Tina Nies interviews Dr. Jack Helmuth, Dean of the School of Management at the University of Michigan-Flint on July 26, 2011
Tina: Welcome to Dr. Jack Helmuth from University of Michigan - Flint. He is a professor of finance and the Dean of the School Management. Professor Helmuth is an experienced teacher with an exciting combination of considerable academic record along with consulting experiences that emphasize creating value to the firm. He's also been a proponent of entrepreneurship and family business development at two universities, and a champion of business education on five continents. And I understand that Dean Helmuth recently returned from teaching overseas this summer. So, we welcome Dean Helmuth here today to talk about creating value and how do we go about doing that, Dean Helmuth?
Dean: Well, first Tina thank you for having me on the show. It’s always good to see another successful alum, doing something creative and your show is really adding value to the community. When we talk about creating a value in the private sector, we’re looking to find ways in the production for anywhere from the one that supply chain right through the retail aspect of your business. In doing that we can take an asset and create value. Think of this example, salt is a just a basic staple product, but Morton Salt was able to package it in a blue container with a girl with an umbrella with the words, “when it rains, it pours.” They took what is otherwise a commodity and created value because people will now reach for Morton Salt over another.
This is what really business is all about. It's finding your niche in your product and product line, your core business and then try to be creative. This is one aspect to business, being creative and creating value. And in finance, when we say creating value, it means, as an example back to Morton Salt, what could be otherwise a 50 cent salt might now sell for 99 cents. The extra 49 cents is associated with the creation of the brand and the image: the value.
You see the same in McDonald's and the Golden Arches, you see it with so many companies here in Michigan. A&W Root beer started here and when you say their name, you immediately have an image of their success. In Disneyland, the same thing; here’s a guy with just an idea and look at the mega empire he created because he had vision. Ford Motor Company has the same story; these people now called pioneers, took an idea, and created value. Of course when value is created in a company and it grows, it’s also good for the community,. You get new products, increase the tax base, people are employed people and that’s what it’s all about. Here at the University of Michigan we’re emphasizing entrepreneurship and family business and trying to give back to the community and be supportive of those sorts of endeavors for our regional economy.
Tina: So, taking a small low local business, which is a majority of people that I work with, entrepreneurs who opened a business because they have a passion for that idea, but maybe they don’t know everything about how to run a business. How do they make time a to create value, how do they really get that piece of it when they’re so busy just trying to function in their daily business?
Dean: Well, they need to take time for self-assessment or have someone come in to help them assess their busines, maybe from our entrepreneurship center and we also have students and faculty work with businesses. But you can also do it on your own. You can make time to go ahead and evaluate your business and say "how can I make it better, how can I make it bigger, how can I create more value?"
I can give you an example, near a university I was working at, a woman opened up a Greek restaurant, it was a beautiful restaurant, wooden walls, and wonderful marble floors. Its 5-7 miles away from the area in city where that type of business would be highly successful. I tried to throw business her away and do some university functions there and so forth, but she finally figured it out after 5 or 6 months of having a near empty parking lot, which means her cash flow was very low and wasn’t making an economic profit. So, she had the ideato simply put in some big screen TV’s and put up posters of some local football teams, etc. It became a successful sports bar, and she did that by changing the assets and reconfiguring them, adding a few TV sets and some posters, and soon the parking lot was full every day.
That created the value for her business and that’s where entrepreneurs and family businesses have to step back and say “what can we do to go ahead and create more value.” Let’s go back to Walt Disney – they re-release their classic movies on new technology - CD’s, VHS and DVDs - and they’ve been releasing them one at a time, over time because they have a huge amount of value and they make more money on movies that were created 30 or 40 years ago.
Tina: Great tips and often small businesses don’t know where to look for that low-cost outside help. So universities and colleges in any local area are fantastic resources and a great place for people to start – just go in and ask.
I love the example of just putting up some TVs and getting a full parking lot. One thing that tears at my heart is when I drive down the road and see yet another small business closed. Recently, in one day, I saw 3 businesses that I personally visited in the last 9 months now closed down. They were missing something, they didn’t have that value that you’re talking about. so what would be the top tip you would give someone today - what would be the first thing that they could to look at their business to improve their value.
