CEO's DIARY: Being the boss

news_arialmandesk.jpg

The CEO reckons that whatever else that being boss means it does not bring freedom

September 28 – It’s really easy to see how even as small an M & A activity as that which I’m doing now can take your eye off the business ball.

I almost found myself resenting distractions from the takeover today. #3 wanted to discuss some cash flow issues with me, and one of them was really my problem. One of our biggest accounts is dragging its feet, and I had to place the call to find out why. So far I haven’t got an answer.

West wanted to discuss recruitment issues, none of which I thought of significance.

Office is usually dependable, but was in a flap (or it least I thought so until I found out that one of the IT issues was real – we did really seem to have accidentally breached a software licence which I’m pretty strict on, and so had to authorise the spend to remedy the defect in a hurry).

And Ops was towing the line and wanted to run a large quote by me, as everyone is required to when we get to agreed overall values. This take some time to work out because he is still an ‘instinct’ pricer. He’s usually right, but I like to be sure his instincts don’t lead us into trouble. Those with long memories will recall that they have in the past.

Which left little time for me and what I wanted to do.

If anyone has the impression that being boss is a route to freedom can you give up such quaint notions now? It actually makes you everyone’s possession if you aren’t very careful. I know it’s nice to be wanted, but there are times when you just have to shut the door. I will, tomorrow.

* * *

September 27 – I saw East today. I realise that in operational terms he’s vital to any deal we do. He might be vital to more than that, in fact. I like and respect him and have the feeling is mutual.

I’ve briefed him on the practical due diligence we need to do. I want him to meet the staff and see if they’re up to the job, to review the WIP, to look at the fixed assets, and to visit some sites to look at what’s there and whether we can do it for the price that’s being charged. This project is, after all not self funding if the profit isn’t there.

He’s relishing the challenge. Which is great. It means I can concentrate on the paperwork.

* * *

September 26 – It’s already amazing to realise how much time this plan to buy a relatively small company will absorb. I swung into action on it today. First I briefed the management team. Not all, of course where here so this required several calls. East is particularly important as the job of integrating the business will fall to him, but I’m 100% confident of his support.

Then the ex-CEO called me to ask about Ops. The ex-CEO was not enamoured by his performance yesterday and asked me to keep a specific eye on what he’s doing. This is just about the first time ever that such sentiment has been expressed, so it took some processing. But I have to say that if Ops is managing his team as he’s relating to the rest of us it’s not good. I’ll have to go North soon.

Next I took a step that indicates confidence that this will happen. I asked Office to tell all the candidates for the marketing assistant job to me that we were suspending the appointment process for the time being and to thank them for their interest (it pays to be polite, I still find and I know it’s not trendy). I have no intention of appointing anyone to this job if, as I think, the vendor of the target company is the man for the job.

I did also of course have to brief the vendor of all this, and arranged for him to meet East.

Finally, I saw the lawyer recommended by our auditor. I don’t like lawyers as a rule. I did like this one. Anyone who says that for the value of the deal he can’t do anything and gives me a pro forma to complete as far as possible for what the deal should say is in my opinion moving in the right direction. In past jobs in practice I’ve seen the complete hash lawyers make of deal documents because they don’t understand the client’s intention. Then the client spends forever correcting the wording. This firm have turned that logic round. They are seeking to understand the intention and are then polishing the wording. That seems good to me. We’ll go with it. They’ve also given a fixed price quote we can afford, assuming it is an asset deal.

Not bad for a day.

* * *

September 25 – Tough going at the Board meeting. Ops didn’t help by whinging about having to come for a special meeting; which didn’t endear him to the shareholders either. In fact, the ex CEO asked him if he still wanted to be a director, which got things off to a flying start.

