Awake at 2 o'clock?

Where’s Waldo?

Posted on July 1, 2012 by John F. Dini

An old New Yorker cartoon depicts two men walking down the streets of Manhattan. “The think I like most about being the Boss is that you get to make your own hours.” one says. “Yes,” the other replies, “as long as you don’t mind 24 hours a day.”

The time commitment of owning a business is one of the biggest complaints of owners. It is so prevalent that I made it the first item on my Business Owners’ Rights satirical labor poster. When I work with entrepreneurs on their goals and objectives, “Less time in the business” is usually one of the owner’s top priorities.

Time is simultaneously the biggest burden and the biggest reward of being a boss. As an owner, your time is both more and less flexible than that of your employees. You schedule vacations when you wish and without limit, but only when the business permits you to be absent. You can leave early, if there isn’t something pressing in your company that requires you to stay late. You can go to the gym at lunch time, if you get to take a lunch break at all.

For most owners, the business consumes so much of our personal time that we have little guilt about the personal time we take during business hours. That’s fair, and it is small enough reward in relation to the total commitment your company requires.

Yet many owners worry about the message they are sending to employees when they are absent. “Do they think I’m home watching television?” “Do they know that I’m in a long business meeting, trying to land a customer who will pay their salaries for a month?” An owner’s concern about the business can become paranoia about always sending the right message, and always being the example for others to follow.

In reality, most employees are more concerned about doing their job than where you are at the moment. When I call a business and ask for the owner, the answer is frequently “He’s not here right now.” In such cases, I’ll ask (for both of our convenience) “Do you know when he will be back?” Unless I’m speaking with the boss’ assistant, the response is almost always negative. The employees don’t know where he (or she) is, what he is doing, or when he will return. When you are gone, you are gone. When you are there, you are there.

You might be playing golf, but perhaps it is with a key vendor. You might be calling on a customer, or buying a new piece of equipment, or attending your kid’s school play. They don’t know, and they don’t think about it much. You are the boss, and if you are a good leader, the employees assume you are doing something that you should be doing.

There is one exception that I coach against. Some owners choose to exercise their control over time by coming in late every day. I believe that is a problem. Chronic lateness is a punishable offense in all but the most relaxed organizations. It is by definition “bad behavior.” The employees naturally assume that you were just sleeping later than they were.

Most importantly, a boss who starts his or her day an hour or more after the employees effectively creates a second starting time for each day. The first hour becomes “ramp up” time. Everyone can get a second cup of coffee, discuss the previous night’s ball game, and send someone out for breakfast. The real work usually doesn’t begin until the boss arrives.

If you have ten employees, the unproductive time of a collective lost hour each morning equals a full-time employee each week. That’s a high price to pay for your flexibility. How much more do you have to accomplish in order to generate that additional revenue?

Control over your time is a privilege of ownership. If you are going to be out of the office for an hour or a day, it has much less impact than you might fear. Just make sure that it isn’t when everyone else in the company can build it into their work flexibility as well.

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Entrepreneurs Love Paperwork

Posted on June 24, 2012 by John F. Dini

Entrepreneurs love paperwork. Not. The truth is that most entrepreneurs hate paperwork with a passion otherwise reserved for the college team that ran up the score on their alma mater year in and year out.

If I want to get a guaranteed laugh in a presentation to business owners, I describe a scene set in their office. You are talking with an employee, sitting behind your 96 inch wide Rosewood desk, admiring the unbroken expanse of its mirror-like finish. That opening doesn’t really lead to any story, because I’ve obviously destroyed any credibility with my fantastic description.

Paperwork is a term we use to describe something we don’t like to do. If you are an engineer, working on a plan isn’t paperwork; it’s engineering. If you are a financial planner, reviewing someone’s portfolio isn’t paperwork; it is planning. So paperwork is different things to different people, but it universally describes something we’d rather not be doing.

As an entrepreneur grows his or her business, paperwork is often the first thing to be delegated. You hire an assistant, or a bookkeeper, or someone to do the invoicing. Your logic is inescapable. The less time you spend on paperwork, the more time there is for generating revenue.

Unfortunately, this antipathy toward repetitive and uninteresting administrative tasks too often extends to documentation that only you can do as the owner of the company. Job descriptions, performance reviews, procedures and business plans become lumped into the general classification of “paperwork.” These are critical tasks that are all too easily postponed indefinitely without doing visible damage to the operation.

There are two reasons for ducking these tasks. The first is a general dislike of spending time on things you don’t do well. There is no pressing need or obvious benefit to carve time out of a busy day to address process issues. No employees are standing idle while awaiting a job description. Your business plan starts with revenue, so time spent on generating revenue is obviously more productive than time spent on deciding what to do with it. You discuss customer service and quality every day, so why would you need to write down a mission, vision, or core values statement?

