Yesterday we talked about how as the CEO or business owner you may want to hole up and do four quick passes through the budget with some hi-liters. RED is NO. GREEN is GO. YELLOW is I Don’t Know.

It’s a good idea to have your leadership team follow suit with whatever you do. In this case, I want my team to do the same thing so when we come together we can more easily discuss each line item. If you’re doing things one way, and each person on your leadership team is doing something different, it can make the conversation more difficult. Not impossible, just more difficult. But do whatever works best for you and your team. 

The major point I want you to consider is “putting everything on trial for its life.” Make each line item live and die on its own merit. Be relentless. 

I’m not terribly fond of cost containment. I more fond of cost squeezing. “Cost creep” can stop you in your tracks. It’ll derail momentum if you don’t incorporate the ongoing habit of the relentless pursuit of profits. 

Don’t be stingy. Be frugal. There’s a difference.

Budgeting demonstrates values. Specifically, the budget will display what YOU value. I can glance at a budget and determine if the owner cares about developing himself or herself. I can glance at it and see if the owner cares about developing employees. I can spot where the owner may have some paranoia or special concerns. I can spot where the owner has pet indulges, too. It all comes out in the wash. 

Well, let’s pick up now with your meeting with the leadership team. I’m not terribly fond of making this a marathon endeavor. That is, I don’t care to have meeting after meeting after meeting about budgets. Truth is, I don’t care about having meeting after meeting after meeting about much of anything. Meet as often as you need to, but don’t meet any more than you have to. The key is to prepare BEFORE you meet. 

If I’ve gone through the list 4 times and each member of the leadership has gone through it 4 times, then we’re ready to meet. I know my speed going through the list 4 times doesn’t likely look like theirs because they’ve each got things they’re willing to fight for, and perhaps other things they’d like to fight against. But hopefully they care about each other and we can enjoy a civil, even vigorous debate. I encourage it. Remember the goal is to put each line item on trial for its life. That won’t happen if everybody enters the room without the courage to fight a little bit. 

I don’t foster the fight, but I do work intentionally to build a safe environment where we all know we’re not there for any reason other than to make the company as great as it can be. Egos need to be left behind. Budgets aren’t about pushing forward somebody’s career agenda or anything else. They’re about utilizing resources to help the company grow. As the lion tamer in the room, my job (your job as the CEO and owner) is to make sure the lions behave. Serve them well. Keep everything safe so people can fully express themselves. And don’t shut down disagreement. Debate and disagreement can (and should) happen without thinking it’s detrimental. Disagree, but don’t be disagreeable. 

The Team Meeting

Everybody should be fully prepared for the discussion. Put a time limit on the meeting. Start on time. Stop on time. Set aside whatever time you think may be needed. It’s wise to ask the team how long they think they’ll need. Let everybody know in advance. Hint: this meeting may very well be a full-day meeting. It depends on the size and complexity of your business. I suggest you limit it to one full day,

Yes, I’m being sarcastic. Sorta. Budgeting can be fun when our coffers are full. It sucks when they’re not. Challenging.

There are just a few principles that I’ve been devoted to throughout my career. Things that seem to serve as kind of “north star” for the operational challenges I’ve faced. One of them is to put something on trial for its life.

Put it on trial for its life.

Budget items live and die based on merit. That’s what it always meant for me. There’s likely going to be a serious and deliberate debate. At least on a few line items. But after considerable wrangling, line items either live or die after the necessary adjustments.

Let’s consider some things we can do to make budgeting great. I won’t promise to make it fun, but who knows?

Fast Scan For The Obvious Bad

Sports commentators talk about a team that passes the “eye test.” That is, the team looks good. No matter their record, they just look like a good team. You can apply that same logic to the first quick passes through the line items of the budget.

Look for the things that jump out without scrutiny. Some items will leap out and get your immediate attention. You may find yourself muttering, “What in the world is this?”

My preference was to do this alone, without a CFO or accounting person. Not because I didn’t want their knowledge, but I wanted to run through the numbers myself without letting myself get sidetracked. You may be able to control yourself better than me, but I knew if I began to question a line item I’d be tempted to stomp down and dive down that rabbit hole. I want to get into a rhythm of going through the whole list so I can do it a few times quickly. It’s not like speed reading for me, but I don’t want to linger too long on any one line item.

