What You’ll Learn From This Episode:
- How employees help in driving profitability in the organization
- The mistake of business operators assuming employees understand financial implications
- Why sharing the company's financial status to everyone is beneficial
Related Links and Resources:
There's a book that I just published which is called "The Baker's Dozen Rules of Highly Successful Business Operators." You can contact at firstname.lastname@example.org and put the title "Free Baker's Dozen" and I will be happy to send you a free digital copy.
Neville Joffe is regarded as a world authority on the subject of “bridging the gap between corporate financial goals and employee performance. Neville has trained internationally with many of the world’s leading companies and has also worked extensively with entrepreneurs and especially those in growth mode.
He has been featured in various news publications and several industry-specific newspapers and is a sought-after speaker. He has written and published several textbooks that accompany his patented teaching method for use in community colleges and universities. Neville’s creative style of education has won him numerous awards, including the conversion of his system into Braille for the visually impaired.
Here are the highlights of this episode:
2:24 Neville’s ideal Client: My ideal clients are scaling entrepreneurs who are likely going to hit the cashflow wall at some point during the growth experience.
2:46 Problem Neville helps solve: Business operators both in large and small businesses cannot do it alone. They need the employees to help them drive profitability in the organization. In fact, I would like to frame it like this: the employees are the custodians over the company's profits. And it's bridging the gap between objectives and performance.
3:26 Typical symptoms that clients do before reaching out to Neville: First that comes to mind having being an entrepreneur for a quarter of century is the absolute frustration that people make decisions that appeared to be really stupid, but they're not really. They just have limited frame of reference, and that changes your numbers in isolation. This is a huge frustration for mostly business operators. I wish that they think like a business owner.
4:11 What are some of the common mistakes that folks make before finding Neville and his solution: Business operators tend to assume that the employees understand the financial implications of operational behavior. The reality is a lot of employees think that revenue are profits, and that profits means cash in their banks and they seem to think that the owner is making billions of dollars out of their business. Without realizing that there's only a 'fraction' of revenues left at the end. So again, I use the term that they tend to look at numbers in isolation without really understanding the financial implications of trade meth (method), like how much volume are you selling at a discount. These are kinds of problems that arise that are so frustrating to business operators at a daily basis.
5:14 Neville’s Valuable Free Action (VFA): That's an easy one Bill; just share your numbers. You cannot reasonably expect your employees to perform and to manage expectations when they are totally naive of the financial implications of what they do. They're living in a vacuum. Share your numbers and never assume that they understand basic trade methods and understand the whole notion of revenue versus profit versus cashflow. Don't assume it.
6:10 Neville’s Valuable Free Resource (VFR): For those of you who can see this, there's a book that I just published which is called "The Baker's Dozen Rules of Highly Successful Business Operators." Very exciting, the chapters are about to evaluate the numbers on isolation, revenues or vanity, profits or sanity, cashflows' reality..there are so many wonderful chapters in this book. You can contact at email@example.com and put the title "Free Baker's Dozen" and I will be happy to send you a free digital copy.
8:01 Why don't business owners and operators practice financial transparency with their employees? I worked with more than 20,000 people in businesses both large and small and I constantly get this question. They say "I'm scared to share with them my financial statement", "I don't want to share with them my financial statement", and "what if my employees here are making too much money?". Again to my earlier point, you cannot reasonably expect them to make responsible decisions without understanding the 'score card' if you will of the business. You cannot play a game without understanding the score card. So, it doesn't mean that you need to hand out the financial statement. If you hand it out there's a process. There's a process in the way you hand them out and the way yo get your employees engage and educated so that they'll have sympathy for you. People say "well I'm making too much money" but hang on a second, would you rather work for a company that's losing its shirt while you lose your job or a company that's financially healthy? Which one would you rather work for? So, don't be ashamed if you are making money, that's why you are in business, but you need to educate your people and incentivize them appropriately.
““The employees are the custodians over the company's profits. And it's bridging the gap between objectives and performance” –Neville Joffe