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From: Michael Wynne <mykwyn@aol.com>
Subject: News from International Mgm't Consulting Associates
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News from International Mgm't Consulting Associates
Header
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Time to Get Real
February 2009
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In this issue
In this issue
--
Time to stop kidding ourselves; this crisis is for real
-- What the numbers say
-- La-La Land stats
-- What you don't measure you don't get
-- No Surprises Management
-- There is no right solution for the wrong problem
-- What does this do for us?
-- Management must always ask
-- Get real numbers
-- A culture of innovation
-- You can bury your head in the sand about global competition - but ...
-- No pain, no gain.

Tough times are here! Having run companies profitably in tough times in the United States and several foreign countries, I learned many ways to deal successfully with the difficult challenges such periods bring. All throughout this year, I will be sharing those lessons with you in this newsletter. They will help you anticipate and effectively manage the challenges you face. Good luck and, if you need help, don't hesitate to contact me.

Time to stop kidding ourselves; this crisis is for real
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A recent article in BusinessWeek, "How to Get Growth Back on Track" by Michael Mandel, says, "Can the U.S. and global economies get back on track? Yes, but it won't be easy. One key is that U.S. companies have to pay more attention to sustaining productivity growth and innovation at home rather than resorting to outsourcing as their main source of cost savings."

What the numbers say
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The same article points out that over the last 10 years U.S. productivity grew 29.7%, while real wages grew only 2%. As for stock market return, it actually shrank to 12.7%. It is obvious that something is wrong with these numbers; if productivity grew nearly 30% why did real wages grow so little, and why did the real stock market return decline to almost 13%?

La-La Land stats
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It turns out that cost cuts from outsourcing were being reported as productivity gains; our true productivity was far less! American industry has been living in La -La Land proudly kidding itself that it was leading the world in productivity. Even worse, huge bonuses were awarded to those who generated those flawed results.

What you don't measure you don't get
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Where do we go from here? They say, "What you don't measure you don't get." What they forgot to add is that if you don't measure correctly, not only will you not get what you intended, you won't even know what you really got! So how do you measure correctly? By being realistic, honest, and humble; remember "Pride goeth before a fall."

No Surprises Management
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You have to want the truth, even if it is bad. When I took my first job as President of an overseas subsidiary of Mobil Chemical, my boss came from headquarters to get me properly installed. When he was leaving to return to the U.S., I asked him, "Is there anything else that I should keep in mind to do a good job and to help you with yours?" He looked me right in the eye, and in two words summarized what good performance is about; "No surprises," he said.

There is no right solution for the wrong problem
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No surprises means your information should be correct, and on time so that problems can be addressed promptly. Information must be correct because you can't run a business successfully if your information is flawed. All too often, information is distorted because of fear of reprisals, failure, and loss of rewards. Business is about solving problems, but you must be able to define the problem properly before you can solve it. There is no right solution for the wrong problem!

What does this do for us?
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True productivity must address the right problems, and have a positive and lasting effect on the bottom line. True productivity will come from increasing sales, lowering costs, growing margins, reducing expenses, eliminating waste, and leveraging all resources.

Management must always ask
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* Is this the best use of our money, time, and efforts?
* What does this do for us?
* What are the benefits?
* What does this contribute to the bottom line?
* What will be the Return On Investment?
* What might happen if we don't do it? Is there a lost opportunity cost?

Get real numbers
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Statistics and financials must be brutally honest get-real numbers: no tricks and games with allocations, sandbagging, hidden reserves, "benefit of the doubt" numbers, or comparisons of apples to oranges. CEOs and boards of directors are very much at risk when they make strategic decisions based on flawed information.

I have found this to be especially true of information received from international operations. The numbers may have been checked by auditors, but practices of overseas auditors, and even the overseas offices of U.S. auditing firms, may not be same.

A culture of innovation
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Just as most real innovations do not always come from laboratories, real productivity does not necessarily come from managers. For example, Toyota has done an outstanding job of creating a culture of innovation and productivity in its operations around the world. Employees at all levels are encouraged to look for savings, efficiencies, improvements, and innovations that contribute to the bottom line; they are also rewarded when they achieve them.

You can bury your head in the sand about global competition - but ...
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To grow and be profitable in the years ahead, you need to integrate with the rest of the world. Ninety-five percent of the world population lives outside the U.S., yet most American companies still focus mostly on our domestic markets. The majority of our markets are mature, slow, low percentage growth. The faster action is in the markets outside our country.

We as a nation and as business people need to become much more knowledgeable about the rest of the world; our long-term survival depends on it. American markets cover only 300 million people; the world is over 6 billion people. We have the means and the talent to provide them with great innovative products and services that will make their lives better and their businesses profitable. To do that, we must first make global business an essential part of our strategies and our planning.

Otherwise, we won't get our share of available markets because global competition is not only fierce and growing, but actually penetrating our US market, and we can not ignore it!. You can bury your head in the sand about global competition, but your butt is still out there!

No pain, no gain.
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As they say in the fitness business, "No pain, no gain." Just waiting around for this crisis to solve itself won't work. If you want to survive and thrive in the months - and maybe years - of this crisis, better make Innovation, Productivity, and Global Business Growth your priorities. We live in a fast-changing world that doesn't tolerate stagnant and slow-moving businesses: TIME TO GET REAL AND GET MOVING!

Questions for you to consider:

* Are you in denial about the reality of your business?
* How confident are you that the data and information you are using for your decisions is appropriate, accurate, and reliable?
* Do you discourage your people from giving you bad news?
* Do you encourage your employees to communicate with you?
* Are you sure you have identified the right problems in your business?
* Do you question all expenses regularly?
* Have you created a culture of innovation in your business?
* Is your business limited to just local markets?

If you are not sure about the answers to the above questions, please feel free to call me at 630 420 3605 for a free consultation. I will ask you the right questions, the ones that will reveal what you need to know about the real state of your business and the problems you need to solve. Remember, "There is no right solution to the wrong problem."

 



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phone: (630) 420 2605
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International Mgm't Consulting Associates | 1120 Summit Hills Lane | Naperville | IL | 60563