Tag Archives: business

AirBnB – BnB Careful


A couple of weeks ago, we were doing some thinking work with one of our customers regarding the accommodation landscape in Ballarat.  As part of our research, we had a look at AirBnB to see what they had listed.

 

Imagine our surprise when we found that Ballarat, on any one night, has in excess of 550 venues available!  This seems incredible.  So, we had a good look at what was there.

 

The number of AirBnB listings was amazing.  They range in price from “cheap and cheerful” to a little bit OTT, but they all seemed to hit various sectors of the market.

 

This is really good for visitors to our fine city, however, there are some consequences which our earnest AirBnB providers need to consider:

 

  • The Australian Tax Office (ATO) gets data feeds from AirBnB;
  • The ATO therefore knows what your income is from your AirBnB activities are;
  • You had better declare your income on your tax returns; and
  • You are, where you’re using your private home as the rental, exposing yourself to Capital Gains Tax consequences when your sell your property.

 

There are numerous other issues around the whole traveller accommodation business which we cannot cover in a short blog post.  One of them is your insurance cover.

 

A lot of people get into AirBnB because they can see an easy way to make some good money from their home.  Yes – it is a good return for only short term inconvenience.  However, the activity which seems pretty easy to do can have some profound and long term consequences for you from a tax perspective.  This needs to be carefully considered when you are looking at embarking on this course of action.

 

Oh, one other thing – if you have a couple of AirBnB properties in your own name or through your business structure, you will be required to register for Goods and Services Tax (GST) once your gross revenue exceeds $75,000 per year (pro-rata).  This is another little challenge for AirBnB operators.  And with the new ATO data capture and analysis systems, you will be found and they will ask questions.

 

At the end of our research, we determined that the AirBnB space is already a significant disruption to the classic accommodation business model.  It does, however, present challenges.  After the first year or two when the ATO comes hunting, it may well lose some of its attractiveness to a number of the new players in the market.

 

If you’d like to discuss the potential impact for you of commencing and AirBnB operation with your property, come and have a chat with us!

On Cashflow Management – and a hint!


Cashflow management is a critical issue for many business owners.

Typically, your cashflow comes under strain in the following circumstances (not an exhaustive list):

  • your business is growing
  • stock levels increase (eg: lead-up to Christmas for retailers)
  • bringing on new staff
  • increasing production capacity
  • diversifying your business activities

Each of these things can be a “cash thief”.

Let’s consider the issue of inventory(stock) management.  The more stock you have on hand, the more cash you have tied up.  I explain this in more detail here, here and here.  By reducing your stock levels, you free up a lot of cash, however you need to balance out the level of stock you need.  You cannot sell what you don’t have!  Effective stock management makes a huge difference to your cashflow.

Cashflow management can also be impacted by increasing production capacity.  Being able to make a lot more “stuff” requires you to have the raw materials, equipment and people to do this.  All this costs.  Your wages come in each week, your suppliers need to be paid each month and the equipment needs to be purchased/financed.  All this robs cash from the business – and you haven’t yet produced anything you can sell.  By building your capacity, you will be able to (hopefully) generate more sales and/or better margins.  But you have to spend first.  This is where your cashflow management needs to be carefully curated.

The Hint

A number of our customers have pretty regular sales.  They use this to reduce their margins (sometimes!) to generate additional sales and hence cashflow.  You find that there is a very clear cycle for this.

One of my favourite fishing tackle stores is in Melbourne.  They have a great range of products, know what they are on about and provide great service.  Over the past year or so, I have noticed that they are having regular sales in the sixth week after the end of each quarter.  This is because they have the Tax Office commitments to meet.  They need to free up cash to pay our friends in Canberra. Knowing this, you, as a customer, can manage your time for purchasing gear.

The same thing occurs in a lot of businesses (especially retail).  Have a look at the sales cycles and you will see a trend.  The margin is better in your pocket than the retailer’s!

