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How will CLTs affect you?

a forest

August Brown conducted the feasibility analysis for a large non-profit land conservationist company located in Washington State to prove their plans to develop new public housing units from culled trees in protected forests of the state.  The plan called for bringing in European technology for the conversion of the trees to cross-laminated timber (CLT) and glue-laminated timber (glulam or GLT) to serve as the building framework for modular units. The study proved that the model reduced the total time and cost for new modular manufacturing units for the public housing sector.

The Client’s project proves the model for how at-risk forests can provide culled timber in a manner that can:

(1) reduce the fire hazard from forests in the State of Washington;

(2) lower greenhouse gas emissions by proving the utility of CLTs and GLTs as effective replacements for steel and concrete in building construction framing;

(3) produce lower-cost public housing at a faster clip through the use of CNC based precision manufacturing of modular structures ahead of onsite construction;

(4) serve as a national model to lower the cost of public housing and provide a demonstration of how to leverage the housing construction industry to fight climate change.

We look forward to this project coming alive as it may produce a model to tackle the national housing crisis in America!

Copyright 2020 August Brown, LLC

 

Why Do You Need a Feasibility Study?

If you work in a bank, private equity, or investment firm, you are likely already familiar with feasibility studies and their use in properly supporting the evaluation of a proposal. However, a feasibility study is often an unfamiliar tool to business owners and is one that could have a dramatic impact the success of their initiatives. It is important to talk to your clients about what a feasibility study is, how it can benefit them, and how to choose a qualified firm to conduct it.

When done correctly, a feasibility study will clearly lay out the technical and economic feasibility of the business as a whole, or of a project under consideration. The well-executed feasibility study will also include market analysis, management evaluation, and a financial viability assessment that enables your leadership team to more accurately measure the probability of successful outcomes for the business or project. Further, a feasibility study has the potential to provide a business with a roadmap for successfully navigating potential challenges. In short, a feasibility study is an excellent way to identify opportunities while simultaneously mitigating risk. 

Read on to see how to talk to your clients about how a feasibility study can benefit their business initiatives and feel free to share it with colleagues!

Why Do You Need a Feasibility Study Expert?

A feasibility study is required for businesses seeking to raise funds or apply for loans over a certain amount (i.e., $5 million for the USDA). It will be used by potential equity and/or debt investors to answer basic questions about your business and to give them an indicator as to the likelihood of its success. So, the short answer is, if the business is seeking a USDA loan then they have to have one!

That said, these studies are not just for loan purposes and can be an excellent resource for internal planning purposes, identifying obstacles and opportunities that may not have been initially foreseen. This is an invaluable asset as the feasibility study helps you unveil the different ways your business can grow and identify the risks that must be mitigated. It illuminates the likelihood of your project’s success while considering relevant factors, including economic, market, technical, financial, and management constraints.

The study further helps you convince investors and /or banks that your project is worth investing in, as it enables you to address how and where a project can be done, with detailed assessments of viability.  Additionally, as mentioned before, should you be applying for a USDA Business and Industry loan and grant, a feasibility study conducted by a qualified firm will be required for your application. It can provide a detailed analysis of the technical capabilities, financial viability, which supports your business in identifying market growth opportunities for the specific product you will be developing, as well as assisting in the exact target market selection process, including market segmentation and positioning. A feasibility study is a great way to refine your outcome-driven innovation, as it helps you to examine your project with tremendous depth and insight prior to initiating the endeavor. 

It is also important to note that who you choose to conduct the feasibility study is critical. The USDA, in particular, has requirements that feasibility study analysts must meet. Should you choose an unqualified provider, the study may be rejected. Further, it is important to understand the level of depth provided in each firm’s feasibility study. Some firms will provide the basics needed and nothing further. While this may be sufficient to obtain funding, the study will give little insights to further assist your business.   

Why to choose August Brown for Feasibility Study?

