“It’s designed to break your heart. The game begins in the spring, when everything is new again, and it blossoms in the summer, filling the afternoons and evenings, and then as soon as the chill rains comes, it stops, and leaves you to face the fall alone.”
A. Bartlett Giamatti, Former Commisioner of Major League Baseball
Ahhh, baseball. Every year about this time I have a brand new love affair with the game. They say, “Hope springs eternal,” and there couldn’t be a better case for that than the beginning of baseball season. Whether you’re a New York Yankees fan, jaded by the expectation of pennants year after year, or a long-time Chicago Cubs fan, still waiting to see your team in the Fall Classic, April brings the promise of hope that “This could be the year!”
As a San Francisco Giants fan for nearly 50 years, I have endured my share of heartaches over the decades.
The sixties, with a tremendous roster, but a string of 2nd place finishes. How could a team of Mays, McCovey, Cepeda, and Marichal not win one pennant?
The seventies… orange softball shirts and orange bills on the caps. ‘Nuf said.
The eighties… I’ll never get rid of the image of right-fielder Candy Maldonado sliding on his rump, successfully turning an out into a game winning triple for the Cardinals. Two years later, God personally stamped his seal on the Giants’ fate with a 6.9 earthquake in the middle of a four-game World Series sweep at the hands of the Oakland A’s.
In the nineties, things got interesting. They couldn’t win the pennant with 103 wins, they were swept in the playoffs by a wild-card team, and they lost a one-game playoff to the even-more-snake-bitten Chicago Cubs.
A new decade, a new millennium, even a new ballpark was needed. Alas, a 3-2 game lead in the World Series and a 5-0 lead in the 7th inning of Game 6 turned around quickly as the Giants lost to a stupid Rally Monkey! Two years after that, yet another playoff loss to the Marlins.
Yet, here we are in 2010 and again I say, “This could be the year!” Even though 52 years have gone by since the Giants moved to San Francisco and they still haven’t won a World Series crown, I am excited about the prospect. I am re-energized by the fresh start, by the young new prospect who lit up AA in some town I only know as a Giants farm team, by the veteran whose glory days are behind him, but who will undoubtedly resurrect his career this year.
So, what is the connection to business or accounting? Is it that we have an opportunity to put the dismal year of 2009 behind us, throw off the bad news of the recession, and start 2010 feeling inspired that we have a chance to make a fresh start, that “This could be the year?”
Success in business lies in understanding the needs of our clients and customers and then providing something of value in response. Sounds simple, right? Our customers will tell us what they want, we take care of it and everyone is happy. Let me use my recent trip to Lowe’s as a quick case study of how this just might not be so simple in real life.
I stopped by Lowe’s one evening after work with a fairly simple mission: get the part I need to fix a broken plug on our vacuum cleaner’s electrical cord. Being the power-tool-inhibited accountant that I am, I knew there was a chance that things could get a little dicey once inside the store… but I was able to find the electrical aisle successfully on my own. I noticed a Lowe’s employee in the aisle and headed over to him with my simple request.
Me: “I’m looking for something to fix the end of a power cord.”
Employee: Blank look.
Me [realizing that this isn’t coming out quite as smoothly as I intended]: “Uh, you know, like where you plug a cord into a wall. I need something to fix that.”
Employee: Blank look, with hint of nervousness.
Me [wondering if I should talk louder, slower, or both]: “You know where the prongs are that go into a wall, and one of the prongs came out so I need to fix it…”
Employee: “Uh, this really isn’t my main area. I’ll get someone else to come over here.” [Exits rather quickly]
Ok, I’ll admit that while I could picture what I needed, I didn’t have a clue how to describe it. Actually, I should have been using the phrase “replacement plug” (which, for the record, I discovered on my own in the next aisle).
So maybe that communication thing isn’t always as easy as it sounds. Think about your customers. How can you help them communicate their needs and questions? Is industry jargon too often a barrier to your customer’s understanding? Sometimes it helps to look past the question to the motivation behind it. What are the unasked questions under the surface? While you may not have all the answers, your customers will appreciate your attempt to speak and understand their language.
They give up pleasure, endure pain, practice at ungodly times of the day, all so they can be a little bit better than they were yesterday. There is no financial payoff, no medal, no crowd of followers. What is it, then, that keeps the non-elite Olympic athletes going, dedicating their lives to pursuing excellence in their particular sport, knowing they will never have a realistic chance to compete for a medal?
