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Just Flip a Coin Instead

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Sometimes decisions aren’t worth the cost of deciding

Click to hear the original Get-it-Done Guy podcast.

[Subscribe at iTunes (search for “Get It Done Guy”) or http://GetItDone.QuickAndDirtyTips.com]

This article is a reprint of an episode of my new podcast. You can visit the site of the original episode here.

Stever Robbins here. Welcome to the Get-It-Done Guy’s Quick and Dirty Tips to Work Less and Do More.

Today’s tip is about decisions. The bottom line? If it costs more to research and make a decision than the impact that decision will actually have, flip a coin instead.

In my first corporate job, we needed a laser printer for our programmers. The executives met to discuss it. After all, a $600 laser printer would only save twelve programmers hours worth of hassle. The marketing department had one, true, but then, they needed one. Otherwise, how could they print drafts of the billboard they erected, celebrating the company’s “Great Beginnings.”

In the end, they didn’t buy the printer. The programmers would just have to make do. And at night, I lay awake wondered: was this somehow my fault? In retrospect, perhaps I overestimated my own importance.

Decisions cost money

But I didn’t overestimate the decision’s importance. The decision not to buy the printer took four executives three one-hour meetings to make. The executives made about $100,000 a year, apiece, which is $50/hour. Multiply by four executives and three hours, and we’re talking $600 worth of management time to make that decision. They should have just spent the $600 on the darned printer.

This was the first time I saw that decisions cost money. And if it costs more to make a decision than the amount you’re deciding about, it’s more sensible to flip a coin or spend the money without further discussion. That’s why some businesses don’t even require receipts for small expenses when employees travel. It’s cheaper to reimburse $5 than handle the paperwork to document the expense.

Indirect costs can mount up

In my example, the cost was the executives’ salaries, but indirect costs can mount up, as well — costs of delays while the decision is being made, the cost of the distraction of having to make the decision, the cost of gathering information, and so on. And sometimes researching one decision leads you to expand the issue way, way too much.

For example (hypothetical, hah!), imagine the motor in your front- loading washing machine burns out for the sixth time, and you decide to buy a new washer. You call a saleswoman and she recommends an $800 model. But you want to be sure you’re making the right choice. So you demur and research begins.

You subscribe to ConsumerReports.org, you print descriptions of dozens of washers, and compare them feature by feature. You call the store and ask about delivery options and service plans. And you realize you can have your dryer venting cleaned as long as the workmen will be poking around. And, you know, since you’re moving the dryer to get at the duct, maybe you should just buy a new dryer to match the new washer.

Soon, your $800 purchase has become a major renovation. Your research gave you so many overspending opportunities that now you’re spending thousands on an extra appliance, delivery, and duct-cleaning. Oh, yeah–and during the project, you’ll be driving your laundry to the laundromat and spending two hours a week doing laundry in bad lighting.

You just spent hundreds of dollars, twelve hours of research time, six hours of laundromat duty, gas to drive there, and the self-esteem nightmare of laundromat lighting, all because you didn’t want to say “yes” to the saleswoman’s $800 suggestion. When you add it all up, you’d have been way better off just buying the dryer.

Non-monetary costs are important

Some decisions have a non-monetary cost. When you and your husband/ wife/transgendered partner or polyamorous family unit decide to go to dinner, you might want a sandwich whereas they want to try a new ethnic restaurant where the food still has eyeballs. Should you graciously say, “Yes,” firmly say “No,” or debate? If you debate, it could become an argument. If you smile brightly and say, “Yes, let’s be adventurous!”, you get major relationship brownie points. Maybe even extra snuggling. If you say, “No, let’s discuss it,” even if you settle on the food-with-a-face, you don’t get the points. With interpersonal decisions, sometimes saying “Yes, dear” and bypassing the decision can be worth way more than getting your way. And you can always order the rice as a safe backup dish.

If my first employers had just made decisions and spent money, instead of spending money to not-make decisions, they might have survived. You don’t need to make their mistake.

Today, put it to work. Review the major decisions you’re making about things to buy, places to go, people to see, and all that stuff. Notice how much work goes into each decision, and ask yourself how important each one really is. Then for the decisions that aren’t worth the cost of deciding, just flip a coin. You’ll free up your mind and you’ll move things forward, and all for less than it would take to make a decision.

