Fatigue, why am I hearing so many signs of fatigue?

In 2008, a perfect storm formed.  The largest recession/depression since 1929 hit the world.  At the same time, we all experienced the full fledged 10 year adoption cycle/impact of the internet.  Through the next four years, two trends emerged:  The markets required companies to do more, do it better and do it faster and all this with fewer people. 

We are now beginning to experience, individually and organizationally a sense of fatigue that comes from depletion.  When I was actively rowing, I learned a valuable lesson related to depletion.  In a rowing race, you start the race with a very intense sprint which immediately puts your body in to a state of anaerobic depletion (this state means that the rowers body is both attempting to take in more oxygen then is possible and is unable to convert fats/carbohydrates to energy…. So, the rower begins the race in a state of pan “pins and needles” in the legs, etc.).  By the end of a six minute race, a rower has performed the fatigue equivalent of playing, full out, two back to back basketball games. 

The lesson learned…. step away.  There are times that continuing a pace puts one, or one’s organization, in peril.  Now, for those who are ready to respond with “Yeah… and watch my customers go away and my progress melt away” let me offer that the purpose of stepping away is to focus on improvement and efficiency.  It is not about giving up. 

So, tell me… what would you do if you stepped away?  What would your team do if they paused and regrouped?  What would change about the spiral I see of faster, better, cheaper? 

The Top 10 Ways Not to Lead

Today we have a guest blog from Lauren Owen:

This month I’d like to present my own lighthearted take on leadership improvement, specifically the Top 10 Ways Not to Lead. (I also want to thank my wonderful clients, who are genuinely dedicated to improving their own leadership abilities and are continually setting examples of great leadership.)

Click HERE to read the Top 10 Ways Not to Lead:

ABOUT LAUREN:

Lauren believes in making a difference in her clients’ lives. She does this by helping them identify their personal and organizational WHY and shows them how to share that with their teams and their customers.  She identifies their areas of development as a leader so that they can focus on making changes that will make the biggest and quickest impact. As a result, their teams, organizations and personal lives are all transformed for the better. 

Lauren is a certified WHY coach and a Stakeholder Centered Executive Coach.

www.laurenowenllc.com

lauren@laurenowenllc.com

206.427.2856

Why are more and more people in business talking about vulnerability?

Please follow me.  I am watching the Seahawks finish off the Panthers.  One of the announcers says that Wilson, the Seahawk quarterback, visions the game before it ever happens and then manifests it.  Following the psychology of sports, I was not surprised to hear terms like “vision” and “manifest” spouted by commentators of today.  The other eight people in the room were surprised and commented on it. 

Soon, I began hearing other words about the vulnerability and trust developed for the level of teamwork achieved.  Now, I have to admit, unless you watched Oprah, then I imagine you haven’t heard the word vulnerability bandied about too often in a rough contact sport like football or in male dominated business meetings. 

Yet, there it was.  So, what is vulnerability?  I’ll give you my definition… pure and simple it is risking something or being at risk.  Applied to business groups, I believe it means placing oneself in a position where others may potentially have power over us. 

Patrick Lencioni in the 5 Dysfunctions of a Team starts from the position that many of us feel a need for safety and we equate this to invulnerability.  So, feeling vulnerable is not something we do very lightly. 

Risking is a first step to producing trust and trust is one of the foundations of creating a highly effective team.  So, what is it that needs to be risked?  That actually depends on each person.  Here are a few questions to ask yourself, or others and which, if answered honestly and with self-awareness would show vulnerability, risk: 

•  What is it that if I revealed it, I would feel that I looked less than good?
•  If my team new something about me, what do I believe would undermine my authority?
• Why don’t people like to work with me?
• What is my weakest skill and how do I shore up that lack of skill?

First, if you can truly answer these questions, even to yourself, you are a person worth getting to know.  Second, most of us can’t? 

•  "There is no 'I' in TEAM" ~ Anonymous
• "A single arrow is easily broken, but not ten in a bundle" ~ Japanese proverb
• "A boat doesn’t go forward if each one is rowing their own way" ~ Swahili proverb
• "Coming together is a beginning. Keeping together is progress. Working together is success" ~ Henry Ford
• "One man can be a crucial ingredient on a team, but one man cannot make a team" ~ Kareem Abdul Jabbar
• "A group becomes a team when each member is sure enough of himself and his contribution to praise the skill of the others" ~ Norman Hidle
• "You don't get harmony when everybody sings the same note" ~ Doug Floyd

“Remember teamwork begins by building trust. And the only way to do that is to overcome our need for invulnerability.” Patrick Lencioni

 

So, what would you risk in order to create trust?  What is it that you do that makes creating  trust more difficult? What actions do you take to create trust? 

