This is a quick note to say that I’ve just launched a new website at www.rallystrategic.com

Comments welcome

Running can be a great time to allow the mind to make connections and here are a few thoughts that I connected this morning as I ran out.

Our unconscious can hinder us from achieving difficult things, quietly robbing us of the resilience to keep going or preventing us from seeing how far we’ve come.  I was watching a brilliant lecture on TED the other day where Benjamin Zander was talking about Music & Passion.  He showed how children are able to hold bigger and bigger musical phrases in their mind given time, allowing them to play more smoothly and competently.  Sadly, he pointed out that many don’t reach the final, more satisfying level, instead giving up just before they do.

In a marathon, this is the wall that people speak about - having run 22.2 miles, your unconscious tries hard to persuade you that you can’t run the last four.

I’ve been using my running blog to galvanise me to run for 20 months now, whilst also exercising my writing ability, one week at a time.  Both writing and running slowly improve and the resilience it has developed spills positively out into other things.  

It is a different matter if you decide not to do something.  A friend recently closed down one of his companies as their key client no longer had a requirement.  His colleagues would have been happy to continue, part-time and unpaid, to see if they could bring in more work.  But a clear decision cuts off the slow drain created by overheads and allows (or forces) everyone to focus on other more profitable things, probably to better effect.

I practice Chi-Kung, ancient Chinese breathing & stretching exercises, every morning & night for ten minutes.  It would be easy to give up as there are no clear instant benefits, but I know that over time it will enable me to stay flexible and positive.  I can’t see any reason NOT to carry on doing this until I physically cannot.

Vipassana taught me that you have to be gentle with yourself when you’re learning to do new things.  And persistent.  When you notice that you’ve lapsed in your New Years resolution to go to the gym, don’t beat yourself up about it or think how much ground you’ve lost.  Instead, just accept that your mind was elsewhere and start going again.  Coaxing the unconscious into a new way of working is the technique that works best, provided you keep applying gentle pressure.

So to business.  Here is some thinking exercise for you.

If it were easy, what would you change about yourself, your business or the way that you do business?  Now imagine that you’ve made that change… how would you behave in this new reality?  Would you stand straighter, dress sharper, look people in the eye, listen longer to your employees or be more direct?  Practice this behaviour, in a small way to start with, but at some point during every day if you can.  And when you realise that you’ve lapsed practicing it, start again.  And though it would be easy to stop going, choose not to and instead keep returning to it.

You may be surprised at how effective this very simple approach is and also how the resilience that you’re building up may start to positively affect other things that you try to achieve.   Emile Coue said that If we imagine that it is not possible to do something, then it is indeed impossible for us to do it.  My sense is that if we can imagine how something will look and start behaving appropriately, then we are a long way towards achieving it.

The news that the Government still seems wedded to their aim to tax small businesses on their parking spaces suggests to me that we need to start thinking about policy in a different way.  This legislation is indicative of a desire to merely recoup reserves that had been spent out on projects and have now been used to prop up the economy.

This is a sub-optimal strategy based on a question along the lines of what can we tax and much like the Window Tax of Wordsworth’s era, will end up with boarded-up windows… this time of businesses.

Rather than focusing on recouping reserves, the policy makers, whose names should appear against their creations in my view, would do better to focus on a more holistic question, for example:

How do we get UK PLC to be super competitive in the new global economy?

A project working down through our economy from this high-level question will of necessity create a very different legislative focus and structure.  

By posing this question, policy makers would be forced to determine where they can nurture innovation and creativity, how they can get fuller utilisation and efficiencies from the available workforce and what unique competitive advantages we have that our competitors, other economic states on the global stage, do not.

My intuition is that the result of this thinking will not be yet another distraction which hinders the owners and managers of SMEs.

I had the good fortune to catch the inauguration of the 44th President of the United States, live on Sky News earlier and I was struck by the eloquence with which President Obama delivered his inaugural speech.

If ever there was a clear demonstration of our two great nations and the common language that George Bernard Shaw typified as dividing them, this was it.  

