COMPANY STRATEGY AND MANAGEMENT: Strategic and operating plans provide an excellent opportunity to spend important time working "on" the business and not "in" the business. Aligning planning, budgeting, reporting and compensation systems drive improvement in the operations and earnings of the business more effectively than time consuming reactive approaches. Thinking like customers and competitors will also help guide better planning. A fact based review will help separate the myths from the reality that the market will determine if you do not. We established and improved practical strategic planning including budgeting at Maynard. A great resource in Company Strategy and Management is the book "Good to Great".
PEOPLE DEVELOPMENT: One of Denis' core beliefs is that you should support people in their desire to reach their full potential. It is critical that people are put in positions where they can succeed and their strengths are used. One important aspect is to have open discussions with people. These discussions are often avoided. It is very important that people understand why the things they do are important and how they impact the business. Investment in Leadership Development is also important.
CORPORATE OWNERSHIP STRUCTURE AND ISSUES:
Maynard America was purchased by 13 equal stockholders (7.7% of shares)
from a large service conglomerate in 1979. The 13 were considered
“partners” and consisted of the entire management team. From 1979 to
2007 the total number of stockholders was 31 with a range from a high
of 19 stockholders at one time to only four at another time. The
percentage of ownership by any one owner ranged from .1% to 28.3%
during that time. All stockholders have been members of management. His
involvement in these transactions, stock valuations, and Buy and Sell
agreements have provided extensive experience and understanding in this
MERGERS AND ACQUISITIONS: As the Maynard CFO Denis was the point person for various discussions with investment bankers, potential acquirers and acquisition candidates over 15 years. This role helped him prepare for the 2007 strategic acquisition of Maynard by Accenture. Accenture is a $20 billion a year, 177,000 employee international consulting and outsourcing firm. Denis gained significant experience in the acquisition process particularly the due diligence process. His role was to deal with the detailed due diligence preparation and the excruciating detailed review by Accenture. This allowed the deal to proceed while the other owners of the business were able to stay focused on keeping the business running well. He also worked as a CFO for Hire for reCAPTHCA, Inc leading up to and through their acquisition by Google in September 2009 enhancing his M&A experience.
AUDIT PREPARATION: The thorough process of preparation for the outside auditors has resulted in unqualified audited financial statements consistently completed by the end of January for calendar year ends. Implementation of a comprehensive preparation process has also saved audit fees which were $21,000 for 2006.
CORPORATE TAX RETURNS: The thorough
process of preparation resulted in minimizing taxes paid, and keeping
the outside accountants cost of preparation of tax returns for the USA,
Canada, and four states to $6,700 in 2006. The IRS has audited six
Maynard returns over the last twenty years. There were small amounts of
additional tax owed for 1986, 1988 and 1989 and no additional tax owed
for 1994, 2003 and 2004.
FINANCE: It is important to establish good banking relationships and to understand that the best time to borrow is when you do not need it. Maynard used deferred taxes, 70 day credit card float for airfare (>$700k per year), and office lease negotiations to provide significant amounts of working capital. The 2002 lease provided $400,000 in deferred rent through no payment of rent for the first year plus $93,000 cash. The 2005 lease renegotiation resulted in another $100,000 cash payment. The billing terms, and the billing and collection process, have resulted in net receivables days outstanding of 43 days over his final two years versus an industry average of 51 days.
INTERNAL CONTROLS: Establish proper division of duties and approvals to reduce the risk and temptation to misuse company funds.
FINANCIAL TRAINING: Provide appropriate
financial training of non-financial staff so that they understand how
they impact the business. The “Cash is Fuel” lesson is an example of
part of the business understanding education Maynard provided.
HUMAN RESOURCE MANAGEMENT: A team effort
resulted in Maynard being consistently selected among the Best Places
to Work - Mid-size PA (2002 - #2, 2004 - #11, 2006 - #10). These were
the only three times Maynard applied for this award. The keys to
providing a good place to work are providing challenging and
interesting work, developing a respectful work culture, and providing
good compensation with an acceptable work/life balance. Maynard
experienced 10% average turnover over five years in an industry that
averages over 20%.
