August 26, 2021 - Are Measurements the Key?

Main Idea:

How important are grades in schools?  Do you ever have great years and at the same time you know that something was incredibly wrong?  Do you ever have horrible years yet you made incredible improvements in your business?  Do key performance indicators matter?  If they don’t then how can you manage your business?

Expansion of the Idea:

Most of us have heard statements like “You can’t manage what you can’t measure” or the alternative statement that you “Manage what you measure”.  We have been ingrained with the need for measurements, key performance indicators and accountability.  And yet at the same time we look at some intangibles and we know instinctively that we can’t measure them.  I view financial statements as absolutely critical for providing feedback on your operations.  However, when looking at financial statements, the financial statements show how we did and where we stand but it doesn’t show how we have invested for the future.  When you start thinking about all of this it leads to the following question:

Should we use measurements to manage and, if not, how do we approach management?

I was reading an interesting article this morning.  The author proposed that we change a metaphor such as “Curiosity killed the cat” to something like “Curiosity fed the cat”.  What does that do to our thinking when we look at something a little different?

I started thinking about what that could mean to measurements and management.  What if we changed the above statements to the following:

1. You must manage what you can’t measure

2. You must decide how to manage what you measure

What does that do to your approach?  For the items that you can’t measure, then you need to figure out how to manage some of the following:

• Relationships: employee, customers and vendors

• Culture

• Personal investment in your team

• Creativity

• Fun

For the items that you can measure, it is important to make sure that you are measuring the right things and then how to use them.  There is no perfect balance between short term profitability on product lines and the lifetime value of a customer.  Those two measures are at odds with each other.  Another example would be employee efficiency versus employee effectiveness. 

Managing people and our businesses can be a black hole.  The issue for each of us is to identify what is going on in our businesses and to try to identify what we don’t know.  This can only come from having clear goals and creating the right management systems.  We have to have the right balance of using measurements and managing everything else. One of my favorite authors is Eliyahu Goldratt who said:

Almost all decisions based on cost accounting are utterly wrong.

The bottom line is that management is a lot more than just following the measurements.  There is no one size fits all.  It requires a lot of work. 

Questions to Consider:

1. Do you rely on financials and key performance indicators to manage your business?

2. How much time do you spend managing the other items?

3. Have you laid out a system to manage everything, both the items you can measure and those you can’t?

4. Do you get input from your team on areas to improve your management?

5. Do you know how much you and your team have learned this year?

June 11, 2021 – What Do You Need to Retire?

Main Idea:

Do you have people or systems that just aren’t working anymore?  Are there pieces in your life that are holding you back?  Do we hang onto things too long?  Why are rental buildings for storage space popping up everywhere?

Expansion of the Idea:

The other night I heard someone on the radio who did not have it.  The broadcast sounded awful and was almost embarrassing.  It was obvious that this person should have retired last year. Historically this person was very good but age, energy and life caught up with him.  You see the same thing with professional athletes who stay one year too long.  Instead of going out on top, our last memories of that athlete show the downside of aging.  On the other hand, I recently have heard about a lot of people who if asked to go back to the office have decided that they are just going to retire.  A lot of people have critical decisions now and their future hangs in the balance. 

The same is true of ourselves and our businesses.  There are a number of things that might need to be retired in our businesses.  They include:

• Ourselves

• Someone on our team

• Systems and Processes

• Computers and Equipment

• Customers

• Vendors

• Key Relationships, such as referral sources and professionals

• Product and Service Offerings

• Anything described by “That’s How We Do Things Here”

Covid 19 and the pandemic have completely altered the business environment.    Chances are you have embraced increased use of technology over the past year.  Two years ago, most people would not know what a zoom call is.  Now, everyone from 6 to 80 has probably participated in at least one call.  That changes everything.  And not always for the better. 

Now is a great time to reevaluate everything you are doing. 

• Do we need to stop going to our customers and just connect by Zoom? 

• Or do we retire Zoom and be more intentional about visiting our customers? 

• Are there team members who are not embracing new technology? 

• Have customers buying habits changed enough that some previous services or products are no longer desirable? 

• What systems or processes are no longer giving you the information that you need? 

• Have you lost touch with key referral sources and are having trouble reconnecting?

There is no end to possible questions or possible new paths.  The key is to take some time and lay out your vision for the future.  You need to decide your future and how you will achieve it.  Henry Cloud writes in his book, “Necessary Endings”, the following:

“Your next step always depends on two ingredients: how well you are maximizing where you are right now and how ready you are to do what is necessary to get to the next place.  And sometimes that depends on ending some of what is happening today.”

