On Bosses & Being Bad

Source: Forbes
Source: Forbes

Why are some bosses so bloody hopeless?

I recently read Guy Kawasaki’s excellent book “Enchantment” (Portfolio/Penguin 2012) where he included a list prepared by Bob Sutton of Stanford University which Kawasaki haad sourced from Sutton’s book “Good Boss, Bad Boss: How to be the Best…and Learn from the Worst”.

The list makes for interesting reading when you have a role that requires you to lead (and that includes in your family).

Note that I have Australianised some of the spelling but the list is as detailed in Kawasaki’s book (p. 159 on).

  1. I have a flawed and incomplete understanding of what it feels like to work for me.
  2. My success – and that of my people – depends largely on being the master of the obvious and mundane things, not on magical, obscure, or breakthrough ideas or methods.
  3. Having ambitious and well-defined goals is important, but it is useless to think about them too much.  My job is to focus on the small wins that enable my people to make a little bit of progress every day.
  4. One of the most important, and most difficult, parts of my job is to strike the delicate balance between being too assertive and not assetive enough.
  5. My job is to serve as a human shield, to protect my people from external intrusions, distractions, and idiocy of every stripe – and to avoid imposing my own idiocy on them as well.
  6. I strive to be confident enough to convince people that I am in charge, but humble enough to realise that I am often going to be wrong.
  7. I aim to fight as if I am right, and listen as if I am wrong – and to teach my people to do the same thing.
  8. One of the best tests of my leadership – and my organisation – is “what happens after people make a mistake?”
  9. Innovation is crucial to every team and organisation.  So my job is to encourage my people to generate and test all kinds of new ideas.  But it is also my job to help them kill off all the bad ideas we generate, and most of the good ideas, too.
  10. Bad is stronger than good.  It is more important to eliminate the negative than to accentuate the positive.
  11. How I do things is as important as what I do.
  12. Because I wield power over others, I am at great risk of acting like an insensitive jerk – and not realising it.

Having experienced (and perpetrated) a number of things that go directly against the wisdom contained in Sutton’s words, I am grateful for the insight and clarity of his thinking.  We need to understand how our actions as bosses/leaders impact those around us and therefore our businesses (or other organisations where we have influence) and our families.

Striving to be a good boss is a never-ending challenge.  It’s a challenge that can be confronting, but, at the end of the day, is very rewarding when you get it more right than it has been!

Don’t be a bad boss – it’s no fun and you’ll drive out all the good that your people want to bring to work every day.

On Increasing Profit by 865% in One Year

Regular readers might recall a recent post concerning the identification and development of talent of one of the staff members in one of our favourite client’s businesses.  This all occurred through using Trimetrix on some of the team in his business.

Source: africanramble.wordpress.com
Source: africanramble.wordpress.com

Well, the financial results are now in.  And they are spectacular

I won’t quote the actual numbers (as that would be unfair and not in line with our professional obligation to keep client information confidential) but I will give you the impact that they have experienced from identifying a great person (using Trimetrix) and giving them the opportunity and support they needed to thrive.

Using the six month period we were reviewing, the results for the half year to 31 December 2013 were (let’s say) $20,000 net profit (after all expenses but before tax).  Then our client dropped his newly-identified star into the business.  Profit for the period to 31 December 2014 was $173,000!  All the metrics for the site have improved and staff morale has gone through the roof.

Remember that, as I wrote in May last year, if you have a deep understanding of your people and their talents and skills, along with the capacity to trust yourself and them, you can create some exceptional outcomes.

Why don’t you give it a go?  What have you got to lose (other than a potential star who will leave because they’re not being challenged and developed in your business)?

Give us a call to discuss how Trimetrix can make a huge difference in your business which will have an exceptionally positive impact on you, your people, your team and your customers.  You will be happier, your team will be happier and your customers will be happier.

And, if it results in an 865% profit improvement for a six month period, I’ll bet the investment will be worth it!

On Fishing & Culture

One of the most enjoyable things about having a break is that you can undertake those things that you’re often too busy to do during the time you’re working and living a “busy life”.

fishing Murray

For me, that usually involves a fishing rod and books.  I can report that the fishing rod was merely a prop and didn’t yield anything in the way of produce (but I did enjoy very much sitting by the river contemplating the universe).

The books I took away and read were terrific.  None of them were tax or accounting books (c’mon, I’m not that boring!) and none were fiction (well…).  They did what good books are supposed to do – they opened up my mind to new thinking and helped me expand my horizon in a number of directions which will hold me in good stead as the years roll out.

