Accountability

On April 10th Bobby Petrino, still red-faced from road rash and embarrassment, was fired as head football coach at the University of Arkansas. Ten days earlier Petrino had wrecked both his motorcycle and his career while on a drive with his mistress and co-worker, Jessica Dorrell. Petrino, a married father of four, had failed to disclose his affair with Dorrell when she applied for, and later accepted, a job working on his staff.

In addition, Petrino had circumvented university policies to fast-track hiring her. He had requested and received a waiver to bypass a stipulation that open jobs remain vacant for 30 days prior to interviews being conducted. Moreover, unbeknownst to the university, Petrino personally had given a $20,000 gift to Dorrell during her first week on the job so that she could buy a car.

Sadly, Petrino’s crash-and-burn is only the latest in a series of moral breakdowns occurring in college football. Several other prominent programs have suffered leadership failings over the past three years.

Penn State: Longtime head coach Joe Paterno and school president Graham Spanier were fired in November 2011 for their part in covering up the misconduct of former coach and alleged child molester, Jerry Sandusky. The school’s athletic director and one of its vice presidents also resigned as a result of the scandal.

Ohio State: Head coach Jim Tressel was forced to resign in May 2010 after falsely denying his knowledge of improper benefits received by players. Ohio State’s football team has been banned from making a postseason appearance in 2012 as a result of the incident. Additionally, the program is serving a three-year probation.

North Carolina: In March 2012, North Carolina was penalized with a loss of scholarships, placed on three years of probation, and banned for postseason play after violating numerous NCAA rules. The program engaged in academic fraud and one of its coaches allegedly accepted bribes from professional agents. In the scandal’s aftermath, the university fired head coach Butch Davis.

USC: Head coach Pete Carroll resigned in January of 2010 with Southern California’s football program under investigation for having lacked oversight of its student-athletes. In June 2010, the NCAA imposed sanctions which included the loss of thirty scholarships and a two-year postseason ban.

In each of the above situations, coaches and/or administrators abused power for personal and professional benefit. Initially, we might be tempted to stereotype these leaders as unethical egomaniacs obsessed with winning at all costs. However, closer examination would show us a far more complicated picture. Joe Paterno was revered not only for winning football games, but also for the stellar academic record of his players. Butch Davis cleaned up the University of Miami’s tarnished image while coaching there from 1995-2000. Jim Tressel was highly esteemed on account of his personal philanthropy. The point is that some of these men were great leaders, even models of integrity, prior to losing credibility. However, each ultimately lacked something every leader, even the most well-respected, cannot do without: personal accountability.

DEVELOPING PERSONAL ACCOUNTABILITY

People want to be known as honest, hard-working, trustworthy, and competent; I doubt anyone starts a career intending to lie or cheat their way to the top. However, as leaders we are determined to succeed, and if we’re not careful, our ambition can overshadow our vision of the moral person we aspire to be. We can lose track of who we are as we strive toward what we desire to accomplish. Personal accountability means being answerable to our “better selves” or to the sort of honorable human being we would like to be. Developing personal accountability involves three steps:

1. Distrust Yourself

In my experience, leaders who fail ethically share a common trait: a false sense of security. They believe themselves to be incapable of ruining their lives on account of flawed character. Wise leaders do not trust themselves to do the right thing all of the time. They know that power corrupts, and they’re fully well aware of their fallibility. Don’t presume that you’re too good of a person to have a moral breakdown. Instead, realize that you’re just as vulnerable to ethical missteps as anyone else. Operate under the assumption that you will abuse your influence as a leader unless you intentionally take precautions to guard against the darker side of your ambition.

2. Set Behavioral Boundaries

Leaders are not only accountable for their actions, but also before their actions. Certainly, leaders should be willing to explain their actions after the fact. However, they also must be prudent enough to prevent morally inappropriate courses of action from ever presenting themselves in the first place.

3. Invite Inspection

When leaders do not inspect themselves, people do not respect them. However, moral authority demands more than self-inspection. Accountable leaders give others permission to inspect their behavior; they’re proactively transparent. The more leaders grow in influence, the less likely their teammates are to disagree with their decisions or to question their behavior. People automatically assume a legendary leader will do the right thing.

This article was reprinted from John Maxwell’s Blog.

What is your Financial Strategy?

Is your business doing well? Do you have your finger on the financial “pulse” of your business? Do you have the financial tools to see what it takes to grow your business this year by 30% or 40%?

The fear that many business owners have around financial management is that it is difficult, complicated, mysterious and it’s the accountants job. Wrong!!!

