Discipline makes Daring possible.

Musings from The Disappearing Boss on People, Process and Responsible Autonomy for small-business employers.

Category: Systems Thinking

Do no harm
August 7, 2019

Do no harm

One of the books I’m reading at the moment is “Jainism and Ethical Finance”, by Atul K. Shah and Aidan Rankin.

The first vow taken as a Jain is ahiṃsā  – non-violence or the desire to do no harm.

The interesting thing about this is that it extends beyond humans to animals, insects, microbes and even plants.   Strict Jains are vegetarians who do not eat roots, because this destroys a plant’s ability to reproduce itself.

That is a very thought-through concept of impact, that we could all learn from.

Especially as it doesn’t prevent Jains becoming highly successful business owners.

Fluff
August 5, 2019

Fluff

A metaphor for the relationship your business creates with its clients could be seen as fluff.   A nice marketing touch.  Something to hang a campaign on, to help people choose you over others.

But it can and should go much deeper than that.

Blue Rocket Accounting used their metaphor (“we are Mission Control to your space mission”) to standardise their services, to define the Roles people working in the business play for clients and to design how they deliver on that promise.  The metaphor becomes shorthand for the purpose – ‘what we do for the people we serve’.

That’s not fluff.  That’s the foundation.

Increasing revenues
August 2, 2019

Increasing revenues

Profit = Revenue – Cost.

So if you can reduce cost, you can increase profit. And if you can increase revenue you can also increase profit.

So how do you do that?

The classic answer is that there are only 4 ways:

  • Sell to more customers
  • Sell more at a time to each customer
  • Sell more frequently to each customer
  • Put your prices up

This is of course true, but it misses a vital point.   Nowadays, whatever business you are in, there are hundreds of options for customers to choose from.   Why should they buy from you?   Why should they pay you more than the next business?

Unless you are operating in some unfortunate part of the world, nobody really needs anything any more.   For example, we all need to eat, but do we really need 25 different kinds of cornflake?  Do we really need cornflakes at all?

No.

The truth is that you’re not selling anything.   You’re making a promise.   A promise to help the people you serve become who they really want to be.   That’s what people are willing to pay for.   The bigger and better the promise, the more it will be worth to the right person.   That’s how you increase revenues.

The hard part is working out who is the right person, and who it is they want to become.

And the hardest part is keeping the promise you make.

Performance – costs and revenues
July 31, 2019

Performance – costs and revenues

As we all know, profit is what’s left of revenue after you’ve taken out all the cost.

Revenue is easy to measure.  Cost is a little harder.

Ideally, you would directly attribute every cost incurred by a business (including what would normally be called ‘overhead’) to the end-to-end process of acquiring and serving a single client with their chosen product or service.

This is a time-consuming thing to do, which is why many small businesses work on a rule of thumb of some kind, such as the ‘one third wages, one third overhead, one third profits’ approximation used by many accountants.

It turns out though*, that ‘time spent’ is a pretty accurate proxy for all costs, so a relatively easy way to get an accurate picture of how much a process is costing to run, is to measure how much time is spent on running it.

This means that the efficiency of a business as a system can be measured in a straightforward way – by simple observation.

I like simple and straightforward systems, so this makes me extremely happy.

*”Duration-Based Costing: Utilizing Time in Assigning Costs” Anne-Marie Lelkes, Ph.D., CPA, Management Accounting Quarterly, Summer 2017.

Good feedback
July 30, 2019

Good feedback

Good feedback is:

  • Objective.   ‘You’re crap at this’  doesn’t help.   “You tend to pull to the left” does.
  • Specific.  “Try harder” doesn’t help.   “Try aiming to the right of where you want to land” does.
  • Enabling.  “Like this” doesn’t help.  “Let me put your arm in the right place so you can feel how it should be” does.
  • Timely.  “A week ago you threw short” doesn’t help.   “That last throw was only out by an inch” does.

Feedback is good when it tells the recipient something about the process, because the process is what you have to change to improve the result.

Feedback is even better if it can come from the process itself, because then the person running the process has autonomy as well as responsibility.

A cattle-prod, physical or emotional, isn’t feedback.  It’s just bullying.

Effort
July 29, 2019

Effort

I saw a great demonstration years ago, which is quite fun to try for yourself.

One of your team sits in a chair, facing away from the rest of the team.    Somewhere behind the chair, between it and the rest of the team, place a waste-paper bin.

The aim of the exercise is for the person in the chair to get a ball into the waste-paper bin without looking at the bin.   They try first on their own.  Then they try again.

This time, the team gives them feedback on how they did.  First of all, the feedback is just “You missed”.

But after a couple of goes, the team get the hang of it and start giving more helpful feedback – “Too far right”,  “About a foot short” etc.   This gives the person in the chair information they can actually use to adjust the only thing they can control – how the ball leaves their hand.

The next thing you know, the ball lands in the waste paper bin.

Effort, with feedback, is what actually gets results.

So if you want to improve results, it makes sense to improve the effort that goes into them.  And to do that you need to know where you can make adjustments, and get the right kind of feedback on any adjustments you make.

“You missed.” doesn’t cut it.

Thanks to Graham Williams for the memorable demonstration.

Parasparopagraho Jīvānām
July 26, 2019

Parasparopagraho Jīvānām

I’ve just ordered “Jainism and Ethical Finance”, by Atul K. Shah and Aidan Rankin, so I thought I’d find out a bit more about Jainism before it arrives (to supplement the tiny bit I know from reading ‘Kim’).

Two phrases really stood out for me in the Wikipedia entry on Jainism – ‘Parasparopagraho Jīvānām‘, the Jain motto,  which means something like  “the function of souls is to help one another”; and ‘Anekāntavāda’, the doctrine of ‘many-sidedness’.

To quote the Wikipedia entry fully,

Anekāntavāda ‘states that truth and reality is complex and always has multiple aspects. Reality can be experienced, but it is not possible to totally express it with language. Human attempts to communicate is Naya, explained as “partial expression of the truth”.’ 

Parasparopagraho Jīvānām and Anekāntavāda seem like useful things to bear in mind as we try to communicate with each other.  At least to me.

10 years old
July 23, 2019

10 years old

When my dad was 10, he was evacuated to a small Durham village, to be safer than in Newcastle upon Tyne.

When I was 10, men walked on the moon.

We live through enormous changes, often not realising how enormous they are at the time.

What happened when you were 10?

What makes a good Process? Simplicity.
July 15, 2019

What makes a good Process? Simplicity.

A good process is as simple as it can be, but no simpler.

And like Chanel’s classic ‘little black dress’, it’s harder to achieve than it looks.