From the time spent lost in their pages, there were a couple of ideas that I have taken and want to share:

  • the concept of team balance is often forgotten – everyone has to participate and recognise the contributions of each other to the success (or otherwise) of the team.  Share experiences (in and out of work) – it brings everyone closer together
  • A re-iteration of Dan Pink’s thinking – provide people with the opportunities to achieve Mastery, Autonomy and Purpose.  In other words, grab hold of good people who are aligned with your vision and goals, give them the tools they need and then get the hell out of their way!

One of the other benefits of being on holidays was that we spent time with some terrific and very smart friends.  Dean (in particular) has a wonderful capacity to “get” the issues around culture in a business.  Trust me – he’s seen the great, the good, the bad and the very very ugly in his career to date! 

As I was consuming pages, we would sit down in the late afternoons over a quiet beverage or two and discuss many things – including what I had been reading.  These discussions often ended up finishing well into the night.

It’s quite easy to be able to take an idea from a book and get it into your head – it’s a whole other matter to explain that idea to someone else in a way that they understand.  This is the art of communication.  Anyway, when Dean and I went through the stuff I was reading and thrashed around the examples we both had of experiences we had been through demonstrating the very best and very worst examples of the issues, it really did serve to cement a lot of this into my head.

The guts of all this waffling is then “what makes a good culture”? 

The guts of the answer is “I don’t know – but I know what’s a bad one”.

Anyway, I am looking forward to spending the next stint with my fishing rod and some more books.

On Franchises and Getting it all Wrong

Franchises.  They seem to be popping up everywhere. 

Image source: National Franchise Associates Inc.
Image source: National Franchise Associates Inc.

BUT, are they all they are cracked up to be and what do you need to consider when you’re looking at getting in to a franchise?

In recent months, we have been in the position of reviewing a number of Franchise Agreements for a number of our customers who are looking at getting into the market as Franchisees.  All good as they know that any business needs a system and all businesses need support to enable them to be their best.  The franchise model can work incredibly well as the platform to do this. 

The big problem that we have seen over many years (and seems to be becoming much more prevalent of late) is that the franchise model is becoming all about the Franchisor. 

Now, forgive me if I am wrong, but would common sense not indicate that if the franchisees are doing well, the franchisor will, in turn, do very well?  From what I have seen in recent months, the franchisors don’t seem to “get” this part of the model.  I have seen situations like this over many years with a range of what turned out to be unsuccessful franchised businesses.  In effect the franchisor didn’t really give a stuff about the franchisee or their success.  They effectively “churned and burned” them.

To my simple way of approaching things, the franchisor should be making it easy for the franchisee to run and operate their business and should be supporting them in growing and developing their business.  They should be able to provide all sorts of assistance and guidance as part of that support and have, as their raison detre, the ultimate success and creation of wealth for the franchisee.  This will then create a sustainable and desirable franchising base for the franchisor that makes their offering attractive to other potential franchisees.

Some of the recent agreements had some mind-numbingly stupid clauses in them.  The philosophy behind the approach appeared to be the protection of the franchisor at any cost with nothing provided to the franchisee apart from obligations and massive cost burdens (over which the franchisee had very little, if any, control).

I get that the franchise model is based on a “brand and process” that the franchisor leverages through their franchisees to create a bigger footprint and network.  This makes good sense and enables the “love” to be shared.  However, when the franchisee gets little if anything by way of support, coaching, encouragement or development, you need to question what the potential franchisee is actually getting for their investment.

If you are considering getting in to a franchised business or looking at franchising your business, you need to do your due diligence and ensure that what is being offered is what you’re seeking or what you’re offering is meeting potential franchisee needs.  This should include a raft of areas but, at a minimum, the following:

  • Training and support (initial and ongoing);
  • Development of your business skills (including sales, HR, cashflow and profit/margin management);
  • Realistic and timely reporting of your perfromance against established KPI’s with suggestions for improvement from within the franchise network;
  • Merchandising and marketing;
  • Product and service knowledge (including your people);
  • Network support with and across other franshisees; and
  • Capacity to expand the franchise into other areas/regions where the franchisee has proven themselves.

I recently reviewed a franchise agreement which actually enabled the franchisor to sell into the market via the internet in direct competition with the franchisees.  The franchisees would then be required to fulfill internet orders processed through the franchisor with their compensation for the work in meeting this obligation being “in such manner as [Franchisor] considers fair and reasonable”.  For mine, this is simply unsustainable.  Not surprisingly, ouor client has decided not to proceed as they would be in direct competition with their Franchisor and they would bear the cost of delivering the product with no guarantee of any worthwhile remuneration associated with it.  Common sense has taken a holiday from the franchsior’s office.

