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What Have You Done For Me Lately…?

November 24th, 2014 Comments off

While I don’t think that I’ve ever used this line in any seriousness at any time, it’s also a line that I strive for in my pursuit of results and ensuring that I can assist others in any way I can. The difficult part for any Finance professional is qualifying the results that you deliver to a company and the value that you continue to build. I specifically say “qualify” as we are constantly quantifying company results in the form of Budget objectives, KPI’s, and every other indicator we use to determine of the company is financially healthy and moving in the right direction.

However, in order to get to the point that you are delivering healthy financial performance, you need to have the right team and the right infrastructure in place. For our Sales team, there is only one metric for performance and answering the question posed above….it’s the continual stream of purchase orders. You’re either successful in delivering….or you’re not. Pretty straightforward. From a Finance perspective, I’ve always been fortunate to have a strong relationship with the President and the rest of the Executive team. Based on my feedback from this circle I’ve always outlined the deliverables that I would be putting in place for the Quarter, which are always supportive of that team, and ultimately, the strengthening of the company and its underlying foundation. I solicit feedback to ensure if there are any other items that I might not have on the radar and if I need to tweak my Quarter objectives at all. Hopefully that is never the case, but it’s always a good exercise to adopt.

As I’ve been interviewing more candidates lately for our next hiring push, it’s given me a reminder of where we’ve come in the last 2.5 years and the foundation we have been able to put in place. I still laugh at coming fresh off an SAP implementation at Quiksilver only to be handed a laptop at Cylance on my first day and being told it already had Quikbooks installed. At that point I knew we had a lot of work to do. As I look at where we are now with what I believe is a very robust platform with seamless integration between platforms, it actually surpasses many of the systems I have had at previous companies. As we continue to grow, our needs become more complex to manage and we adapt. We’ve recently just finished the implementation of our Deferred Revenue module, and with barely a break, are now kicking off the Commission module to manage variable compensation at multiple levels. I’ve also recently completed a complex forecasting module that models out a multi-layer deferred revenue view. This is not an offline Excel model where you’re just updating a few cells, but taking into account all the critical aspects of the business and surgically forecasting proforma cash levels.

As we move into our next hiring phase, we’ve also put into place a very solid recruiting and onboarding process. Also an element of a previous Quarterly goals layout. With this in place we can effectively fill our open positions as we continue to operate in a lean environment, but also without having to rely on outside recruiters that are more than happy to deliver a five figure invoice for each position they’re able to fill.

What I strive for daily is the ability to close each Quarter, and like the salesman that totals out his POs, I can tally up the deliverables I qualified at the beginning of the Quarter and know that myself and the team have pushed the Company forward in a healthy way and have delivered a solid level of support to the broader organization. That the efforts of the team have not just been about staying busy the last 90-days, but have been strategic and surgical in their efforts to strengthen the company. Hopefully that’s what we’ve done for the company lately…

Thanks for reading…

Jeffrey Ishmael

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2-Years and Marking The Milestones…

July 25th, 2014 Comments off

It really is hard to believe that two years have already passed since the company was started, as well as equally amazing to see what has been accomplished during those two years. Coming in as employee #8, I still laugh at my first day sitting down with our Founder over a fold-up table in his living room when he handed me a laptop, tells me it has Quickbooks installed and if I can get payroll entered the next day. Welcome to the start-up world!

Fortunately I had already done an honest self-assessment and knew the dedication it was going to take to play a role in the building of this company and the necessary pieces I would need to put in place to have a solid foundation. I knew that I was going to have to hire people that had an equal dedication and focus. While Stuart was going to need to keep a laser focus on the product side of the house and assemble his technical “A-Team”, I was going to need to focus on everything else that would support that mission. I also knew that I was going to have to modify my approach and decrease the level of rigidity in my operational approach since we would have a heavily dynamic environment that was likely going to be changing on a constant basis. However, there needed to be one basic premise that everyone would need to operate under….Deliver what you promise. It becomes apparent, and very quickly, that there is no place to hide in a start-up.