I like to use hi-liters as I go. Green is GO. Red is NO. Yellow is I DON’T KNOW. But rather than mark things up too badly and clutter things I tend to go through my first pass focusing only on RED or NO ITEMS. No doesn’t mean they’re completely gone, but it means these jump out at me as needing more serious consideration and probably deserving of a cut. I don’t use any other colors on my first pass. That makes it easy for me to discern the most obvious line items where I can make some likely reductions. No, I’m not going to get it 100% right. You aren’t either, but that’s not the point. The point is to give yourself a place from which to begin so meaningful progress can be made.

Fast Scan For The Obvious Good

Now I’ll do the same thing for the items that seem congruent with the goals of the new year or whatever planning period I’m using. It’s time to bust out the GREEN hi-liter.

I’m scanning for line items where the line item seems fitting or maybe it could even use some beefing up. I may put a small + (plus) sign if I think it could use some bolstering. I’ll put a small – (minus) sign if I think it could even suffer a closer shave. I began to do this years ago as I learned how the numbers add up and it’s good (no, it’s great) to have a cushion.

Fixed Expenses

Let me interject here something about fixed expenses and how we deal with these. Fixed may or not be really fixed. Many things – perhaps most things – are negotiable. Too often business owners don’t want to put in the work to see if they can lower their expenses and thereby free up some serious money in the budget.

I’ll work a budget over with a YELLOW hi-liter on such line items, but only if I’m really willing to put in the work, or feel the work would even be appropriate.

Entrepreneurs, business owners – Bula Network is proud to be launching THE PEER ADVANTAGE, a professional peer advisory group exclusively for U.S.-based business owners. We’re now just 23 days away from 2019, a year I’m dubbing, “The year of intentional and purposeful connections.”

Bula Network began almost 10 years ago as mostly a consulting company helping clients with a variety of different business challenges. I leveraged my decades of business building experience to help business owners and CEOs with everything from marketing, to succession planning, to sales force compensation programs and just about everything in between.

Eventually, the work took a turn – mostly because I wanted to stop doing the work for people and instead I wanted to help them figure out ways to do the work themselves. I went from fishing for clients to teaching clients how to fish for themselves. It was much more rewarding work. Some call it coaching.

Three years ago another shift occurred, one that was very congruent with coaching. I became aware of the professional peer advisory group for CEOs and entrepreneurs. Fascinating stuff. By the Spring of 2016 a book was released, THE POWER OF PEERS. It was written by Vistage CEO Leon Shapiro and Vistage VP Leo Bottary. Vistage is a company that specializes in building 16 member in-person groups for CEOs and top leaders. The book captured both my attention and imagination.

By the early fall of 2016 Leo had left Vistage to do his own thing. He was the VP of Peer Advantage at Vistage and clearly one of the chief experts in the world on the topic. As a longtime podcaster I had an idea. I wondered if Leo would like to have his own podcast. Me? I wanted to learn more. I’d be willing to do the heavy lifting to make a podcast possible if Leo was interested in using such a platform to spread the message.

I contacted Leo even though I’d never met him and he had no clue who I was. After a few back and forth conversations Leo agreed to launch the podcast, YEAR OF THE PEER (2017). I was merely the behind-the-scenes guy doing the voiceover work and serving as producer. There were many world-class interviews with fascinating people. At some point in the midst of it all, Leo knew there was a book brewing, based in part on what we were learning on the podcast. Leo began to work on a book.

By August 2017 Leo asked me to co-host the podcast with him beginning this year. We based the podcast on the book he was writing and used the same title he intended to use for the book – WHAT ANYONE CAN DO. In January we launched the new podcast.

What Anyone Can Do (the book) was published this fall (2018). More importantly for me, Leo and I had become friends and co-workers on the podcast. I had been learning as much as possible about the peer advantage, especially the advantage to small business owners who would intentionally and purposefully surround themselves with other entrepreneurs interested in hitting the trifecta of business building: getting new customers, serving existing customers better and not going crazy in the process!