Questions to Consider:

1. Is there anything in my business that I need to end?

2. Is there anything in my personal life that I need to stop?

3. Are there ideas or processes that are holding us back?

4. Is there something that created your success but is now a liability?

5. Discuss this with your team and get their ideas.

February 12, 2021 – Are You Winning the Game of Life?

Main Idea:

Did you play the Game of Life when you were a kid?  What was the feeling when you raced to the end and collected the money for retiring first?  What happened when you had set backs?

Expansion of the Idea:

Recently my mom had a house fire that was started by a faulty extension cord. It pretty well destroyed the second floor and did a lot of damage to the first floor and basement.  She is perfectly fine but now has a major disruption to her life for the next 6-8 months.  She lost a few important documents but they are replaceable.  Overall, she came out of this in pretty good shape.

I was thinking about this and it reminded me of the Game of Life.  As a kid, when you played that game, you had setbacks but you kept focused on the end goal.  The end goal was to retire with the more money than everyone else.  (I think we might need a little better goal.  However, that was the goal of the game.)  You hoped that any setbacks were minor.  You stayed focused on getting the finish. 

The difference between the game and real life is that real life setbacks are very emotional and can completely wipe us out.  Yet, we can sometimes control the effect of the setback.  All of us will get setbacks and some of them are major.  However, we can minimize the impact by planning and doing some things in advance.  These plans would include:

• Safety, such as smoke detectors in the house. 

• Health, both personal and our business  

• Emergency, both physical and financial

• Risk analysis, investments and operations

• Relationships, who you can count on and who counts on you

These types of plans are not what I would normally talk about.  However, when there are crises, such as a house fire or Covid, some of the above areas are the most important things for you during that period.  By thinking about these things in advance, we can sometimes control the severity of the problem as well as starting the recovery process a lot quicker. 

Questions to Consider:

1. What is my goal?

2. What obstacles are there to achieving my goal?

3. What are the possible setbacks in life and in my business?

4. Are there things I should do differently to minimize the negative impact of the setbacks?

5. Do I have an emergency plan? 

6. If so, does my spouse and family know what it is?  Or at work, do my key employees know the plan?

January 15, 2021 – Has Your Cheese Moved?

Main Idea:

What made you successful in the past?  Was there a particular product, service or system that was critical?  Can you name it and quantify it?  Is it just as important today as it was five years ago?

Expansion of the Idea:

20 years ago, Spencer Johnson wrote the book “Who Moved My Cheese”.  Most of us have read it, thought it was good and then promptly put it away.  However, it is just as timely now as it was then.  The basic story is about two mice in a maze who lost their cheese.  They have to find new cheese.  The cheese is a metaphor for what is important to us.  Five years ago, most businesses were doing fine and we became complacent.  Things have changed.  We have to find new cheese. 

What does this mean in today’s context?

We have to decide what will be important for us for the upcoming year.  We must know our financial numbers and key performance indicators that tell us how we are doing.  However, we can’t use the same old numbers that we used in the past.  We should be more intentional about what numbers we use and set goals for those numbers.  Here are a few ideas on things to look at:

1. Customer profitability and retention

2. Lead time and costs of acquiring new customers

3. Employee engagement and performance

4. Business operations and systems

5. Cash flow projections and budgets

6. Vendor and supply chain performance

7. Product and service performance and viability

8. Leadership and Management performance and development

9. Risk management and potential bottlenecks

There is nothing new in my list.  However, what needs to be new is how we apply it.  Most small business owners don’t make full use of key performance indicators.  And during 2020, those numbers were worthless for some industries.  For 2021, I think it would help all of us if we became very intentional about what our goals are and put together the models to make sure we are on track. 

I think that 2021 will be a very difficult year even after the vaccine is rolled out and we have herd immunity.  People’s attitudes and habits have changed.  This could impact their buying habits as well as their goals.  We might lose key employees or customers.  By planning now, we can set ourselves up for success and minimize the potential for failure.  There will be a new normal.  We need to know what it will be and how we can thrive.

Here are some questions or comments to consider:

• Read or reread “Who Moved My Cheese”

• Define what is your cheese.

• What is my action plan for 2021?

• Do I have full key performance indicators, cash flow plans and budgets for my business?

• Have I identified my top 2 or 3 key performance indicators for special scrutiny?

• If not, create them based on expected reality for the new year?

• Determine what additional actions you need to do to make 2021 successful.

October 2, 2020 – Is It Time To Plan for Next Year?