Then I had to deal with the ex Mrs CEO’s accountant, who as usual came along with her (I bet he must love having her as a client). He obviously fancies himself as an M & A man so he began to go on about all the problems of buying companies, the risks, the warranties, the due diligence that will be required and heaven knows what else. And then I quietly pointed out that I was not proposing to buy the company for all these reasons. I wanted to buy the assets in which case, as far as I could see, the risk was threefold. Firstly it’s from TUPE on the staff (and I had a schedule already available for this). Second it’s that that the fixed assets, stock and WIP don’t actually exist (he’s collecting his debts and dealing with his creditors) and most importantly that the customers don’t disappear, which we’ll at least in part cover by paying a bonus for retention as part of the consideration.

Letting him hang himself by first of all showing he hadn’t reads the papers and secondly by having answers to his points was, I have to admit, fun but then I had both him and Ops in a sulk, with the ex-Mrs CEO not far behind.

So I had to come in at this point and deliver a strong presentation on why we should do this. This was make or break time. And I had three telling arguments. The first was that we aren’t paying much (in fact, it’s modest in relation to profits, which we can recover in about 18 months). Second, the people were good and experienced, especially the owner. Third, we can grow faster if we do this than if we don’t, so it’s a good use of money (and I’d done estimates to show this at a simple enough level to be telling, but offered the full workings if anyone wanted them). Finally, I had to point out we can afford it since we’re cash positive as the shareholders can’t agree on taking additional dividends so this was a good use of the money they’d left in the company.

Which argument worked? The last one did, because it made them look like rational investors in their own eyes. I could almost see the switch go over as they both bought into this argument. So I got a green light from the shareholders, who are the only people who count on such decisions under the terms of our shareholders agreement which than had Ops moaning again about why he’d wasted the time coming. He really isn’t trying to endear himself to anyone right now.

But I’m pleased. I can now get on with this, and do that due diligence.

* * *

September 22 – Some weeks last forever. This has been one of them. I’m sure I have done more than a weeks work, and I achieved all I aimed for yesterday. The papers went out, I spoke to the auditors who told me to stick to my guns on buying assets only, and gave me the name of a lawyer they worked with recently on a similar type of small deal who they thought was good and priced realistically. That is what I call value added service if it turns out to be true.

Today I’m simply here. I want to run through a pile of stuff with #3. I mentioned recently that I retained a role in the control environment, and I do. We’ve agreed a programme of periodic checks by me to back this up and prove director involvement. Looking at bank recs is tedious – but it’s also vital. So is reading the cash book, looking at who is on the payroll, seeing what new purchase ledger accounts have been opened and so on. I document all this, and the auditors seem to like it. Call it internal audit if you like, but it’s also true you learn a lot from such an exercise.

I’ll also spend some time with the stock controller. I’ve always seen the merit in knowing what’s moving and what is not. It gives a good clue as to the way things are going. Provision issues are entirely secondary in this; I want to know what’s happening out there and I can learn a lot from this sort of discussion.

And it even means I might be home on time tonight. Which would be nice. I’m not always too popular on that front right now.

* * *

September 21 – The chap who is seeking to sell us his company has sent his responses to my initial enquiries. I’m very impressed. He’s literate (and I get very bovvered (sic) ;-) about such things), can argue his case logically and clearly, can word process (well), is fussy about presentation, and what’s more, the numbers seem to stack. He’s even presented a case as to why he thinks they do. Amazing. I really could work with this man. I’ve not seen such a good document in ages.

There is one problem. He, of course, wants to sell us his company and I, of course, want to buy his assets. I want the tax relief on the goodwill, the absence of contractual hassle and to avoid having to get rid of what will be an unwanted subsidiary. My argument is that we’re not spending enough to go through all the hassle of buying the company. His argument is he’s priced the company low enough to compensate for that hassle.

The reality is I won’t be moving on this one (unless someone can give me a very good reason why I should). But his paper has saved me masses of time in presenting my own case to the Board, the details of which I ran through with Ops when he was here on Tuesday. I thought Ops would not be keen on this, andI can tell in some ways that not (after all, if this chap takes the job I want filled he’s a power threat to Ops, and I have to recognise that) but on the other hand he’s realistic enough to recognise what the paper I’ve now got proves, that this chap’s business fits a geographic gap we have, at least to some degree, and appears to be supplying a good service to good customers who are paying fair prices.

