Short Articles (PDF) - Excellence in Financial Management

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Therefore, retaining customers is a function of gaining new knowledge about the customer. This requires that you establish a relationship with the customer. Once you begin to interact with the customer, you start to identify unique needs of the customer. This is important since customers are not interested in making choices. Customers are best satisfied when you deliver products and/or services that are customized to their specific needs. Customer retention comes from treating each and every customer differently. The most loyal customers are those who expect you to remember what their specific needs are. The more specific a customer is with your business, the more you will be able to learn from the customer. And the less likely the customer will defect and move over to the competition. As the organization learns from the customer, it will be necessary to deliver customized products and services. The organization will have to become increasingly flexible with marketing and production. Additionally, a needs specific program should be directed at high value customers. The high value customers are the ones that you must retain. In the book Enterprise One to One, the authors Don Peppers and Martha Rogers note that a learning relationship between the business and the customer can only take place if: - The business has the capabilities to deliver customized products and services in a cost-effective manner. - The business has intelligence about the customer and this intelligence allows the business to anticipate customer needs. - The business is very flexible and there is a strong interface between production, marketing, and other components of customer service. - The customer is required to tell the business what specifications are required. Customers direct production, marketing, and other parts of customer service. Finally, the emphasis is not on trying to bring in new customers. The emphasis is on providing more and more unique products and services. This wider product mix brings in the new customers. Consequently, the organization must be customized to meet the needs of the customer. This may require changing the organizational structure. We no longer live in a world where one common product or service can be spread amongst the customer mix. We are quickly moving into a world where products and services are customized to meet individual customer needs. Customization based on learning from the customer is critical to value creation in the future. 34
Lessons from the Entrepreneur Lesson 1: Some Basic Concepts One of the best ways to create higher values is to simply think like an entrepreneur. If we can think like an entrepreneur, we can find numerous ways of changing how we manage and create wealth within an organization. Over the next few months, I will summarize several concepts that I believe are paramount to creating higher values. All of these concepts come from thinking like an entrepreneur. Lesson 1 (which follows) will introduce some basic concepts. Lesson 2 will explore characteristics of the entrepreneur and Lesson 3 will outline the entrepreneurial culture. One simple lesson we can all learn from the entrepreneur is how to manage risk. Entrepreneur's think in terms of stages or increments. They never commit large resources up-front, working within a single stage. The traditional manager, on the other hand, is given a budget to complete a project and he or she will force an outcome no matter what new facts may emerge during the life cycle of a project. Compare this approach to the entrepreneur who never takes such huge risks. Entrepreneurs manage risk by making decisions incrementally and they move forward very cautiously, moving to the next stage only if a specific event or action has occurred. This approach allows the entrepreneur to better control risk as opposed to the traditional manager who takes on major risk. By not wasting valuable resources, entrepreneurs not only manage risk better, but they preserve and protect value. They also have better control over the final outcome of projects. Another key lesson from the entrepreneur is a never-ending search for new opportunities. Entrepreneurs enjoy experimenting with new ideas, seeking out new areas to exploit. Contrast this to the traditional manager who avoids experimentation, focusing on his or her career within the organization and not thinking outside the traditional box. Entrepreneurs live for new opportunities whereas traditional managers follow a sequential pattern of procedures that conforms to the corporate culture. A strong emphasis on learning is usually at the center of finding new opportunities. Entrepreneurs seem to listen and learn much better than anyone else and as a result, they can see an opportunity much easier than the rest of us. Therefore, a major commitment to learning is at the center of identifying new opportunities to exploit. A third lesson we can learn from the entrepreneur is that execution is more important than the idea itself. Many organizations are searching for new ideas as a way of creating higher values. New ideas are hard to come by and they rarely result in the creation of value. Value comes from the ability to execute. Entrepreneurs seem to have an uncanny ability for executing an idea and turning something redundant into a great business. For example, something as simple as coffee all of a sudden becomes Starbucks, an international chain of coffee 35
