I’m a huge NBA fan… but I was struck by something the coach of the Denver Nuggets said minutes after winning the championship this year. Let’s dive in and talk about it today.
Thomas Joyner with Business on Purpose here, thanks so much for listening in today.
People who say the NBA is trash are just flat-out wrong. It’s absolutely incredible to watch what the Denver Nuggets were able to do this postseason. Their win percentage for the year actually improved in the playoffs, which is unheard of. They humiliated arguably the hottest playoff team of the past few years in the Miami Heat and Jimmy Butler. Nikola Jokic found about 25 different ways to impact the game whether it was driving the ball, launching threes, getting assists, playing defense, you name it!
It was insane to watch the way that team came together to reach the mountain top of professional basketball. But here’s what was fascinating to me. The confetti is falling, everyone is holding their kids, hugging, crying, laughing, dancing… all of it. And in the midst of the trophy presentation, they bring up the coach Michael Malone to interview him.
The interviewer does her job and basically just invites him to give his thoughts. He thanks the fans, rightfully so, but then, without flinching, says “I’ve got news for everybody out there, we’re not satisfied with one, WE WANT MORE!!!” And the crowd goes wild. “We want more!”
I was up entirely too late, and it just hit me. That’s so sad. Think about the message that sends to everyone. The players, the coaches, everyone. We’re not satisfied with a career-defining moment. We’ve worked our entire lives to reach the mountaintop, only to realize that there’s another mountaintop and another. So sad that you don’t even have time to celebrate before voicing your discontentment and realization that maybe it’s not all that it’s cracked up to be.
And if there’s one prevailing thought that would define our culture right now it’s probably that…We’re not satisfied. We set sales goals and hit them, and then without celebrating, we set more that are bigger, and that are the goals that we should have set all along. And then we subconsciously say… WE WANT MORE.
We hire a new crew and begin to enter a new corner of our industry and become really good at whatever it is we do…and at the end of the year, we hit our numbers. And what do we do? Ok, that was cool, let’s do it again, but bigger and better next time! Why? Because…WE. WANT. MORE!
I felt so sad for the Nuggets coach. He’s worked his way up from an assistant coach in college, to head coach in college, to assistant in the NBA, had multiple stops as a head coach in the NBA and now sits atop the throne and in what would be the crowning achievement for most coaches, he blew right past it to whatever's next.
I remember hearing a story about Urban Meyer, head football coach at the University of Florida where they won multiple championships. He said he knew it was time to hang it up for a bit when immediately after he won the National Championship for the 2nd or 3rd time he found himself in a dark room texting recruits, telling them how excited he was to run it back with them. He had lost his way and so have we.
So… what do we do with this? I think it starts with two things.
We’ve forgotten the ability to celebrate and truly be grateful for the journey! Or… we don’t spend enough time on the front end defining what we want and what truly matters!
Let’s start with being grateful and celebrating. What do you do as a business to celebrate? When was the last time you celebrated without feeling the need to drop that motivational minute at the end that quietly tells the team they aren’t doing enough?
I think we’re terrified to celebrate without motivating. We think our team will just stop. And yet, what we see, time after time, is that people just want recognition for their work and effort. Not to have it glossed over and minimized by the thought of…We. Want. More.
We’re terrified because we don’t know what to do with the feeling that we actually got what we said we wanted and it’s still not enough! So… we do what everyone else does. Oh, it must mean we need just a little bit more! So we push and push and push and burn out everyone around us with this endless hamster wheel of success.
We need to set up a time regularly just to be grateful and celebrate. Now there may be years or periods where we don’t do this. I’m not saying we just blindly celebrate mediocrity or subpar results, but I am 100% saying we set time aside to celebrate a job well done.
The second thing we need to do, and this needs to be done way before this, but we need to spend some serious time contemplating what we truly want out of work and life. There’s nothing more depressing than putting years of work into something to only realize that it wasn’t what you hoped it would be. So what are the things that, if at the end of a chapter in life, are worth the work?
Is it making sure you set aside times for kids' games, date nights, lunches with your teams? Is it making sure you plan in regular times for a weekend away so you don’t “miss it” and look up years later to realize life passed you by?
