Tag Archives: create

On the Cost of Replacing Staff – and how you can avoid it!


What, really, is the cost of replacing staff in your business?

In many businesses, the major issues impacting the “health” of the business revolve around their people.  The culture within a business is often a significant driver to results.  Show me a good culture, and I will show you a great business.  As the late, great Peter Drucker is often quoted: “Culture eats strategy for breakfast”

I reflected on this after reading one of Theo Winter’s recent posts.  Theo is a terrific writer and thinker and I encourage you to regularly visit the DTS site.

Anyway, back to the issue – what is the cost of replacing staff?  According to the study Theo had linked to, the cost can be up to 213% of their annual salary.  This seems a tad high for mine, however I do believe the costs of replacing team members can be significant.  We are often reminded that “people don’t leave jobs, they leave managers”.  This may well be true (hence it hurts when I reflect on the staff who have been and gone through my business over the years!)

How do you minimise the chance of people leaving your business?  We have found that by understanding how best to communicate with them and work with them will make a significant difference.  We understand how important it is to work with people in a way that works for them.

How do you get to this level of knowledge?

Using a range of behavioural/communication tools with our customers for many years has delivered great success.  The tools identify what styles of communication work for the people concerned and highlight how they are better able to be effective in what and how they communicate with each other.  We’re doing some work with a really progressive business at the moment – the knowledge they have already gained is making a difference not only internally, but in how they are communicating with their customers. End result?  Better results.

Think about what the impact would be if you knew how to be more effective in your communication with your team.  What would be the impact of your team understanding what approaches work best with your different customers.  Ultimately, what’s impact if, having this knowledge and investing in your team, they stayed and you didn’t have to replace them.

Through investing in your people and helping them be more effective internally and externally, you will be able to achieve far more, improve the culture markedly and enable your people to thrive.  Whilst you are doing this, you’re also saving money as they are staying with your business!

I have previously posted about the success we have experienced in one of our more recent engagements.  Imagine what the impact would be for you?

The best bit?  The price for undertaking this work is very reasonable.  Put it this way – for our most recent engagement, the total price for developing the whole team, doing their reports, debriefing them on their results and undertaking a group training and development session is WAY less than the cost of replacing just one person within that business.

Win win.

To save your business money and develop the culture, why not get in touch and have a chat about what can be achieved in your operation?

I suppose the only thing you have to lose if you don’t is your staff.

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 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.

On 2016 and the year that was


And so it all begins again.

IMG_2736

Source: facebook NOTE: It’s actually 366 opportunities as it is a leap year!

The past year has been an “interesting” one on a number of fronts and we have seen some of our customers make significant progress in a range of areas.  Their progress has been due to some detailed planning, decision-making and accountability across their organisations and it is exceedingly pleasing to see the results that reward the consistent effort they and their teams have put in.

The major notables can be summarised as follows (and this is not an exhaustive list):

  • clarity around the “why” of the business;
  • effective communication with and engagement of their teams;
  • focus being driven in the areas of their business that offer the greatest opportunities (niche);
  • planning, implementation of the plan and review of results against expectations; and
  • being prepared to try new things and approaches.

Funny isn’t it – the things that have delivered terrific outcomes for business are the things that everyone knows that they need to do?  So, why don’t they do it?  I call it being uncomfortably comfortable – you’re OK, you know things can be better, but you’re pretty comfortable and don’t want to stop being comfortable.

IMG_2764

This issue is one we constantly battle with in discussions with customers who we know can be better – they are so busy being operational, they forget/avoid to be strategic.  And they are comfortable.

In many respects, they have traded off their vision and focus on purpose to being servants of something that doesn’t really matter to them – because it’s easier.  It is also far less fulfilling.

In one of my discussions with a customer prior to Christmas, he came in, sat down and said “I’m just really happy”.  This same customer has undertaken some massive changes in his business – all as a result of effective questions, looking at the broader economic environment and considering what he really, deeply values and where his skills lie.  He has brought his team along with him.  He and his business are now far better, more agile and responsive than they have ever been.  And they are ideally placed to take advantage of the changes that are going on in their industry.

In the current environment where there is so much disruption going on – across nearly every industry, the need to adopt a more strategic approach is essential.  The commitment to do this can be hard and challenging, but it is necessary to enable the business to thrive and continue to deliver on what it is there to do.  Avoidance of the work required will see you wonder why you can’t seem to keep getting the results and outcomes that you desire.

On Saturday morning, I was invited to do an interview with some guys in the USA about what advisory work should look like – it will be up on a podcast in a couple of weeks.  The guts of the discussion really turned on the fact that, as a business owner, you need to ask better questions.  The types of questions that really dig into the opportunities and challenges that confront your organisation.  By thinking about and answering these “better” questions, you then create a planning template which can be implemented in your operation to make sure the changes that are required actually get done.

