ABOUT 
O'HARA BUSINESS STRATEGIES!

O'Hara Business Strategies' mission is "to help clients strategically succeed". Strategically simply means keeping a focus on the key issues and trends facing your company, as well as the long-term success of your organization.

The late Stephen R. Covey, in his classic book, "The 7 Habits of Highly Effective People" captured the strategic mindset with his "Begin with the End in Mind" and "Put First Things First" habits. 

Daniel D. O'Hara and his network of associated professionals can help you make the right choices for your organization. Choices that sidestep the pitfalls and allow you to stride confidently forward. Choices that enhance the stability of your company and allow predictable progress toward your goals.

So, please check out this blog (just scroll down) for short articles on business topics & trends, informative internet links, classic quotes, recommended books, and information about O'Hara Business Strategies--the services offered, Daniel O'Hara's background, and more.

THE DIFFERENCE BETWEEN A CFO AND A CONTROLLER

If you’re comparing the role of a controller to the role of a CFO, you are not alone. The differences lie in the fact that a controller’s responsibilities are mainly technical and tied to historical data, while a CFO’s responsibilities are mainly functional and related to the company’s future endeavors. A controller’s job is more accounting-related, and he or she deals with overseeing processes while the CFO is the CEO’s right-hand man and makes forecasts and strategic decisions based on data and reports supplied by the finance and accounting functions.

Responsibilities of a Controller

     A controller is in charge of the accounting department and/or outsourced accounting activities depending on the company’s setup. If you have an in-house accounting department, the controller is in charge of hiring and managing the accounting team.

     The controller ensures day-to-day accounting processes are running well such as:

·       cash flow maintenance,

·       payroll,

·       collections,

·       accounts payable & receivable,

·       monthly and yearly closings.

The controller will also:

·       provide data for the budgeting process,

·       implement policies to ensure solvency,

·       works to improve reporting and efficiency,

·       help ensure legal compliance when it comes to the company’s financial activities,

·       compiles and reviews historical data and reports the company's historical performance,

·       will work to improve processes and efficiency where necessary to help meet the company’s financial goals, and

·       he or she then passes on this data to the CFO who uses the data to build financial models that provide visibility into how the company is projected to perform in the future. 

Additional responsibilities of a controller can include:

·       management of information technologies,

·       insurance,

·       sales tax reporting,

·       federal income tax reporting,

·       outside CPA audits, and

·       human resources.

Controllers are in essence responsible for the financial and regulatory compliance of a company.  Think of the controller as the "historian" for your company.

Responsibilities of a CFO
A CFO’s responsibilities primarily involve risk management and strategy, as well as being ultimately responsible for the financials of the company. The CFO:

·       collects and analyzes reports from the controller and answers to the CEO,

·       should have the insight to present new opportunities based on financial data and industry trends to the CEO, executives, and the board,

·       also captures new ideas and strategies from the CEO or other senior managers and builds financial models to advise on the best course of action,

·       develops, improves, and utilizes forecasting tools to provide the CEO and senior staff with the best possible financial insight for corporate initiatives,

·       ensures that important business decisions are taken under financially sound principles,

·       maintains relationships with investors and banks and prepares documents needed to obtain capital from investors.

Other CFO responsibilities include:

·       searching for insurance policies and employee benefits and interacting with vendors to ensure the company is getting the best possible deals and

·       using his or her financial expertise primarily for looking forward strategically to identify risks and opportunities for the company. A CFO should have knowledge of the company’s industry and understand how the company works from a holistic perspective.

     

The BEST Solution for Your Business

In some smaller companies, the role of a CFO and a controller may be undertaken by one person. As a business grows, the need for two high-level finance executives becomes more apparent and necessary to maintain business growth and support the operations of a larger firm.  

However, if your company can't afford a controller and definitely not a CFO, O'Hara Business Strategies can function as a Contract Controller or CFO to provide cost-effective, savvy financial expertise and a strategic approach. 

Or, perhaps you need a temporary controller / CFO while hiring a new one or you're looking for some objective consulting advice about the best option for your company, call O'Hara Business Strategies!  

WHAT EMPLOYEES REALLY WANT!

This post is partially an excerpt from a whitepaper by payscale.com entitled, "Turnover: The Good, The Bad and The Ugly."

         What makes an employee get up in the morning looking forward to the work day
         ahead?

GOOD PAY

How strongly pay contributes to employee satisfaction has been debated time and again in the literature probably because money means so many different things to different people. 

However, two truths are constant:
1) employees need money to live, and 
2) money is used as a measure of value by employers and employees.