In order for people to deliver on what was necessary we needed to have the proper tools in place. Two years later, it’s very satisfying to reflect on the systems we’ve been able to implement and track the progression of our business and the contributions of individuals. In many respects, while not the grandiose scope of SAP (thankfully), we have an incredibly robust reporting and forecasting structure that started with the implementation of Salesforce.com. We then added additional platforms that have resulted in a seamless flow of information from identification of an opportunity to final invoicing. We’re in the process of implementing additional functionality with the addition of a revenue recognition module to track what is a rapidly growing product offering.

Systems and reporting aside, how can you not be motivated to deliver when other members of the team have developed a fantastic product that is not amazing in our own minds, but being recognized throughout the industry?!?!

  • Cylance was the runner up at the 2014 RSA Innovation Sandbox program. This was only 18-months into our existence as a company. Amazing!
  • Cylance has just been named one of CRN’s 2014 Hottest Emerging Technology vendors.

When I look at the customer base that we have assembled I see a virtual mirror of the customer base that I was servicing during my time with a Schneider division that supported a variety of customer ranging from SMB’s, to Large Enterprise, and Government. We had a $125 million Services & Product business that employed over 300. While we are still on the upward revenue trajectory, it took them decades to build a quality customer base…and we’re 2-years in. Really a fantastic accomplishment!

It’s all the base hits along the way, and the reflection of those, that really keep me motivated and excited about what lays ahead for Cylance.

  • The creation of a team that is intensely focused on delivering the Cylance mission.
  • The establishment of a successful and profitable Services business
  • The creation of a truly industry disruptive technology that is already being embraced by a notable customer base.
  • The continued development of relationships with key financial partners, as well as new partners brought in during a successful Series-B.
  • Establishment and collaboration with Board level committees adding additional oversight to the business.
  • Successful onboarding of a key accounting partner for additional oversight & auditing.
  • Successful onboarding of a new Director of Human Resources and the continual building of an already successful program.

It’s been a pretty darn fantastic ride over the last two years and I can only imagine where we’ll be in another two years with the team and partners we have in place. The only thing that will limit us moving forward will be the limitations we place on ourselves and our inability to properly plan for the success ahead.

Thanks for reading…

Jeffrey Ishmael

Do You Have a Compass For Your Journey…?

November 13th, 2013 Comments off

I’ve written before about the criticality of having  not only the right systems in place, but having them planned and configured in a manner that will yield the highest quality information that you can use to make your daily decisions. Although I have always worked in relatively lean environments and have always had to have a strong level of self-sufficiency, I’ve come to appreciate the quality of good information even more working in a start-up environment and having to ensure that every resource deployed ($$$) is being done so in the most productive manner.

For our company, our biggest asset, or conversely, our biggest liability, is the people that have come to work for us. We are still a small enough company that every hire must not only have the appropriate experience and skills, but also be able to integrate in with the rest of the team. Even then, the need to hire must be quantified as much as possible and have the appropriate data and long-term plan to support each new position. While this might seem a pretty simple and somewhat rhetorical point of view, its application is a bit harder in a start-up environment. While there has always been the specific business plan in place, many of the early hires were done so at a “gut” level with the belief that they would support the mission and make the necessary contributions.

As the company has moved from living room start-up to growing revenues, it’s been extremely satisfying to be able to have the data that honestly supports the hiring of new positions. Data that is the product of systems that were planned, implemented, and have evolved with the growth of the company. Data that looks at everything from the opportunity pipeline that Sales is working on, to projects currently being scheduled for delivery, the manner in which our consultants are spending their time, to the necessary time our consultants support the Sales team.

We can now look at the time that our folks are spending on both internal and external projects and make informed decisions on when to hire and what specific skills need to be hired in order to support the current team and developing opportunities. It’s certainly a win for the entire team when you can make a decision that is based on data and not based on gut or hope that an expected event will transpire. Although the timing may not always be ideal and the existing team might be taxed a bit longer, you’re ensuring that when the resources are finally deployed and you bring in a new employee that they will be there for the long haul and become part of the “family”.  After all, working in a start-up is no cakewalk and it’s the long days, accomplishments, and team camaraderie that ultimately deliver the success that everyone shares in.