The second reason, and perhaps the more influential one psychologically, is the entrepreneur’s resistance to putting things in tight little boxes. You didn’t start your own business so that you could run by a rule book. You did it so you could control what happens around you. Documenting how things are to be done commits you, as the owner and leader of your company, to doing them that way. It’s just another box, even if it is one you built yourself.

The first reason, that the effort is unnecessary, is simply wrong. You owe your employees and customers a clear understanding of what to expect, and what the results should be time after time. That comes from your systems. If you don’t accept the responsibility of defining those systems, who will? Look around your business. Who, if not you, is better suited to deciding what people should be doing, and what your company should be delivering to the people who pay you?

The second reason, that the effort confines your freedom to act, is a misunderstanding. You document policies, procedure and plans for other people. Your role in the business doesn’t change. You are still the Chief Innovation Officer. It is your job to continually look for better methods and to generate new ideas. Just because you have documented a way to do something doesn’t freeze experimentation or all future changes. In fact, doing so would be failing your responsibility as an entrepreneur.

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Thinking Isn’t Doing

Posted on June 17, 2012 by John F. Dini

My friend Phil owns a mobile imaging company. His employees criss-cross the major cities in South Texas in dozens of trucks outfitted with portable X-Ray and ultrasound machines, responding to calls from nursing homes and home health providers.

In th beginning, like so many of us, Phil was a one-man show. An Army veteran, he was making a good living as a salesman of portable X-Ray machines when Hillarycare, or the threat of it, dried up new equipment sales. Phil bought a used machine from a customer, and began peddling his service from nursing home to nursing home.

For facilities that take care of seniors who are by definition frail, having a procedure come to you is a huge benefit. Aged patients aren’t all that mobile to start with, and a doctor’s order for an X-Ray probably means that there has been a fall or some other injury, complicating the process of getting the patient dressed and transporting him or her to an imaging center. Phil’s business grew quickly, and he soon had 5 trucks on the road.

But Phil was a licensed X-Ray tech himself (a benefit, along with an MBA, from his military service) and still often had to deliver services personally. It was while doing this that he experienced a moment that I’ve always thought defines the difference between an entrepreneur and the rest of the crowd.

One night in the middle of the week, the tech who was responsible for taking after-hours call phoned in sick. Knowing that the chance of getting one of his other employees to volunteer was minimal, Phil decided (as he often did) to just take the calls himself. It was a weeknight, and there was a decent probability that there would be no activity at all.

Of course, that’s not how things worked out. At about 2:00 in the morning (my favorite time!) there was a call for an emergency X-Ray. In this case, it wasn’t from a nursing home, but rather from a small, rural hospital that didn’t staff its imaging department at night. There had been an automobile accident, and they needed X-Rays of a victim before transferring him to a larger facility.

Phil dutifully packed up the truck and drove 35 miles to the hospital. He unloaded the portable X-Ray, and wheeled it in through the front door.

Few places are much quieter than a rural hospital at 3:00 AM. The only sign of life was an elderly fellow pushing the ubiquitous floor polisher around the hallways. Phil asked for and received directions to the emergency room. As he walked away, the maintenance man stopped him.

“What’s that you’ve got there?” he asked. “It that a portable X-Ray machine?” Phil said that it was. “And you take it from place to place when people need X-Rays?” Phil again confirmed that was what he was doing.

“Phew,” the man said, waving his hand dismissively, “I had that idea twenty years ago.”

Phil moved on, suddenly feeling a bit better about having to be out at 3:00 AM delivering services for his own business. After all, if he wasn’t, he might have been polishing floors.

Lot’s of people have good ideas. Only a few believe in them enough to act.

Posted in Entrepreneurship | Tagged business planning, entrepreneurs, entrepreneurship, health care costs, small business advice | 1 Comment

One Response to Thinking Isn’t Doing

Phillip Rathbun says:

June 19, 2012 at 1:44 pm

LOL! You remembered!

Thanks John!

Phil

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Left Behind

Posted on June 10, 2012 by John F. Dini

As business owners, most of us understand that the people who help us get our company to one level may not be the folks who can get it to the next. A great salesman may not be your next sales manager. The sales manager who can supervise and mentor a half-dozen reps may not be able to create your sales process training for a national team. The national sales manager may not be the strategist who can identify and develop horizontal markets.

So it is also with outside professional advisors. When your business is just starting out, you have a clear criteria for retaining a professional. He or she is usually the cheapest one you can find. Then your business begins to grow. A few years later, if you are lucky, you are bringing in millions of dollars of revenue, and employing dozens or scores of people.

At that level, you are far too experienced to seek professional wisdom solely on price. You understand that the folks who charge the least usually have a reason. The ones who charge the most have a reason too. Yet your now-substantial enterprise is still running with the help of the cheapest professional you could find when you were a fraction of this size.

The two ubiquitous consultants for any business are the attorney and the CPA. In my book “11 Things You Absolutely Need to Know About Selling Your Business” I relate the sad stories of estate attorneys, divorce attorneys and litigation attorneys who have been asked to handle business transactions beyond their expertise. Unfortunately, the glut of unemployed lawyers in the market leads any number of them to take all the work they can find, and their license allows that to happen without penalty.

