marketing resource management
A Cash Preservation Strategy for Every Business
For businesses today cash isn’t king, it is king, queen, and the Knights of the Round Table combined. Or, as we say in Texas, it is the whole enchilada.
Select your own metaphor, but cash preservation is top of mind for every board member, CEO and CFO right now. The level of uncertainty is off the charts, too, which adds extra incentive for a cash preservation strategy. What a great time to adopt an interim management strategy throughout the organization, especially in marketing and sales!
Let’s look at a typical example, simplified here for brevity.
For 2009 XYZ Corp had planned and budgeted to add two headcount in marketing and sales—a senior marketing person and a senior sales operations person. Both positions were in the same pay grade with a mid-range base salary of $140k. Fully burdened each position would cost XYZ $190k per year; $225k for each position in the first year when recruitment cost was included.
So XYZ was looking at a $450k investment in two key players in 2009. The CEO believed both positions were critical to the company achieving its revenue goals, but that was the problem. Confidence in the revenue target was shaky.
The company needed the two contributors on board ASAP, but frankly the CEO was concerned about making a $450k commitment when it was unclear what the revenue picture was going to be in the second half of 2009. Heck, the first half was foggy enough.
The CEO and CFO weighed their options.
1. Cut the two positions from the budget until revenue stream was more certain.
2. Cut one of the two positions until revenue stream was more certain.
3. Fill both positions and pray.
4. Fill both positions with interim managers.
What would you do? Would you elect options 1 or 2 and effectively fold your tent? What would the opportunity cost be? Would you choose option 3 and swing for the fences even though there was a stiff wind blowing into your face from the outfield?
With option 4 XYZ could fill the two positions and preserve cash. Let’s look at the math.
Assuming tightly scoped and highly prioritized engagements, XYZ could rapidly put seasoned interim managers into both positions for 6 months for about $250k. It’s a sound compromise that would see the highest priority tasks accomplished for 44% less.
A typical contract for each of the interims might look like this: 3 days per week at $1750/day for 6 months. Each interim contract is $126k, or $252k for the pair for the six months.
During the six months the critical aspects of each position will be accomplished, helping XYZ to reach its revenue target, but if business should suddenly worsen requiring staffing cuts the interims can be cut loose without any severance or HR issues.
Furthermore, mid-year the company still has the option of recruiting for FTEs, extending the interim contracts, or living without managers in those positions for the remainder of the year.
The interim management solution gets the job done, keeps XYZ’s options open throughout the year, and preserves $198k in the bank.
Read Full Post | Make a Comment ( None so far )Management in an On-Demand World
The cover story of the March issue of Inc Magazine was about Zipcar, an innovative company that specializes in renting cars by the hour to its members. It’s a very attractive concept for city dwellers and students who don’t need a car every day and may not have a safe and affordable place to park a car even if they had one.
When you need a car to run errands or for a day-trip to the country just reserve a Zipcar. Pay for what you use. Transportation on demand.
In the same week that I read this article I spoke with a company, eVapt, that has developed a better way to meter software as a service (SaaS). The growth curve of Saas applications is impressive. No wonder. The technology allows companies to pay for how much they use of a particular software application. Use a lot, pay more; use infrequently, pay less. Makes sense. Software on demand.
So, when a company looks at its marketing and sales resources and sees that there are a few gaps why aren’t those gaps being immediately filled with managers on demand?
Too often I see companies let a vacancy in a key position go unfilled for months while the recruiting process grinds along. The smart move is to put an interim executive in the position and keep the momentum going until the perm hire can step in.
Then there’s the case of the gap in critical skills or bandwidth for a mission-critical initiative. Why aren’t more companies being honest with themselves about what their current staff can and can’t do during the time period? And we wonder why product launch dates are missed or compromised. Evaluate where special skills and experience are needed and add a seasoned interim manager to the team.
Using interim management resources today seldom is an indication that a company is in trouble. It means companies are being really smart about resource allocation. Alas, old perceptions are slow to change.
We look at customers who use Zipcar and say, “Good thinking. Use a car whenever you need it, but only pay for what you use.” We see companies that save millions of dollars a year by adopting SaaS instead of traditional software licensing. We think, “Wow, those guys are really using their cash wisely.”
What do you think when a company, perhaps your own, considers an interim management solution?
