Archive for July, 2014

You Know You’ve Got a Great Team . . .

Wednesday, July 30th, 2014

. . . when in celebration of your company’s anniversary, they give you something,that they spent a lot of time working together on. I had such an unexpected pleasure on the 18th of June when, in celebration of Mandat Consulting Group’s 25th anniversary, they gave me a “rhino,” symbol of Dortmund’s concert hall (rhinos are very sensitive and hear extremely well) and thus the symbol for the city of Dortmund. The figurine is hand-painted with individual motifs appropriate to Mandat and its team members, each of whom “signed” it. I was touched.

Needless to say, this rhino now stands on my desk. Many thanks to Anne Hausen, Pascal Kowsky, Nadine Müller, Sabrina Schröter, Kerstin Scupin, Linda Vollberg, and Fabian Woikowsky for this splendid gift. I’ve said enough. Here it is:

Rhino 1

Rhino 2Rhino 3

Rhino 4Rhino 5

Rhino 6 Rhino 7
© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

Ready, Set, Grow! This Week: Don’t Forget the First Sale While Thinking About the Fourth

Monday, July 28th, 2014

Ready Set Grow

In sales, there is a principle that basically gets it right: “First, think about the fourth sale.” I first heard this from my coach, and the saying made it apparent to me that salespeople are always racing off to do the quick deal—only to be surprised when they lose out to a competitor at the next sales opportunity because they have neglected to build a relationship with the customer. Relationships are what sales is all about. They take time, and sometimes it’s not worth your while, metaphorically speaking, to think about the fourth sale to a customer to avoid losing perspective and becoming a victim of the quick opportunity.

But, some salespeople overdo it and think only about the “fourth” sale without completing the first one—even though the customer would be happy to close the deal, and it would be profitable.

So do both. Consider your connections to your customers. Think about that “fourth” sale, but in doing so, don’t forget the first.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved. © Sprinter: mezzotint_fotolia – Fotolia.com

What Stands Between Private-Equity Firms and Their Companies, Part 5: PI (Project Inflation)

Wednesday, July 23rd, 2014

This is the fifth and final part or our short series about increasing the potential in the relationship between private-equity firms and their portfolio companies. The other articles are available by clicking on the “Private Equity” category here. Today’s topic is one of my long-time favorites: leaving/cutting things out.

How many “master plans” have peen drawn up? Sometimes they go by other names, such as “growth agenda,” “future map,” or “Roadmap 20XX,” or . . . You can probably think of others. How many management teams have agonized over this exercise? How many projects have been developed from these “master plans?” Countless numbers.

How many projects have actually been implemented? And in the final analysis, how many of them succeeded? Significantly fewer. But that stops almost no one from assessing a company’s health by the number of its growth projects. However, huge frustration can arise if priorities are constantly shifting in the face of an immense and confusing project-landscape, or when no one really knows, any more, what the priority of any particular topic is at the moment—which has the advantage that no matter what, you are somehow working on something important.

In my presentations, I have abbreviated this state of affairs “PI,” or project inflation. According to our observations, companies don’t have too few projects. They have too many. Not everyone who has MS Project on his computer is a project manager. Not everything that’s called a project, is a project. When used to justify a position, the idea that “I have a project, therefore I exist” is the enemy of growth. If PI suddenly develops in the relationship between a private-equity firm and a portfolio company, it has the additional disadvantage that the ambitious and generally established goals of investors are postponed far into the future. And then, quarterly board meetings become agony.

Cut 50 percent of your internal projects. Then add 10 percent market-oriented projects. In doing so, you will put yourself on a significantly better path than the one you are on today. We have developed a methodology that does exactly this, with a clearer evaluation of individual projects. The impact is striking.

 
© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

Ready, Set, Grow! This Week: Be Seen

Monday, July 21st, 2014

Ready Set Grow

There was once a much-derided concept called “management by walking around.” These “management by” techniques fell short because a good, growth-enhancing management- and leadership style is marked by situational behavior within a framework of guard rails, not with “management by” techniques.

