Can you use this kind of improvement in your portfolio companies?

· Telecom – Increased revenue by 33% in 7 months

· Manufacturing – Improved productivity by 62% in three months

· Aerospace – Reduced cost by 20% in 6 months

· Financial Services – Increased Sales by 20% in 3 months

· Construction – Reduced costs by 20% in 6 months

· Healthcare – Increased Patient Satisfaction (10%) & Reduced Staff Turnover (36%) in 6 months

These are just a few recent results that a change to participative based management has allowed companies to achieve.

The use of Participative Management tools in your portfolio companies quickly increase bottom line results.   Benefits to the Portfolio Manager include:

1) Leveraging an asset that few companies utilize effectively – human capital.

2) Dramatically increasing performance in portfolio companies.

3) Measuring and improving employee commitment, motivation, and other lead indicators which directly impact your bottom-line.

“Private Equity needs to create sustainable and fundamental value beyond financial engineering” – World Economic Forum 2008

Traditional financial engineering and improved technology will only get you so far.  Utilize an untapped resource in your portfolio companies — human capital.Conventional management models will realize typical operational ability and may not take advantage of organizational resources.  As Boston Consulting Group experts Heino Meerkatt and Heinrich Liechtenstein advise,“ . . . [Private-Equity firms] should prepare all their portfolio companies for a long and deep recession, focusing on operational improvements. As the peak-performing private-equity companies have demonstrated, operational value formation contains the solution empowering success in this economy.   This will be the most critical differentiator in today’s recession, especially for the 50 percent of private-equity firms that are hovering between survival and extinction.”

Experts agree that in order to achieve excellence in the workplace, creativity and innovation are critical. 

“The key to survival and success does not lie in the rational quantitative approaches, but rather in a commitment to irrational, difficult to measure things like people, quality, creativity, innovation, and developing the flexibility to meet changing conditions” – Tom Peters and Bob Waterman

Peters and Waterman tell us we need to look beyond traditional metrics and harness intangible resources such as human commitment, motivation and trust. These intangibles (lead indicators) impact our tangible business results (lag indicators).Until just recently it was determined too intricate to monitor and calculate intangibles.  However, even the National Accounting Standards Board( NASB) recommends that metrics for intangibles appear on financial reports.

At hand is a demonstrated practice that makes best use of tangible and intangible assets.  We call it the “secret sauce,” it is very distinct from other management models because it utilizes tools and methods focused on human performance – a frequently overlooked factor that directly impacts the bottom line. Using strategic management tools, forward-thinking businesses obtain fast and powerful results.Rather than the carrot and stick method or taking a laissez faire approach this method provides a stable foundation that is easy and productive. Participative Management make optimum use of an organization’s human capital by providing people in the workplace innovative tools that allow them to increase company performance.Moreover, it imbues a sense of ownership amongst employees, which elicits worker dedication and fervor.

Motivation the Catalyst in Profit Formula – National Underwriter

John C. Bower, executive vice-president of Fidelity Union Life, noted, “a motivated workforce is essential strategy for enhancing company profits.  Highly motivated employees have a tendency to be more productive, which enhances profitability . . . Companies with the productivity edge usually outperform their competition.”

Recent Scholarly Work Supports These Critical Principles:

Improving Business Failure Prediction: Benchmarking Financial Models with Human and Social Capital –Journal of Private Equity 2009

“Research on entrepreneurship and firm performance indicates that human and social capital has emerged with strong predictive ability for business continuation.”

As little as 1/3 to ½ of most companies’ stock market value is accountable for today by hard assets such as , property, plant and equipment. The growing share of value lies in intangible assets—Harvard Business Review 1998

We are moving from the Information Age to the Intellectual Age according to Richard Barrett (management consultant-business). Prosperity creation will progressively derive from the enhancement in value of intangibles. Examples of intangibles are human motivation, commitment, and trust.

In the recent article, “Human Capital Formation and Foreign Direct Investment in Foreign Countries” Koji Miyamoto writes:

“One of the characteristics of rich industrial economies is the availability of a workforce with a high level of human capital. . . [L]ong time series trends in educational attainment and economic growth during the last century indicate that [Human Resource Development] and economic prosperity went hand in hand.”

