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Take No Prisoners: A No-Holds-Barred Approach to Corporate Excellence

Book Description

Now more than ever, American companies are experiencing a nagging feeling that they could be doing much better. Globalization, digitization, and the development of cellular technology have increased competition by leaps and bounds. As a consequence, skating by on marginal performance isn’t enough. It’s time for businesses to find the tools that will help them excel. A turnaround expert, Marvin Davis has made a career out of transforming underperforming companies. He assesses their mistakes, issues a diagnosis, and has helped allay the fears of many CEOs across the country -- leaving businesses more efficient and ultimately more competitive.

In Take No Prisoners, he gives hard-line, tough-love solutions to the real and difficult problems that hinder profitability. By addressing issues that may at first seem too messy or dangerous, companies can learn how to truly improve performance, increase profits, and boost cash flow. Companies shouldn’t wait until they are in dire straits to make changes; they can alleviate many problems if they act now and meet them head-on. Through real-life examples of corporations who have made these solutions work successfully, Take No Prisoners tells American companies the truth about the state of their business, and how to make it even better.

Table of Contents

  1. Copyright
    1. Dedication
  2. Preface
  3. Introduction
  4. One. Setting Objectives
    1. Objective 1: Improve Profitability and Grow the Current Company Long Term
    2. Objective 2: Improve Profitability and Prepare the Company for Sale
    3. Objective 3: Improve Profitability and Keep the Company the Same Size
    4. Objective 4: Begin Liquidating the Company After Stabilization
    5. Building Your Arsenal Through Interviews
      1. The Employees
      2. The Customers
      3. The Competitors
  5. Two. Common Lies Companies Tell Themselves
    1. “We’re So Much Better Than the Competition, We Don’t Have to Worry”
    2. “Our Profits are So Good They Can’t Be Improved”
    3. “Our Business Model is as Good as it Can Possibly Be”
    4. “Our Pricing Model Can’t Be Improved—Besides, We’re Charging the Maximum We Can Get”
    5. “Our Cost Structure is the Optimum it Can Be Under the Circumstances”
    6. “Our Organization is So Good That I (The CEO) Don’t Have to Be Involved on a Daily Basis”
    7. “Our Organization is at Its Optimal Level”
    8. “Complacency is Not a Problem in My Company”
    9. “Fraud is Not a Problem in My Company”
    10. “My Bank Loves Me”
  6. Three. Market Strategy
    1. Market Analysis
      1. Market or End Use
      2. Market Size
      3. Market Margin
      4. Competition
      5. Growth
    2. Simplified Market Plan
  7. Four. The Customer
    1. Customer-By-Customer Profitability Analysis
    2. Firing a Customer
  8. Five. Pricing
    1. Competitive Price Analysis
    2. Competitive Advantages and Disadvantages Analysis
    3. Pricing Case Studies
  9. Six. People
    1. Keeping People Informed/Communicating
    2. Optimizing the Organization
    3. Motivating Employees Through Incentives
      1. Financial Incentives
      2. Recognition Awards
      3. Rewards, Trips, and Status Awards
      4. Personal Compliment
  10. Seven. Controls
    1. Benchmarking
      1. Sources of Benchmarking Information
        1. Public filings
        2. Internet articles
        3. Sales personnel
        4. Trade associations
        5. Credit reports
        6. Trade publications
        7. Offering memoranda
      2. Data Used for Comparison
        1. Sales
        2. Cost of Goods and Gross Margin
        3. Operating Costs
        4. Operating Profit
        5. Net After-Tax Profit
        6. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
        7. Other
    2. Cash Control
    3. Control By Walking Around
    4. An Action Plan
      1. Opportunity
      2. Action Needed
      3. Who
      4. When
  11. Eight. Growth
    1. Internal or Natural Growth
    2. Acquisitions
    3. When Should I Invest? and How Should I Do It?
      1. Outsource Production or Services
      2. Expand Your Hours
      3. Use Other People’s Equipment (OPE)
      4. Find the Back Door
    4. Growth by Acquisition
      1. Do Thorough Due Diligence
      2. Buy “Assets Only” if You Can
      3. Prepare a Plan and Stick to It
      4. Some “Watch Outs!”
  12. Nine. Keeping the Balance Sheet Balanced
    1. Cash
    2. Accounts Receivable (A/R)
      1. Set Your Terms of Sale Properly
      2. Make Everyone a Collector
