"Tear down this wall"

One thing I notice is in companies where there is individual offices for each employee, the culture is not good.

People don’t communicate.  They email the person in the room next to them.  

I favor bullpen-type setups with big open spaces.  When I bought my main building in 1997, the first thing I did was cut 4-foot square windows in the walls to the bullpen, in between offices, and in the solid doors.  Heck in some cases the windows don’t even have to have glass.  This includes my office.

If you have to have cubicles make them low or get ones with glass.

Transparency – literally.  

In the process you can get natural light from the exterior windows to the middle of the space for everyone.

When people see and talk to each other, they work better, and better together.

"Stored Capital"

I know a guy who ran his company this way – he’d ask his accountant “how much money is in the bank?”.

She’d tell him “$238,000”.

He’d say “OK I’ll take $150,000 today”.

No asking about payables or receivables or inventory.  It’s caveman decision-making.

At my companies we measure what I call “The Spread”.  You may call it a Quick Ratio.

It’s CASH + RECEIVABLES – PAYABLES.  You could add the inventory number in there if that fluctuates significantly and is important.  We measure it each month and keep a chart so we can compare it to last month, this time last year, and see the trend.

Obviously, the Spread had better be positive.  We pick a target Spread number – for example, for a 5 million dollar a year company it may be $500,000 a year.  For a 15 million dollar a year company, it may be $800,000.  In some of my companies, it is far higher.  You could have a formula of 60 days of G&A expenses including marketing.

No money comes out for distributions unless the Spread is over that.  This way you have stored capital to survive if things turn down or don’t go the way you had planned.  If you run out of cash, you are out of business.

This is not a substitute for reading and understanding your Income Statement (P&L) and your Balance Sheet.

Don’t be a caveman.  

Successful forecasting

You plan – and in that plan, you plan to make money.  You always make money in the forecast.

Anyone can make a plan where you win in the end.

But the walk is more important than the talk.

Talk can be cheap.

Can you execute a winning plan?

You need productive people to win

Labor productivity is the engine of profitability.

You know as I write this I want to remind you that I have seen a lot in my years along my business journey.

You know I read a lot of books and listen to a lot of stuff, and when ideas match with what I have seen as the truth, I know the idea is valid.

This is one I have seen over and over.  I am closely involved with dozens of companies.  When I see that the team is motivated to really get a significant amount of work done well each day, the team and company wins. 

Conversely, when a team is demotivated, hiding out from doing much work and solving problems along the way, and where people are doing half a job and going home at 4:59, the organization is losing.

I have seen this firsthand.  The difference in labor productivity (with the same people) can be prosperity or ruin.

It all comes from good leadership or failure of leadership. 

Training, expectations, incentives, attention, and attitude.

Are your team members productive when they are working?

Information and Decision Authority

The people at the top have all the authority and none of the information.

The people at the bottom have all the information and none of the authority.

The little things repeated hundreds or thousands of times a day or week or month, all added up, equal the big result of the organization.

So the people that know how these little things are going and what needs to be fixed and how, need to have the authority, or at least open communication to leaders to make the needed changes.

Make sure there is not a disconnect between information and decision-makers.

Make me an offer I can't refuse

Don’t debate with me or argue with me. 

If you want to win me over, just make me an offer I can’t refuse.

What are you offering your customers?

Is the offer clear?

Is it one they can’t refuse?

How can you make it one they can’t refuse?

CULT-ure

The first four letters of culture spell cult.

You want a culture so good, that binds your team together so tight, that your competitors think you have a cult going!

I have seen great cultures, and have have seen bad cultures and I have seen no culture.

If you have a culture problem, then that is your number one problem.

If you don’t fix it, you will not likely be able to fix anything.

Have a philosophy

Processes and policies are great.  But what philosophy are they based on?

If everyone knows the philosophy, then decisions come easy.

“We make every customer happy, no matter what”.

“We will never have to tell a customer an item is back-ordered.”

“We give each customer a cheerful experience when they come into our store.”

“We always get the work done the day we said we would.”

What is your philosophy?

"New Employee College"

When you hire new people, how do they know how to add the most value and do their best at your company?

If you had a “New Employee College”, which you should, what would you teach them?

Really – get a sheet of paper out and write it down – “What we should teach new employees”.

Have you taught existing employees these things?

If you did, do you think they remembered?  How?

Be a disciplined learner

You can’t outperform your ability to learn.

You can’t be a better teacher than you are a learner.

You can’t manage other talented people if you aren’t a good learner.

Are you a disciplined learner who is learning relevant and valuable things?