Thanks for reading…

Jeffrey Ishmael

The Unconventionals….Assessing Team Additions

October 10th, 2013 Comments off

One of the larger challenges of managing the Finance side of the organization, which includes A/P, A/R, Accounting, and in some cases, HR and IT, is the multitude of personality and skill sets needed for each position. In some positions, say in the case of Controller, there is a typically a defined educational or work history that is required.  In other cases, the position may allow some level of latitude in the candidate hire with respect to their work history or absence of certain credentials. I’ve had a number of these hires over the previous companies I’ve worked with and I call them The Unconventionals. Unconventional in the respect that if the sole qualifier was the content of their resume then they probably wouldn’t make it to the interview stage.

With respect to my background, I might have been considered an unconventional hire when I joined MGE since the majority of my experience was in the Retail & Apparel industries and not Technology. I was also going to be tasked with the implementation of the IFRS reporting for the North American operations, for which I had no previous IFRS experience. However, I had an executive team that saw past that and look at other accomplishments and my personality to know that I would get the job done. Not only did the job get done, but we excelled in our continued performance during the 3+ years I was with the company. Perhaps it was this experience that has prompted me to adopt a similar approach in the identification and hiring of candidates.

While working at MGE, I had an opening for a Financial Analyst position. This position would typically call for 2-5 years of experience. However, I was introduced to a potential candidate who really didn’t possess any substantial finance or accounting experience. However, what I recognized was that he was a Marine and had worked with munitions. What I saw was not a candidate, who didn’t have the requisite experience, but someone who had a great work ethic, an attention to detail, and a commitment to team work.  I knew I could bring him up to speed and could trust that he would be a great ambassador internally for the team. In the following years, I hired him into a separate company I had subsequently moved to as a Finance Director, and most recently, he secured his first CFO position with a small action sports company.

While tasked with the turnaround of a small footwear company in San Diego, I had the need to bring in a staff accountant that would also oversee A/P and A/R. I was presented with a number of well qualified candidates. However, the one candidate who had the least amount of experience, with predominantly tax preparation history, was an Olympic level track runner. Knowing the work ethic and dedication required for the athletic endeavor, I knew she was my candidate. Over the subsequent years she not only excelled at that small company of $30 million in revenues, but moved to a larger action-sports company overseeing all accounting for the Canada entities. During this time she also secured her CPA certification and has become the Assistant Controller for an OC-based manufacturer.

At my current company, I had a drastic need to hire a Business Operations Analyst that could support me in the implementation of operating systems, HR functions, and the myriad of other financial reporting I was responsible for. I had a candidate recommended to me, who had previously done some project work for me at DC. On paper, he was green and a recent graduate from UCSB. However, I knew that based on the project work he had done for me that he had a solid work ethic and would likely be a solid team player if given the opportunity. He also had great attention to detail, which was critical since he’d be working quite a bit independently and I couldn’t afford slips in this area. He’s not only done fantastic work, but become a respected member of the Cylance team as a result of his contributions and work ethic.

Ultimately, these candidates have a much higher burden to perform as they have to be willing to go the extra step to earn the respect of the surrounding team. They’re held to the same level of accountability, and if they don’t perform, are also subject to potential dismissal. Although there is a first for everything, and I’m prepared to, I have yet to hire a non-performing candidate I’ve had to dismiss.

While perhaps unconventional, these hires are a direct reflection on me and my ability to deliver on the commitments I have made to the rest of the Executive team or the Board. The hiring of these candidates are a reflection on my department and my effectiveness in assessing candidate potential. When I take this approach, I have to have a comfort that any candidate I’m willing to support will be able to deliver and excel after I’ve brought them up to speed. Not only deliver on my requirements, but also be resourceful enough to potentially support other members of the Executive team. While I do all I can to keep my turnover low and promote internal candidates, there’s nothing more satisfying then seeing these same folks depart into a more prominent position.

Thanks for reading…

Jeffrey Ishmael

Life In The Start-Up Lane: When “Standards” Keep Changing…

September 25th, 2013 Comments off

As I’ve mentioned in some of my prior posts, whether it’s just another day in Finance or within the life of a start-up, there is no normal day. Take that a step further and you’ll likely find that there is no level of “normal” reporting that you can rely on to measure what is happening with the business.  At least not the “standard” level of reporting that you would have relied on at a prior company, which was likely much larger and more mature. As we are about to kick-off our sixth fiscal Quarter, the reporting that we relied on two Quarters ago is far different than what we are using now, and what I expect to be using in another few Quarters.