For the last month, we have been feasting on our backyard citrus crop. Harvesting the abundant bounty got me to thinking about the ordeal I went through in early fall. I had the burdensome task of pruning five citrus trees, all in various states of disrepair. All of them had been pruned a year earlier, but in that short amount of time they had put on anywhere from three to five feet of new growth. The trees certainly appeared much larger than when they had last been pruned, but their shapes had lost that nice rounded “pure Florida orange juice” logo on the carton look. They more closely resembled a silhouette of Mort from the original Bazooka Joe comics.
What I was impressed with, though, other than the size and number of thorns on citrus trees, was the fact that, on all that new growth, there was no fruit to be found at all. Oh, there was plenty of fruit on the trees, but it was all on the old growth. Not only that, but the uncontrolled new growth made it much more difficult to get to the fruit. While the new growth was what everyone saw when looking at the trees, most of the fruit was concealed behind the façade of productive branches.
That got me thinking about businesses I have seen. Lots of growth, plenty of show, but no profit or cash to show for it.
Has unproductive growth gotten out of hand in your business?
Have you added new products, employees, and sales revenues only to see flat or declining profits?
Are you busier than ever, but without an increase in cash flow to show for it?
Is the productive core of your business being choked out by the new and greatest thing?
Perhaps it’s time to put on the gloves, the long-sleeved shirt, hat, and other protective gear, and get to pruning out the non-productive fluff. You’ll have a better-looking business, more production, and profits that are much easier to reach. Check out the “Seeing is Believing” blog to see how we can help.
My 5th grade daughter is raising a puppy for Guide Dogs for the Blind. Zoria has been living with us for about a year and has taken up residence in our hearts. Since being involved with this organization, I have come to see visually impaired people in a whole new light.
Hoping to see what we could expect from our efforts, we attended a graduation ceremony at the Guide Dogs for the Blind campus before we agreed to raise Zoria. It opened my eyes not only to the puppy raising program, but to my perception of blind people as well. I was characterizing the recipient of a guide dog as “blind.” These graduates were so much more than that. They were forest service workers, musicians, college students, fathers, grandmothers and many other things. In addition, they happened to be visually impaired. This guide dog was going to help them navigate through the world they lived in – not be their lasting impact on the world.
Business is a lot like this. Sometimes we need a “guide dog” to help us navigate through a narrow area of our business. We may be experts in business, but that one area of “blindness” or “near-sightedness” is holding us back. Find yourself a trained guide dog and open up the opportunities around you.
As accountants, one of the hardest concepts we have to explain is the difference between cash and profit. (There’s also that whole Debit versus Credit thing but don’t get me started. ) I can’t tell you how many discussions have centered around the subject of cash. The discussion with a client can go in one of two directions: 1. “If I made this much money, why don’t I have any cash in the bank? ” or 2. ” I have cash in the bank, so why don’t those financial statements of yours show a profit?”
In the past, I have resorted to drawing on the financial statements, creating elaborate flow charts, building multi-tabbed excel spreadsheets, and one time I tried hand-puppets to make my point. But it’s just not a subject that makes sense to most people. The missing cash can usually be found hiding in the balance sheet as an investment in customer receivables, increased inventory, or additions to fixed assets. The ins and outs of the missing cash can be tracked on the statement of cash flows, but no one ever reads it. (Except fellow accountants and sometimes bankers who are looking for evidence that their loans will be repaid.)
Part of the problem in explaining this concept and many others is the language barrier between us as accountants and the language of normal people like our clients. We tend to think and speak in a linear, numerical fashion while most business owners think visually and speak conceptually. After many years spent wrestling with this issue. we have found a tool that lets us bridge the communication gap. It’s called $COPE It!. It’s a new iteration of similar products we have been using for a couple of years. The beauty of this tool is that you can bring in financial statements, convert them into pictures, and then make changes to your results. So now, rather than telling you that selling more products and services at the same margin (with other factors unchanged) will generate NOT more but LESS cash, I can change one number on the screen and show you the impact on your cash. I can also enter your targeted cash balance, and show you where to focus to achieve it.
After making one simple onscreen change to a set of numbers, I have had even marketing people proclaim that the blanket of confusion has been lifted from their eyes. Suddenly they understand why cash and profit are not the same thing. It really changes the dialogue when you’re doing business planning, negotiating loans, or evaluating new sales strategies.
But you really have to see it to believe it – just ask a member of our team to show you how it works.
I grew up in the country, where roads are “maintained” rather than “improved”, and where storm drainage can often be a challenge. So we were used to big rain storms (like last week) resulting in large puddles of water on either side of the road. We knew it was a big storm when the puddles met in the middle and stretched across the entire road (and as kids, it meant that some excellent “mud biking” was in store). A day or two after the rain had stopped, someone would notice the puddles and put up a warning sign like the picture above.