McDonalds is seen as an exceptional franchise business and are highly sought after as franchise businesses.  Knowing quite a few McDonalds Franchisees, they have detailed the support and encouragement they receive from McDonalds.  They know that their franchisor is interested and passionate about having their franchisees make a worthwhile living and helps them achieve great things – it is therefore no surprise that the model operated by McDonalds is so successful.

It is a great pity that more franchsiors (and their advisors) do not appear to understand this.  They are doing themselves, but more particularly their franchisees, a great disservice.

If any franchisors or franchisees (actual or prospective) would like to have a discussion about where they can go right in their model and approach, more than  happy to have a chat.

What Banks Need To Know

Looking to invest more money into your growing business?  Need to speak to a lender but not sure where to start or what you’ll need?

Bank Picture

We have always found that, if you can answer the questions the bank (read Credit Manager) is likely to raise before they raise them, then you’re in a pretty good spot.

Here are some points to consider and information to collate before approaching your lender:

  • Don’t expect them to know about your business.  Provide history about where the business has grown from and what the future holds for the business.  This can include when it was established, visions and goals, succession plans, key staff members qualifications and experience, key relationships with advisors etc.
  • Include a one page Business plan.  This is one of the most valuable activities you can do.  It will help to show your direction and acts as a roadmap for the future.  Lenders will only risk their time and money if they are convinced your business will be successful.
  • Paint a picture –Have a structure diagram, what seems obvious to you may not be to someone else.
  • Develop a marketing plan.  Every business is different so use this to your advantage and market why your business deserves the money over your competitors.  Sell to the bank like you would sell to your customers.  Good marketing helps customers understand  why your offering is better then, or differentiates from the competition.
  • Be clear on the purpose of the borrowing, the borrowing entity, the amount required and when and how it will be repaid.  Don’t leave the lender wondering why.
  • Prove you have knowledge about your industry and your competitors.
  • Have your taxation affairs up-to-date and in order.  Provide last year’s financials including depreciation schedules, last year’s tax returns, a current profit and loss, a current balance sheet and the ATO’s integrated client and income tax account.  Point out all other borrowings and the security against them.  Lenders will feel comfort in knowing you take your financial affairs seriously.
  • Provide them with the key ratios of your business e.g. Asset turnover, gross margin, overhead ratio, ROI, debtors turnover and inventory turnover.
  • Prepare projected cash flow scenarios (poor, medium and best case) based on the money being borrowed.  Be clear on what the outcome of borrowing the money would mean for your business.  An understanding of why you want to borrow is only a small aspect in the process, what happens after you’re approved is just as important.
  • Have all the information available before meeting with lenders, this will speed up the process.

By putting in a little extra effort to ensure you have provided the correct information the more likely the lender will be to take you seriously, after all you’ve shown them how serious you are about your business.

Take your accountant to the meeting, this will instil comfort for the lender that your advisor supports you and the figures presented are realistic.  They can also often have a bit to add when negotiating with the bank on terms, conditions and “the rules” under which the bank lends money.

Given the many different facets of borrowings, be clear on mitigating the risks to the bank, this will provide them with comfort and confidence in lending you the necessary funds.  Lenders are more likely to lend to a good manager in a bad industry than a bad manager in a good industry!

There are many types of borrowings and unfortunately a one size fits all bank proposal doesn’t exist!  If you need help putting your bank proposal together please be in touch.  Given our broad base of clients and relationships with the banks we have the experience and understanding required to give you and your business the best chance when you’re needing extra funds to build your business.

One last thing to consider is taking the proposal around a number of financial institutions – often, different banks have differing appetites for lending to certain industries/sectors.  By going to a few of them, you will be able to more accurately gauge who is really interested and who is “going through the motions”.

On Hard & Soft Dollars

hard dollars

Always love having a chat with Russ Wylie.

He was talking to me about some feedback he had recently received from one of his clients in the USA about the utility and value of the Trimetrix Reports that we do.  According to his client, he values Trimetrix, the information contained and the debriefing provided for his business because:

It adds hard and soft dollars to my business

The Return on Investment from undertaking the process is massive – and offers significant upside for any business.

Having seen the impact Trimetrix can have on a range of organisations we have been using it with for many years, I must agree and this is the best way I have heard of describing the value that it does add.

The hard dollars come from the increased productivity and skills utilisation by the people who have undertaken the Trimetrix (skills which can often be the ones they don’t know they’ve got!) – they become far more effective in the roles they play.

The soft dollars come from them being aware of their (and others’) behavioural approaches.  This makes them better team members, leaders, colleagues and (dare I say it) friends.  This translates into less friction in the workplace and creates a far happier and more cohesive enviroment for everyone.

