Category Archives: rants

OK, You Don’t Have To Fire Your PR Firm If You Don’t Want To But …

Don’t expect me to talk to them, reply to their e-mail, or even read any of their missives. I’m not trying to be arrogant, I’m just sick and tired of having my time wasted. Although your PR firm will casually overlook the fact that this is NOT my full time job and that from an opportunity cost standpoint, it’s still a loss for me (as the income I pull in from it is still less than what I would make spending an equivalent amount of time consulting), those are the facts and I’m tired of being:

  • spammed six times with the same press release I wasn’t interested in the first time around
  • ignored when I do reply
  • run-around in circles after being promised a conversation with an executive, customer, etc.
  • rescheduled six times for a demo that ends up not happening because your PR firm has no organizational skills and / or control over your schedule
  • told the week after my trip to the other coast that “we have a meeting set up for you tomorrow”
  • etc.

In other words, I have not had a good experience with an external PR firm since I started this blog. (And every message from a PR firm that slips through my spam filters now results in a new spam and/or auto-delete rule.)

But more importantly, as Jason Calcanis wrote in his phenomenal post On How To Get PR For Your Startup: Fire Your PR Company, and as I elaborated on in my Blogger Relations II post on Fire Your PR Company, the best way to get PR is for YOU to BE THE BRAND. It’s about being amazing, being everywhere, and being real. A PR firm with a lackey parroting a press release is not real. A media monkey with some sound-bites who cares more about the monthly cheque than your product is not real. A voice who never wavers from a script, and who can’t answer a simple question about your product or service, is not real.

What is real is an executive reaching out saying “Hi. I’m so and so of Company X. I believe we have a great product. I’d love to show you.” That’s real. That gets attention. That get results. Especially from yours truly.

I’ve never turned down a demo*1 request that came direct from a vendor … and I don’t plan to, ever*2. It’s one of the things this blog lives for as it’s the only true way for me to educate my large and growing readership on what you do and how you could help them. Now, if it turns out the demo is not as exciting (to me) as you claim, or that I don’t see anything innovative in, there’s a chance I might not blog about it … but I will have sat through the demo and will be more than happy to tell you what I think. So it’s a win for you either way because maybe I’ll see something you didn’t, and give you a suggestion that could take your solution from good to great or great to greater. And you’ll never know unless you contact me. My e-mail’s on the blog (check the sidebar and the “about” posts). Looking forward to hearing from you.


*1 Just a reminder that by “demo” I mean real product demo and not a powerpoint presentation.
*2 The one condition is that you have to have some flexibility in scheduling. Since this is not my full time job, you can’t expect me to be available at any specific time.

What Do You Mean You Need Cash? Your Company Is Full Of It!

I was intrigued as to what direction an article titled “Need Cash? Look Inside Your Company” would take, found in the new edition of the Harvard Business Review, as I know that most companies can find plenty of cash if they just look for it and take the appropriate action. After all, most companies are spending at least 10%, 20%, or 30% more than they need to be … and if they put the right emphasis on strategic sourcing, e-Procurement, contract management, and spend analysis … many companies could find millions without scratching the surface.

The problem is, as the article points out, that the boom years have made your average business careless with capital. But cash is king again … and if you’re not taking a hard look at your cash management strategies, you could be filing for bankruptcy instead of thriving. So where do you start? Well, if you’re in supply chain, you start with sourcing … but if you’re in finance, apparently you start by managing your working capital and freeing up the capital you have needlessly tied up in receivables and inventory. To this end, the HBR article outlined six mistakes that, if avoided, will help in this regard.

  1. Managing to the Income Statement
    Throw those profitability performance measures out the window … it’s about the balance statement. If you measure against contribution to reported profits, then purchasing will be incentivized to buy more inventory than you need to secure a discount … but inventory ties up capital and has holding costs, which will likely cost more than you’ll save from the discount!
  2. Rewarding the Sales Force for Growth Alone
    This encourages sales to book sales at any cost. They’ll grant long payment delays, insist on larger than necessary finished-goods inventories, but then be unwilling to chase down late payments.
  3. Overemphasizing Production Quality
    While quality is important, an undue emphasis can cost more than it saves. Quality Control slows down production and locks up capital in work-in-process inventory. If we’re talking food production, given the recent fiascos, undue emphasis might be justified. But if we’re talking mp3 players, attempting to reducing defects from 50 PPM to 5 PPM might cost more than it saves from just recycling the extra 45 defective products.
  4. Tying Receivables to Payables
    Generally, your customers are not your suppliers, your suppliers are not your customers, and the two are completely different financial concepts. Relative bargaining power, the nature of competition, industry structure, and switching costs will ultimately determine the terms that a company can dictate to its customers or must accept from its suppliers.
  5. Applying Current and Quick Ratios
    Although popular with bankers, who want to ensure companies have enough money to repay their loans in the event of distress, they are inappropriate for management as they encourage companies to manage according to a “death scenario”, which means they are good IF you want to go out of business.
  6. Benchmarking Competitors
    Although it might sound good to benchmark against your competitors, it tends to lead to complacency when the scoreboard indicates a company’s metrics are above what it believes to be the industry norm.

The Worst Cut You Can Make

Times are tough. Your sales are dropping. Your costs aren’t. And your balance sheet is bleeding red. You have to cut. I get it. But you DON’T have to cut resources – especially A level and B level talent! As yet another recent article (in Material Handling & Management) points out, cutting talented staff is a desperate measure that diminishes value in the long run.

