Music Notes Online

This post is going to be a slight departure from my usual posts. I had the pleasure of meeting one of the founders of a website called Music Notes. It was started by two teachers looking for a new way to engage kids at the middle school they teach at. They have created an entire library of hip-hop themes songs and videos all about mathematics ranging from pre-algebra to geometry. Check out a couple of the song samples, you will be as impressed as I was!

The reason I say this is a “slight” departure from my usual posts because I do spend quite a bit of time talking about what I refer to as “America Waking Up”. Lamar and his project are a great example of the kind of work and thinking that is changing things for the better. This man teaches math to middle school kids in South Central Los Angeles. The fact that he teaches the subject people like the least, to the kids who are of the age where they hate everyone, in an area that is not known for its high-end educational facilities is amazing enough. The fact that he not only faced this challenge but thought of a creative way to overcome the challenge is even more spectacular. And then he created a website to spread this unique idea to other schools, thereby leveraging the impact of his idea by factors.

Maybe if we could figure out how to make more Lamars, and pay them what they are worth, American students wouldn’t be dead last in the developed world in math and science skills!

I highly encourage you to check out the site and spread the word!

Organizational Tools vs Organizational Toys

This is just a quick thought that I had, (at least, quick by my usual rambling standards) and wanted to share.

As the end of the year approaches, everyone is getting their 2012 planner pages ready. New Year’s resolutions are flying. People everywhere are telling themselves: this will be the year that I stay organized! Maybe you got a new iPad or Android phone for Christmas and are telling yourself “Yes, now that I have this ‘insert technology here’ I can stay focused and productive. This was the missing link!”

This brings me to my point. The difference between an organizational toy and an organizational tool. Organizational toys will tell you that this is everything you need to be organized. But task apps and cloud calendars, and expensive leather portfolios (yes, even our beloved Field Notes notebooks @inkedmn) are simply toys. I know, I know, they don’t seem like toys. You do very serious work with these systems.

Right.

Organizational TOOLS on the other hand. Are incredibly powerful and can fundamentally change your life (most of the time for the better). The secret is, nearly all organizational tools are entirely mental processes. Shout out to David Allen.

And that is the sad thing that most people don’t to accept. I don’t care how amazing technology becomes, without a clear mental decision to be better and the will power to DO better, none of your toys will ever be more than that, simply another toy in your toy bin.

But, if you wake up one day and decide: “Today I will organize X” Or “Today I will begin capturing all my thoughts into one place”, and if you commit to that decision, I promise you great things will happen, even if you all you have is a Trapper Keeper with wide rule notebook paper. (Yes, yes I did go there).

Now, you combine technology with a solid mental process and truly amazing things will happen. So, in summary:

Technology + Same Mental Attitude = Toys

New Mental Process + Commitment = Organized and Happy

New Mental Process + Commitment + Technology = Look Out World!

I just watched this great video about changing your mental process. If you have a big goal that you want to attain, try following this guy’s mental process for achieving it.

Addendum:

I just found this great and *almost timely article from David Allen that talks about the mental switch I discuss here:

http://www.gtdtimes.com/2011/12/27/the-way-out-is-through/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+GtdTimes+%28GTD+Times%29

Islands of Profit Review

I recently just finished a great book called: Islands of Profit in a Sea of Red Ink by Jonathan Byrnes. I really enjoyed this book. Mr. Byrnes is lecturer on management at MIT and this definitely comes across in the writing. The world of business books tends to be very un-academic, as it is one of those fields where degrees and publications are less a measure of success than dollars and cents are. But there are definitely people who take a more academic approach to business. The difficulty I am facing here is that the whole point of my blog is that you do not need an academic approach to excel in business. For that reason, while I enjoyed the book, I will not be adding it to the Business Guru Reading List. But it is only because the purpose of the list is to get non-business people up to speed and this book goes far above and beyond that goal. If I ever create a Business Guru Ph.D reading list, this book will be one of the first on the list.