So no matter where ranked on the latest employee survey, pay matters. Because every time an employee has to make good on a bill or consider whether he can afford a product or service, he thinks about this pay and the value his employer places on his work.



FLEXIBILITY

SHRM surveyed HR professionals about “Challenges Facing HR Over the Next 10 

Years," 59 percent responded that retaining and rewarding the best employees was their 

main concern. And when asked how they thought this goal could be achieved, 40 percent answered “providing flexible work arrangements.”


A recent article in Time magazine referenced a survey by the American Psychological Association reporting that the top reasons Americans give for not leaving their current jobs are “I enjoy the work I do” and it “fits well with the other areas of my life.” And PayScale’s Generations at Work survey found that telecommuting was the top benefit desired by Generation X (those born between 1960 and 1980).Most all employees are looking for better work/life balance and are willing to display loyalty to those employers who provide it.

RESPECT

Employees want to know what they think matters. They want to be treated as valuable members of the team with something meaningful to contribute. At the very least, employees have no desire to be shouted at, demeaned, or humiliated at work by an abusive manager or coworker. 

Employers who give more than lip service to the notion of workplace respect are way ahead of the curve ball and will experience more worker loyalty as a result.

INTERESTING WORK

Most people would prefer to be intellectually challenged at work than not. When it’s considered that a full-time employee will likely spend more waking hours at work than at home, it’s not hard to understand why she would rather her work doesn’t feel like a waste of time and talent. Pay matters, yes. But even the best pay can’t compensate for boring, mind-numbing work that provides no enjoyment and little mental stimulation.

AUTONOMY

Finally, jobs that offer greater freedom and choice in execution (i.e., empowerment) are associated with higher satisfaction levels. Micro-managing employees can be counter-productive, leading to excessive dependence on supervisors or turnover due to this oppressive management style.  Allowing employees the freedom to do a job the way they prefer, while achieving the desired results, allows them to grow in their job, problem solve, learn faster, and add value to their employer by focusing on results, not petty methods.
 

PREVENTING FRAUD AT YOUR COMPANY!

Small businesses typically have a greater problem with fraud and lost assets than larger corporations!

One of the key reasons is a lack of segregation of duties among employees in many small businesses! According to a July 2010 article in The CPA Journal, smaller companies (less than $75 million market value) were much more likely to have the internal control weakness of lacking segregation of duties in key tasks. The objective of the principle of segregation of duties is to prevent an employee from being in a position to commit and perpetuate errors or irregularities.

For some background on the topic, it is a key basic tenet of internal control that for each transaction cycle, with the cash disbursement cycle being noted as of primary concern, that the following functions should be segregated between different employees:

• Authorization of transactions,
• Custodianship of the asset in question,
• Recording of transactions, and
• Reconciliations of the records.

In reality however, small businesses don't always have the staff or the resources to hire staff to accomplish a true segregation of duties. So, aside from hiring more staff, a few common compensating controls that, at least partially, mitigate the segregation of duties problem are:

• Rotation of duties among existing staff. Variations of this approach include cross-training staff to perform a variety of duties and having a "Mandatory Vacation" policy so an offending employee will be found out at some point.
• Management oversight. Management can review reports of specific transactions, oversee periodic counts of inventory, equipment or other assets like cash and comparing them to accounting records, and/or reviewing reconciliations of account balances or assets or performing them independently. Another technique is to perform surprise checks or exception reports to pro-actively address concerns. An example of exception reports would be to identify financial ratios that may be out of line like gross profit percentages, for example. Implicit in many of these approaches, is that management must have some degree of financial expertise to perform these oversight tasks effectively.
• Third-party involvement. Kind of a corollary to management oversight, is that management could bring in temporary employees, consultants or outside CPAs to offer periodic oversight. 
• A final approach of note is to "beef up" existing procedures like putting them in writing, for example. Another example would be performing a top-down risk-based analysis by identifying threats in the context of the effect on financial integrity and the likelihood of actual violations. 

Segregation of duties is a key principle of internal control! However, adding more staff is not always feasible! Using a compensating control like rotation of duties, management or third-party oversight, "beefing up" existing procedures or performing a risk-based analysis to identify potential internal control threats can provide an effective solution!

USING COMPETITOR RESEARCH AS A STRATEGIC TOOL

Sometimes, strategy is considered to be a highbrow topic for small business. Actually, not so! Businesses that take the time to evaluate their strengths, weaknesses and unique position in the marketplace and then develop a strategy to take advantage of their uniqueness are typically more profitable than competitors.

Competitor research, also called competitive intelligence or competitor mystery shopping, can be a key data gathering tool in the strategic process. Actually, it may be all that is needed externally for many small businesses to develop a satisfactory business strategy!

