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January 14, 2009

Eliminating CYA: A New Management Paradigm

(Part 1 of 3)

In my opinion, there are few things that will make the life of a business owner or manager more miserable than what you are about to read in this article. The president of a small business wears many hats dealing with personnel, financials, sales, production and numerous other parts of the company.

As a turn-around consultant, I cannot tell you how many times I have had business principals say, "I just cannot keep my head above water. If it's not people then it's customers and if it's not customers then it's sales or some other problem coming from left field. It just never seems to end." All roads lead to the top. And as the company's leader goes, so goes the company. That's the way it is.

So if the top leader is over-stressed then it trickles down to all parts of the company. It is in the company's best interest that the head man or woman is under control, manages stress and performs at a high level. The following is one of the biggest problems I've encountered most while dealing with small companies and it makes managers nuts. So let's look at the problem and a different way of addressing it.

CYA (covering your ass)

How many times have you heard employees blame one another for some snafu? In most companies, and I do mean most, this is standard operating procedure. It can be called empire building, climbing the corporate ladder, making your way to the top or any number of other labels. Every company I have gone to help says the same thing, "We have a great team. Everyone gets along real well and helps each other out." Right! Try to find out what is really going on behind the scenes and you will uncover a completely different story in most cases.

This single problem will cost you more money, time, effort and mental illness than anything else. And by the way, we wouldn't need employment contracts, counseling, agreements, conflict training, mediation and all the other legal stuff if humans just did what they said they would do. We humans have issues living and working together. That's the one reason HR departments exist, to service the humans in the company.

This problem starts at the top. Failure to establish a certain culture is like putting a bunch of 5 year olds in the same sand box. What happens is human nature. But all the manager wants is the straight truth about what is happening and for everyone to play nice in the sand box, work as team, solve problems and make money. You cannot write enough operational contingency rules to legislate proper behavior. You have to establish boundaries. That is the key.

If this is a problem at your company I would like to invite you to consider a new possibility. It's a little different, some might say radical, but it has worked for me. The employees really like it once they see it's real and I'm actually going to stay the course. Of course, I have to disclaim that "what you are about to read is only my opinion and should only be considered my opinion. Neither I nor my company shall be liable for any results you may or may not achieve in applying any or all of the concepts written in this article."

Try these 4 boundary rules:

1. You must never, ever tear down an employee in the public, or even private, forum. Nothing will close your employees off faster and cause them to commit CYA than the fear of being hammered in front of their peers. It's a morale killer. You will never get their best ideas because they will be angry and will fear being attacked for an idea that you don't like. Fear of failure is very powerful motivator, but in the wrong direction.
a. The Solution: Tell your employees that you understand they are human and will make mistakes. You know it and they know it. Inform them that from this point forward you will not attack them for making a mistake. What you do want is that they let you know there is a problem and when they do inform you of it, they offer a few suggestions to mitigate the problem. But you aren't going to hammer them for an honest mistake. You just want the truth and some ideas to deal with the issues.

2. Set a policy that encourages staff members to share problems and collaborate on solutions. Make sure you convey to the entire staff that this is what you want to happen. One of the things I've used very successfully is to tell the staff, "in my opinion, and my opinion counts quite a bit, one person does not have to lose for another to win. In fact, that's how I expect us to work." We are talking about building a team and you must remove all reasons to undermine each other's work and effort. And when an employee gives the new policy a test drive by being bold enough to enter your office and be honest with you, then you absolutely must tell them this is precisely what you were looking for and then work on the solution together. Your staff will start solving most of the problems before you know about it because they know it's a safe place to work and create solutions.

3. It must be made known to the entire staff that you will not tolerate complaining or under-mining another staff member. Like this: "If you see another colleague wrestling with a problem or mistake, I expect you to proactively lend a hand. I don't want to hear a single word about their error unless together you have not been able to address and fix the issue or actually need to discuss it with me. I expect this entire staff to support each other. If you won't collaborate like this please pack your things, resign and thank you for your work to date." Trust me, you don't want them anyway. If it looks like a duck and walks like a duck and quacks like a duck then it's a DUCK! Let the cancer leave.

