The 5 management truths for building a Fun business

TTTMBF the revolution

The Ten Truths for making business Fun

The Ten Truths for Making Business Fun

And building a business that sustains you for years to come:

This is the third article in a monthly series on Making Business Fun: This article is about the 5 business management Truths

The last article laid out the foundations of a fun business and you can read it here

The articles are based on my book, The Ten Truths for Making Business Fun, published in 2011. All of my books and other resources are available for free here

Building a Fun Business: The five building blocks

And the hard hitting truth about business management

TTTMBF the management truths Would you like to move out of overwhelm and start building a Fun Business that sustains you for years to come? The truth is that once you’ve laid the foundations (using the Hedgehog Principles), it’s all about learning to manage your Fun Business properly.

I won’t lie, you will need to focus on a few fundamentally dull things, small business management in other words, like goal setting, team management,  planning, systems and measuring. However, I have a few shortcuts and strategies up my sleeve that make the process markedly more exciting…

A Fun Business Has Flexible Goals

TTTMBF goal setting Everyone knows that goal setting is a good idea. It engages your team. It improves your decision-making. It helps your business deliver on its promise. What’s more, I don’t believe your business will ever become Fun if you don’t practice goal setting effectively. To manage your business well, to build a great Fun Business, you simply can’t avoid Goal setting.

Still, goal setting is surprisingly difficult to do well. It’s hard to get people onboard. It’s even tougher to keep everyone accountable. Our world is also changing every day, so goals must be continuously adjusted to suit new realities.

SMART is a well-established tool for creating impactful goals:

  • S pecific
  • M easurable
  • A chievable
  • R elevant
  • T imeframed

I like the idea, but I believe that adding three more letters to the acronym makes it exponentially more powerful:

  • S tretch (you can just see yourself reaching for it)
  • I nspiring (for you)
  • P ersonal (about your personal achievements and growth. Read: not about achieving a particular profit level or buying a Porsche because unfortunately, those material things won’t motivate your subconscious brain!).

I always invite my clients to decide on a large, visionary goal for the future (Jim Collins refers to this as the BHAG or “Big Hairy Audacious Goal” in his book, Built to Last) that meets the SMARTSIP criteria and then break it down into a medium-term goal and a goal for the year.

A Fun Business Engages Everyone

TTTMBF helping hand Lots of businesses proclaim that their people are their greatest asset (and to be honest, whenever I read that statement on someone’s website, I run a mile), but most of them generally belie their beliefs with their actions.

Most companies prefer not to think about the fact that a business IS its people, and your business only gets to make money if your people let you. Business Management is about people first and foremost.

If your employees are only interested in their paycheck, you will always struggle to make a dollar and business will feel anything but FUN. On the flip side, if your whole team is enthusiastically pulling in the same direction then your business will move mountains.

So, how can you achieve said nirvana?

  1. Hire the brightest: Find people whose attitude, energy, enthusiasm and resourcefulness matches your culture and team dynamics.
  2. Move beyond money: Listen to people, recognise their achievements and give them the right tools to do a meaningful job well.
  3. Get the team involved: Bring your people into all the processes, planning meetings and rhythms of the business.
  4. Remember that employees are people too: Don’t just dictate – get people involved in developing their own goals.
  5. Play the game of business: Get your people to start thinking like team members who are playing a game that they all enjoy and want to win.

A Fun Business Has a “Living” Business Plan That Drives It Forward

TTTMBF looking into the future, planning Human beings don’t accomplish anything without a plan. In fact, some say it is our ability to plan that sets us apart from other animals. However, most small businesses do not have a formal business plan, and if they do, it generally lives in a dusty bottom drawer.

Having a written plan (AKA one that exists outside of your head) allows other people to engage with it and understand where the business is going. It allows you and others to check progress, brainstorm, make good decisions and maintain focus on the important stuff.

Most business owners know this. I’m sure you do too.

