founder of naked leader
Post Brexit and Uncertain Times (3 of 3)
Time to Read: 3 minutes and 24 second
Post Brexit (3 of 3): Profit – because…
- Money is the most authentic thing of all, it is where an organisation gets real.
- Organisations can’t confront financial reality if they don’t know what it is.
- Organisations tend to know the cost of everything and the value of nothing – certainly not the financial value of people and their behaviour.
How?
- Measure ‘obvious tangibles’ – financial values of costs and benefits that you know can be measured, you know how to do so, and haven’t done so yet. (e.g. office moves).
- Start from a position that everything is measurable – that there is no such thing as an ‘intangible’ cost or benefit (organisations rarely include people’s time spent as a cost – and it most certainly is). Moving the organisation from an ‘it can’t be measured’ attitude to ‘it must be measured and delivered to get the go ahead’ reality. This alone will ensure you measure far more.
- Hold leaders accountable for Accountables. If any leaders say that something is ‘intangible’ ask them to prove it, or pay them with intangible money! Include leaders’ financial commitments in appraisals. This leads to people taking full accountability at budget time.
- A key point for budget discussions, project proposals and every time money is discussed – Something is only an ‘investment’ if it brings a return of at least 3 times its cost, otherwise it is simply a cost, and costs by themselves can very rarely, if ever, be justified. 3 times covers the total cost of people – salary, benefits etc. and provides a profit, or surplus.
- Only measure the important stuff – the 10% of activities that bring in 90% of your benefits and value. And stop doing everything else. Radical simplicity.
- Hold external partners to account – It is your external partners’ responsibility to prove their value to you, for example IT Suppliers. Don’t partner with any external provider who can’t do this, or bring us in alongside you – we will make and save you 3 times what you invest with us, at least. The IT industry is about to be revolutionised in this area – value, delivery and accountability.
- Take the lead in your present function/role – that will place you and your team at the very heart of your organisation.
With my love and best wishes to you all
David
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Please share your thoughts and comments below
Hi David, thanks for the 3 ‘Uncertain Times’ posts – I’ve been reading with interest. Would you mind elaborating on your point 6 above though?
1) Are you branching out to provide new services? “will make and save you 3 times what you invest with us” or is this more around you helping to negotiate better partnerships?
2) The revolution due soon in the IT industry? – You’ve left me intrigued and I’d be interested on your views on this space around partner management and what you believe the future holds.
Feel free to DM me.
With reciprocated love and best wishes
Intangible money! Brilliant!
Show me the money! It works for me.
And yes, some companies don’t even appreciate the nuts and bolts of what and why it is we all do business.
It’s for the folding stuff, ultimately.
Great post!
Having money as your motivation has to be the starting point for any business.
It’s what we are all out to make!
Be prominent in your role and rise to the top to make yourself an indispensable in the business.
That’s what I try to do that and it’s working so far!