The 8020Info Water Cooler
Highlights from the latest information
for managers, leaders and entrepreneurs
1. Sleep On Those Tough Decisions
Before making his decision to authorize the raid that killed Osama Bin Laden, U.S. president Barrack Obama kept the military and his advisors waiting while he slept on his decision. On Harvard Business Review Blog Network, social psychologist Maarten Bos and Harvard professor Amy Cuddy say that was exactly the right course to take with a complex decision.
During periods when the mind is not consciously focused on an issue, as with sleep, it accurately weighs the pros and cons of relevant decision attributes. In one study about making car purchases, participants who made immediate decisions chose cars with many but unimportant attributes, whereas participants who were first given a task to distract them from the decision chose quality cars.
So when faced with a complex decision, take in all the information that you can, then go for a run, listen to some music, or sleep on it. Finally, since unconscious thought is not as precise as conscious thought, double-check the facts of the decision you now intend to take.
2. How To Manage Cash In A Small Organization
To stay alive, small companies must manage cash carefully. On The Grassy Road blog, serial entrepreneur Penny Herscher offers these four tips:
- Build your own model: A good finance team can construct many financial models but there is no substitute for thinking through the essential factors affecting your business yourself and formulating your own model. Ask yourself – and answer – tough questions like: What is the cost of every new employee? What is your true receivables collection time? What is the monthly productivity of each sales representative and how many months does it take from hiring to positive cash flow for each agent? What assumptions are you making about average sales price and average transaction size – are they realistic?
- Cap your own salary: In many young companies the largest expense is salaries. If you cap your own salary at below-market rates, it makes it difficult for others on your executive team to demand more. “It’s a delicate balance because your team needs to make enough to live and not worry about their families, but no more [than that], because in the end they’ll make more money from their options when you reach a successful liquidity event,” she writes.
- Hire a tight fist in finance: Since you can’t watch every transaction she recommends getting a “pernickety, detail-oriented, negotiating, thick-skinned finance lead at your side.”
- Test every decision: Before every decision, ask: What is the impact on cash flow? Growth takes risk, but you must be sensitive to the cash flow implications.
3. Tips For Choosing A Web Designer Vs. An Artist
Choosing the best designer to build or reshape your web site can be a challenge. But on InformationHighwayman.com, New Zealand web copywriter D. Bnonn Tennant offers this approach:
- Draw a vertical line down a piece of paper and write “Good” and “Bad” at the top of the columns.
- Go in turn to each designer’s site. Put a tick in the Good column every time you see a term that is meaningful to you, like “business objectives,” “return on investment,” “your revenue goals,” or “increase sales” as they discuss the services they can offer you.
- By contrast, put a cross in the Bad column every time you see a term like “beautiful,” “passion,” “branding,” “modern,” “clean” or other puff words that don’t convey a clear outcome or benefit to you.
- Hire the designer with the most ticks and least crosses.
“Designers who don’t understand that websites are business assets which must achieve specific business objectives, which in turn are tied to revenue goals… are not actually designers at all. They are artists. Giving them your money is not an investment in creating a business asset – it’s a divestment of capital that is never going to come back,” he declares.
In that vein, he urges you to beware of designers who use industry buzz-words and faddish terms that they may believe describe benefits, but which you can’t relate to any discernible value in meeting your actual needs and required results.
4. Getting Performance Reviews Right
The biggest mistake managers make on performance reviews is thinking the purpose is to find something wrong with an employee and then fix it, says Mike Carden, CEO of performance-management software company Sonar6.
In conversation with SmartBlogs.com, he says you want to take that approach only with your poorest performers, such as a salesperson reluctant to make calls. With star performers, work out ways to stretch them and leverage their talents.
He notes that whereas any sensible person would have focused on making the 12-year-old LeBron James into a superior basketball player, the typical people manager approach would have foolishly fixated on improving his swimming.
