August 30, 2019
Stakeholders
I found this on the Corporate Accountability Network‘s site the other day: “The Corporate Accountability Network thinks that every company, … Read More “Stakeholders”
Category: The Disappearing Boss
August 28, 2019
Brave New Worlds
The term ‘robot’ was coined in in 1920 by Josef Čapek for his brother Karel. The word meant “forced labour”.
For all the impressive advances in robotics since then, some of which we saw on the BBC series ‘Revolutions‘ last night, the idea of “forced labour” – including, for Jim Al-Kalili, child-rearing – remains almost unquestioned.
It reminded me that we humans often dive into technology, when we should be re-thinking how we relate to each other.
August 27, 2019
Who’s driving?
Most of us business owners are driven by our needs – for autonomy, for self-expression, success, money or even revenge. That doesn’t often build a business that lasts, except by chance.
The promise you make can’t be for everyone. ‘Everyone’, or their close relation ‘anyone’, turns you into a commodity – interchangeable with every competitor in your field, putting all of you in a race to the bottom on price.
And before you work out what your promise really is, you need to work out who it’s for.
There is a community of people who need what you can offer. They are underserved by what’s out there, looking for a change that you can help them to make. They want to become something or someone different, and don’t know how to do it.
As long as there are enough of them, (and enough is less than you think), these people are your market, and by putting them in the driving seat, you’ll start to build a business that lasts.
It’s never about us, it’s about the people we serve.
August 23, 2019
Good design is unobtrusive
“Products fulfilling a purpose are like tools. They are neither decorative objects nor works of art. Their design should therefore be both neutral and restrained, to leave room for the user’s self-expression.” Dieter Rams, Design Principle number 5.
Processes, organisations, jobs, are products fulfilling a purpose too.
August 22, 2019
Autonomy
Autonomy. It’s why you started your business. To be able to do the job you want to do, the way … Read More “Autonomy”
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.
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.
August 1, 2019
Calculating Capacity
The great thing about having a simple and straightforward way of knowing how much work-time goes into a process, is that if you also know the total amount of work-time available to you, you can easily work out how much spare capacity you have. Or not.
Even better, you can work out exactly how many more instances of a process you can run with that spare capacity. So you can target your sales process at getting the most bang for your buck.
Happy days!
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.
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.