Archive for the ‘Culture’ Category

ProfitPATH’s Top Ten Blogs – First Quarter 2015

Tuesday, April 7th, 2015

Lessons about successful business growth1.  3 Lessons About Successful Business Growth

Two books, published 19 years apart, yet saying similar things about a key aspect of successful business growth:
‘Built To Last’ was published in 1994. In it, Jim Collins analyzed 18 companies that he called visionary because they were the best in their industries – and had been that way for decades. Collins argued that the core values and enduring purpose of all 18 could be separated from their operating practices and business strategies. And that, while the former never changed, the latter changed constantly in response to a changing world.
In her book ‘The End Of Competitive Advantage’, published in 2013, Rita Gunther McGrath studied the performance of large, publicly-traded companies from 2000-2009. She found that only 10 of them grew their net income by at least 5% every year. All 10 had found ways to combine tremendous internal stability with tremendous external flexibility. McGrath argues that to win in volatile and uncertain times, companies must learn to exploit short-lived opportunities quickly and decisively. more

time for a change in the direction you are heading, focus on center of compass...2.  3 Times When You May Need To Change Your Strategy

Changes to a well thought-out, well-crafted strategy shouldn’t be driven simply because it’s been in place 1, 3 or 5 years. A strategy shouldn’t necessarily be changed even if it isn’t producing results. In this situation I always look at how well (or badly) the strategy is being executed before I look at the strategy itself. So when should a company review its strategy? And what makes that review and any subsequent adaptation, revision or re-creation necessary? Here are three occasions. more

10 Commandments of Business Development3.  10 Commandments of Business Development

I’m not enjoying the after-effects of the 2007/2008 financial crisis. And I’m certainly not a fan of the banks, investment and other, which I believe were a significant contributor to the mess. But, while my wife may disagree, I like to think I keep an open mind. So when I saw an article talking about how Goldman Sachs grew from mid-tier firm to global player in a few decades I had to peek. John Whitehead, a co-head of the firm in 1970, wrote the following 10 commandments that guided their business development efforts. I love them. They’re full of common sense and they’re very practical. Written in 1970, these 10 commandments add to my belief that the basic, common sense principles of business never change. Here are 4 things that business owners today can take from them: more

4.  Adaptive Strategy – A Way To Profits In The New Normal?

Adaptive Strategy is an alternative developed by The Boston Consulting Group (BCG)¹. Here’s how I think it applies to owner managed businesses. Adaptive strategy is built on the 3 R’s required in a changing environment². Can adaptive strategy be applied in owner managed businesses? more

5.  6 Ways A Business Owner Can Influence Culture

I wrote last week about the relationship between Strategy, Culture and Leadership. As a result we’ve had some questions about how a business owner can influence the culture in his/her company. Here, in no particular priority, are 6 ways that it can be done. more

6.  The Difference Between A Strategy And A Plan

I want to talk briefly about what I think is one of the worst mistakes – confusing strategy and planning. Roger Martin wrote a post for the HBR last month in which he dealt with this very topic. I frequently hear business owners talk about the need to do “strategic planning” in order to create a “strategic plan”. Some talk – every year – about holding a “strategic planning meeting”. more

7.  6 Challenges Fast Growing Companies Face

I’ve mentioned Inc. magazine www.inc.com several times before. It’s a great resource. There’s a well-researched article in the current issue about 6 challenges fast growing companies face. They’re all about execution – and if the owner doesn’t deal with them well any one of them can be fatal. more

8.  6 Tips For Growing Your Business in 2015 – How to Use Them

I was asked a good question last week. “Loved your last blog post, Jim – but how do companies like mine do those things?” So here are some ways any business owner can implement the 6 tips in his/her company. more

9.  6 Tips For Growing Your Business in 2015

January is the month for New Year’s resolutions, freezing cold and, for many, a new fiscal year. Everyone wants to ‘do better’ in 2015 than in 2014 and, for business owners, ‘doing better’ is shorthand for growing. I don’t know how often, in the last couple of weeks, I’ve been asked something like “What are your top 6 tips for growing successfully”. The answer depends on a number of things. Here’s the rub. All 6 are much easier to talk about than do. But if you start on them now you can make some progress this year. more

