Monthly Archives: February 2010

If you resist establishing another department…no matter what, ask yourself if your company has “real managers”

LinkedInTwitterGoogle+FacebookShare

Leaders of many small to medium sized companies can become very reluctant to establish a new department, no matter how compelling the rationale may be.

It makes sense. If you, as President, still make all or most of the major decisions, you have too little mental time available to “deal with yet another department.”  Establishing a new department can seem like “another expense”, “another person to train”, “something else to worry about.”  A new department can feel like “infrastructure” and “more risk.”

If these phrases resonate with you, then consider the probability that you may need to rethink your definitions of “departments” and “managers.”  Your concerns may not be about the next department.  You may have reached the limit of not having real department managers for the existing functional areas.

Perhaps you have long term employees serving in key roles, but they are “doers” not leaders.  Perhaps your employees have convinced themselves that collaboration isn’t possible if there are clear job descriptions and/or departments. Perhaps you have resisted sharing information so your key employees don’t have a sense of the true costs, cash flow, or profitability.  Have they been asked to learn about, generate, or use real budgets yet?

It is far more likely for a person who views management as central to his/her career (rather than “a side activity”) to take responsibility, develop the people behind him/her, keep learning, want a department budget, and understand the reasons for regular reports.  A manager quickly learns that he/she must anticipate and get ahead of you (the President).  One objective of a manager is to reduce reasons for the President to worry and reduce the number of times you (the President) must make decisions related to the manager’s functional area.

Think about it.  Would you be more receptive to having a new department if it reduced your stress and answered questions?

What Your Business Can Learn From Government Budget Shortfalls

I have just made 4 entries in my blog that could have been entitled DO WE LIVE IN THE STATE OF NEW JERSEY OR THE STATE OF DENIAL?

The irony is I have been a benefactor of New Jersey’s overspending.

My beloved late husband, Chet, was a public servant in New Jersey for over 30 years.  He served as the Planning Director for Salem County before focusing his time on coordinating transportation-related planning and programs through ACUATC and the South Jersey Transportation Planning Organization.  His primary role was facilitating transportation improvement projects. Chet also contributed to the State Plan, helped bring back rail service between Philadelphia and Atlantic City, helped NJ comply with air quality mandates, worked hard to save the dunes along the shoreline, authored sensible zoning ordinances, and evaluated enhancement projects.  He was a good man and worked hard.  Frankly, his long hours probably offset the infamous lack of productivity of at least 2 other people on the government payroll (political appointees, phantom employees, or “dead wood”).

He endured the bureaucracy and worked for a dreadful boss for several years of his 30+ year career in large part to make sure I would be OK.  Instead of working with an engineering or architectural firm, he accepted his lower paying positions based on the promise of his pension and benefits. He viewed his pension as “deferred compensation” or “forced savings.” If anyone deserved a pension from the State of New Jersey, it was my late husband, Chet.

In 2001, Chet was diagnosed with terminal bone marrow cancer. That same year, I was injured and needed serious spinal surgeries. Plus, of course, there was the impact of September 11th, 2001. It was like a Tsunami for us. Although most of my medical care had to go through the worker’s compensation insurance company, Chet and I were very grateful for his health insurance.  He probably would not have survived as long as he did without Horizon Blue Cross/Blue Shield.  Across a 6 + year period, Chet needed 2 bone marrow transplants, countless rounds of chemo therapy, dozens of hospitalizations, radiation treatments, very expensive medications, etc.

So how can I speak up about New Jersey’s overspending!!  Am I ungrateful?  Not at all.

But I am worried and my beloved Chet would have been outraged. He passed away with the misimpression that the promise made to him by the State of New Jersey would be honored.  I don’t know how it could legally happen, but realistically, won’t there be a day when suddenly Chet’s pension payments will stop?  How can I trust that they will continue? Chet may well have made very different career choices if he thought that New Jersey could default on its contractual agreement with us. Yet, despite the total unfunded liability for its pensions and benefits of $130 Billion, New Jersey is STILL promising pensions and lifetime benefits (that it absolutely cannot afford) to new and current employees. How can we stop the lie and denial?