The sticking point comes from a simple misunderstanding. It comes from believing you are expected to develop an externally focused plan in the format we are taught by accountants, consultants and government bodies (read: not designed to be useful for you, the owner) when an internal business plan is what you need.

An internal business plan is a shareable and succinct “living” document. It is created collaboratively and revised frequently. It is designed to support decision-making and internal communication about the direction of the business.

Trust me, once you let go of your idea of what a business plan “should’” look like and just get around a table with a flip chart and a group of your people, you’ll find that business planning is not actually daunting at all, but instead really powerful and Fun.

A Fun Business Has Rhythm and Regularity

TTTMBF rhythm Entrepreneurs are the busiest and most guilt-ridden people on the planet. They work long days, dream about their businesses at night and repeatedly scorn themselves for not living up to some impossible standards laid out by a critical inner voice [HYPERLINK TO BLOG POST 1].

As a result, most business owners operate as crisis managers. This situation has many undesirable consequences: dropped balls, neglected business development, burnout, missed family time, stomach ulcers, or all of the above. An atmosphere of stress and last-minute problem-solving also starts to develop company-wide, leading to low morale and high employee turnover. You get stuck in a loop where you don’t have time to foster predictability, develop systems or train people to handle the crises themselves and because of this, there will always be another crisis.

The way through this dilemma? Building rhythm and regularity into your business.

One of the best first steps you can take is to start a weekly operations meeting where everyone reviews the previous week and plans for the next one (a better one). Want to make it effective? Start and finish on time. Follow an agreed agenda. Ensure everyone is present. Don’t allow distractions. Focus on solutions.

Next, you might decide to look at the systems in the business because systemisation is an important contributor to a sense of calm predictability. This could be as simple as creating a script and a standard form/checklist for inbound office calls.

Remember, people want to feel safe, and safety starts with knowing what the future holds.

A Fun Business Measures the Fun

TTTMBF measuring fun Beyond the most obvious measurements, every business has different priorities. However, there is one key measurement that all business owners should consider starting with: Fun.

Fun is the only success factor that cuts across and influences every aspect of business.

One of the reasons Fun doesn’t usually get measured is that most people believe you can’t because it is intangible. But you can measure intangibles such as Fun. Quite easily and accurately as a matter of fact.

Let’s say you asked your team every Friday afternoon to give an anonymous rating on your Fun in Business scale from 0 to 10, with 10 being the most fun you’ve ever had in business and 0 being the opposite. Next you collate and average those numbers and come up with a single “Fun number” for the week in business.

You could then have a staff meeting every Monday morning and share last week’s Fun number, asking the team what you could all do to get the number just a couple of points higher in the coming week.

The first few times you do this, your team will make silly suggestions about doubling their wages and paintball outings because it is all such a novel idea. However, I guarantee that soon enough it will become obvious to everyone exactly what real business Fun is all about and you will start having practical, productive conversations that make exciting things happen.

Your Homework (The Fun Kind)

Here’s a couple of steps you might take in the coming week(s) in respect of each of the management truths:

For Goal setting:
  1. Thinking about the SMARTSIP structure I describe above, pick a date, ideally no more than a year from now and no less than 6 months away ad create a Goal (or set of Goals) for you and your business that inspires you and is both a stretch, yet achievable,specific and  measurable and meaningful to you personally and motivating for your staff
  2. Create a rough draft monthly plan for achievement of your Goal with monthly milestones
For your team:
  1. Get your team involved. Organise a meeting with your team and introduce the Goal and draft plan to them and work with them to firm up the plan
  2. Assign specific tasks from the plan to team members or groups of team members
  3. Agree on monthly meetings with your team to update the plan, and agree on next months actions and responsibilities
For your business plan:
  1. Incorporate your Goal in a longer term plan. Where do you want your business to be in 5 years, what is it going to look like, what is its focus, how big is it, what new developments have taken place.
  2. On your own or with your team (or part of your team) create a SWOT and create actionable targets to address the top 3 items from each of the sections (see more about SWOT here  and also here )
For Rhythm:
  1. Start by blocking out a small amount of time each week for yourself (as little as an hour each week or as much as you can manage), to do nothing but think and plan and develop new ideas. Phone off, can’t be disturbed, go off site to a cafe if you need to make sure you’re not disturbed.
  2. Implement a weekly half hour meeting with your staff to set up the week… Celebrate the wins from last week and plan to have more wins this week. Make sure it’s quick, efficient and doesn’t talk about why certain things went wrong last week, simply acknowledge the things that went wrong and focus on making sure things go right this week instead.
For measuring the Fun:
  1. In your weekly and monthly meetings, start by asking everyone for one small tiny little thing they can do themselves to mak the week ahead more Fun
  2. In your weekly and monthly meetings ask the staff for one thing you can do to make business more fun for everyone in the week ahead
  3. Start recording the fun suggestions and the fun number (more about measuring Fun in business here)