It’s why we spend so much time on Vision. To make sure that if in 2 or 3 or 5 years, if we hit the bullseye, we will be able to smile and enjoy it! And not think… we want more.
That feeling only comes from knowing you prioritized the right things at work and at home. And didn’t get sucked into chasing someone else's vision.
I’ll end here. Last week we spent a full day putting on a done-with you team training day for about 15 businesses. We ended the day giving the owners and employees time to think through their personal vision. After that we had them all stand up, to share one thing from their vision story that they wrote down.
It was honestly one of the most powerful moments of my coaching career as they, one after another, said out loud what they hope for in life and work, and family. It was all about people. The people they loved the most and what they hoped for those relationships.
A room full of people just like you opening up in a powerful way.
It was such a refreshing reset…to see people “get it”. To understand and reorient their priorities in a world that just says more more more.
So will you do the same?
Will you take the time today to plan some time for deep work and thinking through your vision? So that when you finally hit the bullseye you can celebrate, and be grateful and not immediately push past to that awful thought…We. Want. More.
Do it today! If we can be a part of that with you, please let us know. Have a great week!
Business owners are in a constant state of wondering to what depth they “share the numbers” with employees regarding revenues, budgets, profit and loss statement, and/or balance sheets.
A client relayed a story of their administrator going to the mail and coming back with a check for $38,000 to which the administrator looked straight at the owner and said, “Wow, your going to be able to do a lot with $38,000.”
Ugghhhh.
Business ownership is challenging enough and demands continual responsibility around the health and well-being of employees, budgets, products and services, marketing, sales, customers, and clients.
It is a game that does not stop so how can you relay financial information in a way where employees can begin to understand and positions each employee to see how their work has direct impact on both the top and bottom financial lines of the business?
First, you must have clarity on your numbers. Owners that “wing it” with the finances will scale down their confusion.
Every business owner must carry a past/present/future perspective regarding the business finances.
The profit and loss statement and balance sheet offer a rear (past) facing perspective of a business finance. It is a static snapshot of what has been in the past (and in some cases, what is today).
For the present look at finances, each business should have sub-divided bank accounts.
Think of it as a Dave Ramsey-style cash-envelope system, but in digital format for the business. When a dollar enters the business (receivables), that dollar ought to be sub-divided into various homes (bank accounts) for which the portion of that dollar is earmarked. A portion to profit, a portion to cost of goods sold, a portion to operating expense, a portion to taxes, and so on.
The definitive work on the subdivision of bank accounts has been whimsically written by Mike Michalowicz in his important (and fun) book Profit First.
Supporting the sub-divided accounts should be a weekly tracking sheet that we call the Level Two Dashboard (Level One being the sub-divided accounts themselves when pulled up on your bank’s portal).
The Level Two Dashboard is simply a weekly snapshot of your sub-divided bank accounts for that week so we can watch a historical flow of cash (that’s the REAL cash flow we like to see). We can also add line items for receivables, payables, debts, etc. to help us see what actual cash the business has access to today, and historically has had access to.
The future look of our business finance will be spelled out in simple budgets and pro formas. The budgets give us a general idea of how much we have allotted for the various systems of the business, and the pro formas educate us on what would happen if we took on a certain decision.
When you have the confidence as a business owner of knowing that you are taking a three-pronged, past/present/future snapshot of the business then it is time to do some based financial literacy for your team.
There are three principles that would be helpful to communicate along with a fun exercise.
The first of these three principles are
A dollar is not a dollar.
When a dollar comes in the top of the revenue funnel, to our earlier example of the administrator’s dismay…not all of that goes to the owner…in fact the majority of that income goes elsewhere.
It leads to principles two and three…
A dollar out is always MORE than a dollar
A dollar in is always LESS than a dollar
As for principle two, a dollar out is always MORE than a dollar, I went to a pizza place this weekend with my family. The pizza was a published price of $20 but for some reason, I paid almost $22.
Why?
A dollar out is always MORE than a dollar.
With taxes, fees, and other surprising elements, the price that is published is rarely the price you pay… a dollar out is always MORE than a dollar.
As for principle three, a dollar in is always LESS than a dollar, has there ever been a receivable that has come into your business where you have been able to retain 100% of that receivable for yourself?