I wanted to enter the space. Leo encouraged me. He had worked with me for quite a while now and knew my skillset. He felt I was ideally suited for the work because I’m driven to help people without telling them what to do, because empathy is one of my few superpowers and because I thrive on deep connections.

In February this year (2018) I told Leo I wanted to launch a small group of just 7 business owners (the people who are the closest people to my heart). I laid out the details that I intended to launch a virtual group where we’d meet on...

Benchmarking began to be popular business jargon back in the 80’s. At least that’s when I first began to hear about it. Wikipedia has some interesting history on the term.

The term benchmark, originates from the history of guns and ammunition, and with the same aim as for the business term; comparison and improved performance. The introduction of gunpowder arms replaced the bow and arrow from the archer, the soldier who used the bow. The archer now had to adapt to the new situation, and learn to handle the gun. The new weapon left only a mark on the target, where the arrow used to be visible, and with the bow gone, the soldiers title changed to marksman, the man who put the mark. The gun was improved already in the early beginning, with rifling of the barrel, and the rifle was born. With the industrialization of the weapon-industry in the mid-1800’s, The mass production of ammunition as a cartridge replaced the manual loading of black-powder and bullet into the gun. Now, with standardized production of both the high-precision rifle, as well as the cartridge, the marksman was now the uncertain variable, and with different qualities and specifications on both rifle as well as ammunition, there was a need for a method of finding the best combination. The rifled weapon was fixed in a bench, making it possible to fire several identical shots at a target to measure the spread. This is benchmarking, as it is still done today, both at the gun-factory, the ammunition-factory, as well as for a lot of sportsmen who look for the best ammunition to bring to competition.

In short, benchmarking and best practices have been considered interchangeable terms denoting the standards that have been established by industry leaders. Think of it as the current established level of high achievement. It’s not an ideal, but a realized actuality of somebody or some company in a particular area of endeavor.

Best practices on one industry may not quite mirror those in another. Typically, we look within our industry to see what the top performers are doing. They set the standard, the benchmark or best practices.

I’ve always been interested in the benchmarks or best practices, but I’ve also always found them very limiting. Probably for the same reason I find today’s social media quotes so empty. Quotable quotes are nice and all, but your business success and your leadership success aren’t likely going to be impacted by some notable (perhaps completely untrue) quote. For starters, the quotes usually have no context. Additionally, they tend to be stated in absolutes because that gives them perceived authority and power. Words like “always” and “never” are dead giveaways. But we can blitzed with such things and they enter our individual and collective consciousness – and over time, we begin to believe them. So they do have an effect on us. No denying it.

Just this morning I saw one that said, “The problem isn’t the problem. It’s your reaction to the problem.” Really? I’m not so sure. And what does that even mean? If your building roof leaks, you have a problem. I don’t see how your reaction to that problem – getting it fixed, either temporarily or permanently – is the problem. No, the roof leaks. That’s my problem. I’m doing what I must to fix it. No problem.

“Leadership involves finding a parade and getting in front of it.”   -John Naisbitt

You may not know who John is. In 1982 he wrote a phenomenally successful book, Megatrends: Ten New Directions Transforming Our Lives. He’s 89 years old now. The book sold over 14 million copies. He was among the first futurists I followed. We weren’t quite sure what such people did, or who they were, but I was fascinated by their work. Especially his work.

Here’s the full quote:

“Leadership involves finding a parade and getting in front of it; what is happening in America is that those parades are getting smaller and smaller – and there are many more of them.”

Lots of people are critical of that quote, but I’ve always been fond of it. That doesn’t make it accurate. It’s pithy. Maybe a bit snarky, which is likely why I like it.

I’ve been putting audio online since 1997. Podcasting since it first began. Over a decade ago I created The Yellow Studio, a home office and podcasting studio. When I assembled the studio I had two options of workflow: recording or broadcasting. I choose to go the broadcasting route because I didn’t want to do a bunch of post-production work, meaning I didn’t want to spend a bunch of time editing. The broadcast workflow is like live radio. You do the work upfront, preparing before you ever hit record. It’s live broadcasting without an audience…until you release your recording.