British politicians appear to speak in media friendly (or savvy?) sound-bites, aiming their message at the lowest common denominator, both in terms of language and the number of words.  

Obama, on the other hand, showed how truly inspiring a great orator can be, his rhetoric rallying the American people to stand firm against their current challenges, reminding them that countless others had faced far greater hardships to defend the freedoms they now experience.

He also reminded them (and the rest of the world) that despite their different creeds and religions, they stand together as Americans

I am unashamedly British, but I cannot remember being moved to tears by a British politician in the way that I was by President Obama today.  I would gladly see the return of inspirational oration to British politics, with a backbone of principles to back it up.  Furthermore, I would stand tall behind the idea of a Kingdom which is proud to be United by the strength of it’s diversity.

May the words of Obama inspire not only his own fellow countrymen, but also my fellow countrymen and whoever else will listen to him around the world.

If you haven’t already wrapped up & posted yourself home for Christmas, you might consider doing a few little tasks to help you get a boogie-on when 2009 dawns.

Clear the decks:  It’s not a very Christmassy thing to do, but unless you’re in again before the New Year, take down all the cards & decorations and take the opportunity to bring your filing up to date.  One of the results of eating, drinking and making merry is that you’ll hopefully forget about work and this is a whole lot easier if you’ve tied up all the loose ends that you can.  And coming back to old Christmas decorations in January is always a gloomy experience.

Review 2008:  With the heady combination of Christmas and economic gloom, it’s easy to forget what you really achieved in the last year and this is a poignant moment to reflect on your successes and failures.  It helps to put things in an excellent perspective and hopefully demonstrate that you’re pretty damn good at what you do, despite facing challenges like everyone else.

Preview 2009:  Think forward to this time next year and imagine that you’re opening a bottle of expensive bubbly to celebrate a stonking year.  Think about what kind of achievements would actually make it a great year.  Close your eyes and listen to the cork popping, hear the amber liquid fizzing into the glass and taste the sweet Champagne as the bubbles go up your nose.  Imagine toasting the people in your team and watching the looks of pride grow on their faces.

First 100 days:  Sketch out the tasks that you need to do in the first 100 days of next year that will make a real difference to your success.  Don’t get bogged down in detail at this stage, just focus on what needs to happen.  Once you’ve finished this outline, share it with your team so that everyone can see where you want to get to and how they can contribute.

First two weeks:  Plan in detail how you will spend the first couple of weeks after the break.  It’s too easy to waste time at the start of the year if you don’t have a clear plan and this period will really set the tone and pace for the other 50 weeks, so aim to be very busy indeed.  Not just busy though: busy working on important things, things that matter and make a difference.

You’ll be surprised that these visualising and planning tasks do not take long to do.  You’ll be amazed at how much more relaxed you’ll feel over Christmas having put 2008 to bed and with the clarity about what you’ll be doing when you return.  You will also be shocked at the amount of positive energy you’ll bring to work (and life) from the moment you get back.

Have a relaxing Christmas and a healthy, happy and highly prosperous 2009!  You really deserve it, just as soon as you’ve got these last few easy tasks wrapped up!

Hot on the heels of attending a depressing talk by John Dodds of BERR last week, I read the results of a survey of entrepreneurs by Tenon Recovery’s thinktank, The Tenon Forum.

This showed that 34% of SME’s are suffering from the UK’s unfavourable legislative environment and 24% feel alienated by increasing employee rights.

The following passage thus caught my eye in Stevens Drake newsletter:

The Government has recently overhauled the UK’s immigration laws and has created the UK Border Agency (UKBA), a new arm of the Home Office to deal with immigration based on a new Australian style points based system.

As from November 1st 2008, any employers wishing to employ non-EEA nationals will be required to register with the UKBA as sponsors. However, be aware that in doing so you will be effectively opening yourself and your business up to scrutiny, as the UKBA will have significant powers not only to look at those workers you are proposing to bring into the UK, but also to review the right of your existing workforce to live and work in the UK. If you do not have all the requisite paperwork in order and are found to be effectively employing staff illegally, you may be liable for a fine of up to £10,000 per illegal worker.