Main Idea:

Has this year hit you like a Mack truck?  Have you spent most of your time reacting to Covid, political craziness, uneasy economy, unrest, supply chain issues, unstable labor force, panicking customers, regulatory issues, or ________________________?  Are you sick of spending all of your time at home?

Expansion of the Idea:

This has been a crazy year for so many reasons.  Just when it seems like it can’t get any crazier, something happens and collectively we agree that it belongs in this year.  There has been so much outside of our control.  It is easy to get to a point where we just sit at home and wait for what is going to happen next.  There are a lot of pity parties that are being celebrated throughout the US.

The real problem with this is that we get to the point where we think everything is out of our control.  Even the businesses, that are doing okay, are out of their normal patterns because they can’t do things like they would normally do them. 

There is disruption and chaos everywhere.  What should we do?

We are just starting the fourth quarter of the year.  This is a perfect time to start planning for year end and next year.  Obviously, none of us have a clue what will happen with presidential elections, stock markets and all of the other variables that could happen.  But we can start planning.  The more planning we do, the better off we will be to face the upcoming challenges once the economy opens up and life gets back to some semblance of normal.  (I don’t know if normal is the right word here.)

A basic framework for the planning that needs to happen is as follows:

• Evaluation of where you currently are

• SWOT Analysis of what you are doing right and wrong and what the challenges and opportunities are out there.  (See the video on my website.)

• Goals for the next year.  (They must be realistic.)

• ·1-4 action plans on achieving your goals based on the different possibilities of what might happen.  This would include a main plan along with contingent or ancillary plans.

These plans need to include the personal as well as the business side.  On the business side they need to include the following:

• Cash flow and financial planning

• Tax planning

• Marketing plan

• Employee plan

• Risk analysis

• Operational plans

There are other areas that might need to be added to your plans based on your situation.  The point is that you need to start making those plans now.  Of course, things never turn out as you planned.  But the act of planning will improve your businesses and you will be ready for some of the challenges.

Here are some questions to consider:

1. Am I ready for year end?

2. Do I have a robust plan for next year?

3. Am I the only one who knows what that plan is?

4. Am I good at communicating my plans?

5. Have I involved my team, including external advisors, in planning?

If you have any questions on implementing this idea, please contact Tim FitzGerald.  There are a number of videos on the website that outline how to do some of this planning.  Also, I plan on offering three specific Zoom calls over the next month.  They are:

1. Tax Planning for Business – October 13 at 4p

2. Tax Planning for Individuals – October 20 at 4pm

3. Estates, Wills & Trusts – October 27 at 4pm

If you are interested in signing up for the Zoom calls, please email Tim FitzGerald and you will be added to the list.

September 4, 2020 – Is Customer Service Dead? (Part 1)

Main Idea:

Have you struggled getting your calls returned?  Are you able to solve your online problems or questions?  Does everything take 50% more time to do?  Do you feel that there is just a missing link in all transactions?

Expansion of the Idea:

I have noticed that small businesses have not been operating at peak efficiency since Covid 19.  I have been trying to get a window replaced at the office.  This should have been a two-week process.  Instead it has been a couple of months and I don’t know when it will get done.  This may not be fault of the glass repair business as they may be waiting on the glass company.  But it is a supply chain problem or a service issue.  They could have called me and told me that they were having delays in getting the glass and I would have been perfectly fine.  The problem is that I am left not knowing what is going on. 

Covid 19 has completely upended business and how we operate daily.  We have been forced to adapt and try things just to survive.  There have been financial implications as well as complete shutdowns of a number of industries and slowdowns for most of the rest.  There are a lot of people working from home and as a result the normal workflow has completely changed. 

Most small business owners thought that this was a 2 or 3 month issue and as a result only put patches on their operations and systems.  However, it is clear that this is a longer-term problem and our systems need to be redesigned or at a minimum need to be modified to accommodate a different way of creating a superior customer experience. 

Have you driven past a Chick Fil A in the past three months?  It almost doesn’t matter what time you drive by them.  They are always busy.  I thought that there is no way I would get into one of their drive throughs.  That was the case until my wife and I had the grandchildren for a week.  I was amazed at how quickly they ran cars through the drive through.  They could only have done that if they completely changed their procedures and systems.  While they may not be doing quite the volume that they did before Covid 19, they are completely maximizing their potential.  And they are doing it through systems and great customer service.

It is clear that our world is going to be changed for a while, and we need to plan for the future.  We need to look hard at our systems from our customers point of view.  Here are some questions to consider:

1. If we have employees working from home, have we optimized the customer interfaces?

2. Is our website streamlined for remote access?

3. Do we need to bring employees together more often because of the separation?  (This can be virtual but it needs to be intentional.)