More on this topic:

 

Business Is All About The Numbers

numbers

Business is a numbers game

What does it take to make a success of your small business… how can you avoid adding to those frightening statistics about failure rates of small business.

In this series of articles and associated webinars and workshops, by Roland Hanekroot you will learn the basic concepts and get the knowledge need to become a successful ‘Business-Owner’, as opposed to a struggling ‘Business-Doer’.

Format

The format of each episode in the “First Steps” series is to explain the basics of the topic and then in line with the principles of New Perspectives business development programs, to suggest some “First Steps” you can take straight away to put the knowledge into action.

The Numbers

numbersIn the fifth of these articles we’ll look at the numbers and ask:

How do we do business by the numbers and why?

Doing business without numbers is like playing football without a scoreboard. You simply cannot run any kind of business for any length of time without keeping your eye on the numbers.

This is a fact.

You may not like numbers and you may believe you are no good with numbers and you may want to just “get on” with running your business.

Well I have good news and bad news for you:

  1. Bad news: You’ll simply have to get over your dislike and your hurdles.
  2. Good news: Numbers are a lot simpler than you think, you don’t need all that many of them and you won’t have to find them yourself.

Measurement

Numbers are important because they are the result of measurement and measurement is what allows you to manage and develop a business and stop it from going backwards.

For example you have to know (measure) what is in your bank account if you want to stay alive… No argument there I imagine? Well your bank balance is a number.

You may also want to measure the effectiveness of the money you spend on marketing and again the answers will come in the form of numbers.

You may want to know if you have enough stock on hand to supply your customers in the coming week… The answer is a number.

You may want to measure why your bank balance has been going backwards in the last three months… The answer will be in the numbers.

I trust I’ve convinced you that numbers are key and you just have to get your head around them. But which numbers?

Lets have a look at one of my Business Bedtime Stories.

A Business Bedtime Story

(The ‘Business Bedtime Stories’ are real world case histories that illustrate this months topic in some way)

Once upon a time… a long long time ago in a country not unlike Australia… Michael had a carpet cleaning business …

carpet cleaner Michael owned a carpet cleaning business in Sydney and Michael had ten vans on the road with 16 staff. Michael’s life was full of crises, most of the crises involved his staff not delivering the customer service or quality that Michael’s clients expected.

Michael kept thinking:

“If only I had a simple way to measure “Good Work” and “Good Service” that I can apply across the board and use to manage the performance of the guys ?”

Working with me as his business coach Michael learnt that you can create relative measures for intangible things. For example If you were asked to give a score out of ten for how happy you felt at this moment, where “10” was that you felt delirious and “0” meant that you were at risk of self harming, you might say “6”. If I were to ask the same question again tomorrow you might answer “7”. This would lead us to reach a valid conclusion on your state of happiness tomorrow relative to today.

This same principle can be used to measure all sorts of intangible things in life and lends itself really well to measure quality, service and satisfaction levels.