Given the multi-science approach and validation of the science behind the process, I understand exactly why it works as well as it does.  I have seen it make some incredibly positive changes across a range of businesses and industries.  For the life of me, I don’t get why more businesses don’t use it. 

If you would lilke to have a chat about how Trimetrix can make a difference in your business, let me know!

The hard and soft dollars are there for you and your organisation to collect when you do.

On Me Not Being Stupid

Ok, so it’s a provocative headline.

I seem to find it passing strange that some people just don’t “get it” and never seem to be able to “get it”.  I have always supposed it has to do with perspective and where you sit, but as I have had cause to reflect on this, I realised that, well, the issue is mine.

If-you-ever-feel-stupid

Unfortunately, we often view the world through our own set of glasses/perspective and, unless what we see is in line with what we expect, we can often rebel against it.  This can have varying levels of impact on your life.

This was sheeted home to me a little while ago when I was speaking with one of my really, really valued customers – over the years he has developed into a friend.  In response to some open discussions at the start of our meeting, I was so caught up with what I was prattling on about, I totally missed the messages that he was sending out – it was only when I asked him a question as I was leaving that the reality hit home!  My focus had been so internal, so “selfish” that I hadn’t done for him what he was doing for me – listening properly.

After I had realised the fact that my approach had been totally wrong, we sat down again and spent some really good space discussing the issues that were important to and impacting on him.  The best outcome from this is that our  understanding and relationship has developed even further and our appreciation of our respective situations and experiences has deepened markedly.

It comes down to learning coming from mistakes.  I made a mistake and I have learned a lesson as a consequence.  One of the greatest gifts we can give each other is real time and attention to listen to and hear and respond to and support each other.

This isn’t a mea culpa – far from it.  I am wanting to share my experience so that it serves as a reminder for me that I need to be focused on the right things at the time – to give of my best, but also as a prompt for the few readers out there that have read this far to keep their eyes up, ears open and attention focused where it should be.

In the words of Paul Gaugin:

We never really know what stupidity is until we have experimented on ourselves.

On Real Estate Agents, Missed Opportunities and Other Stuff

Ahhhh, Real Estate Agents (aka realtors in the US) – you either love ’em, or hate ’em.

Over many years, the development of the industry has seen the big focus on the “sexy” part of the business – listing and selling wonderful homes and making the big bucks.  Good pub talk and lots of profile.

Leasing

When we look at the property management side of the industry though, it is seen (and yes, I know I will be howled down for this) as the poor cousin.  It’s not as sexy, the revenues aren’t as good, the advertising collateral is pretty crap and all you do is deal with nit picking tenants and unreasonable landlords.

Why is it this way?  Why does it have to be this way?

When we’ve looked at a real estate agency to buy or sell, the vast majority of the value in the business resides in the rent roll.  When you look at a notionally well run real estate office, the rent roll income pays all the operating expenses for the business for the month so that sales commissions are “cream”.

Considering this, why doesn’t the property management department get more “love”?  It would appear to be the place where people get inducted into the industry, or get “promoted sideways” until they leave.  Sure, there are some exceptional property managers out there, but the general perception is that it’s a bit “dead end”.

Now, my question is, what would happen if property management “got its mojo back”?  Imagine how a really good property management division would look – established and well communicated expectations for tenants and landlords, commitments to and actual delivery of service that was valued and appreciated by all the customers.

Think of the true value that the owners of the business would realise if their property management division was firing along?  This, remember, is the core component of the value in any real estate office and is also a very liquid investment for the business that can quite easily be sold off.  The cashflow it generates is (when run well) very healthy and it can provide an underpinning for the whole office.

So, if you own an real estate business, how “well” do you look after your property management arm?  My bet is that you could probably do a lot better at it and, once you do this, your income and underlying wealth will improve substantially.

Taking this thinking a step further, we also see that many businesses do not direct attention at the “boring” aspects of their operations.  Is it because they’re boring?  Probably.  Remember that (according to some) 140% of your profit comes from 20% of your business.  My observation is that the less sexy bits of a business really underpin the whole business and yet they don’t get the “lurve” they deserve.

Have a think about your business – are you paying attention to the boring stuff that pays the way?  Or are you missing an opportunity by not realising you’re sitting on a “field of diamonds”?

On Muddle Management

The Australian Institute of Management has recently released a report on the perception v reality for middle management.

It is not pretty reading – especially if you’re a middle manager!