5. Zingers
- Do you feel you can improve your skills on something like leading a meeting, delegating, or listening? At the end of an interaction with someone, ask that individual how they rate you on that skill on a scale of 1 – 10. If they suggest something below 10, which is likely, ask what it would take you to improve to a 10? After you get specific ideas, try them. (Source: Great Leadership)
- Success through winning a lottery may be easy if your number is drawn, but your chances are uncertain. Medical school may offer a certain path to success, but it’s not easy. Entrepreneur Seth Godin says most people are searching for a path to success that is both easy and certain – but most paths are neither. (Source: Seth’s Blog)
- Everyone appreciates a thank you, but too often we’re too busy to remember to say those powerful two words. Consultant Jennifer Miller says you should make your thank yous unexpected, sincere, specific, and aimed directly to the heart of the individual you are thanking. (Source: The People Equation)
- When Caryn Stern became president and chief executive officer of the U.S. Fund for UNICEF, she asked her subordinates for a list of their best and brightest, without indicating how many should be on the list. After receiving those, she declared: “You’ve got one year. At the end of the year, either everyone working for you is on this list, or you’re telling me how you’re getting them there, or you’re getting rid of them. If we are going to attract the brightest and the best, then we’ve got to keep only the brightest and the best.” (Source: New York Times)
- Consultant Art Petty says too many leaders send their teams into battle on a daily basis armed with nothing more than a “go get ’em” and a metaphorical slap on the back. Instead of cheerleading, consider motivating employees with clarity and context about the importance of their work and their impact on people. (Source: Leadership Caffeine)
6. Q&A with 8020Info:
Tackling Strategy for 2012
Question: We are planning a strategy session to prepare for the new year. Any suggestions?
8020Info Associate Harvey Schachter responds:
Here are five issues to consider:
- Do you really need to develop a new strategy? Strategies should not be redesigned annually, unless something significant has changed or the existing strategy is truly outdated. That doesn’t mean you shouldn’t meet annually. But what you probably want is a session focused on implementation. If so, start with a review of how effective you have been in implementing your strategy recently, and what improvements can be made both in overall approach and specific ventures.
- If it’s a strategy session, don’t waste time drumming up revenue and profit targets. That’s not strategy, according to legendary strategist Richard Rumelt.
- If it is a strategy session, think about focus. In his bookBad Strategy, Good Strategy, Rumelt says the kernel of a strategy has three elements: A diagnosis, a guiding policy, and coherent action. Too often, we bundle all the possibilities together into a large, complex strategy meant to appease all factions in the organization but one that is impossible to clarify for staff. He notes that when Steve Jobs returned to a nearly-bankrupt Apple in 1997, he dramatically simplified and narrowed scope, tackling the fundamental problems with a focused and co-ordinated set of actions. “A good strategy doesn’t just draw on existing strength; it creates strength through the coherence of its design,” he writes.
- Usually we’re told strategy is about choice. And in the need for focus, strategy is about choice. In The Opposable Mind, however, Rotman School of Management Dean Roger Martin showed how many of the best strategies were devised by leaders who were faced with a choice between two less-than-perfect options and instead found a way to combine them into a more effective, alternative path.
- Luxury hotelier Isadore Sharp, for example, refused to accept that only two types of lodging could be built: small motels with intimacy and comfort, or large hotels with excellent location and amenities. Instead, he decided to create hotels with the intimacy of his original small motor hotel and the amenities of a large convention hotel. A. G. Lafley, when he took the helm at Procter & Gamble, refused to pick between low pricing or intensive innovation investment, embracing both.
- On a more prosaic note, if it’s a day-long strategy (or implementation planning) session, make sure you take some time for fresh air, whatever the weather. It stimulates the kind of sharp thinking you will need.
7. News From Our Water Cooler:
A Poem For Halloween
Halloween is upon us, a big night for the kids. But Halloween is a big season for business as well, the second biggest holiday in spending, which led entrepreneur Rhonda Abrams to compose a poem on her PlanningShop.com site, borrowing in tempo and style from A Visit from St. Nicholas. Here are some excerpts:
Merchants and restaurants
And businesses galore
Have found ways to use Halloween
To sell even more
“It’s a holiday for kids,”
I hear you say.
Yeah, just visit a bank
On Halloween Day
All the tellers wear costumes
Some even quite funny
And these are the people
Who’ve got all your money….
Use Halloween to let clients
Know of them you’ve been thinking
So they’ll remember your name
Through all their December drinking
Run a Halloween special
Offer good things to eat
Be creative, be clever
Find a trick, find a treat
So plan a promotion
With a Halloween tie-in
One that will get
All your customers buyin’
As I close out this poem
Only one thing’s to write:
“Happy Halloween to all
And to all a good fright.”
8. Closing Thought Top
“Organizing is what you do before you do something, so that when you do it, it is not all mixed up.”
— A. A. Milne