4. Now this is something I've done (and you will want to consult your attorney and think hard about this one) but I can tell you I have never had to use it. But everybody knows it's there. Every employee is told, "I have a zero (0) tolerance for CYA. That means if I find out you are CYA I will walk you to the door immediately. No discussion, no dialog, no excuses, no reasons. It's over. It is considered lying, deceit and insubordination. Do you understand what I am saying? Are you willing to adhere to operating in this manner? If you will operate like this then I will operate according to items 1, 2 and 3." It generally scares them when they hear this. But, if you give them items 1, 2 and 3 above, and you really follow through, then they have no need to fear. Of course, they want to see these things in action so you must execute items 1 - 3 each and every time. That's 100% of the time. There is no place for hypocrisy on this.

Employees must have the ability to succeed AND fail. They are going to make mistakes so you might as well remove the issue that sends the real problems underground. Of course, if you are not building a new company where it's easier to put this in place, you might get pushback from a few of the staff. You must be fair but firm yet give it some time to take root.

You want their best ideas and best efforts. Remove fear of failure from your company and the watch the office start to buzz with new enthusiasm. Remember, a safe haven is important for growth and creativity. And if this were really happening in your company right now, wouldn't your frame of mind take a turn for the better? The little human craziness and pettiness would begin to shrink and that's a big help to your sanity as the manager not to mention the productivity improvement benefits. Keep your staff enthusiastic and happy by promoting a creative, collaborative environment and see productivity soar.


Charles Nagel is the CEO of Qvinci™ Software, a small business management and intelligent dashboard solution. For the last twenty years, he has been a successful entrepreneur, business consultant, and business owner. As the CEO of Qvinci™ Software in San Marcos, TX, Charles gives the strategic direction and focus for the company providing a pragmatic approach to building the company and empowering its people. To see more articles from Charles, please visit http://qvinci.wordpress.com/

Posted by Charles Nagel at 1:15 PM | Comments (0)

January 12, 2009

Business Intelligence: How To Get The Information You Need

You can't make decisions, at least good ones, for your business with bad data or data that is missing. Many CEO's and managers often make the mistake of managing retroactively by only receiving important data points at the end of the month. From this vantage point, many issues that could have been easily fixed if the appropriate data had been available weekly or even daily have escalated into large problems. It is imperative that the management of your company has the information it needs when it needs it to proactively manage your business.

The first step to getting the data you need is to sit down at the computer and create an outline of the most important data points to running your business. This data must be presented to you in a repetitive and reliable manner. At the same time, the format must be easy to read and quickly understood like a table or graph.

Start with a list like this:

Data I Need To Know

1. Sales

a. Revenue by item or service
b. Numbers of items (services) sold
c. Revenue by salesperson
d. Number of calls made by each salesperson
e. Forecasted sales
f. Other important sales indicators

2. Cost of goods sold

3. Expenses

a. List of costs in descending order

4. Net Income

5. Accounts receivable

6. Accounts payable

7. Cash

8. Project data

a. Estimates
b. Actual data
c. Timelines
d. Resources allocated/used

9. Anything that is important to your business success in measurable terms

Remember to customize your list to suit your company's own specific needs. Once you have the data points identified make sure you get this data weekly. Looking at information on a monthly basis is too infrequent and looking at information after the month is over may help you plan for the next month but it's too late for anything else. Measure your data weekly and keep your staff informed of items that look like they are off track. The key is to catch problems early while you can still do something about them. Problems won't escalate into large issues if this approach is taken.