I have three questions:

Who pays for and trains the HR resource that has to check whether a candidate applying for a job falls into this category, the number of points that the candidate has and the authenticity of any passports and other paperwork presented?

What right does the company have to deselect candidates who are non-EEA nationals so as not to have to register with the UKBA?

What rights does the candidate have to challenge either the outcome of the points system or of being deselected and take the company to tribunal for discrimination?

With more than 4.4 million companies employing less than 5 people (presumably with no specific HR department) and another 100,000 or so with under 20 staff (according to the FSB Pressroom), my guess is that worrying about the answers to these questions and others very like them is hampering the kind of real productivity that UK PLC needs to get out of the current economic trouble.

It is worthy of consideration as SME’s account for more than 50% of UK turnover and 64% of its commercial innovation and each company owner is already an unpaid tax, NIC & VAT collector, pension arranger etc.

And note, whatever time & money the legislators feel a small business owner should spend understanding and complying with existing & new legislation, will be multiplied by 4.7 million times in terms of its real effect on UK productivity.

Simplicity really does count!

Those people who have worked with me know that I am not an accountant, but this does not detract from the fact that I am a great advocate of management information.  In fact, I am often staggered that businesses, usually smaller ones, have managed to survive at all without it and I would hypothesise that there is a correlation between the lack of adequate financial control and likelihood of distress.

For an expert view of MI, bring your accountant in to discuss which measures to follow and how to set them up.

However, my simplistic overview is as follows.

Cash-flow forecast:  Using the income & expenditure headings from your last set of accounts, create a spreadsheet of CASH in’ and out-flow for a period of at least the next 3 months.  You may be able to condense the headings to keep the data straightforward, but the key is to capture every outgoing that you will have to pay for and each income that you will definitely receive within this period.  Where you are uncertain it is best to err on the high and early side for expenses and low and late side for income, but try to be as accurate as possible, both in the amount and the likely timing.

This will immediately give you a sense of whether you are going to run out of cash and if so, when and by how much, but it must be updated weekly or monthly to remain accurate, rolling forward by the same period each time.

Costing Systems:  These will vary by business, but some of the measures that are generally invaluable are as follows:

Staff utilisation, which requires the use of time-sheets, enables you to allocate accurate employee costs to products & services and to accurately charge customers.  It also enables you to see how much of the time that you are paying for in salaries is being used to generate revenue.  There is a natural tendency for staff and Directors to fudge the collection of this data which is why every member of the team, including the MD, should complete them, every day.

Profit is surely the key raison d’etre for companies, unless they are charities, thus it is vital to measure it not just after the end of the year, but on an ongoing basis.  Companies should, at the very least, know the accurate profitability of each client, of each product, service or line and also of each sales person’s portfolio.  This enables strategic decisions to be taken about, for example, which clients to over-service and which to resign, which products or services to develop and which to redesign and which sales people to reward and which to remove.

An absence of this information makes these decisions pretty much impossible for anyone other than a highly gifted crystal-ball-gazer.

Budgetary control:  An absence of predetermined and agreed budgets for overheads, marketing, client hospitality, research & development, staff development and so on generally suggests a lack of strategic planning.  An approach of ‘we’ll spend some money there if and when we make some’ is actually a quite effective plan to fail. 

Time needs to be spent considering what the requirements of the business will be in each of these areas, what the benefits of spending money will be (and conversely, the risks of not spending money) and then an overall allowance divided accordingly.

Budgets then need to be monitored and fine tuned according to key performance indicators (KPI’s).

KPI’s:  These will vary from business to business, but they might (hopefully) encompass some of the profitability measures listed above as well as indicators for customer satisfaction, employee retention, delivery times and so on.  There’s an old adage that says ‘what gets measured gets done’ so the key here is to distill a small number of key indicators for your company, bearing in mind my comments below. 