5th in a Series

WHAT YOUR BUSINESS CAN LEARN FROM GOVT BUDGET SHORTFALLS: Thinking It Can Never Happen to You

When you read the first 3 entries in this series of blogs about NJ’s budget crisis, did you conclude that

-           those problems could only happen to the government?

  • What about General Motors? Bethlehem Steel? Lehman Brothers? 60% of new businesses?

-          elected officials value power and control more than business leaders?

  • What about the fact that 98% of all privately held businesses remain “micro-sized incorporated careers”?
  • What about the glass ceiling? Corporate politics? Insider trading?

Ignoring the Numbers and Borrowing Against the Future During Good Times

Ask yourself if your

-          current financial stresses could have been moderated if you too hadn’t assumed that the good times would just continue

-          routine includes in depth analysis of causal trends rather than just results-focused percentages

Avoiding Conflict and Hoping to be Rescued During Bad Times

Ask yourself if you are STILL not addressing your

-          friction between business partners
-          over dependence on a key leader or a few large accounts
-          chronic recurring profitability or cash flow problems
-          when and how to replace a long term unproductive or disruptive employee
-          unrealistic revenue projections in your proposals to outside investors

Resisting Consolidation and Forcing Disaster Today

-          Ask yourself how bad things must get before you will learn more about:

  • how acquisitions, asset purchases, joint ventures, and mergers really work
  • succession strategies, equity deals, ESOPs, and IPOs
  • alternative business models
  • new approaches to market research to reduce your risk of being blindsided
  • how to recognize complementary companies and become an attractive partner

5th in a Series –

WHAT YOUR BUSINESS CAN LEARN FROM GOVT BUDGET SHORTFALLS: Resisting Consolidation & Forcing Disaster Today

In 2010, the State of New Jersey has a $10 billion deficit on a $30 billion budget, a $130 billion unfunded liability for pensions and benefits, and must borrow money from the federal government to pay its unemployment claims. New Jersey has 611 school districts, 566 municipalities, and 600,000 state employees all looking to the State for money.  Plus, the exodus of companies from New Jersey risks the State’s revenue projections.

New Jersey residents express frustration with high property and sales taxes, corruption, burdensome regulations and bureaucracy, and complacence about economic development.

It is amazing anyone is willing to take on the job of Governor in the State of New Jersey!

The most recent Governor was loudly criticized when he proposed selling the NJ Turnpike, raising tolls, and closing some parks. Maybe those weren’t the best proposals. Who knows? But those measures would have only put a small dent in the huge budget deficit. And that Governor was not re elected.

Is the situation bad enough yet for the underlying premises to actually start to change in New Jersey?

What will it take? What if all State funding to townships and schools stopped? What if employees were laid off?  What if the State defaults on pension payments and/or benefits? What if the State actually stopped making promises it can’t deliver?

In the meantime, legislators continue to resist facing renegotiation with the powerful unions…especially the NJEA (teachers union).  And most of the officials in New Jersey’s 566 municipalities resist consolidation.  One of hundreds of examples includes the 6 townships along the 18 miles of Long Beach Island.  Each has its own school system and school board, police department, water department, town hall, etc. Each Mayor and Town Council is proud and excited about their projects and progress.

Where is the incentive for the Mayors and Town Councils of these municipalities to even consider consolidating services?  Would cessation of State funding to townships get their attention? The Route 72 Bridge project represents a full 1% of the State’s 2010 budget. What would happen if the State of New Jersey couldn’t finish the new bridge that connects “the mainland” with Long Beach Island?

If you aren’t serving on one of those town councils or school boards, it is “easy” to ask the question:

Why does it take a disaster to prompt change?

3rd in a Series –

Growth Strategy Tip

Testimonials

Working with Aldonna Ambler is an invitation to join an exclusive club.

Dr. Dorothy Martin-Neville, PhD
Dr. Dorothy

Schedule a FREE initial consultation with Aldonna to find out how she can help you work through your challenges and take your business to the next level. Click Here