[Subscribe at iTunes (search for “Get It Done Guy”) or http://GetItDone.QuickAndDirtyTips.com]

Is Counting the Root of all Evil?

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Click here to listen to this article as a podcast.

The love of money isn’t the root of all evil; arithmetic is the root of all evil. More specifically, counting.

Don’t get me wrong; counting was a wonderful invention. It has its uses. We can keep track of kids: “Are all 5 kids here? Let’s see, 1… 2… 3… 4… where’s Billy?” We can keep track of time. “He’s working overtime in the salt mines, honey. Instead of 12 hours, he’s working 14 hours today. He’ll be home at … 9, 10. Yes, 10 p.m.” And we can keep track of money: “He gets paid $1.49/hour working overtime, so our bank balance will be $11.37 … $12.37 … $13.37 … $13.86 after Billy gives us his share.” In fact, they remind us over and over in MBA school that “What gets measured, gets managed.”

So where’s the problem? This is evil? This gave us the industrial-friggin’-revolution. This sounds great!!

We measure the wrong stuff

Well, the problem starts when we choose what to measure. We often measure what doesn’t lead to our goal, and expect the measuring to magically create the managing.

Want profit? Let’s count expenses. Tell all managers to submit weekly reports of their team’s expenses. Let’s call it a TPS Report, and count how many TPS reports people send, to make sure they’re doing their job (which has silently morphed from “running a profitable business” to “submitting TPS reports”). Well, whoopie. We’ve added a whole layer of useless counting, and then another layer to count who is and isn’t counting. Since we don’t actually know what to do with the silly TPS report, we slide further from profitability. We’re counting the wrong thing.

Or how about sick days? There’s a hoot. “You only get six sick days.” Nice. Like that’s controllable. If you’re sick for seven days, come on in and give it to everyone else in your department, so everyone has to take six days off. You can measure sick days, but the measure is useless.

Seemingly meaningful measurements … aren’t

Then we make up measurements that mean nothing and try to manage those. “Let’s rank our employees. Then we can fire the bottom 10%.” Sounds easy; isn’t easy. (Sadly, however, it is a much-publicized Jack Welch policy.) How much time will managers spend on this ranking exercise? Do they apply consistent standards that are directly related to the company’s goals? Do we fire the 10% of managers whose ranking skill is in the bottom 10%? Who decides that?

Ranking is hard. Really hard. In fact, in 1963, psychologist George Miller’s famous paper “The Magic Number 7 +/- 2” presented results showing people can make ranking distinctions between 5 to 9 items, and then we pretty much lose track. If you think you can accurately rank a 250-person department, you’re deluded and thus in the bottom 10%; it’s time to pack your bags.

Even if you can rank, can you use the rankings for action? We want to punt the bottom 10% of the company. We can’t really compare an accountant against a design engineer, so our fresh new Harriford MBA, Darren, suggests we eliminate 10% of each department. That will add up to 10% of the company.

But what if our 30 design engineers rock, while our 30 accountants all suck eggs? As a company, we want to fire six accountants (10% of 60 employees) and no design engineers. But firing 10% of each department means we leave three mediocre accountants standing, and three rockin’ design engineers out of work. That’s clearly wrong. But we get one benefit: we know Darren didn’t understand the logic of firing, so we know he’s in the bottom 10% and should be fired. Success! We have at least one confirmed cost savings from this exercise.

Measurement turns us evil

I know you’re asking: what in heaven’s name does this have to do with spirituality, morality, and/or the rest of our lives? (If you weren’t asking that, don’t worry, just go with the flow.)

Here’s where the evil comes in. We only measure so we can make decisions about those measurements and change our behavior. But we do this by judging the measurements as “good” or “bad.” When we’re measuring a “bad” trend, we panic. We’re afraid. We’re angry. We get frustrated, anxious, mean, jealous, violent, and nasty.

How do people act when they feel anxious, mean, jealous, violent, and nasty? Fortunately, we live in a Highly Evolved Society, so we meditate for five minutes, do some yoga, and we’re fine. NOT! Most people want to get rid of the bad feelings. Some fudge the numbers and play financial games. Think Enron. Some people hit something. Some people treat everyone around like crap. And some people blame.

