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Brent Stephens
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While no one key can be attributed to the success of a business, there are a few keys crucial to a company’s success. In our opening meeting with new clients, we usually tell three stories. The first is about dinosaurs. Seen any lately? Live ones? Other than Jurassic Park dinosaurs are extinct, as apparently they could not adapt to whatever change occurred millions of years ago. The second is about training a flea. Zig Ziglar, a noted motivational speaker and author describes putting a flea in a jar, and putting the lid on. The flea jumps and bumps its head, jumps and bumps its head, and finally realizes that while they jump for a living, they don’t want to jump so high that they bump their head! After a while, the fleas’ muscles atrophy, and when the lid is taken off, the flea is now “trained” as it can only jump as high as the top of the lid, and not out.

The third story involves a couple who are dating, and she decides that in order to get the relationship to the next “level” she should prove that she can cook. He duly comes over and watches her prepare the roast. She carves a slice off the one side, throws it away, and does the same for the other side, top and bottom. He is speechless, but knows better than to say anything. She cooks the roast, which he duly eats, and finds it delicious. Unable to curb his curiosity any longer, he asks her why she wasted so much meat, did it allow the seasoning in, or what was the reason? She replies that she does not know, her mother taught her to cook a roast like that. They call her mother who has a similar response. They track down granny in the old age home, who’s response is simple “when we were bringing the children up, we had a real small oven, the only way to get the roast into the oven was to slice some meat off of it!”

What is the point of the stories? The world is changing, business is changing, and companies need to adapt – or fall behind and ultimately go out of business. Their strongest assets are their people, but owners typically do not listen to their people and rather impose management decisions which are “told” and not “sold” and therefore doomed to failure. In short, the employees eventually stop volunteering information and rather adopt an “eight to five” mentality and the company suffers as a result. The final story refers to companies that do things “as this is how they have always been done”, instead of constantly looking at their business objectively and looking for newer, more efficient and effective ways to do things. The three key factors from our perspective as management consultants that drive a business are:

1) effectively generated numbers,
2) decisions based up in what the numbers imply,
3) effective communication of the decisions reached.
This is assuming that our clients have a quality product to deal with in the first place.

Numbers: High on this list must be computers. These need to generate the information necessary to run the business. The bigger the business, the more important the numbers are to “tell” the owner how his business is operating. He can no longer “get” to the further reaches of his business, the numbers must tell the story. The main criteria are whether the computer hardware and software generate the information required to make the decisions. The thought of doing that manually is ludicrous, but so is the thought of “overkill” in the computer area. Speed is an issue, but is not the issue. The main issue remains what information is generated and that it provides an indication for the management decisions to be made, be they purchasing, discount, client callback or other decisions. Sixty percent of our client base is auto recycling facilities which have either “AutoInfo”, “Hollander” and more recently “Pinnacle.” Of the three, “Pinnacle” offers the most potential being more recent technology and “evolving” with the industry. Any of the three are imperative to process of gathering information to make decisions. The bottom line is – if your computer does not generate the information you need to make wise decisions, you need a new system. Tweaking the system and keeping it current is less of a drain on the cash flow, if you wait a few years you will eventually have to throw the old system out and replace it.

The next highest on this list will be telephone systems as they must be able to generate activity reports for the sales personnel. The number of outbound calls and the number of calls received are crucial for any sales manager to manage the productivity of their sales force. Used together with computer activity reports as a sales management tool, clients have experienced rapid growth in their sales volume. Amongst others, the final “number generator” we will cover will be the chart of accounts. This needs to be detailed enough to tell the story of how much was spent on brokered parts, how much overtime was paid and can typically be generated by “off the shelf” software packages such as Peachtree and QuickBooks. Each have particular strengths and weaknesses and must be decided upon in collaboration with the accountant responsible for the tax returns. The focus is more on “Management Accounting” which focuses on the pulse of the business versus “Tax Accounting” which focuses on minimizing the taxes to be incurred.

Decisions: A well-known multi millionaire was being interviewed by a reporter, who asked him what the key to his success had been. His reply: “Millions and millions of wise decisions.” The reporter, being a good reporter, persisted. “How did you know when you were making wise decisions?” The reply: “From making millions and millions of poor decisions”. The point here is that managers are called upon to make decisions. The decisions must be based upon available information. The computers generate the information to make the decisions, e.g. “Should we discount the price” – and based upon information on stock, number of requests and cash flow, amongst others, the manager can make a decision. This criteria can be converted to a policy where sales personnel can discount perhaps 10% after 90 days in stock, reducing wear and tear on the manager, who can now prepare his buying requests based upon what he needs to stock as reported by the computer system. Obviously, every business is different, any information generated by a computer is still subject to interpretation, as were that not true, we would not need managers as they would be replaced by a computer.

Communication: Arguably the single most important word in the world. The computer has improved the communication system with the ability to manage data and advent of email which can be a useful tool to enhance the delegation process. Weekly management meetings are a must, where the week’s activities are reviewed and planned. Monthly meetings should be held to review the previous month’s performance against the budget and to set goals for the coming month. Communicating also means establishing a relationship with the customer, where they know you will “solve their problem” and you are guaranteed repeat business. This process is simplified using the computer system effectively, being able to establish a client base, follow up on quotes, send thank you cards and thereby gain repeat business.

Quality: Our work as consultants would be incomplete if our clients did not realize that repeat business is only maintained through providing quality products. If you cannot provide the quality, the clients will not come back and the time is spent gaining business, which was yours to begin with. We deal with an increasingly educated consumer, who knows how to take their business elsewhere if you cannot meet their expectations. There are programs available to ensure that your facility meets high standards - Certified Auto Recycler (CAR), the Gold Seal program and URG’s recently introduced Best Management Practices, based on ISO/QS 9000 standards are but a few of the programs available. We encourage our clients to participate in as many of the programs as possible, you cannot have too many, and no one program covers all bases. “In the counsel of many, there is wisdom”.

Brent W. Stephens is a project manager with a Masters Degree in Social Sciences. He worked for George S. May International Company and International Profit Associates, Inc. prior to opening his own management consulting company, CE Corporation in 1996, incorporating as Consulting Expertise Corporation in 1999. When the business was closed in 2001 due to personal circumstances, close to 80% of their client base were auto recycling facilities. He was a freelance contributor to the Premium Parts magazine.