The Mechanics of Getting The Information You Want:

You want the above information generated automatically or nearly automatically. You do not want your accounting department to spend 8 hours formatting a file. You want a system in place that can create a predefined report in the format needed or as close a possible. The point? You want your accounting team to click a button and dump the needed data to a standard report format and email it to you. You don't want to make a ton of work for your employees but you do need the information extracted and provided in relatively short order. A system like this reduces human error, facilitates the frequency you want, and keeps personnel working on mission critical items. In this case, software is your ally.

To be able to gather this data you must use technology where possible. It does not get tired nor is prone to human error. It will do the same thing over and over again in the exact manner if you set it up right. My advice: USE A DASHBOARD. This cannot be stressed enough. Dashboards pull the data together and present it in an easy to understand format. If you don't have dashboard technology, or you don't know how it applies to your operation, you should really spend a day or two learning about the technology.

Yes, you or another in your company will actually have to stop and learn about this technology. Once implemented the gains realized can be phenomenal. You get instant visibility and repeatability while your accounting staff focuses on the financial issues of your business. My own dashboard is setup such that all I do is click the refresh button and all the data points concerning the operational and financial health of my company are automatically updated and put into graphical format.

Don't assume that technology has to cost an arm and a leg. This kind of solution does not cost a lot of money. If you run QuickBooks take a look at our website www.qvinci.com . If you don't run QuickBooks® you can still use Qvinci™ with Microsoft Excel® with much of the same functionality. Or you might find a software package that integrates with your financial solution. Dashboards range from $10 per month to $1,500 for enterprise class solutions for Oracle and larger implementations.

Nevertheless, it all starts with you and your team. Sit down and document the important items to monitor. Once done you can look at solutions to provide the framework to deliver you the results.

Posted by Charles Nagel at 1:45 PM | Comments (1)

December 22, 2008

Radically Improve Your Business In Only The First 10 Minutes Of Each Day

Business Intelligence (BI) simply means using technologies, applications and practices to analyze business information. The purpose of BI is to foster better decision making.

Does all the jargon make your head spin? Don't let it. Applying technologies that makes sense for your business is a smart business decision.

As a business consultant in my former life, I saw many companies that didn't know what they didn't know. That is, you must have accurate and timely information to make good decisions. Otherwise, you are guessing. Often, things can "feel" right but turn out to be disasters. Don't get me wrong. Your "gut feel" counts for a lot when running a business, but you must have much more than a "flying-by-the-seat-of-your-pants" plan to capitalize on opportunities and avoid making big mistakes.

So how do you use this BI without breaking the bank? Just as important, how do you find a tool that isn't overly complicated or functionally impossible to use - and that as the practical and operational solutions you want and need? Most small businesses do not have the IT staff or the business expertise in house to create or implement tools internally, and the cost of many third-party solutions are ridiculously high.

Let's quickly explore the small-and-medium business(SMB) paradigm from the owner's or manager's perspective:


Your time is typically in very short supply and you are pulled many directions. As the day goes on, this condition only gets worse.
You generally don't like using accounting systems.
You may have a bookkeeper, but most of the financial reports that you generate or receive don't mean much. What do you really do with those reports? How can you actually improve your business by looking at a monthly P & L or balance sheet printout?

You probably identify with most or all of the above SMB paradigm.

In a perfect world, you want to come to the office in the morning, click a few times and browse though the current state of the company. You of course want to identify critical items that need immediate attention, but you would also like to quickly see if what you are expecting to happen financially and operationally with your company is in fact happening.

You want to avoid looking at a pile of numbers that cause your eyes to glaze over. What if you could see a picture of exactly what is going on with your company instead? And what if this was actually an enjoyable experience over morning coffee? If something looks out of sync, what if you could simply click on the anomaly and immediately see the underlying data and the reason for the blip?
What if you could easily share this technology (with as much or as little of the underlying information as desired) with your staff, so that your team is unified, informed, and motivated?

And finally, what if such a solution was inexpensive and easy to use?

We've created just such a solution here at Qvinci Software - www.qvinci.com – let me tell you how.

