Shooting for the moon

I loved following some of the recent news and programmes to celebrate the 50^th anniversary of the Apollo moon landings.

I remember watching it on the news as an 11 year old boy. Armstrong’s historic steps took place in the middle of the night for UK viewers. That may be why the first moon walk from Apollo 11 is imprinted slightly less on my memory than Apollo 8 breaking from earth’s orbit to head for the moon a few months earlier. Both are brilliant, mind-blowing memories.

The wider Apollo programme, from Kennedy’s visionary speech at the start of the decade, through the tragedy of Apollo 1 where astronauts were killed in a ground test, to the successful exploratory flights and the triumph of Apollo 11, was a crazy, massively expensive, heroic and incredible journey.

Apollo’s legacy is huge and far-reaching. Many see it as man's greatest achievement and even those who believe it was an expensive folly and arms race indulgence would recognise that it was an incredible feat of ingenuity and courage.

Whatever your view, I believe there are lessons for business owners which can be drawn from this programme.

These are some which spring to mind:

The vision thing

JFK made his famous speech at Rice University in September1962. It is worth watching on Youtube to capture its raw power. ‘We choose to go to the moon’. Kennedy’s statement was simple and specific. To land a man on the moon, by the end of the decade and bring him back to earth safely. The goal was achieved in July 1969. How many businesses have a vision? How specific is it and how is it communicated? Kennedy’s vision inspired, motivated and mobilised a whole country. Powerful stuff

Belief

Landing on the moon seemed like an impossible challenge. A striking thing listening to the reminiscences of those involved is that they ‘believed’ they could make it happen. Some of this was possibly down to the confidence of youth. The average age of mission controllers was 27! ‘They didn’t know what they didn’t know’. There were huge setbacks and barriers along the way but belief that they would eventually be successful helped to carry them through.

Commitment

One of the podcasts I listened to about the Apollo programme described how committed people were to making it a success. Unpaid overtime was the norm. At peak times people worked all hours to get things done and overcome hurdles. Unpaid working on that scale is not realistic or ethical for businesses but commitment in terms of a desire to get things done and work towards a common goal is a priceless commodity

Teamwork

There are numerous examples of incredible teamwork on the Apollo programme. At its peak 400,000 people were employed directly or indirectly on Apollo 11. What a fantastic job of coordination and teamwork to bring all this together to focus on the end goal. The teamwork between Armstrong, Aldrin and Collins in space and the support team in mission control, Houston was tangible and each team praises the other in almost every interview.

Adaptability

The Apollo team were always adaptable. If their plan A didn’t work there was plan B and if there wasn’t a plan B they would make one on the fly. The most striking example was with Apollo 13 where the Command Module failed and the lunar module was adapted to become the astronauts’ place of safety and their refuge to travel back to earth. How many businesses have a plan B or rise to the challenge if plan A doesn’t work?

Excellence

The best thrived in Apollo’s challenging and competitive environment. Nothing but excellence was tolerated in terms of attitude, commitment, quality of work, decision-making and so on. Timescales were so tight to achieve JFK’s goal that the best engineering graduates were recruited without interview. They were thrown into a work role almost immediately and either ‘sank or swam’. I’m not advocating this as a recruitment or a management method for businesses but the focus on excellence is the key thing. There was no room for passengers or people making up the numbers. You either ‘got with the programme’ or fell by the wayside.

Landing on the moon is clearly different from running a small business. The similarity is that it's about a group of people working towards a shared goal.

If the moon mission was possible in 7 years from vision to success what can be achieved in business with vision, belief, commitment, teamwork, adaptability and a focus on excellence?

Shoot for the moon as they say…

www.base52.co.uk

Burgers and bookkeeping

Most businesses are in control of how they provide products or services to their customers.

A McDonald’s burger is a McDonald’s burger. It’s done the same way, every time. When you get a flight you turn up at the airport, do check in, go through security and passport control, sit in your selected seat and follow the process. In a restaurant you are greeted, shown to your table, choose your food, it arrives, you eat, you leave.