10. 3 Reasons Why Strategy Isn’t Dead In The Water

I hate sweeping generalizations. Strategy is dead is one that I particularly dislike. To say that, it seems to me, is to say that it’s a complete waste of time for every company, regardless of size or industry, to have a strategy.
An article appeared in the Globe and Mail late last year, headline “Why Strategy is Dead In The Water.” It was based on an earlier article in Forbes magazine, headline “Is Strategy Dead? 7 Reasons The Answer May Be Yes.” We’d gone from strategy might be dead to signing its death certificate – in the space of two headlines. more

 

Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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Top Ten In 2014……

Monday, December 29th, 2014

The results are in!

Our top 10 blog posts in 2014 were:

1.   Adaptive Strategy – A Way To Profits In The New Normal? looks at an alternative strategy that is built on the 3 R’s (Responsiveness, Resilience, Readiness) required in a changing environment.

2.   6 Ways A Business Owner Can Influence Culture looks at the ways a business owner can develop a culture which will help increase operating profits and build shareholder value.

3.   6 Challenges Fast Growing Companies Face discusses the 6 challenges of execution which, if not dealt with, could prove fatal.

4.   3 Times When You May Need To Change Your Strategy explains when a company should review its strategy and what makes that review and any subsequent actions necessary.

5.   The Difference Between A Strategy And A Plan talks about the difference between strategy and planning and why it’s important to understand what these terms mean.

6.   6 Things We Can All Learn From Family-Owned Business puts forward 6 simple things business owners can implement to achieve better long-term financial performances.

7.  Use These 3 Tips To Make Your Next Critical Decision offers 3 things Ram Charan, co-author of “Execution”, says business leaders do when faced with a critical decision.

8.  5 Traits Effective Business Owners Share outlines some of the traits effective entrepreneurs have in common that contribute to the growth of their businesses.

9.  3 Reasons Why Consulting Assignments Fail and 3 Reasons Why Consulting Assignments Fail – Part 2 addresses the most common reasons why things can go wrong between consultants and their clients.

10. Strategic Planning – 3 Things That Are Wrong With It outlines how business owners make 3 mistakes that could destroy their company when they confuse strategy and strategic planning.

If you missed any of them, here’s another opportunity!

7 Ways to Hold Consultants Accountable Now

Tuesday, September 23rd, 2014

7 ways to hold consultants accountable nowMy wife will tell you I like giving other people advice.

That’s probably why I’m a management consultant.

But even consultants have to take some of their own advice – and change in order to grow.

For example, we must find a process for linking our compensation to our results in a meaningful way.

There’s no doubt this is hard to do. But that’s no excuse for refusing to try.

However, at the risk of making a huge understatement, it’s going to take time.

So, while we’re waiting, what can a business owner do to make sure the consultants they hire actually deliver results?

1. I talked about our own solution to linking compensation to results last year in a post called “Let’s Hold Consultants Responsible For Results”. It isn’t perfect, but it’s better than the traditional model.

2. Four years ago I suggested how owners can keep control when they work with consultants.

3. Around the same time I highlighted 3 reasons why consulting engagements fail. It’s really not difficult to avoid making them.

4. Look for consultants who have had practical, “hands on” experience operating a company. They have 2 clear advantages over consultants who have spent their entire career in consulting roles, as I pointed out in 2011.

5. There are also clues that you can listen for. Consultants who are effective tend to say certain things.

Here are 2 more things that I thought about this week.

6. Yesterday I was talking to a business owner who had been referred by an existing client. He asked if I would go out and meet him. I agreed immediately because that’s the only way to determine if there’s any chemistry between us.

Some people might consider the idea of “chemistry” to be foolish. But I can tell you from experience, that without it, the risk of a project failing increases dramatically.