Strategic financial management of your business is relatively straightforward. The challenge is in establishing good systems and procedures for financial reporting.  One of the many reasons that businesses fail is often due to poor accounting practices. In these failed businesses the owners never took the time to regularly track and measure the key numbers in their business.  Contrary to popular belief, financial management does not require a degree in accounting or an MBA.  The basic fundamentals are the same, whether you are Apple or Joe The Plumber.

Starting Point

During the Conception Stage of any new business, owners usually fund their businesses by mixing their personal money with borrowed funds. This is a dangerous practice and one that can cause you to unknowingly “embezzle” from yourself.  To begin with, separate your business funds from your personal funds, and resist the temptation to pay business expenses from anything other than your business account.

Next, spend some time with your accountant or CPA and learn how to properly read your Income Statement.  Then, do a regular and complete analysis of the Income Statement at least monthly. A complete analysis should include a review of all general ledger accounts which support the Income Statement.  Every item in the general ledger should be documented and properly accounted for.  I have found where a general ledger item was documented as  ’Unknown’, or  all the purchases from the company credit card were simply labeled as ’Credit Card’ without documenting each item such as office supplies, computer hardware, etc.

Along with the Income Statement educate yourself on the Cash Flow statement. If you are a cash-based business this might be seem redundant, but for all businesses this is critical. You should know the state of your cash flow at all times, especially when your business is growing– the reason is Growth Eats Cash.

Death and Taxes

Are taxes killing you? Most business owners are not ‘killed’ by paying taxes.  However, it is the unpaid or unfunded taxes that often ’kill’ a business. Avoid the habit of deferring business taxes which could endanger the financial health of your business.

According to financial expert Dave Ramsey, “If you don’t keep up with your taxes, that alone will close you down. If you are in a product business where you collect, and deposit, sales taxes and you “borrow” that (sales tax) money to operate, you will fail. If you have employees and don’t deposit the proper amount withheld from them for taxes, you will fail.”

Create a business “tax” account strictly for your quarterly estimates as required by the IRS and other taxes – this can be worth far more than the time and effort it may take.

Know your Numbers

Every business owner should know these critical numbers in their business, and how to forecast and manage these numbers.  Start first with your desired Net Profit  .  .   .

Net Profit

Fixed Costs

Gross Profit

Gross Margin %

Total Revenues

Revenue/Customer

Total Customers

Retained Customers

New Customers

Conversion %

Leads

Optimizing Employee Performance

I have coached a number of companies whereby management is doing everything right– clear vision, core values, mission statement, USP (Unique Sales Proposition), and have clearly branded themselves in their respective market.  The problem is the team members have not bought into these changes.  So, what is the problem?

The foundation for getting your employees to take ownership in the Strategic Plan, is to give them a game worth playing. Please keep in mind that your business certainly is not a game, but nonetheless you must create an environment where people are given the expectation and the understanding that only their personal best is allowed to support the team effort.

It is no longer just a matter of properly motivating and inspiring your people; every game worth playing has to have rules that are designed to help everyone win. So, what are the rules of your game? Does everyone know what the rules are? How do you get everyone to buy into the rules of the game?

Preparations

Without the preparation of clearly defined roles and responsibilities, the rules of the game are never clearly defined. What ultimately happens is that employees make up their own rules, many times not aligned with Strategic Plan. This leads to mismanagement and further miscommunication, and that is a recipe for disaster. What are the necessary steps to avoid the chaos:

1.    Agreements
Managers and employees establish clear agreements for the expectation about the work that is to be done, the quality of the work, and how and when it is to be done. Within the body of these agreements are the Roles and Responsibilities, Accountabilities, Key Performance Indicators (KPI’s), the Systems, and the Work Flow.

Unless these items are clearly defined and clearly documented, you are left managing by abdication. By establishing an environment of Management by Agreement, only then are the standards fully communicated and documented.

2.    Communication
Any and all changes in the Roles and Responsibilities and the Mapped Procedures, occur only after there is mutual agreement between the manager and employee. Agreement needs to be reached about anything that might deviate from the expected results, work, and standards.

3.    Responsibilities
By having an agreement, employees take full responsibility for performing the work and achieving the results as agreed upon. The managers are accountable for providing the employee with the necessary resources, tools, guidance and training to achieving the work.

4.    Changes  
The employee and the manager are accountable for immediate notification for any and all changes or exceptions to the established agreements.