To do a broadcast workflow required more money. The equipment was largely intended for radio stations because…well, they’re in the broadcasting business. It’s hardware-intensive to do it the way I’ve done it for years. And the hardware ain’t cheap, but it lasts and lasts and lasts.

I’ve got 5 pieces of gear in my equipment rack. I’ve got the main mixer and a side mixer. And who knows how many feet of cabling. The cabling and connectivity is nightmarish. But when I created the studio there was simply no other option if you wanted to create a broadcast workflow, which was a non-negotiable for me.

Through the years a number of solutions have been offered by various manufacturers, but none have checked all the boxes of what a seasoned podcaster might want or need. None have made me envious enough to ditch my current set up because they haven’t simplified things enough to warrant me dismantling my set up, selling my existing stuff and reworking things. None have been simple and straightforward enough to give me the benefits I want and let me maintain or better yet, simplify my longtime workflow. Until now…

There’s at least one product coming out this month – after years of others trying – that may just do the job. We’ll see. I’m going to be watching it very closely to see if it will do what I’ve been longing for for years.

Simplicity is a common theme around here. So is innovation. They go hand in hand.

Most of us own and operate businesses that are not on the bleeding edge of technology. We typically don’t have billion dollar R&D labs cranking out a variety of potential game changers. I read over the weekend that the CEO of Novartis announced a new drug, which goes by the name AVXS-101. It saves lives of kids with a deadly disease called spinal muscular atrophy. It takes only one injection of the drug, but it costs $4 million for that one dose. Talk about innovating for simplicity – one injection, done. Cha-ching, FOUR MILLION DOLLARS.

I can be easily obsessed with simplicity because it’s a great weapon against customer or client friction. Take my podcasting challenge. Two mixers, five or more pieces of hardware and lots of cabling. Lots of friction for me, but when there are few (or no) options, you do what you have to do. Most of us operate businesses where we’ve got plenty of competition. Our customers won’t likely tolerate any more friction than necessary to get what they want.

Do It For Your Customers

We’re not innovating for any other reason. The goal to simplify things is so we can make it easier for our customers to buy from us. And easier for them to benefit from whatever we do for them. Plus it’s far more pleasant an experience.

Think about the basic customer experiences of contacting customer service. Let me pick on one of my all-time favorite bad customer experience companies, DIRECTV. They’re world-class in pathetic customer service. From complicated pricing where they love to inch up your bill every few months. To their woefully poor phone customer service wher...

I live in Dallas/Ft. Worth. This is a pro sports town. This season it’s a pro sports town with 3 sensational rookies, representing 3 different sports.

Dallas Cowboys rookie linebacker Leighton Vander Esch. Age 22. The National Football League.

Dallas Mavericks rookie Luka Doncic. Age 19. The National Basketball Association.

Dallas Stars rookie Miro Heiskanen. Age 19. The National Hockey League.

These professional athletes aren’t merely serviceable, they’re outstanding. Leighton Vander Esch played college football for Boise State. He was good, but at the NFL level, he’s great.

Luka with the Mavericks basketball team is a seasoned veteran having played against grown men much of his life, but at the NBA level, he’s fearless, unintimidated and spectacular.

Miro is from Finland where he’s had extensive hockey experience, but at the NHL level, he’s as confident and capable on the ice as anybody.

Three very young, inexperienced (at least at their current level of competition) players who are proving as successful or MORE SO at these highest levels of their sports.

Local sportscasters and sports talk show hosts have marveled at these young athletes playing at such high levels in their first years as professionals in the most competitive leagues in the world. Some have wondered how it’s possible, noting that as good as they were at lower levels of play — they’re even better now.

You just never know.

198 players were selected in the 2000 NFL draft ahead of Tom Brady. At pick number 199 Brady barely cracked the top 200 of players drafted that year. He’s a surefire Hall of Famer, having played 18 seasons at the highest levels possible in his sport. Who knew? Well, everybody knows now.

We know what we know. We think what we think. And what we think is our reality.

