Calling the CA Real Estate Market

A special update for those living in California and interested in our state's real estate picture.

Those of you who know me a little, know I'm passionate about investing.  Stocks, bonds, commodities, real estate...this is my idea of golfing on the weekends.

Only a few of you, who know my deepest secrets, know I have man crush on the Newport California based bond company PIMCO.  In short, the company is run by two of the best fixed income minds in the game today, Bill Gross and Mohamed El-Erian.

In last weekends Barrons magazine, their top manager was interviewed.  "Top manager" might be a bit of an understatement, Mark Kiesel was Morningstar's 2012 Fixed Income Manager of the Year.

You see, Mark has written a couple of prescient articles on the housing market. He has also put his money where his mouth is, and in 2006 literally packed up all his belongings, sold his home, and rented.  He summed up the reasons for his exit, in his paper entitled "For Sale."

A year later Kiesel wrote "Still Renting," showing he still was betting against the housing market.  We all know what happened from 2008-2011.

Well now Mark is back, figuratively and literally.  In May of 2012 he purchased a house in Newport and wrote his latest housing paper called "Back In." He says, "the way to make money is to be as overweight housing as you can, because we are going to see the beginning of probably a four-to-five-year upcycle in housing."

He also points to data saying, "today there are 36% fewer homes for sale in the state of California than when I bought my house a year ago...so where people want to live, there is almost no supply."

I'm not in Mark's league, so I don't try to predict market cycles.  But I do now have Mark's blog page bookmarked.

Where do you think we're headed?  Hit reply and let me know.


Notes:

Mark's article "Back In" written about this time last year.

http://www.pimco.com/EN/Insights/Pages/Global-Credit-Perspectives-May-2012.aspx#

I can't bookmark the article to Barron's, but you can Google "barrons, kiesel" and find the full article.

Using Consulting Resources Effectively - Part 2

In our last post we helped categorize your projects.  Today, let's look at the characteristics of external consultancies.

Consultancy Types:

Big Firms - Bring to bear resources across a broad spectrum of industries, technologies and functional areas.  Can meet the needs of the largest of large inititiatives domestically and globally.   Big firms will primarily focus only on these large initiatives to move their "revenue meters”.

Mid Sized Firms - Directly can compete with Big Firms in all but name (branding) and the largest initiatives. Often possess a core strength upon which they were initially founded; be that industry, functionally or technology. 

Management Consulting & Technology Boutiques - Typically made their name in a specific industry, functional area or technology.  Great work, word of mouth and/or a hot technology have allowed growth into larger team based deliveries.

Software/Platform Specific Vendors - The professional services division of a software vendor.  They possess a very high degree of knowledge in their own product and often the specific business functions their product aligns to.

Staffing / Placement Agencies - Focused on augmenting teams, and single resource placements.

Independent Consultants -  Independents are typically used to augment projects or fulfill gaps in on-going operational activities. Specialities, acumen, and skill sets will vary tremendously. Note: in the context described here are truly independent workers, not joined to or aligned with any of our previous categories.

Internal Resources - Although not part of any external consulting organization, may at times augment 10-50+% of any given project's team size.  These internal resources are "do’ers” and officially allocated to a project, even if only part-time.  This category does not include business stakeholders that may provide input throughout a project.

Consultancy Characteristics:

Total Cost of Pricing - The total cost of doing business excluding travel (see below).  This includes: base consultant rates, over-time, over-head costs (partners, directors) and retainers.

Client Focused Flexibility - Willingness and ability to make common sense changes occur quickly for clients. Do small scope changes require a change order? Do legal contracts and statements of work take weeks to negotiate? Do you lack access to frequently interact with the firm's top management?

Team Focused Delivery - Turn key ability to resource all major aspects of a team’s makeup if so requested.

Lean Staffing Models -  Does the consultancy take an aggressive approach to lean project staffing?
Does the consultancy allow for its' resources to cross over into different roles simultaneously?  Are all resources efficiently allocated and being utilized to the fullest? 

Bench Strength - The ability to meet project resourcing demands with the appropriate talent level.

Travel Related Expenses / Out of Town Consultants -  Are >50% of project resources typically incurring out of town travel expenses?  Travel costs can quickly add up when an additional 10-20% is added to direct resourcing costs.

Stay tuned for our next post, where we'll match resourcing options with your project types.