“Private Equity Companies need better management practices in their portfolio companies –“ World Economic Forum 2008

During this recession Private Equity firms will have to hold on to their portfolio companies longer and adapt their business models to accommodate the downturn.  Private Equity firms can adapt their business models by focusing on improving operational performance and internal capabilities for sustained long-term results. 

Caridas Consulting International (management consultant-business)

The secret to starting a small business is simply about having a nice product or service, though having a great product or service helps tremendously particularly when you are operating with a tiny business. If you’ve got an onsite location furthermore an on-line location create use of traditional and net selling techniques when available.

This may be a tricky kind since several people mark these sorts of messages as spam. This type of marketing places well written highly targeted advertisements on search pages and web pages. Additionally to the current type of selling alternative forms like link sharing, article submission and directory submission.

Taking the time prior to the launch of your small business to plan everything, evaluate software applications, marketing techniques and come back up with a website that is engaging to your market could be a good means to confirm that your business encompasses a profitable start right from the gate. second is that the marketing plan that you’re going to use so as to make sure that your business is noticed. Web selling has advanced even as technology and software capabilities have over recent years.

While a number of the a lot of elaborate selling strategies could be over the prime for those starting a small business, there are plenty of options that are accessible ideas for business that will not have a massive budget to pay on promoting but still want the benefits that come back from promoting via the internet. In some instances, these applications help to automate the method like sending emails and messages, uploading and posting articles and blogs or posting links. It’s vital to plan how you want your business to run, as well as how you want to present your business, merchandise and services to the public.

Many people who are wanting at beginning a starting small business are trying for a fast means to earn additional cash. The a lot of complete these plans and the information is that the additional precise the selling plan and that ends up in success. Having a backup arrange in place when starting a tiny business can ensure that no matter what’s thrown your means you and your business plan samples will handle it. The a lot of you recognize regarding your customers and your product the higher ready you will be to match the elements of your product and services to the requirements, desires and demands of your customers.

Trying new things and keeping information and your image contemporary keeps customers interested. Create sure to pick a product or service that you fancy and are passionate about. Starting a tiny business only looks easy when the effort and time was put in to properly arrange for as many eventualities as possible.

As we all know that business is rising high. Be it any field, business is spreading its empire and wings all over the world in every city. The main reason behind this is more planned approach to do a business. People now know how to make their business more and more productive. This task they accomplish by the means of proper market research. They interrogate their clients and users, including customers, about the various flaws and fowls in their item. Then after knowing the loop holes they start working to overcome those loopholes and for rectifying these problems they follow an order. The order basically depends upon the intensity that loophole is troubling their customers. Thus, making and keeping their customers happy and attracted, people follow a fantastic approach. The professionals of the world are following the similar approach too for their services. Our renowned Oyster Bay Plumbers (Need one?click here!) say that with proper planning and approach business can reach at apex. An intellectual approach is essential for every business to succeed to the level you want. Its just a small amount of intellectual approach that is required. The very creative Hoffman Estates Electricians (Need one? click here!) say that the most important and essential thing required for a business to emerge in its full form is absent and once it is introduced in the business all over the world, it would lead to a huge amount of success and stability. Though many big Multi National companies have started implementing this practice in their business but much more awareness is required amongst all business tycoons who could be the future saviors of the corporate world and hence will protect us from the crisis caused due to mismanagement of business activities. Even the Escondido Roofers (Need one?click here!), who are known to be very good at business strategies, agree to this point and say that planning is essential.

Many complaints about strategy range from the fact that it is difficult to determine, it gets messy and unfinished, and many people involved either do not contribute or attempt to dominate proceedings and a general feeling of the future and the failure of any future chosen path.

Broadly speaking, some schools of thought hold with notion that there are three main reasons for a failure of strategy.