4. Have we looked at our supply chains to determine if there are changes in vendors?

5. Do we have systems to keep customers informed?

6. Do we have systems to keep employees informed?

7. Do we need to change our physical space?

I hope you have a great Labor Day weekend. 

May 1, 2020 - Are There Other Ways to Look at This?

Main Idea:

Have you looked at your business from a customer, a vendor, an employee or someone else’s eyes?  When you look at your business do you see the same things?  Do you get stuck in ruts on which reports you look at?  Do you think you have done everything you can to fix your problem?

Expansion of the Idea:

On Tuesday morning I was working from home and I received a call from my 5 year old grandson on Facetime.  He asks me:

Papa, do you want to play Legos?

This caught me so off guard that I said yes.  Of course, my grandson lives 120 miles away and I didn’t have any Legos nearby.  But I was able to play Legos with him for about 20 minutes.  (It also gave his mom a short respite.)  He was perfectly happy and we had a good time.  I could have spent a year thinking about what to do with him over Facetime and I would never have come up with his simple solution. 

The same is true for a lot of our businesses.  Sometimes asking questions like a 5 year old is the best idea for our businesses.  He didn’t think of the reasons why it would not work.  He just asked. 

With all of the craziness in the world, are there questions that can help solidify (or save) your business.  Here are a few that might get you started.

• Should we get rid of our offices?

• Should we hire more people as opposed to cutting back?

• Should we change our supply change even if it will cost us money?

• Should we get rid of our biggest customer?

• Should we go after lower dollar customers?

• Is there better technology for us?

• Should we discontinue a product or service line?

• Should we spend more in certain areas?

There are a lot of additional questions.  I am not looking to commit financial suicide with this.  But some answers lead to some surprisingly counterintuitive results.  These types of questions can frequently be brought up when doing a strategic planning session or SWOT analysis.  But it is a process that can be spread throughout your whole team.  They can cover any of the following:

• Planning

• Finances

• Operations

• Human Resources

• Vendors

• Customers

• Marketing

• Product or Service Lines

• Relationships

• Technology

All of these areas have some sacred cows that no one even thinks to question.  And most of the times, they are sacred cows because they are the right answer.  But not always.  And that is the point.  When we can ask the right question, probe in the right area, explore systems and basically verify everything, we can sometimes find some gold in our businesses that can be used to really push the business forward.  The key is to start looking.

What is Your Surprise Question?

Next Steps

1. Are there areas in your business that are struggling?

2. What are the critical assumptions in that area?

3. Brainstorm with your team.

June 24, 2010 - Are You Out Working Your Competition?

Main Idea

What is the difference in take home pay between a great waiter and one who satisfies his customers?  What caused that difference?  What is the difference between a sales person who is setting his appointments for the next week on Friday afternoon and one who is playing golf?  What separates the truly great athletes such as Albert Pujols or Michael Jordan and the athletes that have a lot of potential but never seem to reach that potential?

Expansion of Idea

Each of us has been given different gifts.  We may have been created equal, but we are not identical.  There is always someone better than you in your chosen field.  There are people who have been given more talent than you.  The big secret is that industriousness or hard work is a great equalizer.  No matter how much talent you have been given, without hard work, you will be a failure.  If you have not been given quite as much talent as your competitors, then hard work is even more important.  The funny thing is that the truly great competitors such as Albert Pujols, Michael Jordan, and Larry Bird all outworked their opponents.  They were given talent that we would all love to have.  Yet, they spent more time developing that talent than almost anyone else. 

If you go into a restaurant, you can tell which waiters are making the most money.  They are the ones working the hardest.  The same is true in every business, large or small.  Other people may have been given a better starting point than you.  They may have better talents than you.  They may have better finances than you.  However, there is no reason that anyone should outwork you.  This is one of the cornerstones of success. 

Questions to Ask Yourself

1. Are you working hard?

2. If yes, what do you need to do to continue to work hard? 

3. If no, what is holding you back from working hard?

4. Are you being a positive role model for your team members or a negative role model?

May 7, 2010 - What Are You Testing?

Main Idea

What is the one significant difference between highly successful companies or individuals and people who just get by?  How do teenagers grow into responsible adults? 

Expansion of Idea

When you were growing up, you tested everything.  You may have tested eating dirt.  You definitely tested your parents.  For those of you who have teenagers, they test everything.  As a parent it frustrates you.  However, it really is a necessary part of learning.  It establishes things that work and things that don’t work.  It puts boundaries in place.  It enhances the curiosity of kids.  Testing is a great instructional tool. 

