Quaestor Equity Partners LLC
The Niche Industry Brief: Highlights for $5 to 50 million makers and marketers of
industrial products.
Third Quarter 2004
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Articles:
Free Government Data for Market Intelligence - An Overview
Competing for Top Talent: Does Size Matter?
Strategic Supplier Alliances Do More Than Just Save Money
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Free Government Data for Market Intelligence - An Overview
By Paul Graham, P.E., CnIConsulting@mcihispeed.net
You don't have to employ a full time market researcher like the big firms to collect good
data about your competitors or know more about your industry. Knowing what to look for,
you can use free data available from government agencies on the Web.
Find Known Competitor's Patented Products (and Others You Don't Know)
To analyze competitive product, use the extensive and free US Patent and Trademark Office
data base found at: www.uspto.gov Using a very powerful and extensive keyword search
engine, you can search 31 different fields, including competitor's names ('Assignee Name'
in PTO parlance) or product type (under 'Abstract' or 'Description/Specification') to find:
>All the issued patents for those competitors
>All the issued patents of your unknown competitors (in other locations and markets)
>How a competitive product works
>Competitor's 'Published Applications' that are undergoing patent review (and you
can comment on their validity)
>Patents of products that the competition decided to abandon (and are now
usable by anyone)
>All the locations of both known and unknown competitors
>All the key innovators working for your competitors
Determine Competitive Pricing
Over 9,000 contractors offer their products for purchase to various governmental agencies
through the General Service Administration's website www.gsaadvantage.gov GSA
Advantage is fully searchable database by keyword, part number, manufacturer, contractor or
contract number, or product classification. The GSA Advantage website will help you find:
>If your product is priced right against your competitors
>If your quantity discounts are competitive
>If your delivery times are typical
>If the additional cost you offer for setup and delivery are competitive
>If there are other distribution methods for the competitive products
What Is Your Industry Size? Are You a Player?
The Census Bureau assigns you a Standard Industrial Code (SIC), or the new North
American Industry Classification System (NAICS) number that describes your service or
product. Knowing this number (or finding it at www.census.gov/epcd/www/naics.html)
you can tap into:
>Zip code, metropolitan, statewide and national economic trends for your industry
>The economic analysis for the country as a whole
>Detailed content information (sectors, programs, or data products) from subject
specialists at local or federal census bureau offices
Other Information Sources
Many other free government data sources exist. Here are just a few:
>The Bureau of Economic Analysis (www.bea.gov): GDP by state and industry,
corporate profits, state and local personal income, etc.
>The National Technical Information Service (www.ntis.gov): Information on
government funded research in your industry
>The Department of Labor 'America's Career InfoNet' (www.acinet.org): Wage
data available by occupation for all states and over 300 metro areas
Remember when you could send yourself a letter with your new product idea inside to
'prove' the invention date with the postmark? Look for an upcoming article on the Patent
and Trademark Office's Document Disclosure Program that updates this practice and
safeguards your ideas.
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Paul Graham has a broad background researching and managing the design of new products
and processes in Engineering, Marketing, Sales, and Quality, is a Registered Professional
Engineer, and is a diverse inventor of electrical, acoustic, aerodynamic, radio based and
illumination products. Reach him at CnIConsulting@mcihispeed.net or (708) 420-9201.
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Competing for Top Talent: Does Size Matter?
By John Chalekian of HR by Design, Inc., jchalekian@hrbyd.com
Many people responsible for hiring in small- and medium-sized businesses tell me they have
difficulty competing for the top talent in their labor market. I agree it is difficult to find,
attract and create interest in high-performing candidates. But it is not an insurmountable
problem. It takes a plan for creating a branding strategy not unlike Marketing develops to sell
your products. You've heard of niche marketing; think of this as niche recruiting.
From the outside looking in, it appears the mega-companies have many recruiting
advantages: instant name recognition, positive brand identity, quality reputation, generous
reward system, more resources, perceived teamwork atmosphere, etc. Wow, it seems perfect.
Yet for some reason, people leave these Utopias. Why? Let's consider what would be
unattractive to high-achievers working for a mega-company.
Niche Recruiting:
Step 1- Know your opponent's vulnerabilities
There are many disadvantages for talented workers in big corporations: for example,
decision-making that is removed, slow, and conservative; constant pushing back against the
'politics'; and waiting their turn for advancement. Savvy smaller companies recognize the
differences and speak to the sore spots of the candidates they seek.
Step 2 - Know your target candidates
What makes a person strive for excellence? What attributes, attitudes, and work ethic do
these people possess? What are their expectations in terms of the job, co-workers, work
culture, rewards, recognition, promotions, etc.? The answers to these questions vary for each
candidate. A sound interviewing process uncovers this information by providing structured
interviewing and question guidance for each interviewer. The information obtained is used
to your advantage.
Step 3 - Know your company's strengths and value
A purposeful communication strategy can be of real value to attract candidates (and motivate
current employees). Answer this about your company: What is your value proposition in the
marketplace, overall reputation, and future vision? Sometimes we get overly concerned that
our products are not 'sexy' enough to attract top talent. I've discovered that products or
services do not really matter to the talented - leadership does.
