Category Archives: xbig6

Oil market shaken by Iraq conflict

After news that an American aircraft carrier was dispatched to the Persian Gulf, the international benchmark for oil prices hit above $114 a barrel for the first time in nine months. Militant activity pushing towards Baghdad and threats of civil war have many market experts expressing concern. 

"We've been waiting for the other shoe to drop in this tightly balanced market and now it's happened," Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, told Bloomberg in a phone interview. "There have been lurking risks but nobody was projecting how quickly things would turn worse."

West Texas Intermediate crude rose 63 cents, or 0.6 percent to $107.54 a barrel. Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, told Bloomberg that media headlines from Iraq will continue to affect the U.S. oil market, but that WTI is not expected to reach above $120.

Although growing domestic oil production in the U.S has cut the country's dependence on foreign oil, Iraq still plays an important role in market stability, Bloomberg reports. Many of the world's largest oil providers and manufacturers have significant holdings and investment in Iraq, and long-term disruptions in production due to unrest in the country would have a global impact. 

As of the time of reporting, conflict has been contained in the north of the country, which contributes roughly a quarter of Iraq's crude oil output. If fighting reaches the southern fields, analysts form Goldman Sachs Group Inc. predict a "significant impact on crude prices given current supply disruption in other OPEC members." 

Oil and gas management consulting can help organizations be prepared for any significant changes to market supply or demand. At Xbig6, we provide leading-edge thinking for operational efficiencies tailored to the industry. Our extensive expertise in the energy industry allows us to provide skills training and organization alignment necessary to successfully react to changes in the market.

Avoiding the ‘decision spin cycle’

Each organization has their own method of making a big decision. Some are able to recognize a good idea and quickly act, while others enter into what is known as the "decision spin cycle." 

Even if you are unfamiliar with the term, you might be able to recognize the process. The idea is translated into a presentation, offered to management, then executives, then reviewed and discussed, details are added and the process restarts. The Harvard Business Review recently spoke to Ron Ashkenas about how companies get caught in this cycle.

"Decisions bounce around the company, from group to group, up and down the hierarchy and across the matrix, their details and consequences changing as different stakeholders weigh in. Often, the underlying problem isn't an inability to make decisions–it's a tendency to avoid conflict," Ashkenas writes.

It is human nature to want to avoid conflict. However, when this desire to keep everyone happy begins to interfere with processes at an organization, it could be time for a review of policy or to bring in outside help. The decision spin cycle is not only frustrating for those pushing for progress, it can be a significant financial drain. 

Breaking this habit can be difficult, especially when it has become entrenched in the company culture. If the spin cycle has begun to sap the competitiveness from your organization, bringing in an outsider can be helpful. Contracting the services of an expert consultant can present new opportunities to move forward without being bogged down by internal politics.

At Xbig6, our consultants have an average of two decades of professional experience in management consulting, technology consulting, program management, and organizational change management with a price point of half the cost of many larger firms.

Campbell Soup CEO ‘reshaping’ company for more growth

Successful companies continually invent new ways to garner and process information to discover missed opportunities and understand market shifts. Today, more businesses are looking for outside help to determine new strategies to increase their market share in a volatile industry. 

Denise Morrison is one of only 25 female CEOs in the Fortune 500. She took over control of Campbell in 2011, which includes brands such as Campbell's Soup, Prego, Pepperidge Farm, Spaghetti-O's and V8.

The company has become iconic for Americans, with its products immortalized by Andy Warhol and representing the perfect rainy day meal for millions. But as customers' preferences shift, Morrison is responsible for keeping the company in line with consumer demands. 

"We're changing to deliver on consumers' expectations because consumers are changing," Morrison told USA Today. "We noticed a series of seismic shifts with the consumer and one of them is about health and wellness." 

To meet their customers needs, in the past two years Campbell has purchased organic baby food maker Plum Organics and Bolthouse Farms, a carrot producer that also sells salad dressings, juices and smoothies. But in the face of under-performing stocks, Morrison continued to seek new ways to improve profitability.

The company is now focusing on new means of communication to reach shoppers on social media as well as in the supermarket, and creating new products that appeal to customer's changing tastes. In a time when U.S. soup sales are falling flat, these new strategies are key to overcoming the company's growth challenges. 

