I can’t tell you how many times I have kept myself, my team or my business group out of trouble by doing something as basic as simple math. You know, adding, subtracting, multiplying and dividing. The sort of math that we were all supposed to learn starting in elementary school. It seems many of us think that we now have computers or other people who are responsible for this sort of activity. In just about every business that I have been in, it has always been brought home to me that knowing and understanding the numbers is everybody’s job. In almost every instance where this tenet has been forgotten or ignored, things have turned out badly.
I think part of the issue may stem from the fact that we don’t seem to use real numbers anymore. In the spirit of speed, or simplicity, or possibly laziness, we leave all the appropriate zeroes off of our numbers when we work with them for business. So now when we are working with say, twenty four million, six hundred thousand dollars (a reasonably large sum by just about any standards), instead of writing out $24,600,000 we put down $24.6 M. I know and you know they mean the same thing. However, I probably have $24.6 in my wallet. I know I don’t have $24,600,000.
Perhaps this trend has promoted a more relaxed attitude toward the numbers. Twenty four point six as opposed to twenty four point seven is only point one difference, right? It’s a rounding error. In reality its one hundred thousand dollars. How many more people could you hire or what more could you do if you had an extra hundred thousand dollar rounding error in your budget or in your wallet?
This example is just one of many possible reasons why people and businesses may have evolved this tendency toward what seems to be a more lackadaisical view of the numbers. There are probably many more. The point here is that the numbers and the math behind them represent the scoring system for the business game. It has been my experience that business eventually always boils down to the score.
In most other games you get to start tied with your opponent at zero and start counting upwards. The scoring only goes one way. Those that score the most usually win. The one exception that comes to mind here would be golf. It seems I never miss the opportunity to mention golf. In golf everyone starts at zero and starts counting and it is the one with the lowest score that wins. The point here is that you cannot do worse than zero. That is not the case in business. In business you can in fact end up with less than you started with.
This is called a “loss”, as in you have lost money.
Here in comes that math thing I mentioned at the start. Not only are there things that add positively to your score (this is called “Revenue”) unlike other games, in the business game there are things that can be and are subtracted from your score (this is called “Costs”). In sports you have a “loss” if your opponent ends up with a higher score than you. In business you end up with a loss if costs you more to provide your good or service than you get paid by customers for the good or service.
Here’s the kicker: the numbers don’t lie.
Bill Parcells, the famous football coach is credited with the following quote, when asked if his team was actually better than their record indicated. He said: “You are what your record indicates you are.” If you lost ten games and had a losing record that meant you were a ten game loser with a losing record. It didn’t matter how well you played. The numbers didn’t lie.
Any time you are looking for ways to improve your or your team’s performance, start with the numbers. Do the math. Look at the revenue (value) that you or the team generates or is responsible for. Don’t generalize regarding what you affect. Don’t try to take credit for associated work. Don’t claim “enablement” of someone else’s revenue. Be specific. Math is about specifics, not generalizations. Games have specific scores. Look at the costs you or your team generate as well. These are going to be the reductions to the score. You can’t hide them. They too must be figured into the score.
Leadership is about recognizing what needs to be done before it needs to be done.
Anyone can recognize that something needs to be done when the score indicates that the business is losing at the game. It is the leader who will have already done the math that will anticipate that something will need to be done. They will plan for it so that they can take full advantage of any potential opportunities and minimize and mitigate any potential risks.
The math is really pretty simple. If you want to change the business score there are basically two things you can do: Increase the positive score (revenue) or reduce the negative score (costs). Just about everything you can do to affect the business will fall into one of these two categories.
The usual seduction occurs when the manager focuses on only one or the other category. It is very difficult to grow an unprofitable business into a profitable one. Costs tend to grow along with the growth in revenue, hopefully at not the same rate, but they do grow. If you started out unprofitable and tried to grow without changing anything else, chances are you would still be unprofitable after any growth.