Yes, they blame. They blame colleagues. “Sales are down! Sally distracted me so I lost the big prospect.” They blame loved ones. “I went over my sick day quota since I had to take Billy to treatment for his Black Lung disease.” They blame the government.”If it weren’t for the (Republicans/Democrats), (the economy/the occupation/global warming/life/love/happiness) would be better.” And they blame themselves. “I’m just a failure.”

All because they counted, then got emotionally wedded to the counting.

What counts and what doesn’t?

I’ve been talking so far about business, only not really. We count the wrong things in business, we count the wrong things in life. We go to pieces when our business counts go off-track, we go to pieces when our real-life counts go off-track. And remember, real life counts more. Where do you get caught in the counting?

Some of us count who’s done more housework, us or our spouse. Some of us count the dollars in our savings account. Some of us count what someone does to prove they love us. Some of us count how pious our neighbors are. It all turns into judgment, and from there, into emotion. When the counting is going the way we want, we think life is good. When the counting goes the other way, we get upset.

The upset is extra, though! It’s our reaction to the counting. The counting doesn’t cause the problem; it’s our stories about the counting that cause the problem.

Let’s fix this. Let counting be counting. Let emotion be emotion. All this score-keeping, counting, and measuring is made up. It’s all fantasy. It’s a convenient tool for making decisions. But it’s not real. And it’s certainly not worth turning yourself into an ogre, feeling horrible, and abusing yourself and your loved ones.

What if you count and discover your bank account isn’t high enough to send your kids to college? Don’t get upset. Use it as information and change your savings plan. But don’t beat yourself up. You can’t do anything for your kids that way, except set a bad example. Use the information to stay centered and work with the people you love to fix the situation.

What if you count and discover your spouse overcharged on the credit card? You can fly into a rage, or you can sit down with your spouse, love each other tremendously, and decide from that place how you’ll deal with the situation. I used the “fly-into-a-rage” method several times. It didn’t pay the bill, nor did it make me an attractive snuggle partner, even to our stuffed animals. The counting-as-information plus love-then-problem-solving works way better.

What if you count pounds, and discover you have more than you want? You can get depressed and eat a chocolate cake to help yourself feel better (Stever’s diet advice: learn to distinguish “sugar rush” from “feel better”). Or realize the number’s just information you can use to change your diet. If you’re going to diet, doing it from a place of fun makes it … well … more fun. And if you’re not going to diet, then at least enjoy the chocolate cake. But don’t let counting trick you into not-dieting, and also not enjoying the cake. That’s plain foolishness!

And what if you count and discover you’re not as rich as Darren, despite your superior skills? Or you’re not as rich as the goal you set at age 23? You can call yourself a failure and jump out of a plane without a parachute. That’s one solution. But maybe you can notice that a number is just a number, while you’re an entire human being who has much more to offer than a number.

Counting is optional. If you stop counting and look around, you just might find you’re warm, dry, full, and reading the web. And that’s not such a bad place to be. So count only when it’s useful, don’t take it too seriously, and feel good either way. Move your attention from counting to living. Put your attention on the things that make you feel happy, joyous, and grateful. If you must count, count those, and every day, count a little higher. It’s your life, and only you can make your counting count.

Is "nice" good business or just wishful thinking?

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Click here to hear this article as a podcast.

I’d like to share with you a LinkedIn exchange I had on the topic of whether Being Nice is a good business strategy.

Questioner Is there power in being nice, with people in general or as a management tool? … Do you agree, or is this just so much psychobabble?

Stever

I haven’t read “The Power of Nice,” though I’m amused that we’ve created a culture where we believe we have to make a case for treating each other nicely. It can certainly be better business to screw people. Prof. Howard Stevenson of Harvard Business School did a study about that years ago. He concluded that being unethical did, indeed, pay, but it produces a world we don’t want to live in, so we tell stories like, “Being ethical is good business.”

In my life, I find when I’m centered and calm and at my best, I naturally want to be nice to people, and it feels darned good. And yeah, there’s more and more research supporting that position.

Questioner Are you saying there are times when the best thing to do is “screw people”?

Stever

The “best thing to do” depends on your value system. In business, if you value profits over people, you can sometimes maximize profits by screwing people. Nicotine-enhanced cigarette, anyone? Unethical behavior is common in business. The Conference Board did a study showing 60% of all people interviewed over a wide range of companies and industries routinely were asked to do unethical or illegal things. That makes it the majority way of doing business. That says to me that unethical behavior is more normal in the workforce than being female. (Copy of the study is available in PDF form here. See page 22.)