Quantifying Your Value Proposition

Today we have a guest blog from David Lightfoot:

Much is made of financial metrics. This is good but often the simplest metrics are the best.  Gross Margin is one of the best. Gross Margin is the difference between the business’s revenue and cost of sales. Cost of Sales is the cost of providing goods or services to your customers but not including any costs of overhead.

The right way to calculate Gross Margin in a service business is to include the cost of labor of all people who provide direct client/customer service within Cost of Sales.  And that labor cost needs to be fully burdened including taxes, benefits and paid time off (PTO). To use the manufacturing term, that’s called Direct Labor.

Indirect Labor goes in Overhead. Indirect Labor includes managers, supervision and support staff. Often, some people do some work that is directly billable to clients and some work that is supervision or management. In this case, the labor costs need to be allocated between Cost of Sales and Overhead.

For most professional service companies, Direct Labor (unburdened) needs to be charged to clients at 2.5X to 3.0X. For example, if a staff person is paid $50 per hour, they would typically be charged to the client at $125 to $150 per hour. Looked at another way, Gross Margin in a professional service business should be about 50%. That’s Revenue less Direct Labor including burden.

Gross Margin of 50% sounds great but remember overhead and profit need to come out of that 50% margin, leaving (hopefully) some Net Margin.

Businesses selling goods rather than services will have significantly different gross margins. I’ve seen 30% typically for contracting and 90% or more for software. Whatever the business, gross margin, properly calculated, is usually one of the Key Performance Indicators (KPIs).

There are a number of things that are significant about making an accurate Gross Margin calculation. First and foremost, this is the purest measure of the value proposition of a business. It measures what customers will pay for the business’s goods or services against what it costs for the business to provide those goods or services. It is the quantification of your value proposition.

Why is all of this important? It helps with understanding the cost behaviors of the business. This allows one to calculate breakeven, figure out how to be more profitable and whether the business has a viable model.

Do you know what your gross margin is?

David Lightfoot
David Lightfoot has over 35 years of accounting, finance and operational experience as Controller, Chief Financial Officer or Vice President of Finance for small and medium-sized businesses. He also has operations experience and has worked as a CEO, giving him a broad business perspective.

      Mr. Lightfoot is currently a Partner with B2B CFO, the world’s largest provider of CFO services. David’s clients range from start-ups to $50M in annual revenue. He specializes in professional services, real estate/construction, software and healthcare.

Can Companies with fewer than 500 employees do effective training and should they?

Universally, companies with fewer that 500 employees are pretty poor at training employees.  The reasons for this are understandable and many, starting with flat organizations, populated by doers and a mindset that people are hired to add value. 

The reasons that training becomes more important to a company as it grows from 15 to 50 10 120 employees are just as universal: employees stop providing as much value if they are not challenged and developed; self-learners are extremely rare; companies whose employees, processes and systems don’t improve get stuck/complacent at points in their growth. 

So, what’s a CEO/Company to do?  Here are a few options that reduce risk, improve sustainable growth and provide size appropriate focus to the training that is needed:  Recognize training is important and that training is something you model; not what your company can train and what training it may not be able to provide. 

If you are an executive or business owner without a coach, then you don’t yet recognize that training is important or that it is something you model.  I know of no professional athlete who is without a trainer/coach.  Maybe they know something you don’t know?  If you are getting coaching ask yourself how much you are communicating its value to your team/employees?  Do you have goals for the coaching you receive and do you share those goals/KPI’s?  Do you include your key reports in the coaching process? 

As to training others… I have found that in most companies of the 15 and 50 employee size, that they are best at technical training, next best at operational training and usually weakest in training leadership, management and supervisory skills (soft skills:  communication, professional improvement, etc.).  These are important roles/skills and tools.  They should be a part of employees professional improvement plan and there should be some budget attached to the training involved. 

Back to the technical training…. If you make something, provide a service or distribute something, the knowledge base and tools to do it and do it better are likely to be within your and your employees wheelhouse.  Meaning that you have best practices, skills and tools that can be taught.  The companies that do this the best focus on three aspects of training: the provide training in very narrow areas and cross train; they train people to train and make the training a constant part of employee’s jobs. 

So, what works in your company?  How did you initiate training?  How did you make sure that training was a part of what everyone does? 

