Dr. Russell F. Henke -- Business Consultant

Frequently Asked Questions



How Do I Get In Contact With You?

The easiest way is to call and leave a confidential telephone message at any time of day or night, at
(510) 287-9168.

Or you can send me a confidential e-mail message at russ@henkeassociates.net.
You may click on the "envelope icon" at the bottom of each web site page as well.
I will respond to you quickly in whatever medium you prefer.

How do I find out if you're available for a new consulting assignment?

Just click on the link to Available Services or the link to How To Get Started; I usually list my current availability for the next several months, near the bottoms of those pages.

Or, you can just give me a call or send me an e-mail message!

I welcome inquiries now for possible modest or significant assignments starting as soon as Monday November 30, 2009 for up to 15 to 20 hours per week; additionally, associates are also available for appropriate engagements. Just phone (510) 287 9168 or send an e-mail.

How Long Have You Been Doing Management Consulting?

My current independent practice has now extended continuously since March 31, 1996, so that’s over 13.5 years so far. While the intensity of engagements has varied somewhat, I have generally been devoted to client projects around three weeks out of four during that period, on the average.

How Many Clients Have You Worked With During This Period?

The count is now well over forty. My engagements have the most benefit to clients when I keep the number of simultaneous involvements to a low number and also the benefits increase to clients the longer the engagements last. You can see some of the comments made by these clients, as well as recent endorsements, by clicking on the Client Comments link at the bottom of this page, or go to the Site Map.

Who At A Client Usually Hires You?

This has varied by client, but it’s almost always a senior officer of the client company, such as the CEO, the COO, the Managing Director, a functional Vice President, or a General Partner.

Do You Only Work With Big Companies?

Not at all. The client companies over the 13.5+ years have included start ups at the seed and first round financing levels, with just a few employees; to larger but still private companies; to public corporations with revenues well beyond nine figures annually. Occasionally a client is a venture capital partnership or an external individual or entity seeking investment opportunities.

How Can You Help Start Ups?

It’s amazing how similar the challenges are, that almost all small companies face. This is of course one of the big advantages that an experienced consultant can bring...he has probably encountered the same or similar business issues somewhere before, and he knows generally which solutions work most often and which ones contain pitfalls. Start Ups (or "re-starts") are almost always squeezed between the need to raise initial money (or more money) and the need to manage the day-to-day product development & recruitment of key personnel. Nowadays, startups have to act faster than ever before. As J. Neil Weintraut of 21st Century Internet Venture Partners said, "Time to market is the only advantage of being a startup. Winning startups are the ones that out-execute competition. They are also the ones who hire senior players quickly". Setting Priorities; rapidly creating/following a simple, strong yet flexible Business Plan; and developing revenues quickly are usually the key services that I can help an entrepreneur with, along with guidance in seeking angel, venture or corporate capital and help in recruiting & interviewing.

What Can You Bring To Larger Companies?

As a company grows and matures, its needs change dramatically. While it still may need assistance in financing, the key concerns usually shift toward building efficient and effective infrastructures. For example, what kind of marketing and selling activities does it need? What about geographic expansion? What’s the impact of e-commerce? How can it effectively ride the Internet wave and avoid the "dot com" fate of many? How can it find and retain excellent people? How can an atmosphere of 'constant innovation' be created? How does it keep in compliance with changing human resources laws? Visa quotas? Tax laws? How does it ensure that its financial audits are competent, independent and fraud-free? What’s the best way to organize the company to achieve its objectives (hierarchy, matrix, business units, ...)? How does the CEO choose and/or work with a Board of Directors? What should a new executive do first if he/she is promoted to a new position that he/she has not done before? If you run a division or subsidiary, how do you command more attention from parent company headquarters? Should you consider acquisitions as a path toward growth? Which ones? How can you improve your due-diligence? Are there portions of your current company that would benefit from a spin-off? From new strategic partners?

What’s The Most Important Ingredient In Helping These Companies, large or small?

An effective Business Plan! No doubt about it! Whether it’s a new plan to go raise money, or a refreshed plan for a larger, changing business. The PROCESS of doing a new/refreshed Business Plan raises all the key questions that successful managers must answer; the PROCESS either re-confirms that the current path is correct, or it uncovers lots of areas for improvement. In late 1999 and early 2000, it became fashionable to "dis" the time/effort of preparing a complete business plan, especially for start ups, under the theory that VC's were ready to fund "4 people and any dot.com idea". I believed then/now that this was/is a serious mistake, since the PROCESS of thinking through the enterprise IS the BENEFIT, and you'd better believe the investors will soon ask you all the tough questions, even if they did not necessarily ask to see the formal planning documents right away. Moreover, since the Spring 2000 NASDAQ meltdown to the 2002-2008 lows of the NASDAQ, VC's are placing even more scrutiny on new investments. Naturally, you can't afford months of elapsed time to do a Biz Plan; you have to do it rapidly and that's where experience (of consultants) really helps.