So…

Any time you look at the cashflow in your business, get behind the issue to find out what is driving it.  Sales too low?  Margins being squeezed?  Inventory too high?  Expanding?  Diversifying?  Any and all of these can have a significant impact on your cash reserves.

Cashflow management can be difficult.  But when you look behind the numbers and develop your understanding of what drives your cashflow, you will be in a far better position to make the decisions and changes needed to improve things.

We have access to some really powerful cashflow modelling tools that will enable you to see the real picture – going forward.  If you would like to have a chat with us about how we can help you get a better handle on your cashflow management, give us a call!

On Investing in People


The most astute business owners understand the power of investing in people.

The other week, we received some very satisfying feedback from one of our customers.

We have been doing work with the Executive Team at Federation Business School at Federation University over the past few months.  The work has revolved around the way the Executive works and communicates together.

The Testimonial

Bob O’Shea, the Executive Dean of the Business School very kindly sent through a testimonial and here are some quotes from it to give you an insight into what they’ve experienced (our highlights):

  •    … only one month since we had the group feedback session facilitated by you I can tell you that is has had a very positive effect on the way the group works together
  •    … let me say that we have all been very impressed with the way you handled the whole process from the very beginning
  •    The personal feedback sessions you … had with each member discussing their results and their profile in depth and without raising defences was very powerful and taken on by all in a very positive way
  •   I have noticed (and other Team members have told me that they too have noticed) a marked change in the dynamics of our Executive meetings
  •   It is fascinating to observe as for example previously aggressive members are moderating their language and style in order to have a [more] positive impact
  •   Interestingly and importantly we are each experiencing this sort of behaviour modification outside of the meetings where individual team members are using their [personal] insights to enhance one-on-one meetings they have with their fellow team  members
  •   …[two senior team members have] said that they now consulted each other on matters previously avoided
  •   …[Professor] told me that these meetings were the most productive senior level meetings he had been involved in for 20 years
  •   … it is early days yet but the signs are there that this is a very worthwhile investment

The Experiment

I have shared the above with a number of people across various industries (from education to medical, legal, real estate, insurance, retail and manufacturing).  When sending out the letters and emails, I was reviewing in my own mind whether the recipients would be interested in learning more.

It became a fascinating experiment.  There were, of the numerous business owners I contacted, a couple who I thought – “yep, these guys are future-focused, interested in learning and wanting to challenge things whilst bringing their teams along”.  The others would give me the “usual brush-off”.  Guess what happened?

Using the exact same email/letter format, those whom I expected to come back with interest did so.  I don’t know whether this is confirmation bias or not.  I don’t believe so.

Similar to Bob at Federation University, some business owners understand the importance investing in people.  They also understand that any investment they make in this space will have a very significant positive return.

Are you one of these?

If you are, give me a yell.

 

On Development and Glasses – Communication Matters!


Do you ever feel like you know you have potential to be better – particularly with your communication?  Are you constantly frustrated with being unable to do what is needed?  When looking at business and people development, what glasses are you wearing?

Your position is not abnormal – it is in fact very normal.  But, what can you do about it?

People tend to see the world, their situation, other people or things as either “good” or “bad”.  They can fall into the view of black v white.  This again is natural and your normal approach will be to follow your tried and true strategy.

I know this very well as one of my relatives is a constant “nay-sayer” -nothing is ever seen in a positive light.  When at a restaurant, they will place their order.  As dishes come out of the kitchen, you will hear “oh, I should have ordered that”.

We see this too in many businesses – owners/managers of businesses will recruit people who are just like them.  This is generally because the “feel” is right – there is an automatic preference for liking someone like them.

Great teams consist of a broad range of people who work well together.  You want to have a diversity of views, a range of communication and listening styles and a healthy attitude to risk.  Style blending will see better decisions made and more effective analysis performed.  You don’t want all the same type of people just agreeing with each other!