Personally, I value people over profits. I would love to live in a world where, if a business can legally, but unethically, make a profit, it would go out of business regardless of profitability. I used to stand up in meetings and point out when we were doing something unethical. Now I’m self-employed; honest self-examination isn’t a survival trait in corporate America. What was a survival trait, however, was the willingness to help everyone convince themselves that the profit-maximizing choice was also the ethically and morally “right” choice.

My own life has been a continual effort to deepen my integrity and building a life that aligns with my values. It disturbs me to see people damage their own integrity through self-denial.

That’s why I quoted Prof. Stevenson’s research. There’s this very comforting, but empirically false story that we can somehow maximize our business fortunes and our ethical/moral fortunes in one happy bundle. When we adopt the story, we get to have it all. When we face tough choices with very real tradeoffs between being a “good businessperson” and being a “good human being,” we relieve ourselves of having to confront the real choice, since our little story lets us maximize people OR profits, and claim that in the long run, our decision was magically best for both.

So back to your original question… I’ve had a very happy, satisfying, successful life on many levels, and have forgone chances to get a lot richer, legally, in ways that would have compromised my personal sense of integrity.

You may be different. If you prefer profits to people, then yeah, the best thing for you may be to screw people. I suspect if you do that, you’ll find yourself at life’s end surrounded by people you don’t like very much, with fewer happy memories than you might like. But that could simply be MY wishful thinking. I’m sure there are people who’ve been total jerks their whole life, accumulated huge fortunes, and died quite happy and quite oblivious to any suffering or harm they cause to others.

The good news is that you get to choose who you’ll be.

Are you as good at recruiting as you are at sales?

August 2007 Newsletter

Click here to listen to this article as a podcast.

We say people are our greatest resource. And Dilbert’s boss points out, “resources are our greatest asset.” But most companies put huge effort into attracting and retaining customers, and much less into attracting and retaining people. Salespeople get trainings, off-sites, apprenticeships, workshops, and books on finding and romancing customers. But rarely does a company jump so fully into finding and romancing their people (“our greatest asset,” remember?)

If your business depends on innovation, judgment, or in-person contact, people are key. MIT says 40% (yes, 40%) of its grads enter into finance or consulting. They don’t go because they like the fields, nor do they go for the money; grads go because consulting firms and I-banks put as much effort into recruiting as they do into sales. They recruit better than other companies. You could have those kids working for you instead. It would be better for you, and frankly, better for the country.(1).

When you want a customer, you go where customers hang out. You learn what motivates them. Why do they buy what they do? What are their needs? What do they think of you and your products? With your insights as a guide, you begin the dance that ends, we hope, with a nice new business relationship.

So where do new recruits hang out? What are their needs? Why do they choose the jobs they do?

Last week, I blogged about the absurdity of punting a job candidate after reading their MySpace page. I said it’s us old fogies who don’t understand that the World has changed, and we need to get with the program. It turns out, I was righter than I thought.

My friends Ian Ybarra, recent grad, Chris Resto, founder of MIT’s largest intern program, and Ramit Sethi just published “Recruit or Die.” Interviewing over 1000 students, they give a tour through the minds of today’s best candidates and how they make decisions.

Today’s job candidates research companies as much as companies research them. And then candidates swap notes. A lot. MySpace, Twitter, you name it, they use it. Successful recruiting means managing your reputation as much as selecting the people you want. When you ding someone, act rudely, show up unprepared, or rescind an offer, the news flashes through the social networks back to the people you most want to hire. If you’re less than top-notch, you’ll never even know you’re chasing away your best candidates.

What are candidates discussing in their online forums? Top performers aren’t looking for a salary; they’re looking for a career. They don’t want a retirement plan, they want growth, opportunity, and positioning for their next jobs. They don’t want to feel like a cog in the machine, they want a chance to have real responsibility to rise as rapidly as their talents allow. Take a look at your current recruiting pitch. Is there any overlap with what your recruits want?

Once your message is right, you need a quality recruiting process to deliver it. Sales has a century of research and frameworks. Recruiting, not so much. But just as sales builds on itself, so does recruiting. You research and contact your potential recruits. You build brand awareness among them, complete with all the brand attributes you want your company to stand for as an employer. Then you develop ways to identify your prospects early on, and begin building relationships far in advance with the people you someday want. The pieces of good recruiting aren’t hard, you just need to do them and put them all together.

