12 Key Lessons from the Latest Workplace Research

"Allow yourself throughout the day to see that you're doing what you're doing because you want to.  Instead of moaning that you "have to" shovel the snow outside, you can talk internally about what you want.  Think about the clean sidewalk.  Think about what you want, not what you don't want.  Talk to yourself about the good feeling you get in the cold fresh air when the task is complete and your muscles are pleasantly humming and the snow is all shoveled.  You want that, you know you do.  So accept it. Let it in.  You are happy, deep down inside, accept it.  It's not going to kill you or keep you from solving life's problems if you're happy.  In fact, it will help you.  Happy people have more creative energy."

 - Steve Chandler

Share this with your team and keep this in mind as you coach and engage your employees.

Guest Post:

In the last couple weeks, rock star academics Barry Schwartz and Adam Grant have outlined a new vision for work in op-eds published in the New York Times. It is a humanized vision that is not utopic, but grounded in research about what actually drives each of us to do great work.

This research builds on a growing body of new knowledge about how we need to change our approach to our careers and to how we build organizations. We are entering the golden era of work, driven by research that confirms that the ideal employee is human and not robotic (the unfortunate legacy of the industrial age).

We distilled the lessons from the top researchers into twelve key shifts in our approach to talent. It is a cheat sheet for employees and leaders to intentionally approach work effectively going forward.

Making these changes will not only radically increase the success of your organization but increase the wellbeing of your people. It is already happening in pockets of the workforce but it is time to make this the new norm. We need to 

re-imagine work and set a higher bar.

Spark the Change

You have a lot more influence in the world than you think. Share these changes with your colleagues and get the conversation going about how your organization can thrive. Show your support - spark the change.

 

Aaron Hurst's Imperative is to create communities that are empowered to realize their potential. He is the CEO and co-founder of Imperative. Check out his Purpose Profile or follow him on Twitter.

Stress - An Employee Walks In and Quits

"Thank you Rick. The employee who was on the fence gave me his notice on Friday. Because of your training, I was not surprised, we had thoroughly vetted his thinking (via weekly coaching conversations) and it was an easy step to let him walk away. As he was talking I heard your words "how hard would you fight to keep the employee", and I had decided a couple of weeks ago that I would not. Your training was invaluable in the process. I also had a plan in place in the event he did resign (a virtual bench), so there will not be any significant disruption in our operations."

This was an email I received over the weekend. My response to it was as follows:

"That is really is good to hear. Thank you for sharing this with me - it feels good that our discussions and your actions, more importantly, enabled this result. Knowing is not enough we must do and you did."

That's right knowing it not enough, we must do. We are all too busy, too uncomfortable to take 10 minutes a week to sit down with each of our direct reports and have a coaching conversation. We are all too busy, too uncomfortable to take an hour a week and focus on building a virtual bench of A Players that we can bring in when needed.

"Recruiting is a process, not an event. It must be ongoing and continuous. Can you imagine only going after a new customer when you lose an existing one?"

- Jack Daly

What is hard is stepping back and seeing that the reason we are so busy and uncomfortable is because we are not doing the very things (above) that will make us less busy and less stressed and more comfortable in the future.

"At most companies, people spend 2% of their time recruiting and 75% managing their recruiting mistakes." 

- Richard Fairbanks, CEO of Capital One

"If I am on the wrong road it doesn't matter how good I get at speeding down the road. It's the wrong road."

- Steve Chandler

Learn to coach - quit managing - and learn how to build a virtual bench of 'A' Players. But remember knowing is not enough you must do!

Here is my presentation on these subjects if you want to learn more:

• Video format streaming (no pause)

Video Format advance by click

You Could Have Had This For Nothing

"An employee was retiring from a company after 30 years. At his party he got up and thanked his fellow employees and then turned to the management team and thanked them for a great 30 years. Then he held out his hands and said "you know you paid me well for the use of these" and then he pointed to his temple and said "but you could have had this for nothing but you never asked."

- Unknown 

"I did then what I knew how to do and when I knew better, I did better."

 - Maya Angelou

As a follower of these posts, you probably know that I have evolved over the last few years from a buttoned down corporate executive who thought the path to success for a business was the black and white, common knowledge, old beliefs that we have all been taught and weaned on all these years.