This always struck me as humorous. Everyone who lived on our road, or used it on a daily basis, had already been navigating the puddles for several days by the time these signs started showing up. We already knew, or had learned the hard way, that caution was needed. So what was the point of the sign?
When is a warning sign most effective – before something dangerous or unwanted happens, or after it occurs?
What about your business – are you getting timely warnings before adjustments are needed, or just historical indicators telling you that something has occurred? What are the key performance indicators that drive your business? How do you get accurate and timely feedback about these key measurements, so that you can react when adjustments are necessary?
Think about your potential warning signs and put them up early. Let people know what they mean and how to avoid the problems that could arise. Prepare a plan to follow to get you around the potential pitfalls.
“Confess?” you say, “You’re an accountant. We already knew you were a geek.”
Now, I like to think I hide it most of the time, but I have a passion for math problems, puzzles, and technology. So it’s good to know that there is now a TV show dedicated to people like me.
“Big Bang Theory” is about a group of friends who are physicists at Cal Tech, but they resonate with this accountant’s nerdy side. But, as a business consultant, I laughed my head off during a recent episode that featured process mapping as an instructional method for making friends.
Here’s the setup. Sheldon, the most anal-retentive of the bunch, decides that he needs to make friends with the guy who schedules access to a certain lab. He proceeds to research the art of making friends and ends up using a children’s book to create a flowchart (or process map) to follow during his phone call to the scheduler. While his friends are watching, he calls and follows the process step by step, smugly nodding as the discussion flows right along with his chart. As he reaches the final stage of setting up a common activity to share, the would-be friend declines several offers. Panic sets in for Sheldon until one of the friends in the room recognizes that he’s stuck in an infinite loop, changes the chart, and allows Sheldon to operate outside his predetermined plan.
Needless to say, in business things often don’t go as we planned. We set up a wonderful strategic plan, come up with the tactics to use, and, yes, when we’re firing on all cylinders, we even create a map detailing the process.
What happens, though, when either the situation changes or the “standard process” just isn’t all that great?
Do people stick to the process or do they work around it?
Do they tell anyone that they’ve gone around the process?
Are they allowed to go around the standard process?
Are they free to suggest changes or improvements?
Does anyone listen to the suggestions?
Ultimately, are improvements made to the process as needed?
Process mapping is a wonderful way to capture the current reality of how things are done and identify wastes, but it’s extremely important to have the honest input of those performing the tasks. Only when you know your current process can you create improvements that reduce waste, eliminate redundancies, and allow people the flexibility to provide maximum value to your customers.
Ask your people, let them be honest, and figure out how to improve what they do. Your customers (and closet geeks) will thank you for it.
Last night I ate at the Mesa Grill in Las Vegas, a wonderful restaurant owned by Food Network Star and Iron Chef, Bobby Flay. I was curious and was keen on keeping my consulting eye open to what makes him one of the country’s most famous restaurateurs. In addition to the fabulous food, two things stood out immediately.
Team members know their numbers. In a brief, informal exchange with the hostess, I found out that the restaurant has 217 seats, breaks even at two table turns per evening, has a goal of three turns per evening, and once served a record 732 dinners in one evening.
Employees know their products. The waitress was very quick to recommend only a few items on the menu, but described them in great detail. She told us which dishes were spicier and exactly how they were prepared. She also asked us exactly how we wanted our steak cooked, so she could properly communicate with the chef. The steak was excellent and perfectly prepared.
Your employees crave information about your business and your products. Give them numbers. Let them know how the business makes money. Give them samples of your products and allow them to describe their personal experiences with your customer. You like to do business with real people. So do your customers.
You keep up on all the latest trends. You update your technology way ahead of your peers and competitors. You look forward to the new industry magazines to see what you can do next to maintain your competitive edge. Of course, you put up with your employees’ complaints about constant change and “bleeding edge” technology, but you kind of enjoy the challenge.
So, let me show you cutting edge technology. I was exposed to this video featuring a young man from India, Pranav Mistry, who is an intellectual giant currently working at MIT. Recognizing that humans intuitively use objects and gestures, he set out to combine these natural instincts with computer technology. Imagine displaying a watch on your wrist by drawing a circle on your arm with your finger, taking a photograph by making a square by joining your thumbs and forefingers, displaying a phone keypad on the palm of your hand and making a call by tapping the display with your finger.
The possibilities are staggering. And… he is willing to make the source code open to anyone who wants to advance the technology.
The next time your employees tell you that you need to ease off on the changes, show them this video. Then watch their jaws drop.
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