Page 1 and 2: Excellence in Financial Management
Page 3 and 4: Cash Flow Management Basic Cash Flo
Page 5 and 6: Basic Accounts Receivable Managemen
Page 7 and 8: Financing What are Effective Intere
Page 9 and 10: Companies like GE (General Electric
Page 11 and 12: Budgeting & Forecasting Financial F
Page 13 and 14: Customer C owes $ 30,000, there is
Page 15 and 16: Project Evaluations Basic Economics
Page 17 and 18: Using Decision Trees Too often Fina
Page 19 and 20: 1. Determine Market Values for Capi
Page 21 and 22: Finally, how do you measure IC Well
Page 23 and 24: Ratio Analysis Cash Flow Ratios Alt
Page 25 and 26: Another ratio that can be used in m
Page 27 and 28: Measuring Sustainable Growth Is the
Page 29 and 30: Value Based Management Valuations o
Page 31 and 32: Lease Valuations A lease is an agre
Page 33: categories. Keep in mind that we ar
Page 37 and 38: this new knowledge. Therefore, "int
Page 39 and 40: Intangibles over Tangibles In today
Page 41 and 42: known as the Value Dynamics Framewo
Page 43 and 44: competencies. - Business success is
Page 45 and 46: Understand the Customer: You must u
Page 47 and 48: “For vision and strategy to be mo
Page 49 and 50: involves risk and the acceptance of
Page 51 and 52: (government, interest groups, and t
Page 53 and 54: Value through Marketing For any org
Page 55 and 56: • Accuracy - Some sources of info
Page 57 and 58: Four Steps to Calculating EVA EVA o
Page 59 and 60: Risk Management Step 1 in Risk Mana
Page 61 and 62: Managing Foreign Exchange Rate Risk
Page 63 and 64: Why Implement Activity Based Costin
Page 65 and 66: Design Steps in Building a Performa
Page 67 and 68: Examples of Key Performance Indicat
Page 69 and 70: The Power of the Scorecard The Bala
Page 71 and 72: their scorecards to meet the needs
Page 73 and 74: Typically a set of performance meas
Page 75 and 76: Financial measurements will often d
Page 77 and 78: 4. Review the allocation and distri
Page 79 and 80: - Sets a good personal example - Ac
Page 81 and 82: Secondary sources of intelligence a
Page 83 and 84: analysis of differences can be diff
Page 85 and 86:
A final point on leveraging competi
Page 87 and 88:
Reaching for the Six Sigma One of t
Page 89 and 90:
several links, manufacturer to agen
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Another common attribute of process
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then we invariably lower our costs.
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Human Resource Management Metrics f
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Cross Functional Teams Financial ma
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What is Matrix Management As Tom Pe
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Cost => Time => Quantity => Error =
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Control over surveys is low Control
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The role of management is to find w
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Since emotional intelligence is som
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Few, if any educational programs (i
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emphasize the most effective applic
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- Competitive forces - Organization
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to do with recruiting and retaining
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In order for HR to be successful wi
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Coaches are very engaged with their
Page 121 and 122:
The Lombardi Rules - The Winning Mo
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poor position to understand what wo
Page 125 and 126:
6. People can Change - People have
Page 127 and 128:
• Team Building - Encourages and
Page 129 and 130:
Strategic Planning: Your First Step
Page 131 and 132:
5. Create: Provide a strong learnin
Page 133 and 134:
your analysis for more detail audit
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Without name recognition in the mar
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Although game theory has been aroun
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as people share with each other wha
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Is Knowledge Really Power We all re
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almost like wiping the slate clean
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will need a diverse group of people
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There are several approaches to bui
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Even simple task, such as distribut
Page 151 and 152:
Comprehending the IT Challenge For
Page 153 and 154:
Leveraging Knowledge Management It
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when viewing it over the internet;
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materials, products, and systems (a
Page 159 and 160:
interdependencies, you will have to
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Key Elements to Effective Decision
Page 163 and 164:
How to Brainstorm All people and al
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analysis - all pre-occupied with tr
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