Figure 1.  Consultancy Characteristics Summary Matrix

Figure 2. Consultancy Strengths

Figure 3. Consultancy Weaknesses

About Us:

At CompassX we know all about strategy implementation and project execution excellence. To learn more:

kyleh@compassx.com  |  www.compassx.com | © COMPASSX GROUP, 2013 All Rights Reserved.

Using Consulting Resources Effectively - Part I

You know how it goes...a whiteboard chock full of prioritized strategic initiatives and projects that all need to be implemented this year.  Annual spending budgets may have increased slightly year over year, but certainly not significantly and not keeping pace with business demands.

No longer can your internal business customers wait many months for delivered benefits and results.  The Lifesciences compettitive landscape has only become more and more competitive; patent expirations, generic competition, biosimilars, increased regulatory scrutiny and legal burdens and the higher costs associated with bringing new products and devices to market.

A recent 2012 Accenture Lifesciences industry study states, "The revenue forecasts...reveals how starkly the future prospects have changed for several of the companies over the last three years. The four year forecast (2013-2016) remains low for some companies which continue to struggle to navigate a path back to growth after the worst of the patent cliff. A few even face the prospect of a second round of significant patent expiries and are forecasted to have negative growth. However, several companies are forecast to grow in line with the estimated global market growth of 4-5 percent, having articulated a clear path back to growth and making substantial strategic and operational changes.These companies are adjusting to a “new normal” where profitable growth is still attainable, although harder to achieve." 

Do you have a plan? How will you resource strategic projects this year? This buyer’s guide will assist you in navigating the hazardous landscape of buying consulting services.

Let’s first look at defining your project type.

Project Categories:

Strategy - Architecting new business and IT solutions by shifting previous thinking and adopting new approaches.  Here, our categorization of strategy projects is "pure strategy", it does not include the execution or implementation phases which would later fall into one of the below categories. 

Large Scale Transformational - Efforts attempting to deliver benefits across an entire organization, or multiple business functions simultaneously.  High degrees of business and IT complexity, organizational changes and many moving pieces equates to large:  program budgets, project resources and capital expenditures.

Large Divisional - Delivered benefits intended to impact a single large company division e.g. Research and Development or Sales.  Even the most straight forward implementation will be complex due to size and business criticality. 

Departmental - Vertically organized to produce results that impact specific business functions e.g. Legal, Compliance, Regulatory Affairs.  Smaller in scope and complexity of a Large Divisional program.

Ad Hoc or Incremental - The smallest of the project categories, often used to incrementally build upon previously delivered benefits, for example system enhancements or extensions, and continuous improvements to business processes.

In Part II of this series we will show you a behind the scenes "menu of consulting firms" available to fulfill these project types. 

About Us:

At CompassX we know all about strategy implementation and great project execution excellence.

Learn more: kyleh@compassx.com  |  www.compassx.com | © COMPASSX GROUP, 2013 All Rights Reserved.

No B.S. Time Management Book Review

Recently I finished reading Dan Kennedy's "No B.S. Time Management for Entrepreneurs, the Ultimate No Holds Barred Kick Butt, Take No Prisoners, Guide to Time Productivy and Sanity".  The title is quite a mouthful, and a bit flashy, but the author's content is worth the read.

Since many of my clients and friends are not business owners, I wanted to extract the bits most relevant to both leaders, employees, and business owners. 

• Kennedy takes you through a series of steps on how to value your time in dollars.  The punchline...your time is worth a lot more than you think, treat it as your most valuable resource.
• Increase your productivy by "getting lost".  Kennedy provides an example of a businessman who rented a small office neither at his home office or onsite work office.  In this example, the man was not productive in either of the typical settings because of frequent interruptions.  His third office provided him with the opportunity to harnesh his producitvty zone.  Find your "third office", whether this be home, a closed door office, conference room, library or coffee shop.
• Link everything you do to your goals - multiple times per day.  He recommends frequently asking yourself, "Is what I am doing, this minute, moving me measurably closer to my goals"?  A >50% "Yes" rate is your benchmark, strive to constantly push this percentage higher.
• Delegate and then keep yourself out of the way. Kennedy has a little saying when delegating, "Good enough is often good enough", meaning often the delegator will have a better way of doing things or at least believe he does.  By stepping out of the way, and letting the results materialize, you will often find the results are indeed good enough.
• Reasons why a year passes and no meaningful progress is made.  This final chapter is the most poignent.  Write down the 3-5 most important, highest value, daily tasks that will return big dividends.  Make yourself do at least one of these tasks every day without fail.  This may require some serious self-discipline, tossing out old ideas and re-arranging your daily routine, but Kennedy points this single disiplice out as the number one factor of personal and career success.