 

That being said, I am going to do my best to give you an idea of what it is about and why I liked the book. It is a fairly lengthy book and covers a LOT of information, but I will do my best to summarize the main points here.

 

First, some context: This book is written primarily for senior level and C-Level executives of large companies. It assumes that your company has clear silos: Sales and Marketing, Finance, Operations, etc. The idea is, as one review mentioned, an extension of the 80/20 principle. Much of your business is not actually making you much money. The problem is that sales people tends to focus on gross sales numbers, not on the profitability of those sales. There are a variety of ways that sales can be unprofitable and you not know it:

 

  • Order frequency and timing
  • Order mix
  • Distributions issues

 

Mr. Byrnes devotes the first third (roughly) of the book to describing some of the common causes, examples and a systematic method of identifying these “islands of profit”. While it might seem like this is not very difficult, he goes into tremendous detail on the system. Small business owners might think the system is overkill, but for large companies analyzing this kind of data can be tough. Pulling info from ERP systems, working across silos and with different departments can all create many more challenges than you might expect. There is also good information on how to realign incentives of sales staff with profitability instead of gross sales.

 

The middle section of the book is dedicated to selling for profit. Once the cost and profit drivers have been identified, how do you work with customers to increase profitability? He gives some good treatment to the new trend of working with customers and vendors to develop closer relationships and integrate more closely. This is the area where, if you really want to get ahead of your small business competitors, you should put some attention. It is still a fairly “new” idea in the large business space, which means that small business folks are still 10 to 15 years away from doing it on a regular basis.

 

I really enjoyed the end of the book, which focused on leading for profit. There is some great stuff here about how to make sure that your managers are working at the right level, how to train leaders, and how to create cultural change in your company. In my humble opinion, this was the most useful section. As someone who is trying to turn managers into leaders, I found a lot of good ideas from here.

 

So, that is my “short” summary of the book. I hope you find it interesting and if you want are bored with some of the books on the Guru Reading list (which I can’t imagine), you might kick it up a notch with this book.

Work Makes Wealth

If you follow me on twitter, then you know that I just recently fired a client. Sometimes this is a necessary evil, and there is typically one very common reason for having to fire a client. Their expectations and your expectations simply don’t line up. Any good service professional will tell you that managing client expectations is the key to success, but sometimes it just can’t happen when the client is starting from a place of irrational expectations. This is where this client was, and their irrational expectation is a great example of a VERY common misconception so I thought I would write it out.

 

Retail investments do not create wealth.

WORK is the only thing that can create wealth.

 

This is the misconception that caused me to have to fire a client. They assumed that if they paid me for financial advice, and gave me $100,000 I could make them wealthy with it.

 

The world simply does not work that way.

 

The purpose of investments and financial planning is to grow wealth and protect it. Or maybe the goal is to generate income from your wealth.  But you will NEVER create wealth through your investments. You need to have MADE the money first. The only way to make money is by adding value. Since it is really tough to add value buying and selling stocks, you can see how the immutable laws of finance will not allow you to create a great deal of wealth that way.

 

Now, on the other hand, if you own your own small business for example you can create LOTS of value for your customers and therefore build up a significant amount of wealth. The only significant way to create wealth for 99% of the population is their work. If you work and spend less than you make, you can create wealth by saving. Then, you can take that wealth you created and grow it by investing.

 

So if you are normal person, and you save into a 401(k) or an IRA, or a brokerage account, that is great! But do not expect those investments themselves to make you wealthy, it simply won’t work. The greatest driver of the growth of your wealth is how much YOU put into the account.

 

Now, I am being a little general here. Yes, there are private investors who invest in companies and make money. Some people, like Warren Buffet, have made tremendous amounts of money by investing. But the reality is, these people are still working, even though they are working at investing. And yes, there are real estate developers out there that make millions by developing property, for example. The secret is, unless you are already wealthy, you don’t have enough money to create real wealth through investment.  Since none of us are venture capitalists or professional investors or multi-millionaires go with me here and ignore that aspect.