Can You Take a Punch

Today we have a guest blog from Dan Weedin:

I vividly recall being a member of the junior high football team. I was a skinny kid that probably looked pretty funny in my football gear. I was definitely NOT a fighter. I wasn’t ever looking for a tussle from anyone that was filling out their uniform and growing a beard at 14 years old.

One practice on a crisp autumn afternoon, we had a drill where the ball carrier was going to run through a gauntlet of teammates and practice holding on to the football at all costs. My turn as ball carrier came up and this was the first time I had tried the drill. As I made my way through the gauntlet with ball firmly tucked under my arm, I swiveled to the left to see if I could make my way out. WHAM! The next thing I know, I’m lying on my back and the absence of air (or the ability to even inhale) was palpable. My good buddy Eric had come out of nowhere and basically “blew me up” with a collision to my chest. It was my first experience of having the wind knocked out of me. After a few seconds (that seemed like hours) elapsed, Eric was helping me up so I could resume practice. To this day, I have no idea if I held on to the football or not!

I was blindsided by Eric because I had a huge “blind spot” in my process of running. What blind spots do you have in your business?

Football teams at all levels – from junior high to professional – run drills and practice in part to figure out their “blind spots.” They learn through drills to anticipate perils and to be resilient in the event of crises. For my part, I never more ran without my head on an allegorical swivel, to assure that I kept my breath where it was supposed to be!

As a CEO or chief executive in your company, you’d better have your head on a swivel, too. Just like Eric didn’t announce his impending presence to me, neither will a disaster send a calling card. You will have unexpected “collisions,” and without having identified, analyzed, and prepared for them, you may just find yourself flat on your back. You must then hope that someone is there to help you up!

The best way to avoid this is to take control yourself of the strategic work related to crisis planning, business continuation, and resiliency. This isn’t something that should be delegated away. The buck ultimately stops with you. So while you can delegate implementation, you can never relinquish the duty of being the strategic leader of your team. Only you can eliminate your blind spots. And the best way to do that is through planning, preparation, and practice.

It’s all about that action, boss!

DAN WEEDIN

Dan Weedin, CIC, CRM
The Crisis ConquerorP.O. Box 1571 / Poulsbo, WA 98370
http://www.TheCrisisConqueror.com
dan@danweedin.com
360-697-1058

Blog – http://Weedin360.com
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Skype: danweedin

Inducted to the Million Dollar Consultant™ Hall of Fame – 2012
http://weedin360.com/2012/11/15/the-official-announcement

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The Power of “Not Yet!”

This winter, I am undergoing my usual:  I have a plan for improving my golf game.  It includes a certain number of lessons at an indoor golf range and practice sessions.  What I did not initially grasp is that it would require me to embrace the concept of “Not yet”. 

You see, as I completed my fifth year of playing golf, I thought that I was going to be working on nuance and refinement of my swing.  (you can skip the next paragraph if you don’t golf)

I walked in to the first lesson and heard myself declare, “ I am hitting my driver 200-225 yards.  I may as well put it away and just hit my 3 wood.  I hit a 3 wood  about as far and more accurately.”  My instructor asked, how far I wanted to hit my driver and I answered by saying that on longer courses my second shot was not a 7 iron but a wood, or at best a rescue club.  This means that my strategy of being on the green in two is significantly reduced.  My accuracy and the likelihood of parring the hole go down if it takes me three strokes to get to the green.  To hit with better golfers, I needed to hit the drive 250 yards. 

What my instructor offered was to get me to hit my tee shot farther by spring and as, or more, accurately then I was when I hit it a shorter distance. 

What I have had to confront is failure.  I confronted the possibility that I can’t hit a golf ball longer.  To avoid the frustration of failing, I have undertaken a mantra, “not yet”. 

How many times have you said (or heard others say), “I can’t do that”.  The truth of the statement is self-evident and self-defeating.  By exchanging the above words for “not yet”, I get to take failure off the table. 

In business this is often critical.  To succeed, we have to try things that we have never done and have no data to support our accomplishing.  We have staff/teams who get stuck by saying, “We can’t do that!” and a simple substitution is to exclaim, “not yet!”. 

If you can get your teams/key employees to embrace “not yet” you are half way home to achieving a goal.  Your mindset will shift.  You still have to take action, accomplish your goal.  What is removed is the hurdle of telling yourself, as you work toward that goal, that you are failing.  Try it and let me know how differently you feel? 

What mindsets do you create to increase your and your team’s odds for success in a project or new endeavor?