My capstone college course in college was strategic management, emphasizing that every business is duty-bound to understand not only who its competitors are but also their competitive strengths and weaknesses. Only then can you evaluate your own business’ relative “SWOTs” (strengths, weaknesses, opportunities, threats). Knowing more about your competitors will thus help your business grow and succeed.

Competitor research can hone in one price primarily but it may also address key issues such as customer service, promotional/marketing methods used, warranty policies, location and layout and financing options made available by your competitors.

While traditional market research is a tactical, methods-driven discipline that measures beliefs and perceptions through surveys or focus groups, competitor research uses both primary and secondary research and goes beyond answering existing questions to raising new ones and guiding action.

Contact O'Hara Business Strategies to learn more about how competitor research can be a key, cost-effective tool for developing a winning strategy for your business!

COMPETITOR RESEARCH CASE STUDIES

Competitor research is an excellent market research tool to learn more about your competition, so you can differentiate your business and increase profits!

A few O'Hara Business Strategies' (OBS) case studies have included:

Banking Case Study
O'Hara Business Strategies (OBS) worked with a major merchant services (credit card processing) client to compare its services to other competing major financial institutions. This client wanted to evaluate everything from the overall rate quoted to a new or established business of various sizes (based on revenue) to the customer service offered by their merchant services specialists. Additionally, the client wanted to track the type of pricing model used and quoted, the cost of equipment and software used, whether there were fees for charge-backs or for the latest security features to block identity theft.  OBS used business savvy, discretion, confidentiality and accurate data gathering skills to add value to this client!

Agriculture/ Aquaculture Case Study
One of O'Hara Business' Strategies first projects was for a trout fishing ranch, which served residential and commercial tourist customers. This client was primarily interested in comparing prices with its' competitors. However, having the foresight to realize that non-monetary differences often make the difference between a marginally profitable and very successful business, the client also chose to track their competitors' customer service phone skills, delivery times, product offerings, and how they responded to special demands and requests. This client appreciated our firm as "professional, concise, and cost effective...the wisest management tool we used (that year)...".

Business Services Firm Case Study
OBS assisted a growing, Montana-based business services firm compare its' rates with a broad cross-section of competitors for several of its offerings. This firm appreciated OBS's clear and concise comparison of competing firms, noting that it gave them the chance "...to gain valuable information and insight about my competition." Additionally, OBS used this information to provide advice about how to capitalize on this information to fine tune their position in the market in terms of price and help focus its offered services.  This project was an example where OBS intentionally challenged a client's competitors to get a feel for how they would handle more stressful, real-life situations.

Grocery Store Case Study
Sometimes, "competitors" can be other stores within the same chain. In some cases, OBS has been hired by a parent company to evaluate and audit franchised or affiliated stores for adherence to company standards in merchandising, inventory management, company signage as examples.  In addition to the pricing of selected items, other factors such as staff friendliness & availability, restroom cleanliness, and freezer & refrigerator temperature levels were audited. This information was compared to competing stores and top performing stores were recognized.



Conclusion
As you can see from these examples, competitor research involves all aspects of business management, not just the products, services and prices that are traditionally the focus of market research. And competitor research or mystery shopping is a great way to acquire this necessary information. It is a proven business tool, invaluable in growing your business and improving your bottom line.

BENEFITS OF REGULAR FINANCIAL STATEMENTS

Unlike a major corporation that is required by stockholders, banks, or regulators to have monthly or quarterly financial statements, there is typically no such mandate for most small businesses.

Many small business owners may dismiss the idea of regular financial statements, thinking they are:

• Too expensive,
• Too much of a hassle,
• Unnecessary, since their business is simple, or 
• They have gotten along without them for many years.

However, regular (monthly or quarterly) financial statements offer the following POWERFUL benefits:

• A holistic, and inter-related snapshot of a company's finances--it's a report card in the form of the income statement, it shows the financial health of a business in the balance sheet, and summarizes cash-- the "life blood" in the statement of cash flows.  
• A mental, one time "financial statement" in your head, or on the back of a napkin, about how you did on one job or over one month doesn't tell the whole story.  The three financial statements provide crucial accuracy and insight! 
• I find time and again that human nature distorts results positively --how we think or want things to be aren't how they actually are when wearing these "rose-colored glasses". Perception is not always reality, in the case of financial information! Having those hard numbers in front of you helps you make decisions more rationally and logically, rather than based on deluded, emotional hunches.
• While your profit picture for one job or one month may not be that "complicated," the whole picture may need a closer look. The accounting system allows you to see the "big picture" rather than fixating on just one great job or one super month of sales. 
• Financials allow you to see trends...Is gross profit holding steady? Are travel expenses getting out of hand? Are sales in line with goals?
• Monthly financial financial statements are the solid foundation for further study of questionable line items, for budgeting, for comparing current vs. prior years, for comparing different departments or products, for other analysis like capital budgeting or lease-buy decisions, and they are a rational benchmark for goals.
• Regular financials create peace of mind for a business owner! The certainty and accuracy of knowing a bank balance, the current inventory level or that profits are at an expected level all feed this peace of mind!