Considering issues around strategy and business management, only looking at things from one perspective.  This can result in either missing opportunities completely or being so focused on one aspect of an option the “big picture” is overlooked.  There are obviously other forms this can take.  The main point though relates to the ability to have robust (sometimes “prickly”) discussions and being open to a range of contributions/inputs.

Understanding that recruitment and development of people with differing styles adds a depth and robustness to your business is a real positive.  Differing approaches will keep things bouncing along.  Your conversations will go “broader and deeper” than having a lot of the same folk discussing an issue.

When it comes time for you to consider what sort of person you want to recruit or promote/develop, have a serious think about choosing someone who has a different style to you.  Sure, there will be times when the discussions will be a tad uncomfortable, but doesn’t this give a better result in the long run?

If you just want someone to agree with you all the time, get a dog.

To maximise your development, improve your strategy and make your business management a lot easier, think about glasses.  Different eyes see the same things differently.

We have access to world-leading tools to assist you and your business identify the different styles and inform you of the differing ways people approach issues and communicate.  Having access to this information enables a far deeper and more open conversation to occur.  To find out more, give us a yell – we would love the opportunity to show you how these tools can really help you and your business flourish!

On Budgets, Cashflow and Your Business


Budgets, don’t we love them?

The federal government has just delivered its budget for the country – the feedback on which isn’t overly positive.

In your small business, what approach do you use for your budgeting?  Most budgets I see are based on the thinking of “last year plus 5%”.  I have also seen budgets done by some pretty large franchise businesses that are, to put it bluntly, crap.

A budget needs to be approached from the aspect of “is it realistic, is it achievable, is it based on solid assumptions?”  It also needs to take note of the environment within which the business operates.  Over the past couple of decades, we have seen budgeting and planning programs proliferate.  Search “Budget template” on Google and you will get 108 million results.  Like anything, having a tool and knowing how to use it are two completely different things.

Moving Forward 1

When you’re looking at your budgets, the issues you need to consider need to be delved into in some detail.  Here are some examples (and the questions aren’t extensive):

  • Increased sales (everyone works on this assumption) – where are they going to come from?  Who are we selling to?  Do we offer what they need? Can we supply the additional product/service and at what cost?  Is the market being disrupted?  Can we divert focus in to one or two high margin products that will deliver a better result?
  • Profit margins – what do we need to do to improve them?  What options do we have with pricing?  What product mix works to deliver the best margins?  Does our marketing support our pricing to deliver the margins?  Does our sales team understand the impact of margins (hint: most don’t)?  What are our competitors doing and where do we see them going?
  • Operating overheads- what are we doing to ensure we are getting “bang for our buck” on expenses?  What is happening with regard to our overheads and the potential to replace old approaches with new ones (esp software applications)?  What control do our people have over the costs incurred in operating the business?
  • Staffing – What do our team understand about the expectations and accountabilities of their roles?  What additional training and support would enable them to flourish?  What is the ideal team mix for a business such as where ours is moving?
  • Capital expenditure – do we have the right gear, in the right condition, to enable us to deliver what is needed to support our team and customers?  Do we need to invest in additional equipment to save costs over the medium/long term?  What is the best utilisation of our capital to deliver strong, sustainable results over the medium/long term?

As stated, the list above is only a “taster” for the questions that need to be asked prior to even thinking about what the budget looks like.  More often than not, where these types of questions are asked, they are asked after the budget has been done.  This is like putting the cart before the horse.

Once you have done your overall budget, I strongly recommend that you do a cashflow budget that ties in to it.  The assumptions you make in this should also be assessed to ensure you are making the right qualitative decisions for your business.  For example, we have been dealing with one of our customers relating to one of their major debtors.  Sure, the debtor (owes money to our guys) is a big customer.  But the margins they make on the work they do for them are really small.  Then, the debtor takes nearly four months to pay their account.   Is he really a customer that they want?  By the time they do the work, spend three months chasing payment (including heavy involvement from the Directors who could be better utilised building the business), the profit from doing the work has disappeared.  Is that really what you’re wanting in your business?  Maybe you already have it!