Not only does it have a severely negative impact on productivity (the drop in morale decreases productivity across the board, which is a double whammy as you no longer have enough resources to get the job done right), but it greatly increases the risk of a major supply chain failure which could bankrupt you. Consider the recent highly publicized peanut recall. According to media reports, Stewart Parnell, president of the bankrupt Peanut Corporation of America, told employees that quality measures were too expensive and time consuming. If you have a sufficient number of high quality resources, you can do quality control in-house cost effectively — but only if you have a sufficient number of high quality resources, which you won’t have if you go around indiscriminately cutting your workforce without regards to the total cost to the business.

Furthermore, I’ve never encountered a situation where there wasn’t a better option. Not that long ago I was talking with a colleague at a consultancy who spent weeks working out a 500,000 productivity improvement that would be realized over the next 12 months and cost the company less than 50,000 to implement. Instead, the company chose to reduce costs by cutting a 45,000 resource (which prevented them from undertaking the initiative). All I can say is where’s the logic in that? Especially since the company *guaranteed* the savings and was offering a contract where they wouldn’t get paid until the savings were achieved. (Save 4K a month at the expense of 40K a month? That’s just dumb.) And I hear this story day after day and week after week from consultancies that identify 500,000 to 5,000,000 (or more) but the customer won’t pull the trigger because it will cost them a few thousand of expenses up front. (And I mean a few thousand, most of the bigger consultancies these days, and even some of the SaaS solution providers, are willing to offer results-based pricing where you don’t pay consulting fees until the contract is completed or until you realize the savings necessary to cover the consulting fee.)

So don’t cut head-count. Use them to tackle 3X, 5X, 7X, and even 10X ROI opportunities that will help you get back to the black before you bleed to death.

Did We Need Yet Another Study To Tell Us That Slave-Driving Isn’t Productive?

A recent study from the University of Melbourne, covered by Computer World, found that workers are more productive if allowed to use the internet for leisure. Duh! Anyone with two working brain cells in IT should be able to tell you that.

Specifically, it found that People who do surf the Internet for fun at work – within a reasonable limit of less than 20% of their total time in the office – are more productive by about 9% than those who don’t. The explanation given is that people need to zone out for a bit to get back their concentration. Duh! Anyone who’s taught can tell you that. Every 17 to 20 minutes, you lose 1/3 of your audience if you don’t shake things up a bit, change the topic, wake them up, etc.

And even more insightful, the press release notes that it is important such browsing is done in moderation, as internet addiction can have the reverse effect. Duh! If you spend 8 hours a day following the twits that comprise the twittersphere, then you’re obviously not going to get anything done.

At least the computerworld article had the good sense to state the obvious points that should have been made.

  • It gets personal things off your mind.
    It’s hard to work distracted. If you can pop-on the internet, and get an annoyance like paying a bill, pre-ordering take-out, or getting out a message you can’t forget to deliver over with, you free yourself of distractions and this enables you to concentrate (providing you turn off those twitter feeds).
  • It converts unnecessary real-time interactions into asynchronous ones
    Nothing destroys deep concentration more than a five minute “pop-in” by a colleague who just feels the need to “talk”. If it’s unimportant, they can write you an e-mail, and you can read it later when you’re not in the middle of something important.
  • It makes work enjoyable.
    No one is productive in workplace hell where bosses spend all their time reciting garbage along the lines of “personal time steals from the company” and doing everything they can to squash happiness. Happy workers are productive workers. Productive workers create value. And that’s what sells in today’s economy.

So keep your workplace fun and free of too many unnecessary restrictions. As long as employee behavior is responsible, you’ll get your money’s worth.

A Procurement “Metric of the Month” is a Bad Idea

As a prominent blogger, I get a lot of e-mail (or should I say spam?). One of them had “Procurement Metric of the Month” in the title. I was about to trash it, as this is one of the worst ideas I’ve ever heard (as I’ll explain shortly), but then I noticed it was from Hackett. Needless to say, this got my attention. Why would one of the leading research firms in the space, which produces the very useful and relevant Book of Numbers, be touting a “metric of the month”?

It turns out they weren’t promoting a “metric of the month”, which would be an incredibly bad idea because a metric is only useful if you benchmark against it month after month after month for an extended period of time to measure your progress (and changing metrics too often gets you absolutely nowhere), but a new free research offering as part of their Hackett Performance Network (where, if you qualify, you can get access to selected research reports, performance studies, and webcasts). Designed for Finance, HR, IT, and Procurement, this new offering is apparently going to showcase an important metric in each area each month, starting with “Tax Book Entries Requiring Correction Percentage”, “Outsourcing Utilization by HR Process Category”, “IT Business Value Contribution through Portfolio Optimization”, and “Level of Supply Risk Management Adoption”.

With respect to the latter metric, which focusses on procurement, Hackett points out how 67% of world-class organizations implement supply risk management consistently across the business as compared to only 13% of their peers, indicating that top performers are 5 times as likely to have a comprehensive supply risk management strategy. Considering that effective supply risk management is a way for procurement to elevate its value proposition and help the business protect its brand, cost leadership, and stability, this makes sense. It’s free, so check it out. Just don’t take “metric of the month” literally.