Note that the information I’m suggesting above is not for show.  It takes time for someone to generate and the opportunity cost  of that person alone should suggest that it is kept to a minimum, but it needs to be engaged with and acted upon.  If, for example, your sales & profitability has been declining for four quarters in a row and you are getting low on cash, you need to focus attention on addressing the underlying issues. 

In this case it might mean reducing overheads, resigning unprofitable clients to free up time to service more worthwhile ones, redesigning products or services to reinvigorate sales and rescue profitability and so on.  NOW!

If you are reading this with no MI or are embarrassed because you don’t understand the MI you do have, I have a suggestion.  Either schedule a meeting with your accountant and sort it out, or alternatively, email me with a top-line about your industry and size of company and I’ll ping back an email with some more tailored suggestions.

Either way, now is the time to ACT!

As if to underline my post this morning, this article just arrived in my inbox.

I had the great double-honour to interview John Moulton on behalf of Stuart Slatter as part of my course on Turnaround Management at London Business School.  Moulton is savvy beyond the ken of even gifted businessmen and I heartily recommend heeding his words!

Whilst out running this morning I was thinking about the power of perspective and although I touched on it in the 8 driving analogies I wrote a month or so back, I thought it was worth revisiting it as we get deeper into the slippery season.

My driving coach, Don Palmer, once explained how to conciously look at a problem in a different way.  He outlined a four-step approach. 

• Position one, what actually are your peceptions of the problem? 
• Position two, what is the likely viewpoint of the other people involved. 
• Position three, how would an onlooker see the problem from the outside? 
• Position four, what does it look like from a great distance away, say for example, looking down from space.

When faced with a challenge, we often only think from position one and we are likely to see far fewer options than by considering it from other perspectives.

This thought started this morning because I ran a favourite circuit in the other direction, highlighting all kinds of different things to me even though I have run the paths many times before.  Thinking about Don also reminded me how similar running is with driving… and also with business. 

The orange trainers I am using this season have an exaggerated tread pattern to gain grip in muddy conditions and they are brilliant in this respect.  However, despite the tread, mud is still a low grip surface and running on wet wood in them is like skating on ice.  This means that you have to plan ahead as only gentle turns are possible in the mud, whilst turning on one of the wooden bridges that I cross would almost certainly end in a painful fall. 

In a car, leafy-wet roads are almost as slippery as ice so it it once again necessary to first slow down to a speed that you can then corner at without spinning.  This takes observation and planning, which means that in poor conditions you either need to be even more focused on the road ahead than normal, or you need to be driving more cautiously. 

Don’s explanation is that we have 100 theoretical units of grip, which we can allocate between turning and either accelerating or braking.  If we are using 80 units of grip to brake, we only have 20 left to turn which may result in us spinning.  Likewise, a spin is likely if we accelerate hard whilst turning out of a junction.  To resolve the issue, we ideally need to either brake/accelerate or turn, not together.

The analogy holds true for business too and with the current economic downturn, it is fair to expect difficult trading conditions ahead.  Once a challenge hits us, it will be very tricky to find the cash and the management bandwidth (brain power) to change approach, product attributes or adjust our cost / price structure etc. 

In this case we need to ensure our business is ready for the conditions, trimming unnecessary costs and setting strategies in advance of any problems.  This requires your attention firmly on your business, on the environment, both internally and externally and on what is happening elsewhere in you industry.

A trick that many of my clients have found useful is to plan ‘thinking time’ into their schedules.  A quiet two-hour ‘meeting’ with yourself every couple of weeks will allow you to consider what is happening from a range of viewpoints and help you retain the holistic perspective where you can probably add most value.

One final thought.  If you have been presiding over a slow slide in sales or profitability, or there are aspects of your company that you know are working sub-optimally, don’t put off addressing them any longer.  Seek advice from your accountant or a specialist.  With poor conditions approaching on a number of fronts, the time to act is NOW. 

And while it’s fresh in your mind, why don’t you write that session of thinking time into your diary?

Readers might like to know that I have a second site at www.FosterRuns.com, where the visitors appear to come from very different places.