Doing the cashflow budget may cause you to go back and revisit your operating budget.  The assumptions made might be called into question.  This is a really powerful process to go through as you are considering all aspects of the performance of the business.

Remember that a budget is a forecast of what your results are going to look like.  Doing your budget with the approach that your inputs will drive your results will give you a far more robust, realistic and achievable plan than doing it “the old way”.

By approaching the process in a way that allows you to develop solid, detailed and explainable budgets, you will actually be in a position where you are in far greater control of your business and you will be able to use those budgets to make better decisions along the way through the year.  This moves you from working “in” the business to “on” the business.

Establishing budgets can be a time-consuming process.  Yet it is be very valuable.  The emphasis should be on qualitative questions to drive the quantitative outputs.  By just focusing on the quantitative aspects of budgeting, you are missing out on a great opportunity to maximise your return.  And isn’t this what you, as a business owner, should be looking to do?

If you want to (metaphorically) fall in love with your budgets once again, take the time to approach the process in a way which will enable you to get the reward and return you’re seeking.  Last year plus 5% doesn’t work.

If you want to discuss how we can assist you in developing a really solid budget (and cashflow budget) for your business in the lead up to the end of financial year, please get in touch.  Our first meeting is at no cost to you and is designed to provide you with significant value.  It just might lead to you achieving the results you’ve always wanted.

On Analysis, Happiness and Satisfaction


“I get the figures, but I’m just not that happy” – so said the Engineer customer to me recently when we were discussing a range of issues impacting on him and his business.  His three-plus decades of professional training and practice have been based around detailed analysis of numbers and formulae.  Very clinical, very precise and, to his mind, now very wrong.

Sure, he can outline margin, profitability, ROI and all sorts of easily measurable results.  Some years they are up, some years they are down.  That’s business – and he knows that.  He knows why his margin has dropped, he understands why the ROI sits where it sits and he can detail precisely his asset utilisation rates.  Perfect.

But not.

He is able to rationalise all this based around the numbers, however the answer he is getting from undertaking this process isn’t the one he is looking for.  It’s not that he’s asking the wrong question, he is looking in the wrong spot for the answer – because it is where he has always looked.

As we delved further into his thinking, we started getting into the “why” questions and that “what” drivers.  I found it very sad that his answer to the question “when was the last time you drove into the office really looking forward to the day ahead” was “never”.  How soul destroying!

The process many people adopt in reviewing their position and opportunities tend to revolve around the same approaches they have taken in the past.  They tend to adopt the same metrics to analyse and assess their “success” each month, quarter, half-year or year.  The results are a scoreboard which tends to drive how they “feel” about their performance.

Success Quote

My experience has been that having assessments which are based on metrics that don’t resonate with satisfaction or happiness tend to be low-value.

For example, as I discussed in a recent podcast I did with the guys from Grow My Accounting Practice in the US, the feeling of being “happy” or “satisfied” rarely has anything to do with hard, numerically-based metrics.  Satisfaction comes from achieving things that mean something to you.  Sure, I acknowledge that there are metrics that can inform this, but you’re unlikely to have the feeling of deep satisfaction purely based on a margin improvement!

When we bring up kids, we don’t measure our success or failure as parents based on their academic scores.  To do so removes the focus from where (I believe) it should be.  You cannot objectively measure the things that really matter in your role as a parent.  I know from the various posts I see on social media that when people post things about their kids, they aren’t about their test results.  They are about instances where the kid has demonstrated care, concern and love.  Not getting into a heavy theoretical/philosophical discussion here, but how do you measure love?  And what, exactly, is a “good kid”?

