Ugly Truth on Accountability

It starts with you. When you aim to lead your organization and people to greatness, you need to be accountable to the company. There are things that people in leadership roles do that they believe are of little or no consequence that other people on the team see differently.

Throughout the years, I have had to come to terms with different things. I used to think it was my right to have the company pay for personal cars, meals, etc. When I really understood what it meant to want to lead my people to greatness, I recognized that these things I did hurt my intentions. I needed to change my approach to things. Even though I owned the company, it was not right to have my wife drive a company car nor pay for my personal dinners. As time went on, I was able to identify other little "perks" that negatively impacted the company and the people in it. The Ugly Truth was that I was hurting the company and the team's morale. I am the driver of the business and while I was pushing the company to be better, I was weakening it. This is not a comforting feeling.

I now view the company and run the company as if I was not the owner. This mindset helps me keep in clear focus the things that are unnecessary. My team now sees firsthand that I do not bleed the company of its money and I do not treat it as if it were my own. I now aim to protect the company from all predators, including myself. It is the best opportunity I have to build a sound financial future and I will not weaken this opportunity by making it bleed to satisfy my lifestyle. Many business owners do not understand this line of thinking, but it is this thinking that helps push businesses to greatness.

The company is on the best track to success that it has ever been on. I hope this pushes everyone to take less liberties in their business and treat it as the best opportunity they ever had for success.

Cost of Keeping a Bad Employee

I have come across a good article regarding this. It was put out by careerbuilder.com.

There are many blog posts, articles, and books written on the subject. This is a quick, but informative read:

http://www.careerbuilder.com/jobposter/small-business/article.aspx?articleid=ATL_0095COSTOFBADEMPLOYEES

Aggressive Conservatism

My approach to the financial aspect of business is best summed up by the oxymoron "Aggressive Conservatism". I aggressively approach the financial well being of the company in a conservative manner. Let me better explain:

1. I pay bills faster than terms. This is not what most people would teach because it has the potential to negatively impacts your rate of return on investment, however, it creates a safety valve that you may need to employ. Consider this situation: If I typically pay my bills within 15 days of 30 day terms, my business becomes accustomed to it. If cash becomes tight, I could slow down my payments and pay within 30 days and boost my cashflow without violating my vendor terms. Benefits of the quick pay approach are potential discounts, usually between 1 and 3%. So this conservative approach can actually create more aggressive returns.
2. The company needs protection, not my lifestyle. The company needs to be protected and strengthened. Many people bleed their company of its earnings and to support a consuming lifestyle. If that business faces a downturn, the business becomes exponentially more at risk of closing down. This can become extremely stressful, which only makes failure even more likely. I believe in building the business and keeping it financially strong. I do not think of the company's money as money for my own personal use.
   
3. I build a safety net. Many companies take on added risk and use their safety net to do so. This compounds the risk the company takes on. When I add risk, I want to make sure I strengthen my safety net. I am not always able to do so, but I recognize it and try to get to my comfort level as quickly as possible.

These three points may not be glamorous, but they have helped me weather a couple of storms. I almost went out of business because I did not have a safety net in plan in the first few years. I worked hard to position Resicom to be financially stable. We are now in the position of leveraging our financial position to take advantage of this dire economic climate.

Completeness

There is a certain level of anxiety, nervousness, or uneasiness I feel when someone gives me information. I question the information in my mind. I run it through all kinds of internal tests to see if it makes sense.

The first thing I try to do is verify the information. Too often the information is based on inaccurate assumptions, even when the correct information is nearby. The second thing I do is to try and wrap my arms around the information and get a complete understanding of it. Many times I find holes in the information or find it incomplete. Please see Workplace Reconnaissance post for more information on that.

Anyway, I feel much more comfortable when the person providing the information has a quality I call "Completeness". This is where the person approaches any topic and examines it from many Perspectives before passing the information on to me. These people tend to look at components of something independently then as one. This helps me perform at a higher level because I am able to spend less time questioning whether or not the person ran it through a bunch of internal tests and more time on thinking about how to use this information.

