Precast Inc. - September/October 2008 - (Page 24) Three Indicators To keep a company growing during tough economic times, Kramers urges CEOs to employ the following three financial indicators: • A daily cash report and weekly cash reforecast to obtain a quick snapshot of the company’s financial situation. • An estimate of operating expenses as a percentage of sales, ideally on a 12-monthstrailing basis. Depending upon the business, the percentage should be between 12 percent and 20 percent. • Identification and tracking of the single component within the company that most contributes to revenue growth. “Start measuring and tracking whatever that component may be,” says Kramers, “and act on those findings.” “The next 18 months aren’t going to be easy, with no one really sure just how bad it’s going to get. The companies that survive and thrive are going to be the ones that use the best possible tools and strategies on a daily basis.” – KRAIG KRAMERS No. 8 on the list). “If you give someone an extra dollar for doing a good job, the next time they do a good job, they’ll want two dollars,” says Kramers. “Reward them with recognition and they’ll want to do a good job the next time so they can achieve more recognition.” Kramers believes that the weakest link in all companies is communication. In addition to what he learns, and the relationship level he is able to build during a daily “20-minute walk-around routine,” he cites many examples of how to improve communication with employees at all levels of the company. Kramers emphasizes the buy-in he was able to achieve – from upper-level managers to the bottom tier of employees – through communicating the company’s goals via memos, letters, signs, banners and so forth. For example, one of his companies was a leading fine-color commercial printer in the United States. Although profitable overall, the company had lost money in the first quarter for 94 of its 95 years in business. The firm had lost $750,000 in the first quarter of the previous year. Using a campaign, keynoted by signs that proclaimed “Qtr 1=$1,” he embarked the company on a quest for making just one single dollar of profit in the upcoming first quarter. “The company made a game out of finding some way to make that dollar’s worth of profit,” says Kramers. The methods they used included more aggressive pricing, pre-selling accounts for later work, encouraging cost-cutting and better productivity practices, and having strong rewards available for a positive result. “The ultimate outcome was that they made more than $200,000 for the quarter,” says Kramers. “It was an exciting, real-world example of what goal-setting, combined with fun in the workplace, can achieve.” Survive and thrive To persevere in today’s ultracompetitive precast industry and continue to grow profits in any economic conditions, Kramers says companies must first understand and embrace the uncertainty that most manufacturers are facing right now. Realize that things aren’t “as they should be,” and take the steps necessary to keep that bottom line on a growth curve. “The next 18 months aren’t going to be easy, with no one really sure just how bad it’s going to get,” says Kramers. “The companies that survive and thrive are going to be the ones that use the best possible tools and strategies on a daily basis.” Bridget McCrea is a freelance writer who covers manufacturing, industry and technology. She is the winner of the 2007 Florida Magazine Association's Gold Award for best trade/technical feature statewide. company, you will build relationships and trust with your employees,” he says. “They will then become willing participants in working to achieve the company’s goals.” Recognition counts Employee recognition stands as yet another profit optimization tool that too many firms overlook, particularly when they’re striving to cut costs in unfavorable economic conditions. Kramers says a better approach is to realize that every individual needs recognition, personal growth, challenge, communication, convenience, compensation, fun and security. “Recognition pays off a thousand to one over compensation,” says Kramers, who points out that when employees are surveyed about what they’re not getting at their company, the top two gripes are typically communication and recognition (compensation is about 24 SEPTEMBER/OCTOBER 2008 | PRECAST INC. Crane Truck for Sale 1989 Pacific truck with Line Haul 30,000 lb hydraulic unloader, 20,000 front, 48,000 rear, 3406B Cat, Fuller transmission, 233,000 miles, 18 foot deck. Contact: Ken Wilkinson 1-319-648-2708 or kenwilky@msn.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.