But, it is an indisputable fact that it pays to show yourself regularly on the “shop floor,” especially if you are a manager. All too often, we hear the complaint that the people “up there” haven’t the foggiest notion of what “we” do down here (in assembly, fulfillment, logistics, and so on). All too often, an ivory-tower mentality arises. All too often, a barrier exists between blue-collar employees and white-collar staff.

Our most successful clients regularly appear on the shop floor. They visit production. They take a look at the warehouse. They go through the specialty departments. They drive to branch offices. And they take an interest in relationships. Please note: We’re not talking here about acting the benevolent uncle, but about genuine interest. By the way, it is not much of an excuse to say that, in doing so, you’d be interfering with the employees’ immediate supervisors. Having “no time” is just as bad an excuse. Better to hold a shorter meeting on the shop floor.

Show some interest. Be there. Be seen.

 
© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved. © Sprinter: mezzotint_fotolia – Fotolia.com

“I’ve Got a Camera”

Wednesday, July 16th, 2014

Recently in our narrow streets: A package delivery-service driver can’t make the uphill curve in one shot with his van, so he has to back down the hill. Meanwhile, a bicyclist emerges behind the vehicle, the two coming dangerously close to one another. Only a couple of inches separate them. The driver drives forward again, and then back, annoying the cyclist. On my way downhill in my car, I honk to signal the driver of the van that something isn’t right. Coming to a stop opposite one another, we both lower our windows. The following dialog transpired:

  • Me: “There was a bicyclist dangerously close to the back of your van.”
  • He: “I know. I’ve got a camera.”
  • Me: “Still, that was dangerously tight.”
  • He: “I’ve got a caaa-mmerr-raa back there!”
  • Me: “Didn’t help much.” It was pointless; I drove off. In the end, things turned out OK.

Despite the back-up camera, the driver barely escaped a collision with the cyclist—or the other way around. Having the tool was not enough. But how often do we use tools that others aren’t familiar with? How often do we use the wrong tools—or the right ones incorrectly?

Lessons for everyday life:

  • Don’t rely on your tools alone.
  • Don’t assume that others know that you know what you’re doing.
  • Use the right tool. A back-up beeper would have been of significantly more use to the cyclist. Namely, he would have know when he should or shouldn’t be behind the vehicle.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

Ready, Set, Grow! This Week: Don’t Forget the Saw

Monday, July 14th, 2014

Ready Set Grow

Perhaps you know the following story: Out for a walk in the woods, a man comes upon a woodsman. The woodsman is struggling mightily to slice a felled tree into slabs with a saw that is obviously dull. He is making little headway. The man says to the woodsman: “What are you doing there?” The woodsman wipes the sweat from his forehead with a cloth and replies: “Surely you can see that I’m sawing.” He returns to his work. The man persists: “Wouldn’t it be better if you sharpened the saw? It’s as dull as can be!” The woodsman, becoming impatient: “My good man, be off with you. I can’t sharpen; I have to saw.”

Evidently, the woodsman sees only the task immediately at hand. Instead of investing time to make his tool significantly more effective, he prefers to remain on safe ground. Better to make progress slowly but surely than to stop for an unspecified time to sharpen the saw, and then continue toward an uncertain outcome (perhaps the work would go no faster, after all). No time to lose. Saw!

That’s right. The woodsman should indeed saw. But, just as we should develop ourselves further in matters of growth, just as we should learn new things, sharpen our strategies and tools, we must also at some point consider the saw. At some point, it is sharp enough. If we merely sharpen and don’t do any sawing, the tree won’t be sliced into slabs.

When we huddle with our clients about strategy, we tell them at the outset that this pause, this sharpening is important. However, we also tell them that there must come a time when they resume sawing as briskly and efficiently as possible, something that our growth projects with our clients demonstrates.

Have a great week!

 
© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved. © Sprinter: mezzotint_fotolia – Fotolia.com

What Stands Between Private-Equity Firms and Their Companies, Part 4: Too Little Interest in People and Processes

Wednesday, July 9th, 2014

Here we are already at the fourth installment of our five-part series on opportunities to improve the relationship between private-equity firms and “their” companies. Today, we’re going to address the lack of interest in people and procedures that we often observe.