In talking through the issues with my customer, we covered a lot of ground which had to do with his thinking about and approaches to what actually mattered in his life.  His concerns were around his family, his kids’ education and his staff.  Hard to objectively measure.

As he indicated to me during the conversation, he finds it difficult to assess how the really important things are going in his life but can be really precise about the looking-backwards results and his forward budgeting.  Once he has done his budget, they try their level best to achieve it, but, given the industry he operates in, it is difficult to drive additional revenue or improve margin by “throwing things at them”.  And, at the end of the day, the results the business achieves are only relevant in so far as they enable him to do the things outside of his business that are important to him.

Focus on business yes, but realise that it is only a stepping stone/tool to fund the important things that you want to achieve.  Of course we want to make sure our businesses operate well, but is that the end game?  My argument is that it’s not.

After a very enjoyable meal and nice bottle of red wine, we decided that he would spend some time thinking about the things that really mattered to him and where he could increase his level of satisfaction.  He is going to gain a better idea as to what he does and work out the things he loves doing.  This will then inform our planning as to what he keeps doing and what he stops doing.

The analysis process he had adopted caused him to direct his focus on metrics that resulted in him losing sight of the bigger picture.  As part of our discussions, we worked out that there were available and easily exploitable opportunities for him to more than double his profit each year.  Because he had fallen into the rut of using the same metrics that were precise and he was comfortable with, he had not seen the opportunities that are, quite literally, sitting on his doorstep (actually, inside his office).

Beware of too much focus on analysis – the old adage “paralysis by analysis” was proved to work in our discussions as it had given my customer a tunnel vision that fed his dissatisfaction and unhappiness with his position.

When it is just about the numbers, the meaning is lost.

On Addition by Subtraction


Speaking with one of my crew recently and he made the very sage comment with regard to a strategic issue we’re dealing with at the moment:

It’s a case of addition by subtraction

I’d never heard this phrase before and I asked him for a translation.  The guts of the issue is that you can often get a lot better by removing things that clog you up or hold you back.  In effect and expanding the analogy, the removal of a cancer has a positive impact on your health!

This can the in the form of processes, procedures, people, clients or whatever.

Thinking further about that phrase, I realise just how powerful it is – often times you become more welded to the process or context rather than focusing on the outcome you’re striving to achieve.  It can be that you’ve always done “stuff” so you keep doing it, your loyalty to people (as staff or customers) or a supplier with whom you have dealt with for years makes you unable to see beyond your own version of reality.

You become blind to the issue and don’t take action when you really know that you should.

Reading “Leading Teams” by Ray McLean has alerted me to the fact that, as leaders, we need to listen to the feedback from our people (and our gut) when things start going wobbly.  It is also imperative that action is taken sooner rather than later to deal with the issue.

We recently had an issue where we changed suppliers in our business.  The effect of the change has been revolutionary – we’re getting better service, more personalised information and tailored reporting for our needs.  We’ve also gained access to a truck-load more options that were available through our previous supplier that, for whatever reason, they had decided to withhold from us.  This has enabled us to increase our offering and provide a greater range of solutions to our customers than were were able to before – not because they weren’t there, but because they weren’t made available to us.  Outcome?  Far more sales for us and our supplier, happier customers and better outcomes for all concerned.

We have subtracted, and it has lead to addition.

Similarly, over the years, we have found that where there is a change in staff, the outcome can be exceptionally positive.  I recall once occasion in our business where we acted too slowly to remove a “cancer” from the business.  By not acting more quickly, the damage they created was significant and took some time to repair.  I must admit though, that once they had gone, the reflection with the rest of us was “we should have done that sooner”.

Due to our loyalty to them and wish for the person concerned to take the opportunities to develop and become the best version of themselves, we stayed in the situation far too long.  It ended up that their best version of themselves wasn’t what we needed/wanted!

Can you see opportunities for addition by subtraction in your business?  Are there areas where you’re “blind” and unable to see beyond your version of reality?

