Concrete Products

APR 2012

Concrete Products covers the issues that attract producers of ready mixed and manufactured concrete focusing on equipment and material technology, market development and management topics.

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MANAGEMENT BY DAVID M. SHEDD Lasting lessons from business school A little over 20 years ago, I entered the hal- lowed halls of the Wharton School of Busi- ness at the University of Pennsylvania. Through 21 years' post-MBA experience, I find these lessons from Wharton have proved most valuable in the business world. Finance & Accounting—It's All About Cash Cash flow is what matters. This is the fun- damental of finance and accounting that constantly gets forgotten or obscured in the day-to-day business. At the end of the day, accounting done right is just a way to keep track of whether you have more money in your bank account today than you had at the end of the day yesterday. Yes, growth needs to be funded, and so projects and business lines can often con- sume cash for months or even years. But, that has to end and the project or business line needs to start generating cash. The En- rons, MCIs, Adelphia's, Lehman Brothers, et al., in the world were all quite foreseeable if you looked to see whether they were truly spinning off cash. None of them really were, even if their accounting statements said so. Marketing—It's All About What the Cus- tomer Values Marketing is all about taking off the blind- ers that your love of your product and/or service has created. Instead, you need to look at the world through the lens of the customer. What is the value of your product Moving your company forward As we enter the second quarter, I remain confident 2012 is the year companies that have taken the right steps during the eco- nomic downturn can once again begin to soar. To that end, here are six suggestions on how you can make a substantive change in your business. Bring in fresh blood: Your operations- oriented leaders who have not yet adapted to the sales and marketing world we live in, will never adapt. It is time to change them out and bring in some fresh ideas to re-vitalize the company. Delete layers: Many companies still need to downsize. Not with their workers or lower-level employees, but in their management structure. If you have leaders managing fewer than five employees, why? It is time to thin out those layers and re- duce the over-management and extra pro- grams and initiatives that the managers in these extra layers inevitably call for to jus- tify their existence. Manage less and lead more: Do you re- member the boom time when you might have gotten updates from your best em- ployees only on a weekly basis because there was so much going on? Guess what: Those same employees are still just as good as they were then (if not better). But, they are likely chafing under your daily and constant micro-management and the endless progress review meetings. Trust them once again, and they will per- form. Remember, as Peter Drucker said, "So much of what we call management consists 4 | APRIL 2012 of making it difficult for people to work." Use video more: Video can be a great promotional tool (see the success of YouTube). But, further it is a great opera- tional and management tool. Use Skype or other video services to have internal calls or conference calls. In these video calls, you can see the other party and read their body language to ensure that they under- stand and agree. This makes the communi- cation more effective (a higher-bandwidth communication) and saves countless dollars and hours in useless internal travel. Use video to conduct screening calls and inter- views. Use video in the plant or operations so that management and employees can see exactly what is going on and discover ways to fix it. Think about sports: What high school, college or professional athlete today does not use video and video review to find ways to improve their performance? Get serious about CRM (Customer Re- lationship Management Software): If you or any of your sales team is not using CRM such as ACT,, Constant Contact, etc., then they are just like those dumb-lug hockey players who did not wear helmets for years. Your customers, current and potential, are vital. Thus, understand- ing their needs and following up with them consistently is fundamental to your company success. Specifically, use your CRM software to set up regular visits with your good customers to thank them for their business and find out what more you can do for them. Get serious about social media: Social media is not going away. You do not need to go whole hog, but moving forward with social media ensures that you are respon- sive, progressive and interested in reaching new customers. Some ideas to get started: • Personalize your website. Show pic- tures of your team. Show biographies of top management. People want to buy from people and know that you are legitimate. • Start a blog. With the blog (which you can do as rarely as once a month), tell stories about your companies' successes and victories. Written in a more informal language, the blog stories help your company and brand come alive as opposed to the stale copy on most websites. These blog stories are also accessible to your salespeople and make effective sales tools for them in their customer meetings. Finally, regular blog post- ings help you with your Google search engine optimization (SEO). • Set up an e-mail list and create an in- formative monthly newsletter. Use services such as Aweber to create multiple lists. Get customers, poten- tial customers and influencers to sign up by giving out useful information (it need only be one page) in a monthly newsletter. This creates an easy way to touch all of these stake- holders on a monthly basis and begin to develop a relationship. WWW.CONCRETEPRODUCTS.COM and service to the customer? Yes, your product and service may be the best. And I mean the BEST. Further, it may be a product or service that the customer should need and truly value. But, if the customer does not value it, you have lost. It is quite simple. Looking at the world through the cus- tomer's eyes has stuck with me ever since my then-rookie marketing professor, Pete Fader, gave us a pricing case in the first few months of school. I don't remember the exact details, only the magnitude. We were required to price a spare part used in the oil-drilling industry. Using all the data, the class came up with a variable cost of a few hundred dollars, which most of us then

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