84th Edition – September 13, 2020
I am a survivor, but not a financial success.Paul Downs, Founder of Paul Downs Custom Conference Tables and Author of Boss Life
1. Would You Read a Book About Someone Who Says He’s Not a Financial Success?
Not only did I, but I interviewed the small business owner from Philadelphia who wrote those words in his 2015 book, Boss Life.
I know we all love books like Shoe Dog where the flawed hero is triumphant at the end – a similar story arc to Jeff Bezos, Bill Gates, and Warren Buffett.
We need stories like Paul’s because he tells us what it’s like being a small business owner at the office and at home where he and his wife have a special needs child.
How many CEOs in their books tell you their cash balances at the beginning of each month and how they quit paying themselves for months (this was a business that was already about 30 years old at the time)?
It’s a long interview, but consider listening to it here.
2. From Hidden Figures to Hidden Messages
I loved the 2016 feel-good story of the African-American women who were mathematical wizards in helping to put astronauts into space. If you liked the movie, there’s a similar storyline you might find fascinating.
This past week, I just learned about the U.S. women of World War II who were recruited to crack enemy codes. In late 2018, journalist Liza Mundy told their story in the book Code Girls.
You and your fellow business leaders can learn that nothing is impossible when it comes to finding, hiring, and training new staff in a role that’s completely foreign to them. Granted, these women were academically intelligent, but they entered an arena where the U.S. lacked skills and capabilities in cryptography.
Anything is possible when it comes to employee onboarding.
3. GoDaddy’s Net Promoter Score
My email through my consulting practice was hacked this week, and I felt both infuriated and helpless.
I use Office365, and I signed up through GoDaddy (don’t ask me why – that was 2014). GoDaddy did not cause the malicious hack. But their customer service and follow-up messages left me feeling like a guilty criminal. Ahem, I was the victim. And so that got me curious about their Net Promoter Score.
Incidentally, be careful if you use NPS. It can lead to false-positives and I’ve seen some of my clients even game the system. Consider skimming or rereading this HBR article about the purpose of NPS. Remember, NPS is a theory, not a science. You should have a handful of other key measurements that are predictive of customer loyalty and satisfaction.
4. A Piece of the Action
Does your business share profit with all staff members? if not, why not? Fear? Can’t afford it? We’ve never done it before?
In the 1950s, splitting profits was unusual for any company in trying to get staff more engaged in the business.
Les Schwab first tried an informal profit split with two of his first employees. The profit share was 50-50. When he built his second tire store, he formalized the program.
The key to such systems is first testing, training staff, then tracking results. Repeat the process. Some of my best clients tweak their programs during the first years after implementation.
By the way, the Les Schwab story is covered in Intelligent Fanatics Project, a book I require for all up-and-coming financial leaders.
5. Closing the Books
“It just drives me crazy that we have to wait two weeks at the end of every month to get numbers about stuff that has already happened, and when we do, it takes another five days to rework the accounting reports into a management view that people can actually use to make some decisions—it is crazy.”
The quote above is a fictional conversation from Steve in the book, The Management Mythbuster by David Axson.
If you are my client, the benchmark for getting the financials closed is one day. Even that is just, “Okay.” I want them done before midnight on the last day of the month.
If you work in retail, distribution, or food service, you should also be reporting your financials weekly by each Monday morning down to gross profit and including key SG&A line items like compensation, marketing, and sales costs. No excuses. These weekly, historical financials should also be tightly integrated with your weekly cash flow forecasting system too.
If you are not meeting these timeframes, spend some time this week figuring how to make it happen. Better yet, figure out why it should happen. Your CEO will love the answer.
Thank You For Reading. Thank you for making this a successful newsletter.
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Always be learning.
Title Photo Attribution – Image by Paul Downs Custom Conference Tables and used with permission.