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No. Na. Nope. Nya. Ummm … no. No siree. Not me. Oh, maybe, hang on a second, er, sorry, no.

I have no idea what should be in your budget and it’s a simple truth that no one else does either. They may have a first clue about what they want to be in there and what it should all add up to, but beyond that … they know nothing.

You do.

A play in three acts

In theory, budget setting is a simple play of three acts.

Act 1 — Setting — What happened last time, in words and numbers?

Act 2 — Thinking — What will change next time? Including anything that’s different inside the company, like targets and constraints, or outside the company, such as market conditions, competitor movements and new technologies making headway.

If you aren’t given objectives, set them yourself. If you don’t know what’s happening in the market, go find out.

The better you understand the variables the easier the planning will be (and the more robustly you can justify your choices during review meetings).

Act 3 — Planning — What do you plan to do, in words and numbers?

After discussion, comes decision. What will you spend in order to achieve the objectives? How is that different from last time? Why have you made those choices?

Give yourself a budget and a target. The budget is a promise, so don’t make promises you can’t keep. The target is a stretch motivator, something to shoot for, to achieve if … if … if, but not a fantasy. Pinning everything to a fantasy is the surest way to demotivate everyone and guarantee failure.

That’s the theory. What’s the reality?

Budget meetings can be bloody. Turn up with a low ball, last year +/- 10%, no thinking, generous pay rise, doubled marketing spend, steady state budget and you probably deserve to get juiced.

Budgets are all about numbers but like so much else, they’re really all about preparation. Get set, have a strong and reasoned argument for every change, be ready to walk through every penny — you’ll skip out of the meeting with a firm budget, a warm glow and a polished reputation.

Sadly, some review meetings are an ego trip for the finance team; they think it’s their job to beat you up. You owe it to your team to deal with them like any other bully — look ‘em in the eye and stand firm.

Ruined by game playing and phoney smiles, managing in the pursuit of skippiness means taking budget sessions as a brilliant opportunity to align your whole team behind a coherent plan.

Neatly filed under Keeping Promises,Making Promises
Tags: budgets, finance, meetings, motivation, planning

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By the end of a sales call you should have a pretty good idea who you’re dealing with. I’d say most people will fit into one of five categories:

1. We don’t have a problem — some customers simply don’t have the problem your product or service is designed to solve. Some customers have the problem but are unable or unwilling to see it. The final possibility that sits here is that they know they have the problem, but they don’t believe your product can solve it.
2. We’ll wait for a major player — people buy from people that they know, like and trust. The wait-for-a-major category accept they have a problem and that you may even be able to solve it, but they’re unwilling to take a risk on a company they don’t know. It may be slightly unfair that they’ve invited you in when they’re too risk averse to buy from an unknown.
3. We’ll do it ourselves — I always hire someone to paint my house, the guy next door never would, ever. Some people, departments or even entire organisations are more like me, some are more like my neighbour and will try to do pretty much everything on their own. I’m sure they don’t invite people in just for the influx of ideas, but for some reason, when they see something new, they imagine it’s easier or cheaper to do it themselves.
4. Come back with version 2 or 3 or 4 — some people are always waiting for the next version, or until the price comes down, or for some other imagined improvement that they know is on the way. They might think you’re not yet ready for their particular situation yet, or that they’ll wait until other people have helped you iron out your kinks.
5. Looks good, what are the next steps?

Many people can be nudged from any of the first four categories into the final group. Many can’t.

Neatly filed under Making Promises
Tags: sales

I came across Taylor Davidson’s How to Fail post through John Wilken’s Our Start Up Story blog. Imitating John I’m going to add my tuppence to three of Taylor’s topics: Meet to discuss, Build prototypes, mock-ups and samples, and Focus on the long-term.

Meet to discuss

I have previous on this topic, having written here on effective meetings and ten ways to ruin a perfectly good one. We’re all experts on how to ruin meetings on a practical level but one of the biggest man-hour traps of all is a meeting-as-talking-shop. As Taylor says,

If you need meetings to “get everyone on the same page” then you have bigger problems the meeting will probably not address.

So many companies have meeting cultures with managers running between days scheduled back-to-back. Almost everyone could benefit from fewer meetings. I’ve found the best way to break a meeting-as-update culture is to force managers our of their offices to perch on the edge of someone’s desk, finding out how things are going, what roadblocks they’re having to deal with, and offering support and connections. Fifteen minutes of this can save man-days of meeting time.

All of my best manager/managed relationships (in either direction) have involved this style of management-by-arse-on-desk.

Meetings, when you have them, should really only be held for one reason – to make decisions. I confess to a secret secondary objective of team-bulding. Teams get built faster when they’re active (discussion with the purpose of making a decision) rather than passive (pretending to listen to John’s update when really worrying my own update that I’m about to give or have just given).

Meetings are certainly not to stroke anyone’s ego. Don’t go to meetings just because you have an opinion, are flattered to be asked, or just to be busy. Don’t call meetings to find out about things (go sit on desks). Don’t invite people simply so they won’t be offended.