Self-scoring

Michael and I went to work to create a self scoring system, where a staff-member filled in a small form at the end of each job in which he gave himself and the just completed job a series of scores out of 100 on a number of different measures (for example: “Give yourself a score out of 100 for being punctual”)

The forms would be collated in a spreadsheet and the numbers averaged for each staff member and for the business as a whole. Every week on Monday morning Michael received a report from his admin assistant with the average performance numbers across the company for service and quality in the last week. At the same time Michael had his assistant call 10% of all clients every week and ask them to rate the completed jobs in a similar manner and these ratings were listed side by side with the staff member’s own ratings. The staff members would be given access to the customer ratings as well and as required Michael would sit down with individual staff members, compare notes and generally help the staff improve on their ratings and become more accurate in their self-scores.

This scoring system completely changed the way Michael thought about managing his business and he realised that the way to build a great company and great business value was to step back and create management systems, scoreboards and dashboards.

Five years later Michael sold his business for a price much higher than he could ever have hoped to gain when we first met.

And Michael as well as the new owners of Michael’s business will live happily ever after… The End

Lessons from Michael:

So let’s have a look at what we can learn from Michael:

  • First: There are many other numbers that we can focus on besides money in the bank
  • Second: Measuring intangibles like punctuality is actually quite simple.
  • Third: Measuring an aspect of business allows you to improve it.

Deserted island

deserted island Here is what I’d like you to do: Imagine that you are banished to a deserted Island. And for a period of time, say 6 months, the only information you get about your business comes from the weekly mail boat. The mailboat can deliver you only a single piece of paper with maybe 15 numbers on it and the mailboat will wait for 15 minutes to take your instructions back to your business for that week.

What are the 10 to 15 numbers that will tell you how healthy the business is and allow you to make quick management decisions and instructions that you can send back?.

Most businesses will have a couple of common numbers, such as bankbalance and profitability on their mailboat report, but beyond those common numbers every business owner has his or her own priorities that tells him/her what’s going on. For example, in my business I constantly need to know how many inquiries I have had in the past 6 months, because it gives me a really good indication of the number of new clients I’ll get in the next 6 months. In another business a critical indicator might be the average number of days it takes to get paid, because if this number goes up, the business will to run out of cash.

Don’t do it yourself

I mentioned in the ‘Good News’ that you don’t need to be the one who finds the numbers.

finger on the pulseThis is actually a critical point. You as the business owner are primarily responsible for keeping your fingers on the pulse, but I want to encourage you to delegate the production of the numbers to others as much as possible.

There are a whole lot of reasons why you should delegate getting the numbers to others. This article is not the forum to go into the  detail of those reasons, but let me assure you that business owners who truly manage their business by the numbers, get one piece of paper every week, with the critical numbers from their bookkeeper, one from their sales department and one from their production department. It is simply not the job of the business owner to dive into the bookkeeping system themselves to find the numbers; that is not ‘best use of your time’

So start thinking about that deserted island, what do you need to see on that single page mailboat report to enable you to manage the health of your business?

Your First Steps:

As mentioned at the start of this article, here are some resources and actions you can take right away, that will get you started on implementing the principles I discussed:

  1. Go to the resources page http://tiny.cc/numberslpage the following resources will help you start to manage the business by the numbers
  2. A sample dashboard with critical numbers of a past client of mine in the catering industry.
  3. Article about business dashboards by Valerie Khoo in the SMH

About the author and the Masterminds sessions

roland Roland Hanekroot is a business coach who works with Small business owners to help them have more Fun in their businesses and build businesses that sustain them for years to come. Roland is also the author of “The Ten Truths books for Business owners” (more about the books here: http://thetentruths.com.au)

Every month Roland Hanekroot runs a business development workshop as well as a webinar called “The Small Business Masterminds” more information here and to register for the next webinar or workshop, follow this link: http://smallbusinessmasterminds.com.au/ The first time is free.

 

Masterminds Observations… More Meetings

verne harnish

verne harnish Business Masterminds Observations

 

Predictability

If you enjoy this article click here to get a copy of one of the “The Ten Truths” books for business owners for free

Another thought about the Rhythm of business and how to make business as predictable as possible from Verne Harnish’ book: “Mastering The Rockefeller Habits”.