During times of change, many organizations, especially large companies with an extensive history, become bogged down in internal politics, and can often benefit from the insights provided by professional consultants. At Xbig6, we provide leading-edge thinking for operational efficiencies, supply-chain optimization, and back-office support tailored to the industry.

U.S oil and gas sector ordered to cut carbon emissions

President Obama has taken executive action aimed at cutting carbon dioxide emissions from U.S. fossil-fired power plants. On Monday, the Environmental Protection Agency (EPA) released a draft of the new regulations, which proposes a 30 percent reduction in carbon-dioxide emissions from 2005 levels by 2030. 

EPA Administrator Gina McCarthy spoke of the significance of the decision at a press conference earlier this week. "That's like canceling out annual carbon pollution from two thirds of all cars and trucks in America," she remarked. "And if you add up what we'll avoid between now and 2030—it's more than double the carbon pollution from every power plant in America in 2012."

The EPA had hoped to strike a middle ground between environmentalists who are demanding an ambitious reduction and the needs of the industry, whose representatives are calling for flexible regulations and an extended compliance timeline. Carbon emissions have already dropped since 2005, giving the industry a slight advantage.

The EPA estimated that the utilities companies will spend upwards of $8.8 billion each year in order to comply with the new regulations, but the savings in healths services could range from $55 billion and $93 billion by 2030, with reduced asthma attacks and premature deaths.

The U.S. Chamber of Commerce disagreed with that figure, arguing that the new rule could cost the economy up to $50 billion a year. "Today's regulations issued by EPA add immense cost and regulatory burdens on America's job creators," claimed Chamber of Commerce President and CEO Thomas Donohue.

While it is hard to settle on specific figures, the new regulatory initiative will inevitably have a significant impact on America's energy companies.

At Xbig6, we provide leading-edge thinking for operational efficiencies tailored to the industry. Many of our consultants have both Big Six experience as well as industry experience.  This combination provides a powerful answer to many of the most pressing challenges faced by our clients, and our extensive expertise in the energy industry allows us to provide skills training and organization alignment necessary to successfully comply with changes in regulation. 

The importance of honest advice in times of company crisis

A newly published work by Ben Horowitz, co-founder of Andreessen Horowitz and one of Silicon Valley's most respected entrepreneurs, has been making waves among C-suite executives for its pull-no-punches approach to problem solving.

The book, entitled The Hard Thing about Hard Things: Building a Business When There Are No Easy Answers is a refreshingly un-sugarcoated analysis of issues involving layoffs, poaching employees and other gritty business topics. Below are bullet points summarizing some of the piece's most pressing messages:

  • Don't subscribe to politics. Office politics are impossible to avoid, but management is able to limit their impact on the company's practices and organization. To accomplish this, Horowitz advises granting rewards such as pay raises or promotions to the staff that accomplish the most toward moving the company forward, and not simply ambitious employees that have more interest in advancing their own career than making the company more effective.  
  • Be honest with your employees. Faking positivity in a down time can do more damage than good. Horowitz writes "a company that discusses its problems freely and openly can quickly solve them."  By not giving staff an accurate idea of the company's position, you run the danger of insulting your employees by implying they are unable to handle bad news or lack the skills needed to help the company succeed. 
  • Streamline communication. Horowitz stresses the importance of developing a process for regular feedback, and making the importance of communication understood by all team members. "In a vacuum of feedback, there is almost no chance that your company will perform optimally," he explains. 

If your company is struggling to find a new direction or is being bogged down by internal politics, contracting the services of an expert consultant can present new opportunities to move forward. At Xbig6, our consultants have an average of two decades of professional experience in management consulting, technology consulting, program management, and organizational change management with a price point of half the cost of many larger firms. 

Effective change management hinges on leadership

Effective change management has become critical for companies that wish to succeed in a dynamic market. With advances in technology taking place at a more rapid pace than ever and consumer demands in almost constant flux,  a company's success can now be measured in how well they adapt to change. 

There are several instances that Forbes points to where change management has become commonplace. A merger, acquisition, rebranding, reorganization, or a reduction-in-force are significant periods in a company's history where change management should be utilized. For the purposes of this article, we will focus on what Forbes considers the most difficult aspect of enacting effective change management—the people. 