So today it’s slogging through this to get papers to the board. We’re meeting on Monday.

* * *

September 20 – Had the management meeting yesterday, which I was just too busy to write.

First things first, having a chairman is fantastic. This decision liberates me to speak at the meeting. But more than that, we chose a person with a calm authority who is able to steer someone who is rambling off course to a gentle conclusion and back on track (me included, at least once, to some people’s amusement). Simply in terms of time saved (given the number of expensive people there) there was an immediate payback on his cost from that alone. I strongly recommend it.

Second, we worked through an agenda, efficiently, and if people tried to simply represent a written report the Chair asked them to only add comments by making clear he had read the contribution already. That also reinforced the importance of those reports in a way I could not have done.

Third, we discussed two big ideas. The first was the new accounts layout. It was great to have had comments from here before doing so, because all the points about allocations cam up, and I was basically able to dismiss them. We aren’t allocating anything. We are asking people to manage what they spend. The fact that, as a result, East and West basically don’t have an overhead issue is a relief to them – their concern is at the gross profit level and they do manage a lot above there – and will be asked to account for it. In fact, people seemed reasonably happy about this overall, helped no end by Office and #3 picking up the difficult bits and being two tenacious managers who will, in practice hold others to account if they waste resources. So this experiment is going through.

The other big idea was the new report. This has had a mixed reaction. Ops does not like it. East does, West does not, but recognises that his team leader who I was out with last week is a fan. Since the issue is far too big to roll out without some effort anyway we agreed to form a working group to trial it. The group is me, East, the West team leader and Office (because there’s a production process to manage). And we agreed that nothing would happen until some serious trials took place. But even the concept of creating a team to do something is new here. And I call that progress.

This was a tough day, given all that went on round it. But I really think this arrangement is working. Well, with everyone but Ops who seems fairly determined to go his own sweet way in the north. I think I’ll have to schedule a visit up there.

* * *

September 18 – It's rare for me to post twice in a day but I’ve noticed the comments on cost allocation on here. They’re really interesting – partly because I’m not planning to go the way people seem to expect.

For example – Office organises all phone contracts. So they’re all on her account. She can say in her report ‘West’s team have spent much more than East’s on mobile phones and I need to know why’ but that’s a statement of fact. But if neither East or West agree the terms of the contract, or even if we’re giving their people phones, then the cost is not on their P & L.

Likewise fleet costs will be in #3’s report – because most fleet costs are actually decided upon in accounts (leasing, insurance, maintenance contracts, repairs (usually related to insurance) and so on). #3 can then challenge Ops people on usage and ask questions. That’s management. But there’s no way on earth I want to spend days, months and even years asking about apportionments. This is about decision making information.

The examples I’ve given are about accepting responsibility for management and using data to get answers to questions. That’s my aim. Does that make sense?

* * *

September 18 – Friday was fascinating. And not at all what I expected.

I met the owner of the business that had approached us for lunch. What I had expected, of course, was that we’d spend the time talking about why his business was for sale, what he wanted for it and so on, with all the usual positioning that goes with that.

But it was nothing like that at all. Sure, he wants to sell us his business. But that’s because he wants to apply for the job as my assistant to develop the market. Which has to be the weirdest job application I have yet come across.

His position was simple. He’s built a business in which he and a small team work hard. They’re in our area of work, and he makes a reasonable living (not bad actually). But he hates working by himself. He realises that in the long term he wants to be a team player. Of course he could try to do that by growing what he’s got, which he’s built in a commendably short period of time. Or he could sell it and get back into a company where he would be happier. What he said was he thought the role I had advertised for provided the possibility of a win: win in this respect.

The sheer novelty of the thinking appealed to me.

I also liked him. Which really helps. So we talked for a long time – much of the afternoon.

And I’ve sent him away to make a written proposal of all the benefits to us from doing this.

I slept on it over the weekend. I really like the idea. The price he’s asking fro is modest for the added value he supplies. It would be recovered in a year or so. And I would get a more mature person who knows the sector, what we do, and has a proven ability to build value, which the profile of his company that we had established before I went to the meeting demonstrated to be the case.

