“Financial Adrenaline” is a term we love around here because it reflects our commitment to help you turbocharge your business with practical tips and techniques to improve free cash flow, the lifeblood of business. As a further extension of our Financial Adrenaline program, we’re going to share a new Business Finance Tip every Wednesday specifically for those business executives who don’t have a finance background.
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In most fields of endeavor, the more we learn, the more we realize how much we have to learn. It’s certainly no different in the world of business finance, so for non-finance executives, it’s never easy to know where to start.
So, why not jump into the deep end right now by reading Warren Buffett’s Letter to Berkshire Hathaway shareholders for 2010. The publication of Berkshire Hathaway’s annual report is closely watched in the national media, as well as in homes and offices across the country … and for good reason.
I’ve said before that leaders don’t have the luxury of confining their interests to just a few things.
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“Financial Adrenaline” is a term we love around here because it reflects our commitment to help you turbocharge your business with practical tips and techniques to improve free cash flow, the lifeblood of business. As a further extension of our Financial Adrenaline program, we’re going to share a new Business Finance Tip every Wednesday specifically for those business executives who don’t have a finance background.
Most non-finance executives have picked up a few tidbits … from a class, from a financial colleague or friend, a banker, an accountant … and have assimilated a variety of random fragments that are probably more like a messy collage than a well-drawn portrait. Is it enough to get by? Maybe … but if you’ll take ownership of your own financial education, we’ll help you. Dig in, challenge what you read, add your comments or questions and we’ll answer them right here … every time … and we’ll get this conversation started. Are you with me?
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If you’ve ever exercised by lifting weights, you know that the amount of the weight on the bar is only one variable that needs to be considered for a particular exercise. If you’re doing a bench press, you can add more weight because your chest and shoulder muscles help your arms to lift the weight. But if you put 50% of that total weight on each of two dumbbells, you can’t lift either one. You’ve probably also learned that you can’t use the same weight for curls as you do for bench presses.
Likewise, if you’re going to do only one repetition, you can handle more weight than if you’re going to lift it ten times. If you are lying flat,
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Carjack. Nail clippers. Teeter-totter. Tweezers. Nutcracker. Scissors.
What do these devices all have in common?
They create leverage, a simple but extraordinary tool that increases the force, or power, of everything to which it is applied. Engineers use a more complicated definition, but you and I know that we need at least three things to create leverage: a 1] fulcrum, or pivot point; 2] a load being moved; and 3] a force that’s moving it.
Leverage is even more invaluable following the 30-month economic drought. Most of us have fewer resources to solve the problems we face every day … so we need as much leverage as we can muster to turbocharge the resources at our command. Financial leverage may be one the first things that come to mind, but I want to talk about at least five pivot points that can drive your business to greater success.
Are you doing everything possible to leverage your time?
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‘Always ask why. Dig deeper. Get the facts.’ Avoid crowd mentality“Ask Why” was their motto. “Wheel Out,” “Fat Boy” “Death Star” and “Get Shorty” were some of the nicknames applied to their strategies. Confirmation letters of successful trades were addressed to names like “Mr. M. Yass and “Mr. M. Smart” … and I think you can parse the underlying contempt. “Rank & Yank” described their people performance system, “Pump and Dump” their trading strategy. About $70 billion of market value was destroyed, more than 20,000 employees lost their jobs and pension funds worth $3.2 billion were destroyed, more than two thirds of which belonged to retirees with little chance to rebuild.
I had always intended to watch “The Smartest Guys in the Room,” the 2005 movie based on a book by the same name from co-authors Peter Elking and Bethany McLean, but it got lost in the shuffle until last week. It chronicles the Enron cataclysm, whose meteoric ascent was violently terminated with its bankruptcy on Dec. 3, 2001.
It’s hard to believe this happened almost 10 years ago since to be “like Enron” still reverberates as an ignominious curse. It’s really more like a viral infection, though, because so many of the forces that drove its destruction have cleaved similar fissures in scandals from
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~ Dwight D. Eisenhower, (American 34th President (1953-61). 1890-1969)
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Most of us weren’t around during World War II … but D-Day was the largest amphibious invasion of all time, with over 250,000 troops and 15,000 ships landing along a 50-mile stretch of the Normandy coast on June 6, 1944. Luck? Accident? … or the result of rigorous strategic planning and project management?
Did General Eisenhower, the Allied Supreme Commander, lead this effort without any planning? Of course not, and even if our business plans aren’t quite as extensive, we know (deep down, we know for sure) that we need some sort of an organized planning process to build a successful business.
We need to make sure that everyone’s headed in the same direction … that we don’t ignore the obstacles or overlook the great opportunities on the road ahead … or don’t squander valuable resources chasing rainbows.
That’s why you should listen to our 5-part podcast series that demystifies planning and describes a simple discipline to get you started.
I find myself using General Eisenhower’s phrase repeatedly for at least two reasons … it’s true … and
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What do YOU want to do? There’s no criterion more important to evaluation how you’re going to build your business.