You know, a medical license allows a physician to perform any medical procedure as well, but none would dare practice outside their training. I wonder why lawyers can regularly screw up things for which they weren’t qualified, but their profession does little or nothing about it?

Even more frequently, I see accountants whose client has long ago outgrown their skills and capabilities. These are companies who need to be advised about investment tax credits, research credits, buy vs. lease decsions, and hiring incentives, but whose accountants roll merrily along preparing basic tax returns that leave thousands of dollars in the IRS’ pocket unnecessarily.

There are many competent solo accountants, but I’ve never met one that could handle all the needs of a complex organization. I’m regularly surprised by owners who brag that their $5,000,000 business still pays $700 for a tax return. Do they think that’s buying them top-shelf services?

I knew a retailer who was rapidly expanding. His solo and very inexpensive home-based CPA got pregnant. She filed an extension for his tax return, then another, then a third. Finally she filed a special “It’s my fault, not the taxpayers” professional extension. (I’d never heard of that one.) All that time he kept right on building new stores.

By the time she finished the tax returns, it was a year after he had closed his books. Most of his expansion had been done under with the wrong kind of contracts, with the wrong leases, and with a misunderstanding of how depreciation worked. Too late, he found out that he owed the IRS hundreds of thousands of dollars from the previous year just as he opened his biggest store ever. Negotiating a tax payment plan consumed all of his working capital, and the new operation had to start in an untested market without any advertising budget.

That store failed. His CPA had never discussed why he should isolate his risk by separating the new venture from his other, profitable operations. He lost everything.

That’s one story of a business owner paying the price for using an advisor who couldn’t keep up with his business. I have another, and another, and more after that.

Right sizing your outside services should be instinctive. You wouldn’t have a 30 gallon aluminum garbage can for a manufacturing plant. When the garbage starts to pile up, you get a dumpster. It’s just a cost of doing business. Why would you stick with professionals whom you’ve long ago outgrown?

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Is It All About the Money?

Posted on June 3, 2012 by John F. Dini

If you have more than ten employees, and an outside observer (like me) asks them confidentially to say in one word what their boss cares about the most, what do you think they will answer?

We’d like to think that answer will be “quality.” Or perhaps you might prefer “service,” or “customers,” or “employees” or “vision” or “culture.”

I often get the opportunity to ask that question indirectly because I coach the owner of a company, but in many cases may also be teaching a management class or leading a key executive group with his or her employees. Do you know what they think the answer is? “Money.”

I know very few business owners whose first concern is money. They aren’t fixated on it, but it just seems to always be the topic of conversations with employees. Take this conversation between an owner and a manager last week (slightly disguised for anonymity).

Q: “Why didn’t you get the compliance reports done for the last two operating periods?”

A: “I was covering shifts for an employee who called in sick.”

Q: “Why didn’t you bring in an on-call person?”

A: “No one wanted to do it for $10 an hour.”

Q:” Why didn’t you offer more?”

A: “Because that job pays $10 an hour.”

Q: “But when you are doing it, I’m paying you $24 an hour, and the compliance work isn’t getting done. Wouldn’t offering $12 or even $15 an hour to someone have made more sense?”

A: ” I thought you said that taking care of the customer came before anything else.”

It’s two different conversations. The employee is pleading that his priority is service. The boss isn’t disagreeing, but is pointing out that the delivery method chosen wasn’t cost effective. The employee only hears “money,” which in his mind is mutually exclusive with service.

The perceived conflict exists in most businesses. For the owner, taking care of the customer is of primary importance. He also realizes that he can’t take care of customers (or employees for that matter) for very long if he is losing money on each transaction.

It happens at every level. A master’s degreed employee recently told me “The boss says he can’t afford to have me wasting non-billable hours on side projects. I get paid $60 an hour. When he bills for me, it is at $150 an hour. I could be unbilled for two days every week and he’d still be fine. He just wants to make as much as he can.”

Actually, after overhead and benefits, if the employees were unbilled for even one day a week the company would quickly be out of business. The effort of explaining the cost dynamics of the business, employee by employee, month after month, is too exhausting for most employers.

So we resort to shorthand, telling them just what they need to know. “If we don’t get revenues up, there will be no raises.” “We have to cut expenses, we aren’t making a decent profit.” “We have to get higher margins.” We have to work smarter, because we can’t afford to hire more people.”

The employees hear you, and think “All he cares about is the money.”

I’m not Pollyanna. I don’t believe that the employees would understand a whole lot better if we had weekly meetings where we only talked about quality and service, and never mentioned profit. On the other hand, the companies who say that they just focus on doing the job right and let profits take care of themselves are frequently, although not always, short-lived.

This is more of a reminder. We need to talk to employees about costs and profits, but we also need to talk about why and how those fit with the rest of our vision for the business.