I’m calling a board meeting to discuss this. It might be too good a chance to miss.

* * *

September 14 – The balance of time in and out is proving to be the hardest thing about this job. Base want me to be in the office, and control procedures require me to sign things and approve payments and heaven knows what else. I’m keen to see customers and our people out and about.

And I also want to try out ideas myself. Today was mainly an ‘out day’. I got an early train heading west and one of West’s team leaders picked me up so we could go and see two people. One is a real prospect, and in a sense I should not cover it, West should, but I also wanted to see this team leader in action. He’s also the one who lost a team member earlier this week so I wanted to quiz him on that and give support if needed.

I liked his style with the clients, and I really think we have a good prospect with the one who was already warm. I also took the opportunity to bounce off them how we could add value. I explained the reporting idea as it would really suit them. I know they would have signed up there and then if we could supply this now. It would have immediately put clear blue water (horrible phrase) between us and the competition.

Our team leader was also convinced by that. I think we had a bit of a mutual fan club arrangement by the end of the day. As for losing the chap who has resigned this weak, he was sanguine. He reckons he’ll be a liability for the competition, not us now.

This makes it worth going out. Nothing beats talking, and sometimes it has to be face to face.

* * *

September 13 – The weirdest thing happened today. Well, I think it’s weird. One of the small competitors that our two students had identified approached us, and was put through to me. He wants to sell.

We’ve sold before, and we looked at buying the Belgian company, but as far as I know no one has actually asked us to buy them before. I listened to what he had to say. I agreed to meet him for lunch on Friday. And I called one of the students, who I know is still around and asked them to come back in to pull together everything they have on this lot. Initial impressions are good enough to make it worth talking.

And, of course, I got their last few years accounts – not that they help much as they’re abbreviated. So, using the mobile number he gave me I called him and said would he get me information in advance of our meeting. He said he couldn’t as he couldn’t use his company email, which was all he had. 15 minutes later we had got him set up with a new email and I sent out the first questions. Amazingly he appears to have no knowledge of things like non-disclosure letters. I wonder if I should offer him one anyway? We did one for Belgium so it would be easy.

Actually, I think I’ll do the decent thing and get that out now. Amazing what you think of when writing your diary.

* * *

September 12 – August results out today; slightly later than #3 planned but holidays mess things up. This is my deadline – a week before the management meeting. And almost all managers have their reports out as well, me included. Ops was, of course, the last, and it is perfunctory, but he’s working to the template I’ve supplied and that’s enough for now.

The good thing is that although the accounts were only finished today drafts went out earlier for people to comment. This is reflected in one or two reports. That’s really encouraging.

But the next change is one I’ll be really curious to see the response to. #3 and I have been planning how we can re-jig the entire reporting format so that each manager gets the P & L cut so that there’s a report on all the income and expenditure they’re responsible for included in their report and for which they are, therefore, responsible.

Income has required us to ensure coding is improved, and allocated to customer, and so identifiable by individual / manager to make this happen. We’ve got through the trial stage of that now.

Expenses are relatively easy. If a person decides on it, they account for it. Depreciation, therefore, is on my report. I decide the rates. But staff is split by manager, both direct and indirect. As are all consumables, which we intend to get down to person in due course. Some overheads are obvious, others need allocating, especially at manager level but not below (where decisions are effectively at the gross profit level).

Right now this is a big spread sheet #3 and I are working on, fed straight from the TB, with lots of checks built in, but I admit I’m quite excited about this.

* * *

September 11 – Another staff member resigned this morning, from West’s team. He doesn’t like the new operating arrangements. And he’s going to a competitor which is slightly irksome. But this is a price we’re willing to pay for getting it right.

I have to say the general feedback is good, and some people are clearly flourishing in their new roles, at all levels. The departee was not one of them. Which makes it easier to accept.

PS My wife had lots of ideas on vans, ranging from the absurd to the really good. It's another item on the agenda for the management meeting now.