However, somewhere in our 20’s or 30’s a lot of us stopped testing.  We started getting comfortable with the status quo.  The impact of that is that we lead moderately successful but unfulfilling lives.  Instead of great success we have moderate success.  We have made the core assumptions in our lives sacred and untouchable.  This is a real problem in society and business today.  The world is changing so fast, that we have to constantly analyze our assumptions and test new ones.  We may need to decide if we should continue to offer a particular service.  It may be a system that worked in the past but doesn’t work so well now.  Why don’t we look at these alternatives?  Part of the problem is that we are comfortable.  The other part is that we are afraid of sticking our neck out.  However, there is an inherent link between risk and success.  The real issue is for you to decide what you want, comfort or success.

Points to ponder:

1. Are there assumptions in my business life that need to change?

2. Are there systems that you have a hunch need to be updated?

3. Do you have new ideas that you are afraid of trying? 

4. What tests can I set up to see if any of these ideas make sense?

April 7, 2010 - Are You Burning a Candle at Both Ends?

Main Idea

What happens when you burn a candle at both ends?  Does it serve its purpose?  Is its life shortened? 

Expansion of Idea

With the increased use of cell phones, I-pads, laptops and always on- demand service, we are all working harder than ever.  But are we more effective?  I see a lot of people who are tired, stressed out and generally not providing great customer service.  When we get in that mode, we normally are only performing at a percentage of our optimal level.  If you are only performing at 70% of your peak level, then how much time could you take off and still get the same performance?  Do you have to stay later to get that report out or should you make sure you get a chance to refresh and hit your job fresh in the morning? 

It is very easy to get into a downward spiral with work and other duties.  How often do we actually plan time to read a book, take the kids to the zoo or take our spouse to dinner?  It is virtually impossible for you to do a great job between 8 and 5 if you are completely out of control time wise between 5pm and 8am the next morning. 

If you are the boss, questions to ask yourself

1. Am I burned out?

2. Do I have regularly scheduled time for relaxing and improving?

3. Is there anyone working for me that needs work reassigned to remove pressure?

4. How can I help my team improve their work-life balance?

If you are not the boss, questions to ask yourself

1. Am I burned out?

2. Do I have regularly scheduled time for relaxing and improving?

3. Is there a way to help my coworkers with their workload?

4. Do I need to talk to the boss about systems to help workload?

February 17, 2010 - Are Little Errors Driving You Crazy?

Main Idea

Do you struggle with little errors in your business?  Do you have a strong desire to do things perfectly?  How do you balance your desire for perfection with the fact that, as humans, we do make errors?

Expansion of Idea

There was a study of mountain climbing fatalities on Mount Everest from 1921 through 2006 and of the 212 fatalities, 56% of them died on the way down.  That is after they reached their goal.  Another 17% died on the way down after deciding that they could not get to the top. 

I thought about this after I had a discussion with a client recently who was struggling with his team members making little errors.  Overall, they are doing a great job and the number of errors is extremely small compared to the volume of transactions that they handle.  A lot of factors could be contributing to these errors.  Sometimes fatigue or hunger or a general lack of personal balance can create some issues. 

I personally believe that a lot of problems occur when we are not as busy.  If you go into a restaurant during a slow time, I think the odds of bad service go up considerably.  The waiters are not focused on you.  It is human nature.  My point is that we can make mistakes anytime.   During our busy times we have to be very careful.  However, we can probably control more of the mistakes during our slower times by careful focus on our goals and our jobs.  Those goals have to be that our jobs are critical to giving the customer service that our customers need and deserve.

Suggested Areas to Start

1. Brainstorm with your team about when you do make mistakes.

2. Decide if there are any systems that can be implemented to reduce the mistakes. 

3. Build awareness of potential problems during slower times by talking to your team about this.

February 10, 2010 - Are You a Good Coach?

Main Idea

How focused are you on developing your team members?  How focused are you on developing yourself?  Is this something that doesn’t get done because you are not sure what to do?  Do you struggle with coaching?  Do you struggle with accepting other’s ideas and direction? 

Expansion of Idea

I have been reading a new book by John Wooden called “Game Plan for Life”.  This is a book written by the former basketball coach of UCLA outlining his reasons for success. (His teams won 10 national championships in 12 years.)   He describes the mentors in his life and the people he has mentored.  The amazing thing about this book is, even though there is nothing revolutionary about any of the ideas, I instantly can relate to the stories and how my own coaching skills can be improved.  (And I am talking about a lot of improvement.)  I happen to love basketball which makes the stories very interesting. 