On the other hand it is impossible to cut costs all the way to prosperity. You can reduce costs to profitability (hopefully) but you cannot reduce your way to growth. However, a business left unchanged will continue on in the same direction, in the same manner that it has before. I have referred to this phenomenon in the past a business momentum. There have been too many instances in the past of managers not taking or delaying appropriate actions on the cost side in either the hope or expectation that something would change of its own accord.
It usually doesn’t and the score only gets worse.
It takes both the “pluses” and the “minuses” to change the score in a business. It takes looking at what has happened and using it to anticipate what will happen next. It takes the numbers. And if you are going to utilize the numbers you are going to have to do the math.
Investment firms have a wonderful disclaimer that states that past performance is no guarantee of future success. This is true. However in business it is a good indicator that without a change to the elements that make up that business’ scoring system on both the plus and the minus side of things, of what can be expected. When you start changing the factors that affect the score, you definitely need to first do the math.
Monthly Archives: October 2013
Facilities and Information Technologies
In the past I have looked at several different disciplines within the business organization. Sales, Marketing, Finance, Research and Development and even Human Resources all have their roles and responsibilities in the organization. There are a couple of key support organizations that should also be examined; Facilities and Information Technologies (IT), and unless you want to have an office in an abandoned warehouse and communicate via semaphore (that’s the waving of flags to pass messages between ships) or smoke signals, you need to be aware of and know how to work with them.
The facilities group is a reasonably simple group to identify and locate in the business environment. Simply find the second nicest offices in the building. Chances are these will be the facilities group.
Why the second nicest? Very simple. Facilities is normally wise enough to understand that the senior corporate executives will expect to have the nicest offices in the building. They will want the biggest offices on the highest floor with the best views out the windows. If someone else has them, the executives will want them. This will cause unrest and unhappiness. It is best just to give executives what they want. Everybody knows this, including the Facilities group.
And who will be the ones to give the executives the offices that they want? Correct, it will be Facilities. They are the group that is in charge of all the buildings and all the stuff that goes in all the buildings. Once they have decided who gets the very best offices – the executives – they then get to decide who gets the second best offices. The only people who can over-rule Facilities decisions regarding who gets what office are the executives, and since chances are that the executives are all content and placated in their offices Facilities pretty much at this point has carte blanche to decide who gets what.
With this kind of power with respect to office allocation it is only logical that they should place themselves only slightly below the corporate executives in the office pecking order.
Also expect Facilities to place their offices as far away from the corporate executives as is possible. They usually do this in order to minimize the opportunity or even the chance that a corporate executive may actually wander over to their area just to make sure that they do in fact have the second best offices in the building and not the actual best offices in the building. This will mean if the executives are on the top floor, facilities will be in the basement. If the executives are on the east end of the building, facilities will be on the west, and so on.
Why is all this important you may ask? Remember on average you will be asked to move your office location every one to two years. Also remember to take advice like this with a grain of salt as it is also estimated that 76.43% percent of all statistics are made up on the spot. I however have found this to be a reasonably accurate estimate on the number of times I have moved my office in my career.
With that in mind, it may be a good idea to identify who the Facilities representatives are within your organization and to foster a relationship with them. This relationship will be good for you in that it may help you and your team when it comes time for you to move, and it can be good for Facilities as they want to build relationships with both the current and future leaders of the organization.
The next group to be aware of is the Information Technologies team. No one is ever really sure where their offices are. Their offices are normally in a part of the building that is cordoned off from the rest of the mere mortals in the organization, usually behind a security door or special access badge reader of some sort. This is usually claimed to be done in the name of making sure the communications infrastructure of the organization is kept safe from terrorists and other employees of the business, but one can never really be sure.
I have walked by these doors on several occasions and thought I have heard the sound laughter and music, but as these doors also appear to be somewhat sound proofed I was never quite sure so I have written it off to an over active imagination.
The Information Technology team members are also easily recognizable by the number, quality, complexity and sophistication of the electronic gadgets that they have in their possession. The Information Technology team members are usually the people with the coolest mobile phones, with the latest time saving applications on them, and the ability to have you stricken from every corporate directory with but a single call or key stroke. Now that is power.
