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In a recent interview before their playoff game with the Kansas City Chiefs, Mike Tomlin, Head Coach of the Pittsburgh Steelers, was adamant about what it would it take to beat the Chiefs at Arrowhead Stadium. He stated:

“Don’t blink. If you’re a blinker, cut your eyelids off. This is not gonna be for the faint of heart. We understand what type of game we’re in. It’s gonna take a ridiculous effort and 60 minutes of it. And we’re excited about it.”

As a Chiefs fan, I’m happy that the Chiefs won the game very handily, but the main point is this. Aren’t you and I in the same position in our respective industries? We cannot afford to blink today, can we?

If you are running a dairy operation, your feed costs are higher at present. If you are a grower who is selling these higher priced feeds, your year may seem “easier,” but you have to be thinking way ahead about upcoming taxes and other challenges. All businesses today are being slammed with higher costs, simply due to inflation and the recent supply chain challenges. My goodness. It practically costs $200 just to have someone look at a simple repair anymore, that is if you can find someone to look at your necessary repair(s)…

If you are buying or selling assets, decide what you want to pay or are willing to take, in the case of a potential sale, and then don’t look back. Don’t blink!

If you are negotiating with a bank, never blink. Instead, have a well laid out plan, know your pluses & minuses (what’s fairly sure & what’s uncertain), and then act accordingly to implement your plan. If I ever blinked with a bank, I’d never be able to complete “business turnarounds” successfully. I can think of two specific cases in the last three years where the bankers were insistent that my Clients should start selling assets. I totally disagreed.

In both cases, I was proven correct over time. Did it happen overnight? No. However, it did not take long before my projections came to fruition. Yet, I had to hold the course, just like Gimli in the Lord of the Rings movies, who said, “Certainty of death, small chance of success. What are we waiting for?” There was no “blinking” allowed.

In both cases, these Clients are now well positioned for added success. Yes, they had “dug a financial hole,” but they were also very willing to change course. Of course, the best way to get out of any hole is to stop digging! To their credit, these operations are now both on track with sound cash flows, rising prices they are receiving, outstanding productivity and finally some diversification plans in place. They have a bright future.

So, think about the question above: Are you prepared to not blink?

Let’s take your business to the Next Level!

During the last 23 years of my consulting work, there have been times when my life has seemed like a cross between two of my favorite movies, Catch Me If You Can and Up In The Air. Here’s a quote from the Actor Christopher Walken in Catch Me If You Can that I believe you will find appropriate for our discussion that follows:

  • Two little mice fell in a bucket of cream. The first mouse quickly gave up and drowned. The second mouse, wouldn’t quit. He struggled so hard that eventually he churned that cream into butter and crawled out. Gentlemen, as of this moment, I am that second mouse.”

My question for you is this: As you face industry challenges or ones that are specific to your operation, which one are you?

I’ve been called crazy for doing some of the work that I’ve completed these past 23 years, but you know what? I love doing this work. Is it challenging and occasionally frustrating? Yes. Can it be difficult at times? Yes, but if it was easy, everyone would be doing it and take all of the profit out of the process.

How do I do this? I recently reviewed my records and discovered that I’ve completed 73 financial turnarounds with Clients since 1999. That’s a lot of change! Some of these rescue missions have taken 1-2 years; others have taken 5 years or more. Some of them, following their financial recovery, decided it was time to exit their industry. The great thing on these was that they were positioned to sell out and walk away with sufficient proceeds to live the rest of their lives successfully. That news helps me to sleep at night.

So where are you in your current operation? Many industries, especially on dairies today, are facing some dire outlooks, but it doesn’t have to be that way. As the saying goes, “The best time to plant an oak tree was 20 years ago.” However, the next best time is today.