The immutable importance of the Planning Process is confirmed daily, not just in my own consulting practice, but also in dozens of business meetings, conferences, publications and articles. A couple years ago, Jerry Engel wrote a fine piece about Business Plans in the UC Berkeley Quarterly called INNOVATION. Just click on the Press Releases link below (or go to the Site Map) to see Engel's comments.

And don't overlook the quote from Lycos CEO Bob Davis in his book Speed Is Life, "Speed to execute something that has been thought out and planned for strategically can be very important. It is [then] when all your practice and hard work pays off and the actual doing just happens".

In recent months, I have also helped companies locate and recruit executives for key slots within their top management teams. Long years in the business have created lots of contacts with excellent people. Usually I will refer folks directly, or I work with search firms as appropriate.

Doesn’t Every Manager Already Know That A Good Business Plan Is Critical?

Most managers "know" it, either explicitly or at least viscerally. But it's often "inert knowledge"; that is, simply knowing it, and actually acting to create/follow a Business Plan, are often two different things. Some managers only give business planning occasional lip service; they see it only as a necessary evil. Others fully embrace the idea, but either don’t have the experience in putting a plan in place with his/her staff, or don’t have the time to devote to the PROCESS to make the resulting Business Plan effective. Then of course there occur the situations where a company’s progress gets off track, and changes are needed in the business plan but the management is torn about how to implement a turnaround. In every one of these cases, having an outside, unbiased fresh set of experienced "eyes", can really help.

But What If a Manager Wants Help with a Business Plan, but He/She Is Reluctant To Commit To A Long Term Consulting Deal with Henke Associates?

This situation occurs frequently. It does take time to develop confidence in a consultant. What I have done to help here, is develop a Business Planning Tool Kit that a new client can begin with, at a very modest cost. The Planning Tool Kit (PTK) is semi-tailored to the particular business and company he/she is in, and it is priced at a flat $6000. The PTK is NOT a standard textbook, but rather a comprehensive compilation of my consulting and management experience over 35 years, and focused on and tailored to the particular client entity. A client can purchase the PTK and use it on his/her own. Or he/she can later choose to engage me as a consultant, to help facilitate his/her Business Planning Process, using the PTK as a guidebook. So far, about a third of those who have purchased a PTK have later entered into a follow up consulting relationship. But everyone who has purchased a PTK has been pleased.

How Do You Get Paid For Your Standard Consulting?

Well, I follow standard business and industry professional practices. The client and I agree on an approach based on an initial discussion and then a brief written proposal from me. In all these cases, I am an independent contractor; I take care of the associated taxes, etc. The consulting fees can be simply "time & materials", where I would receive hourly, daily, weekly, or monthly payments based on the time worked and the agreement with the client. Or we might agree up front to a fixed fee and time proposal. If the client is willing to guarantee a longer commitment in the form of a retainer, then my hourly fees are adjusted lower to reflect the increased commitment. The written contract is simple, brief and protects both parties. I have had consulting engagements as short as a week and as long as several years; I prefer and enjoy more the longer ones because the benefits to the clients are larger. As discussed earlier, a couple of engagements have resulted in my becoming an interim full-time employee, as dictated by the situations at hand. But it’s up to the client...he/she is the boss!

Does Every "Contact" Turn Into a paid consulting contract??

Not at all. If I do not think that my experience can help the prospective client find a solution, after discussing the situation with the client, I will definitely decline to bid. Often I can recommend another consultant or contractor who might have the expertise to be helpful. Occasionally, I have written a bid, but the contract is delayed for one reason or another, but that has rarely happened. Sometimes there are entrepreneurs in very early-stage companies whom I may help on a pro bono basis to get started. In these cases, I may offer discounted fees and/or delayed fees, pending funding of the enterprise, and then negotiate the residual fee amounts and/or start-up equity. Finally, M & A and other investment solicitation consulting, usually require customized arrangements, cooperation with selected i-bankers, etc.

Do You Work Alone Only?

