Steve Pilgrim: Business Improvement

Unknown. "In absence of clearly defined goals, we become strangely loyal to performing daily acts of trivia." [Motivational Quotes of the Day]

WE'VE SPENT THE LAST COUPLE OF DECADES
Where have all the leaders gone?

tearing down the command-and-control thinking that won two world wars and built a prosperous nation. In our zeal to rid ourselves of tyrants in leadership positions, we also ridded ourselves of many benevolent dictators who could build strong businesses.

We replaced them with pop-psychology management thinking that, while often sound in theory, is difficult to put into practice. Poorly practiced these fads or leadership-by-bestseller concepts lead to some horrible failures. Drucker, Deming, Juran and others had it right. In far too many places, we simply missed it or we allowed endless government intrusion to sap the optimism of our business leaders! Lately, we value style over substance.

The talent myth. I couldn't help being reminded of the steady deterioration in corporate and political leadership over the last twenty years while reading The Talent Myth, Malcolm [Jonathon Delacour]

THERE'S BUSINESS BLOGGING TO BE DONE

Building Business Relationships via the Blog. If you read only one post today, make it this one. [Blunt Force Trauma]

DOES YOUR BUSINESS HAVE A SURVIVAL STRATEGY?
Does your management team know how to develop one?

"There is nothing in sight that will provide an impetus for a spike in growth,'' writes economist William Dunkelberg in his midyear scan of the small business horizon. Call this the desert island economy. As you do all you can to survive, each day brings renewed hope of recovery. Are you going to let the media's mood determine your business success? # [John Henry on Business]

SPECIALIZATION

Niche market sparks an unlikely franchise - charged up with unusual power. Call it the mother of all narrow-retailing concepts. It's one-stop battery shopping, with batteries for everything from automobiles, RVs and lawnmowers to electric razors, remote controls, camping lanterns, smoke detectors and backup power systems for hospitals and other institutions. That's a unique a gimmick. What's yours? # [John Henry on Business]

SMALL BUSINESS KNOWLEDGE MANAGEMENT
Note the this post and the next

Traction and Radio. Roland Tanglao liked my review of Traction, but reconsidered when Jim McGee pointed out that Traction is a whole lot more expensive: ... [Jon's Radio]

THIS SEEMS LIKE A VERY SENSIBLE APPROACH

for evaluating knowledge management tools as they might be applied in small organizations. We also do some small business consulting and advisory work and our clients want a tool, but often lack the disciplines to use them well. Terry says this, "But Radio is still a lot closer to reaching the mythical Zero Contribution Barrier that I believe is critical to any long-term KM success."

Radio vs. Traction -- A Personal View. Jim McGee asked, so I thought I'd try to find an answer. [Blunt Force Trauma]

A COUPLE OF OLDER COMPANIES PRESENT GOOD NEWS

Union Pacific's net surged 25% for the second quarter, led by higher volume in a sign that the economy is slowly improving. [Wall Street Journal]

Sears also posted some decent numbers.

ABOUT AS EXPECTED

I.B.M. Posts Sharp Drop in Quarterly Profits. I.B.M. said it eked out a second-quarter profit of just a few pennies a share as it took a $1.4 billion charge to cover job cuts and write-offs. By Reuters. [New York Times: Technology]

ENCOURAGING NEWS

Coca-Cola reported a 15% profit increase and said that despite a weak economy it is sticking by its outlook for full-year volume. [Wall Street Journal]

Citigroup also posted a 15% earnings increase.

Alvin Toffler. "The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn." [Quotes of the Day]
(me thinks he never saw Radio templates, macros and HTML)

FIGHTING OFF THE SALES SLUMP

For many small businesses, the summer months mean a sales slowdown. New prospects become hard to locate, and current deals become: "I'll have to think it over" or "I'll get back to you in a week or two." How do you handle that? Here are a few pointers, which can help. [John Henry on Business]

THE RAT RACE

can be defined in a variety of ways. We define it as:

keeping up with the Jones's

materialism as a path to happiness

everyone knows we've got to get more

climbing the corporate ladder to say you did it

working all day and going home too tired to pursue your dreams

letting the liberal media tell you how things really are

There's more, but that gives you the essence. One of the corporate myths has to do with measurement, compensation and 'getting results.' Nine out of ten organizations don't have metrics that really cause the results they seek. In fact, those metrics cause results that have to then be 'fixed.' Steven and Joel capture those notions with these posts!

Measurement Dysfunction. "As a result, workers began doing just about anything to get customers off the phone" Boy, does that sound familiar. "If you're in a helpdesk or call center, for example, and you're measuring your people on the number of calls they're taking, that's what they're going to do - take calls. [16-Jan]

Today, Joel writes about the oft-seen but (mostly) un-planned-for effect that measurements can have upon individuals' and organizations' performance. We call it "getting just what you measure," and too often the measurements are the only thing looked at by mid-level management. This "metric of the month" leaves employees feeling powerless to really do what's best for the customer; when they do they get 'dinged' by their manager for making the weekly stats look bad. Beat that horse too often and he'll just give up on the customer entirely.

What? You don't want your customers given up on? The trick is to find the measurements that really encourage the behaviour you want... not just the ones that are easiest for "the system" to give you (like number of calls taken, or time per call). [Steven's Weblog]

HERE'S ANOTHER REASON THAT TELECOM COLLAPSE AND REBIRTH IS INEVITABLE

Few people debate the fact that all of us use the phone at home, in business and on-the-go more than we did even ten years ago. Few people argue with the notion that we will be using one or more of these to an even greater degree in the future. We probably won't stop at Blockbuster, but we may 'order' a movie feed from Blockbuster. Those same phone calls may become video calls. Demand for bandwidth is a given!