7. Ask what success will look like. It’s more than just a description of what the consultant’s going to do and the services they’ll deliver. It’s about knowing how, when and what they will do to help you get the results you want.

Success, they say, comes not from doing one big thing well, but from doing many little things well. Perhaps change is like that too.

We at ProfitPATH, and lots of other consultants, are chipping away, doing the necessary things that will bring change to our business.

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Jim StewartJim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

One Big Reason Why Strategies Fail

Tuesday, September 9th, 2014

the main reason a strategy fails is based in how it’s executedI often argue that a strategy isn’t important.

It’s the benefits a strategy delivers – more profit, increasing the value of a company – that are important. They put more money in the owner’s pocket.

To reap those benefits the strategy must, of course, be successful.

A strategy can fail for many reasons.

It could just be a lousy strategy. But that happens less often than you might think.

Even a poorly conceived strategy can deliver results – if it’s executed with focus, energy and passion.

I believe the main reason a strategy fails is based in how it’s executed.

For example:

  • There’s no link between the strategy and the actions which have to be completed if it’s to be successful.
  • Most people don’t know what the strategy is – and the part their job has to play in making it successful.
  • People, at all levels, do know what their role is – but there’s no accountability if they miss targets.

Some examples are less evident.

One in particular is quite insidious. It goes like this.

After intense discussion, the owner and management team reach a consensus on the strategy for the next 3 years. Everyone goes off determined to do the right things to execute it successfully.

However, since much of their time is taken up with running the business day-to-day, after a while, that begins to affect their perspective.

And that gradual, subtle change in perspective can have a major impact on the execution of their strategy.

It is possible to detect it and fix it. But that requires the discipline to do 2 things.

First, hold regular strategy review meetings. Second, keep the agenda off day-to-day stuff, and on measuring progress toward the 3-year goal.

Any shift in perspective can be spotted by asking one question. “Are all of the projects being discussed integrated/aligned with the strategy we chose for the next 3 years?”

The odds are there will be some drift.

That’s because the company is made up of people. And people tend to have their own priorities, concerns, agenda, and goals – which may be directly opposed to the next person’s. In the face of day-to-day pressures, people find it hard to keep the whole company perspective in mind.

But it can be restored – and one big reason why execution fails can be easily avoided.

If you enjoyed this post you’ll also enjoy Strategy Execution – How You Do What You Do

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Jim StewartJim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

3 Growth Strategies That Always Work

Tuesday, September 2nd, 2014

Here are 3 strategies that work for privately owned businesses in any economic conditions.

3 strategies that work for privately-owned businesses in any economic conditions

Guaranteed.

I’m going to be really bold and also say they will work in any industry.

Interested?

1. Keep costs down – but quality up.

Twenty small and medium-sized companies, based in the U.K., managed high growth by keeping their production costs under control and their prices competitive.

Even when the economy slumped, they kept their quality up even though that meant their prices were slightly higher than their competitors.

That way they kept their customers satisfied – and avoided price wars.

2. Differentiate on tangibles – not intangibles.

Thirteen of the companies were consistent innovators, regularly introducing new products, services or processes.

Five of them, all manufacturers, consistently allocated a large percentage of revenues to developing new products.

In contrast, 15 of the 20 spent relatively little on traditional marketing activities, using their sales force and the Internet to keep customers up-to-date on their new products or services.

3. Customization.

Almost half of the companies stayed very closely in touch with their customers, delivering solutions tailored to specific needs and adapting products as needs changed.

Even those who produced standardized products invited small changes or provided complementary services.

Flouting conventional wisdom, 75% of the companies spurned niches for the broader market. They took time to figure out their competitors’ strengths and weaknesses, then exploited their knowledge to increase their market share.

The 20 companies in the study grew at a consistent rate over a 4-year period—outpacing their competitors by more than 50 percent while operating in declining industries – for example, the clothing industry.

Think about it – keep your costs under control; understand what your customers need, and then give it to them; introduce new products and services regularly.

Put that way it almost sounds like common sense.

So, if these approaches work in a tight economy or mature markets, why wouldn’t they work in good times and healthy markets?