At August Brown, we pride ourselves on the depth and quality of our feasibility studies. We have assembled a team with decades of experience across a variety of industries in order to best support our clients. This also allows us to conduct our feasibility analyses with unmatched analytical rigor. In addition to the core analysis mentioned above, we build compelling financial models with Monte Carlo simulations that display realistic outcomes, meticulously hone in on the risk factors, and offer risk mitigation insights that will smoothen the diligence process of investors before a funding or acquisition event. The depth and insight provided by our feasibility studies can offer a clear roadmap to any business looking to assess the viability of a project. With an August Brown feasibility study, you can be sure your clients are getting the highest quality analysis available. We further support this with our post-transaction services, which work to implement continuous improvement initiatives that will continue to enhance the value of the firm. To learn more, contact our offices today at office@augustbrown.com or just go ahead set up your free strategy session with our team.

 

FAQ’s

What is a feasibility study and why is it important for business owners?
A feasibility study assesses the technical and economic viability of a business or project, helping business owners identify opportunities and mitigate risks.

How can a feasibility study benefit a business initiative?
A well-executed feasibility study provides market analysis, management evaluation, and financial viability assessment, enabling accurate measurement of the project’s probability of success and offering a roadmap to navigate potential challenges.

Why is a feasibility study necessary for businesses seeking funds or loans?
Feasibility studies are required by potential equity and debt investors to evaluate the likelihood of a business’s success and answer basic questions about its operations. They are particularly necessary when applying for loans over a certain amount.

Can a feasibility study be useful for internal planning purposes?
Absolutely. Feasibility studies help businesses uncover unforeseen obstacles and opportunities, refine project outcomes, and identify risks that need to be mitigated. They provide valuable insights for internal planning and growth strategies.

Why is it important to choose a qualified firm to conduct a feasibility study?
A qualified firm ensures compliance with specific requirements, such as those imposed by the USDA. An unqualified provider may result in rejection of the study. Additionally, choosing a firm with depth and quality ensures a more thorough analysis and valuable insights beyond basic requirements.

What sets August Brown apart as a provider of feasibility studies?
August Brown offers depth and quality in their feasibility studies, backed by a team with extensive industry experience. Their rigorous analysis includes comprehensive financial models and risk mitigation insights. August Brown also provide post-transaction services to enhance the value of the firm.

Copyright 2021 August Brown, LLC.

Case Study: How the Non-Profit Received $46M with Tax Increment District Support

The August Brown Client, a Colorado 501(c)3, sought $46 million to complete the construction, the purchase of the equipment and the financing of the soft costs for the development and launch of its Film Center. 

The Challenge:

Though the company itself is quite profitable, its Film Center was essentially a startup with no prior financial performance. They needed help to gain the funding needed.

The Solution:

To solve the problem, August Brown created a  strategy that separated the Film Center from the shadow of the company. They created a new financial model that demonstrated the impact of the contribution from external sources to the financial performance of the Film Center. 

August Brown also worked with the state of Colorado to confirm the qualification of the Film Center under a tax incremental district for tourism business and included the state funds to the bottom-line of the project in the model. 

August Brown provided the client with a feasibility analysis that concluded in a positive determination across five key areas of assessment:

-Economic Feasibility

-Market Feasibility

-Technical Feasibility

-Financial Feasibility

-Management Feasibility

Additionally, August Brown provided forecasted revenues based on Monte Carlo simulations and recommendations to the leadership team. Through a USDA-backed bank, the Flim Center project received $46 million in funding and is currently in the construction period of their project.

 

Dr Gordon Nameni on Crossing the Chasm from R&D into the Commercial Markets

As founder and partner of tech-focused Milwaukee consulting firm August Brown, Dr Gordon Nameni helps companies take their technologies and products across the R&D/commercial gap, create new products from emerging technologies, explore AI and automation possibilities and scout supply chain opportunities. He founded the company in 2011 after completing a Fulbright Fellowship in South Africa and then a National Science Foundation Corporate post-doctorate at AO Smith Corporation.

Why did you found August Brown? 