Link to Amazon: http://amzn.com/0978774949

Verne says to have more meetings, not less.

Verne believes quarterly strategy meetings with your staff are not enough. You need to have a monthly, weekly and even daily schedule of meetings to ensure that the strategies and deliverables from the less frequent planning meetings are actually carried out.

I know that many management gurus would baulk at that statement, because the amount of money and time wasted in business in meetings is staggering.

But Verne is right. Strategies and plans without regular, formal and structured follow up meetings, never lead to the outcomes you’d hoped.

Do learn how to make your meetings super-efficient though (For example, I know of a company where all meetings are held standing up, so that the meetings don’t take a minute longer than absolutely necessary).

See – Feel – Change

Business Masterminds Observations

SEE-FEEL-CHANGE

switchI read a wonderful book by Chip and Dan Heath a little while ago called “Switch”, “How to change things when Change is hard”

The book is full of wonderful anecdotes and really clear explanations of powerful concepts about change.

The authors explain how most people believe that if something needs to be changed, that we need to go through a process of ANALYSE-THINK-CHANGE, build a business case in other words with figures and stats and graphs. Sadly that turns out to be one of the least effective approaches to building a momentum for change… A vastly more effective approach is SEE-FEEL-CHANGE. In other words let people see and feel the problem and the effect of the problem and help them see and feel the change and the effect of the change to get them on board.

So if you’d like people to “get” why something in your business needs to change… demonstrate… speak to their feelings… tell stories

1001 Business Bedtime stories… Michael Cleans Carpets and Builds Dashboards

1001 Business Bedtime stories…… Truth 3, Finger on The Pulse

Truth 3, Planning
Little richard measures and plans his business

Here follows another one of the “1001 Business Bedtime Stories” … Every story comes straight from the New Perspectives Small Business Bootcamp, stories of business and courage and they illustrate an aspect of one of The Ten Truths… You might recognise some of them from your own experience.

Once upon a time… a long long time ago in a country not unlike Australia… Michael had a carpet cleaningbusiness …

Michael owned a carpet cleaning business in Sydney. Michael had 10 vans on the road with carpet cleaning equipment and Michael would book the jobs and do the marketing and generally run the company.

Michael’s life was full of crises, in fact most of his days involved extinguishing brush fires and he would never know where the next crisis would come from. Most of the crises involved his staff not delivering the customer service or quality that Michael’s clients expected and the only way to manage these issues was by Michael going out and fixing the problems himself.

There were many factors at play of course but Michael found it difficult to keep his staff accountable to specific performance criteria on quality and customer service. How do you measure the quality of a cleaning job and how do you measure the level of customer service and satisfaction you have delivered? But as the saying goes, you can’t manage what you don’t measure.

“If only I had a simple way to measure “Good Work” and “Good Service” that I can apply across the board and use to manage the performance of the guys ?” kept going round and round in Michael’s head.
Michael was at the end of his tether.

The Bootcamp

Working in The Bootcamp with me, Michael learnt that you can create relative measures for intangible things. For example If you were asked to give a score out of ten how happy you felt at this moment, where “10” was that you felt delirious and “0” meant that you were at risk of self harming, you might say “6”. If I were to ask the same question again tomorrow you might answer with “7”. This would lead us to reach a valid conclusion on your state of happiness tomorrow relative to today.

This same principle can be used to measure all sorts of intangible things in life and lends itself really well to measure quality and service and satisfaction levels.

We went to work to create a self scoring system, where a staff-member filled in a small form at the end of each job in which he gave himself and the just completed job a series of scores out of 100 on a number of different measures (for example: “Give yourself a score out of 100 for being punctual”)

The forms would be collated in a spreadsheet and the numbers averaged for each staff member and for the business as a whole. Every week on Monday morning Michael received a report from his admin assistant with the average performance numbers across the company for service and quality in the last week. At the same time Michael had his assistant call 10% of all clients every week and ask them to rate the completed jobs in a similar manner and these ratings were listed side by side with the staff member’s own ratings. The staff members would be given access to the customer ratings as well and as required Michael would sit down with individual staff members, compare notes and generally help the staff improve on their ratings and become more accurate in their self-scores.