The short answer is that they will.

I’ll make 2 more points as a wrap up.

  • These 3 approaches aren’t mutually exclusive. In fact, the British companies used a combination of them – usually the second and third.
  • The authors of the study commented that the owners and managers saw the situation as offering a challenge and lots of opportunities. As they say – attitude is everything.

If you enjoyed this post you’ll also enjoy The Keys to Executing a Strategy and Getting Results.

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Jim StewartJim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

 

Strategy And The Sales Force

Tuesday, August 26th, 2014

“It’s as plain as the nose on your face!”Funny glasses

One of my aunts used to say that when one of us kids overlooked something by not looking at a situation in a complete way. We saw the obvious – but missed the subtle message.

I was reminded of that yesterday.

I was reading about how, in the mid-1990s, Xerox missed an underlying technological change taking place in their industry.

The sales force was focused on maintaining market share in the face of lower cost competitors like Canon.

But, even though they were visiting companies every day, they missed the fact that people were beginning to use PCs and printers to produce copies.

How did this happen? How could something, so evident in retrospect, have been missed?

One answer is that sales and strategy are separate worlds, often disconnected from each other.

No doubt that’s true. But it’s not just a process or functional issue.

Before becoming a CEO, I spent time in sales and then managed sales forces.

I also worked in companies which had entrenched positions in their industries and which failed to respond to structural shifts.

So here’s my question. Even if the sale force had spotted the change, would anyone have listened to them?

Market dominance can breed a culture in which owners and management develop the belief that they can do no wrong. Their attitude is…….

We’re doing what we’ve always done and that’s resulted in success for many years now. If growth slows or sales actually decrease, that must be because the sales force have stopped being effective.

Instead of complaining about products not having enough features or prices being too high, the sales people need to focus on making calls. What’s needed is a sales training program. And if that doesn’t work, then we’ll replace a few of them.

If things still don’t turn around, we’ll have a look at our marketing programs.

By which they really mean the promotional programs, if any, because they’ve forgotten that marketing also includes pricing and product strategies.

I was on the receiving end of attitudes like these when I worked in corporations.

And, in the last 13 years, we’ve worked with many privately owned companies after sales training and marketing programs failed to restart growth.

So, before reaching for the process or functional solutions, take a moment to check the culture and attitudes. However improbable, that might lead to the answer.

 

If you enjoyed this post you’ll also enjoy Is Crushing the Competition a Strategy?

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Jim StewartJim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

ProfitPATH’s Top Ten Blogs – First Half 2014

Tuesday, July 15th, 2014

 

1.   6 Challenges Fast Growing Companies Face

I’ve mentioned Inc. magazine www.inc.com several times before. It’s a great resource. There’s a well-researched article in the current issue about 6 challenges fast growing companies face. They’re all about execution – and if the owner doesn’t deal with them well any one of them can be fatal. more

 

 

Strategy is not planning and the importance of knowing the difference2.   The Difference Between A Strategy And A Plan

I want to talk briefly about what I think is one of the worst mistakes – confusing strategy and planning. Roger Martin wrote a post for the HBR last month in which he dealt with this very topic. I frequently hear business owners talk about the need to do “strategic planning” in order to create a “strategic plan”. Some talk – every year – about holding a “strategic planning meeting”. more

 

3time for a change in the direction you are heading, focus on center of compass....   3 Times When You May Need To Change Your Strategy

Changes to a well thought-out, well-crafted strategy shouldn’t be driven simply because it’s been in place 1, 3 or 5 years. A strategy shouldn’t necessarily be changed even if it isn’t producing results. In this situation I always look at how well (or badly) the strategy is being executed before I look at the strategy itself. So when should a company review its strategy? And what makes that review and any subsequent adaptation, revision or recreation necessary? Here are three occasions. more

4.   Adaptive Strategy – A Way To Profits In The New Normal?

Adaptive Strategy is an alternative developed by The Boston Consulting Group (BCG)1. Here’s how I think it applies to owner managed businesses. Adaptive strategy is built on the 3 R’s required in a changing environment2. Can adaptive strategy be applied in owner managed businesses? more