As it happens, on most of the assignments booked by Henke Associates, I do work alone as the only consulting person involved with the engagement. However, when the situation warrants, I have brought in associate specialists in the areas where I might have only general skills. An example is a detailed financial or accounting analysis. Another might be an HR legal expert. Or a skilled customer survey person. Or a marketing communications expert. If the client wishes, I will manage the contributions of these extra folks. These folks are the "associates" in the HENKE ASSOCIATES' name.

On mergers, acquisitions & divestitures, there are always outside folks with whom I need to work (attorneys, accounting firms, i-bankers, et al).

In late February 2007, I also became affiliated with Cyon Research Corporation, and I now happily anticipate the occasional opportunity of ongoing joint consulting projects with Cyon's analysts and experts as well. The assignments to date from Cyon to Henke Associates have worked out well for all concerned. Occasionally, a lead for a project also goes from Henke Associates to Cyon. (See the Latest Press Releases link below, for more information).

By the way, everything done for any particular client is totally confidential to that client.

Are All Your Clients Local To the SF Bay Area?

Not at all! Like anyone else, I would prefer to work with client companies within reasonable commute distances, as this simply enhances the intimacy and frequency of collaboration with client personnel. Until Bush 43's administration took over, Silicon Valley offered one of the most robust business economies anywhere. Fortunately, Silicon Valley has slowly recovered its prosperity over the last eight+ years. As it happens, however, I have had clients from all over the USA, in part because I have previously lived and worked in the MidWest, the NorthEast, the NorthWest and here in Northern California. Of course even the clients based here on the USA West Coast tend to require occasional travel around the country and abroad, which I undertake as needed. For example, one particular client routinely required my presence in England, France, Germany and other European countries. I must admit, however, that frequent 15 hour airline flights to the Far East are now far less attractive to me than they once were.

Do You Ever Consider Returning To A Full-Time Corporate Position?

This possibility is always present, either as a result of consulting involvements with clients, or via separate contacts from executive recruiters. At this juncture in my career, I am leaning heavily toward continuing to build my independent consulting practice. These last twelve + years have proved intellectually challenging and rewarding, and consulting allows the exercise and leverage of all those previous years in the corporate P&L trenches with multiple companies. However, I do note with interest and irony, how the consulting engagements of some lengthy duration are the most satisfying, where some new thrusts are suggested and then I hang around to help get them implemented and successful. In many ways, such engagements are most like the previous corporate general management positions that I have held, so I obviously have some bias toward such line management relationships. Indeed, I was recently invited into serious discussions regarding the CEO slot for a $100 million enterprise. But ultimately I passed up this role because the entity was not headquartered in the SF Bay Area and because of my previous commitments to existing consulting clients. So you can see that, while I prefer the current mode of consulting independence, one "never says never" to a possibly exciting, new full time start up or corporate position (but in the SF Bay Area).

Isn’t All Your Corporate Experience in EDA, MCAE and Mechanical CAD/CAM? How Can You Help Companies Outside That Field?

Well, first, while all my experience has been what you might call "high technology", all that is not just in EDA or Mechanical CAD/CAM. Indeed, I have worked in top management positions for electronics manufacturers, machine tool builders, and image processing and computer graphics companies, who were focused on turning out complete, integrated hardware and software systems. Moreover, every customer of both the electronics design automation companies, as well as every customer of the mechanical/manufacturing design automation companies where I have worked, were individually and collectively interested in providing faster-better-cheaper end user hardware and software products that helped their customers become more competitive.

Early on, it was clear to me that success in any of the corporate roles I held, was dependent on empathy with the needs of the end user corporate customer! This same ethic has been transferred over to, and reinforced by, my consulting practice. Indeed, any hope for enduring success in B2B Internet e-commerce must by necessity rest on the firm underlying knowledge of how the real-world manufacturing industry truly works.

And finally, at the top of every company, the business issues facing upper management are far more similar than they are unique; the issues always involve being successful in one or more of the classical general management areas: planning, leading, organizing, staffing and financial control. Moreover, it's usually not sufficient that the corporate leader have the essential knowledge in his/her head alone; such knowledge only reaches its full potential when it can be extracted and embodied in the daily processes and routines carried out by his/her whole organization. Helping a company leader quickly accomplish revised management practices throughout his/her company, is often the role of a business consultant.

The word quickly is emphasized, because research shows that even when a "better practice" in some area is recognized, it takes most companies an average of 27 months to incorporate a new approach by normal methods, without an outside consulting agent to help drive change. With many of my clients, I become a sort of "knowledge broker" in their time of uncertainty --- keeping an eye on new techniques and emerging competitors who seem to come from out of nowhere --- often from outside traditional industry boundaries. I have been a successful general manager for decades, applying and refining these line P&L skills. In many of the new general management positions that I have taken in my career, the situations required significant turn-arounds. These successes were excellent preparation for a becoming an independent management consultant. These experiences have provided the essential skills that I bring to my consulting clients today.