I am a technology evangelist, a technology translator and I am passionate about increasing the amount of technology that crosses the chasm from research and development into the commercial markets. When we can get new technologies into the hands of people, it can really change lives. Let me give you an example. In the United States, the government wants to save the coal industry and keep coal miners employed and yet environmentally, we don’t want to burn coal. So what can we do here? We have a client that mixed coal with a polymer resin to create a coal composite ceramic that doesn’t burn. August Brown worked with the client to produce a roof shingle product from the technology. The roof shingle concept was not intuitive but the application of coal in roof shingles has opened the door to many more opportunities for coal as a valued-added product in the building materials industry. The US Department of Energy is now providing $122m in funding to establish coal innovation centres throughout the US. It’s estimated that roof shingles could use 10 tons of coal for the average house, which could total 23,000 metric tons in the next decade. This means that residential and commercial buildings could one day receive CO2 mitigation credits that could ultimately make an impact on the national carbon footprint. The patent is still pending on the coal-based roof shingle and other applications that we have developed and qualified. That is just one example of how we can support American innovation.

What do you mean when you say you are a technology translator? 

Technology translation is about matching scientific or industrial requirements to capability from elsewhere, creating new applications in new revenue-generating spaces. The coal-based ceramic roof shingle is an example of technology translation. ‘Technology translators’ often work to identify opportunities for innovation in the marketplace and connect them with emerging technologies in academic and research laboratories. Our national laboratories in this country are extraordinary and we can work more creatively to integrate their resources. Argonne National Lab started a venture capital fund that supports technology development around the energy sector for start-up and early-stage companies. This is a great way to support nascent technology development.

Along those lines, how do we foster technology innovation? 

We work on developing technology and innovation in our own backyards. Where I work and live – the greater Milwaukee area – the state of Wisconsin provided $3bn in tax credits for a company to build the next generation liquid crystal display manufacturing plant in the area. Everything was put in place including a real estate park and then the company backed out. The Milwaukee region has the second highest density of manufacturing companies in the US. As the US government continues to strengthen the manufacturing capacity of the supply chains in areas of national security priority such as the medical and semiconductor industry, the MMC Triangle region (Milwaukee, Madison and Chicago) will be a top destination for these two industries. We are now working on a large study that will analyse the feasibility of repurposing the assets in the MMC Triangle in support of a semiconductor manufacturing plant in the same development site that has already been prepared near the Milwaukee area. This region is a natural fit for the semiconductor industry because of the talent pool, manufacturing base and access to freshwater resources, which will ultimately contribute to lower chip manufacturing costs. If the resources in the region can be organised around the effort, we can make this happen and build a thriving semiconductor industry in the Midwest.

You mentioned you did a Fulbright Fellowship in South Africa. Did it play a role in what you’re doing now? 

Yes, I worked on the development of new materials and devices for water purification at the community level. Through that experience, I became passionate about converting technologies into solutions that can make an impact in daily lives. In my post-doc at AO Smith, I had the opportunity to begin to place the technologies that I was developing into commercial formats. That’s the reason I ultimately opted to pursue a career as a management consultant because I saw that I actually had greater leverage in converting technologies into real products that could affect lives.

I’ve read that in your free time, you like to do poetry slams. Would you ad lib a poetry slam right now on technology? 

Yes, of course. Tell me not in solemn numbers, life is nothing but algorithms and widgets for the soul. For the soul is dead that slumbers and things are not what they seem. So give me your algorithms, give me your lessons and I will show you how to convert that into life-changing missions.

Do you want to generate greater profits? 3 points that support automation

Do you want to generate greater profits? 3 points that support automation

When considering how to increase profitability, do you focus on increasing revenues or cutting costs? Over the last several months, August Brown has been working with industrial goods manufacturers that are seeking to increase revenues and profitability. In this sector, it is easier to impact profitability in the short run by focusing on cost reductions.
tan gears on a black background
To achieve impactful cost reductions, an organization must be willing to accept short term cost increases in order to achieve sustained cost reductions. Two areas that many companies overlook that can make a sizable contribution is the implementation of artificial intelligence and automation.
In this article, we focus on the 3 key points of consideration that can support the successful adoption of cost reducing automation at a manufacturer.
#1: Maximizing the labor force
An automation platform with an easy learning curve makes it possible to re-scope a traditional line position with minimal investment. Strategically repurposing unskilled workers to more skilled tasks not only enhance the manufacturer’s bottom line, but also improves the workers’ skill sets. This is a win-win situation – the employee gains added skills, expertise, and job satisfaction, and the manufacturer gains the benefit of profiting in a competitive marketplace.
 