McDonald’s is the extreme example of a business owning and controlling the process but most businesses do the same, to some degree.

Except, perhaps accountants. All our clients are different it seems. Some provide their records to us in a carrier bag, some in shiny folders in monthly batches, some via email or Dropbox, some summarised on Excel spreadsheets, some on accounting software. Some tidy and reconciled, many not.

So often we work in different ways and using a different process for different clients. That’s a challenge because we need to adapt to each client and have a good working knowledge of multiple accounting systems. ‘That’s what our clients want’, many accountants would say. Maybe, but it’s not terribly efficient and maybe our clients ‘Don’t know what they don’t know’

I’m happy to admit that we have followed what we believed to be the ‘client friendly’ method. However the records are presented, we will find a way of coping with it.

I believe now that things have moved on and we are not acting in the client’s interest if we do not direct the process more than we have in the past. If we can scan receipts, quickly and easily why would we not encourage our clients to do this to save time and simplify the process? If we can use software which downloads the bank feed and automatically matches invoices to payments and receipts, why wouldn’t we take advantage of that? And why would we not use intuitive dashboards rather than paper-based or pdf reports?

Some firms have taken this on board such that they work with a single accounting package with associated apps and they own and control the accounting process with their clients, including doing the bookkeeping in most cases. They get huge efficiencies and economies of scale which they can pass onto clients in terms of improved services and ‘value-adding’ advisory support.

We may not go quite to the extent of prescribing a single accounting system but I do believe standardising how we receive records from our clients and our own internal processes is beneficial for us and our clients.

Accountancy may be different from burgers in a bun but we can learn a lot about consistency, value and service from Ray Kroc and his empire.

www.base52.co.uk

Riding the wave of the latest killer apps

I started my career in accounting just when the the last big ‘killer app’ arrived. 

The spreadsheet. 

We can’t live without them now and Excel has become the ubiquitous market leader as part of the Microsoft Office suite. 

Before the spreadsheet arrived ‘number crunching’ was a big part of accountants’ lives. Checking column and row totals in their clients’ manual records. Cross-casting on their own large analysis sheets. Lots of time spent checking and adding up lots of numbers. This time spent added no value at all to their clients but was a necessary part of work to ensure accuracy.

The spreadsheet changed all that and perhaps more importantly it allowed for rapid analysis and ‘what if?’ modelling. As a management accountant this was my bread and butter. Spreadsheets enabled me to prepare budgets, forecasts, investment appraisals and complete ad hoc analysis, rapidly and accurately.

It’s a tool we still use and can’t do without. It changed the way accountants work and enabled them to provide more value, rather than removing the need for accountants altogether. Undoubtedly some clerical jobs were lost but accountants continued to thrive.

There are new killer apps now transforming the accounting sector in the form of scanning software and cloud accounting software with links to  banking transactions.. 

Accountants ignore these at their peril. 

They have changed and are changing the landscape in 3 major ways:

• Removing the need to key in invoices and receipts into an accounting package
• Increasing the speed with which accounts can be processed and made available
• Access anywhere, any time

These are transformative changes on the scale of those we saw with the spreadsheet. As with the spreadsheet I don’t think these changes will bring about the demise of accountants. They will however limit the careers and prosperity of accountants and accountancy firms who do not embrace the change and adapt to new ways of working.

There is an opportunity to deliver greater value to clients through more timely reporting and analysis and providing more proactive advice and support..

There is a huge benefit for clients and accountants alike if we ride the wave together with these latest killer apps.

www.base52.co.uk

Ch-Ch-Ch-Ch-Changes

‘Turn and face the strange’, as Bowie said.

I’ve lived through and played a small bit part in some big change programmes in my former life as a management accountant at a large food retailer.

Big consultancy firms were involved, large PowerPoint presentations, lots of jargon and buzzwords and backing from the Board. Some went better than others. Key aspects were engaging those affected and ultimately the whole business on why the changes were needed and communicating, communicating, communicating.