Now all that being said, I still value my ties to the EDA and Mechanical CAD/CAM industry and treasure my continuing participation in helping to shape current issues. For example, I was delighted to be invited to The Summit on the Future of Engineering Software, sponsored by The CAD Society. (See details on the Press Releases page - click on the link below). Moreover, my two most recent year-long consulting projects were tied very closely to either the the manufacturing simulation market, or to B2B 3D mechanical CAD data availability and knowledge of real-world manufacturing, as was my recent 2002-2003 MARKETING engagement at think3. Indeed, my 2003 - 2005 part-time gig at MTS strongly leveraged my familiarity with Noise-Vibration-Harshness and a wide array of Mechanical Testing issues at worldwide industrial companies. Of course, the 2000 election to "Fellow" status by SME certainly focused on the CAD/CAM/CAE/CIM portion of my career (click on the "Press Releases" link below, or the "SME Fellow site" link). In May 2001, I was encouraged to run for an International Directorship in the SME, for a two-year term beginning on January 1, 2002. On September 7, 2001, the HQ of SME notified me that I had in fact been elected in the August voting by the SME membership. Swearing-In occurred in Chicago on November 12, 2001, and now of course the 2-year term is completed (click on "SME Board of Directors" link). In March 2003, I was nominated to become a Fellow of ASME International and in June 2003 I was notified that I had been elected an ASME Fellow, and a Life Fellow of ASME in 2006. Finally, in April 2006, The CAD Society itself presented me with the 2006 Lifetime Achievement Award (see "Latest Press Releases" link below).

What Recent Trends Are Affecting Your Clients?

These early years of the 21st Century have been some of the most exciting since I first became a hi tech general manager in the seventies. Today, everything is changing for managers, and more rapidly than ever! Of course, the 2001-2004 virtually-continuous recession added extra pressure, as the current 2008-09 recession does. Demands for productivity from individual workers is higher than ever before. Companies want more done with fewer people. Americans workers are now working more hours each per year, than workers in any nation in the industrialized world. The work ethic among "Generation X - Generation dot.com" folks (and especially "Nexters") is considerably different from the work ethic of the baby boom generation, posing new challenges for management. Worker loyalty to companies, and company loyalty to workers, are rarer and rarer commodities, especially the latter during tough economic times. Many US jobs are being offshored. Acquisitions and Mergers continue even during an econmomic malaise, often between and among international multi-billion dollar entities. And even with the loss of millions of US jobs since 2001, there are still far more critical jobs available than there are truly skilled people to fill them.

Technology continues to explode everywhere, but it’s still not keeping up with the avalanche of new information available via the Internet. Are we better off with all this information? Can we stand the pressure of business moving @ the speed of thought, without acting too quickly and making mistakes? The Internet has changed not only the way existing companies do business, but it is also fundamentally affecting the way new companies go into business. Windows of market opportunity continue to open and close at "Web Speed". Customer loyalty is becoming obsolete, with competitors only a mouse-click away. The 1999 and early-2000 "bubble opportunity" for wealth-generation through IPO or acquisition may not ever return, with certain exceptions like the Google IPO. Nevertheless the "bubble" did raise the financial stakes to a height unique in history.

Per Lycos CEO Bob Davis, "The Internet is one of the most powerful communications tools in human history. It took radio 38 years and television 13 years to build audiences of 50 million in the United States. The Internet attracted this critical mass in a mere three and a half years".

Marketing techniques have become more varied and specialized than anything witnessed in the past. The World Wide Web dominates; nothing else comes close! Once the sole province of exclusive direct territorial salespeople, selling today is multi-layered with direct, VAR, tele-connected and electronic-commerced. Once measured in years, Product Development Cycles and Times-to-Market are now measured in months and even weeks, each product often containing microprocessors, nanomachines and software! Out-of-the-box High Quality is super-paramount. Mass-customized, shrink-wrapped, easy to use, marketed virally...all critical in this "do-more-faster" world!