The industry is facing the death throws of a 100-year old legacy, copper-based network. This centrally-planned, government subsidized relic is currently operated by a relative handful of monopolists or executives from the monopolists' ranks. Their rule is coming to an end. Some of them don't even know it.

Replacing that old network and its kings and lords will be a modern, continuously upgradable fiber optic network that passes IP packets end-to-end. Running that network will be a group of people who understand Moore's Law, rapid time-to-market and the concept of price-elasticity-of-demand. They're anything but monopolists!

I had an experience similar to the one mentioned below when one of our daughters phoned home from Boston while dancing with the Boston Ballet for a month or two. Little did we know we were facing a $700+ bill until after it arrived. We had done our homework in advance, fortunately, had documentation for the rates we had been quoted and got adjustments made to the bill. The relief was not easy to get nor was it immediate, but in an age of $0.045 per minute long distance rates, $700+ was not going to be paid!

Other than the airline industry, where you can be arrested for inquiring about the sobriety of the pilots, no industry treats its customers the way the telecom industry has. Better times are on their way, though!

SprintPCS Nightmare. I'm broke. I barely have enough money to get by through the next month. And my "royalty" check I received this weekend was only 36.00 - I was expecting 1000.00. Still, I can manage. I can manage...until today. Don't worry... [Burningbird]

OPPORTUNITIES FOR IMPROVING INVESTOR CONFIDENCE
No surprises, please

The week ahead: Big-name earnings. Investors will turn their eye to corporate earnings this week, after a string of financial scandals that rocked Wall Street and individual investors. [CNET News.com]

OUTSTANDING NEWS
Thank you, Mr. Buffett

To date, Florida-based grocery chain Winn-Dixie Stores Inc. and aerospace giant Boeing Co. are the only other major companies to make the change so far, Coke officials said.

Coca-Cola will begin treating future stock option grants as employee compensation, a key accounting change that could offer a fairer assessment of ... [Wall Street Journal]

Ralph Waldo Emerson. "Trust men and they will be true to you; treat them greatly, and they will show themselves great." [Motivational Quotes of the Day]

Tom Robbins. "Disbelief in magic can force a poor soul into believing in government and business." [Quotes of the Day]

EVERYBODY'S DREAM
It is everybody's dream, isn't it?

She Built a Business in 'No Time'. A young New Yorker is building a fashion business out of nothing more than an iBook and a catchy phrase. By Leander Kahney. [Wired News]

GREAT ADVICE FOR BUSINESS OWNERS

The next time you're grumbling with a fellow Entrepreneur about ungrateful employees, chiseling customers and high tax rates, take a moment to share a happier bit of news: how you recently made your business more efficient, because efficient Entrepreneurs survive in tough times. # [John Henry on Business]

THEY'LL EVENTUALLY STEP ON THEIR SIEBEL RELATIONSHIP

Microsoft jumps into CRM market. The software behemoth shows off its first customer relationship management software effort, another step toward the company's expansion into the business applications market. [CNET News.com]

ACCOUNTING & ERP SOFTWARE MARKET IS TOUGH RIGHT NOW

SAP lowers forecast, implements hiring freeze. Cites unclosed deals, poor market conditions [InfoWorld: Top News]

FIGHTING SPAM

Lately we've heard about SpamNet from Cloudmark. Today, Walter Mossberg reviews ChoiceMail. SpamNet is free. ChoiceMail seems to start at $29.95.

BOOKKEEPING SCANDALS

There are debates about options and their "accounting treatment" in today's public corporations. There are investigations. There are restatements of past financial statements. Why? (Because there have always been!)

The real cause is tightly tied to the fact that accounting is an opinion. Each year around tax time someone passes the financial information for an individual or small business to six or eight accountants. They are asked to prepare a tax return. In the best of these articles the tax returns are then submitted to one (or more) IRS agents. In no year that I've read these articles has there been a precise agreement between any of the 6 or 8 accountants. Further, the IRS agents usually disagree.

Take an example: is the purchase of a personal computer an expense or a capital investment? At Sally's Crafts Store where 4 new kilns, 2 dishwashers and a new loom were purchased, it may be a capital expenditure. At Federal Express it may be an expense. If it's part of 5000 PC's being purchased at Citigroup, it may be capitalized.

Most often the rules have more to do with past practices, consistency and a formal declaration of changes in practices than they have to do with law or accounting regulations.

Certainly there are attempts at fraud in some companies. Sometimes those attempts are elegant and difficult to catch. Other times the fraud stems from a change in practice that isn't disclosed in hopes of buying the company some time until things improve.

We are entering a period in which every public company and, quite possibly, some large private companies will be scrutinized. Stock analysts have caused 30% to 40% drops in market caps when companies have missed their "whisper numbers" by a penny. The SEC can now cause similar fluctuations by beginning a sentence with, "We are looking into the accounting practices at..."

The solution is not a team of federal auditors. The solution lies in several key reforms:

Stop the ridiculous and excessive executive compensation programs.

Disconnect executive compensation from stock performance and focus it on business performance.

Expense stock options as if they were any other form of expense.

Send convicted offenders to jail.

Hold the boards, the audit committees and the outside accounting firms accountable along with the CEO and CFO of the business.

Warren Buffett has often said, "I'd rather be roughly right than precisely wrong." Intent is a difficult thing to evaluate until you see the extremes of an ulterior motive. Let's get roughly right about these accounting opinions, make the needed changes in laws and enforcement and get back to running businesses - not stocks!

WILL THE MID-MARKET

of accounting software wind up in SAP's and Microsoft's hands? If not, who will block their ways or challenge them?

Microsoft completes Navision acquisition. Company will be merged into Microsoft's Business Solutions division [InfoWorld: Top News]