#2: Increasing ROI
What value can automation provide over time and how long will it take to achieve a return on the total investment? When calculating costs, some expenses that often increase the project budget, are more than the price tag of the manufacturing automation tool itself. You’ll want to consider hardware and software cost, programming time, work cell integrations, employee training, usage (hours) and other customization costs.
#3: Improving customer response time
The advantage of automating is the speed with which you can get a system into production at your factory. Today customers have multiple offerings, a variety of products, and often highly customized options. This makes the rate of production line changes and assembly to meet customer demands very challenging. If your time to market is slow, customers can move to your competitors to fulfill their needs.
 
If you are a manufacturer and want to increase profitability, automation can be achieved at a lower cost through multiple tactics. To learn more, contact August Brown at office@augustbrown.com and one of our consultants will offer you a free strategy session.
 
Copyright 2020 August Brown, LLC

How to Take A Materials Company to the Next Level

How to Take A Materials Company to the Next Level

Bill Easter CEO X-MAT Reimagining high performance materials

What does it take to start and grow a successful materials company? August Brown sat down for an interview with the CEO of Semplastics, Mr. William (Bill) Easter to learn the insights that have guided his success over the years. Bill is a self-described “Bell Labs refugee” with over 30 years of experience in industry and over 56 U.S. patents. Yes, 56 U.S. patents! Bill has led Semplastics, a supplier of precision plastic engineered components for the semiconductor, medical, aerospace, and oil & gas industries since 2000. Bill’s unquenchable passion for materials led him to found X-MAT in 2011. X-MAT has developed an array of high performing polymer derived ceramic composite materials that have successfully been applied as building materials, anodic battery materials and light weight mirror backing for advanced mirrors and LIDAR support applications. X-MAT has won over $8M in federal contracts.

While the context of the conversation focused on his materials businesses, it’s clear that the principles that he espouses can be applied to any business, particularly those in the manufacturing, industrials goods and chemicals sectors. Here is an excerpt from the conversation.

What are the trends that are occurring across the materials sector?

New materials developments are moving towards lighter weight materials that take less energy to produce and provide higher performance. More and more collaborations are occurring in the materials industries as companies are beginning to strategize around maximizing their resources due to the pandemic.

What makes materials businesses different than other businesses?

The timeline for a materials business is longer than most businesses. As a materials business, you must be an ultra-marathoner. It requires more patience and owners must be willing to play the long game. You must be willing to go after government contracts for new developments. Finally, materials companies should seek to connect with local universities in order to leverage their analytical resources and their safety equipment (ie fume hoods).

What are the best lessons that you have learned?

The integrity of the people you work with are more important than the contracts you sign. It is vitally important to identify people of high integrity to work with. You must believe in the pit or the hunch in your stomach. Go with your gut.

You can receive the full transcript of the interview by contacting our office. To stay abreast of our latest news and receive more helpful tips, subscribe to our blog. To help businesses through the current COVID-19 crisis, we are extending the 30-min free strategy session with August Brown to 1-hr. You can select a time here.

Copyright 2020 August Brown, LLC

Working with a Contract Manufacturer? 7 Key Elements for Your Next Manufacturing Agreement

Working with a Contract Manufacturer? 7 Key Elements for Your Next Manufacturing Agreement

Hands offering paper and pen to another set of hands which are folded.

Would you marry your spouse BEFORE going on your first date? Probably not! In the business world, a contract manufacturing agreement is the equivalent of a marriage certificate. If you sign one without first going on several dates with your partner, you could get yourself into a bad relationship that is hard to break.