Some of the changes implemented like effective meetings, project management tools and process improvement became part of the DNA of the company and helped it stay ahead of the competition for a sustained period of time.

What about managing change in a smaller company - say with 10, 20 or 50 employees? Processes and ways of working tend to be more informal and centred around people and their likes and dislikes rather than a company style. Budgets are small and people (including the owner) are normally working at capacity so there is little time to consider and actively engage with change.

But sometimes change needs to happen.

Small businesses evolve and from time to time they reach a plateau. Perhaps they have become too dependant on the owner. Perhaps the owner is nearing retirement age and wants to move away from doing 50/60 hours weeks. Perhaps the business has become a bit stale and is not focussing on their customers.

Making a change can be difficult but it can transform a business if the owner and key employees commit to the change and focus intently on delivering it.

The same principles of communication and engagement are critical as with a larger organisation.

I strongly believe that an external facilitator of some kind is important if not essential. This could be the company’s external accountants or a business consultant of some description. Their key attributes should be that they are experienced in managing change and ideally with specific experience in the areas you are looking to transform.

Another essential component in my view is to have a programme manager or project manager whose responsibility is to oversee and facilitate the change. This would probably involve freeing up one of the team from their day job for a period of time to manage the change programme.

So you have a plan and the objectives you want to achieve. It’s worth bearing in mind Mike Tyson’s quote, ‘Everyone has a plan until they get a smack in the mouth’. You will probably get several smacks in the mouth to veer you off plan and will need to keep the objectives in mind and try to steer back on track.

With luck, effort and resilience the plan can be achieved and the business taken to a much better place.

Good luck if you decide to embark on your own change journey.

www.base52.co.uk

Early Adopters, Laggards and those in between

I used to work with an Early Adopter. 

No, I mean a real Early Adopter. He loved the newest of new technology. Whether it was the latest phone, the latest palm pilot (as it was back then), he was first in. It didn’t matter that it was pricey or still in Beta version with all the glitches. He had to have it. So he did.

It must be nearly 20 years ago now since we were working together and he was taking notes using a writing gadget on a rudimentary tablet. They are now mainstream with Smart Pencils and other tools and Apps but he was well ahead of the curve.

My tech-loving work colleague has gone on to be a senior director in the world of marketing and social media. Being at the ‘bleeding edge’ has done him no harm at all.

I’m not like that. I’m always interested, but whether its work or play, I usually wait for something to be tried and tested before I dive in and have a go.

There is a ‘Technology Adoption Life Cycle’ which describes the different categories of behaviour types. These range from Innovator and Early Adopter through to the Late Majority and Laggards. Laggards only come along screaming and kicking after the new technology becomes mainstream. Typically they will still be watching Betamax videos and playing their vinyl records. On the latter, the cycle came around again and they could argue they were the innovators. But that is the exception.

Usually the Innovators and Early Adopters win in the market place. They take the pain and make the mistakes but keep learning and stay ahead of the pack. So when the Early Majority join in they are already on to the next thing. 

Being slightly late isn’t always a bad thing. Being too late is disastrous. 

So in the business world, when the Early Majority ‘wake up and smell the coffee’, if they act quickly and decisively and embrace the new technology or process which is disrupting their market, they can still exploit the new opportunity at the expense of the Late Majority and the Laggards. 

Technology is disrupting the accountancy sector in a big way at the moment. Cloud software has been around for a long time but is really now coming into its own. Why would you use a clunky desk-top package when you can have a cloud package where you can view your accounts from any device, at any time and it is always up to date? Scanning software too is taking the drudgery out of bookkeeping by removing the need to key in receipts. 

I have to admit that we have not been first out of the blocks with this. We have had our cautious accountant’s hat on and observed closely how things have developed. HMRC’s “Making Tax Digital’ initiative has also changed the landscape by making the adoption of accounting software a necessity for small businesses.