Managers often fail to realise what these differences are; business schools talk about corporate-centre strategy and business-unit strategy. Business-unit strategy is for controlled organisations that may be part of conglomerates or single-business units whereas the other is for conglomerates planning growth through the use of single business units.

Another is often no clarity of purpose; for example there is no point in using models that are simply intellectually attractive when the purpose of the task is to discover options and directions and gather proof to support decisions about the future.

The business – unit level requires methods that are relatively straightforward and the only real obstacles are intimidation by “professionals” and their jargon. Most means of analysis are in excess of 35 years old but there is a general lack of understanding of them amongst business people and most of them do not know how to use them.

So how do we correct this anomaly?
Initially, the ground rules need to be set so participants need to arrive with open,clear minds. Strategy may be likened to seeing everything around, from every angle available and even into the future and the following requirements must be met to be successful: Customers are paramount and form the basis of market uuderstanding, practicality must take priority over theory, the business needs of now and the future need to be thought about and the strategy needs to be measurable.

It is worth at this point to touch on the philosophy behind a strategy.

The best place to start is to take the old adage of begin with where you want to be and work backwards to where you are now.

If, on the other hand, one believes that strategy is an analytical process then start with where you are and work forwards. However there is a difficulty with this approach as straightforward arithmetical thinking stifles creativity.
Perhaps, in the real world, a combination of both methods is probably a necessity.

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What is a SWOT analysis (also known very simply as a SWOT) and why is doing one important to your business? Use this sample SWOT analysis to help you do your own SWOT. All small businesses need to include a SWOT in their strategic planning. SWOT is a key element of successful strategy development.

The definition of SWOT analysis is that it is an acronym for the strengths, and weaknesses of the internal organization and the opportunities and threats of the environment external to the organization. The importance of doing a SWOT is that it provides an opportunity for small business owners to identify and analyze the strengths of, and opportunities available to, the business. It also helps to identify and minimize internal weaknesses and develop management strategies for external threats.

The most effective use of a SWOT analysis is within the planning process. But analysis and plans must be followed with actions. Develop your SWOT and build an action plan that includes who, what, where, when, why and how to deal with the strategies.

The sample SWOT analysis below will help you develop your own. The best approach is to include key members of your organization in the process. If you are a one-person business; then do it on your own or try to do it within your network of business acquaintances.

In another example, a non-profit organization I worked with wanted to restart a thrift store. They said their mission was to provide a place where people could sell their used and unwanted items. I asked what the proceeds from those sales would be used for and was told the store’s profits supported several local charities. So, I asked if, considering overhead expenses and very generous consignment policies, they would be willing to forgo the charitable gifts as long as people had a place to bring their used and unwanted items. At that point the light went on and the organization developed a mission statement spelling out that their prime reason for being was to raise money for charities. The manager then called all the workers together and explained the true mission. There was a noticeable change in the store and the next two years were the most successful in recent history.

In 1968, Martin Luther King stood on the steps of the Lincoln Memorial in Washington D.C. and delivered what has become one of the most famous speeches in American history. His “I have a dream…” speech clearly illustrated his vision. King saw what needed to be done. He knew what the mission was, but so did many others. He was a major leader in the civil rights movement because he had a vision of what should be…he had a dream and he was able to articulate that dream to the masses. His vision touched a chord and led to real change.

Simply speaking, the failure to plan is planned failure. Without an action plan to begin to guide a business or even an individual, the end result is usually walking down the wrong path along with a lot of spraying and praying going on.

A mission statement on the other hand must be more concrete and define specifically what the organization does. It must be short and succinct. I was surprised to see a large corporation’s mission statement that was several pages long. How many employees actually read that mission statement? Many times, when I ask what their mission is, employees can’t answer. A few years ago, I was assigned to lead an organization with a mission statement that attempted to cover everything they did. No one really knew what it meant, but it took up a lot of space on the website! I gathered my leadership team and we created a new statement, clearly focusing us on what was important. Then we made sure everyone knew it. We even sent it to our customers and told them to tell us if we weren’t living up to our own mission statement. What had been a disjointed group quickly became a focused team, able to complete several projects which had languished for quite some time.