission statement for the team and the overriding goal of what needed to be accomplished. 

     Where their setbacks? Absolutely.  The team arrived at last year’s Tour only to have Wiggins crash out in the first week with a broken collarbone. Essentially the Tour was done and they missed their “Quarter”.  You knew I had to bring this full circle to Finance didn’t you? However, the Tour isn’t the ONLY race of the year, although it is the biggest. The team had countless other successes through the year and maintained their focus. They didn’t swap out a Director Sportif, didn’t find new sponsors, or change their equipment….they maintained their laser focus on the Tour.

     This year? After another year of athlete conditioning, wind tunnel testing, nutritional focus, and investing the proper resources into the team, they are the dominant force in this year’s Tour. While some are calling them robots, they are executing to the plan and reaping the benefits. There’s a lot to be said when you have a cohesive team that is communicating and the goals are clear to all involved. Wiggins standing on the podium in Paris will be the ultimate affirmation of everything the team has invested.

Thanks for reading…

Jeffrey Ishmael

What Is Your ROI As A Corporate Asset?

July 9th, 2012 Comments off

     We spend our time constantly assessing financial results, retooling forecasts, and debating the legitimacy of OpEx or CapEx spend. However, when was the last time that you sat back and calculated your personal ROI and the contribution margin you deliver for your company? Whether you are a candidate in transition, or a current member of the Executive team, are you ensuring that you are delivering the proper value?

      It’s rather easy to look at the majority of the positions in a company and determine the value those positions deliver.  Whether you are looking at overall revenue per employee metrics, new sales generated by a new channel manager, or the improvement of collections through a new Credit position, it’s a relatively basic calculation. However, what is the multiple you assign for senior Finance positions, particularly a CFO position?

     First, have you determined what the necessary overhead is to support your position? This will be an all inclusive figure that should include everything from salary, benefits, and other compensation….to any travel and related OpEx considerations. You need to figure out your “all-in” number.

     Second, are you clear about the expectations on your position? Are you being tasked with a turnaround, overall EBIT growth, or other projects that will result in improved operating metrics? Are you setting additional goals that will add to the EBIT-multiple your position will generate? Can you look back at your results over the last 2-3 years and see the value you were able to deliver as a result of your direct involvement and guidance?

     Although we are constantly dealing with nothing but firm metrics and comparisons against historical results, we have an obligation to deliver the highest achievable multiple for the investment that is being made for us to have a seat at the table. Whether that multiple is a 10x, 20x, or higher, you better be able to quantify what your contribution is…or will be. It’s absolutely critical to assume the role of asset rather than expense.

Thanks for reading…

Jeffrey Ishmael