Our instinct has been to go with our clients on this and move at a pace they feel comfortable with. We will continue to do this but I think they expect us to lead and guide them, which is what we intend to do. 

On a personal level I have my new tablet now with the whizzy drawing pencil for my notes. I’m 20 years behind my old work colleague but I’m embracing it enthusiastically. 

Who knows, I might just try out one of those new-fangled Smart Watch things very soon.

www.base52.co.uk

Knowing when to call it a day

Some do it early.

‘I’ve sold my business’, your business pal blurts out over an early morning coffee. ‘What?’ You didn’t even know they were contemplating selling up, let alone having the deal all done. Signed, sealed and delivered. How did that happen?

Your pal is in their early fifties. This is something that they have been thinking about for a long time apparently. The proceeds from the sale will give them a comfortable retirement. After a short ‘Earn out’ period where they work in the business to hand over to the new owners they will leave, hopefully to enjoy the rest of their lives.

The chat leaves you a bit unsettled. You don’t have a plan. You’re a business owner like your friend and a few years older. From time to time, usually when going through a difficult period at work, you think about slowing down and doing less. Then things pick up again, you get stuck in and the cycle continues. You need the money. You have your old employment pension which will start to pay out soon but there’s still the mortgage to pay off and savings are minimal.

So it feels like carrying on is the only option.

Some entrepreneurs do that. Literally keep going until they drop or ill health forces retirement upon them. The smarter ones have at least put some plans and an infrastructure in place so that the business can continue without them.

There is a saying that a business owner should start to think about their exit on the day that they start.

Essentially an orderly exit breaks down to a few choices:

• Business sale with the owner leaving immediately or after a period of time
• Partial sale or merger with the owner retaining a stake in the business and some ongoing involvement and income
• Retaining full ownership but with gradual handover to a new management team

Exiting well takes time to plan and implement. Those plans may change over time as the owner’s circumstances and aspirations change. 

We may not all be as organised and decisive as our fifty-something retiree at the start of this blog. But a little thought and planning in advance might help us get closer to the retirement we want.

www.base52.co.uk

Ex businessman with ideas to 'Make America great again'

Here are some ideas from an ex businessman on how to ‘Make America Great Again’;

• Low business taxes
• Get other countries to share the burden of American defence spending
• Reorganise and lower the cost of Medical Insurance
• Level the playing field in international trade
• Invest in infrastructure projects

Sound familiar?

Leaving the 'wall' and immigration controls aside, it could be lifted straight from Donald Trump’s manifesto. These in fact are all ideas espoused by Lee Iacocca, then President of Chrysler in the 1980s.

I’ve just finished reading Lee’s autobiography, the modestly titled ‘Iacocca’, written more than 30 years ago. It charts his rise to be number 2 at Ford and his fractious relationship with Henry Ford II.

He was eventually unceremoniously sacked when Henry decided they could no longer work together. Within weeks he was recruited to run the ailing Chrysler business. He quickly found this was a poisoned chalice with the financial situation much worse than he had imagined. With guts, drive and sheer force of personality he managed to achieve ‘equality of sacrifice’ with management, workers, suppliers and banks all tightening their belts. With the help of a hard-won government loan guarantee he managed to turn the company around, paying off the loans early and restoring profitability.

Lee was an engineer by training and a marketeer by inclination. The son of Italian immigrants he believed in the virtues of education, hard work and ‘doing’ rather than just thinking. His politics may sound conservative but he was much more nuanced than that. If anything he leaned more to the left politically and was supportive of targeted government support for industry if it was in the national interest. He was also a strong believer in balancing the books and concerted effort to reduce the national deficit.

One of the final chapters of the book is entitled, ‘Making America great again’. In his heyday Lee was seen by some as a potential future president. Politics wasn’t for him though. He preferred the cut and thrust of business and being able to make and implement decisions quickly.

Another ex businessman is now shaking things up at the White House and at least some of his ideas bear a striking similarity to those of his older contemporary.

www.base52.co.uk