Read Full Post | Make a Comment ( None so far )New Book Helps CEO’s Achieve Results with Interim Managers
About 12 months ago I saw the need for a book that would enlighten CEO’s on the strategic use of interim managers in Marketing and Sales. With the help of co-author, Paul Travis, and editor, Theresa Heath, we interviewed top executives who had experience with interims and wrote our book. Leadership On Demand: How Smart CEO’s Tap Interim Management to Drive Revenue is now available in paperback and eBook. We self-published the title using the latest in print-on-demand technology and eBook technology. We’re selling the book directly from our site and through book resellers . The news announcement appears below and can also be viewed here.
Management’s Antidote for Turbulent Times
New Book Sheds Light on Practice of Using Interim Managers in Marketing and Sales
March 28, 2008, Austin, Texas. What is the little-known secret some CEO’s use to keep employment costs down while maintaining growth strategies during uncertain economic conditions? The answer involves the prudent use of interim or on-demand managers within their Marketing and Sales departments, according to the authors of Leadership On Demand: How Smart CEO’s Tap Interim Management to Drive Revenue.
Although companies are familiar with using interim or on-demand executives to fill temporary gaps in HR, IT and Finance departments the new book provides fresh insight and best practices on how to use interim, “just-in-time” talent to impact the revenue engine of their organization—Marketing and Sales.
The authors contend that too many companies have allowed temporary gaps in Marketing and Sales leadership to retard their revenue performance. The gaps occur in three areas: a key management position is vacant for more than a month, a critical set of required skills is missing in the organization, or there’s a shortage of management time to accomplish an important business initiative.
“This topic is one of great importance to our economy and society. The chapters do a good job of identifying the general trends that would lead a company to consider the utilization of an interim manager,” said John Mavers, First Vice President, Washington Mutual Bank.
Through its 14 chapters the book shows CEO’s how to identify when interim management should be considered, how to structure an engagement, how to socialize the solution within the organization, how to justify the fee, etc. The book includes interviews from CEO’s, COO’s and Board members who share their experiences and insights about the prudent use of on-demand leaders in small and large organizations.
Leadership On Demand: How Smart CEO’s Tap Interim Management to Drive Revenue is published by LOD Publishing, LLC and can be ordered from www.leadership-on-demand.com or http://www.Amazon.com. The suggested retail price is $28.95 plus shipping and handling. The title is available in both paperback and eBook formats.
About the authors
The authors and editor of the book have over 75 years combined sales and marketing management experience primarily in high tech, pharmaceutical and medical device sectors.
Charles Besondy, author. After a career holding marketing leadership positions for small high-tech companies in Washington State and Texas, Besondy began his consulting and interim management practice in Austin in 2001. He has conducted interim management assignments for a range of companies, such as a Web start-up, a computer manufacturer, s professional sports franchise, and a large financial services vendor. Regarded as an authority on the topic of interim management for marketing functions he is co-author of the book, Leadership On Demand: How Smart CEO’s Tap Interim Management to Drive Revenue. His blog on the same topic, One Riot – One Ranger, is a popular source of insight and leading-edge thinking on the topic of interim management.
Paul Travis, author. Having managed a team of 10 and a budget of $5 million as a Vice President of Marketing for a publicly traded internet security company, after executive roles in foodservice to software publishing, Travis made the move into consulting. He has served in both project and interim capacities primarily in branding, product marketing, and launching new offerings – for technology, food/beverage, and manufacturing clients situated between British Columbia and the Midwest United States. In addition to his capacity as President of the Institute of Management Consultants – Pacific Northwest Chapter, he serves on the board of two privately held companies. His blog, www.60-Second-Marketing.com, features educational insights around snapshots of “hits and misses” in the marketing world.
Theresa Heath, editor. With over 25 years of experience, Ms. Heath is an innovative leader skilled in creating and implementing business development plans that reinvigorate sales teams and grow new products and markets. A strategist with a global and conceptual perspective, Ms. Heath approaches problem-solving in a relational and holistic manner by utilizing experience, intuition and knowledge to craft fresh and imaginative solutions. Heath is a versatile executive with both sales and marketing expertise in the healthcare and technology sectors, with a particular emphasis on bringing new technology successfully to market and exceeding company goals. Her background and flexibility serve her well in consulting, particularly in sales turnaround situations, developing new markets and new product commercialization.
