Tips and stories to add value to you and your organisation
I’m a words guy really. Always was. As a child I loved learning new words and shoe-horning them into conversations. Not always with great success though. I distinctly remember a dinner conversation when I proudly used a new word and was soundly told off for it.
Apparently, describing your sister’s juvenile joke as cr*p, when you’re 9 years old, is not a laughing matter. Who knew that was a swear word? Not me.
Luckily I’ve learned all the other swear words now so know what not to use when in polite society.
Numbers always foxed me. They seemed like villains, that wouldn’t stay still and refused to be easily manipulated. For example, I’d find it easy to spell ‘receive’ (i before e except after c) and ‘parallel’ (one r and two l’s), but multiplying 18 by 14 or dividing 525 by 75 took a while to master.
(Answers at the foot of the page, for those of you trying to work these out in your head. Good for you for not cheating with a calculator, like I did).
What surprises me is that I’ve also become a numbers guy in business. Not complicated numbers, you understand, but simple honest ones.
I like business numbers and have been fortunate to have studied finance and statistics as part of my ongoing CPD.
Without the numbers in our head, we are working blind. Would you drive through a 30mph zone and past a speed camera without a speedo or rev counter in your car? Probably not.
Amazingly this is exactly what many people do in business. This is bad form. If we’re in business then we absolutely have to know the numbers. We don’t have to like the numbers, we don’t even have to work them out (that’s why God invented accountants), but we do have to know them.
Put simply, not knowing them is at best careless and at worst irresponsible.
And on that jolly note, now everyone is all fired up with numerical enthusiasm, here’s the quiz for you.
Pen and paper ready? Answer honestly and do it from memory. Knowing the numbers means having them in our head for instant recall, not having them parked on a spreadsheet that we rarely read.
You can round up or down to the nearest 100 or 1,000. Here goes…
Q1. How much cash does your business have in the bank today?
Q2. How much cash will it have at the end of this month and in six months time?
Q3. What is your year end net profit likely to be, after tax?
Q4. What is the total value of unpaid invoices?
Q5. How much cash do you have in a reserve account, for contingencies?
Q6. How much VAT are you likely to owe at your next statement?
Q7. How much tax are you likely to owe at year end and how much have you saved so far?
Aren’t these great questions! Annoying ones too, probably, for some of us.
I can answer all of them, to the nearest £1,000 as I always update my P&L forecast and cash flow forecast at the end of each month and/or when something significant changes in my business.
I like to know the impact of things. Income down? Delay that expenditure. Income up? Put some more cash into the reserve account.
I’m not perfect and I am diligent …and that’s the place to be.
And I’ve learned the hard way by managing a loss making business in my younger days. I did turn it round in the end, but counting the pennies and making tough decisions was an ‘education’ that’s helped me in my own business.
We all have to pay our dues!
How did you get on with the quiz? A score of 5/7 and above is pretty spiffing. 4/7 is okay for today. 3/7 or less means please diarise some number crunching this week.
I’m not a natural numbers guy and in business we have no choice. It’s like driving sensibly, we have to do it, or the law catches up with us eventually.
Have fun with numbers this week!
Next week: 3 Essential Business Card Tips
Answers: 18×14 = 252 // 525÷75 = 7
Wouldn’t life be interesting if, once a year, we sat down with our life partner and gave them an appraisal? Obviously they would love us to point out when their cooking was poor, or when they made us late to the cinema. Relationships would flourish with this kind of honest feedback!
Ok, maybe not.
The appraisal wouldn’t account for all the love and joy they bring into our lives and the fact that dinner was cooked after a tiring day at work. The late cinema was down to them making sure the online food order went through on time and so was perfectly reasonable. We lead busy lives and we are not going to get it right all the time.
Instinctively we know that ‘family appraisals’ are a shockingly bad idea, guaranteed to breed resentment. Your partner works hard all year and you score them as only 3 out of 5 …must do better. Ouch! Arguements guaranteed I think.
So, if we know they’re bad form at home, why do companies insist on appraising staff in such arbitrary, flawed and unfair ways?
And, in my experience of listening to appraisal grumbles during coaching, the time taken to actually get an appraisal at all is way too long.
Oh and staff really hate it when their line manager delays their appraisal. That’s a great way to make people feel undervalued. They get psyched up and then feel let down.
What’s needed is a quick and effective process, one that actually happens on time.
One sheet of paper.
The staff member fills it in.
The line manager listens.
They agree new actions.
The staff member is praised.
Everyone is happy.
(Waiting for the appraisal in order to deliver bad news is also poor management).
Here are my 4 great questions for that single sheet of paper…
1. When have you performed to a high standard? (Work delivered on time, problems solved, difficult situations handled well and so on).
2. What could you have done differently? (Do not ask ‘done better’ as people find it a bit of a trap to own up to mistakes and tend to avoid answering).
3. What changes would you like to make to your role in the next six months? (Think about training, changing processes, starting or stopping a piece of work, changing hours or workload).
4. What resources do you need from me, as your line manager, or from the wider organisation, to make these changes work effectively? (Ask for what you really need, no limits!)
That’s all we need.
No complex scoring systems (which people either game or abuse anyway).
No ‘here is where you let me down’, because these events need to be resolved at the time.
No good-bad-good process, because people ignore the good and chew on the bad.
4 great questions to focus people on being objective and encouraging them to think about continuous improvement in their role.
Have fun conducting simple and worthwhile appraisals!
Next week: The Essential Numbers Quiz
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