Many SMBs run QuickBooks® from Intuit for their accounting system. So we built an intelligent dashboard called Qvinci™ that takes many of the reports from QuickBooks® and turns them into charts, graphs and tables. These charts, graphs and tables give the user a visual representation of the actual numbers - a major step forward.

But we took it a step beyond. Frequency and trending of data graphically are hugely-valuable tools to the business manager. You can see relationships between different elements and do head-to-head comparisons between months, quarters, or years. This is incredibly useful for trending.

Imagine doing these kinds of things for all the important data from fuel costs to electricity to cost of goods to project costs. Once you create these charts, they will be there every time you open Qvinci™ - and the data will automatically freshen as your company moves through the month or year.

You obviously want to see what has happened with your company to date. Equally or more important is knowing whether you are going to stay on or under your expenses budget and hit or exceed your revenue targets, based on where you are today. Qvinci™ makes it easy by incorporating a tool called "triggers".

Triggers are displayed as a table of financial data that you select and for which you want an early warning if your numbers to date indicate that a revenue target will be missed or an expense threshold will be exceeded.
You simply select an item to track from the P&L, balance sheet or other report, then set a target (a desired amount to achieve) or a threshold (an amount not to cross over). Qvinci™ pulls the actual data from QuickBooks® and linearly estimates the projected value for the month or year. If the projection indicates that the target or threshold will not be met, the item turns red. So if you pick 10 important items and set the triggers based on historical metrics, Qvinci™ draws your attention - via color coding on the main screen - to those items needing action.

Using Qvinci™, you might have 15 to 20 QuickBooks dashboard pages of your company’s most important operational data, all up-to-the-minute-current, and you can navigate through the visuals in about 10 minutes with a high degree of understanding. The items needing attention on any given day can be drilled down and isolated for further action by the manager or staff member.

Knowing your company's actual data points and projected trends are the keys to making the best management decisions. You've seen how Qvinci™ lets you see your data, rather than read it, and how it keeps you ahead of the curve by trending and trigger tools. But we again went a step beyond. In our Qvinci™ Pro version, we added a powerful Proforma tool.

Proformas give you detailed projections based on what your company has actually been doing. You have been performing in a certain manner, so the Proforma simply scales that forward. You can then go through the Proforma, make your "what-if" adjustments, and manage accordingly to hit the levels indicated by your adjustments. Using this tool, the manager is able to provide staff with measurable goals and objectives. If you hold to the levels projected, you will attain the expected results. And since Qvinci™ makes the data visible and easily digestible, you can fine tune and correct your course on a daily or weekly basis.

The goal of dashboards and management tools should be to provide the manager with measurable data points and a road map to success, in an easy-to-use, pleasing interface.

A typical morning might look like this: grab a cup of coffee, check your email, and then click through your business dashboard. From here, with all vital information about your company available to you, making the right decisions to manage your business is easy.

Posted by Charles Nagel at 1:00 PM | Comments (0)

The 1 Secret Small Businesses Must Know In Order To Survive And Prosper

Succeeding in business doesn't happen by accident. It is hard work and perseverance that produce success. We often forget that it takes a LOT of effort to make a company successful. It also takes some luck and good timing. It's been said that luck is what happens when preparation meets opportunity (George Allen - NFL football coach). If that is true then luck is nothing more than hard work (strong effort and accurate preparation) while waiting for an opportunity to present itself.

You've probably also heard that if you fail to plan then you plan to fail. This cliche is actually pretty accurate when it comes to business. But why do so many business owners and managers hate preparation and planning? Maybe hate is too strong. Let's try "avoid". Well, planning usually involves a lot of detail work and many managers don't like that kind of effort.