Book Statistics
Title: Leadership On Demand
Subtitle: How Smart CEO’s Tap Interim Management to Drive Revenue
Authors: Charles Besondy, Paul Travis
Editor: Theresa Heath
ISBN: 978-0-9802035-1-6 (paperback), 978-0-9802035-0-9 (eBook)
Category: Business Management
Length: 112 pages
Retail price: $28.95
Binding: 6”x9” trade paperback
eBook platform: Requires PDF reader software
Illustration: Charts and tables
Additions: Case studies, resources, survey, Website for the book’s readers is http://www.leadershipondemand-book.com
Read Full Post | Make a Comment ( 1 so far )Achieving Flexibility and Results in a Time of Uncertainty. Three Cheers for Interim Management!
By Charles Besondy
Depending on the political slant of your favorite news source the U.S. is either falling into recession or experiencing a mere speed bump. Everyone can agree the economy has taken it on the chin lately. The undertow caused by defaults of sub prime mortgages is still threatening to pull some financial companies under. The record high price of oil is having an inflationary impact on nearly everything we buy. The value of the dollar is at record low levels compared to the Euro. Swings of 100-200 points a day on the NYSE is common place. Unemployment is still relatively low, however, and inflation is in check (at least for now).
These are unnerving times for executives responsible for driving their business plans forward no matter the head wind. Revenue forecasting, always a challenge, is made more difficult by the economic factors in play (not to mention a Presidential election). When there’s less confidence in the revenue forecast executives are loath to add to their fixed costs, such as payroll. It is common in times like these for companies to become very cautious about filling vacant positions, or adding head count.
Just because the economy is sputtering doesn’t mean that companies are putting key initiatives on the back burner, or hunkering down in a bunker mentality. It simply means they are looking for ways to maintain momentum while mitigating financial risks. Interim managers or on-demand leaders in Marketing and Sales can play invaluable roles for companies during uncertain economic times by achieving the necessary results without adding to fixed payroll costs.
Q2 Employment Outlook Softening
ManPower, Inc, the $21 billion employment services company, just released its Manpower Employment Outlook Survey for Q2 2008. It clearly reflects a softer jobs market for the quarter ending June 2008.
ManPower’s CEO and Chairman, Jeffrey A. Joerres summarizes the report’s findings, “The important change we are seeing is not about reductions in workforces, like we would typically expect in a recessionary period, but rather an increase in the percentages of employers who are planning to put a hold on hiring and forge ahead with the people they already have. This is definitely a ‘wait and see’ approach as they evaluate where their economies are headed, rather than a panic attack at this point.”
In the survey “a quarter-over-quarter comparison shows the weakest employment prospects since Quarter 1 2004. According to seasonally adjusted survey results, employers in nine of the 10 industry sectors expect the hiring pace to remain stable or decline during Quarter 2 2008. Of the 10 industry sectors surveyed, only Transportation/Public Utilities employers anticipate improved conditions for job seekers in the coming quarter versus Quarter 1 2008.”
As you’d expect the figures vary by region and by industry sector. The report can be downloaded from ManPower’s Website.
Damn the Torpedoes and Full Speed Ahead
Any experienced business leader will tell you the keys to achieving results during periods of uncertainty are to mitigate the financial risks but keep charging forward. The use of interim managers is a smart way to achieve much-needed flexibility and results during unnerving times. Here’s why.
- You can quickly apply the right talent to achieve the necessary results. Hiring an interim is much faster and easier than is recruiting someone for a senior-level permanent position. Less valuable time is lost.
- You can focus entirely on the skills you need for the short term without complicating the picture with concerns about future requirements. You don’t have to find the marketing or sales leader who is perfect for this quarter as well as next year and beyond. You can focus like a laser on meeting the short term requirements.
- Interim managers are the utilities of management talent. You only pay for what you use. This is an enormous benefit during uneven economic conditions because you can adjust the volume of service you need very easily and quickly. To use interim talent you’re making short-term financial commitments with variable dollars, rather than long term, fixed cost commitments.
- Interim manages can deliver results for less. When the total cost of recruiting and employing a permanent executive or senior manager is compared to an interim’s fees the cost advantage can be significant.
- Interim managers often provide a more practical and cost-effective solution than management consultants. Usually you can bring in the same level of talent, one with both strategic and operational credentials, who can be a member of your team for less than management consultants with bureaucracies and fancy offices to support.
