Charles Nagel

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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)