For those of you that are wondering, IT are the people that are responsible for your phone and computer networks. If you want to have a quiet day in the office just go and insult the IT leader in your area. It will be surprising how seldom your phone will ring, or dial tone will be present when you go to make a call.
If you want to reduce the number of emails that you have to deal with, just send an email to management which is critical of the IT team’s performance. You will also find that when your email is not working and you call the toll free hotline for immediate technical support that they will direct you to the website where they will ask you to send them an email detailing the issues that you are having with your email.
There is currently a détente between most Facilities groups and most IT teams in that Facilities is responsible for enabling IT to have office space behind closed and locked doors where goodness knows what goes on, and IT is responsible for making it impossible for all but the very most senior executives to ever establish real time contact in the form of a phone call with anyone from the Facilities group. If this relationship were found in nature it would be called social symbiosis.
The reason that I bring IT into the discussion about the Facilities group is that every time you move your office you also have to reestablish all of your network connections so that you can get email on your computer and that your phone will ring when someone calls you at your new office. If you move every one to two years on average, that can turn out to be a significant amount of time spent with the Facilities and Information Technologies groups.
Without exception I have found the professionals associated with the Facilities and IT groups to be some of the most helpful individuals in any company I have been in, I have also found that it does not hurt to bring them “tribute” in the form of a written thank you for the effort that they have invariably expended on my behalf to make the vast majority of my office moves while not enjoyable, at least that much more tolerable.
International Travel, Beer and Cabs
A recent international business trip reminded me of several axioms that I had learned on past international trips but for some reason seemed to have forgotten. When I mention international trips, I mean real international trips. Not trips to our neighbors to the North or South, but trips over oceans and to different continents. Trips where you get to sit next to people for eight, ten, twelve hours at a time while traveling. Those are the kind of international trips I am talking about. In fact it can’t really be considered an international trip unless you go to a place where you can order and drink a beer that you have never heard of before, and the actions that are perpetrated on the highways during the natural order of conveyance (what we would call driving) scare the hell out of you.
I’ll start with the more pleasant of these two aspects of international travel, the beer. As time has passed I have found myself ever more comfortably in the rut of preferring to drink beer as my social beverage of choice. It is estimated that beer was invented some 7000 years ago. There have been ancient Sumerian poems written about beer that are more than 6000 years old. Some anthropologists argue that it was the invention of beer (along with bread) that was the base line cause for the rise of human civilization and technology. I guess if you are going to have to survive on something as boring as bread you better have something tasty to wash it down with.
7000 years is a long time to have in the perfecting a beverage. I think we have gotten pretty close in some instances, and maybe not so much in others. I think the last great advancement in beer-kind was when we went from “beer” to “cold beer”. Mixed drinks have come and gone. Martinis were popular, then they were not. Then they enjoyed another resurgence, but then fell out of style yet again. And this was all just last month. The same can be said about various other drinks based on bourbon, gin, vodka and just about any other distilled spirit you can think of.
The one exception to this rule would be scotch. One should never mix scotch with anything. Alone and unmixed scotch is almost undrinkable. Mixing it with anything is the one thing that does in fact render it truly undrinkable. I suppose mixing scotch with water, or ice (frozen water) is acceptable as it serves to dilute scotch’s almost undrinkable nature.
I have digressed. Each culture has its local preferred beer. I have found that part of the fun of visiting these foreign countries is to sample the local brews. It usually surprises my hosts and creates a common topic of conversation. I have learned that in foreign countries Budweiser is considered an imported exotic brew. Now I have nothing against the good people of Anheuser Busch, in fact when I am home I have been known to partake of many of their products. Despite the “man-law” that you “don’t fruit the beer” I seem to have developed a certain partialness to one of their lime infused beers. Again I have digressed. This seems to be a common thread when I talk about beer.