Don’t let the next months of economic uncertainty prevent you from keeping your customers satisfied and your competitors on their heels. Maintain fiscal flexibility and generate results through the use of interim management for filling gaps and driving forward key initiatives.
For a more in-depth look at how to successfully utilize interim management strategies check out these sources:
- Leadership On Demand: How Smart CEO’s Tap Interim Management to Drive Revenue, available from Amazon.com
Is Domain Expertise Overrated? Who Wants More Kool-Aid?
Allow me to share a bit of introspection. In my long career as a marketer I’ve worked for eight companies as an employee, but I’ve provided services to over 55 different companies as a consultant or interim manager. Nearly all my employers and clients were in different industry segments or product categories.
So, when I see bios of executives who have for 25 years worked for three companies all in the same industry I’m astonished at their dedication to one industry. I can’t help but wonder if they didn’t get really bored though.
As you can imagine this introspective glance at my career got me to thinking (once again) about the relative value of domain expertise versus process expertise for an interim manager.
I can see the value of having experience within an industry sector or product category if one is attempting to work for another company in the same field. Really, I can. However, I think domain expertise is overrated. I believe more companies when hiring a permanent or interim executive in marketing should put more weight on the leader’s process skills and relationship skills.
One of the biggest values an IM in marketing can bring to the organization is objectivity. If the person doesn’t have in-depth industry experience they will question everything and ensure that customer data and market trends are significant factors in strategic and tactical marketing decisions. This objectivity and current market insight is absolutely critical to off-set the tendency for companies to drink their own Kool-Aid to the point of extreme myopia.
A person who has been in the industry for a time is likely to believe they know it all and be eager to show the client that they do. They will also be very tempted to rely on “what worked for them at ABC Company.” In both cases objective, market-centric thinking can take a back seat when someone wants to showboat. Professional marketers won’t do this. No matter how experienced they are in a category they’ll insist on the latest customer data, competitive analysis, and market trends to help steer their decisions.
If you’re considering interim management to fill a gap in the ranks, to shore up skill levels temporarily, or to add one-time bandwidth look first at the individuals who have a track record of applying proven processes and marketing instincts to their assignments. It’s hard to go wrong with that type of experience.
Read Full Post | Make a Comment ( 3 so far )Marketing Job Outlook Strong
By Charles Besondy
In my never-ending quest for wisdom and enlightenment I browsed the Occupational Outlook Handbook, 2006-07 Edition published by the Department of Labor. http://www.bls.gov/oco/oco2008.htm
According to Uncle Sam the demand for our profession looks rosy except in manufacturing. This report doesn’t concern itself with interim managers or temporary managers, but I strongly believe in the theory that a rising tide lifts all boats. So if there is consistent demand for marketers, the demand for interim marketers should also be strong. An excerpt from the report follows.
Read Full Post | Make a Comment ( 4 so far )Advertising, marketing, promotions, public relations, and sales manager jobs are highly coveted and will be sought by other managers or highly experienced professionals, resulting in keen competition . . . In particular, employers will seek those who have the computer skills to conduct advertising, marketing, promotions, public relations, and sales activities on the Internet.
Employment of advertising, marketing, promotions, public relations, and sales managers is expected to increase faster than the average for all occupations through 2014, spurred by intense domestic and global competition in products and services offered to consumers. However, projected employment growth varies by industry. For example, employment is projected to grow much faster than average in scientific, professional, and related services, such as computer systems design and related services, and in advertising and related services, as businesses increasingly hire contractors for these services instead of additional full-time staff. By contrast, a decline in employment is expected in many manufacturing industries.
The Marketing Audit: A Key Interim Manager Deliverable
By Charles Besondy
Companies shoot themselves in the foot by thinking that just because the #1 or #2 person in marketing has left the ship important work can’t commence until a replacement is on board (4-8 months). The thought process goes something like this, “We don’t want to do this or that because the new manager will have specific ideas on what he/she wants to do or how he/she wants it done.”
This is a true statement to a point, but there are steps that can be taken to minimize the loss of momentum that transitions always cause. There is very important strategic work that can and should be done during a period of transition to enable the incoming manager to make well-informed decisions from day one.
Any key marketing manager (CMO, VP, Director) who is stepping into a position is first going to do an audit—formal or otherwise—that basically flags what’s working and what isn’t. They will be under extreme pressure to make positive things happen quickly, especially if this is more of a turnaround situation. Every day is critical.