You are not alone.

You can do something about it.

 

On Sun Tzu


Sun Tzu is familiar to most of us over 25 years of age who have been in and around business. A General in ancient China, he is credited as authoring “The Art of War”.

Reading through some information the other day, I came across a quote of his which is eminently applicable to our modern approach to business (and possibly, life):

Thus we may know that there are five essentials for victory:

1 He will win who knows when to fight and when not to fight;

2 He will win who knows how to handle both superior and inferior forces;

3 He will win whose army is animated by the same spirit throughout all its ranks;

4 He will win who, prepared himself, waits to take the enemy unprepared;

5 He will win who has military capacity and is not interfered with by the sovereign.

Reflecting on the passage, it became obvious that, in our busy lives, we can often forget that patience and culture can count for a hell of a lot when addressing the challenges we face.

Sun Tzu quote

Breaking down the components of the quote, the application to your business may well be seen as follows:

He will win who knows when to fight and when not to fight

A bit like picking your battles – there are some times when opportunities in business arise and you’re just not prepared to take them.  Or, you decide to take them but risk the whole operation in pursuit of the new goal.

There are always three options available when opportunities or challenges present themselves:

  1. Take it;
  2. Actively retreat from it; or
  3. Do nothing.

Where you determine your course of action, it is essential that you marshal your resources to give yourself the greatest chance of success.  If you don’t have the requisite resources (people, financial, fixed assets), then unless you can get hold of them in a hurry, the chance of a successful expansion are significantly lessened.  I have often seen businesses who lurch into a new area or operation or activity that offers great potential but they go too early.

Taking the opportunity is the “easiest” course of action, however you need to consider fully the impact that this will have on your existing business and its resources.  Effective planning and implementation around this needs to occur to ensure that you don’t kill the golden goose.

Actively retreating from the opportunity can be a very powerful but less intuitive approach.  How do you do this?  You might (for example), pass the opportunity off to a more appropriately resourced competitor who can exploit it.  They can take it on, and you can gain some flow of profit share by structuring the deal effectively.  This helps to ensure that you gain something from the opportunity rather than nothing.  There are many possible ways of doing this – they are somewhat limited only by your imagination!  It can often be a very powerful approach to maximise your returns whilst limiting your potential downside.

On numerous occasions over the years, I have suggested to customers that they don’t pursue an opportunity because they simply don’t have the capacity to take on the extra business and/or they are not positioned to undertake the development required to fully exploit the opportunity.  The “do nothing” option is always alive.  People often feel the need to “do something” and then rationalise it afterwards.  This can lead to very adverse outcomes as they will lurch forward without proper assessment and planning.

He will win who knows how to handle both superior and inferior forces

Working out the strengths and weaknesses of your team are vital to enabling you to make better judgments and more strategically utilise the strengths you have.  I have often heard the argument “but we’re too small”.  They may well perceive themselves as being too small, however the strength that comes from being small is agility and responsiveness.

Playing to your strengths can be a very powerful tool – along with playing on your preferred “patch”.  The David and Goliath story is a great metaphor in this regard.  By understanding your strengths and your opponents weaknesses, you are better able to play a game that will result in victory.  In many senses, the sheer size of a larger competitor can be a weakness as they are generally slower to react and marshal their resources to deliver a competitive response in time.  Their size actually conspires against them.

Playing to your strengths rather than trying to mitigate your weaknesses is a more positive and effective approach.  By trying to deal with your weaknesses, you will actually reduce the capacity of your strengths.  Marcus Buckingham has put it exceedingly well in this video.

He will win whose army is animated by the same spirit throughout all its ranks

Drucker wrote: “Culture eats strategy for breakfast”.

Where your culture is one which encourages and supports the growth and development of your people, you will have a business that is going to be far more effective and resilient than your competitors who have better technology or products but a disengaged workforce.

I have written much previously on the impact of positive and negative culture and encourage you to review the posts on this topic.

