You have to love the clarity and power of numbers.

Now that school’s started up again, homework is ramping up as well and my wife and I had a great ‘tutoring’ session with my daughter on her math homework.  My daughter was struggling with one of the concepts and wanted to argue that the answer we had led her to wasn’t right….

But that’s the beauty of math and numbers…they are either right or they’re not.  You may be asking the wrong question, but when the answer is in numbers, it’s very clear where you stand.  43 is bigger than 35 – and it’s always going to be bigger.

That’s why when you’re analyzing your business and your goals, the more things you can tie to a number, the better off you’ll be.

There’s no ambiguity in numbers, no gray area…no where to hide.  As long as there’s understanding and agreement on where the number comes from, the numbers for your business will be the clearest information you can get.

Everyone needs a number

There’s a great story that’s in Dale Carnegie’s classic book “How to Win Friends and Influence People” about Charles Schwab when he was the president of Bethlehem Steel in the early 1900s.

Charles Schwab was touring a mill and the manager of the mill was frustrated with the lack of productivity.  Schwab took a piece of chalk, turned to the day crew foreman and asked them how many heats they had completed that day.

“Six” was the answer – so without another word, Schwab took the chalk and wrote a large number 6 on the floor of the mill and walked away.

As the night shift came on a little later – they noticed the big number 6 and asked what it meant.  The day shift team told them the President of the company had been there, asked how many heats they completed and had written down 6.

When the day shift showed up the next day, the 6 had been rubbed out and replaced with a large 7!  Not willing to fall behind, the day shift focused, worked together enthusiastically and by the end of the shift they inscribed a huge ‘10’ on the floor.

The end result?  That mill, which had been underperforming soon became the most productive mill in the company.

By making the mill productivity simple, clear and to the point, it was easy to set a target and get instant feedback.  That’s the beauty of numbers.

What are your numbers?

If you’re in a manufacturing industry, then number of widgets produced is an obvious choice (although number sold might be more effective if your ultimate concern is profitability).

In service industries they often track billable hours, from a quality perspective you might look at number of returns or customer complaints.  Bottom line, there are a handful of numbers in your business which really give you a feel for how well you’re doing overall – especially looking at them over time.

Let’s say production is at 110/day – flat relative to the last 3 months, Revenue is at $5000/day down steadily from $8000/day 3 months ago and new leads from the website are at 5/day, down from 50 / day just a few months ago.  Just based on those numbers, it looks like you’ve got a marketing problem!  There may be other issues as well, but you can at least start there.

It’s not easy to find your numbers – it will involve some trial and error and they may change as you and your business mature.  Here are some tips to help you come up with what you need to drive your business:

• Keep it simple – if you have to go through a lot of work to get to the number, it won’t work in the long run.
• Keep it visible – ideally your numbers should be something that people can easily see.  You could even consider creating a report or dashboard that’s visible at all times.
• Narrow it down to just the critical numbers for operational success.  For starters, see if you can limit it to less than 10 for the entire business.  You may want to track other things as part of strategic planning and evaluation, but for more tactical management of the processes – keep it to a small number.

What do you measure in your business?  How often do you look at it?  If you were on vacation and only got a one page report of your numbers, would you know what’s going on?  Share your thoughts below in the comments below – I’d love to hear how this works for you?

Shawn Kinkade  Kansas City Business Coach

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Sometimes you need to mix in a little philosophy with your business…

I’m re-reading the classic business book – The EMyth Revisited by Michael Gerber (prepping for a workshop I’m doing next week) and I was inspired by some philosophy in a chapter that I hadn’t thought about in a while.

For those that haven’t read the book (it’s one of the Top 100 Business Books of all time), it’s a story about a struggling entrepreneur who owns a pie shop and how the author helps her realize why her business is struggling (along with most small business owners at some point and time) and the shift in perception that’s needed to avoid the all too common downward spiral of business failure.

The book was originally written in the 80’s and the revised edition came out in 1995, but the key points are still valid and powerful.  The story and the writing occasionally feel a little over the top and contrived, but but you will walk away with some major insights and inspirations on a better way to build your business.

Back to the philosophy, Chapter 12 is entitled “Your Primary Aim” and it outlines the first step of the Business Development Process and how you would start evolving your business.  As you might suspect from the chapter title – the first step is to define the Primary Aim of your life…not the primary aim of your business, but your life.

A lot of people skip over this step, but it’s critical to your long term success!

Especially if you believe that the sole purpose of your business is to help you get what you want out of life!

If you really know what you want to get out of life and you recognize your business is a tool to help you get there, then your perspective on the strategic direction of your business takes on a new meaning.  Let’s say a major goal of your life is to enjoy spending time with your family, then building a business that requires supreme sacrifices and 60 – 80 hours a week at the office probably isn’t a good fit.

Designing a business (and a lifestyle) that fits your goal of quality time with family will drive a lot of decisions.