Here are some essential dating questions that you should have your prospective partner answer before you think about getting a ring:

  • Are you capable of protecting my company’s intellectual property?
  • Will all factors of your pricing be transparent?
  • Is your organization financially stable and capable of meeting my demand?
  • Can you provide novel solutions to common problems that I may experience?
  • To what extent do you employ lean manufacturing processes?
  • What do past clients have to say about you?

As with any dating couple, transparency is key at this stage. When you get the answers to these questions, you should also expect to receive some supporting evidence. Once you determine that you want to move beyond dating, it is time to consider the marriage certificate, or in this case the Contract Manufacturing Agreement (CMA).

The pillars for maintaining a healthy relationship include communication, consistency and accountability. To achieve this with a contract manufacturer will require regular check-ins and a clear process for identifying, reporting and resolving issues quickly.

To ensure that you set up a good marriage, ensure that your CMA contains these 7 key elements:

  1. Non-disclosure Agreements (NDA): Prevent your soon-to-be spouse from spilling your secrets to those that come after you. Apple, for example, will always include an NDA in its contracts with third-party manufacturers to ensure that they have the element of surprise when revealing their latest products. If Apple makes this a standard part of their agreements, then you should too!
  2. Licensing Agreements: Without a licensing agreement, the contract manufacturer cannot legally manufacture a product. The licensing agreement is a crucial part of the CMA as it protects the contract manufacturer from receiving a lawsuit for trademark infringement.
  3. Purchase Orders (POs): You can establish specific terms of the transaction with the contract manufacturers through individual POs.
  4. Quality Standards: To ensure that the contract manufacturer maintains high-quality products and services, include stipulations related to quality standards. This saves time and effort in the long run and reduces the possibility of receiving sub-par products.
  5. Supply Chain Agreements (SCA): If your product requires further processing steps beyond a particular contract manufacturer, the CMA should include an SCA, which will improve efficiency and enable communication throughout the production process.
  6. Essential Processes: Oftentimes, contract manufacturers produce goods that go into various industries. To ensure that your contract manufacturer understands your products and commercial market, the CMA should define the terms for key processes including delivery, lead times, invoicing, and payment. Outlining the processes and defining the terms ahead of time will help to avoid headaches and frustration on both sides.
  7. Termination Clauses: This by far is the most important element of the CMA. To prevent a messy divorce, the CMA should address what happens when the relationship ends. The CMA should directly outline the circumstances in which the contract can be terminated (ie breach of the agreement or insolvency), and what happens to patents and intellectual property.

Before you start a CMA, you can review example manufacturing agreements to get a full view of their features to ensure your chance of success. Don’t let the price from your contract manufacture be the only determining factor for your decision to work with them.

To learn more and stay abreast of our latest news and receive more helpful tips, subscribe to our blog.

References for this article: Intran; Upcounsel; Thomas Net.

FAQ’s

Q. What is the purpose of a Non-disclosure Agreement (NDA) in a contract manufacturing agreement?
Ans. An NDA is included to protect your company’s intellectual property and prevent the contract manufacturer from disclosing your proprietary information to others.

Q. Why is a Licensing Agreement important in a contract manufacturing agreement?
Ans. A Licensing Agreement ensures that the contract manufacturer has the legal right to manufacture your product without infringing on any trademarks or intellectual property rights.

Q. What role do Purchase Orders (POs) play in a contract manufacturing agreement?
Ans. POs establish specific terms and conditions for each transaction between you and the contract manufacturer, including pricing, quantities, delivery schedules, and other relevant details.

Q. Why are Quality Standards included in a contract manufacturing agreement?
Ans. Including quality standards ensures that the contract manufacturer maintains high-quality products and services, reducing the risk of receiving sub-par products and saving time in the long run.

Q. What is the purpose of a Supply Chain Agreement (SCA) in a contract manufacturing agreement?
Ans. An SCA is crucial if your product requires additional processing steps beyond the contract manufacturer. It helps improve efficiency, facilitates communication, and ensures a smooth production process.