I have learned so much and dispelled so many of these old beliefs. I have found the truth about business and the key actions that need to be taken to build a profitable business and provide the owners and the employees more money, more time and a better team.

You see, unlike what I was taught and practiced in my career "to improve profits we need to raise prices and cut expenses", I have learned that there are only two real levers to profitability: Gross Margin % and Labor Productivity.

We were always taught to budget labor (it was an expense), add a little for health insurance increases and raises, and that was the last we looked at it until sales were down, profit was tanking and we had to reduce our labor force.

I now know for certain that Labor must be looked at as an Investment.

How can I maximize the return I can get on that investment? That is the true profit driver.

I have confirmed over and over the following premises:

• 'A' Players may cost a little more but they produce 2 times the average employee
• People who are engaged, share your values and enjoy coming to work every day, will increase the productivity of the company
• Annual reviews and standard management techniques don't work, you have to coach, not manage

In other words, the better the individuals are on the team, the more they are engaged, the more they enjoy working there the better the return we will get from that investment and the higher our profits will be. (Not to mention a better place for you and the entire team to come to every day).

I want to introduce you to a man who has developed the best engagement program I have yet to see, and a program that will increase the engagement, the productivity and thus the return on your investment in labor.

Paul Akers developed this simple yet powerful program, no it is more of a culture, that he has been using in his company for several years and is now spreading the word all over the world.

It is called "2 Second LEAN", and it's the name of his book.

It is a simple, fun process to engage the whole company in:

1. Seeing Waste
2. Empowering them to fix what bugs them everyday
3. Videotaping the before and after

Many of my clients have recently implemented this in their companies and the results so far are inspiring.

Here are a few select videos from some of the hundreds of videos that he has on his website. Watch a few and catch the bug for your company.

Paul has a tour every single day from companies around the world. I think this video captures the magic: 

Bombardier Tour - What they learned & why it works (14 minutes)  http://www.youtube.com/watch?v=E3QxouC6r38&hl=en&fs=1

(If you want to know the whole story, watch the Morning meeting (53 minutes).) 

Paul's story, "LEAN is Simple" (1:37 hours):

Knowing is not enough - we must do.

Where the Hell Is My Cash - Part 2

"80% of small businesses don't make it to their 5 year anniversary and a great majority fail even though they make a profit. They fail because they run out of cash." 

- Rick Wallace

As a follow up to last week's blog I wanted to offer the first in a series of solutions to the age old problem of determining where the cash went. We look at the P&L and see we made a profit but when we go to write a check, there is little or no money in the bank account. Where the hell did the cash go?

The P&L is an accounting document that is developed with accounting principles geared to the rules of the IRS. It is a valuable and very informative document, but it does not show us what is happening to the cash.

Every accounting package has a report called the "Statement of Cash Flow" - a document that at the bottom tells you whether you are cash flow positive or negative, over a given period of time, and how much cash you should have on hand at that moment.

Here is a short 6 minute video that introduces you to this document:

https://youtu.be/G9-MxUTCyyM

Every time you look at your P&L, look at this report and you can begin to understand and use this document to see how cash is flowing in and out of the company.

Remember you can show a profit on your P&L and go out of business because you have no cash.

Where the Hell is my Cash?

"My income statement shows a profit and I'm constantly busy. SO WHERE THE HELL IS ALL THE CASH?!"

- Business Owners Everywhere

The following is a post from my friend and colleague Tony DeSimone. If you have ever uttered the words above take special note to this post.

August 25, 2015 

Anthony DeSimone

WHERE THE HELL IS ALL MY CASH?!

  

I'm currently working with the owner of a restaurant.  Back in 2013, Jeff was feeling very confident about his business because the restaurant made a profit of about $50,000. That confidence grew even stronger as Jeff's business continued to do well at the start of 2014.  All of that changed, literally overnight, when tax time came and Jeff had to pay his 2013 Federal and State tax bill.  

He quickly realized he had no cash and then made a statement that many business owners make. He said, "My income statement showed a profit, we were constantly busy but we never seemed to have any cash. Where the hell is all the cash?!"  