Step 4 - A simplified employment process
When you get to the interviewing stage, all candidates should be qualified to do the job.
Professionals focus on evaluating for fit:
>Find areas of commonality
>Find areas of concern
>Explore resolution
>Make a decision to pursue (or not)
>Exploit the information above to land your first choice
Step 5 - Salary offer negotiations
Regarding pay: top performers demand better pay (period). However, experienced recruiters
try to set realistic expectations by conducting an on-going conversation about compensation
during the interviewing process. The structuring of the pay package is the key. Some
contingent pay for performance is usually an accepted element of today's job offers. But,
sometimes paying a competitive salary can't be avoided. It is a strategic business decision
made for key positions only because they do positively impact the bottom line.
In the end, it is a value proposition: Are they worth it? If they aren't worth it, then you
haven't found the top talent.
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John Chalekian, SPHR, is CEO of HR by Design, Inc., a Human Resources services firm
providing small businesses with strategic solutions that impact the bottom line. He holds an
MBA and has taught at Keller Graduate School. For more information on HR by Design,
please visit www.hrbyd.com. For immediate help with your business issues, contact John
directly at jchalekian@hrbyd.com or (847) 215-6706.
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Strategic Supplier Alliances Do More Than Just Save Money
By Matt Saviello of Federal Signal Corp., msaviello@federalsignal.com
Federal Signal reduced purchasing costs 1.6% in 2003, and targets 3% in 2004. We do it
through concepts such as principled negotiations, cross-functional sourcing teams,
consensus decision-making, new supplier implementation and commodity management.
These concepts are universal; small companies can save just as significantly.
Most important is leveraging spending - consolidating vendors and leveraging over time
with multi-year agreements. A larger spend gets the attention of better suppliers. Leveraging
is a first step toward developing strategic supplier alliances. Rather than pit buyer against
seller, this innovative purchasing strategy allows buyer and seller to negotiate as a team.
Recipe for Strategic Alliances
Negotiating effective alliances requires cross-functional teams - purchasing, finance,
manufacturing engineering, design engineering, receiving, accounting, etc. The teams
research, meet, negotiate, and finally select the supplier. Select team members carefully.
Experts are not always the best because they know the answer before the question's asked.
Research and supplier identification comes first. Start with a clean sheet of paper. Find brand
new suppliers, not just the ones you've always known. Potential suppliers fill out an
extensive profile with a lot of open-ended questions on their expertise. They tell you what
they could do for you - often things you never thought of. Let the supplier manage his
business the most efficient way; you all enjoy better economics.
As the list of suppliers shrinks, teams meet them on their turf, so later negotiations are more
personable. Negotiations should be principled - we use the techniques of Fisher and Ury of
Harvard Business School. Sitting next to one another - not across - the group meets for an
entire day with each supplier to negotiate everything: payment terms, warranty, price, costs
savings, future pricing, etc. Supplier and buyer collaborate to maximize the mutual benefit.
It's problem-solving, not traditional negotiation.
Suppliers as Business Partners
Treat suppliers like a partner. That earns both buyer and supplier special treatment. Since
business will be steady, suppliers grant lower prices, and product customization which costs
them little, but can save you a lot. Suppliers earn steady, low-maintenance business for a
prolonged period. It's a deeper relationship because you share business plans and work
together to achieve them. You ask each other for special help in lots of ways - things like
reduced lead-times to meet a sudden demand.
The relationship is beneficial even regarding price changes that are normally problematic.
You feel comfortable sharing inside data, so you can develop a pricing model that looks at
the specifics of a part and then prices it fairly and consistently. Instead of quantity breaks,
you look at estimated annual usage. Let the supplier determine lot sizes to most efficiently
meet your demand - perhaps with kanban or vendor-managed inventory.
A Little Extra Effort
It is a long process - sourcing takes at least six months. But the benefits are real: in 1999,
when steel prices were rising much like today's, Federal Signal got a significant price
reduction. And don't allow alliances to go unused. Do compliance audits, and verify what
the savings are. Aggressive implementation creates a whole different level of success.
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Matt Saviello is the Chief Procurement Officer of Federal Signal Corp., a $1.2 billion
manufacturer with many diversified divisions. His nine-member corporate purchasing
organization supports 120 purchasing professionals worldwide. He is a graduate of the
United States Naval Academy and holds an MS in information systems technology. Matt's
ideas were featured in the September 16 issue of Purchasing magazine. Contact Matt at
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Edited by Mark Gibb, Quaestor Equity Partners LLC, mark@quaestorequity.com
Prior to co-founding Quaestor, Mr. Gibb was President of Safety Storage, a $20 million
manufacturer of pre-fabricated HazMat buildings. Before that he was a Strategy Consultant
for Accenture, and he held senior sales and operations roles with Stewart Warner and
Federal Signal. Mr. Gibb has a BA from the University of Illinois and an MBA from the
University of Texas. Contact him at mark@quaestorequity.com or (708)668-7640.
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Copyright 2004 Quaestor Equity Partners LLC, 20821 Oak Lane, Olympia Fields, IL 60461
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