Q. Why should essential processes be defined in a contract manufacturing agreement?
Ans. Defining key processes such as delivery, lead times, invoicing, and payment terms in the agreement helps both parties avoid confusion, delays, and frustration throughout the manufacturing process.

Q. Why are Termination Clauses important in a contract manufacturing agreement?
Ans. Termination Clauses outline the circumstances in which the contract can be terminated, such as a breach of the agreement or insolvency. They also address the fate of patents and intellectual property upon termination, preventing complications and ensuring a smooth transition if the relationship ends.

Limited Marketing Budget? Here are 3 Secrets for Small and Medium Manufacturing Companies to Increase

Limited Marketing Budget? Here are 3 Secrets for Small and Medium Manufacturing Companies to Increase

Think About Things Differently

So how did we increase the revenues for the flagship product of a small Midwest manufacturing firm by nearly 3x within 19 months without spending any money on external advertising? You might be tempted to guess we found a new “viral” web-marketing strategy, but in fact, we did not even use the internet. We focused on distributors.

Revenue growth is a company’s life blood. However, successful revenue growth often comes with increased advertising expenditures. In the article below, we will give you 3 secrets to grow revenues without spending more money on external advertising.

#1. Study the distributors of your competitors.

Getting one new distributor can dramatically improve your business! Distributors are the fastest way to increase sales without significant effort. Depending on your industry, the competition for distributors can be fierce. Among those distributors, the competition can be especially ferocious. Some of them might be seeking ways to differentiate themselves from the crowd. You can grow your revenues by identifying the distributors that fall into this category and working with them to tailor a solution that will help them separate themselves from competitors in their market.

#2. Build a regular communication channel with your distributors.

Every relationship needs nourishment for success. Among the distributors that you already have, taking the time to get to know them and their markets better can dramatically impact your business. Schedule regular calls and visits to ensure you get a pulse for their business and how your products can best serve them. You might want to also provide regular product demonstrations as their staff turns over or generate updated marketing materials to help them drive the sales of your products over other similar offerings that they retail.

#3. Do NOT publish your distributors list.

It’s nice to be able to tell your prospective customers where they can get your products… but why would you want to tell your competitors where YOU SELL your products? Tell your prospective customers that your products are available through distributors and they should contact you for the nearest location. Offering upfront information about your distributors is like opening up your store and replacing the price tag with a “FREE” sign!

To learn more and stay abreast of our latest news and receive more helpful tips, subscribe to our blog. To help businesses through the current COVID-19 crisis, we are extending the 30-min free strategy session with August Brown to 1-hr through July.

Copyright 2020 August Brown, LLC

Preparedness Assessment – A Path Towards the Business Resiliency Blueprint: 5 Steps to Strengthen Lon

Preparedness Assessment- a Path Towards the Business Resiliency Blueprint: 5 Steps to Strengthen Lon

Yes, your business will get through the COVID-19 crisis, but how does your forecasts look for next year? How prepared is your business for the next major crisis?

Whether your business has been directly affected by the global COVID-19 pandemic or you have been in the periphery, you are certainly not alone. The pandemic has galvanized an array of resources to help businesses recover.

  • The Centers for Disease Control and Prevention (CDC) has stated a new weekly COVID-19 Surveillance Report to track the spread and impact of the disease. Access the weekly COVID-19 Surveillance Report here.
  • The Small business Administration (SBA) now offers multiple funding options to provide relief to businesses. The available programs now include (1) The EIDL $10,000 Loan Advance; (2) Express Bridge Loans; (3) Paycheck Protection Program; and (4) Debt Relief. Access the SBA COVID-19 related funding options here.
  • Each state have adopted independent programs apart from the federal initiatives. A comprehensive summary is provided by Forbes. Access the list of state programs here.

We would like to share the insights that we have recently gathered through client engagements focused on helping companies get through the crisis. We focus this article towards the future as many businesses who have been affected, are likely already inundated with resources for help.