5.   6 Ways A Business Owner Can Influence Culture

I wrote last week about the relationship between Strategy, Culture and Leadership. As a result we’ve had some questions about how a business owner can influence the culture in his/her company. Here, in no particular priority, are 6 ways that it can be done. more

6.   6 Things We Can All Learn From Family-Owned Businesses

The 6 things I’m going to talk about come from a study of 149 large, publicly-traded, family-controlled businesses. However, stay with me because we’ve seen the same characteristics in the successful family-owned businesses we’ve dealt with – and none of them are publicly traded. Another thing – the study looked at 1997 – 2009, covering some good and some very tough times. Guess what? The family-controlled businesses, on average, turned in better long-term financial performance than non-family businesses – in multiple countries. So what are the 6 things we can learn? more

7.   6 Tips For Finding The Right Buyer

Last week I was one of three speakers at the Toronto Star’s Small Business Club event, “Exit and Succession Planning”. My talk included 6 things a business owner can do to ensure she/he finds the right buyer or successor. more

8.   3 Ways Human Nature Sabotages Strategy

Ask 10 people how long it will take them to complete a task and I’d guess 7 or 8 of them will underestimate the time required. That proportion might increase if the 10 are all type A personalities – i.e. business owners or entrepreneurs. We see this when we take teams through our strategy and business planning processes. For example, at a specific point, we prioritize the things they need to do to close the gap between their company’s current state and where they want it in 3 years’ time. Typically the teams want to tackle more items than is humanly possible given their resources. There’s no ideal number of items – the complexity of each item is only 1 of the variables – but we’ve seen time and again that completing a few key tasks produces better results than taking on too many. more

9.   5 Traits Effective Business Owners Share

I believe the single biggest thing that separates companies that grow from those that don’t is the owner’s awareness of the need for change and their willingness to do so. So, I was interested in a recent post about traits that effective entrepreneurs share. Sure enough, it contained a quote saying that if owners commit to learning more about themselves and becoming the best that they can be, they’ll find that challenges are really opportunities. But what other traits, according to the post, do effective entrepreneurs have? more

10.  Strategic Planning – 3 Things That Are Wrong With It

We all know that picking a strategy means making choices. But that means making guesses about that great unknown, the future. What happens then if we make the wrong choice? Could we destroy a company? That’s why, according to Roger Martin¹, we turn choosing a strategy into a problem that can be solved using tools we are comfortable with. And we call that strategic planning. But, Martin says, companies make 3 mistakes when they confuse strategy and strategic planning. more

 

 

Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

3 Ways Human Nature Sabotages Strategy

Tuesday, February 4th, 2014

Human nature is a wonderful thing.3 ways human nature sabotages strategy

Ask 10 people how long it will take them to complete a task and I’d guess 7 or 8 of them will underestimate the time required.

That proportion might increase if the 10 are all type A personalities – i.e. business owners or entrepreneurs.

We see this when we take teams through our strategy and business planning processes.

For example, at a specific point, we prioritize the things they need to do to close the gap between their company’s current state and where they want it in 3 years’ time.

Typically the teams want to tackle more items than is humanly possible given their resources.

There’s no ideal number of items – the complexity of each item is only 1 of the variables – but we’ve seen time and again that completing a few key tasks produces better results than taking on too many.

One point teams overlook is that the items that didn’t make the cut aren’t going anywhere. They’ll still be on the list when the top priorities have been dealt with, and can be tackled later in the year.

People don’t believe us when we tell them this. Why, because in our hectic world there are so many distractions that it’s becoming unheard of to finish a project that takes more than 10 minutes to complete.

So, we tell people to block off time in their schedule 2 or 3 days a week to work on the priorities. And we tell them to allow nothing – not voice mail; not email, not their colleagues, not even their boss – to distract them during that time.

A company’s culture can be an incredibly powerful, positive force. But it can also multiply the negative impact of human nature.