Not even an all-cash business can say that. Even an illicit, all-cash business must pay overhead, employees, cost of goods, etc.
A dollar in is always LESS than a dollar.
There is a fun exercise that we have shared with our clients and their teams a number of times where you take a roll of 100 pennies and a solo cup.
Dump the pennies out onto the table and start working through the percentages of your profit and loss statement in general terms (or you can use an example company from a similar industry).
35% goes to cost of goods? Put 35 pennies in the solo cup.
26% goes to employee payroll? Put 26 pennies in the solo cup.
Do that until you're left with your remaining pennies and then remind the team that we still have not accounted for taxes or mistakes and other overages. So even if the profit and loss shows a profit, that number is rarely the cash that is actually available to the business.
It is not reasonable to assume your employees understand the basics of business finance. When they hear that your business generated $5,000,000 in revenue last year, there is an assumption that you are a millionaire, when in reality you spent the majority of that money to run the business.
A dollar is not a dollar, and employees need to hear that message.
“I don’t have much to do in my business these days” were the exact words from a business owner I met with last week.
You could get a sense that the words almost scared him as they came out of his mouth and left a concerned sense somewhere between, “I can’t believe this is actually true, ” and, “Am I missing something that I should be seeing?”
As business coaches, we can’t help but be excited, and offer a bit of a chuckle when we see business owners arrive at the place where their business is running consistently without their direct, hour by hour, day by day input and effort. Not by unhealthy abdication, but instead by thoughtful, consistent, intentional leadership rooted in purpose, people, process, and profit.
After a few seconds of joy and enthusiasm, we quickly move into a mode where we want to ensure that the owner is in a healthy place, and the team is in a healthy place.
Frankly, it makes me a bit uneasy to think about a driven personality with a forward-leaning mindset to be equipped with marginal time and marginal resources.
Ever heard the story of the successful entrepreneur who was engrossed in a twisted and bazaar mid-life crisis? The marginal time and marginal money paradox is the most common breeding ground for such an unrestrained crisis.
The very first thing you should do if you are bored in your business is to pause and make sure you have health in your personal disciplines. Boredom has been made out to be a non-productive territory littered with heat, dust, and tumbleweed...a wasteland to progress.
It’s not true.
Boredom can actually breed healthy solitude which becomes the catalyst for proximity to motivate a team to pursue the named future you see.
It is in boredom where restoration can happen, insights can emerge, problems and opportunities can be clearly seen, and experimentation can flourish.
Busy automatically cranks the volume knob to 10, boredom gives you control of the volume so you can think.
Boredom is not bad; it offers value, flexibility, and opportunity. Boredom provides an opportunity for you to indulge in your thoughts, either good or bad.
Instead of asking “What should I do?”, if and when boredom sets in, change your perspective to “What can I hear?” or “What can I see?” now that I have the wide open space of boredom.
The Jewish Rabbi compelled his followers to allow for “eyes to see, ears to hear, and a heart to understand”.
Your mind has a trainload of thoughts, and boredom is the train station for those thoughts to disembark and lounge for a while.
The second opportunity that emerges with boredom is a chance to revise your future destination.
We travel back and forth to Nigeria on a regular basis, which usually requires four airports along the way. I follow a similar, subconscious routine at each airport reviewing my flight app to check boarding times, seat assignments, and the itinerary on the ground once we get there. Inevitably, sitting in the boredom of the airport terminal, a new idea that alters the itinerary will pop in my mind, and bring with it some fresh ideas that I can breathe into the trip.
You have a written, multi-page vision story, and that vision story will be tweaked (as opposed to wholesale changes) throughout the year as you have new insights in the context of the boredom spaces.
Boredom allows a business owner to re-evaluate and revise the written vision, drawing in a tighter and tighter focus on the final destination.
Boredom can also be an impulse to revise your role. You should never be without clarity in your role within the busy, especially when you are not in the day today.
A unique way to gain insight into your new role is to ask your key leaders, “What does the business need from me above all else.”
I asked this question of my team and here is how they responded, “We need you to help provide momentum, organization, tools, and leads.” After some discussion and clarity, their insight provided clarity on my role and allowed me to craft it towards the elements where I too thought my time was best spent.