Often, a shift in business practices creates issues for staff and management. New leaders are promoted, job descriptions change and employees can naturally react adversely. The uncertainty of change puts many on edge, whether they are concerned about an increased workload or losing their place in the office hierarchy. In order to put these fears to rest, effective change management must begin at the top.

If company leadership does not share the same level of commitment and support of the company's new direction, the transition can quickly encounter roadblocks. In uncertain times, employees look to C-suite executives for support and direction. These high-level professionals become the "change champions" for the entire office, and if they do not have confidence in the company moving forward, this pessimism can quickly spread to employees. 

Xbig6 has an extensive history of helping companies successfully navigate organizational change. Through our network of independent consultants, we offer basic-blocking-and-tackling through leading-edge thinking. The inclusion of an outsider as change leader offers an opportunity to work outside of organizational politics. In other instances, there simply isn't the existing skill set inside of an organization due to capacity constraints or resource allocations. Xbig6 offers the experience and expertise necessary to successfully navigate periods of change, at half the cost of many larger firms. 

Hewlett-Packard struggles to find new direction

Hewlett-Packard CEO Meg Whitman, who took over the position in 2011, is currently facing a third consecutive drop in annual revenue. To turn the company around, she has announced in intent to lay off up to 16,000 employees, in addition to the 34,000 announced earlier this year, bringing the total to as many as 50,000. 

"The workforce reduction suggests the demand environment continues to be challenging," said Bill Kreher, an analyst at Edward Jones & Co. to BusinessWeek. "The company is still in some very challenging businesses. The company needs to right-size the business."

The Palo Alto, California-based computer product company released fiscal second-quarter earnings this week that fell slightly below analysts' expectations. This marks the eleventh consecutive quarter of declining sales. 

Entrepreneur.com explained that consumers are turning away from buying personal computers and printers and instead electing to purchase more mobile-friendly tablets and smartphones. Hewlett-Packard is the second largest vendor of personal computers after Lenovo Group, and shipped 73.4 million units in the first quarter, according to BusinessWeek. 

Hewlett-Packard also settled expensive legal disputes in the past months. The company was required to pay more than $100 million in response to claims that they had bribed officials in foreign countries, and paid another $57 million to settle a suit regarding shareholder fraud. 

"We need to be nimble in what is an enormously rapidly changing marketplace," Whitman told Entrepreneur.com. "So while no one likes to reduce the workforce, this will be good for our customers and it will be good for Hewlett-Packard."

Fluctuations in market trends often result in a company restructuring their goals and workforce. Many organizations, especially large companies with an extensive history, become bogged down in internal politics, and can often benefit from the insights provided by professional consultants. At Xbig6, our consultants have the same valuable insight and experience as the large international firms, but cost companies half as much. 

Sears CEO takes stores in new direction

Sears Holdings CEO Edward Lampert said the company is adopting a new plan to combat the falling sales at its stores. Lampert called the plan a "connected living strategy," and said it will echo consumer demand by shifting focus towards products like appliances, fitness equipment and auto services. 

Sears was once the nation's largest retailer, but lost the top spot to Wal-Mart stores in 1990, and has not yet been able to recover. The company has closed 80 stores this year, and is considering closing additional locations. Annual revenue has fallen 6.8 percent to to $7.88 billion. Although this is better than the $7.72 billion projected by analysts, the year-over-year decline is indicative of the brand's ongoing struggles.

Lampert told Forbes that "the biggest negative contributor to sales has been from our consumer electronics business at both Sears and Kmart." As rivals continue to chip away at its customer base, the retailer has focused efforts on reducing costs, lowering inventory, closing unprofitable locations and selling off assets. "We fundamentally are changing the way we do business," said Lampert.

Part of Lambert's proposed changes is a renewed focus on a member-centric business model. Lambert points to the success of the company's membership program "Shop Your Way," that made up 74 percent of eligible sales. 

Lambert, who took over as CEO in May of 2013, has also publicized the option of selling its Canadian operation.  Shares in Sears Holdings were down about 4 percent in Thursday morning trading to reach $35.10. Shares are down close to 28 percent for the year.

Changes in both market trends and company leadership often result in turbulent periods in a company's history. Many organizations, especially large companies with an extensive history, become bogged down in internal politics, and can often benefit from the insights provided by professional consultants. At Xbig6, we provide leading-edge thinking for operational efficiencies, supply-chain optimization, and back-office support tailored to the industry.