Dean: There’s something called core business. With Disney, it’s is entertainment, not just theme parks and movies. Ford Motor Company is more than just cars, its core is transportation (at one time they also produced airplanes). So, one of the things that you need to do is step back and say "what type of company are we and what is our core businesses, and what are we really good at?".
This can also help people narrow their focus, for example a business trying to be a general contractor, when their best skill is carpentry and they are not very good at the other stuff. They should be concentrating on what they are really good at and they can be more creative and create even more value.
Tina: Sure, so I hear you say that if you’re trying to do so many different things you’re not creating the value of that thing that you’re best at. So if people know you as a general contractor and you’re only okay, you’re probably not going to create a great value in a community. But if you’re an amazing carpenter, you’ll get known for that and your value can sky rocket if you focus on that piece.
Dean: Definitely
Tina: That’s really good. Sometimes I think that people are thinking "I just have to make a buck", right? So they might take on other work that isn’t adding value. So, is there some tool or things that they could do that would give them that support in their business and as they’re trying to look at their core business value and create their business plan.
Dean: Well, I think successful businesses eventually get it. Successful businesses will continue to reevaluate their business, their pricing, their value, so they cover their overhead and become profitable. And in the process of continuous improvement they can go ahead and figure how to change a product, look for new markets, and essentially be creative with the product itself. There’s a successful entrepreneur in Buffalo, who started a business, Naja foods. Through continuous improvement and putting a little money in the company, she now produces the low fat brownies that are sold in Subway retail food establishments. And her low fat brownies are so healthy, the American Heart Association is a proponent for her brownies. She also had to figure out a low-cost way to produce and distribute her brownies. So she got creative and contacted local bakery shops around the country; bakery shops generally produce their products at night for sale the following morning. Then the production facility is not operational in the morning, so she cut a deal and Naja would have those local bakeries make her brownies during their off-peak hours. And she was able to match the production as exactly as needed as she grew her business bigger and bigger.
Tina: You’ve shared so much great information, and I can see that creating value includes being creative and maybe thinking outside the box, like Naja using the bakery downtimes for her production. Today, I think our top tip would be looking at that core value of your business. So, take a few minutes to just think about that piece, think about what is that you are really good at, what is your business, what do you want to be known as, and what do you want your expertise to be.
Tina: Welcome to Dr. Jack Helmuth from University of Michigan - Flint. He is a professor of finance and the Dean of the School Management. Professor Helmuth is an experienced teacher with an exciting combination of considerable academic record along with consulting experiences that emphasize creating value to the firm. He's also been a proponent of entrepreneurship and family business development at two universities, and a champion of business education on five continents. And I understand that Dean Helmuth recently returned from teaching overseas this summer. So, we welcome Dean Helmuth here today to talk about creating value and how do we go about doing that, Dean Helmuth?
Dean: Well, first Tina thank you for having me on the show. It’s always good to see another successful alum, doing something creative and your show is really adding value to the community. When we talk about creating a value in the private sector, we’re looking to find ways in the production for anywhere from the one that supply chain right through the retail aspect of your business. In doing that we can take an asset and create value. Think of this example, salt is a just a basic staple product, but Morton Salt was able to package it in a blue container with a girl with an umbrella with the words, “when it rains, it pours.” They took what is otherwise a commodity and created value because people will now reach for Morton Salt over another.
This is what really business is all about. It's finding your niche in your product and product line, your core business and then try to be creative. This is one aspect to business, being creative and creating value. And in finance, when we say creating value, it means, as an example back to Morton Salt, what could be otherwise a 50 cent salt might now sell for 99 cents. The extra 49 cents is associated with the creation of the brand and the image: the value.
You see the same in McDonald's and the Golden Arches, you see it with so many companies here in Michigan. A&W Root beer started here and when you say their name, you immediately have an image of their success. In Disneyland, the same thing; here’s a guy with just an idea and look at the mega empire he created because he had vision. Ford Motor Company has the same story; these people now called pioneers, took an idea, and created value. Of course when value is created in a company and it grows, it’s also good for the community,. You get new products, increase the tax base, people are employed people and that’s what it’s all about. Here at the University of Michigan we’re emphasizing entrepreneurship and family business and trying to give back to the community and be supportive of those sorts of endeavors for our regional economy.