However, the ideas and applications are instantly useful in my roles as a business owner, parent, community volunteer and probably another role or two that I can’t think of immediately.  Coaching and/or mentoring are skills that tend to atrophy if you don’t work on improving them.  We need to look to get better in this area.  And the only way to get better is to learn from others, ask for advice and feedback, and to spend dedicated time working on these skills.  If you look at the best coaches in the business world or in athletics, they are constantly working on their skills. 

Suggested Areas to Start

1. Read “Game Plan for Life” by John Wooden

2. Ask yourself how much time you actually spend coaching your people.

3. Ask your team if you are coachable yourself. 

4. Do you need a personal coach?

5. Are there skills that you can learn?

February 3, 2010 - Are You Playing to Not Lose?

Main Idea

Do you play to win?  Or do you play to not lose?  Do you go full tilt forward or do you go slowly forward and are very careful about failing?

Expansion of Idea

As most of you may know, I am a pretty risk-averse person.  I am wired that way.  Part of that may be due to breaking so many bones when I was a kid.  About 15 years ago, my wife and I were on vacation with her family in Florida.  Someone had a brilliant idea to get some wave-runners and go up to a nearby island.  I had never ridden a wave-runner, the ocean was choppy, and I was not feeling great before I started.  (Needless to say, I really did not want to go.)  On the way to this island, I took it fairly slow and I really felt bad.  We then had lunch in a hole in the wall restaurant.  My brother in law looked at me and said “You really hate this, don’t you?”  I was really dreading getting back on the wave-runners and going back.  On the way back, I decided if I was going to die, I was going to die quickly.  I went faster and remarkably it was a much smoother ride.  The moral of the story is that there are some things that if you are going to do them, you need to go full tilt. 

The same is true in business.  How many of us are doing things that we are supposed to do but we are not giving it our best?  We aren’t necessarily trying to be lazy.  Instead, we may not understand exactly what we are trying to accomplish.  Or, the systems are not in place to do it well.  Or, we have not devoted enough time and money to accomplish the activity well.  When these barriers are in place, we hold back on our performance thereby guaranteeing mediocrity at best or failure at worst. 

Start by Asking Yourself these Questions:

• What activity is not getting your best efforts?

• Why are you not giving that activity your best effort?

• Is there something you can do to improve your effort?

• Do you need help and resources to accomplish your goals?

And No, I have not been on a wave-runner since then.

January 20, 2010 - When Was the Last Time you Evaluated Your Risks?

Main Idea

If you woke up this morning, looked at your to do list and the only thing that you had to get done today was to evaluate your risk management, would you go back to sleep? 

Expansion of Idea

The only things less appealing to most of us than risk management are probably doing your tax return or getting a root canal without anesthesia.  Most of us would not know where to start in evaluating risk even if we knew that we needed to do so. 

First, I want to define what I mean by risk management.  When I use the term, I mean the process of evaluating your activities, looking at what could go wrong and setting up systems or policies to take care of the potential problems.  Most people just think that they need insurance to handle risk.  That is obviously part of the solution.  Another part is having the right legal structure.  But the biggest part is looking at your business and seeing what you could fix or improve.  When you have systems that keep breaking down, then that is hurting your business.  When your computer hard drive crashes, your business will be hurt.  We need to be prepared for the big disasters, such as an earthquake or fire. 

We also need to be prepared for the controllable disasters that happen when a customer is hurt by your product or service.  And I think that when my client is hurt by our products or services, it is in a lot of ways more of a disaster than if my business is burned to the ground.  I have backups of data and insurance policies for the fire.  But I may not be able to fix the loss of goodwill if we hurt a customer.  Yes, I can reimburse them for the financial loss because I have insurance.  But goodwill probably will not be restored.  And that can put me out of business.

Here are some things to think about:

• Is there anything in my business that needs to be fixed and will add value to my customers?

• What can go wrong with my business that may be out of my control?  Are there systems that can be put in place to minimize the damage to the business and to our customers?  Is this something that can actually add value to the relationship?

• When was the last time I met with my insurance agent and attorney?

December 10, 2009 - What Mistakes are You Making?

Main Idea

When are you most likely to make mistakes?  When do good and bad things happen more frequently?