For the past couple of years, I’ve been fascinated with the human brain, how we think and how it shapes our reality. I’m no expert, but I think we can all agree that our future reality begins in our how mind. First, we think it. We believe it. Then we behave, act and make decisions according to those beliefs. Our actions bring about the results to make what was once just an idea, thought or belief a reality. It’s more complex than that, but from my simpleton’s point of view that pretty much sums it up.

It means that our ability to excel at the next level – whatever the next level may be for us, or our business – depends largely on our belief that we can excel at the next level. The three rookies here in Dallas have extraordinary skills, but their skills appear more obvious at this highest level than they did even at lower levels. In other words, they seem better at this level. It’s like this toughest of environments is where they shine most.

It begs the questions, “What if you could perform even better at a higher level? What if there are significantly higher levels of performance in your future, but you can only access them if you truly believe you can do it?”

Daily conditioning over the years of our life impacts us. We have a vision of who and what we are. It can very hard to overcome. A man making $40K a year dreams of making $50K, but having never made that much money he can’t truly see himself making that much. So he doesn’t. Sure, it’s more complicated than that, but if he can’t see it or believe it, then the details don’t much matter. Replace those numbers with much bigger numbers and you’ve got the same phenomenon happening. People making $150K a year may struggle to think they could ever earn $200K.

Self-Limiting Beliefs

They’re real.

Here we are. The final month of the year. For many of us, it’s the end of our fiscal year, too. For others, it’s the end of your 3rd quarter (or something else).

There’s a paradox of saying hello to the end. It’s also hello to the start of a new week and a new month.

Today I mostly want to reflect on the last 11 months and the remaining days of 2018. Not in some detailed point-of-view, but in general. A drone’s perspective.

Hopefully, back at the end of the summer you really set about to plan and prepare for 2019. If you’ve not yet done it, it’s not too late. But you need to get started so you don’t leave your future to random chance. So let’s begin with a challenge to ourselves.

Let’s set about to make December 2018 and all of 2019 our most intentional and purposeful year ever. 

Even if random chance has been good to you, try a different approach. And if you’re a fanatical planner, you can try a different approach, too. There’s room for improvement and growth no matter how we roll.

Here we are on December 3rd. When you close the books on December 2018 what do you want to see? What results are you after for the month? What about the year?

You’re not likely going to make the year if you’re woefully behind projections? A month isn’t likely enough unless your seasonality is ridiculously slanted toward December. But I’ll remind all of us, how you end matters! I’m not going to be so idiotic to repeat the triteness — it’s not how you begin that matters; it’s how you end. Both matter, but here we are entering the final month of the calendar year so how we started is far behind us. We can’t do anything about it now. But the finish is ahead of us, so let’s concentrate on that.

End Strong

You’re thinking of something right now. Something that you wish you’d have accomplished this year, but it’s not looking good. Or something you wish you’d have improved, but so far you haven’t.

What are they? Don’t run away from them.

Maybe they’re not possible to accomplish over this last month, but what if you could? What if you could really make meaningful progress on them in the next few weeks?

Now is the time. 

Don’t let the bigness or the smallness of it dissuade you. We can all be prone to think, “There’s no way I can get that done in such a short time.” Or, “It doesn’t matter that much. I’ll start it later.” I’m pleading with you to avoid letting either of those thoughts ruin your December.

The biggest projects on the planet had simple, straightforward beginnings. Begin it now.

The smallest accomplishments often lead to much bigger, more significant efforts. Don’t minimize the impact of something small. Has your spouse ever hugged you and told you how much they appreciate you, and love you? Did it impact you? Don’t sell yourself short on doing little, but impactful things.

The Habit Of Accomplishment

Our companies and our lives operate in parallel. As the CEO or business owner, your life is impacted by the business, and the business is impacted by your life. They’re not the same, but they’re tied together. Both, your life and your company, develop habits. The habit of accomplishment is critical for you both. Leverage this final month of the year to get that habit even more entrenched in your life and your company.

I don’t care how accomplished you are, there’s room for more. But there’s another advantage. The habit of accomplishment in pushing through the finish line.

Wise parents begin to instill into their elementary school kids how to behave and react to influences they may have yet to encounter. We want our kids to be prepared for dealing with things like drugs, alcohol and sex. And it’s not just a fear-driven agenda we’re fulfilling. It’s practical.