For more material on Dan Kennedy see www.dankennedy.com

Speaking Bureau: Life Sciences’ New Compliance Normal

Life sciences chief compliance officers are not taking many vacations these days.  Regulations are requiring compliance departments to delve progressively deeper into interactions with health care professionals (HCP’s) and health care institutions (HCI’s).  The physician speaking bureau is one such HCP interaction which has come under increased regulatory scrutiny.

Speaking Bureau → Training → Programs → Events.  Great compliance programs will ensure “compliance entry gates” are in place prior to each stage of a speaking bureau.  Long before a HCP has delivered on her speaking engagement, a series of best processes must be in place; they must be enforceable, repeatable and reportable. Not only will these procedures protect a high risk corporate work-stream, but these same procedures will serve as proof of organizational training that is aligned with your company’s compliance policies.

Entry Stage.  A speaking bureau allows for the organization of life sciences marketing objectives, key opinion leaders, speaking events, regions of coverage and all of their associated details.  Much the same as a folder is used to organize paperwork, the bureau is used to group similar topics with a specific purpose.   To maximize the bureau’s effectiveness, acceptance into the speaking bureau should be dependent on the following categories and the proper auditable documentation of the following:

1. Good professional standing. Includes verifying: state and federal licenses to practice, Office of Inspector General excluded individuals, and generally sound existing public relations.
2. Curriculum Vitae.   A potential speaker’s career should illustrate a consistent track record to be given the opportunity to present to highly skilled peer groups, including areas of specialization and clinical experiences.
3. Fair Market Value Compensation. A consistent method or tool used to calculate payment standards for honoraria both within the organization and pan-industry.  Notice should also be taken to ensure payment maximums are not exceeded and, when exceptions do occur, a clear supporting explanation with executive level approvals provided.
4. Contract or Agreement. A fully executed contract with the primary or secondary speakers defining: scope of services, expected dates of program performance and completion, honoraria (gathered through the Fair Market Value process described above), travel and lodging reimbursement policies.
5. Compliance Certification.  An additional but recommended step to clearly presenting your compliance department’s policy to your potential speakers.  This additional certification clause brings special attention to important matters such as: non-approved, or “off label”, questions and answers, mandatory use of pre-approved materials and slide decks, and procedures to ask clarifying questions prior to the actual event occurring.

Training Stage. Once a speaker or HCP has passed the entry criteria for a bureau, proper training is required to meet regulatory training guidelines and ensure the speaker is fully prepared to facilitate speaking sessions on behalf of your Life sciences organization. Proper record keeping and documentation of the following activities is a must have.

1. Attendance & Understanding.  A speaker must attend a training session (either live or web-based) and present an understanding of the materials covered through interactive feedback.
2. Pre-Approved Materials.  The importance of using only pre-approved materials and slide decks should be reinforced during training.  Deviations from pre-approved materials has proven to lead to an increase in speaking infringements.
3. “Off Label” Discussions.  Another priority of your training sessions with speakers will be to reinforce the proper dialogue and communication around non-approved, or “off label” questions and answers during actual events.  It should come as no surprise that this particular area has come under much regulatory scrutiny over the past several years.  The ability or inability to execute controls in this one area should be treated very seriously and given top priority by compliance organizations.

Program & Event Stage.   Only after meeting the above criteria and passing thru the Training Stage should a speaker be allowed to conduct or facilitate an actual event.  Now your policies and processes are put to the test.  This final stage represents a delicate balancing of your organization’s sales and marketing efforts with regulatory and compliance requirements.