5.    Space
Managers can assume the work is being done as agreed upon, unless notified by the employee. To avoid micro-management of the employees, a mindset change needs to happen to allow employees the space to do their job, with the understanding they know what is expected of them, when it is expected and how it is expected.

6.    ‘Huddles’  
Regular ‘huddles’ are scheduled with the employee and manager to communicate and update the progress of the work and the KPI’s. By regular communication, testing and measuring, only then can you confirm that you are on track with the plan.

7.    No Exceptions
Failure to notify each other of changes, exceptions, or missed due dates is unacceptable. Period. Your management strategy can only be effective if you are willing to hold your employees and your managers accountable for their agreements, and if you are willing to hold yourself accountable to those agreements.

8.    Trust
Relationships built on trust are developed as managers and employees keep their commitments and successful results are achieved. Trust is an ideal to live by, without trust your management strategy cannot work. Find a way to implement these Rules of the Game, and make them rules that you live by in your business. You will find that you start taking huge strides toward consistency in your business and predictable results. You will also go a long way toward creating a company culture that people are attracted to and fulfilled by.

Problems with getting your employees buy-in?

Contact:
Business Coach Sam Stroup
focusedbizsolutions@gmail.com
www.focusedbizsolutions.com

Integrity . . .

This past week while I was in a tire store, I noticed a poster on their wall.  My first thought was, what is this doing in a tire store of all places.  My second thought was, OK I get it, and I accepted that fact that this company is challenging their employees and sharing with their customers their values.

I spoke to the Store Manager, and he made a copy of the poster, which I would like to share with you . . .

Integrity

When you are looking at the characteristics on how to build your personal life, first comes integrity; second, motivation; third, capacity; fourth, understanding; fifth, knowledge; and last and least experience.

Without integrity, motivation is dangerous; without motivation, capacity is impotent; without capacity, understanding is limited; without understanding, knowledge is meaningless; without knowledge, experience is blind.  Experience is easy to provide and quickly put to good use by people with all other qualities.

Make absolute integrity the compass that guides you in everything you do.  And surround yourself with people of flawless integrity.

-Karl Eller

Challenge

So, look at the walls of your office or store, and ask yourself this question . . . What one thing should I convey to my customers/clients that shows my true Core Values to my customers/clients and employees?

Sam Stroup
Focused Business Solutions LLC
www.focusedbizsolutions.com

Strategic Thinking . . . The Way to the TOP!!

During my career, I had the opportunity to work directly under two different Harvard MBA’s- coincidentally both were females.  Both of these Harvard MBA’s intellect were far superior to almost everyone I ever known, and  I always wondered if they rose to the pinnacle of their career due to their intelligence, their education, or their ability to think strategically far and above the ‘rest’ of us.

During my tenure under these Harvard MBA’s, I felt almost invisible, and became little more than a statistic.  From my experience and as we go through our career, as our proposals end up in a pile, and like everyone else we get a raise every once in a while, we’re referred to as applicants, employees, or human resources, and we sense our individuality became buried.

Jack Welch called this feeling of anonymity “being in the pile,” and he recommended thinking as the means of escape. Most people go with the ‘herd’ doing what’s asked of them but not much more. In Welch’s estimation, the key to elevating your business is to go above and beyond expectations whenever someone asks you question or you have a customer or employee complaint.

As Jack Welch wrote, “If you understand that the question is only the beginning, you will get out of the pile fast, because 99.9 percent of all employees are in the pile because they don't think. If you understand this principle, you will always be given more critical questions to answer. And in time, you will be the one giving out the questions to others!”

I would like to offer five ways to begin thinking your way to the top.

1. Where to think . . .

Today’s work environment is incredibly fast-paced and fraught with demands and huge workloads. Unless you’re deliberately get away from the noise of day-to-day operations, you will never break free. The first step to getting out of the pile is giving yourself permission to disconnect. You have to get away from all the daily challenges by retreating to a space free of any and all interruptions. Initially, you might think that scheduling this time feels incredibly unproductive. However, this is the only way and the beginning to gaining perspective to working smarter and more strategically.

2. Shape your thoughts . . .

In the beginning most ideas lack clarity. Our initial ideas are unclear due to the clutter in our mind. As a leader, challenge yourself to translate your gut feelings into distinct ideas and plans, which you can document and articulate to your team. Next, strategic ideas never come fully formed. As a leader, your job is to test your ideas by asking critical questions. Does the idea proceed from reasonable assumptions? Does the idea align with the mission, core values and strategic vision of the organization? Does the idea make sense given the structure and strengths/weaknesses of the organization? Lastly, thoughts spring into existence with huge possibilities. However, they must undergo tests. For instance, how would the idea actually take shape in your organization? What would it cost to pursue? How long would it take to implement? What significant changes (positive and negative) would impact the business?