The second half of “Recruit or Die” lays out the recruiting process start to finish—including what to do once your offer is accepted to build a strong partnership with your new employee. They make recruiting as rigorous as sales. In fact, just replace “job candidate” with “customer” and the book becomes a sales management handbook!

If people are key for your business, pursue them as you’d pursue your hottest prospect. Get inside their minds, provide real value (and not just money), communicate respectfully, and you’ll find you’ll attracting recruits of the very top calibre.

You can find Recruit or Die via my website: https://www.steverrobbins.com/r/recruitordie.

(1) Stever’s over-the-top soapbox: This trend spells doom for America. Forty percent of MIT students go into consulting and i-banking? FORTY PERCENT? These are exactly the people we need innovating. We need them discovering clean, cheap energy, halting global warming, and helping us compete globally. If they get sidetracked into producing 500-page jargon-filled strategy documents, we’ll lose their potential forever.back

Overcoming your own change resistance

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Some change resistance is good. How about yours?

Click here to listen to this article as a podcast.

Q: I am change-resistant. I know it, but it doesn’t help. Once I’ve decided to change something, I enjoy the challenge. But I often resist with “it won’t work because…” How do I know when I am simply resisting change or have a valid concern? You can always point out what can go wrong, and the change resistant-person (e.g. me) truly believes he or she is correct in their objection. – Suzanne

A: You’re in good company, Suzanne! Things change fast these days, yet success is built on resisting change. Yes, you heard right; results come from stability, dependability, focus, and persistence. In other words, the *change-resistance* that keeps us on-track day in and day out. Trust me, Fortune 500 companies rarely get there by embracing change. They innovate once (or get lucky), grow, then do everything they can to keep anyone from creating change that might topple them. Just watch ExxonMobile embracing change around global warming…

Change is hard, physically hard. Our brains grow neural pathways when we learn. Change means creating new paths, PLUS actively resisting our past learning. It’s way easier to invent reasons not to change, so we often do.

You know you’re knee-jerk resisting when you start with objections. Your points may be valid. Maybe. But starting with “No” shows resistance. If the objections come rapid-fire, that’s an even stronger signal. On your third “yes, but…” you’re driving from habit. Realize it. Pat yourself on the back for realizing it. Then stop.

(Try a rubber band around one wrist. When you hear yourself say “yes, but…” snap the rubber band lightly to remind yourself to shift gears.)

Next, just listen. Inside, think, “yes, AND…” Outside, say “Tell me more.” Listen, nod Yes, smile, and take notes. Agree to nothing. Just listen. Inside, object to your heart’s content; go wild. Outside, nod, smile, and write. Then say, “I’d like some time to think about this. Thank you.”

You listened, now think. Write down your objections. On paper, you’ll often find them less daunting than you thought. Once you’re done kvetching, list the possible benefits of the change.

Now, stretch your imagination; write down three or four possible futures that could come from the change. Explore positives and negatives about each one. For example, “If we move, we’ll have more Chinese restaurants that deliver. That means more romantic evenings at home. But then, we’ll bloat from the MSG, so we’ll need to buy a treadmill…” Be humorous. You’re not trying to predict the future; you’re just shaking up your thinking.

After this brainstorming, decide if you agree with the change. If not, you’ve thought enough to build a careful argument. Rather than a seeming nay-sayer, you’ll be a thoughtful contributor to the discussion. If you decide you like the change, psyche yourself up for the challenge and give it a go, full steam ahead!

Change-resistance is fine, if your reasons are good. By letting your knee-jerk response signal Time To Think, you can choose when to keep the status quo and when to act. Either way, you won’t respond willy-nilly; you’ll make a good decision from careful deliberation.

How to think strategically

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What is strategic thinking, anyway?

Click here to listen to this article as a podcast.

It sounds easy: my client wanted to think more strategically. isn’t that the hot buzzword? “Strategic thinking.” Oooh! Sexy. There’s only one problem: what, exactly, does it mean?

You’d think we would know. But I’ve seen executive teams discuss in all seriousness what the lever does on a piece of machinery. That’s about as non-strategic as it gets. In fact, a general rule is that if you read it in a manual, it’s quite likely not strategic.