1. Aggregated Spend. Spend must be tracked not only on honoraria for the speaking training and program participation but also, due to newly enacted regulation PPACA, expenses such as airfare, lodging, and meals will be reportable for speakers and attendees.
2. Monitoring. Sample or risk based auditing by field compliance team members allow a “boots on the ground” approach to learning about complexities, potential bottlenecks, compliance improvement areas and reporting issues, as necessary.  This monitoring exercise may also extend into other related areas of HCP interactions such as office visits, training and advisory boards.
3. Attendee Lists. In addition to the actual speakers, processes should also capture the participants’ attendance for the proper allocation and recording of items such as #1 above, Aggregate Spend capture.
4. Attestation & Feedback Forms. Your compliance reach will go only so far, and help from your field representatives who will be attending the speaking events provides an opportunity to push your policies to the level of direct daily interactions.  An attestation to the delivered program’s compliance effectiveness provides another level of ownership and buy-in.  This follow-through will enable your organization to react quickly to gaps and facilitates continued improvements in future sessions.

Due to their federal promotional categorization and direct interaction with HCP’s, speaker bureaus lie directly in the crosshairs of regulatory scrutiny, creating a high risk environment for Life sciences compliance departments.  Compliance officers need to orchestrate a symphony of risk mitigating processes with extremely varied departments such as: marketing, commercial, clinical, legal, and information systems in order to produce the elite outcomes necessary for meeting the “New Compliance Normal” of their speaker-physician bureaus.

This article was originally published on March 29, 2013 at Corporate Compliance Insights  http://www.corporatecomplianceinsights.com/speaking-bureau-life-sciences-new-compliance-normal/

Virtual Work for the Project Resource

My first position out of college was working for a big consulting firm, I was allowed to work virtually on some Fridays while engaged on out of town projects.  Since then technology has made virtual work even more effective and easy.  Personally I am a big fan of virtual work when it is appropriate.  In fact, often certain phases of a project can require periods of time where work is better performed remotely.  Take for example authoring a series of functional specifications, these documents require constant un-interrupted focused effort, and project war rooms are not often associated with long periods of quite time.

You will never hear me say an entire project can be run virtually or be tempted to hire a resource who is only available to work virtually.  Business consulting has just too many "high touch" moments when you need to be sat across from your stakeholders and team members.  But there is often flexibility to perform phases or certain periods of work virtually.

When used correctly virtual work can have several benefits: You can pull from a larger pool of project resources, you can keep those resources more refreshed and engaged from potential project burn out and office real estate can be best utilized.

Set the ground rules:

• Understand to work virtually is actually a temporary privilege, one that (if guidelines are followed) continues or ceases to exist altogether if not.
• On-site project or client needs always take precedence over virtual work.  If a big meeting has been moved to Friday, sorry your plans have just changed.
• Extra due diligence is required in planning and scheduling meetings and travel.  Often this requires much more forward planning on the part of the resource who will work virtually.
• Define core working hours where you expect 100% focused at your desk work (e.g. 8am - 3pm)
• Always be accessible.  In this era of smart phones, aside from you having an MRI or being in-flight, be very responsive...very quickly.

Monitor the ground rules:

• Monitor responsiveness to emails, phone calls and instant messaging (especially during the agreed upon core working hours).
• Monitor last minute meeting cancellations, usually it is a sign of poor planning and time management.
• Monitor flexibility on behalf of the virtual project resource when project plans change.
• Weigh the most important aspect, "Is the work getting done?"

About Us:

At CompassX we do a bit of virtual work for our clients, to see how we can help you visit our web site.
You can contact me at kyleh@compassx.com  |  www.compassx.com | © COMPASSX GROUP, 2013

What Makes a Good Consultant a Great Consultant?

Last week I met with a number of my clients, while helping them plan for upcoming project work. One of the questions I asked the group was, "What makes a good consultant a great consultant?"

By my estimation, my client group represented close to 100 years combined experience working with consultants in all sorts of different capacities.

Like an expert sharpshooter, their answers were consistently grouped.

1. A real focus on the customer.  Quick question, which is most important?  Your firm's goals or your personal career path?  Neither, without a real focus on your customer both will never fully materialize.
2. The ability to quickly bridge knowledge gaps.  Although the client often dreams of the perfect consulting resource, rarely does one individual meet the complete wish list.  Possessing the ability to quickly get up to speed in areas where you may lack knowledge is tremendously useful for the great consultant.
3. Drive, persistance, determination. You might be a Rhodes scholar, have prestigious university credentials and speak fluent Mandarin. I'm still taking the guy who has demonstrated he won't give up when things get tough, the pit bull who won't let go of his toy until he has won the tug o' war.
4. Listening  and communication skills.  No matter how good you think you are in these soft skills, as a great consultant you should always be trying to get better. I intend to do a post specifically on these two traits soon. 
5. Personality. Consulting is tough sledding. Many hours are spent in the trenches, deadlines are always looming, tensions can run high.  How do you react when things don't go your way? Do you play well with others?  Great consultant's won't be rattled easily.