Here are some thoughts for you as you think about this question of what should happen next:

  1. Begin with what I call the Discovery Process. Where do you want to go and Why? If you can answer these two questions, step #2 is easier.
  2. Complete an analysis of where you are today, in terms of assets, debts and overall cash flows. This information provides the building blocks for your success plan.
  3. Outline and discuss the challenges that you will face in your next steps. My next blog will be focusing on just that topic.
  4. Evaluate what Cash Flows will be required to make it all happen successfully.
  5. Talk to your banker. Please don’t tell me this is too tough… I’ve faced off with large banks where the Client owed $6 million and had almost no collateral. What could we do? We simply built a repayment plan and worked through it successfully. The one thing I knew going in was that there was a solution. They just hadn’t identified it. If they had, my input wouldn’t have been needed. My saying that I was sure there was a solution may sound arrogant to you, but trust me. After you’ve completed 73 of these turnarounds, you start to understand that the answer, indeed, is out there. We just have to dig it up!
  6. Once you determine your plan of action, track your Cash Flows and always know where you are throughout the year. I treat CF Analysis the same as MacDonald’s founder Ray Kroc did the hamburger. Recall what he said? “I didn’t invent the hamburger. I just took it more seriously than anyone else.” It’s the same for me with Cash Flow Analysis!

Once again, are you drowning or climbing out of the bucket of cream? If I can assist you, please let me know. I’m happy to help.

Let’s take your business to the Next Level!

I recall a fantastic book by author Harvey Mackay entitled We Got Fired! – And It’s the Best Thing That Ever Happened to Us back in 2004. While his book focused on celebrities like Baseball Manager Joe Torre, Governor Jesse Ventura, TV Host Larry King and former Notre Dame Football Coach Lou Holtz, I believe there are some applicable lessons for each of us in our businesses.

Each of these individuals had been fired at some point in their careers, but they also were able to “bounce back” and take their leadership roles to new levels. While I’m fairly certain that none of them had immediate financial concerns, I think it’s important that we zero in on what else they had in common with us, in the event that the same thing happened to us.

They all claimed that this event was the best thing that ever happened to them. While they had regrets about losing their jobs and the paychecks that went with them, they also realized that it was not the end of the world if they used this as a learning experience. They focused on three questions:

  • Where did I go wrong?
  • Was I actually “off track?”
  • How can I do better, moving forward?

Now, let’s take this concept one step further. Can you apply these lessons before you got fired?

Let’s pretend you are getting fired from your current role. Kind of a scary thought, isn’t it? Regardless of whether you are operating a dairy, a vineyard, a service business or a bank, what “justification” could your “Board of Directors” find to justify letting you go? What are the areas where you could do better?

Yes, I know it’s “tough out there,” and we all have a million excuses for why our business wasn’t more profitable, but as the saying goes, “When the going gets tough, the tough get going!”

What areas do you need to improve in your business? Is it management of your labor force to boost efficiencies? Remember that employees need some development programs, too. Are you working with them to educate them & boost their efficiency levels? Recall my prior conversation with a bank manager who claimed there was nothing worse than spending money on training people and having them leave for other jobs. I’d assured him there was one worse outcome – that was not training them & having them stay!

Do you need to improve on cost controls? If you measure it, you can understand it. If you understand it, you can control it. If you can control it, you can improve it. This is true for Cash Flow and Cost Controls, too. However, if you look back several lines, you’ll note that the key was to measure it. I’ve been doing that with Clients for 22+ years, and it pays huge dividends!

What about development of your company’s future direction? Many factors are changing, so are you staying on top of these changes? Does additional automation have a place in your operation?

The ultimate key is to turn over as many stones as necessary to make sure you understand the following points. Why do we do a task this way? Is it because it’s the most efficient approach, or is it because we’ve always done it this way? Should we change?

I recommend that you undertake this “thinking process” without the pain of actually experiencing being fired. Take a moment and ask yourself, “If I was being fired, what specific reasons could they use against me?” If you are willing to complete this task, you will have identified the areas upon which you should focus your “improvement programs.” Better yet, you will be headed to higher levels of success, without the pain.

Want to learn more? I’d like to invite you to join me for our upcoming Next Level Thinking™ workshops later this year, within which, I’ll continue to focus on the benefits of this type of proactive thinking. We’ll be doing portions of this process through Zoom Group Sessions, with monthly follow-up calls on an individual basis. Watch our website for more details.