But planning is not the secret referred to in the title of this article. Planning is a necessary part of running a business. You have to do it. It's not negotiable. If you won't do it then you put your business in the VERY HIGH RISK category. I'm assuming you are reading this article because want to find a tool that will help you run your company better, make better decisions or improve some aspect regarding your company. What you read below will do just that but you have to take action or what you read cannot help you. That is where planning, perseverance and effort are needed as noted previously.

Are you ready? The great secret is: You don't know what you don't know. Failing to realize this fact and make adjustments is a very good way to ensure you make mistakes. If this is true then what does it mean in practical terms?

Let me offer an actual example. When I was working as a business consultant, I specialized in turn-around consulting. I was hired by a company that was a fabricator of metal devices. The first meeting with the owner was typical. I asked a lot of questions to uncover details. When I asked about the team, he said they were skilled but were very inefficient and should be producing a lot more. I asked, "How do you know that to be true?" His answer: "I just know it."

The company had repeatedly missed the estimated budget and deadline for each project. They routinely used over-time hours (often over 30% of payroll) to bring projects to completion by the deadline. Obviously there was some gap in information or communication that resulted in missed deadlines and a large number of over-time hours, and I had a feeling that the reason was not inefficiency of the team.

This is where I prove my point. The company had the estimate budget and deadlines for all projects in one database. They had the actual time for every hour worked by every employee on every project in completely different database. They did not have a consolidated report that merged labor, resources, and deadlines into one format. The result was the managers could not make informed decisions or view all projects holistically.

To correct this, I created a single page (it was a big E-size print out) that showed what they budgeted, current status, and remaining days and resources for all projects. With this single page they were able to move resources as needed to meet deadlines without overtime. Then they could reallocate resources to ensure future projects were performed timely. The result? Overtime was taken to 0, that's ZERO, in less than 4 weeks and they made their deadlines moving forward.

The managers of this company didn't know what they didn't know. Practically, the manager of a company needs accurate and timely information with which to make decisions. It is imperative to have whatever information is necessary, whether it is cost data, project data, time data, sales data or any other information that is critical to good decision-making.

Technology, software and hardware, can provide frameworks that facilitate collecting, sorting and displaying mission critical data. How is it possible to plan and prepare as discussed earlier if accurate and timely data is not available? Well, it's not really possible. I submit that you cannot plan with any accuracy if data is faulty or missing. Remember, failing to plan is planning to fail.
All too often managers make decisions primarily based on "gut feel" without good metrics to substantiate the "gut feel." You want your business to improve and your decisions to be better? Decide what data points you really need to know to make an informed decision and seek out technologies and methods to provide it to you in a reliable and repeatable manner.

Try to use the many-to-one concept for collecting data. For example, let's say you have 5 salespersons and you would like to know "how things are going". You could take several approaches from having meetings several times a week to talking with each salesperson frequently to waiting to see how things turn out at the end of the month, etc. Most of these methods take a lot of time and are usually subjective. They also take the salesperson away from selling.

But imagine you build an Excel spreadsheet that contains daily activity for leads, calls, prospects, targets, etc. This spreadsheet has the same format for all salespersons. Imagine you put it together so that each salesperson entered their daily activity on their sheet. It would be very easy to pull the data from each sheet and aggregate it to a top sheet for your viewing. You could easily see where each salesperson stood on targets you defined for them. And the benefits of this approach are fantastic. Taking just a few minutes, the salesperson enters data before her or she leaves for the day leaving more time for selling. You do not need to have a meeting to gather the data, the data is automatically aggregated for you and you get to see the individual as well as the team totals. With that kind of ammo, you can make informed decisions because you know the details and you know them early in the game. If a particular salesperson isn't hitting target you know it immediately and have time to make a decision or adjustment.

In short, you must know what you don't know. Put processes in place that spread data entry across many resources to keep the burden light. Apply technology to give you the data reliably and daily. It costs less than you think and is worth its weight in gold.

To see more from Charles, please http://qvinci.wordpress.com/

Posted by Charles Nagel at 12:45 PM | Comments (0)