* * *
September 8 - I know I was talking about a new marketing person only yesterday, but the issue's still on my mind. We have a batch of new vans coming. They're all on lease with a reasonable degree of flexibility because I'm generally concerned that as things change here our fleet needs might change, not last away from the Transit style van to smaller vehicles. The kit is not as big now, installation is easier in many cases, and we actually don't need as many people on the road. I was also quite pleased with the price. The market seems highly competitive at the moment.

But the reason for thinking marketing was that they will need to liveried. And it's just made me look afresh at what we have on the vans and then about our design in general. Having said I don't need someone to come up with swish designs, I'm not so sure. Frankly, what we have is neither as clear as it could be, or as obvious as it could be. Maybe there is a job to do.

I'm sure that this is quite common, but I'm going to ask my wife about this before saying anything here. I trust her on colours everyone else in life. Why not on this?

* * *
September 7 – Reviewed all the applications received for the post of my assistant/marketing and product development person.

They were, of course, the inevitable applicants who did not appear to have a hope. I do feel sorry for people like the HGV driver who applied. Why did he do it?

Then there were the 'bright young things' who think marketing is whizzo fun at exhibitions (of which you have already learned my opinion) or designing jolly web sites with lots of interactive bits. I've got no problem with the latter, but it's far from the whole job.

I’m looking for a person who sees marketing as being understanding what the customer wants, who innovates to meet that need and then sells that solution to us. Am I completely mad in thinking this is as much an internal exercise as an external one? After all, if the customer really doesn’t want what we come up with, are they going to buy it?

If the HGV driver could do that I'd be happy (although I happen to think the qualities that made him choose a life in the cab aren't going to suit here.) I definitely don't care about the person’s age or gender. They have got to be willing to fire themselves. And as for the garbage phrase 'team player', of course they’ve got to be able to relate to us. But what does that mean? If it's passing (the buck) I’m not interested. If it's running off the ball, likewise. It it's yelling and shouting when things aren’t going well, no thanks. As for rushing in when someone else scores to claim the credit, that's not on. I'm looking for an individual who can define their individuality within the context of the company and those within it. And on this occasion I really do mean I want and individual. This person has to be able to stand up to me, and others with ideas they have generated which they believe in and which they believe are saleable, and be accountable for the consequence.

And the CVs don't inspire me.

* * *
September 6 – The world is waking up again, thank goodness. Get children back to school and the traffic gets horrible but at least people think about doing business.

So am I. Because I'm a bit of a wordaholic (you might have noticed) I’ve been playing with what an assurance report from us to our customers might look like. Of course, a lot won’t want it. Frankly, not everyone runs a quality system, even in areas where there is some regulation to be complied with, as is the case for what we supply. But for those that do I’ve been musing on how we can add value.

At first I thought we should supply a report. We do in fact do these for some clients, but usually on demand, not routinely. This could be driven from a database, which in turn could be fed from feedback from our monitoring visits and the feedback from our new kit on site which yells when it needs attention. This would look bulky and might be impressive since we could include data of various sorts. And then I realised no one would read it, so it's a waste of time.

The alternative is much easier. We simply send the client a statement, once a quarter probably, that their system has operated satisfactorily during the period. There’s a plus in this. Saying the equipment has operated satisfactorily is not the same as saying there are no other issues. It just says our kit is working and has not found them within the limits of its capabilities. Second, it's retrospective, so as a matter of fact the issue has either arisen or not. Nothing says it won’t happen tomorrow just because it hasn’t to date. I don’t think there’s a lot of risk in this, but it changes what we supply from being kit and maintenance into being a part of a quality system. That really product differentiates us from many companies in the field, and from all the smaller ones (of which there are quite a number around the country).

This is important. I learnt some time ago it's not what you supply that matters. It's how it's perceived that matters. As far as I can tell my wife's Skoda is in fact an Audi for all practical purposes. Indeed, spare parts seem to come with Audi, VW, Seat Skoda labelled on the box. But perception says Skoda is worth 60% of the nearly identical Audi when new.

It’s like that with us. What we do is good now. And our new kit gives us a cost edge over some people for the time being. But what I want to change is the perception of what we do to add value.

