Top Management Story

Writen by Christopher Walker

Hard work is bad management.

If you are running a business then you will know that one of the most disastrous things you can do for it, as a leader and manager, is to develop a huge vision.

Yes, that's right. Fantasies burn people out. Things like taking a flee bitten dog and making it win the world grooming championship tomorrow. These dreams are ego pumping and this motivation is what has been sold to business in the past. This is why 80% of small business go broke within the first year. Too big a vision, too small a bank account.

Dreams are wonderful. They pump adrenalin through your body, they help you overcome hardship, they are an antidote to depression but the other side of the coin that dreams create is naivety. A recklessness that is so promoted in new age circles, "anything is possible." If you live by dreams you give your power to the luck market. Wild imaginings and emotional swings are one in the same.

The visionary will go broke, the emotionally hyper pumped person will reach for the sky, but they will always feel vulnerable. Dreams are dreams, action is reality. Real action means real steps. Dreams and visions feed the ego, make us feel so self important. But self importance only translates to bottom line profit if you are in the entertainment industry (and then only short term). If you deliver a product or service, with real and tangible results, you better become a realist.

We can easily pump up our sense of self. We can tell the world how wonderful we are. We can create a vision statement, like "keep the big boys honest" when the big boys have a billion dollar advertising budget and we have $10. These visions and dreams make the ego fly, and this is motivation. Motivation is pumping us up to reach beyond our limits. The problem is that motivation does not create sustainable performance. So motivation is temporary.

Inspiration on the other hand is a dream that comes from within, but lacks the hype of motivation. Inspired dreams are more sustainable because they are not do or die adventures. A person who lives an inspired dream does not put all on the line for one quantum leap of faith into the unknown. Instead they follow one of the most important laws of nature. The law of Evolution.

Nature never destroys anything, she simply builds a new one on top of the old one, greater in consciousness, less in number. In other words nature doesn't make quantum leaps, she evolves by making things smarter and faster.

Business runs on cash. The currency of love in a business is cash. Love sustains a relationship, cash sustains a business. If you run out of love in a relationship, you run out of relationship. If you run out of cash in a business, you run out of business. Cash is king.

So, in a large business, when we vision the future, we do market analysis, budgets and feasibility studies. We measure customer response and we get quality control feedback before we start production. We calculate how much love this project will consume then calculate the expected income. Finally, we double the length of time we have been promised by the leader that the income will come back in by, and on that basis we know how much love the business will need.

Small business, run by entrepreneurs on the other hand, get an idea, guess the idea, produce the idea and struggle with the money as it comes. Cash flow problems send companies broke. Most companies go broke during growth stages because they run out of cash. And as a relationship needs love in the bank, a business needs love in the form of cash in the bank. When the love of the business overtakes the love in the bank, business go broke. Customers buy value, they don't by the dreams of the owner.

A well managed business grows automatically. You don't even have to be clever to have a good business that grows. You can see many people who have grown their business to very large sizes and yet they are no genius, no visionary, no master of creative invention. Richard Branson is one. But my Dad was another.

My Dad ran his own business all his life. He wasn't a big time entrepreneur, he just wanted to accept responsibility for his family, retire with comfort and provide for his children. There were many things my Dad could have done to make more money but he decided to have family fun instead.

Hard Work is bad management and bad management is poor cash flow control. Here are a few points.

1/ You need 6 months hard cash flow in the bank to run a business well.
2/ Management of Debtors and Creditors is one of the most critical elements for business growth.
3/ Cash is king. If you can get paid early, and not spend it, do so.
4/ Business that adds value to peoples lives, sell themselves
5/ Bad service and bad quality won't be profitable.
6/ Helping people do more in less time is the key to value added services.
7/ Real is a future trend in business.
8/ The ego is becoming less and less important in choices for good business
9/ Length of time is not the basis for measuring value. Faster is better. Smarter is better than longer.
10/ Good business evolves from old business. Quantum leaps are high risk.

Some more points

Existing customers are your best customers – and what you appreciate grows. New customers become as you treat them. If you don't do what you say you are going to do, people don't come back. One unhappy customer costs more than 10 happy customers can make up for.

Summary.

It is important for us to dream of the future. This feeds the ego. The ego deserves to be fed. But the best business is now business. The customer you have now is the best customer you will ever have. The evolution of your business is limited only by your creativity. Creativity about how I do what I do faster, better and at less cost. In other words how do I make my existing customers happier. This is also true in relationship. How do I make my existing relationship better? The best business are fed with cash. That cash comes from existing business. If we inject more cash into a business then we do so to evolve the safe and happy existing customers to be safer and happier and therefore consolidate our competitive position. Then we will expand.

Hard Work is Bad Management.

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