That vision and role may include doubling down on what you have already written. It may involve selling your business and starting something else. You may uncover a pivot in your business or personal life that you simply had not seen or heard prior because the distraction and the volume were too loud.
The third thing you can do when you are bored as a business owner is to embrace the time and rest.
It is said that even God himself rested.
Probably an indication that we too should have moments of rest. Rest defined is to “cease work or movement in order to relax, refresh oneself, or recover strength”.
Rest can be reading a book, self-converting a sprinter van, napping, writing, exercising, or just sitting and staring.
This is where you need to be mindful of where your rest leads you, and it is best to have someone else help hold you accountable to how you rest so you maximize that time for good, and not for backward movement.
Finally, when boredom hits you it’s ok to just sit still.
We undervalue stillness, silence, and solitude.
Thomas a’ Kempis said, “in silence the quiet soul makes progress”. The history of the Executive Leader pushes through rest in an effort to outwork others for an elusive prize that does not exist.
Dallas Willard has a modern spin on this idea in sharing that each of us “must ruthlessly eliminate hurry from your life.”
A dear friend has been in a health battle for the past two years and he recently shared his journey meandering through the dark values of stage three Melanoma, in concert with severe kidney trauma.
His takeaway to the audience he was sharing with was not “woe is me”, but instead, “the world has forgotten the joy of silence.” Shortly after he said quietly in the words of author Frederich Buechner, “Pay attention. As a summation of all that I have had to say as a writer, I would settle for that.”
He has spent hours waiting in the last two years. Waiting on doctors appointments, waiting on prognosis calls, waiting on the next treatment...waiting.
As he has waited, he has been reminded of the power and gift of boredom.
If and when you get bored working on your business, don’t rush, don’t run, slow down... and listen.
Executive Leaders pre-plan their anticipated marginal time in a way that provides proximity to motivate a team to pursue the named future you see.
That proximity empowers a team to convert your marginal time into the business's marginal return.
In business, money is constantly moving.
A cash flow statement is a bit counterproductive. As the cash flows, we can see trends and movement. The moment we snapshot the flow of cash into a static cash flow statement, the cash stops flowing.
Taking a snapshot of a rushing river means the river is no longer rushing; it is still. You can clearly see the river, the level, the color, and the shape, but the rushing-ness of the river is lost in the stillness of the snapshot.
The mass publishing of the now infamous story of Chris McCandless documented in John Krakauer’s book In The Wild has led to a surge in the number of me-too explorers who wish to track McCandless’s fateful footsteps. To reach the famed bus that McCandless made home explorers must trek through and across the Teklanika River.
After safely crossing the river many inexperienced explorers fail to take into account that rivers trough and crest often at unpredictable times leading to many of these post-McCandless explorers stranded in need of rescue, or in some cases left for dead.
The metaphor is not much different in the trough and cresting of the cash in your business.
With a little preparation, you can begin to have greater insight into the reality of the future tides of the river of your business.
Static financial statements and reports are incredibly valuable, including the cash flow statement, and yet still can be of only momentary help to a business owner who lives in a dynamic, constantly moving world.
The statements and reports themselves need a means of tracking the flow, the peaks and troughs, and the standard deviation of that volatility so we can make a point-in-time-decision in the midst of a constantly flowing market.
The Executive Leader is looking to create proximity to motivate a team to pursue the named future you see, therefore must be able to cut through the financial fog and pay attention to reliable instruments that are always calibrated within the values of the business.
Just as in an airplane cockpit, the pilot maintains a panoramic view of the horizon (vision) the Executive Leader must also build in a panoramic view by which to view the financial health of the business that is tracked with repetition, predictability, and meaning.
Three tools will aid the Executive Leader in having such a panoramic view past, present, and future.
First, the well-tested profit and loss statement (P&L) provides a still shot of what has-been with one major caveat; the data you retrieve is only as helpful as the data that has been input.
The P&L helps you to understand your Cost of Goods Sold which in turn immediately helps you to understand what Mike Michalowicz calls your Real Revenue. Your COGS is a number that theoretically goes away if sales goes to zero, everything “below the line” would continue as-is and gives you a great snapshot into your other expenses or overhead.