 

Now, the sad fact is that there are people and professionals out there who will tell you the opposite. If you give them your money, they will make you rich. If you pay for this class, they will teach you to be rich, etc. And you can give them your money and you will not be any more wealthy (and possibly less) than if you had just worked hard and saved in a smart way.

 

They are lying to you. Every. Single. Time.

 

It isn’t easy to get rich, so get back to work!

Overcoming Plateaus

I have been thinking a lot about the disconnect between what people plan (as you know I am proponent of strategic planning) and what they actually accomplish. I consider myself a much disciplined person, yet I still find myself falling short of the plans I set for myself. Every time I do planning, whether it be for a year, a month, or simply for the week I find that something is always being pushed off or delayed. When creating the plan, it seems simple enough. I plan enough hours for everything, so why do I not get it done? Anecdotally, I know that it is a lack of will power. Pushing yourself to always be working, accomplishing and achieving is hard work! It is often times so much easier to rationalize and then simply click “play next episode” instead of sitting down to finish that project or do that load of laundry. I came across a great New York Times article that discussed a whole series of studies that were done on this exact behavior. Apparently I’m not the only one that does this!

I also began to think about how this behavior affects a small business owner. I know tons of bright, hard-working people, with great businesses, that can never seem to get over that hump. The hump can vary; maybe it is getting from 100k of revenue to 200k or from $1 MM of revenue to $2MM, or maybe it is simply overcoming the endless disorganization and backlog of work and the stress that it brings.

The article had some startling advice for how to overcome this. It was startling to me, only because I had done this on my own, without realizing it, and was shocked at how productive I had become. The last paragraph of the article says it best:

“Good decision making is not a trait of the person, in the sense that it’s always there,” Baumeister says. “It’s a state that fluctuates.” His studies show that people with the best self-control are the ones who structure their lives so as to conserve willpower. They don’t schedule endless back-to-back meetings. They avoid temptations like all-you-can-eat buffets, and they establish habits that eliminate the mental effort of making choices. Instead of deciding every morning whether or not to force themselves to exercise, they set up regular appointments to work out with a friend. Instead of counting on willpower to remain robust all day, they conserve it so that it’s available for emergencies and important decisions.

If you know me, then I have probably talked to you about the importance of being organized and creating a structure. You only have so much decision making ability in a given day. The fewer number of decisions you have to make, the better off you will typically be!

But you can only structure so many decisions. You can pre-pack healthy lunches and snacks for the week, so you don’t end up at the fast food joint. You can pre-schedule important, but often delayed, activities like working out, performing administrative duties, or strategic planning. You can also put a limit on the number of meetings you have a day, when they start and end and how much is covered at each one. At the end of the day though, there are still a number of projects that require your input and decision making skills.

Micro-business owners, as a rule, tend to be a very ego-centric group of people. Not in the traditional sense, but in the habitual sense. They started the business by doing everything themselves, so are therefore very comfortable being involved in every aspect of the business. This behavior is what leads to the plateaus in your business. If you involve yourself in every decision, and you have a finite amount of decisions you can make in a given day, mathematically speaking, you cannot progress past a certain point.

I have found in my company that the biggest leaps forward we have taken came when I looked at a very full project list, picked the two most critical ones and focused on them and them alone. The other items had to get done by someone else, without my direct involvement or simply didn’t get done.

It is really scary!  But in so many instances I have seen great things come from this process. Your staff is often times much more capable than you give them credit for and will step up when given expanded responsibilities. So many of the things that we think are critically important, simply aren’t!

So the moral of the story?

Structure your time to pre-decide as many things as possible. It will create the most productive you.

After accomplishing that, you have to realize you can only do so much and that if you truly want your business to grow, you will have to let go, focus on the most valuable projects, and let your staff support you.

In the coming months, I will try to put together some ideas and thoughts on hiring and training the right people to take these kinds of responsibilities from you.