The New Year promises to be a challenging and exciting time for all of us.  There is a lot of stuff going on the world at the moment which, whilst remote from Australia, will have an impact on us.  Things like the slow-down in the Chinese economy, the migration issues within Europe and the coming Presidential election in the USA.  Each of these things can have an impact on your organisation (believe me, they do) and you need to consider how you’re placed to take advantage of the opportunities that do present themselves.

By way of example, think about the issues going on in China at the moment.  The well-reported slow-down of their economy is unlikely to directly impact on you unless you are exporting into that market.  However, the impact of that slowing economy will be felt in Australia through lower export demand, greater uncertainty and a loss of the confidence that “China is there” that has supported the growth of our economy over the past decade or so.  We have seen the impact of the downturn in the mining industry over here.  What was once “boom time” is now not so.  The flow-on effect of this has had a marked impact on a number of regions around Australia.  It is impacting on home prices (did you know that the banks have a number of postcodes where they won’t undertake any mortgage lending?), employment levels and subsequent demand for goods, products and services.  This challenge then flows out beyond those regions into the organisations that support the businesses that were operating at “full tilt” in those regions.

idle gear

Consider the impact on the airline industry – fewer jobs and increased closures of mines means fewer fly-in-fly-out employees.  The airlines have specifically geared up to deliver the services required to meet the FIFO demand from the mines – now, much of that equipment is sitting idle and/or being used far less.  This means that the airlines therefore have less cashflow to support their commitments for the planes, staff and support crews.  They can either try and get rid of the excess capacity, or pass the increased costs through to the other customers through less discounting/higher pricing.  Have you noticed how there are fewer discounts being offered of late?  I’m not blaming everything here on the Chinese economy, but I am trying to demonstrate how a global event that seems far-removed from your operations, can actually have a trickle-down impact on your business.

Over 2015, those organisations that have thought further and harder, who have asked themselves the challenging questions and have gained greater clarity about not only their operations but the industry they work in and the broader economic environment have flourished.  Because they have done the work.

How are you placed for 2016?  Are you prepared to ask yourself the right questions (or, better still, do you know what questions to ask?) to create the outcomes you desire?  If you’re not, then you might well be bound to repeat the success or otherwise of the past year.

One of my favourite quotes come from Albert Einstein:

Einstein insanity

To make the coming year as effective as possible in delivering things that really matter to you, please don’t go insane!  The change in approach is challenging and requires work, but it actually isn’t that hard.  You just need to make up your mind to do it.

On Dead Elephants & Communication


“You’ve got a gift” – so said one of my guys after a fantastic meeting with one of our customers.

Don’t know whether I agree with him.  Whatever gifts I may have, I probably don’t use as much as I should.  However, I digress.

The real essence of this post is that we, as professionals, need to be aware of the issues that are confronting our customers and, if we are unclear, ask better questions to enable us to get to the guts of the issue.  This is a skill that I am still learning – although I understand that I will never perfect it.

The discussion with our customer was meant to be about getting some clarity about their goals for their business.  We had the meeting booked in for a while and had let them know that this was the purpose of the discussion.  They arrived late (normally not a great sign – putting it off), which flagged a possible issue with the process about to be undertaken.

The discussion opened up with them identifying some frustrations they were experiencing with one of their team members.  It then progressed on to analysis of the communication styles adopted by both people and, how not fully appreciating the communication style of the recipient and tailoring the message for their needs might have been the actual cause of the frustration in the first place.

This then led to a discussion about the style of the owner of the business.  They started to open up as our discussion developed around why they were aware of the style they had and the impact it could have on their team, they made the statement “I know this, but I’m not doing it”.  That then caused the question to be asked “why not”?

Source: polarzoo.com.kr

Source: polarzoo.com.kr

And that’s when the really positive stuff started.  Suffice to say, the tissue box got a bit of a hammering as they opened up about external issues (non work-related) that were impacting on them and had been impacting on them for some time.  It was fantastic as we could now understand why the business, which has incredible potential, has been stagnating and not exploiting the  numerous opportunities that have presented themselves.

The owner of the business has simply not been in the emotional state they needed to be in to enable them to drive and direct the business.  Powerful.  Meaningful.  Honest.

So, we did what all accountants do, and walked through the journey they have been on (isn’t that what all accountants do?) to enable them to fully verbalise the feelings they had been having and to enable them to understand that they had massive opportunity in the team – if only they could trust themselves to “let go” a bit.  About half way through this discussion, they indicated that they would go home and cry all afternoon.  That’s not necessarily a bad thing.

However, as we continued to talk through the issues and acknowledge the impact they had on the owner and the business, the air seemed to clear a bit.  By getting the issues out in a non-judgmental and non-confrontational environment, we were able to help them see that the “fork in the road” wasn’t actually anything to be feared and that the way they were feeling was OK.

The discussion eventually returned to the communication with the team (that’s where it all started remember) and how it can be improved.  They will be undertaking some Trimetrix Reporting with the team to allow everyone to better understand and appreciate the differences in the team communication styles and create an environment for better communication within the group.