Smart companies will bring in an interim manager (IM) the day after the former marketing manager has left the building. While providing senior leadership to the staff during the transition the IM can provide an invaluable service by conducting an objective and thorough marketing audit.
With an unbiased eye a highly experienced IM can do an analysis that addresses the following fundamental questions about the marketing function.
- Do we know the customers?
- Do we know the best prospects and can we communicate with them?
- Do we know our markets?
- Do we know our competition?
- Do we know the industry trends?
- Do we know our costs for acquiring leads and customers?
- Do we know the lifetime value of a customer?
- Do we have the right marketing processes, metrics, and technology in place?
- Do we collaborate and support Sales optimally
- Are the skills and experience of the team up to the challenges ahead?
- Is the company aligned with the right vendors and agencies for the challenge ahead?
Odds are good that the audit will reveal some “no-brainer” changes that the IM can implement during the engagement. But, the real benefit is that the IM can present to the incoming manager a professional, unbiased marketing audit that can be acted on immediately to either right the ship or trim the sails. The 60-90 days this saves can easily be the difference between missing or hitting quarterly targets.
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Why CEOs Should Add Interim Marketing Managers to their Arsenal
By Charles Besondy
Every CEO I know can be described with one or more of these labels:
- Orchestra conductor
- Magician
- Chemist
- General
- Chef
- Chess master
- Pied piper
- Puppet master
Try it. Think of the CEOs you know (perhaps yourself even). Pin the label on the CEO. It’s fun. While personalities and leadership techniques vary, CEOs all have one thing in common—they manage resources to drive results. More specifically, the CEO blends and directs the talent, infrastructure and finances at his/her fingertips. When he gets the combination right success usually is the outcome.
However, if it was easy to get the right combination every company would be widely successful. More often than not, the limitations of the talent, infrastructure, finances, or time (our number one enemy), muck up the works and restrict success.
Interim management should be the CEO’s best friend and secret weapon (or favorite ingredient if you prefer the chef label more than the general label). By relying on interim managers in the marketing function, the CEO can apply exactly the right marketing skills and experience to an initiative for exactly the right amount of time—all while working with variable budget dollars rather than fixed budget dollars.
This ability to augment the CEOs arsenal with the right talent at the right time can be a major competitive advantage in that it enables business agility.
- The company can jump on market opportunities or react to competitive moves swiftly and adeptly. It takes far less time to locate and retain an interim manager than to recruit a full-time senior manager (even if there is headcount in the budget).
- Existing teams aren’t whip-sawed from one initiative to another. A high degree of focus can be maintained on existing business, while teams enhanced with interim marketing talent chase new opportunities.
- The initiative’s requirements can be matched to an interim’s domain and process expertise; very few compromises necessary. The CEO can select the optimum weapon for the job.
As a CEO do you see yourself selecting weapons, moving chessmen, orchestrating a team, or creating a world-class stew? Whatever metaphor you select, consider that interim management for the marketing function stands ready to help drive business and revenue growth.
Read Full Post | Make a Comment ( None so far )Get ‘er Done
By Charles Besondy
I recently finished an engagement with a manufacturer of high-end computer systems for digital artists. Reflecting on the project I realized that it was a classic case for interim management.
The management team recognized that they had a common problem on their hands–a new product line had been conceived in Engineering and was under development. However, no product marketing or product management resources were available to validate customer requirements, develop positioning, create pricing strategy, set up a beta program, construct a go-to-market plan, etc. The company’s thin marketing resources were fully occupied with the support requirements for existing revenue-generating products.
So, management could have elected to tell their existing staff to suck it up and take on the considerable extra work for several months. However, this management team was smarter than that. They didn’t want to endanger the current revenue stream. They knew all too well how difficult it is to get business momentum in the air, and once achieved just how quickly it can stall, crash and burn if ignored.
This management team did the right thing. They brought in an interim manager (me!) to handle the product marketing duties for the new product line. With apologies to The Cable Guy, they chose to “Get ‘er Done!”
Read Full Post | Make a Comment ( None so far )Popularity of the Temporary Executive
By Charles Besondy
The BizLaunch Blog reports that one of the top-20 book downloads from Work.com is on the topic of hiring temporary executives. I think this is a positive indicator that smart entrepreneurs are thinking about how to retain the flexibility of their organizations by bringing in seasoned executives on a temporary basis, rather than full-time employees.
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