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BOOSTING PROFITABILITY <br> CONSULTANT CHALLENGES POPULAR MANAGEMENT STRATEGIES

Small businesses can often boost profits if managers forget all they've heard about the value of teamwork, put more emphasis on paying employees based on performance and candidly assess their own management styles, a corporate turnaround specialist told local business owners Monday.

More than 200 CEOs and managers of small and mid-sized companies attended a day-long forum sponsored by the city in conjunction with the U.S. Conference of Mayors' Partner America initiative.

The small business summit, billed as a first-of-a-kind event in the region, featured a keynote address by State Comptroller H. Carl McCall, who talked about new efforts to channel more venture capital into expanding companies.

Workshops were held that focused on import-export opportunities, landing government contracts and boosting sales through the Internet.

Some of the more non-traditional tips came during the opening session when a consultant focused on the pitfalls of running family businesses and challenged some of the management strategies that are popular models in academic circles.

George A. Cloutier, chairman of Partner America, spent 17 years as a corporate turnaround specialist in the food and sporting goods industries. He also heads American Management Services, a Boston-based consulting company that has worked with thousands of businesses.

Cloutier grabbed the attention of some participants when he challenged business models that stress teamwork.

"Frankly, teamwork is overrated," he said. "All of a sudden, you have five managers who are afraid to criticize each other. You need to apply team work very carefully."

Here are some other guidelines Cloutier offered for boosting a business' profitability:

Dissect financial statements on a regular basis. Do "flash" reports that provide frequent glimpses of a company's financial health.

"Don't fool yourself into thinking that you're doing well. Run scared -- all the time," he said.

Tackle tasks based on the level of their importance.

"Eat your vegetables first. Do the tasks you don't want to do. Work the priorities," Cloutier said.

Institute a pay-for-performance component. Cloutier said between 30 percent and 40 percent of an employee's compensation should be based on performance.

Have employees fill out confidential questionnaires assessing the CEO's management style. Cloutier said he recently talked to a worker at one company who felt irrelevant to the company's bottom line.

"The guy said 'if I fell asleep and died at my desk, George wouldn't notice.' "

Understand the unique challenges inherent in operating a family business.

"We like to say that the best family business is that with only one member," said Cloutier to a chorus of laughs. "If your spouse is not an accountant, don't make that person the bookkeeper. It's just not going to work."

Not all participants agreed with Cloutier's comments. Dr. Raul Vazquez operates a family-owned medical office on Niagara Street and he said fostering a teamwork approach has been key to the growth of Urban Family Practice. "It helps to bring people together, deflates problems and improves efficiency. I think teamwork is very important," said Vazquez, who also serves as president of the Latino Business Association.

In response to McCall's speech that focused on a state program expected to increase the availability of venture capital funding, Vazquez expressed doubts that the new effort will help most inner city businesses.

"What we need is a whole new infrastructure that will deliver expanded resources, including low-interest loans, job-training and even Internet training to small businesses," said Vazquez.

Officials noted that the Buffalo Economic Renaissance Corp., the city's main development agency that coordinated Monday's conference, offers loan programs and other services that are tailored to small and mid-sized businesses.

Vazquez and several other business owners underscored the difficulty of attending a day-long conference, noting that smaller companies don't typically have "fill-in" managers when bosses are gone. During conference breaks, some business owners stood in the Hyatt Regency lobby, making cell phone calls to staffers.

Helen Kurzdorfer is an Amherst businesswoman who manages a two-person company that sells remanufactured toner cartridges for copiers and fax machines. She said Monday's conference will help to chart the course of the company called Pajetec. While she wished there had been more information given about procuring government contracts, Kurzdorfer said the panel discussion on e-commerce was enlightening.

"We don't have a Web site yet and this could be a good strategy for increasing sales," she said.

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