Now I've got two things to do. One is try it on our insurers. The second is to try it on the management team. I’m going to do this as a session at the management meeting. It's part of my plan for these. By and large I don’t want them to be retrospective report receiving activities. That is what the written reports I'm requesting are for. I want them to be about planning. This is going to be a first stab.

* * *
September 5 – I’d love to say that my confidence in Ops has been restored, but he's still ignoring the requirement to treat other people's staff as being beyond his domain. As a result even West has had to complain to me that his people are being asked to do stuff for Ops in his territory which is conflicting with their own work schedule, or the clients to whom they now have responsibility.

Put simply, this isn’t fair to those staff, or their managers.

Which is how I put it to Ops. Which resulted in another sullen silence. I think I'm going to have to get used to this.

* * *
September 4 - Sometimes I do like to drop into accounts just to feel in touch with things that feel familiar. Mind you, I already find I'm doing it in a different way. I now assume that the data is right, by and large. I've mentally as well as actually passed over responsibility for that issue to #3, who seems more than up for the job. And now I go to ask questions to get data, not to get numbers.

I'm not sure how to explain just what this means except in a sense I always used to see any accounting system as part of the system as a whole. So, a debtor balance was of the sales ledger control, was part of the asset side of the balance sheet, was located in the asset section of the trial balance and so on. It has meaning in its accounting context. I'm not saying it doesn't have that any more (and I'm still part of the control environment by the way – I should mention that another time) but now I want a debtor balance in relation to sales performance on that account, payment history, product type, the opportunity it suggests in relation to other customers of similar type and so on.

I'd thought of myself as a pretty management orientated accountant before my promotion to CEO, but it's curious. It has changed my attitude all the same. I come to the conclusion management accounting and management are not the same thing, and that I could have done more for management beforehand. Mind you, I can see what accountants do add to real management now. As a manager who understands accounts I can definitely ask different sorts of questions of data, and of customers, suppliers and staff than could a manager who sees things as a salesperson, engineer of whatever. And that may be because an accountant does eventually have to see things both as a whole, and that every action has a consequential action as well (if, that is, they recall double entry). I'm not sure people from other disciplines do have that ability.

* * *
September 1 - I read an article recently about staff appraisal. It made two really good points as I recall. The first was that staff appraisals are almost wholly unconstructive because they are about internal control and keeping managers happy when the focus of any successful business is keeping the customer happy. The second point was that if the system was flawed, investing lots of time and effort in it to get it right made no sense. Doing something that's wrong well makes no difference to the outcome. It's still wrong.

I've got to say I read this with a sense of increasing well being. The reason is simple; I hate doing appraisals and think they are a complete waste of time. We have however been doing them since I got here (at least) as a legacy of some course Mrs ex-CEO went on whilst she was in charge of staff issues (HR being another term I hate).

I've been musing on this article since I read it and have decided that we should scrap our current appraisal system, all the form filling that goes with it and the daft monitoring it requires. It's guilty of all the flaws that the article pointed out and I know it is pretty universally unpopular.

That said, I'm not keen to abandon appraisals entirely. So I'm thinking about what we can do to greatly improve the system. This means the system has to be

Comments

Ops must go!

Anonymous | | Permalink

I've been thinking this for some time now but didn't quite have the courage to say so. Is he being deliberately awkward so that you might think of paying him a large sum of money to go?

listerramjet's picture

appraisals

listerramjet | | Permalink

I wholeheartedly agree with your thinking. There is research that supports this - from memory I think it is from Demming and his supporters.

Take care with cost/revenue centre reporting

Anonymous | | Permalink

Splitting costs/revenues up between the managers responsible sounds good but can lead to a lot of in-fighting, wasted investigation time and bureacracy...."I didn't make any international phone calls. I think you've charged me for calls Simon made from my office" "I didn't authorise that training for my staff that's been coded to my cost centre, it needs booking to Engineering, they organised it for their benefit" "If I am to be charged for every paper clip that my team use then I insist I authorise the requisition before it is issued".
I did away with such reporting at one firm and got a manager allocated to be responsible for each type of expenditure no matter where it was spent, eg someone reviewed phone costs with the aim not of allocating correctly but actually getting the total bill down.

