Jay Holstine discusses growth strategies in an economic downturn

Jay Holstine shared how his Dallas-based Vistage CEO peer group helps business leaders capitalize on change, and attain new levels of productivity.  “Our workshops feature expert speakers, followed by discussions among the CEO peer group,” Holstine said.  

“We’re seeing that, while leaders are a little more risk-averse, they’re still looking for capital for strategic growth. One of our members shared that he sees funding as the primary challenge in these efforts. Even prior to the pandemic, companies were trying not to take on too much debt, or dilute equity. After having accepted federal Payroll Protection Plan support, or drawn on lines of credit, many company leaders are reticent to go to their banks again. But they don’t want to miss out on unique growth opportunities,” Holstine shared.

“The focus is in finding ways to advance efficiency, in order to free up capital, so that it can be directed to areas where it will create revenue, provide strategic growth options, and increase enterprise value,” Holstine added. 

“Most members agreed that major changes in the workforce in 2020 deeply affected the ways in which companies are running. Leaders are seeing more latitude in organizing people and finances, and they are looking for advances in productivity and efficiency,” Holstine said. “One CEO surmised that the budget dollars being lost to inefficiency could be going toward growth,” Holstine said.

“Most agreed that instead of depleting the organization by cutting costs across the board, there are better approaches toward strategic efficiency, in order to still maintain growth” Holstine shared.  Most feel it’s wiser to find opportunities to maximize outputs, as well as reduce inputs, and to derive more value from all the assets, not just the workforce,” Holstine said.

Working Capital Optimization

“A highlight of the workshop discussion was that the most practical capital you can access is your own money that’s tied up in the bills you pay too soon, your own receivables you collect too slowly, and your own unnecessary inventory,” Jay Holstine said. 

“Most of the CEOs said they underestimate how much working capital their companies use. Improving the use of their payables, receivables and inventories, most say, can provide a significant amount of interest-free capital to use in growth efforts,” Holstine shared. 

“In supplier and trading agreements, many companies have more leverage with their big customers than they used to, especially if they’re providing critical components and materials,” Holstine added.

“Some other comments involved financial planning and analysis. It’s important to use real-time analytics for more informed business decisions,” Holstine said.  “By linking sophisticated load-planning software with its ledger of customer commitments, companies are able to optimize their service capacity to their more profitable, valuable customers,” Holstine said. 

“A variety of cost-saving opportunities came from workforce shifts caused by the pandemic. The reduction in travel has given us a much greater use of virtual meetings, new modes of communicating, new expectations in sales and marketing, and reduced travel budgets,” Holstine shared. 

“Officing is another financial opportunity to consider.  With office vacancy rates at an all time high, it’s wise to negotiate lower rents and reevaluate your officing needs as a whole. The new hybrid work culture has benefits that your workforce wants to keep, and it enables companies to hire beyond their traditional geographic footprint,” Holstine said.

 “Identifying the best finance strategies, and finding solutions in efficiency that fit each CEO’s company, is what we focused on in this workshop, but in every meeting, our CEOs depend on the shared wisdom, great research, practical experience, and ideas, that help their  companies succeed,” Holstine shared.