My foreign hosts invariably try to order me one of these types of beers when I visit. Why would I fly thousands of miles just to drink the same beer that I can easily get at home? I want to try the favorite local beer. Almost without exception it has been a very pleasant experience.
In Ireland the fresh Guinness from the tap does in fact taste different than the Guinness we get here in a bottle. The bottled stuff here reminds me personally of shoe polish in both its color and taste. The stuff in Ireland is truly wonderful. The same can be said about Hite beer in Korea, Cerpa in Brazil and Steinlager Pure in New Zealand. They are great tasting beers and there is certainly a reason why they are popular brands in their home countries. I strongly urge everyone who travels to sample the local foods and drinks when traveling. Since civilized business people have been drinking beer for thousands of years, it is a great ice breaker, conversation starter and usually results in a pleasant discovery.
The only real problem with the beer in foreign countries is that you usually have to go somewhere in that country to get it. The act of going somewhere for beer, or anything else for that matter usually involves getting in a car and venturing out on the roads, with the local inhabitants. There is nothing that can prepare you for this, short of going to your favorite amusement park, getting on the roller-coaster and demanding that they run at least five other roller-coasters at the same time, on the same tracks, all in different directions. I don’t ask to drive these roller-coasters, and I certainly know better than to try and drive in a foreign country. When visiting foreign countries I don’t drive, I take cabs.
First of all, contrary to my wife and children’s opinions, I do know how to drive. I know most of the rules of the road here in the US, both the written and unwritten ones. The unwritten ones seem to include such gems as “Don’t make direct eye contact with someone you are passing” and “Turning on your signal to move into another lane is seen as a challenge to anyone else to try and speed up so as to occupy the space in the lane you are intending to move into”. I think we are all reasonably familiar with these rules and many others when it comes to driving here. It seems to be part of the “sport”.
However, nothing can really prepare you for riding in a cab in a foreign country. I am not casting aspersions or trying to denigrate any people, places or things. What I am saying is that, in general and with a few noted exceptions, that upon entering a cab in a foreign country you should be issued a blindfold and a cigarette when getting into the back seat.
While this idea may conjure up images of facing a foreign firing squad, it should not. First of all a firing squad ends reasonably quickly, while a foreign cab ride can go on for hours. A more accurate comparison would require a firing squad with guns that either would not, or could not operate properly, people who might not know how to properly operate or aim their guns and multiple conflicting orders being issued from a multitude of incomprehensible commanding officers.
Amidst all this, after a certain amount of time, many loud noises and several near misses later, you would then be required to then pay this firing squad an unspecified amount of money and to thank them for their time and effort on your behalf.
The foreign cab issued blindfold would more properly be so that you couldn’t see what was going on around you on your way to wherever you were going, and the cigarette would be to calm your nerves, even if you didn’t smoke.
Mark Twain is quoted as saying: “All generalizations are incorrect, including this one”. I would say that in general he is correct. One notable exception that I have encountered to the international driving free for all that I have experienced has been in Australia. While travel on the roads there does seem to have a tendency to take on certain aspects of a game of high speed bumper cars, you are actually expected to ride in the front seat of the cab, next to the driver. Perhaps this passenger proximity has a mellowing effect on the drivers. Perhaps it is the funny accent all Australians claim we have when we speak English there. Whatever it is, they seem to drive in a manner that I can more readily comprehend.
That, and they have some really great beer there too.
Drop the Rope
Business, like life is about growing. Pretty deep, huh? Actually it is probably more aptly described as pretty trite and stale. In so many instances we seem to associate business and professional success with acquiring an ever growing reporting structure. The more people you have reporting to you, the greater the size of the pyramidal organizational chart that you sit atop of, the more successful you must be right?
This acquisitive approach to organizational dynamics is probably the leading cause of more lost business productivity that just about any other topic that I can think of. The time that is lost to the business based on the various organizational structuring, restructuring, acquiring and defending from being acquired, plans and discussions has to be boggling in its magnitude. I think it may be the largest driving factor in the zero sum gain practice of business and office politics.