3. Stretch your thoughts . . .
Throughout my career, some of the best ideas have come from others. Many times my ideas start out small until we got ahold of them and found ways to stretch them to their maximum potential. Isolated leaders never obtain as much influence as those who surround themselves with an inner circle of key advisors.
 
4. Land your thoughts . . .
Before an idea can take shape, it must take on a concrete existence. The number one question to ask when landing or implementing an idea is: Who will own it? Who will champion the idea and push it forward? A leader must prepare the way for the idea to touch down safely. This means winning the support of your team and communicating clearly with those most likely to be impacted by the idea’s implementation.

5. Fly your thoughts . . .

If you wanted to fly an airplane, you would begin by taking lessons from an instructor.  To fly an idea, you first need to learn from an instructor or a practice flight. Testing your idea on a small scale will expose weaknesses before a major launch. Sometimes the flaws are fixable, and the idea can be reworked. On rare occasions, you may even have an idea that tests out brilliantly on the first attempt. However, other ideas are not feasible in real life and ought to be scrapped. A practice flight confirms that an idea can actually withstand the challenges of real-world application.

Sam Stroup
Business Mentor & Coach
focusedbizsolutions.com

Today’s Business Challenges

In this pending election year, how have the daily challenges business owners face changed? I found a recent survey which addressed some key business issues. The business owners responses are presented below in no particular order. First, ask yourself how have things changed in your business in the past 12-48 months?

1. Finding Profitable Customers
The biggest challenge for any business, NOT just small businesses, is finding and keeping profitable customers- not just any customers, but customers that make you a profit.

2. Team Issues. . .
The biggest problem is finding, recruiting and hiring employees that can truly help your business grow. It's difficult to compete with the larger businesses for the same talent when you have limited funds.

3. Cashflow . . .
The biggest problem is when you have to invest your entire cashflow in client projects that last several months, which result in a huge growth in receivables. But when you should be celebrating, you find that cash is thin preventing further growth.

4. Focus on What You Can Control
Uncertainty continues to be the major challenge facing all businesses. The solution is to revisit your Strategic Business Plans; determine where course corrections are necessary. Then, focus on what you can control instead of what you cannot control.

5. The Elephant in the Room
Health insurance- the cost of which now exceeds my mortgage, never mind the $5K deductible. The potential is that business growth and innovation could increase when dollar $12,001 of an entrepreneur's income no longer equals dollar one of an employee's.

6. Make Friends with the Bouncer!
Remember standing in line for hours trying to get into a popular club only to be turned away by the bouncer at the door? Marketing your business on the Internet is no different. You can spend hours canvassing for friends, linking profiles, and even mastering the ad game. But if consumers do not have a sense that they can trust you, your product, or your service, they will turn you away. Your business friends guard the gates to a whole new world of consumers.

7. Asking for Help
The single biggest challenge for business owners is breaking free from the mentality that says, "I have to do it all myself." Business owners struggle with this continually. When they finally ask for help, they find that problems get cleared up in a matter of minutes that previously took days to solve.

8. To Social Network or Not
I work with business owners every day and one of the most common questions I get is "Should I be doing social media as part of my marketing?" The short answer is "YES!"

9. The Economy
The biggest challenge facing small businesses today is the lousy economy. It is difficult to get new customers and generate sales when people and businesses are not spending. This is why it is so important to distinguish your business (brand) as being "different and better" so people/businesses receive a strong benefit from doing business with you that they do not receive anywhere else. Just being another "me too" business in this economy will kill you.

10. Loosen Your Grip on E-mail
E-mail is an abysmal tool to rely upon solely for selling. Last year, your average customer spent 8+ hours per week plowing through their inbox– that's one entire business day! Furthermore, the amount of 1st class mail has dropped by over 46 billion pieces in the last five years. So what is the best way to stay in touch with your clients?

11. Too Many Hats!
Business owners notoriously wear too many hats! Not only does the business owner have to provide expertise, they also have to manage all aspects of the business. You're the accountant, the marketing manager, the schedule keeper, etc.

12. How to Hire a Millennial
Hiring Millennial generation employees can be a big challenge; their attitude and thoughts about work and their work environment are total different than the Baby Boomers. The difference ranges from continually checking Facebook and texting all day to pushing back against HR policies- while expecting a speedy promotion. Learn to hire them for their strengths; they handle social media, create grassroots marketing strategies and work well together to play off each others' strengths.