In this chaotic environment, or because of it, accessing knowledge and know-how (via consulting) are more important than ever before. The Dow charged through 10,000 (closing at 10006 for the first time on March 29, 1999, and it closed above 11,000 by May 3, 1999). The NASDAQ ignored the 70th anniversary of the 1929 crash by closing at still another record high on October 29, 1999. New NASDAQ records were set since (e.g. a close above 4900 on March 3, 2000). Minor market corrections during this period actually served to help new starts (provided they had real products). By September 1, 2000, both the Dow and the NASDAQ recovered to close above 11,000 and 4,000, respectively. Since then, wave after wave of serious corrections have set in. In August 2001, the NASDAQ dipped below 1850, and in September 2001 it plunged below 1690 even before the terrible events of September 11, 2001. Even a colossus like HP had felt the need to seek a partner (COMPAQ) to remain competitive!

Alas, the January 20, 2001 appointment & installation of George W. Bush by the U.S. Supreme Court did not result in the expected boost to the Dow or to the NASDAQ; indeed, just the opposite occurred and the deleterious effects linger to this day! Nevertheless, year 2001 investment opportunities still existed. Mr. Greenspan continued to try to brighten the picture with repeated FED interest rate cuts. Mr. Greenspan also provided a tax cut "endorsement" 1n January 2001. Once implemented, neither the interest rate cuts nor the tax cuts did anything to help boost the economy (did the cuts go to the right sectors? No, only the wealthy!). Thousands of Internet firms have gone out of business or declared bankruptcy since January 2000. GDP fell in Q2 and Q3 2001, and so we then had another "Bush Recession" just like his daddy's 10 years before (although the current administration did its best to ignore the unprecedented 1993-2000 economic boom and call 2001's downturn "Clinton's Recession"). Post-September 11, 2001 oscillations in the stock market averages continued to plague the hi-tech economy. The Enron/Arthur Andersen debacle and other major bankruptcies and unpunished corporate frauds do not help. By February 19, 2002 the NASDAQ index closed 200 points below the December 31, 2001 close of 1950 (itself -21% for 2001). It closed at 1661 on May 24, 2002, down another 15% in only five months! And 1429 on June 26, 2002! And into the 1200's by the end of July 2002, 35% below the start of 2002. As of August 30, it stood at only 1315. By Sept 27, it was at 1199. It stood at 1348 in late December 2002, and closed 2002 32% below the start of the year. In Q1 2004, the stock market averages declined, and US unemployment remains as high as of August 2004 as 10 years ago! As of January 24, 2005, the NASDAQ stood at 2009 – nearly 19% below its 2470 close on December 31, 2000. That’s the economic progress of the last four years! By April 15, 2005, the NASDAQ had sunk to 1908, down 12.3% in 2005 alone. The NASDAQ closed on May 31, 2005 at 2068, up a little in the previous couple of weeks. Nevertheless, it still stood 4.9% below the beginning of 2005. For the first six months of 2005, all three major stock indexes were down for the year. The 2H 2005 showed only slight improvement. The NASDAQ is still to this day shy of its 2757 level of January 22, 2001, just to choose a date.

Notwithstanding the recent 8+ years of ups and downs - mostly downs - of technology issues on the stock market, entrepreneurs are still pleading with venture capitalists and investment bankers to step forward with millions of dollars to launch new high tech enterprises. While the number of IPOs these past several years were way down, each IPO currently raises twice as much money as each IPO in previous years, on the average. And even though VC investments have declined severely, things are improving, and investors continue looking for new start ups that might come to market in one or two two years! So dreams and visions remain the currency of the hour!

An entrepreneur may still take advantage of the now-more-infrequently available funds, but he/she had better have his/her act together soon enough, lest his/her enterprise be short-lived.

Heed the lessons of the stock market ups & downs! Capturing and using knowledge efficiently, are mandatory. Educational Services, Professional Consulting Services and true value-added business-to-business Internet content are critical to successful corporate supply chain partnerships. It’s a services-centered, visually-collaborative world in high technology.

The old fashioned value-added principles still apply! A solid yet flexible Business Plan is still critical to any enterprise’s success. Leadership, Organization, Enabling Innovation, Financial Strength, Hiring & Retaining the best people, focused marketing, good partnerships, Continuous Education, running profitably --- these still stand all companies in the best stead. The difference today is, there is no leisure time to experiment, to learn on the job. As Arthur Rock once said, "As an entrepreneur, you can't afford to make mistakes because you don't have the time and resources needed to recover". Per Stephen M. Shapiro in his book 24/7 Innovation, "In today's age of change, as soon as you achieve success, someone is nipping at your heels, learning your strengths, and planning to take a portion of your market".

Those who wonder whether they need to bring in some outside business consulting? ... THEY DO!



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This page was last updated on October 20, 2009