Tina: So, taking a small low local business, which is a majority of people that I work with, entrepreneurs who opened a business because they have a passion for that idea, but maybe they don’t know everything about how to run a business. How do they make time a to create value, how do they really get that piece of it when they’re so busy just trying to function in their daily business?
Dean: Well, they need to take time for self-assessment or have someone come in to help them assess their busines, maybe from our entrepreneurship center and we also have students and faculty work with businesses. But you can also do it on your own. You can make time to go ahead and evaluate your business and say "how can I make it better, how can I make it bigger, how can I create more value?"
I can give you an example, near a university I was working at, a woman opened up a Greek restaurant, it was a beautiful restaurant, wooden walls, and wonderful marble floors. Its 5-7 miles away from the area in city where that type of business would be highly successful. I tried to throw business her away and do some university functions there and so forth, but she finally figured it out after 5 or 6 months of having a near empty parking lot, which means her cash flow was very low and wasn’t making an economic profit. So, she had the ideato simply put in some big screen TV’s and put up posters of some local football teams, etc. It became a successful sports bar, and she did that by changing the assets and reconfiguring them, adding a few TV sets and some posters, and soon the parking lot was full every day.
That created the value for her business and that’s where entrepreneurs and family businesses have to step back and say “what can we do to go ahead and create more value.” Let’s go back to Walt Disney – they re-release their classic movies on new technology - CD’s, VHS and DVDs - and they’ve been releasing them one at a time, over time because they have a huge amount of value and they make more money on movies that were created 30 or 40 years ago.
Tina: Great tips and often small businesses don’t know where to look for that low-cost outside help. So universities and colleges in any local area are fantastic resources and a great place for people to start – just go in and ask.
I love the example of just putting up some TVs and getting a full parking lot. One thing that tears at my heart is when I drive down the road and see yet another small business closed. Recently, in one day, I saw 3 businesses that I personally visited in the last 9 months now closed down. They were missing something, they didn’t have that value that you’re talking about. so what would be the top tip you would give someone today - what would be the first thing that they could to look at their business to improve their value.
Dean: There’s something called core business. With Disney, it’s is entertainment, not just theme parks and movies. Ford Motor Company is more than just cars, its core is transportation (at one time they also produced airplanes). So, one of the things that you need to do is step back and say "what type of company are we and what is our core businesses, and what are we really good at?".
This can also help people narrow their focus, for example a business trying to be a general contractor, when their best skill is carpentry and they are not very good at the other stuff. They should be concentrating on what they are really good at and they can be more creative and create even more value.
Tina: Sure, so I hear you say that if you’re trying to do so many different things you’re not creating the value of that thing that you’re best at. So if people know you as a general contractor and you’re only okay, you’re probably not going to create a great value in a community. But if you’re an amazing carpenter, you’ll get known for that and your value can sky rocket if you focus on that piece.
Dean: Definitely
Tina: That’s really good. Sometimes I think that people are thinking "I just have to make a buck", right? So they might take on other work that isn’t adding value. So, is there some tool or things that they could do that would give them that support in their business and as they’re trying to look at their core business value and create their business plan.
Dean: Well, I think successful businesses eventually get it. Successful businesses will continue to reevaluate their business, their pricing, their value, so they cover their overhead and become profitable. And in the process of continuous improvement they can go ahead and figure how to change a product, look for new markets, and essentially be creative with the product itself. There’s a successful entrepreneur in Buffalo, who started a business, Naja foods. Through continuous improvement and putting a little money in the company, she now produces the low fat brownies that are sold in Subway retail food establishments. And her low fat brownies are so healthy, the American Heart Association is a proponent for her brownies. She also had to figure out a low-cost way to produce and distribute her brownies. So she got creative and contacted local bakery shops around the country; bakery shops generally produce their products at night for sale the following morning. Then the production facility is not operational in the morning, so she cut a deal and Naja would have those local bakeries make her brownies during their off-peak hours. And she was able to match the production as exactly as needed as she grew her business bigger and bigger.
Tina: You’ve shared so much great information, and I can see that creating value includes being creative and maybe thinking outside the box, like Naja using the bakery downtimes for her production. Today, I think our top tip would be looking at that core value of your business. So, take a few minutes to just think about that piece, think about what is that you are really good at, what is your business, what do you want to be known as, and what do you want your expertise to be.
RSS Feed