Part of the challenge within a start-up is balancing the integration of new systems while developing the rest of the business. This is not a sequential sequence of events, but a series that run parallel, often forcing business decisions based on experience and gut instinct. This is probably where I highly value the time that I spent in equity research covering 20 different retail and apparel companies. Monthly comp sales unleashed a flurry of data that had to be quickly assessed, reported on, and subsequently disseminated to clients. It had to add value, and above all, it HAD to be correct. Making business decisions in the absence of data, or at least incomplete data, is a very uncomfortable position for most folks.

So how do you measure the business when the standards are constantly changing? The absence of standards is not indicative of an absence of accountability or transparency, but part of the evolution that naturally occurs within a start-up. Yes, there is a Budget that is developed and based on certain assumptions, but it’s not long before that Budget becomes a distant reference point as you begin compiling data and assessing the potential trends that are developing within the business. However, one to two Quarters of data certainly is not a “trend” within a start-up, but it sure helps in refining the assumptions used in the Forecast. As with our business, while we are cognizant of the metrics that we will ultimately be using to measure our performance, some of those metrics are simply meaningless at this point since the business is still young and there isn’t enough data yet collected. That doesn’t mean that we’re not tracking our bookings, revenues, margins, and other macro indicators, but the detailed view is in a bit of a holding pattern at the macro level until we can drop down to the next level for more meaningful reporting.

As our business continues to grow and prosper, I absolutely expect a fundamental shift in our reporting abilities as we collect more data. We’ll move from the “spirit” of building the business to “fine tuning” the engine and driving increased performance through the data distributed to our key internal stakeholders. In these early stages of a start-up, it’s a delicate balance between giving the teams the latitude they need in developing the business, tracking their activities to the Budget, and determining whether their invested time and expenses will deliver an ROI in the immediate future. In the initial phases, that ROI may come in the form of customer satisfaction, referrals for new projects, potential new hires, and if all are executed properly….bottom line profitability.

Living the day-to-day life of a start-up is not the black & white mechanical structure most are used to working under. It necessitates the development of comfort in change and knowing that will be the case for quite some time. However, at the end of day, just take a step back, look at the evolution of your bottom line results, the trend in customer engagements, customer feedback….and you’ll know exactly how well you’re performing.

Thanks for reading…

Jeffrey Ishmael

Financial Reporting, Coaching, & Supporting the Team…

August 9th, 2013 Comments off

After taking a few days off this last week and having some time to think over a few of the companies I’ve worked with, it occurred to me that there is a distinct difference between many of the finance colleagues I have worked with and the approach they bring to their position. For some, and without trying to hyper analyze how their childhood is affecting their work approach, it seems that the process of reporting the monthly results & highlighting the deficiencies of others is something they enjoy a bit. What has puzzled me about these individuals is that they are also part of the same team and should assume a more vested interest in partnering with each area to ensure that their colleagues have the proper tools and information they need to succeed and deliver the expected results. It’s really a matter of balancing the needs of consistent financial reporting, enforcing accountability across the organization, and partnering with each area to ensure that you’re giving them the support they need.

For myself and my work with Cylance, there is a huge correlation between the Services business I reported on and partnered with at MGE. At MGE, we had over 150 field engineers and reported on almost 340,000 labor hours annually. While a mature organization, there was still the need to develop and refine our ability to accurately report on that portion of our business and have the information to make business decisions that would help us continually improve our performance. It’s no different here, except that we are a 1-year old start-up that has a smaller staff. We have incredible talent who bring a wealth of experience from some of the top companies in the security space, but as a start-up, it takes time to deploy the necessary tools and provide them all the necessary information. While it took a bit of time, we do have that information and are constantly using it to measure the business and make informed decisions.

Managing the Finance side of the organization, it’s not just my responsibility to throw a set of numbers on the table at the close of each month, but to partner with our Services team and ensure they have the proper reporting and can focus their efforts on customers and project management. I want to provide them the information so they can audit and tell me the system isn’t properly reporting…or it is and they can adjust their business as necessary. It’s not just hindsight reporting, it’s about a complete performance picture:

  • What is the current utilization rate and what are the trends you’re seeing over time?
  • What is the estimated proforma utilization based on the bookings pipeline being reported?
  • What is the current hourly cost rate and how do the actual results compare to the Plan?
  • Is the existing skillset of the staff aligned with the bookings that are being recorded?
  • What is the average billing rate and how does that compare to the Plan?
  • What is the cadence of new bookings and project kickoffs relative to available staffing levels?