    3. Accounts Payable (A/P)
    4. Inventory
  13. Ten. Analyzing the Profit and Loss Statement
    1. Compensation
    2. Benefits
    3. Insurance
    4. Freight
      1. 1. Can Freight Costs be Passed Back to the Customer?
      2. 2. Can I Renegotiate and Restructure Freight Costs to Reduce Them?
      3. 3. Are We Being Charged Correctly for the Shipping We are Doing?
      4. 4. Am I Spending Needlessly on Demurrage?
    5. Travel and Entertainment
    6. Entertainment
    7. Leases and Rental Costs
    8. Legal Costs
    9. Advertising, Including the Internet
    10. Telephone, Fax, and E-Mail
    11. Energy Costs (Fuel, Natural Gas, Power, Etc.)
      1. Fuel
      2. Natural Gas
      3. Power
    12. Warranty Expense
    13. Supplies
    14. Taxes
  14. Eleven. Systems/The Computer/The Internet
    1. 1. What Do I want My System to Do?
    2. 2. How Can the System Make My Business More Efficient, Competitive, and Profitable?
    3. 3. What Will be the Cost/Benefit of Any System that I Install?
    4. 4. What Internal Resources Will I Need (People, Money, Facilities, Equipment)?
    5. 5. Will There be a Disruption in My Operations as a Result of Changing Systems? Can I Make it Seamless?
    6. 6. What Peripheral Systems Will I Need?
    7. 7. How Long is What I am Planning to Do Viable, and Can I Scale It With My Business?
    8. Tips for Installation and Implementation
  15. Twelve. Sales
    1. 1. You are Not Telling the Story Properly
    2. 2. You are Not Selling Through the Proper Channels
    3. 3. Your Sales Department is Not Exercising the Proper Effort
    4. 4. There is a Problem with the Product or Service You are Selling
  16. Thirteen. Sourcing and Globalization
    1. Outsourcing
      1. Precautionary Measures
      2. Exporting
    2. Tips on Exporting
  17. Fourteen. Special Analysis Tools
    1. Cash Flow—The Lifeblood of a Company
      1. Start-Ups and New Ventures
      2. Rapidly Growing Companies
      3. Companies Undertaking Mergers or Acquisitions
      4. Companies Undergoing Large New-Product Development Programs
      5. Companies Whose Customers are Undergoing Economic Stress
    2. Cash Projections
    3. Starting Cash
    4. Sources of Cash
    5. Uses of Cash
    6. Cash Surplus
    7. Value Analysis—Examining Products to Lower Costs
  18. Fifteen. Productivity
    1. Physical Plant
      1. Physical Layout
      2. Machinery and Equipment
    2. People
      1. Incentive Programs
      2. The Union
    3. Materials and Assets
    4. Overhead
      1. People
      2. Equipment and Facilities
      3. Safety
    5. Financial and Production Controls
  19. Sixteen. Research and Development
    1. Be the Leading-Edge Innovator
    2. Copy the Idea But Do It Better
    3. Copy the Idea But Do It Cheaper
    4. Choosing Your Initial Approach
    5. The Leading-Edge Approach
    6. Improving on an Existing Product
    7. Making the Product More Cheaply
    8. Picking Your Product—Input Sources
  20. Seventeen. Banking
    1. Types of Bank Problems
      1. Economic Conditions
      2. Bank Mergers and Consolidations
      3. Underperformance
      4. Regulation
      5. Highly Levered Transactions (HLTs)
      6. Changing Levels of Scrutiny
    2. What a Bank is Looking for in a Loan
    3. The Banking Relationship and How to Manage It
    4. Loan Documents—Taking Control
    5. The Personal Guarantee
    6. Other Lenders or Sources of Money
    7. The Workout
  21. Eighteen. Fraud
    1. Conditions That Lead to Theft
      1. Lack of Adequate Control
      2. Where There are Drugs, There is Theft
      3. Reliance on Your Auditors to Discover Theft
      4. If the Numbers Don’t Look Right, They Usually Aren’t
      5. If Something Doesn’t Make Sense, There’s Something Wrong
    2. What to Do if You Suspect Fraud
  22. Nineteen. Bankruptcy as a Tool
    1. Possible Reasons for Chapter 11 Declarations
    2. Bankruptcy Process
    3. Debt
    4. Contracts
    5. Unions
    6. Utilities
    7. Legacy Payments
    8. Legal Settlements
    9. Bankruptcy Plan
    10. Benefits of Bankruptcy
    11. Disadvantages of Bankruptcy
  23. Twenty. Cashing Out
    1. Small Companies
    2. Medium-Size Companies—Privately or Closely Held
      1. The ESOP
      2. The IPO
    3. Advantages of a Public Offering
    4. Disadvantages of a Public Offering
    5. The Large Private Company and All Public Companies
    6. Golden Rules of Cashing Out
  24. Twenty-One. The Board
    1. Choosing a Board
    2. Outside Members
    3. The Board Meeting
      1. Create an Agenda
      2. Before the Meeting
    4. Small Businesses
  25. Twenty-Two. Implementation