We have been able to establish earlier, in installment three, that it’s a good thing when private-equity firms and “their” companies don’t let responsibilities fall as they may between them. In many cases, we have observed that a positive interest (by the people-in-charge at the private-equity firm) in specific individuals involved—certainly at the executive level—coupled with a greater interest in procedures and their details would have done—or would do—both parties well.

Often what’s important are the signals that are sent. If a new investor—and it is largely irrelevant whether this is a private-equity fund or a strategic investor—takes an interest in the details, and when without meddling, he attempts to understand the essence of the model beyond its efficiency and possible “leveraging,” acceptance of the investor within the company rises quickly. Do not undervalue this symbolic element, because it forms a basis for trust. Successful investors devote a great deal of time to due diligence, in order to understand the system more fully. As mentioned before, less to talk about it afterward than to show earlier: “You are important to us.”

That’s not something you support with numbers. In our projects we encourage the exchange of content as a matter of course, if it pertains to our consulting mandate.

 
© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

Ready, Set, Grow! This Week: Develop a Quick Wit

Monday, July 7th, 2014

Ready Set Grow
How quick-witted are you? How often have you been upset with yourself, after a conversation during which you were perhaps challenged personally, that you didn’t have the perfect riposte at the ready. Don’t get upset. It’s not worth it.

Three examples of quick wit:

1. Musician Frank Zappa was once interviewed by Joe Pyne, a talk-show host who had a wooden leg. Pine was known for giving offense.
Pine: “So, I guess your long hair makes you a woman.”
Zappa: “So, I guess your wooden leg makes you a table!”
(Different versions of this dialog are quoted, but the exact wording isn’t the point here.) Text from www.tvparty.com)

2. Recently, a female member of our management-consultant network in America was curtly labeled a “trainer” by a banker. Whereupon, she said, “You’re mistaken. The difference between me and a trainer is the same as the difference between you and an ATM.”
Result: astonishment.

3. In a project meeting,
a member of the project team, unreceptive to valid criticism of the progress made in his department: “If my boss were here now, he would not stand for this.”
At that, the project leader responded: “That would in no way make him more correct.”
Result: a huge burst of laughter.

Here’s the best way to be quick-witted: Be in the present, don’t censor yourself, remain cool and above the beltline. In the worst case, you’ll ge more respect; in the best case, you’ll all have a good laugh.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved. © Sprinter: mezzotint_fotolia – Fotolia.com

What Stands Between Private-Equity Firms and Their Companies, Part 3: Uncertain Roles, Competencies, Responsibilities

Wednesday, July 2nd, 2014

In the third episode of our short series about hurdles in the relationship between private-equity firms and the companies they take over, we’ll focus on rolls, competencies and responsibilities, which are not always adequately resolved and possibly cause confusion between the players.

For a company taken over by a private-equity firm, it’s an entirely new ball game. Insecurity sets in. Your own position might be at risk. Expectations are unclear, or worse: They are supposed to be clear, but they are not articulated. What is management to do?

The company that has been taken over often perceives representatives of the private-equity firm as if the latter want to be the experts in the business. Sometimes the perception is ungrounded, but all too often, the arrival of the private-equity partner and its employees is all but certain to nourish this very expectation. A big threat, because the company will buttress itself with a counter-response, and a wholly-avoidable, confrontational situation arises. The threat manifests itself in operational results if one party seeks to prove that the other is not only wrong, but responsible for their present quandary. Pointless.

In order to prevent such situations from arising in the first place, our advice is that everyone should concentrate on what he can do best. The company must remain the expert in the field, as long as members of the advisory are highly-competent. The private-equity firms must perform their function as catalysts in matters relating to networks, finances, overall growth strategy (for example, buy-and-build), and to ask brilliant questions of management. Growth of the company is incumbent upon management, not the private-equity firm.

Through such role clarification—ideally led by a neutral third party at the very outset of the new relationship, and that must also include a detailed definition of responsibilities and competencies—brakes on growth will be released.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.