Now, the survey was conducted by AIM and Monash University and surveyed 1,898 people across the business spectrum and, according to the Press Release from AIM:

The survey participants said middle managers in their organisations are significantly underperforming across the range of key indicators including people management, communication and leadership

stuck-in-a-rut-dog

As AIM states,

Middle managers are the communication ‘gatekeepers’ in an organisation responsible for transmitting messages up and down the workforce ‘ladder’.  It is these managers who have a key role in shaping a company’s workplace culture and who help determine the success of productivity initiatives and major change programs.  Pacesetter organisations are those in which middle managers are in sync with their organisation’s vision, goals and business strategies.

It all comes back to the leadership within an organsiation – how well the goals and mission and vision of the business are communicated not only from those at the top, but through those all the way “down” in an organisation.  From my experience, there are not very many businesses that devote any time or effort to really get this information effectively all the way through their business.  Those that do are exceptionally successful, those that don’t wither and underperform.

Whilst the report encourages middle managers to take more responsibility to refine their own skill sets in the areas of  leadership, communication and staff management, the reverse is actually true – the owners/senior management within organisations need to provide their own leadership and support in this area.  “A fish rots from the head” is an apt analogy here.  Those “at the top” are obliged to provide what is needed for those reporting to them to deliver what is required.

With an effective strategy to engage and develop middle managers, organisations can truly excel.  We have seen loads of examples over the years where businesses have invested in processes and strategies that specifically address the need to communicate vision and mission and goals through and organisation (the Stages of Growth process is ideal for this and, being research based, is incredibly effective) and also to enable people within an organisation to understand and then play to their strengths (the Trimetrix Assessment is perfect for this).  The end result of undertaking these processes is that the organisation is healthier, more focussed and far more effective in what and how it does what it does.

One of the more telling components of the report states:

Our survey results confirm that now is the time to be more strategic when evaluating the contribution and capabilities of middle managers.  Certainly, if organisations are to maximise their performance in a marketplace that is becoming more global and more competitive by the day they need to ensure that middle mamagers are a positive asset, not a hindrance.

Where an organisation understands that middle management is there to provide the support, guidance and direction to the operations level of the business and then ensures that middle management has the right information, communication skills and leadership abilities, they will do exceptionally well.  Unfortunately, we often find that most organisations adopt one (or more of the following excuses – and this is not an exhaustive list):

  • we’re too busy
  • we don’t have the budget
  • our people aren’t up to this
  • we don’t have the time
  • it’s not onoe of our priorities at the moment.

Thinking such as this on the part of senior management will ensure that they won’t allow their organisation to thrive.  There will always be an excuse and there will always be the opportunity to work on the business to make it better.  By putting it off and/or ignoring the potential that exists within an organisation, the argument is that the owners/senior managers are being negligent.

So, if you want to invest and get a very solid return on the improvement that is waiting to happen within your organisation, why not get in touch?  The survey results show that most businesses are pretty crap at management of middle management.  By improving their performance in this area, they will significantly outperform their competitors and find life is a lot less stressful.

Nothing to lose, everything to gain.  It would seem stupid if you didn’t pursue the opportunity for your business.

By way of example, we did a Stages of Growth Xray with one of our customers the other month.  As a direct consequence, their gross margin increased from 34% to 51%.  Would you like to do that?

To read the report, please follow this link.

On The Feedback We Love

happyOK, so we all like to think we do a pretty good job doing what we do.

We work away at delivering the “why” of our businesses to the customers with whom we work.  It can sometimes be challenging to know how we’re going and how we’re being perceived as we tend to get too focussed on the matter(s) at hand and forget to look at the big picture.

What a wonderful thing it was this afternoon when I received the following email from the Business Manager of one of our customers:

Hi Matt,

 Just thought I would take this opportunity to say how happy and pleased I am (as is the firm) to have the support of the fabulous team at MTA Optima.

I’m sure you already know, but I’d like to say what a great group of people you have on staff.

 Corey, Daina and Jane have been superb to work with;  nothing is ever too much trouble and I am completely at ease in dealing with them.

 So you know, Jane is taking care of payroll for me whilst I am on leave;  this is a huge benefit not to mention relief for me.

 In the past it would have been necessary to  prepare in advance multiple weeks of payroll which is quite a task.

I can go on leave with absolute confidence that Jane has it all  under control.

 Most importantly, it also ensures that [we] have a backup plan for payroll and are no longer exposed in this area.

 Many thanks and kind regards,

This sort of stuff inspires me and the team to push for even greater things and see how much further we can go in delivering our “why”.

I am very proud of our crew and what they do for our customers – they really do care about what is going on and try to work out ways to remove the headaches, reduce the risk and provide real value to the people with whom we work.