If it’s your meeting, ask who you really need in order to make the decision? Invite them. Discuss with a purpose. Make the decision. Move on.

Build prototypes, mock-ups and samples

The thinking goes like this; don’t build the whole thing, but build something that looks like the whole thing, so we can see if the whole thing (kinda) works. It seems to make sense. But as Taylor points out,

“Nothing saps the spirit more than creating mockups and designs without making progress toward a completed product. Most often the product cannot be created exactly as it is designed, and thus it is important to learn through working on the product itself, not the design.”

Having wasted far too much time and money over the years on mock-ups, I have an idealistic two stage process in mind whenever I start something.

First, boil the idea down so you can explain it with one graphic and two sentences.

Second, when everyone gets it, build the simplest version that people will appreciate enough to get a definable benefit from, and iterate.

This is the launch early, launch often philosophy – which doesn’t mean launch buggy code, or a boat that leaks, or a pacemaker that can’t stand walking past a speaker magnet. Launch a simple version that works brilliantly, and then improve it every day.

Focus on the long term

This is probably the hardest one for a planner like me to do something about, and the one I struggle to overcome every day. I love change, I see “a rich landscape of opportunities” and my job has always involved working out how to get there. Vision is great, but what to do today? I’ve developed a system that seems to work for me called GOYA management.

Get Off Your Arse. (The name at least was inspired by my old hero Frederick Herzberg’s famous Harvard Business Review article which debunks KITA management, and everything else on the way). GOYA is what I tell myself to do after I’ve worked out what I want to achieve, how I propose to achieve it and what I won’t be able to do because I’m doing the other stuff (which all fits into my personal planning joy). So then I tell myself “GOYA and do it.” The planner in me prints out special note pages with sections headings. My inner manager lifts my chair and puts me to work.

So that’s my homage to Taylor Davidson’s How to Fail. Make sure you take a look at the original, what are your lessons learned?

If you like what you find here please follow by RSS for a little slice of Layers cake whenever it’s on the table.

Neatly filed under Focus,Managing
Tags: fail, GOYA, lessons learned, meetings, prototypes

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Everything I’ve ever heard about Zappos has reinforced my belief that skippiness is good for business. Following this week’s news that Amazon.com has agreed to buy Zappos in a deal that tops $900 million, I’m surer than ever.

Feel-good employment

Under the heading of Success Stories, Inc magazine says,

Zappos, the online shoe retailer that has won renown for its stellar customer service and feel-good employment practices, announced that it was selling itself to Amazon.com.

The article goes on to reference a letter sent to employees by CEO Tony Hsieh, saying,

that although Zappos would be a part of a larger company, it would preserve its quirky culture that focuses on keeping workers happy.

Reading that, and being a little biased about this kind of thing, I see a simple skippiness formula:

(products people want)+(“stellar customer service”)+(“feel-good
employment practices” that “focuses on keeping workers happy”)
=very happy owners.

I don’t mistake a simple formula for an easy formula. Each part is hard work in itself and pulling the whole thing together, consistently, over enough time to build a significant business takes more focus, clarity, commitment and discipline than most leaders can muster. But when it does come together, the editors of Inc pay compliments and investors pay far more than just their attention.

The thing that bothers me is, why don’t more businesses try?

Glad to be involved

Is it because it’s not easy? Maybe, but it has to be worth the effort.

Owning/running/working in a place like Zappos must be better than the opposite – a business that offers products people don’t want, with grudging service and feel-bad employment practices that make workers unhappy. I don’t believe anyone goes in to business or takes a job intending to make it like that. It just kinda happens, especially when leaders are concerned with the pursuit of money as an end in itself.

Running a business in the pursuit of skippiness takes an alternative perspective. It’s the idea that businesses should be started and run with the explicit objective of making customers, staff and owners all glad of their involvement.

This week Zappos “powered by service” proved beyond doubt that if you do a good job, all kinds of money will flow.

Neatly filed under Skippiness
Tags: customers, finance, people, Zappos

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It’s been three months since I wrote my first post for Shearing Layers and threw it into WordPress. I guess like most new bloggers I’ve found it an exciting, miserable, nerve wracking, delightful, low, high, skippy experience.

A big thank you to everyone who’s said things about Shearing Layers, given me feedback, and sent such interesting people my way.

Here are the most popular posts:

Bringing products to market

• How to build a financial model
• Get out of the building
• A short cut to the short list
• How to get ready for market
• How to write a plan
• Is the back end bomb proof?
• Making promises
• Ice cream and how to deal with entrepreneur’s risks

Managing

• How do you decide what to do
• What do all those people do?
• Everyone speaks
• A little help from your friends
• Hire on attitude
• Let the driver do his job

Some of these posts also make it to a series I’m building on the shearing layers themselves:

• How to build a financial model
• What do all those people do?
• How to get ready for market
• Making promises

With three months under my belt I’ve finally bitten the Twitter bullet, please follow me @sn1ck.

Here’s to another three months.

If you like what you find here please subscribe to the RSS feed for a little slice of Layers cake whenever it’s on the table.

Neatly filed under Skippiness
Tags: story