A great monthly exercise is to simply march down the P&L and see if any of the percentage numbers have changed from month to month, quarter to quarter, or year over year.
The net income number on the bottom of the P&L is nice, but let’s be clear, it is not an actual reflection of how much cash remains in the business. It drives me crazy when someone says, “Congratulations, you made X in net income.” Your net income seems to be more advantageous regarding your taxes than it does in showing your actual cash profitability (the funds you really have access to).
You could not take your P&L to the bank and ask to withdraw your net income…I know it’s silly to say, but that is how many think of the net income number. Your P&L is more of a value of past “actuals” related to income, real revenue, costs, and expenses…it is the history less for your business.
For the present, merging two ideas has been of significant value to so many business owners making the pivot to Executive Leadership. The first of those two is the subdivision of cash entering the business. When a dollar comes in, that dollar should be physically subdivided into separate accounts or expense homes where you are able to see what cash is actually available to the business for real-time decisions.
You might begin to feel a draw to defend the balance sheet, or the cash flow statement, or a simple spreadsheet as a means to do the trick. Here is the major problem, most business owners and executive leader (heck, most accounting professionals) struggle to keep up with the daily tracking of cash on a spreadsheet. Also, the balance sheet or cash flow statements are static, not following the flow of cash (different meaning than a cash flow statement).
When the cash is subdivided into multiple bank accounts the decision-making for the executive leader has a much faster turnaround because whatever is in the account is what we have to work with, period.
Each week, a team member documents the balances of those multiple accounts and begins to watch the peaks, troughs, and up/down deviations. Sure, you can always log into your bank account or quickbooks to check today’s cash balances…but what about watching those balances at hundreds of waypoints over the years to see trends?
The Level Two Dashboard is a tool (Level One is your online subdivided bank accounts) that requires about 5 to 10 minutes of work each week and provides hours of time saved and in most cases a retention of money earned without losing it to the thief of leakage. The more you have access to, the more prone to leakage.
The Level Two Dashboard also has options to track receivables, near-term payables, and a water-level number called the all-in/all-out number.
This number answers the question, “if we grabbed all of our available cash, grabbed the receivables we are owed, then paid all of our tax liabilities, and paid our near-term payables (not long term loan balances)...then this is the money the business should have access to.”
The goal of the all-in/all-out is not to get stuck on one week worth of data, but instead to watch the flow of that number over time and determine an appropriate “water level” of your business.
The P&L will educate you on the past, the subdivided bank accounts and Level Two Dashboard will educate you on the present, and your future can be planned by building a simple budget ironically based on your past P&Ls.
A simple and well-built budget will take a forward-gazing future look towards the vision of the business. What good is a budget if it is being spent on items that are steering the business away from the vision, or in haphazard directions? A budget will have line items and categorized for things that will push you and the the business towards the vision. If a line does not align with a healthy vision, then it is simply removed from the budget.
A simple and well-built budget will take a backwards-gazing historic look towards the previous spending of the business. Starting a budget from scratch without looking at prior spending is akin to a amnesia-riddled pilot learning how to fly a plane everytime she climbs into a cockpit. That is not a plane you want to be on! The quickest way to look at past spending to simply run a profit and loss report from prior years making sure that the expense categories are visible.
Finally, a filter for a simple and well-built budget is making the appropriate time to actually sit down and build your budget. Have you ever jumped out of your seat in the airport terminal and sprinted into the Zone 4 boarding line for your flight the second your boarding announcement came across the crackline terminal speakers? All that sprinting just to stand their and wait in a line akin to a cattle stall.
That is NOT how we want you to budget.
Instead, block the time, maybe no more than 1-2 hours to sit, review your vision, review your previous profit and loss reports project what you think you might need in each category in order to hit your near term goals (see 12 Week Plan module) and your long term vision.
The Executive Leader will make proximity towards the past P&Ls, the present subdivided bank accounts and Level Two Tracking Dashboard, and plan the future with a simple annual budget. A constant awareness of your triangulated (past, present, future) financial position will allow you to offer rapid motivation that emboldens your team to pursue the named future you see.