As parents, we know the value of facing something ahead of time. Driven by our love of our kids, and our desire to protect them, and arm them with as much wisdom as we can — we engage in conversations where we discuss the various scenarios they’re likely to encounter. We rehearse how they should react when these situations happen. Our hope and goal are that they’ll remember these conversations and respond with wisdom. In short, we don’t want them to be caught off guard.

Why don’t we do that more with our own lives…and our businesses?

Pre-think? Pre-determine? And then prepare accordingly?

Complacency. That’s the biggest reason. We get into the routine of life going the way it goes. So we don’t think about something disrupting it.

Avoidance. Another big reason. We don’t enjoy thinking about the negative things that could happen. Think about all the financially successful people who die without having their affairs in order. Even people who may have been suffering from ill health. Largely we want to avoid considering bad outcomes.

Let’s end the week by getting real. You’ll thank me. I promise.

I Learned The Hard Way

As a young leader I had to figure some things out after being smacked in the face with a really bad situation. I’d love to tell you it only happened once or twice, but life is happy to hit you in the face as often as possible. I endured my fair share of punches. Thankfully, none were fatal.

I once had a manager working for me who I really liked. I had recruited him from a vendor I once dealt with. He was likable and seemed to have the right demeanor for the job. It was the early 80’s. That’s important for the context.

One day somebody discovered a stash of marijuana in his office. I was stunned. Stunned that he’d have it at work. Sort of stunned that he was smoking pot. (Years later we’d all call it “weed”)

Simply put, core competencies are what you do best. A more detailed view might be the things you need to do best in order to thrive. It’s the practical side of business building that relies on focusing more on your strengths, and less on your weaknesses. Soar with your strengths.

What would your answer be if I asked you, “What’s your core competency?” Shockingly, some owners and CEO’s struggle to answer succinctly and clearly. A common response is more of a rambling searching than a clear declaration. I don’t think it’s because owners and CEO’s don’t know. They’ve just not really given it enough thought. It’s like I’ve caught them off guard (which isn’t really the point). I honestly want to know their answer.

Think about it. Self-awareness is hard. Whether it’s your personal self-awareness or your self-awareness about your company. And that’s exactly what we’re talking about when we talk about core competencies. “What do you do best?” “What does your company do best?”

It’s at the heart of who you are and your competitive advantage. You’d think more of us would think about it. Sometimes we don’t because we’re just too busy doing business. We’re installing HVAC systems, repairing cars and trucks for customers, selling boats, building custom homes, selling cars, or whatever else defines our business. So it’s understandable that quite often business owners or CEO’s answer the question – “What do you do best?” – by simply stating what they do for their customers. But it’s deeper than that. More foundational.

A home builder builds houses, but his core competencies may include being able to find and acquire land. Building the homes on the land is just a way to enhance the investment and turn an even higher profit.

A retailer sells stuff, but her core competencies may include being able to find and acquire solid bargains. Selling the products at retail is just how she leverages her buying skills into higher profits.

In other words, it’s not always as it appears. Nor is it always what you might think it is.

“What do you do best?”

Let’s start with your company. What are the core competencies of your business? It’s worth wrestling down so you’re sure about them.

Suggestions

Step 1: Assemble multiple groups of people to see what others think.

Sit down with your leadership team and ask them to answer the question: “What are we best at?” But don’t stop there.

Create a group comprised of front-line employees with leadership (front line leadership and others). Mix and mingle is a good strategy. Hierarchy doesn’t exist in the group. The representative roles does matter.

Create a group of customers. How about a group of suppliers? Have top leadership facilitate these groups (for obvious reasons).

Have the groups wrestle just one question: What are we best at? As a company, what do we do well – perhaps better than anybody else?

You may learn that others, inside and outside the company, think your company is best at something very different than what you think. It’s easy for you to see what you want or hope to see. By getting a perspective from a variety of viewpoints you’ll more likely find out how things really are.

Step 2: Assemble the information and review it with your leadership team.

With fresh eyes – as much as that’s possible – open the envelopes to reveal the answers of what people think your company is best at. Don’t debate the validity of the opinions.