What is strategic is when you’re doing something that changes the structure of the business in some basic way. Paint a machine lever red? Not strategic. Decide to outsource manufacturing to China? Strategic, because it changes who you hire, how you manage them, and what they’re capable of achieving. You punt your machines and take on eager young managers who speak Mandarin.

This is the first kind of strategic impact: changing organization structure. This includes outsourcing, selecting vendors (since what you can do now becomes expanded and limited by what they can do), mergers and acquisitions, changing the org chart, going public, and hiring and firing people who will in turn make strategic decisions.

Or consider an entrepreneurial client who insists on answering the phones himself. He’s done it since founding the business 20 years ago and prides himself on knowing everything that’s going on. But now that the company gets a hundred phone calls a day, he decides to install an automated attendant, freeing himself to do other things. This is an example of “business process reengineering,” which is a fancy way of saying “doing things differently.” Changing how a business does something is strategic because different hows give the business different capabilities. If your product is produced on a machine that turns out 100 widgets a day, then you simply can’t bid on a job that wants 500 units by tomorrow. If you can rearrange your factory processes and produce 5,000 units a day, whole new markets open up.

Speaking of markets, choosing the markets to compete in, what to sell, and how to price are all strategic decisions. After all, those decisions determine who you’ll hire, how you set up your org structure, and how you’ll deliver your product or service.

The American Express web site lists 20+ cards. I called a friend in Amex’s strategy group to help me understand the difference between the “Platinum Business” and the “Business Platinum” cards. He said, “I work in strategy. I don’t really know our product lines.” A strategy group that doesn’t know the products? I don’t know what they do, but it seems awfully dangerous to be making organization structure and process decisions without even knowing what your customers are buying.

Everything we’ve discussed so far is cross-functional; they can involve changes that affect many parts of a business. Though it’s possible to make strategic decisions in one area of a company without involving other areas, that’s a dangerous game. If our marketing department starts competing in a new market that cares about delivery time, but doesn’t tell our shipping folks, they can set the company up for failure.

Don’t make the same mistake. Learn when your decisions are strategic. That means decisions about org structure, process–the HOW–, cross-functional decisions, and the marketing decisions of what to sell and who to sell them to.

If you want to learn more about strategy, my very favorite book is Co-opetition by Adam Brandenburger and Barry Nalebuff. I also liked Geoff Moore’s “Crossing the Chasm.” Both books are circa mid-90s. There are 83,416 other business books that will teach you some kind of strategic thinking. I’m not sure the specific strategic approach is very important (though consulting firms will make big bucks telling you otherwise); to me, the value comes from learning to think at a strategic level consistently and integrate strategic thinking into your daily running of the business.

The Joys of Overhead (why overhead isn't necessarily bad)

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Why Overhead isn’t necessarily bad.

Click here to listen to this article as a podcast.

I never thought I’d be able to grow up and say, “Mom, I’m not just a productive businessperson, I’m overhead!” Many people think overhead is a bad thing. Well, maybe. Maybe not. Overhead’s an essential part of business.

Overhead is the time, effort, money and manpower you spend on parts of the business that don’t directly make money. The cleaning service that keeps your desk so shiny you can see yourself? Overhead. Your office rent? Overhead. That cool new Blackberry? Overhead. The wonderful people who work in your accounts receivable department? Also overhead. And brace yourself: if you’re a manager, you just might be overhead, too.

We talk as if overhead’s a bad thing. That’s just silly. Building and maintaining the support systems to do our job, that’s overhead, but it’s also necessary. In today’s office environment, I’ve had executive clients who hunt-and-peck type their own letters and fill out their own expense reports. They don’t want the overhead of an assistant, they say. Harumph, I say. If they’re high-powered folks (and they people I work with are!), they can do more for the business by concentrating on their jobs, not their expense report. If they could spend 100% of their brainpower on their job, they would build so much great business that the so-called overhead of an assistant is peanuts.

One place the world is very confused about overhead is with non-profits. Many people think the better a non-profit is, the less overhead it will have. “Only 2% of every dollar goes to overhead!” non-profits proudly claim.

What they’re not claiming, probably because most non-profits don’t know how to educate donors, is that with only 2% money available for overhead, they’re not likely to ever build the talented staff, tight business systems, and focused delivery to make a big impact in the world. We routinely accept that businesses may need 30-40% overhead just to get the job done well. The same is true of non-profits.