How do I discover my Primary Aim?

Of course the challenge that I’ve always struggled with is answering the question…What should I do with my life?  (By the way, that’s the title of a great book by Po Bronson…and it’s also in the Top 100 Business Books).

Gerber recommends an exercise of imagining reviewing your life’s accomplishments from your funeral as a way to uncover what’s really important.

I also like this idea of Designing the Ideal Lifestyle Audit from Richard at Lifestyle Design unleashed.  His suggestion is to carve out some quiet time and write down what your perfect average day would be like…what would you do?  Where would you be?  How much does that differ from an average day right now?

Do you know your Primary Aim?  How well does your business support that aim?  Have you done this kind of exercise before?  I’d love to hear your thoughts in the comments below.

Shawn Kinkade  Kansas City Business Coach

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Well I stumbled across the perfect primer on the book and the topic – it’s a short video speech from Daniel Pink on the core concepts and it’s illustrated with an animated technique that’s really engaging and adds a lot to the presentation.

Here’s the link if you can’t see the video for some reason:  RSA Animate – Drive

Let me know what you think about it – share your thoughts in the comments below.

Shawn Kinkade  Kansas City Business Coach

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A lot of thought over the years has gone into what makes a business great. In the business classic “Good to Great” by Jim Collins, 5 years of painstaking research led to a lot of interesting conclusions about what separated great companies from good companies (and all the rest).

Some of the key drivers included things like great leadership, and disciplined focus but one of the fundamental keys to a great business is that they have great people. In other words, using Collins terminology you have to get the right people on the bus if you want to succeed.

But what are the Right People?  How do you evaluate them?  Let’s hear from Jim Collins first:

Right People

When it comes to getting started, good-to-great leaders understand three simple truths. First, if you begin with “who,” you can more easily adapt to a fast-changing world. If people get on your bus because of where they think it’s going, you’ll be in trouble when you get 10 miles down the road and discover that you need to change direction because the world has changed. But if people board the bus principally because of all the other great people on the bus, you’ll be much faster and smarter in responding to changing conditions.

Second, if you have the right people on your bus, you don’t need to worry about motivating them. The right people are self-motivated: Nothing beats being part of a team that is expected to produce great results.

And third, if you have the wrong people on the bus, nothing else matters. You may be headed in the right direction, but you still won’t achieve greatness. Great vision with mediocre people still produces mediocre results.

- Jim Collins

The Right People are different for every company.  You’ve got to have people who want to be with you (on your bus) – they need to share your core values, they buy into why you’re in business and they like the other people that you’re bringing on around them.

I wrote previously about the importance of uncovering your company’s Core Values. Using those core values to identify the ‘right people’ is one of the most important things you can do in terms of building a foundation for growth.

Even for the entry level ‘paint by numbers’ jobs, having an employee that genuinely ‘fits’ with your company will have a lot of long term benefits. They will stay around longer, they will do better work because they appreciate the company and fit in and they will help to positively influence everyone around them.

You also have to have people who are motivated, not only do they want to be in the company, they also want to accomplish things…great things. It’s possible to externally motivate people, for a while, but nothing compares to the output of a self-motivated person who can and will run on their own.

Finally you also have to have the Right People in the Right Seat. They have to have the skills and abilities needed for the job (which implies that you have a clear understanding of what jobs and roles are needed…food for another post).

How to evaluate the Right People?

The most straight forward way to evaluate if you have the Right People is to simply compare them to your top 5 Core Values.  Do they consistently display those core values?  Do they occasionally display them or do the never display them. 

Set a benchmark on what you think is acceptable and see how many employees make the grade.  If they don’t hit your minimum benchmark then you probably need to work with them or start the process of letting them go.  It will be painful if you have to cut employees, but if they really don’t fit with who you are as a company then you need to let them go or risk losing your identity.

What do you think about the importance of having the Right People?  Are you familiar with companies who have made this a priority?  How about those that haven’t?  I’d love to hear your thoughts – share them in the comments below.

Shawn Kinkade  Kansas City Business Coach

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The internet continually offers up all sorts of cool things – some of them are just entertaining (like the picture above) but a lot of them are world class educational resources, tools and ideas that most of us wouldn’t have seen 10 or even 5 years ago.

If you’d like to make your web browsing more productive, I’d strongly recommend using a tool like Delicious (I wrote about Delicious here) not only as a way to save and reference the cool stuff you find, but it can also help you find new things that other people find valuable.

Today I wanted to share a presentation on Social Media that I thought was outstanding!

What the F**K is Social Media Now

This week I found a really worthwhile updated version of a presentation by Marta Kagan (thanks for sharing).  The original was good as well and it’s amazing to see how much has changed in a short time.

It’s a bit irreverent (and possibly not safe for work depending on how strict your workplace might be).   She shares a lot great statistics that illustrate how ingrained Social Media is today, great ways it’s being used and compelling points about where Social Media is going.  Check it out!

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