Circular metalic gray icon of a face wearing a gas mask

 

We offer the 5 key criteria from the Preparedness Assessment Toolkit that will enable you to “self-diagnose” the resiliency of your business to withstand a future calamity.

Perform a Supply Chain Analysis.

Do you produce parts or products? Evaluate all incoming inputs for your company. This should include the raw material suppliers and THEIR supply chain! If you do not produce products, start with suppliers of your software vendors and understand their uptime and contingencies in place to protect YOUR business.

Evaluate your contractor management system (or companies from which you source your contractors).

Does your business model heavily rely on contractors? For companies with a high contractor work force, assess the contracting companies that you use and their health.

Determine the vulnerabilities with your customer acquisition strategies.

How concentrated are your customers (geographically or otherwise)? Determine your customer concentration (geographically and/or by type ie online vs foot retail), create uniformity in your sales tools, and transparently map out your customer engagement process.

Perform a cyber security audit. Recent news has suggested that certain video conferencing products are simply not secure.

Your staff is already working remotely, correct? Every company, especially those in the service sector, need to have a remote work policy. Review your remote work policy, review the tools and software to support the offsite work and stress test the cyber security protection.

Conduct a financial continuity appraisal of your lenders or investors.

This is the dreaded question- what does your rainy-day fund look like? Do you have the ability re-engage if times get bad? If you are an investment backed company, review your plan, create buy-in to your disaster preparation plans and get commitment on terms for continued financing, if needed.

We are in this together. To learn more or to start a Business Resiliency Blueprint for your organization, click below for the free Assessment Tool.

Free Assessment Tool

Copyright 2020 August Brown, LLC

5 Barriers That Stop Revenue Impacting Innovation And How To Overcome Them!

5 Barriers That Stop Revenue Impacting Innovation And How To Overcome Them!

Closeup image of a barb from a barbed wire against a blurry background that appears to be a rural counryside

What is the percentage of revenue that comes from new products or services in your company? If the percentage is lower than 20%, then August Brown may be able to help. There are five specific barriers that prevent companies from attaining their full revenue potential from their innovation focused products and developments. Some of the most prominent barriers include: (1) Inability to experiment quickly; (2) Inability to work across silos; (3) Risk averse culture; (4) Lack of corporate vision; (5) Lack of marketing integration. August Brown has addressed all these problems in various forms for many clients.

This article offers at least one best practice solution that has helped our clients overcome barriers and develop revenue impacting innovation during the past several years.

  1. Inability to experiment quickly: Remove all approval barriers required to perform low level experiments. If possible, place an expense cap for personal projects below a fixed amount (ie $1,000-$5,000) for a calendar year where no approval is needed. Such a move will increase employee independence and encourages innovation at every level of an organization.
  2. Inability to work across silos: Help organize and support regular “lunch and learn” events where colleagues from different departments (or companies) share their work. This will provide an opportunity for cross-silo ideas to be shared and could spur prospects for “open innovation” outside of the business.
  3. Risk averse culture: Give awards to those who display breakthroughs in innovation. The breakthrough does not necessarily have to lead to a patent or a new product. The goal is to demonstrate to the technical staff that management is paying attention to the details. Encourage employees to search for solutions to difficult problems.
  4. Lack of corporate vision: While this may not necessarily have a direct impact towards innovation projects, regularly discussing and providing examples of the corporate vision can encourage creative developments. This can fuel innovation projects that actualize the vision. The ultimate goal is to create the space for innovation within the long-term projects that support the strategic goals for the organization. Make this a regular event and use it as an opportunity to highlight key wins.
  5. Lack of marketing integration: The marketing team should be involved at all steps of the innovation and development processes so that marketing and a revenue model are integrated within the new product or service before market launch. This change in process can lead to greater savings in development and stronger upsides in the future with more clearly defined marketing outcomes.

We hope this article spurs you toward a wider path of options to overcome the revenue impacting innovation issues that companies can face. To learn more, “Contact” from our main menu and schedule a free appointment.

Copyright 2020 August Brown, LLC