EMPLOYMENT ISSUES: Denis has extensive experience with the proper way to handle terminations and other employment related issues to reduce company risks balanced with the needs of employees. Denis has dealt with the EEOC and has a good understanding of how government regulations impact being an employer. An up to date employee handbook allows you to communicate and administer policies consistently with employees to avoid employment and morale problems.
BENEFITS/401(k) MANAGEMENT: Maynard offered a good benefits package, at a reasonable cost, that was competitive with other companies in order to recruit and retain high quality staff. We reviewed, changed and communicated our medical benefits annually. We used outside brokers to get bids to minimize our costs and to explain changes to our staff. We had 100% participation and an average deferral rate of 12% in our 401(k) plan. We also used an Investment Policy and other good practices in managing our 401(k) plan. Effective Employee Financial Education is important in good 401(k) plans.
COMPENSATION: Denis has extensive experience in salary administration and bonus plan development. He strongly believes in understanding and paying market value salaries for the right people.
STAFFING: Denis has an excellent understanding of proper staffing for financial and human resource functions based on the needs of the organization. He also understands the appropriate use of technology including accounting software as well as the appropriate use of outsourcing for tasks such as payroll and travel.
RECRUITING: Maynard had a very strong need to constantly recruit new consultants. We developed an excellent process to hire high quality candidates which included extensive use of interns. The focus was on the critical requirements of the job and the candidate’s prior experience and success in meeting those requirements.
LEGAL COUNSEL LIASION: Managed the legal affairs of Maynard with the perspective of preventing issues and knowing when to use an attorney. The result was no litigation over 15 years and with average legal spending of $21,000 per year for legal fees over the last five years. The legal work included client and vendor contract review, human resources issues, employee immigration, and intellectual property including trademarks.
TRAVEL MANAGEMENT: Travel was a very important part of Maynard’s business making up about 15% of total costs including about $700,000 per year in airfare. We developed good processes and policies for managing these costs and reimbursing employees for travel expenses.
RISK MANAGEMENT: Doing things the right way is the most important aspect of managing risk. Being properly insured with good policies from a good company are also important. Maynard experienced very low loss ratios and kept the cost of insurance relatively low through the proper use of a competent broker.
WORK ENVIRONMENT: Maynard provided a quiet, organized and productive work environment. Through the leadership of the build out and furnishing of Maynard office space on three occasions over 14 years Denis has an excellent understanding of how to create a productive work environment while minimizing the amount of space and related costs. The office renovations and moves were also accomplished in a way to minimize the disruption to the business.
LEASE NEGOTIATIONS: In 1993 and 2002 Denis
led the effort to determine Maynard’s office space requirements. In
2005 the landlord asked Maynard to move due to the sale of the building
Maynard was in. The lease was renegotiated to accomplish this. The 2002
lease was for 8% less cost than the 1993 lease for the same size space
while increasing the number of work areas/offices by 50%. The lease
negotiation and move in 2005 resulted in an additional 12% cost
reduction (half of which was a due to a reduction in space) while
slightly increasing the number of work areas and offices. Denis has
developed a good understanding of common space factors, operating
expense clauses, and build out provisions and the impact they have on
the ultimate cost of office space.
VENDOR RELATIONS AND NEGOTIATIONS: Denis has extensive experience and success in working with vendors and negotiating contracts. He is fair and believes in asking for price reductions, holding vendors accountable, and looking for ways to work together to provide better value to both organizations.
CONSULTING EXPERIENCE: Denis has experience using assessment techniques such as structured group interviews with Maynard clients as a way to quickly get feedback and to learn of improvement opportunities. He worked for several clients in different industries doing analysis of potential financially based group incentive plans.