The video of Marcus Buckingham as linked above touches on this subject and you can see the effect of great cultures in some of the leading organisations today – Southwest Airlines, Disneyland and so on.

It comes down, at its essence, to trust.  If you provide your people with the tools and support to do their job then trust them to do it, they will perform far more effectively than where you “sit on them” and micro-manage them.

Are you adopting the most effective approach in managing your team?

He will win who, prepared himself, waits to take the enemy unprepared

Again, waiting for the opportune time rather than rushing into the fray can be a very powerful strategy.

Time is only a measure that we have invented – the real value in knowing your own team and knowing your competition is that you are better placed to exploit the opportunities that arise at a time that suits you.  If you progress forward at a time that suits them, you’re not giving your business the best chance of success.

Reacting to situations is a function of this.  By not feeling that you need to react to situations gives you the power to respond appropriately at a time of your own choosing.  This can give you a massive strategic advantage.

He will win who has military capacity and is not interfered with by the sovereign

Depending on the style of the leader of your organisation, they might or might not be the most qualified or appropriate person to lead new program delivery/opportunity exploitation.

Often times, the leader might feel they need to be at the front of the queue to deliver the strategy or implement the program.  This can be very demotivating to the team who has developed the strategy.  It can be seen as the leader taking all the glory.

Best to let the person/team who has developed the opportunity to run with it rather than come in at the last minute and usurp their role.  Chances are, they will be far better informed and capable than some “johnny come lately” who is seeking glory.

For a leader to swan in and try and deliver something they are not fully briefed on can be incredibly dangerous.  They will often miss vital parts of the puzzle or make the wrong moves/decisions/communications that end up derailing the project.

Sun Tzu may have detailed his thinking some 2,500 years ago, but it is highly relevant and applicable today.

On Recruiters – an Ethically Bankrupt Business Model?


Each week brings new challenges and, occasionally, provides illumination into a world where you wonder where a business model actually comes from and on what ethical platform it is based.

This week has got off to a great start – on return to the office yesterday, I was greeted by a chorus from the team telling me how they had been approached by a “Professional Services Recruitment Consultant” wanting a “confidential discussion” about “…some opportunities that are available”.  Based on the subsequent discussions with the crew and our GM, there is nothing professional or ethically “good” about him.

Given the apparent carpet-bombing approach to people within my business, a phone call to the “consultant” was called for.  His argument went along the lines of “that’s business”.  Fair enough.  I pointed out to him that his business model was based on trying to market and place the people he destabilises to, well, people like me.

The ironic and sad issue (for him and his employer) in all this is that he is currently wanting to speak with our GM about placing a “candidate” from another local firm into our organisation!  Great tactics Einstein!  Try and poach our crew whilst trying to “market” someone else’s staff to us.

IMG_2789

Spectacular business model – until you get found out.

According to the firm’s representatives (spoke to the body-pusher and his Manager), their electronic communication and website, they are an “elite” brand.  It all comes down to how you define “elite”.  I note on review of the various dictionary definitions, there is no reference to ethical.  There is also no mention of the word “ethics” on their website.

Later that afternoon, I had cause to have a discussion about ethics with one of my crew.  It was interesting, engaging and high-value.  Ethics is something that is inherently about doing what is “right”.  I like the following definition from the British Dictionary:

adjective
1.  pertaining to or dealing with morals or the principles of morality; pertaining to right and wrong in conduct.
2.  being in accordance with the rules or standards for right conduct or practice, especially the standards of a profession…

If you believe it is ethical to try and destablise a person from their job to place them into another one where you are trying then to create a “gap” that needs filling by taking someone from that business, are you really any different from a slave trader? Is there really any inherent value in this process or is it just about levying fees and costs, disruption and bad feelings?  As Ron Baker, an Ethics Teacher and Founder of the Verasage Institute put it to me:

I’ve always thought “headhunters” were a notch below used car salesman

If you have staff who are unhappy, they need to let you know and you need to address their concerns or they will leave.  The culture you create in your business is critical and will serve to keep your people engaged and developing.  My view is that you should speak with each of your team regularly, one-on-one, to give them the opportunity to bring up issues they are unhappy with early rather than when it’s too late.  As I say to them “If I don’t know, I can’t do anything about it”.

