Getting It to the Bottom Line: Management by Incremental Gains

A practical approach to management for maximum profitability, it provides a methodical guide to boost operating performance.

Category: Banking & Finance

This title is part of the Smart Management list.

Of Interest:

Learning Leadership: The Abuse of Power in Organizations

No-Nonsense Management: A General Manager's Primer

No-Nonsense Planning

The Managerial Mystique: Restoring Leadership in Business

A step by step guide for managers, this books recommends a common sense methodology in the management of change, shows how to determine the amount of change necessary and how to achieve those changes incrementally and profitably. A complete management program, it also provides for measured progress reporting and instructs management how to evaluate the results.

Review by Gail Owens Hoelscher
From Turnarounds and Workouts, June 15, 2001

In the author’s words, “(t)his is a book about how to optimize operating profit in an ongoing business consistent with and supportive of the owners’ (and/or creditors’) demands.” As in his book “The Turnaround Manager’s Handbook,” also published by Beard Books, Richard Sloma’s guidance is all-inclusive, straightforward, and wise. He is perhaps unique in his ability to use quotes and maxims liberally without sounding the least bit preachy or trite.

A quote from Francois Voltaire, “perfection is attained by small degrees,” explains the main premise of this book, management by incremental gains. It is based on the simple notion that change, for better or worse and accidentally or on purpose, only occurs incrementally. Without a succession of small changes in the same direction, there can be no progress or growth. Mr. Sloma defines management as “getting work done through the efforts of others.” Thus, change in an organization depends on people. Mr. Sloma takes a pragmatic (and perhaps somewhat dim!) view of the ability of people to changes, and maintains that the smaller a change planned by management, the more likely it is to be successfully implemented.

Mr. Sloma provides “real-world tested and proven methodology for working with people in a professional manner to maximize their individual commitment to goal achievement.” He offers recommendations based on his more than 30 years of management experience that “strike(s) the long-sought-after logical balance of viewing and managing people as if they were competent, conscientious, and ambitious individuals who genuinely seek opportunities for professional growth and development.”

“Getting It To The Bottom Line” is not only about people skills. Mr. Sloma introduces financial and operational performance numbers, and gives details on how income statements and cash flow statements measure the magnitude and direction of planned changes in financial operational performance. His operational framework is illustrated in the following eight steps: Quantify the do-nothing scenario; If it works, don’t fix it; If it doesn’t, quantify minimal acceptable performance levels; Quantify components of any financial performance gap; If necessary, cut your losses, liquidate and reinvest elsewhere; Quantify management action plans to bridge the performance gap; Define and establish a reporting and control system; Define and implement an incentive compensation program.

Mr. Sloma examines each step thoroughly, using recognized financial analysis methods, as well as some of his own. Throughout, he consistently emphasizes the importance of achieving ambitious goals one small step at a time. He admonishes managers to “spend no time or effort making ‘little” plans. They have no magic to stir men’s blood – or to make owners as wealthy as they could be!”

This is a solid and substantive book that targets managers at every level. Mr. Sloma presents his concepts in such a way that anyone charged with leading an organization can learn to do it better.

Twenty-eight years of hands-on management experience as a Board Member, Chairman, CEO and COO of several companies. Hold a J.D. from DePaul University and an MBA from the University of Chicago. He is the author of a number of other books on good business practices: No-Nonsense Management, No-Nonsense Planning, How to Measure Managerial Performance and Getting it to the Bottom Line.