The way to think about overhead is to ask whether the organization gets better results with the overhead than without. For for-profit companies, it becomes the most fundamental management question: does a dollar spent on overhead turn into more than a dollar of profit. If the answer is Yes, then it’s useful overhead. (Note that I’m not saying a word about CEO salaries here.)

For a non-profit, the bottom line isn’t money, it’s impact. You need to ask: can the non-profit have greater impact with its overhead than without. Consider a Non-Profit Co, a third-world hospital. They could have low overhead by taking donations, buying and distributing medicine. But if they increased overhead by spending money educating hospital staff in public health, they could educate communities to prevent many diseases in the first place. The training costs increase overhead, but increase the positive impact of the hospital even more than if the money were spent directly on medical care.

Personally, I incorporated last month. My last two weeks have been spent filing incorporation stuff, navigating government websites, arranging payroll deposits, transitioning merchant accounts, and doing lots and lots of stuff that is all overhead. I decided to write this article to convince myself that the overhead was time well-spent. And it was, because overhead is only a bad thing if it doesn’t help the business move forward. And in this case, the overhead inspired an article and a podcast. And that, my friends, moves my business forward.

So don’t reject your overhead. Embrace it! Because like it or not, it’s here to stay.

Promises, Promotions, and Trust: Building relationships

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Click here to listen to this article as a Podcast.

In mid-2004, I won a free 1000-CD pressing as a prize in a raffle. I was thrilled; I didn’t yet have a product, but the prize would make it that much easier to create one. The company added me to their mailing list, occasionally sending emails to persuade me to buy CD duplication.

Finally, late last year, it was time! I eagerly contacted the man who had sent the emails … and he said my prize expired. Duplication would cost money going forward. The tag line in his email: “We create relationships.”

Wow. Talk about a disconnect between words and actions. Relationships are built on trust, fulfilled expectations, shared commitments, and mutual support. If you give a promotional prize, hoping to attract a customer, don’t kill the trust on day one by reneging on the prize. Even if you include an expiration date (though I didn’t remember one), enforcing it starts the relationship with a refusal. That’s hardly a great way to create relationships. In this case, I’ve replied courteously, and politely hinted that this treatment has me disinclined to do business. He hasn’t taken the hint.

When you make a promise, follow through. If you don’t, you’ll undermine trust and damage the relationship. This is true for explicit promises and also true for implied promises. If someone thinks you’ve agreed, the relationship will depend on your fulfilling the agreement[1].

How many of these lines have you heard, or maybe even used yourself?

  • We promised you a promotion, but circumstances have changed. Next year. Promise.
  • We’ll never have layoffs. Ever.
  • You’ll have the report in your hands by Thursday.
  • I’ll come see your play/ballgame/art opening tomorrow evening.
  • We care about you as a customer. (Please hold.)

If you break a promise, it really doesn’t matter why. Yeah, maybe it wasn’t under your control. Or maybe you had other priorities. But why should the other person care? When you say things like this, it’s important that you realize the listener thinks you’re being sincere. If you don’t follow through, all they know is that you’re undependable. So if there’s doubt, say so. “I don’t know if I can have the report in your hands by Thursday, but I’ll give it my best shot.” You just might be surprised when they reply, “Oh, that’s OK. I don’t need it until next week, anyway.”

For the next week, practice being honest when you make promises. Be honest with your co-workers, your customers, your family, and your friends. Be honest with yourself. Only promise what you’re sure you’ll deliver. Tell the truth. Have your company do the same. Then and only then, will you be able to say:

We create relationships.

[1] Like every rule, this one has its exceptions. When your spouse asks you to tell the truth about how good their new outfit looks, the answer is always “I’m telling the truth. You’ve never been more lovely.”back

Stumbling on Beauty: Creating Passionate Devotion

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Click here to listen to this article as a Podcast.

“I’ve stumbled on beauty.” The ground was gray, the horizon melding seamlessly with a velvety black sky. Reflecting in the plain beneath us, four beautiful icons gazed out, happily rotating in a graceful dance. I held my breath, reached out, and pressed a key. The wrong key. The icons faded down, and in the distance, my screen reappeared and swooped towards me. I was back in reality.

