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By Christopher Janis
Next month football teams across the country will start their training camps. Regardless of their status -- NFL, NCAA, or high school -- each team will gather in the late summer heat to revisit the fundamentals of the game. Professionals and amateurs alike will practice for hours on end to rediscover basic blocking, tackling and other skills as they prepare for opening day.
Executives should hold their own version of training camp amidst one of the most challenging economic environments in recent history. Getting back to the basics can have an immediate impact on bottom line performance. Executives need to reflect on the risks inherent in their business, and set a path for improved operating fundamentals across the enterprise. Some issues to consider for "Training Camp" are noted below:
Entity Level Controls - When is the last time your company's board or audit committee performed a self assessment? Is the budgeting/forecasting process re-engineered to address the issues the company faces in this tumultuous market? Are compensation plans truly aligned with operating performance? Do the rank-and-file employees really understand the company's operating mission, which may have shifted due to market conditions? Are your external auditors and other key advisors in sync with the operating challenges of the enterprise? Solidifying the fundamentals starts at the top.
Managing Cash Flow - Are your billings performed timely and accurately? Have your collections efforts been modified to manage customer pressure points? Are you managing outflows of cash appropriately? Are you sensitive to the long-term impact of the current credit markets on your future capital requirements? Basic treasury management can yield positive cash flow.
Purchasing and Payables - Does your purchase order system really function as designed, or do blanket approvals or workarounds happen every day? Is your vendor selection process tight? Are line managers held accountable for their spending activities? Does your variance analysis extend deep enough to cut the "little stuff" that may be overlooked during more robust operating cycles? Basic controls actually do work.
Sales Force Management - Are the sales efforts being optimized to capitalize on unique opportunities in the challenging marketplace? Are the sales force compensation plans aligned with profitable growth or simply top-line performance? Are pricing policies appropriate? Are T&E budgets being recast and appropriately scrutinized? Managing profit margins on the front end of deals can enhance operating performance over the long haul.
Information Technology - Are your systems enablers of impediments to enhancing process improvements? Do passwords change often enough, given employee turnover risk? Is proprietary technology secure and recoverable? Do you leverage technology to improve your customers' experience with your product or service? IT can be a profit center if managed appropriately.
Do you think the issues above are too basic? If so, then ask Tom Brady or Joe Montana if revisiting the fundamentals hurt them when they won all their Super Bowls.
Christopher Janus is a partner in charge of the internal audit and risk management practice of Weiser.
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