Appraisals

Anonymous | | Permalink

Appraisals are really only in place to force managers to provide the feedback that they should be giving to their teams anyway.

We do annual appraisals for all staff, but I take those appraisals into my weekly 121s with my team as it helps keep it a living document. We're also implementing 360 appraisals, although we're at the start of the process so I can't talk about the outcomes of that yet.

This article might also give you some ideas. I particularly like the thought of building a bonfire and torching all your policy manuals...

http://www.fastcompany.com/magazine/17/feedback.html

In terms of your relationship with Ops, have you agreed any formal objectives for him for the next three/six months?

davidwinch's picture

CEO - try this short exercise!

davidwinch | | Permalink

CEO

As an ex-accountant (in a manner of speaking) try this exercise, which will take only a couple of minutes.

Go to the Visual Cognition Lab webpage. A video (technically a java applet) should load. Please allow some time for it to fully download (it is approx 7MB) before attempting to play it.

Watch the video (it lasts about 30 seconds) and count the number of passes of the ball made by the team in WHITE tee shirts.

After you have done that . . . watch the video again. This time do NOT count the passes.

The result should be self explanatory.

I use the same video in my money laundering training courses for accountants in practice.

I cannot say more here without spoiling the exercise for you!

It should be an eye-opener. Enjoy!

David
david@mlrosupport.co.uk

Reporting the past

AnonymousUser | | Permalink

The report you suggested for your customers seems like a good idea, but do you have any sites where you have major issues? Would you still produce a report for those customers which said "equipment failed 5 times last month"?

listerramjet's picture

i am intrigued to know

listerramjet | | Permalink

whether your applicant knew of your blog?

Get your retaliation in first...

fraserjopp | | Permalink

You may be pondering whether to reveal your competitors' financial status to potential customers. In the light of your latest staff departure, you could also consider what your competitors might say about your firm ('they've got this new boss, keeps changing things, no-one knows what they are doing'), and how to counter it (customer newsletter, interview in trade press?) before it happens.

Like the man said: 'A lie is halfway round the world before truth has got its boots on'.

keep up the good work

Appraisals - Another question

dewi | | Permalink

Perhaps the appraisal should start with another question - 'What is your job?'
Sometimes what is in the job description, what the employee thinks the job is, and what the line manager thinks the job is, are all very different to each other.
Dewi

Beware of allocation

Rderry | | Permalink

I would echo Martin's comments below with regards to manager P&Ls. I worked in a company where we did this (despite the whole Finance team except the FD being against it) because the Ops director wanted it to try to get his managers to be responsible for their costs. They couldn't control their revenues, either by price or volume, but this was allocated anyway. Managers would argue over things like the coffee machine as they said their staff didn't use it as much as the other departments.

Most of the management effort then was directed towards pushing costs already incurred away from their P&L and not actually reducing expenditure. Certain departments would always make a loss not because they were inefficient but because the only way to sensibly allocate revenue meant that this was the case. This was also due to the way we priced. The product overall would make a margin but some tasks would make a loss. This sounds strange but without going in to detail and revealing the business, it was a quite correct pricing policy.

Another thing it seemed to encourage was the poor treatment of customers who the operational managers deemed to be unprofitable. Because they didn't think the price to that customer as right, they would downgrade the priority for that customer's jobs.

In another company previous to that, managers would actually purchase outside the system because they didn't like the internal recharge price. That may have saved them money in their P&L for that one transaction but it messed up group purchasing agreements, payment processes and all the other things that day-to-day management don't see about the bigger picture.

PLEASE DON'T DO IT unless you have an absolutely watertight method of allocating costs that no-one can argue over and that everyone involved agrees with (unlikely!).

Angus - which one did I get wrong?

Anonymous | | Permalink

Tell me the date

Cheers

The CEO

(I try to please - even if most of the time this stuff is really written just for me, if truth be told)

Add comment
Log in or register to post comments