It’s always good to periodically take stock and ask yourself what you have recently learned. My experience – if you don’t do this – is that you are bound to repeat the same mistakes. And I speak from experience in that department – trust me! Zweig Group is a 29-plus year-old company – and I have been working in business for over 40 years now.
Here are a few of my recent epiphanies:
- You can be too quick to trust. I have done this too often over the course of my personal and business life. You can assume everyone is good and has good intentions and will do the right thing, but the fact is that some people are selfish and greedy and don’t mind using you to get ahead. For whatever reason, they justify it as the right thing – they didn’t get their fair share, or you have it too easy and don’t deserve it, or their needs are just greater than yours. None of it matters. The point is, make sure you know someone well before you give them the keys to your house or you could regret it.
- Keep focused on the cash. The single most important financial metrics to track are those that involve your cash as this is the most critical to your survival. Cash in the bank, balances on credit lines, working capital, total accounts receivable, AR days outstanding, monthly cash breakeven point – these are all super-important numbers that you need to KNOW and understand so you can figure out what’s happening if you see them changing. It is the difference in making it or not making it.
- If your growth has stalled, look at your marketing budget. Show me a stagnant revenue growth history and I’m telling you – every time – the problem is that the company has stopped spending – or at least stopped increasing its spending – on marketing. You may be able to grow without increasing marketing spending when you are in a hot market. You certainly won’t in a flat market.
- Good people want to exercise some discretion over what they do. No one who is motivated and talented wants to be an order-taker. The best people – whether they are sign painters or skilled architects or financial managers – all want to have some say over how and what they do. The more of that you take away, the less motivated (and happy) they are going to be.
- You have to pay your best people well. Sure – I have seen all the studies that say “pay is the ninth thing” (or whatever the number is), on a list of motivators. But the fact is this: If you don’t pay people well, someone else will. That fact will cost you some good people. And while yes, the condition of the company financially does dictate much of what you can ultimately do for your people, at some point they won’t care and will just want more. Ignore me at your peril!
- When you get rid of a dud or troublemaker a new one will emerge. I don’t know what this says about human behavior – it can’t be good – but my experience is that this happens every single time. People seem like they NEED someone to complain about or blame their woes on. It is a sad commentary on the human condition, but watch what happens when you get rid of the low performer or someone who is out of synch with your culture. In a few weeks, everyone will start talking about someone else!
I’m sure I have learned more than these six things in recent months but I’m out of space here. Have a great week, everybody!
Mark Zweig is Zweig Group’s chairman and founder. Contact him at firstname.lastname@example.org.Subscribe to the electronic version of The Zweig Letter for free.