Expansion of Idea

I made a mistake this week.  It is not the first and I am afraid it won’t be the last.  I forgot to get something to a client that should have been there yesterday.  It was fairly easily remedied, but the point is it could have been more difficult to fix.  I do not like mistakes, especially my own.  Whenever I see mistakes, I look back at how they happened and try to determine why.  Occasionally there is no real reason.  But more often than not, the mistakes happen when something is in transition, is brand new or is unusual.  That alone should not be a problem, but we sometimes don’t have the systems in place to ensure that we perform properly.  This particular problem occurred because we were doing something new for a client.  The system fix was very easy.  I just had not put the system in place and therefore, I made the mistake. 

The real problem for me is that I did not spend the extra time to fully implement a system.  Whenever we are in transition, we need to stop and ask if there is anything we need to do to insure our performance.  Too often, because of the transition, we are scrambling to put out a fire and we don’t step back from the situation to see what else we should be doing.  This is really obvious when you look at a professional football game.  If the offense adopts a no-huddle offense, they do not give the defense time to implement their systems.  When this happens, a lot of good things happen for the offense.  The key part of this transition is creating the right systems to implement.  And those systems need to be set up in advance.   

• Start by Asking Yourself these Questions:

• Are you in transition in your job? 

• Have you been given some new duties?

• Is there a new or unusual transaction occurring at your business?

• Have you stepped back and looked at what could go wrong?

September 30, 2009 - Is Short Term or Long Term More Important?

Main Idea

What were you thinking when you got engaged?  Was the time period the next 60 days or did you think about the rest of your life?  When you started your current job or started your business, was your time horizon two weeks or ten years? 

Expansion of Idea

The current economy dictates that we watch the business and legal environment very carefully.  We have to manage carefully cash and debt and receivables and a lot of different things that are very short term focused.  The main problem is that we can be consumed with the tyranny of the urgent.  We lose sight of where we are going.  Or we lose sight of our employees or customers.  We have to balance our short-term focus with a long-term view. 

Last fall there were a number of fashion shops that cut their prices and probably forever destroyed their brand.  Yet, Giorgio Armani completed a brand new store on Fifth Avenue in Manhattan.  This store probably cost $40,000,000 to complete on one of the most expensive retail locations in the world.  This was also in a town that was decimated by the stock market crash.  Mr. Armani might be completely nuts, but he was quoted “An entrepreneur shows his true colors in a period of crisis, not in a period when everybody is having success.  Understand that the investments that I made in this store I will probably not get back for twenty to twenty-five years.”    He was 74 at the time.  This might be an extremely long-term view. 

How many companies cut employees and then training budgets when faced with cash flow problems.  Employees are expected to handle more without the right training.  Major companies cut research and development in these times.  What they really have cut is their future.  With all of the upheaval in business, you are determining your future right now.

Start by Asking Yourself these Questions:

1. What is critical for you to do now to insure your future?

2. Do you have a plan for investing in the future?

3. Have you cut service levels? 

4. Should you add service?

September 9, 2009 - What are Your Performance Standards?

Main Idea

Do you do the same thing every time you perform a business function?  Does it help?  Does it hurt?  Do your employees and associates know what to do when a customer shows up at your door or on the phone?  Are your customers treated the same every time?  Does it matter who the customer is?

Expansion of Idea

I have been reading a book about Bill Walsh who was the legendary coach of the San Francisco 49’ers.  He used to get upset if a wide receiver ran a route at 12 feet and 6 inches instead of at precisely 12 feet.  The reason is that their whole offense was built on precision and timing.  That was one of the key ingredients for success.  Most of us would look at the difference of 6 inches in a passing route and we would not think it is a big deal.  But for Bill Walsh, it was the difference between being Super Bowl champions and being a normal football team.  He had performance standards for all aspects of the business, including respect for others.   He created these standards so that teamwork could be elevated to the highest level. 

Companies that operate at extremely high levels have some version of these types of standards.  They have thought through the parts of their businesses that are critical to the business.  These standards are the cornerstone of teamwork, customer service, and interpersonal communication.  All of our businesses could implement these to solidify our values and our systems. 

Everyone in my office knows the standards for answering my office phones or responding to clients.  Everyone in my office knows the standards for dealing with each other and with customers.  We have standards for completing tax returns and financial statements.  All of these are critical in timely completion of duties, quality control, and helping our clients achieve their goals. 

If you do have standards in place, it is a good time to critically evaluate the standards.  If you do not have any in place, then this is a great area to pull all of your team together and focus on creating teamwork and raising your business.

Start by Asking Yourself these Questions:

1. Are there any inconsistencies in our operations?

2. Do people sometimes not know what to do?

3. Do you have the teamwork that you are looking for?

4. Document the areas where you can standardize the performance. 

August 5, 2009 - Have You Asked the Extra Question?