In all of this, returning to the question “is this good?” is imperative,  Thinking about the afternoon and events that unfolded, my further education into ethics has been good –  I have further clarified what conduct is right, good and ethically supported and what is not.

I will be informing all of my colleagues in Ballarat as to the approach of this particular organisation to let them determine how they will ethically deal with this “elite business”.

If anyone would like to know the name of the firm, please contact me – happy to share.

On Culture (again)


Organisational culture is a nebulous thing.

In many discussions over the years with customers, colleagues and others, the issue of what is a “good” culture is the hub of the conversation.  Everyone wants to work in or with a business which has a great culture.  Not surprising really, but what does that actually mean?

One of the most interesting conversations on this topic was with a colleague a number of years ago.  He viewed our business as having a “great culture” and wanted to replicate this in his own business.  Fantastic.

Even though he is a competitor, I wanted to see him have a wonderful culture in his operation as this would make him, his people, his customers – and us, better.  Why?  Because, as his business improved, he would provide more and better competition to us which ensures that we keep ourselves sharp, challenged and developing.  This can only be a good thing.  I have always found that where you develop everyone around you, you improve yourself.

In our discussions about how to undertake this, he wanted to know what we did and how we did it.  That’s fine, but you need to remember that you cannot copy a culture.  It is something unique to every group (business, social, sporting etc) and what works for one will not work for another.

I have just read a very interesting article on this topic by Steve Tobak in Entrepreneur.  In short, I agree with his thinking, but believe that trying to copy what works in one organisation won’t work in yours.  Take the lesson, not the method.

Getting back to my discussions from some time ago, we were discussing how our approach is that we try our best to “set our people free”.  This means that we empower them to take their own path and develop in ways that matter to them.  If this is broadly in line with the organisational vision and purpose, this has to be a good thing.  Where you sit on them and ride the hell out of them, life becomes that much more difficult.

In discussing the management style in my colleague’s firm, he explained that he was a micro-manager.  In effect, he was showing his crew that he didn’t trust them, that he was fearful that they might go “off reservation” and that his issue was one where he needed to feel in control at all times.

Not sure about you, but I could not work in an environment like that.  Tried it decades ago when I started by accounting career and it was so stifling that I had to get out.  It doesn’t instill enthusiasm (in fact it kills it), severely constrains innovation and creates an environment which people want to leave.

This past week, I have revisited a TEDx presentation by the great Ricardo Semler.  He gets the idea and has been practicing the approach for decades.  Yet most organisational leaders are fearful of adopting the approach which he did in his organisations.  In most respects, they are the same as my colleague – unable to make the leap of faith in their people to enable the culture that they desire to have a chance of living.

We must remember that the vast majority of people in the world want to do good.  They want to be involved in an organisation that exists to deliver something and provide some value to the world.  Not wanting to get philosophical here, but it is part of the human condition.

By not trusting your people, by sitting on top of them and communicating (through words, actions and example) that they aren’t good enough, you’re getting the desired outcome – they will believe they’re not good enough.  Then they will leave.  Or, worse still, they will stay.

You need to release yourself from the thinking that holds you and your business back if you are going to truly lead.  Simon Sinek, in his inimitable style, puts it beautifully.

Near the end of our discussion, my mate asked me when I knew the culture in my organisation was good.  I told him that I didn’t.  But I did know when things weren’t right as the “feel” of the place changed and became less “flow-like”.

If you want to create a superb culture in your organisation, you need to get out of your own way.  That’s not nebulous.

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