19
Jul
10

A week of tough phone calls

Last week’s Monday Morning Wake-up was clearly a “wake-up” for many. It was aimed squarely at addressing the epidemic of “owners’ nights” that has spread throughout the entrepreneurial world. The root cause of owners’ nights is financial distress, or what I prefer to label, “living on the financial edge.” It’s the worry and the stress of having too little cash flow to keep up with payroll, credit card and loan payments, rent and other expenses. Yes, living on the financial edge is stressful. It sucks. And I decided to do something about it.

At the end of last week’s MMWU, I offered to take as many coaching calls as possible for the entire week – at no cost. The only condition was for owners to be committed to going “no compromise” and engage in the tough stuff that success and profitability demand. I requested recent Balance Sheets and Profit and Loss Statements because they tell the story of the leader’s financial decision-making and behavior.

The phone started to ring, and by the end of last Monday, my schedule was jammed for the week. I did receive a good number of “Neil, you’re crazy” e-mails warning me that I would be buried in requests. One person wrote, “A whole week of heartbreak and desperation is too much for any mortal to endure. Please protect yourself from this emotional onslaught, as we need you around for a long time to come, giving us that ‘kick-in-the-pants’ every Monday morning.” Well, I’m happy to report that I not only survived, I got to talk with and help some most appreciative owners.

I feel it’s important to share some of the common threads woven through the conversations. Why? Because I’m certain that the issues addressed on these calls are currently causing owners’ nights for the many who chose, for whatever reason, not to take my offer to help. I talked with owners of multi-million dollar businesses. I talked with owners of very small enterprises. It doesn’t matter how big or small the company is, owners’ nights are exhausting. And, most often, they result from patterns of leadership behavior.

With the utmost respect for those owners I talked to, here goes:

  • The financial literacy gap: The gap is huge and scary. I ask to see the most current Profit and Loss Statement and Balance Sheet because they provide a wealth of insight, far beyond the actual numbers. I heard everything from “My accountant doesn’t give me these reports,” to “I still have no idea what that Balance Sheet is supposed to tell me.” I tried to connect the dots between their financial stress and not being able to read, understand and make good decisions from their financial scorecards. It’s seriously hard to win the business game when you don’t know the score. No more excuses. Please get the book, Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean by Karen Berman and Joe Knight. We have it in stock in the Strategies bookstore. Click here.
  • Don’t know what that expense is: OK, the Profit and Loss Statement is the “dollars in, dollars out and dollars left” report. It’s not a difficult report to understand. However, if you don’t understand or can’t explain what’s in each line item on the report, you are compromising the financial wellbeing of your company. Every owner I spoke to had a challenge explaining what certain expense accounts contained. Hey, if there’s a $34,000 expense on your Profit and Loss Statement and you can’t answer what it is, don’t be surprised when you wake up at 2:30 a.m. in a cold sweat.
  • Overpaid/really bad bookkeepers: So, you can’t afford a bookkeeper so you’re doing the bookkeeping yourself. Read the first two bullet points. Get a competent bookkeeper, get out of the office, lead your company and make money for the bookkeeper to account for. Stop the madness. Stop looking at messed-up financial reports and stop frustrating yourself.
  • Ignoring the elephant in the living room: Payroll. That’s the elephant. It’s your elephant. You designed or picked your pay system. If it’s sucking the financial life out of your business, do something about it. Yes, pay conversions can be dicey and heart-pounding adventures. Not taking a paycheck yourself or losing it all is one adventure you don’t want to experience. When done properly and with integrity, pay conversions don’t have to be a walk through the fiery pits of hell. You won’t please everyone, but you’ll put your business on the right path to opportunity, growth and profitability. Confront the elephant.
  • Excuses and blame: I’ll keep this one short. It’s not “them” – it’s you. You led your company to the financial edge and you’re the one keeping it there. You need to change first. You need to be accountable first.

This was rewarding for me, and a no-compromise wake-up call for the owners I spoke with. If you wanted to do a call but hesitated, I’ll keep my offer open. Just call Bruce Hourigan at 800.417.4848 ext. 203. He’ll set up a coaching call for you. Just be patient as I’m traveling the early part of this week and on vacation next week.

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Please share your thoughts with me about today’s Monday Morning Wake-Up. Click the Comment button above.

Neil Ducoff, Founder & CEO of Strategies and author of No-Compromise Leadership

Pass this e-mail on to your business colleagues, managers and friends. They’ll appreciate it.

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3 Responses to “A week of tough phone calls”


  1. July 19, 2010 at 7:28 am

    Can you please tell me what you mean by “pay conversions”? A web search turned up numerous definitions.

    Thank you for your help and the wake-up.

  2. July 19, 2010 at 9:41 am

    Hi Mark,
    By pay conversion, I’m referring to the work we do at Strategies redesigning compensation systems to build team-based, no-compromise, business cultures. The team-based component refers to bonus systems that kick in when goals are achieved for a specific time period.

    Hope this helps.

    Neil

  3. July 19, 2010 at 10:44 am

    Neil,

    It helps greatly. Thank you.

    In one of my former lives, I wrote incentive compensation plans. So, the concept is quite familiar to me.

    Mark


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