As an example, if you and I are peers, there are essentially two ways that I can advance in the organization with respect to you, and others in the organization, given the ever reduced nature of opportunities as you advance up the organizational structure. I can do something that truly merits my promotion into a next level up vacancy, or I can arrange it so that your team, or even better, you and your team report to me, then either I have been de facto promoted or you have been de facto demoted. Either way I am now relatively more important than you (and presumably others in the organization) based on the new reporting structure and my increased span of control.
Most of the time these sorts of restructurings and reorganizations are couched in terms of “increased efficiency” or “improved corporate alignment” or some other type of corporate speak.
Having been a veteran of these resource wasting political machinations I can honestly say that I have come up with a new approach to dealing with them. It may not actually be a new approach. It is the approach that I choose to use when I find myself in these political and organizational responsibility free for alls and tug of wars. There may be others that have chosen to use this approach, only I haven’t run into one of them yet. I have termed it “Dropping the Rope”.
In many of the business environments that I have previously been in, if you were not openly or aggressively looking to expand you span of control within that organization, you were viewed as an internal organizational target for acquisition to enable the expansion of someone else’s control.
What a “dog eat dog” view of internal organizational politics. Either fortunately or unfortunately, depending on which side of the acquisition process you have been on, with a few exceptions it has tended to be an accurate perception, at least for me.
Dropping the rope, as the name implies simply means that there is usually nothing to be gained in openly opposing these sorts of restructurings. Pulling against a force that you may, but more probably cannot counteract, is a waste of your effort. I have written in the past that ego is good in that it drives us to work harder in order to avoid failure and to achieve our goals. I have also written that there are times where one must check their ego at the door because it causes us to pursue unproductive goals. I believe that these sorts of political turf wars are some of those unproductive times.
That does not mean that you should just roll over every time someone makes a political foray into you area of responsibility. Far from it. It is always good to directly check with your reporting structure to vet out what is in effect business management sanctioned and what is just curiosity. Once you have verified that a political reorganization is going on, the time has already passed for counter arguments. If you have not been involved in the restructuring decisions any resistance to them will be viewed as an unproductive professional tantrum and obstructionism. It is time to drop the rope and get on board.
I have been careful to classify these events as a political reorganization. Reorganizations for the purpose of cost reduction, or to get closer alignment to the customer’s business structures are usually clearly defined as such. They also usually entail some sort of a reduction in staff. If there is a restructuring going on that does not involve a reduction in staff you can usually guess that it is political in nature. And as such it will probably not add value to either the business or its customers.
Therein lays the key. In a time when the business is internally focused on a political reorganization focus even harder on the value that you and your organization brings to the customer. If part of your value proposition is affected in the impending changes, simply identify it and clearly document that it is being transferred to a new responsible party.
Instead of taking time away from the customer based charter, instead of putting together all sorts of irrefutably logical reasons why the decided change should not in fact happen, instead of taking it personally that a responsibility that was once yours is now going elsewhere, focus on the customer and let it go. It is hard to believe but these things do have a way of working out.
I hope this sounds like the now logical but formerly painful, ranting, frustrated voice of experience. I have learned to trust in my abilities. I would suspect that you have as well. My experience in these situations has usually been that when I officially transition the function or responsibility in question, in due time I am contacted and requested to resume responsibility for it. Political expediency has a way of giving way to functional performance. The most recognized and valued performance in business involves customers and their money. A temporary political internal focus in a business will always give way to a need for customer performance.
Dropping the rope in an internal, political organizational tug of war quickly removes you from the distraction. It gets you out of the arena in question. It cleanly severs your ties with the responsibility in question. It enables you to remain professional and keeps you from being viewed as an obstruction to the desired organizational change. It allows you to stay focused on the customer.
Staying focused on the customer is everyone’s job. Periodically organizations do have a tendency to become internally and politically focused. These periods by necessity always pass. When they do it is usually those that have stayed focused on the customer based substance of the business, and not those that have been focused on the internal politics of the organization that tend to profit in the long run.