While costs of gathering information certainly need to be considered, THE BOTTOM LINE is, you know your business better by seeing the whole picture (and diverse aspects about it), with information in front of you or with it easily accessible. Helping a business owner be intelligently pro-active is a strong benefit of regular financial statements!

DELEGATION 101

Delegating is a key skill for managers and entrepreneurs. Leveraging competent staff, a business can both flourish and allow leaders to focus on leading, building and growing!

One of my favorite illustrations of effective delegation is found in the classic book, "The 7 Habits of Highly Effective People" authored by the late Stephen R. Covey. 

Covey had excellent insights on the topic in "7 Habits". His premise was that leaders, or producers, delegated in one of two ways:

"Gofer Delegation" which means "Go for this, go for that...tell me when it's done." An example: a construction contractor I once knew, quipped, "I just want someone who can hand me tools", when he referred to his staff needs! In the extreme sense, it is a slave. Covey calls it the producer mentality; "...roll up your sleeves and get the job done". The focus is on methods, not results. Very little, if any, investment is required or desired in developing/training people. Ironically, the results are limited because you can't supervise very many people with this approach, so growth is limited. Unless you have an overseer motivate with a whip (not legal, the last time I checked). 
    Unfortunately, leaders who major in, what Covey called, "gofer delegation", seem to share a number of these common traits:

• a disdainful, superior attitude to their employees, 
• high, even unrealistic, expectations that often result in an employee's failure, which justifies their need to do the job themselves, 
• a "production focus" results since such leaders are technicians (carpenters, plumbers, accountants, farmers, etc.) and such folks often find great enjoyment out of doing their work well instead of developing others to do the same,
• employees are often viewed as a hassle--often due to a lack of training and effective delegation-- than as a resource to develop and leverage, benefiting all concerned, and 
• they possess a strong need to control results and avoid hassles, which is ultimately counter-productive, since people can feel used & trust is often destroyed, systems aren't put in place, the business flounders and this micro-managing approach actually further frustrates the leader. 

"Stewardship delegation" which is focused on results, not methods.  It gives subordinates the choice of method but also makes them responsible for results. It takes an investment of time up-front but the return can be enhanced, both in quantity and quality. Covey notes up-front commitment and understanding are required in five areas:

• Desired results - Covey used the example of "green and clean" when he delegated his yard's care to his young son. Clear, mutual understanding is needed!
• Identify parameters, guidelines and pitfalls. Sometimes, a certain method must be honored for safety, regulatory or perhaps liability reasons. Point out the potential minefields in a task!
• Identify resources that can be used, whether financial, technical, human or organizational. An example: time draining technical glitches on a software program might require reaching out to a computer technician inside or outside the company.
• Accountability - Set up standards of performance and the times when evaluation will take place. Obvious examples are the scheduled performance review many employers do or a report card for students..  
• Rewards & consequences - Specify what will happen...good and bad, in terms of financial rewards, psychic rewards, natural or actual consequences. If someone isn't measuring up, coaching can be an excellent way to salvage the investment in that person before an abrupt termination!

As noted previously, Stephen Covey illustrated "stewardship delegation" effectively with an experience involving his young son. His seven-year-old son, Stephen had volunteered to take care of the family's yard during a family meeting designed to spread out the family's workload. Covey explained how sound delegation practices can work with the youngest person or the most mundane, low-skill job. Specifying that he wanted a yard that was "clean and green", and with patient training and a few rough patches, Covey noted that his son, Stephen, "...kept it greener and cleaner than it have ever been " under his own stewardship. 

Covey's bottom line...was that effective delegation is perhaps the best indication of effective management but it takes a commitment to manage, not just produce.


*Source: "The 7 Habits of Highly Effective People" authored by the late Stephen R. Covey, pg. 172-179. 

SO WHAT IS TICKING YOUR STAFF OFF...


While the modern workplace is definitely a two way street, with managers and business execs dealing with problem employees as well, it's important to realize some of the issues that frustrate employees, especially if you are doing the frustrating!