In this episode of our Building a Business podcast series, we conclude our conversation about the criteria you should use to evaluate all of the opportunities available to build your business:
You’ll recall that we started our planning discussion by killing all of the strategy myths. We dedicated the following 4 episodes to understanding the 4 important criteria to evaluate the opportunities you have:
– how to assess your current capabilities,
– assess the competitive landscape, and
– consider the external, and often less controllable, forces that affect your businesses … industry trends, markets, demographics, technology changes and other external factors.
In this podcast, we explain why what YOU want to do is a critical component of this process.
~ Thomas Carlyle
A lady walked into a neighborhood market one day and spoke loudly over the counter to the head butcher.
“Your prices these days are atrocious, Sal. Joe’s Deli across the street is selling your $10 chuck roast for only $5!”
“I know, Mrs. Haggle. I saw the sign. The thing is . . . Joe doesn’t have any chuck roast.”
So, the law of supply and demand rears its head again, some days a beautiful vision, other days an ugly hag. We’re surrounded by her mystique everywhere we go. Traffic is tied up because there are more cars than highway space. Starbuck’s is backed up because people want coffee faster than it can be made. There are no paper clips in the supply room but there’s plenty of fruitcake left in the kitchen.
Supply and demand drove markets long before economists appeared … and its jarring prevalence is unavoidable. One of my favorite examples is
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At this time of year, we all get excited about personal renewal, our plans for the coming year and how we can enhance our personal and professional lives in 2011. Even though most of us have traveled the road of broken resolutions, hope springs eternal as we prepare to refresh our commitment and recharge our batteries … and make plans to overcome our shortcomings and rise to new levels of success.
There are many fashionable approaches to this process, many of them with valuable insights. Jonathan Fields chose 10 words to focus his energy. His approach is an expanded derivation from a three-word approach used by Chris Brogan, who, like me, uses his carefully chosen words “the way a lighthouse helps a ship in a storm.”
Ernest Hemingway used only six words to write what he called his greatest novel … and the more you think on it, the more intriguing it becomes. It’s one more approach you can use to bring the essence of your 2011 plan into sharp focus. Although we’re more interested in clarity than mystery in our annual pilgrimage to the altar of realistic expectations, this approach, like those of Jonathan and Chris, also celebrates the power of simplicity.
Maybe you’ve used variations on these K.I.S.S. principles to craft all sorts of goals and objectives … memorialized in lists, notebooks and diagrams. Yet, when we step back into the maelstrom of real life, distractions intrude, new input floods our inboxes, and without seeing it, we start to slowly drift off course. We madly implement course correction procedures, but instead of returning us to our original direction, they cause us to lurch about, each adjustment resulting in a slightly different course even further from our original objective.
So, how many words does that leave us?
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Imagine that you are so remarkable that all the world stands in your honor, swinging and singing, tiny flashlights dancing across the ceiling, oblivious to the world around them? How do we achieve such an astounding level of recognition and praise for our own talents and accomplishments?
That’s what was going through my mind when I tuned in late last night to the Kennedy Center Honors featuring Paul McCartney. Yes, there were other honorees … Oprah Winfrey, Merle Haggard, Jerry Herman and Bill T. Jones … but there were goosebumps aplenty as I listened to some of McCartney’s and the Beatles’ memorable songs … sung by luminaries like James Taylor, Steven Tyler, Gwen Stefani and Mavis Staples. Members of every generation ravenously devoured his music. You can watch many of the performances here.
Wow! How can we do that, I wondered? How do we, as Steve Jobs said, “get rid of all the crappy stuff” and stay focused like a rocket heading to its target? How do we apply the unique characteristics that define and differentiate us to achieve excellence in our chosen field? How do we stay unshackled from the constraints of everyday living and get our star to shine like Sirius?
It’s easy to ponder McCartney’s accomplishments and overlook the turbulence that has surrounded his life … from the screaming crowds and adoration beginning in his early 20′s, to later encounters with drugs, the deaths of his wife and John Lennon, a more recent divorce …. Just a few of those distractions would overpower a weaker individual, and yet with all of it, he created an enduring musical catalog that lives in the hearts of billions of people across the world.
What are we doing to get there? What inspires you to sharpen your focus and accelerate your journey in 2011? Do you have the desired outcome and the next action steps clearly in mind?
Welcome to Exkalibur. I’m Lary Kirchenbauer, President of Exkalibur Advisors, Inc. Please take advantage of our resources to help you build your business ... and let me know what more we can do to serve you.
Read my latest column from the NY Times affiliate, the North Bay Business Journal.
In my former position as a tax partner at KPMG, LLP, I worked closely with Lary on the tax aspects of the plethora of business issues that arise in the life cycle of a start up company. It was unusual to see a senior finance person demonstrate a seasoned business acumen in identifying issues and opportunities, grasping the technical issues, resolving obstacles and implementing change.
Jeffrey Bergmann, V.P. Worldwide Tax, VeriSign, Inc.