This scoring system completely changed the way Michael thought about managing his business and he realised that the way to build a great company and great business value was to step back and create management systems, scoreboards and dashboards.

So she did… and it took a lot of courage… Michael created 3 different weekly dashboards: one for operations, one for marketing and one for finances.

Now 5 years later Michael is negotiating to sell his business. The price he is likely to sell for  is at least 3 times what he would have been able to sell it for a few years back, because now he is selling a business that operates almost independently from Michael himself.

And Michael as well as the new owners of Michael’s business will live happily ever after… The End

Ask yourself… Where will you find the courage to make Profound things happen in your Business?

Find out more about the Small Business Bootcamp here

Or follow this link to New Perspectives Business Coaching

1001 Business Bedtime Stories… Laura Had a Fashion Label

1001 Business Bedtime stories… Laura had a fashion label… Truth 2

Here follows another one of the “1001 Business Bedtime Stories”. Every one of the “1001 Business Bedtime Stories” come straight from the New Perspectives Small Business Bootcamp, stories of business and courage and they illustrate an aspect of one of Ten Truths. You might recognise some of them from your own experience. This story is about Truth num 2: “A Business without a plan achieves everything in it”

Once upon a time… a long long time ago in a country not unlike Australia… Laura had a fashion label…

Laura had a little shop in Sydney and a fashion label and a small dedicated band of followers for her unique brand of office fashion for successful corporate women. Laura’s business was 4 years old and although it was gratifying to see the same customers come back season after season for her latest lines and to know how happy her customers usually were when they left her shop, Laura felt strongly that there was a wonderful opportunity for her to grow the business and bring her unique designs to a larger audience, but she just didn’t know where to start.

“Should I get involved in some social media, or maybe I need to take the plunge and open a shop in the cbd or should I look for a partner in Melbourne or knock on the door of Myer, and how will I finance an expansion, and can I continue to manufacture in Australia, and what if I am not good enough to manage more staff and various localities, and is the market in Perth the same as the market in Sydney, and what if Cue designs simply decides to knock off my designs, and if I grow will I lose the loyalty of my customers” etc etc etc

“There are so many what-ifs and so many different priorities to choose from, how do I know where to start?” was the constant refrain in Laura’s head.

Laura was stuck in a classic decision paralysis loop.

The Bootcamp

Working in The Bootcamp with me, Laura came to realise that the only way to cut through her dilemma’s was to face her lack of confidence of business planning head on and get to work with me to develop a thorough Business Plan, in a form that worked for her.

So she did… and it took a lot of courage… but Laura got under way and together with me she started creating a big mind-map in which she put all the dilemma’s and questions and start to work systematically to order them, prioritise them and answer them.

The mind-map evolved to a series of small one page documents for different aspects of the business and a time line with projections for different stages of the business development.

From there Laura simply started to work progressively through the plan, and every time another question or dilemma came up she could go to the plan and the mind-map, and find a place to house the question. This simple process of planning allowed her to be able to focus on the immediate step ahead without being afraid that she will forget something crucial.

Making this step to getting involved in an appropriate level of consistent planning is the one thing that started to shift Laura’s business into a new realm.

Now, 1.5 Years later, Laura has opened a second shop in Sydney. The planning process has helped her understand that her opportunities in the short to medium term are not in the CBD, nor in large scale production Off-shore, but in a series of small unique shops in specific inner city suburbs like Balmain and Mosman, followed by similar expansion in Melbourne and other major cities in Australia.

Laura is looking forward to the next 5 years of consistent controlled growth and building a loyal national following of her label.

And Laura and her business lived happily ever after… The End

Ask yourself… Where will you find the courage to make Profound things happen in your Business?

Find out more about the Small Business Bootcamp here

Or follow this link to New Perspectives Business Coaching