In the end, the responsibility of Finance should be much more than publishing revenue or margin results. It should be an ongoing partnership with the areas that significantly influence the results and helping them optimize those results. When it comes to working within a start-up, we are all vested parties and need to drive towards the best result possible.

Thanks for reading…

Jeffrey Ishmael

Start-Up Fun. A Fiscal Year Review…

July 25th, 2013 Comments off

I think I have been living the adage of “time flies when you’re having fun…”.  I realized yesterday that it had been almost a full two months since my last blog entry and I was a bit mortified. Especially when I try and keep a strong discipline in all aspects of my life. However, when I look back on what has been happening the last 60-days, it’s easy to see how that could have happened. With the final wrap-up of an ERP implementation and the closing of our first fiscal year, it’s been a crazy few months. But it’s not just the last few months, it’s the satisfaction of looking back over the last year and seeing what we have been able to accomplish as a team. While I’m obviously not going to share financial results or product development achievements, the growth and operational achievements are something for the team to be proud of.

When I first started with Cylance, we were all of 7 employees, I was given a laptop with Quickbooks installed on it, and the company had signed on with a PEO to administer our payroll and benefits. The company’s founder, Stuart McClure, had just started to implement his vision and we were working out of a living room. At that point, you couldn’t have asked for a cleaner slate to move the company forward. Fast forward to now and you realize how much of a transformation this company has gone through.

While I continued to use Quickbooks for a short amount of time, we put tremendous effort into bringing a sales management platform online to manage the opportunities we were already seeing coming into the company. Once we had the confidence we had effectively installed the first phase of our automation, we moved on to implement an additional platform aimed at the management of our professional services business. How do you make effective business decisions if you don’t have the ability to measure your business? A rhetorical question I know, but those needs can easily be lost in a hectic start-up environment. Once we were about halfway through that effort, we already knew that we were going to have to upgrade the Finance side of the house so we could have seamless integration of all three platforms. Hence, the process started to interview ERP candidates. I started having bad flashbacks to the SAP implementation I had carved myself out of a year prior. However, we aligned ourselves with a great partner and the calendar was set to bring the final piece online. As with everything else, we committed to the calendar and executed to the exact day and brought all elements of the business online with platforms that will support us for years to come.

Time for a break…right? Not even close. The next big step, with a VERY underestimated effort of what it would take, was to extract ourselves from our PEO parent on payroll and benefits and bring that entire effort in house. This might have been more painful than the SAP implementation, but a worthwhile endeavor. Again, a full interviewing of partner candidates. In the end, we were able to achieve savings, enhance our benefits offering to employees, and be the master of our destiny with regards to program management. We successfully brought our benefits offering online and on time, as well as bringing all payroll processing internal.

What a year it’s been. But wait…there’s more. Toss in the scouting for a new corporate office, 3 different office moves before we settled permanently, an increase in our employee count from 7 to 60, the development of a remarkable team, customer base, and marketing results that would make most established companies envious. Ok, now for a break….right?

We’re not just knocking on the door of our 2014 fiscal year, but we’re kicking it in. It’s still a target rich environment and the task list is longer than Santa’s naughty & nice list in December. At the end of the day, you need to look back on the day, the week, and ultimately, the last year and feel satisfaction with what you’ve accomplished. Start-ups are not for the faint of heart and you need to stay motivated and driven. It’s easy to stay that way when you have a mission you’re committed to and a team that is equally committed.

Thanks for reading…

Jeffrey Ishmael

Is Corporate Influence Impacting Your Brand Performance…?

May 17th, 2013 Comments off

In my last blog entry I provided an overview of all the areas that could potentially impact the value and performance of the company or brand that you are responsible for. Essentially, are you squandering brand value through your own actions, or conversely, are you having to work through parent company influencers that are impacting your results?

At DC in particular, I was hired one month on the heels of a new President, who in his words, “was not brought in because things were going well”. Very true words, and in the beginning, we were given all the corporate support we needed to make the necessary changes. Gradually, as we continued to improve our results, we began to see an increasing restriction in our available resources. Not because our results were deteriorating, but out of support for the other brands who were not performing as well and the need to post a strong consolidated result. The availability of resources started to become scarcer as we consolidated locations and became an embedded brand at a corporate level as opposed to our previous situation of operating as an independent brand…down to a geographic level.