Our customer could then see that there was a path forward and, whilst acknowledging the impact of the issues outside of work, started to get refocused back on their business.  We made commitments as far as setting some goals (some wonderful additional opportunities came out in this discussion) – the big battle will be getting the goals prioritised over the coming month or so – there are so many opportunities for this business we have to narrow them down and align them to the goals that will be fleshed out.

At the end of the meeting, we recommended that they go home to enable them to have the big cry they had earlier said they needed.  “No – don’t need that now.  I’m feeling a lot better”.

A really positive outcome was achieved by creating the environment and asking better questions (usually the ones starting with “why”) to get to the core of an issue.  Unless you carve up the elephant in the room, it crowds everything else out.

Don’t think I have a gift, but I’ve got a dead elephant in meeting room one and I need more tissues.

On “Call THAT a Profit Increase?”


The purpose of a business is to make a profit – so have uttered many business sages over the years.  As one of my mates states “Profit is the applause you get from your customers”.

Whichever way you look at it, we need to understand that improving profit is a goal that all businesses should strive for.

idea

You may recall that some time ago, I posted about the results one of our favourite customers had realised from appointing someone they would not have previously considered to the role of Manager of one of their remote sites.

Well, we now have the full year results in and – they’re even better than I had previously reported.

For the previous financial year, the site in question had generated an EBITDA loss of $13,000.  Yep, a loss.

The results this year?  Well, the EBITDA  result for this site has come in at comfortable number in excess of $155,000.  That represents a $170,000 turnaround.  Bottom line.

In a highly competitive market, with lots of challenges.  How?  By getting the right person in the job, giving them the opportunity to thrive, providing them with the support they needed in the way they needed it and, otherwise, keeping out of their way.

How many people in your organisation are you not setting free to do their best?  What would happen if you did have some absolute stars who you could enable to be of their best for and with you?

It happens.  Wouldn’t it be great if it could happen in your business?  If you would like to find out how you might be able to sleep better at night, give us a call.

After all, it’s only profit you’re missing out on.

 

On Business Growth & Chaos


It’s funny – most businesses feel like they are operating in an environment where chaos reigns.

The sad thing is, most businesses do not understand that, until you get to about 20 employees, chaos is actually a natural state of being.

Source: brucemctague.com

Source: brucemctague.com

The good news about this fact is that when you’re aware of it, you can plan for it.

James Fischer wrote “Navigating the Growth Curve” (Growth Curve Press, 2006) following his research of (then) 600 businesses that had grown and developed.  He found that there were some very common issues that those businesses faced and that, armed with this knowledge, other businesses could predict and plan for the issues that would accompany their growth.

As a consequence of his research and writing, Fischer and Laurie Taylor from FlashPoint! developed the Growth Curve program and this has been picked up and tailored for ease of use by Targeted Training International in the US.

We first came across the concept some three years ago and have now adopted the program as part of our offering to our clients.  We’ve rolled the program out to a number of our customers in the past 18 months  and the results have been sensational.

So, the chaos bit?  Well, the table below shows the findings of the five top challenges for businesses at the various stages of growth.  Some businesses will face some different challenges, however, based on the research, the following are the most common issues businesses face as they grow:

Stage 1

Stage 2 Stage 3 Stage 4

Stage 5

1-10 staff 11-19 staff 20-34 staff 35-57 staff

58-95 staff

Cashflow challenges

Cashflow challenges Improved profit design Employee turnover Improved profit design

Limited capital

Limited capital Improving staff buy-in Project management and resource co-ordination

Staff training

Chaotic periods destabilising things

Hiring quality staff Unclear values Vision for future growth (Where? How?)

Lost knowledge when employees leave

Slow getting new products/services to market

Communication gap (leaders – staff) Culture resistant to change Difficulty diagnosing the real issues impacting growth

Difficulty forecasting problems in advance

Expanding sales

Expanding sales Communication gap (leaders – staff) Slow in getting systems and procedures implemented

Expanding sales

Copyright – 2013 FlashPoint!, Origin Institute & James Fischer

When you review where your business is against the issues you’re currently trying to manage, do you find any of the issues raised above resonate?  I have yet to find a business that doesn’t identify very closely!

Source: johngattorna.com

Source: johngattorna.com

The best bit about this is though that, with the identification of the issue, there are processes and approaches specifically designed that enable you and your team to address the issue for once and for all.  It “cures” the problem and allows the operation to grow in a less chaotic and more planned and deliberate way.

The approach we use not only looks at the above (as part of the “27 Challenges”) but also addresses the style of the leader, the Non-Negotiable Rules for each stage the business passes through, the right balance of confidence and caution in the business (that bit gets REALLY interesting) and the mode of operation of the teams within the business.  In short, it brings out the “elephants in the room” and cuts them to bits so that we remove the “hidden agents” that are holding the business back.

Business is complex – the more people you have on board, the more complex it gets.  By undertaking the processes such as those outlined above, we can de-clutter the business and get it on the path you originally desired when you set it up or took it over.

It’s fun, challenging and enlightening.  It’s also incredibly valuable.

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