Why should you care, since you are in charge? Well, because the bottom line is, it's wise to do so! Such issues lead to reduced morale taking the form of lost productivity, turnover, and a toxic work environment. How about subtle and not so subtle forms of sabotage! An example: I recall one concrete contractor who was actually quite afraid of his workers quitting before an important job got done or, if you can believe it, even returning from lunch!

Let's take five problem management issues/styles to be aware of:

• Meddling, micro-managing managers!  Having seen and experienced quite a few over the years, this type of management behavior burns people out fast, stifles creativity, creates a toxic work environment and seriously hinders productivity. While new staffers expect to be "baby sat" and new employees should be trained thoroughly, competent employees should be given the resources to do the job and cut loose. If someone seriously can't do the work in a reasonable period of time, then it's time for a decision!  If a company has experienced, competent employees that are not allowed to do their job, this often points to an insecure, "control freak"-type management, that is almost always not effective at running a business. Such managers typically don't manage from financial statements, expected results, or a business plan....and they don't train employees. 

• Mixed messages & moving goal posts! When a manager continually changes the goal or standard, especially quickly and unreasonably without some commensurate increase in compensation, or worse yet, with threats and browbeating, that creates frustration. In today's corporate environment the tension is often between accuracy and speed. One consultant from a major firm quipped to me recently, "Speed is more favored by today's companies." I tend to agree but I would say both are desired, at least by smart management! A fast worker offers and receives quick feedback. The job is done or the quote is processed. It's out the door! Accuracy, or the lack of it, can hit hard, but less often. A mistake can be missed that costs hundreds or thousands of dollars, auditors can come down hard months later, and reputations can be damaged. But, If management preaches speed continually, creating a climate of intense pressure for it with little positive feedback for accuracy, it is human nature to grease what is "the squeakiest wheel." 

• Threats, belittling and ridicule - Whether express or implied, public threats and domineering behavior, can stifle a team environment. Stifling discussion or reasonable questions with accusations or discipline provides the incentive to remain silent! Bullying management can take a toll on creativity and the input many employers claim to want. It is often worth it for one of your employees to ask a question, make a suggestion, etc?

• Creating & fostering conflict! Setting one department against another, processing vs. quality control, as an example, can also destroy the team spirit. No matter how many pot lucks, game days, etc. management might have, the toxicity created by handling conflict unfairly among staff can't be overstated. These "team events" may be loathed in such cases! The same conflict can be created among individual employees who think they hold the same title--whether it be CFO, office manager or supervisor. Such situations breed tension and strife. Most managers deny doing this, but the actions need to be observed! 

• "Mastery by mystery" management. Discussing the mixed messages before, a manifestation of this extreme is how management may preach one thing like speed, speed, speed. And rarely, speak of accuracy or "data integrity". But then use a less favored subordinate's poor performance on a few tasks as the pretext for discipline, or even dismissal. In other words, no one really knows what excellence or poor performance are, because they exist only in the mind, or moods and whims of the manager.

14 ISSUES & ATTITUDES

AFFECTING EMPLOYEES'  PERFORMANCE

 

This is an excellent comprehensive list I saw recently in an old Human Resources textbook. It helps tell the story of what motivates employees, what's important to them and what can contribute to turnover in a company.

1. Job Demands - Includes work pressure, fatigue, boredom, and work load. 
2. Working Conditions - Includes equipment adequacy, safety, and annoyances.  
3. Pay - Adequacy, compared to competing firms and administration of pay.
4. Employee benefits - Benefits offered and how they are administered.
5. Friendliness, cooperation of fellow employees - Includes friction and bossiness.
6. Supervisor-employee interpersonal relations - Includes fairness, friendliness, treatment of suggestions, follow-through on promises.
7. Confidence in management - The belief in management's integrity and concern for their employee's welfare.
8. Technical competence of supervision - Includes decision making, administrative skill, work organization and ability to train employees
9. Effectiveness of administration - Includes cooperation among departments, efficiency of company operations and confidence in higher levels of management.
10. Adequacy of communication - Includes complaint-handling, freedom to express opinions and suggest improvements, and providing information about future plans.
11. Security of job and work relations - Includes security from arbitrary discharge and recognition of length of service. 
12. Status and recognition - Includes standing with the company and respect for judgment. 
13. Identification with the company - Pride in the company and a sense of belonging in the company.
14. Opportunity for growth and advancement - Includes the opportunity to develop one's skills and get ahead in the organization.

*Used under the Fair Use Rules of the U.S. Copyright Law. From the book, "Managing Human Resources", pg. 537 by Herbert J. Chruden and Arthur W. Sherman, Jr. Published by South-Western Publishing Co. The book reprinted this information from "Administration and Interpretation of the SRA Attitude Survey by Science Research Associates, Inc.