Now to be clear, the issue wasn’t fiscal accountability at a corporate level, but the frustration in the inability to deliver the value that we knew we were capable of. A level of performance that would not have been at “any cost”, but a level of performance that would have easily been achievable while still showing improved financial results, a methodical leveraging of our expense base, and an investment in headcount that would have supported the necessary growth initiatives.

For our brand team, we had complete transparency on our goals, our financial performance, and the mapping of what would get us to that point. So when the brand was denied the resources to perform, the entire team felt the same level of frustration, as well as sharing the common question of why there wasn’t the same level of fiscal accountability across all brands. It was pretty easy to see where there was a prevalence of “legacy” management and staffers across the other brands that held their positions as a result of their tenure with the company, as opposed to the value they actually delivered on a daily basis. It was necessary to accept that the environment we worked in was one of lifestyle, as opposed to the responsibility of driving corporate performance & drive shareholder value.

Conversely, if there was a common drive for performance, knowing that we all designed, developed, and sold a similar product, the allocation of resources should have been a very straightforward process.

  • We should have been looking at the growth rates across all brands, both at a realized level, as well as a forecasted level. We also would have been looking at the historical ability to deliver on previously committed results as opposed to who delivered the most favorable presentation.
  • We should have been looking at the allocation of operating expenses and whether each of the brands was achieving the necessary leverage in their forecasted results.
  • We should have been looking at headcount levels relative to our existing revenues, forecasted revenues, as well as the impact on forecasted OpEx. Would we be looking at an increased revenue per employee metric with the impact of new hires? We’d be looking at that metric across the brands on both a current and proforma basis.
  • We should have been looking at brand level inventory performance and whether we were showing an increased turn versus prior seasons. We should have been measured at a brand level on our performance with reserves, past season inventory, and not merely arbitrary opinions that inventory levels were too high because overall corporate inventory levels had become bloated.

In the end, it’s important to understand the environment that you are working in, or being forced to work in, and whether it fits your own approach and what motivates you. Regardless of whether you’re being forced into a position of compromising the performance of your brand, it’s still important to track what the capabilities are for the brand and to still strive for those levels, even if it is in the face of headwinds that are over and above the normal market, product, and customer challenges.

Thanks for reading…

Jeffrey Ishmael

A Squandering of Brand Value: Developing A Case Study…

April 22nd, 2013 Comments off

In my last entry I mentioned that I would be running a series that would break down the elements of how brand value is can be so easily squandered when mixed into a larger corporate portfolio, or under the watch of an executive team lacking the proper motivation. This is obviously a pretty complex issue and can’t be contained in a single blog entry, which is why I have chosen to take the approach of outlining the issue in a series of entries. Keep in mind, that while my approach might be directed at an entity that rolls up into a corporate parent, it can easily apply to a stand-alone entity. My experience in seeing brands fail to reach their true potential has typically been linked to a corporate parent. Ultimately, it’s an inequality of brand level performance, a lack of consistent accountability, a lack of proper resource allocation, as well as a highly political environment.

The walk we will go through on this case study will be a top down overview of the company’s P&L. Starting with revenue, progressing down through cost management, expense management, and ultimately addressing key issues such as personnel, accountability, and communication.  A company and its employees can always work through certain levels of resistance. Resistance is a natural part of the growth process. However, when each one of these potential resistance levels are compounded on each other it develops into a strong headwind where forward progress is minimal and the amount of energy needed to overcome ends up becoming, in some cases, more than the team can tolerate and key team members opt out. It’s not the hard work that turns them off, but the extreme efforts and frustration it takes for small incremental gains. Gains that could be much larger in the face of a cohesive effort and proper support.