Main Idea

Have you ever played Monopoly?  Have you ever spent your last $400 on a property and then on the next turn another player puts up hotels in an area that you are going to go through?  Would you have wiped out your cash if you knew that they were going to do that?

Expansion of Idea

Information is power.  Making informed decisions is the key to helping our businesses move forward.  We can never know the future.  But we can try to know the facts as they exist now.  The main question to consider is how are you making decisions?  What information is being used by you in adjusting your pricing, evaluating employees, or deciding on business strategy?  How accurate is it?  Is it the best source for making the decisions? 

More information will continue to come out about the Bernie Madoff Ponzi scheme.  But already we have seen some investors who chose not to invest with him and others who chose to put their life savings with him.  What is the difference between the two?   There are sophisticated investors who didn’t invest and sophisticated investors who did.  The key difference between the two is probably the extra question or extra step in evaluating the information.  The investors who did not invest probably learned enough to realize that there were no controls on Madoff.  They decided that if they could not be sure of the information, they did not want to make the investment.  That saved them a lot of time, money and aggravation. 

The current business environment requires that we reevaluate how we make our decisions and also what information is being used.  It is critical that we go back to basics and look at the information to make sure it is accurate, appropriate and timely.

Areas to Start:

1. Make a list of your key pieces of information.

2. Test it and make sure it is accurate

3. Brainstorm with your team to see if it is measuring what you need.

July 29, 2009 - Do You Have a Client Evaluation Plan?

Main Idea

Do you have clients who drag down your whole organization?  When those clients call, does everyone run for cover?  After they leave your business, is there one big gripe session?

Expansion of Idea

Several years ago, we started evaluating our clients on an ABCD basis.  A clients are generally our more profitable clients who we enjoy working with.  They tend to be bigger accounts because we are doing more with them.  B clients are solid bread and butter accounts who are good to work with but we are not quite as involved with them as with the A clients.  C clients are those who don’t always pay attention to our advice, or may get a little behind in their bills and are not always a delight to work with.  D clients are ones who suck the life out of us or, alternatively, we are not the best fit and our services don’t line up with what they really need.  We have made it a policy to get rid of the D clients as soon as practical.  We have done some of this every year. 

Even with the economy in the tank, in the past year I have resigned from several accounts.  The reason that it still makes sense is that it is consistent with my stated goal of providing value to our clients.  I am only compensated if my firm adds value to our clients.  When we stop adding value, then we need to move on.  That frees up resources so that we can improve our services to our A or B clients.  We also can use that time to help our C clients become B clients.  (Of course, if they choose not to improve, then they will be next year’s D clients.)  Our real goal is to keep helping our clients improve their businesses.  Small minorities of clients can actually do damage to our other client relationships.  That is something that I cannot afford to let happen. 

Areas to Start:

1. List your clients either individually or by type or by region. 

2. Identify the parameters of ABC & D clients

3. Assign your clients a grade

4. Fire the D clients

5. Work on a plan to help C clients become B clients and for B clients to become A clients

July 8, 2009 - Do You Have Enough Cash?

Main Idea

What is the cause of business failures?  How can a business that is losing money be worth a lot?  What is the number one reason why a business shuts its doors?

Expansion of Idea

The current economy has created some enormous problems for a variety of people.  Small business owners, charities, large businesses, governments, and a lot of families are having trouble with cash.  For a number of years, cash has been taken for granted.  The economy has been strong and people have not thought about or worried about their cash flow.  But it isn’t lack of sales that force a company to close its doors.  It is lack of cash.  Businesses can be profitable as they file for bankruptcy.  Businesses can be losing money and be sold for outrageous sums.  What is the difference? 

CASH FLOW!!!!!! 

The new owners of Anheuser Busch have completely decimated the loyalty of their suppliers by forcing them to accept 90-day payment terms.  This will put some of them out of business.  And I am sure they were profitable. 

Cash flow is critical for organizations to survive.  Whether you are a leader or a team member, you need to do what you can to help your company’s cash flow.  In the past it may have made sense to buy a new copier.  Now it may make sense to lease the copier.  Yes, it will cost you a little more, but you are preserving cash.  New clients are worthless if they are not going to pay.  If you are in sales, you need to be aware of the warning signs for customers.  We have to stay focused on cash flow and planning for possibilities.  If you or your company does not have a plan, then it is time to start.  This is not management’s problem.  This is everyone’s problem.

Areas to Start:

1. Develop a cash flow plan.

2. Evaluate customers and their payment patterns.

3. Brainstorm alternative sources of cash if needed.

4. Carefully manage bank loans and lines of credit.