It was the day after I switched to the Mac, six weeks ago. My fingers, trained by 15 years of Windows use, typed some magical incantation and took me somewhere … beautiful. It took three days of searching to figure out what I’d done.[1]. In my search, I became a convert, wishing dearly to recapture that moment.

Stumbling on beauty. What a great experience for a customer. Disney knows it, too. Where else can you stumble on a candlelit dinner for two overlooking the Caribbean…in the heart of Orlando. It’s the little things that grab people’s hearts and keep them coming back.

How do people use your product or service? Can you arrange for them to stumble on a delightful surprise? Perhaps hauntingly nice music at an unexpected moment. Beautiful artwork. Or (gasp) full-service at self-serve prices. It needn’t be expensive, just fun and unexpected.

But why stop at work? It works with friends, too. Send a “thank you for being my friend” card to your best friend. Or watch your cuddle bunny wander around the house at night, finding a little poem hidden in a favorite before-bed snack. Maybe a quiet love song as they fall asleep. Or your kids…what if they stumbled on a free concert ticket beneath their pillow for no reason at all—just because.

We get so wrapped up in the daily grind that we often forget it’s the truly exceptional moments that make the biggest impression. It works in business, it works in your home life. Plan some exceptional moments for the people around you and watch what happens. Nothing compares to Stumbling on Beauty.

P.S. If you haven’t spent time with a Mac recently, run to your nearest Apple store. They’re really quite something!

[1] Command-escape in OS 10.4.8 starts the Front Row media center. Don’t tell Windows users, though. They must buy a whole special edition of Windows to get a decent media center experience. back

Dealing with a difficult ex-boss

Elements of a difficult conversation

Q I worked for a lousy boss during a turnaround situation. I performed well, but he treated me poorly and never told me how I could improve. We’ve moved on, and he called to catch-up. We should get along fabulously, and during our call, I told him how much I admired his skills and accomplishments. Again, he had no feedback for me. It was all one-way. Should I cut him out of my life because of how he treated me? I want to understand what motivated his behavior.

A This could be a communication issue and nothing personal. Some people just don’t compliment others or give positive feedback. They don’t consider their impact on others. There can also be weird power struggles between managers that undermine relationships. Given you were in a turnaround, maybe he was so stressed he wasn’t at his best. So maybe he’s a great guy, you simply misunderstood, and you should be friends going forward.

But you’re still having real conflicts around this, however. Maybe he had real reasons he acted as he did. First and foremost, take care of yourself. Stop thinking of him as your “boss,” and think of him as a peer, who’s doing the best he knows how to do.

Then forgive him. Not for any spiritual reason (though that can’t hurt), and not for his sake. Forgive him for your sake. He may be doing his best, and that “best” might not be what you need. But he is who he is—problems and all—and you are who you are. And both of you are just fine, even if you don’t mix well together. Forgiveness is what helps you lot go of the emotion and make the rest of this easy. Once it’s easy, you’ll be in a better mental place to choose your next action.

What do you want? If you want a friendship (professional or otherwise) with this man, you need to fix the relationship. Talk. Tell him what’s going on, and ask for his side of the story. He’s not your boss; he’s your peer. You have nothing to lose. “I would like a continued relationship with you, but I feel apprehensive about our past relationship and would like to understand your perspective. Would that be OK?”

Have a discovery conversation. Get both your perceptions of the facts of what happened. Share your feelings about it, in an inquiring way. And also (this is the hard part) discuss the impact it has on your sense of identity. Did you feel threatened? Did he? Keep the tone light–keep it an exploration.

Check out the book “Difficult Conversations” for a great framework for such conversations. At best, you might discover it’s all a misunderstanding. At worst, you still won’t connect and you’ll go your separate ways. My own experience is that some of my greatest friends and colleagues have started out with misunderstandings and personality clashes.

If you want to cut the ties now, I would simply stop returning his calls and emails. Be too busy to talk for more than a few minutes. Don’t get personal or attacking, just let him drift back out of your life.

I hope this helps!

Putting it to work:

  • Choose an ambiguous or incomplete relationship that is weighing you down.
  • Forgive the person, so you can move on with resolving the relationship.
  • If you want to break it off, commit to yourself that you’ll do so and stop engaging with the person.
  • If you want to continue, have a “difficult conversation” in which you share your perception of what happened, how you felt about it, and what that meant to you about who you are. Inquire to understand their perceptions, feelings, and identity as well.