13. Business as ‘Usual’ Equals Death
The story goes . . . A business starts, struggles through all of the issues, and finally gets to a profitable and comfortable status. That's the challenge; the comfortable status is a death warrant! The next day everything changes, the market, the competition, the technology and now your company is behind!

Sam Stroup
Owner, Certified Business Coach
303.898.0737
www.focusedbizsolutions.com

Important Life Rules

Giving Business Owners: Focus,
Clarity, Results and Growth

I remember my twin boys just learning to play the game of baseball when they were just eight years old.  The laughter of the parents when a child who finally hit the baseball and ran down the wrong base line– directly to third base instead of first base.

Then, there was the experience of  my twins learning the fine game of soccer.  At this age, there was no real offense or defense, rather it was an entire swarm of small bodies chasing the ball, with the only player staying in their respective position being the goalie.

Finally, the basketball game when a child got so excited that he got the ball and forgot to dribble on the way to the basket.

I have coached a number of my children’s sports teams, and learned the importance of learning the simple rules of the game. Initially, coaching involved managing the level of chaos and confusion as children learned the rules of the game.  But over time, it was profound that the once-confusing rules become second nature, and I finally watched children play together as a team without a second thought about the rules.

RULES TO LIVE BY

Playing a sport without knowing the rules leads to chaos, confusion, and even injury. Likewise, in your life and in your business, without clearly defined rules, the result is disorder, dissatisfaction, and even harm. Here are some simple rules that can help you navigate life and your business. I hope they provide you with thoughts to ponder and reevaluate the rules in your life and your business.

RULE #1: Family is always first.

Many leaders give lip service to putting family first, but they don’t actually practice this concept by giving their spouse or kids top priority. What does it mean to put family first? It involves redefining success. Do not measure success in terms of career accomplishments, money, cars, or a big house.  Rather, success is when those closest to you truly respect you and refer to you as an good example. Practically speaking, make sure to schedule family time before setting your work time. It is far more important to have quality family time than to have work demands that result in the continuous 60 hours per week.

RULE #2: Follow the Golden Rule

Ask three questions about our leaders: 

1) Do they care for me?
2) Can they help me?
3) Can I trust them?

As a leader, ask these same questions of yourself: Am I caring? Am I helping? Am I reliable? Set the example to those under you to treat others the way you would like to treated.

RULE #3 Take care of yourself

Doing things for yourself is not a selfish act; it’s a critical and important act. Brian Dyson, CEO of Coca Cola said, “Imagine life as a game in which you are juggling some five balls in the air. You name them- work, family, health, friends and spirit and you’re keeping all of these in the air. You will soon understand that work is a rubber ball. If you drop it, it will bounce back. But the other four balls- family, health, friends and spirit are made of glass. If you drop one of these, they will be irrevocably scuffed, marked, nicked, damaged or even shattered. They will never be the same. You must understand that and strive for balance in your life.”

A very dear friend and mentor of mine learned the importance of this rule the hard way, through the trauma of a heart attack and a quadruple bypass. If you are not managing the necessary time to rest and replenish, to exercise, and to monitor your mental facilities, then eventually you and your body will breakdown. When that happens you have no value to anyone around you.

RULE #4 Choose a positive attitude

Happiness cannot be won, bought, or brought to you by another person. Rather, it results from a conscious choice to be grateful and to make the best of life’s challenges. Whatever happens to us, we always have control of one thing: our attitude. Yes, attitudes are contagious.

RULE #5 Always have a plan

The key to personal growth is to have a beginner’s mindset– remembering when you first started your business. Beginners admit they do not know everything and proceed accordingly. As a general rule beginners admit that they are open, humble, willing to learn and grow, willing to make the necessary changes, and are noticeably lacking in the rigidity that accompanies experience, success and ego.

RULE #6 Always give more than you receive

Looking back over your career, make a list of those that served as your mentor. Everyone at many points in their career ask for help, but not everyone has the capacity or willingness to give and mentor others. When you stop trying to ‘use’ people around you, only than can you learn ways to add real value to your personal relationship with others and only then can your influence truly soar.

 

Sam Stroup

Managing Principal, Business Growth Strategist, & Mentor
FOCUSED BUSINESS SOLUTIONS LLC
303.898.0737 Phone
303.586.6454 Fax
focusedbizsolutions@gmail.com
www.focusedbizsolutions.com