This dark side prevails when, for example, carrying a superhuman workload is considered to be the only way to prove your commitment to the company.

A negative culture is often unwittingly fostered, and maintained, by the business owner or management team. So we work on them by, amongst other things, reminding them that Michael Porter said, “the essence of strategy is choosing what not to do”.

Does that work? Do people change?

The smart ones do and, strangely enough, there appears to be a direct correlation between leaders who change and companies being successful.

 

If you enjoyed this post you’ll also enjoy The Single Biggest Thing A Business Needs To Grow

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Top Ten In 2013……

Tuesday, January 7th, 2014

The votes (page views) have been counted; the results can be announced!

Our top 10 blog posts in 2013 were:

1.   6 Challenges Fast Growing Companies Face, which won by a good margin, discusses the 6 challenges of execution which, if not dealt with, could prove fatal.

2.   10 Tips To Improve Your Public Speaking Body Language, written by Mark Bowden of TruthPlane, is the first of our guest posts to make the list.

3.   The Difference Between A Strategy And A Plan talks about the difference between strategy and planning and why it’s important to understand what these terms mean.

4.   6 Ways A Business Owner Can Influence Culture looks at the ways a business owner can develop a culture which will help increase operating profits and build shareholder value.

5.   Adaptive Strategy – A Way To Profits In The New Normal? looks at an alternative strategy that is built on the 3 R’s (Responsiveness, Resilience, Readiness) required in a changing environment.

6.   3 Times When You May Need To Change Your Strategy explains when a company should review its strategy and what makes that review and any subsequent actions necessary.

7.   6 Things We Can All Learn From Family-Owned Business puts forward 6 simple things business owners can implement to achieve better long-term financial performances.

8.   Strategy, Culture and Leadership deals with how these 3 things affect the development and the execution of strategy.

9.   10 Commandments of Business Development are the basic, common sense principles every business owner can apply to their business development efforts.

10.  How To Keep Control When You Work With Consultants provides steps business owners can take to maintain control when they work with consultants.

If you haven’t seen them before, here’s your opportunity!

5 Timeless Hiring Tips for Business Owners

Tuesday, December 24th, 2013

People are key to the success of a strategy and, therefore, a company.5 timeless hiring tips

That’s not news. It’s the very opposite.

Articles about people management regularly appear in the press and there are blog posts published daily about the impact of culture and leadership on success.

Yet some business owners still deal poorly with the people part of strategy. And it often starts with how they hire.

So, here are 5 of my favourite tips (that also aren’t new) for hiring.

1.  Be Clear About The Role. Make a list of the things the role contributes to the execution of the strategy. That will determine the skills and experience required by applicants and make the responsibilities of the position very clear.

2.  Always be Hiring. Think about everyone you meet as a potential hire, particularly those you think would be great to work with. Keep their names in a database. Build a relationship with them in case you do ever decide to offer them a job – and reduce the risk of making a bad hire. Drop those who don’t measure up.

3.  Don’t Settle For the Best of the Bunch. I mentioned skill and knowledge earlier. But you also want people whose attitude and values fit with your culture. And that combination doesn’t pop up every day. That database of potential hires can help you avoid having to settle for the best of the candidates who happen to be available. So can patience and a willingness (and ability) to wait.

4.  Consider a “Test Drive”. Hiring people you’ve worked with previously is similar to test driving a car before buying it. So is hiring someone on a short-term contract, or taking them on as a sub-contractor, to complete a project. All 3 provide an opportunity to get to know their values and attitude. That’s better than hiring someone who looks good on paper – we know that more people are “massaging” their resumes than ever before.

5.  Onboard, Onboard, Onboard. Many companies consider the hiring complete when their offer is accepted. That is just plain wrong.  An onboarding program ensures a great first impression; it allays the stress a person experiences when dealing with new processes, fresh expectations and people they don’t know; and it reduces the time it takes new employees to become productive.

You can find a more tips here.

If you enjoyed this post you’ll also enjoy Little Things Can Have a Big Impact.

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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