The good news is that Completeness is something that can be trained. It takes time and there needs to be a consistent approach that everyone can get used to following, but in the end, it is well worth it. I created Perspectives to bring more people in Resicom to have a higher level of Completeness. By staying firm in my approach and by demanding verification of information, I have been able to successfully raise the level of performance of my team. I hope you can do the same.

Mentor Added Accountability

Finding a mentor is one of the best things entrepreneurs can do for their business. Too often small businesses do not have a board of directors to keep them accountable. Therefore they do not perform to their potential. Its like the old adage, what gets managed gets done.

A mentor relationship can add accountability to the entrepreneur or business manager. Picture your business if someone was checking YOUR work. You probably spend a lot of time checking your team's work. Even the best qualified members of your team can use the tips you give them and perform better when they are kept accountable. Imagine the most important role in the company being improved.

A good mentor will help you approach situations, deal with the things that you may not want to deal with head on, and keep you to your plan. This accountability is crucial in executing your plan. It makes you answer to someone else. It creates a board of directors type of relationship where one may not exist.

I have mentored many entrepreneurs and helped them strengthen their businesses. My mentor has helped me strengthen mine. I recommend giving it a try.

Experience Sharing

All to often people share their two cents when not asked. People tend not to follow advice they receive without solicitation. A more effective method of helping one another is through experience sharing.

It is arrogant to assume that you have the answer to someone's complex problems after briefly hearing about the story. There are so many nuances to a situation that one could not possibly understand in a short briefing.

Through experiencing sharing, one is able to help see a route taken and use it to help them develop their own solution to their problem that addresses all of the nuances. This type of thought process is found in the major entrepreneur and president organizations, such as Entrepreneurs Organization.

I have learned many things and created many solutions to my challenges through experience shares of people within my professional circle. I encourage all entrepreneurs to join an organization such as EO and establish a trusting inner circle that will openly share experiences and help sharpen your skills.

Risk Management

All businesses are indirectly in the insurance business. I am not referring to the traditional types of insurance, rather I am referring to the management of risk. The people we hire, the technology we put in place, the operational procedures we produce are all a form of insurance we invest in to protect and strengthen our businesses. There is the flip side, what is the cost of not having them? What is the risk?

An example: A business is a store that only has one person that works in the store. The store owner feels like he cannot afford the $15,000 annually to hire a part time person. To fully understand his predicament, I have him do a little bit of workplace reconnaissance.

1. Confirm that the business is operating in a risky manner.
2. Estimate the potential loss if the employee was to get sick, injured in an accident, or quit?
   
3. The owner estimated this exposure at $8,500.
   
4. The owner took that risk and deducted it from the costs associated with hiring the part time person and he realize the actual increase of costs is $6,500, not the initial $15,000 that the owner assumed.

Armed with the actual costs the business owner was better able to make his decision. He was now informed and could properly manage his risk.

As business owners and managers, we need to manage this risk. The owner determined that the $6,500 additional investment was affordable so he hired the person. In addition, he understood the investment needs to yield a return. He set forth additional tasks for the two person team to complete to help get more value out of the investment.

This approach will help you make decisions that are based on risk adjusted numbers. This outlook has helped me lower my risk and strengthen my company. I hope it can do the same for yours.

Directional Clarity - The Child Test

As business owners and managers, we are often put to the test. We face all sorts of situations that there is not a handbook on dealing with. We need to be able to count on ourselves. Here is the test I give myself before taking action.

I imagine my child is watching me and learning from me and I ask myself "Do I want her act in the way that I am about to act?" This relates to everything. If I am disciplining someone, training them, everything. Do I want my child to learn and mimic my actions. Think about it, this approach makes you break down justifications and leads you to make a deliberate choice of doing the right thing or the wrong thing.

This "Child Test" has helped me work through countless situations. I hope it helps you do the same.