About Us:

At CompassX we know all about strategy implementation and great project execution excellence, 80% of our client work is focused on nothing else.

You can contact me at kyleh@compassx.com  |  www.compassx.com | © COMPASSX GROUP, 2013

Strategy Implementation - Planning a Strong Start

Back a couple years (grin), I used to run the sprints.  I was pretty decent, All New England in college, and set a few school records progressing to the Eastern States Championships in high school.  Except for the start, there is not much strategy to the short sprints; gun goes off, run for as fast and long as your body will allow.  Ah...but that start, a race can be won or lost at that start.  Same goes for strategy implementation, a poor start can cost you the race.   

What are the essentials to strategy implementation planning?

Do’s

• Do realize your best attempts at providing early detailed data points are futile.  Too much early emphasis on obtaining detailed data costs the client time, money, and often provides false positives.  ROI, schedules, cost estimates, Voice of the Customer surveys will be inaccurate, completely incorrect, off by many multiples or all three.  Instead provide basic high level current knowns, be forthcoming on the unknowns and how estimates were determined.

"Use the formula P=40 to 70, in which P stands for the probability of success and the numbers indicate the percentage of information acquired." Part II: "Once the information is in the 40 to 70 range, go with your gut." - Colin Powell

• Do continue to refine and provide greater and greater levels of accuracy on data points as the strategy implementation progresses.  Accurate analysis combined with the phased approach below, will allow for course changes and continuous refinement.

• Do use phases when building your strategy implementation approach.  Three reasons why I favor segmented planning.  1. Speed of business is running at warp speeds, what is needed today will change tomorrow. 2. Benefits delivered today immediately start adding returns. 3. Momentum is a force multiplier.   

Don’t

• Don't wait to build full consensus.  There will always be dissenters, and there is no such thing as the perfect time.  Get key champions on board and blast out of the starting blocks.  Time is a killer of all things, especially true of great ideas and early momentum.  

“I don't know the key to success, but the key to failure is trying to please everyone.” ― Bill Cosby

On your mark, get set, Go!

About Us:

At CompassX we know all about strategy implementation and great project execution excellence, 80% of our client work is focused on nothing else.

You can contact me at kyleh@compassx.com  |  www.compassx.com | © COMPASSX GROUP, 2013

Strategy Execution - The Lost Art

Business can be funny, one moment something is hot, and the next it's gone. Often replacing the tried and true with new, flashy, and easy to use. But is it really built to last? Why have strategy execution failure rates skyrocketed? 

I believe strategy execution has gradually been eschewed, by the formerly great management consulting firms in favor of strategy creation and increased profits, by corporate executives and their management teams trying to keep pace with the new warp speed of changing business and thereby less time and attention focused on actually implementing those necessary business changes, and ultimately by the "do'ers" themselves in favor of sexier projects and fancier bullets on their resumes, after all great project execution is really hard work.

Strategy execution, two very simplistic words, but as I would do with my clients let's break these down to ensure we are aligned in understanding.  Strategy, in itself can be defined as an idea, concept, scheme or plan created to bring forth a competitive advantage or to alleviate a business pain point.  In and of itself a strategy is an idea, hopefully a good one.  But in order to reap its' realized benefits, next it must be broken down into actionable concrete steps.  Execution are these series of steps, implemented, to make the strategy or project materialize.  Without excellent execution, all strategy fails to meet its full potential or worse completely falls flat. See figure #1 below.

Edison and Einstein both often used the quote, "1% inspiration, 99% perspiration", in their respective fields of invention and science.  In the coming weeks I will further break down strategy execution to provide meaningful short takeaways that can be applied immediately within your own organization.

Strategy Execution Benefits Curve

About Us:

At CompassX we know all about strategy execution and great project execution excellence, 80% of our client work is focused on nothing else. I personally have spent the past fifteen plus years learning and applying what it takes to bring a client's strategy to greatness. You can contact me at kyleh@compassx.com 

www.compassx.com