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Half Empty or Half Full? Who Cares!

I constantly see the sayings “Is your cup half empty” or “Is your cup half full”. There are many variations to these, all with the purpose of determining whether you are optimistic or pessimistic. While I think that, as a leader, it is important to know how you naturally perceive things, it is just as important to take the next step and ask the question “Why isn’t the cup full and what are we going to do to fill it back up?”

Why perception is important?

As a leader, you need to understand how you and each of your team members perceive things. If you are naturally pessimistic and you surround yourself with like-minded individuals, you are probably going to see your environment in a less-than-positive manner. The same if you are naturally optimistic. I want to stress that I firmly believe you should embrace who you are. If you are naturally pessimistic or optimistic, understand that and work with it. Create a team that balances your natural perception.

You’ve observed, now act!

How many times does your organization encounter a difficult situation and then nothing happens? I see situations like this frequently and too many times there is a lack of action because the team is too focused on why they are in the situation. They spend a lot of time working through the cup half empty / cup half full debate. While it is important to understand the situation, once you have defined it you need to create your strategy. Then act!

It’s overflowing!

The next time you encounter a difficult situation, I encourage you to not spend too much time defining the situation and spend more time on planning how to move forward and fill the glass back up. Rally your team around creating a strategy to not only fill up your cup, but make it overflow – then you will need a bigger cup! Then you can have a heated debate with your team on whether your new cup is half empty or half full!

Getting stuck in these situations is a very common problem for businesses of all sizes. Sometimes, a new perspective helps get things started. Please contact me if you would like a confidential, no obligation conversation about your cup.

 

 

Management Reports – Drowning In Data?

One of the recent new buzzwords is “Big Data” and as technology progresses, all forms of data will continue to play a bigger and bigger role in our lives, especially in business. While the ability to access data and use it to make informed decisions is exciting, it is also challenging. It is getting easier to reach data overload and the dreaded “paralysis by analysis” – the state where you have so much data you just don’t know how to make a decision. As business owners, it is our responsibility to sift through all the data and identify the key points that drive our business. This is especially true if you have a management team in place that will also be reviewing the same data. What’s important to you will be important to them.

Financial reporting is critical to every successful business and a frequent, in-depth analysis of your income statement, balance sheet, and statement of cash flows should be happening. I am assuming that this is already happening in your business and we will not cover it. I am focusing on management reporting and how we should be using it to operate our business. I am going to look at three areas from a high level and hopefully create some thought-provoking items for you.

What should be in my reports?

Maybe the better question should be, “What shouldn’t be in my reports?” As we get access to more and more data, there is a tendency to continue to create more and more reports to capture that data. More is better, right? Not always. Like other things, there is a point of diminishing returns. If you have 20 reports available to your team, each with 5-20 different data points, how often do you really think they are using it effectively to evaluate the business? I encourage you to sit down with your team and identify the Key Performance Indicators for your business and design your reports around them. My recommendation is to keep your KPIs around 8 to 10 or fewer. More than that and my concern would be that some of the important data is not being seen. If your business has multiple divisions, you would probably have a unique set of KPIs for each division. Remember, your KPIs are the measurements that illustrate how your business is doing and the direction it is going.

Who Should Look At Reports?

I’m a fan of sharing data, so I would be in favor of everyone in the organization having access to management reports. What a great way to make sure everyone is focused on the same goals. This may not be comfortable for all business owners. I would suggest that, at a minimum, you provide relevant reports all the way up to the team members that are providing the service. It’s important for them to get feedback on their hard work. The other benefit of sharing reports with everyone is that it helps create a team environment. Also, take the extra step and have a training session with your team to make sure everyone understands what the reports say and how you can use reports to help the business. Don’t assume everyone understands the reports the way you do.

We’ve looked at the reports – now what?

Once you have reviewed your management reports, what do you normally do? Do you identify areas to focus on? Do some data points prompt you to look deeper? If you see a negative trend do you create a refresher training session? When you see a positive result, how often do you send out an email high-five to the team? Many times we are looking at data for negatives, when it could be used as a powerful motivator when results are good. It’s important to remember that data is just that – data. It’s your interpretation of the data that prompts action. How many times have you looked at results and come to one conclusion and then, after talking with your team, come to a different conclusion? Before taking any actions based on report data, you should ask yourself and your team if you have all the information needed to make the best possible decision. Only then should you consider making a change.

Next Steps

I encourage you to take a hard look at what reports you are currently using and talk to your team. Do your existing reports cover your KPIs correctly? Do you have reports that no one is looking at? Does your team understand what the reports are saying? This is a great opportunity to take a hard look at how you are measuring your progress and successes. It’s an even better time to align your entire team and make sure you all are focused on the same items. Management reports should encourage analysis, communication, and action. The other step I would encourage you to take is to start learning more about data analytics and how it can help your business. This is an evolving area of business that, if implemented correctly, will give some businesses a competitive advantage. Don’t get left behind.

If you would like a fresh set of eyes and perspective to help you and your team review your management reports or identify your KPIs, don’t hesitate to contact us. We are here to help you.

“My success, part of it certainly, is that I have focused in on a few things.” — Bill Gates

 

What Do You See?

During my career I have had opportunities to work in many different locations all over the country.  Each location had a completely different view.  If I was in a retail location, the view was generally of a busy street with passing cars and pedestrian traffic.  A hotel meeting or conference usually did not have a window to the outside world, so you saw mostly hotel guests and generic artwork.  A corporate office view would range from a picturesque landscape that covered countless acres to a dark alley that made you glad you were inside.  Prior to my new venture, my personal office looked over acres of trees and rolling hills that overshadowed the highways and office buildings in the area.  It was really quite beautiful, especially when a midwestern thunderstorm would roll in.  I noticed that in each location, over time, I would become accustomed to the view and almost not even notice it.  This “phenomenon” not only happens with the visual things we see everyday, but with the other important things we encounter on a daily basis.  How many times over the years do things change so gradually that we fail to notice that “suddenly” they don’t look the same anymore?  If we don’t stop and take a hard look at our business on a regular basis, what are the things we miss?

You hear about the horrible fraud cases where someone trusted within an organization has been defrauding them over a long period of time.  How did that situation happen?  Was there someone that should have been taking a hard look at things, but instead did not notice the gradual changes that were taking place?  The same could be said for long-term clients.  Do you ever get surprised because you have a sudden departure from what you believed was a very satisfied client – “They never said they were unhappy.”?  Did you take the relationship for granted and not notice the gradual unhappiness creep in?  If you are a manager in a retail location, do you ever get surprised when you get feedback that the appearance of your shop is “tired”?  As you walk in every day it looks clean and organized.  How do you notice that over time paint, signs, and other fixtures become faded and lose their lustre?  All of these situations require us to take a hard, honest look at the things we see on a daily basis.  If we cannot be the objective eye to identify the opportunities for improvement, who do we task to give us this critical information?

My new venture has the wonderful view of a rooftop.  I see roofing, air conditioning units, and depending on the season, leaves blowing around.  While others may see this as an eyesore, I see it as the view that was given to me as I explore my new opportunities to help others with their vision.  I see this as my avenue to adventure.  Over time, to make sure that I do not miss the gradual changes or become accustomed to the view, I will need some objective help to remind me that this vision needs to stay on track.  Who will you have do this for you?