In particular, we’ll dive into the following areas;

  • Corporate Influence. Are the brands financial goals clear and aligned with the expectations of corporate? Are the resources being deployed enough to support the achievement of those goals? Will the brand goals remain unchanged in the event of under performance by another brand or division?
  • Revenues. Is there a defined revenue plan in place that has been developed in the spirit of longer term sustainable and healthy growth for the brand? Is the brand constantly being challenged with pushing last-minute & unplanned revenue to offset a lack of performance by another brand or division. Is the revenue plan supported by the proper product initiatives and investment to see the plan realized? Is the revenue plan properly detailed by channel, product line, key customers, or similar detail? Macro level plans are only hope in disguise.
  • Cost Management. Are the projected margins for the product offerings, as well as the channel strategies, aligned with the expected outcome? Do you have the proper contingencies in place should there be a disruption in costs or supply chain? Are suppliers being paid as negotiated by corporate or are late payments affecting what might potentially be the optimum product costing?
  • Inventory Management. Is the brand being given the latitude to make the proper inventory investments to fund the planned growth? Are inventory resources constrained due to the lack of performance by another brand or division? Are you managing the brands inventory levels so as to maximize margin performance, avoid potential brand dilution in the market, as well as optimize cash flows?
  • Expense Management. What is the trend of operating expenses for the brand relative to historicals, as well as against expectations for the current plan? Is the brand continually seeing an improvement as a percentage of revenues or do they continue to grow disproportionately? Are you being denied the proper resources by corporate in order to offset non-performance by other brands or divisions? Do you have the proper staffing to execute on the original plan? Is a current lack of proper headcount creating risk that may not be seen for a few more Quarters but is allowing corporate to show more favorable results in the current results?
  • Quality of staffing and accountability.  Is the brand employing the right talent to deliver on what the brand has promised to corporate? Is the brand being given the latitude by corporate to execute on the plan that was delivered, and possible communicated in a public manner, or was it an exercise in futility? Are the levels of accountability the same across all brands or divisions? Does the same commitment to top talent extend across all brands or divisions or do results tend to be overlooked in favor of tenure? Is there a consistent level of communication across the brand relative to goals, progress, and commending the team for what has been accomplished?

Each one of these areas will be looked at in more detail. What is interesting to watch unfold is how each of these areas, even by themselves, can have a material impact on profitability. Take a combination of these and you then see how the effect is millions of dollars that are lost throughout the year. Not lost in a theoretical sense, but realistically lost and are NEVER regained. It’s not just the potential loss that might happen over a few Quarters, but that loss combined with the opportunity cost in the time spent rebuilding. Add to this the loss of key players who leave to align themselves with better performance and you lose some of that core brand knowledge that is so critical for the rebuild.

Thanks for reading…

Jeffrey Ishmael

Take It As An Opportunity To Learn…

April 11th, 2013 Comments off

It never fails that you have those conversations with somebody in your network that talks about how much they dislike the company there are working with, how bad things are, how severe the silos are, and how bad the political climate is. All of this in consideration to the fact that they are working at an industry leading company or within a company that most would aspire to hire into. I’ve certainly experienced that in my own career history, and while frustrating at the time, has always left me with a fantastic perspective that I could take with me to a new company and use it to improve the environment and financial performance. Or consequently, you have that experience to draw on in your considerations to joining a new company and ensure you don’t repeat the “sins” of the past. The analogy that I like to use with my friends is to take it all in and put yourself in the position that you’re living a day-today case study and it’s up to you to process the experience in a beneficial manner.
From a Finance perspective, one of the more frustrating perspectives is that these situations have a tremendous impact on the ability of the company to truly perform to its financial possibilities. The presence of deep silos and highly political environments ultimately focus energy on all the wrong areas, thus diverting from achieving top performance. If you’re prepping for a hard race are you going to divert your energy towards activities or diet that will ultimately hinder your performance on race day? I know…a rhetorical question, but the same dynamic. If you continue to perpetuate a bad diet or deviate from your training regiment, your simply not going to perform to your best potential. Period.
While most of my posts have usually been single entry topics, I’m drafting a multi-part series that is focused on how easy it is for a company, or brand, to squander value on such negative contributors like silos, politics, and the tolerance of hiring sub-par talent, and working in an environment without accountability. I’ll speak to not only the financial implications of these issues, but also the impact it has on staff and their ability to stay motivated. That in the face of a lack of motivation, it becomes not just a productivity issue within the office, but a diversion of productivity as they channel their efforts into a job search to leave behind a situation they feel will never change. Looking forward to sharing these perspectives.
Thanks for reading…
Jeffrey Ishmael