(My comment: This a common problem for many business owners and the main reason only 20% of small businesses make it to their 5th year anniversary. They make a profit but they run out of cash.)

One of the primary reasons this occurs is because of the disconnect business owners have between how the inflows and outflows of cash get recorded on the financial statements.

The income statement shows only half of the cash picture.  Many business owners (like Jeff) ignore the balance sheet. It's a common mistake.  The income statement and the balance sheet are connected. Even if you don't understand how, or why, from this point forward, just remember that those two statements are connected and in order to get a full picture of how your company is doing, you have to understand how to read both income statement AND balance sheet.  

The two together make a great pair but even trained CPA's have to learn how to read those two documents to see where the cash went. So how can I expect you to learn that? I can't - read on.

Jeff thought he had $50,000 in cash because of his $50,000 profit but during that year, he used most of that cash when he paid down some of his debt and purchased new equipment in the restaurant in the amount of $45,000.  Paying down the principal on his debt and buying equipment are not accounted for on the income statement, therefore, they did not affect his  "profit", both of those actions were accounted for on the balance sheet.  Had he understood both reports, he might have figured it out but, like many business owners, he didn't know how to read those reports.

OK, I know what you're thinking - "This is beginning to get real confusing" - and that's exactly why so many business owners ask, "Where the hell is all the cash?!"

The concept behind how the balance sheet and income statement work as a pair is difficult enough for students majoring in accounting - it's far more difficult to teach an individual who not only isn't majoring in it but really has no interest to learn.  

There was no way that I was going to be able to teach Jeff the intricacies of how the income statement and balance sheet work together - so I didn't.  Instead, I taught him how to properly track and forecast cash flow.

So my advice to you if you're struggling with getting your arms around where all the cash is, don't waste your time trying to learn how to read the income statement and balance sheet.....at least, don't start there.  

Start with focusing on cash flow. It's far more advantageous and here's why:

• There's no disconnect between the inflows and outflows of cash and where it gets recognized on the income statement or balance sheet.  
• It doesn't matter if you used the cash to buy equipment (a balance sheet item) or to pay the utility bill (an income statement expense) because when focusing on cash flow, every dollar received or spent is treated the same way.
• When focusing on the "ins" and "outs" of cash, the timing issues created with accrual accounting are nonexistent
• It's easier to track cash on a timely basis
• The owner doesn't need to wait for a report to be created at the end of the month, the owner can review the bank cash detail immediately
• You can operate your whole business with just focusing on and tracking cash

When I met Jeff, his line of credit was tapped out at $75,000 and he also borrowed $70,000 at a very high interest rate from his credit card company.  He was struggling to pay payroll and losing sleep.  

Jeff had absolutely no experience in accounting but he learned how to operate and maintain the very user friendly cash forecast spreadsheet in three, one hour sessions. Once fully implemented, Jeff had a tool that gave him clarity on his current cash position and, more importantly, the expected cash balance months into the future.  

Jeff was no longer paralyzed with uncertainty and immediately began making decisions and changes which played a pivotal role in helping him to completely pay off his credit card balance and line of credit debt.

But, even without implementing the cash flow spreadsheet, here are some things, you can do to get your arms around your cash and understand it better:

• QuickBooks (and most other accounting software programs) creates a standard Statement of Cashflows report. Print it out and review it at least monthly.  
• This report will show you the 'ins' and 'outs' of all the cash from both the income statement and balance sheet.
• Upon receiving your monthly bank statement, immediately review it for anything that looks unusual.
• Review your payroll registers every pay period for anything that looks unusual.
• If you ask your bookkeeper a question and the answer doesn't feel right - investigate further until you're satisfied.
• Upon receiving your monthly credit card bill, immediately review it for anything that looks unusual.
• Don't give your bookkeeper check signing authority - sign your own checks.

So forget the balance sheet and the income statement.  Start with focusing on cash flow! Master that and you'll never ask "Where the hell is all the cash?!" again.

You too can have the same vision and clarity to confidently make the proper changes in your business and begin slowly to actually see a growing cash balance on your bank account.  

My addition:

If you are interested in learning more about his cash flow forecasting tool, you can contact Tony at 

tony@youretheexpertnow.com

Regards,

Rick Wallace