- One of the quickest ways to be fired is to actively resist any new change in leadership or strategic direction of the company you work for.
- When hiring, use the Problem-Action-Result formula to determine how the candidate addresses a problem, executes an action, and achieves a result.
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MAKING MONEY COUNT
Five Strategies for Keeping Money First
In a meeting with a client discussing the Leadership Development Plan for the organization, the CEO of the company stated that he appreciates leadership and the importance of good relationships with customers and employees. But then he paused and sharply stated "You can be liked as a leader and a good communicator, but if you don't get financial results, you won't be here. It's all about results."
It may not be politically correct to talk about in executive leadership development, but the reality is that a leader without results is another word for failure. An executive runs a business. Business is the vehicle to solve customer problems that result in generating money. Like blood that nurtures the heart, money nurtures the business.
Money is invisible in most companies. Payments are sent to accounting departments and then profits or losses are calculated. In daily life we actually see dollar bills. For example, when buying milk at a grocery store, you will see money in a cash register and usually hand dollar bills to a checker. In large corporations, an actual dollar bill is rarely seen.
However, I truly believe anyone working needs to remember that work without profit is a recipe for failure.
Here are five strategies to "making money count."
- Read financials - Anyone working for a public company should read the annual report. If you don't work for a company but own stock, call investor relations to mail you the annual report. If you do not understand the story behind the financials, then ask someone to coach you.
- Start a business of your own - Sell something on e-bay or Craig's List where you actually receive dollar bills. Decide on the dollar value or cost of your product versus the dollar value a potential customer would buy it for. Analyze your potential profit margin or loss.
- Play the game "Monopoly" - Even though this seems childish, the game of Monopoly is an excellent simulation of how money, trading, and profit occurs. You will learn the excitement of making money and the feeling of loss when all your money runs out. Similar to a real business, the purpose of the game is to do better than your competitors.
- Develop a weekly "Profit and Loss Statement" - At the end of every week, take a few minutes and add up all the money you received and subtract all the money you spent. What you have left over is your profit. All businesses operate with the same focus to achieve the highest amount of profit with the least amount of losses.
- Become financially literate - Most of us learn about money from our parents. Take on the task of learning about money. Read books on finance, accounting, economics, and investments. The more you learn about money, the more you keep money top of mind in your personal and professional life.
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"Profits Aren't Everything,
They Are the Only Thing"
by George Cloutier
This short book was recommended to me and the title alone piqued my interest. I was especially interested in the bold statement that profits are really the only thing. This little book is a no-nonsense manual on keeping money first.
Here are a few principles he suggests that may contradict many of today's business thinkers:
- Work all the time - According to the author, to be successful making money or profits takes a time and energy. He believes that working weekends is a requirement not an option. My caution is to find the right balance. All work and no play, makes for a shallow life.
- Give yourself a raise - The author talks about the power of giving yourself a raise. The authors describe numerous businesses that went from failing to succeeding when the owner gave himself/herself a raise. The author postulated that when business owners sacrifice by taking less salary, they are not perceived as inspiring success and profitability.
- Choose the best and get rid of the rest - Being rigorous and non-emotional in employing the best people is absolutely critical. Profits always take precedence over personalities.
- Business first, family second - This is a very controversial principle since many business owners and executives do regret not spending enough time with their family until it is too late. However, the author's opinion is that the family benefits the most from generating dollars. The reason is that having money provides a comfortable lifestyle, a college education, and the best healthcare possible. Therefore, profits come before family. That said, I believe that you need to achieve a balance where your business is profitable, but you spend sufficient time with family to benefit from that profit.
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The Value of Investing in Others
Behavioral scientists Elizabeth Dunn and Michael Norton show that you can get more out of your money by following several principles - like spending money on others rather than yourself
. Studies suggesting investing in others can make individuals feel healthier and wealthier, even if it means making yourself a little poorer to reap these benefits. One study showed that giving as little as $1 away can cause you to feel more flush.
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Money is one of those topics that people find difficult to talk about. However, as business executives and business owners, money is the lifeblood that needs constant attention. We all can become enamored by the importance of relationships, the next initiative, and the next crisis instead of thinking about the importance of money. As the CEO said, even with the most liked and respected leader, making money is the only thing.
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Solving People and Management Issues
The Heller Group focuses on coaching for senior level executives. We facilitate change within an organization that results in more effective leadership, increased productivity, innovative thinking, and improved employee morale and retention.
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Dr. Bruce Heller
Dr. Bruce Heller, founder of The Heller Group, Inc., has over 20 years experience consulting with managers and executives on executive education, leadership development, and organizational.
He is an adjunct professor at Southwestern Law School.
Dr. Heller is a consulting psychologist and member of the American Psychological Association Consulting Psychology Division. Dr. Heller holds a Ph.D. and Masters Degree in Education from the University of Southern California.
Dr. Heller is the author of The Prodigal Executive-How to Coach Executives Too Painful to Keep, Too Valuable to Fire.
Read the book.
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