Category Archives: management

I’m currently reading Stephen Covey’s latest – “The 8th Habit”; following of course his best selling “The Seven Habits of Highly Effective People”.

On the subject of management and leadership he summarizes the themes and concepts of many other authors. (Give him credit for some humility.) What sticks with me are the stated principles of: 1. Set the direction, 2. set an example, 3. define the values, 4. provide the systems; then let people manage themselves.

My own summary of management has always been simply to communicate the objectives and then remove the obstacles to achieving them. The guiding principles may be simple, it doesn’t mean they are easy to follow.

I am just completing the teaching of two summer courses in Financial Management at Concordia University. It’s time for their final exams so I’m now thinking about what are the most important lessons to learn for future business managers and entrepreneurs. Or alternatively, what do most entrepreneurs neglect in the management of their businesses?

Most of us focus regularly on the income statement – revenues, gross margins, expenses and the resulting profits. But we often neglect the management of our balance sheet – inventory, receivables, return on assets, and the short and long-term sources of funds. These issues can all have significant impact on profitability and the long-term value of the enterprise.

So I will try to emphasize the importance of regularly reviewing performance of assets and liabilities in addition to the more obvious and intuitive issues of sales and income. How does balance sheet performance compare to prior years? the plan? or the industry averages?

Can we improve turnover on inventory and receivables without losing sales or diminishing service levels. Can we extend payables and get additional short-term financing without hurting our credit ratings or adding to our costs? Are we making good use of long-term debt to add financial leverage and improve the return on our equity investment?

All important issues for effective financial management.

I had lunch yesterday with a client and friend who represents for me the essence of entrepreneurship. (He is too modest and discrete for me to mention his name here.)

In my opinion, the essence is to combine the strength of a marketable expertise with the ability to think and act strategically. In his case, he has a very high level of knowledge and experience in the design, build and maintenance of computer data centres. He initally worked for another a specialist in that field then left to start his own business. Over time he successfully positioned his company as the recommended service centre for the industry’s leading manufacturer; grew to a size that exceeded his own management abilities; introduced a new partner and executive management team; accepted a new role in the company that leveraged his unique expertise and skills in developing customer relationships; and managed to re-position the company as a major project contractor to design and build large computer room installations from its origins selling and servicing basic hardware.

Many entrepreneurs I work with are equally competent and dedicated to their area of technical expertise but much less capable of managing their business strategically. Others may have the education and experience to manage and think strategically but have little to offer in unique expertise.

Success flows more easily for those that have both.

Mothers and business seems to be my current theme. Perhaps it’s the subliminal (or blatant) advertising for Mother’s Day this weekend.

My Uncle Ralph persona is partly inspired by my father and his well-recognized character and manner of dispensing wise advice. But my mother also had a strong influence on my personality and management style (other than the genetic connection), but it was more subtle and less frequently stated than demonstrated. Quiet, hard working, good humoured, and responsible are the characteristics that immediately come to mind. Things we all learned from her example, simply by being around her. Of course, she was also good at reminding us when we forgot those important principles or our behaviour was not up to her standards. And it’s still a pleasure to make her proud.

That’s why I recommend you use the test “What would Mom think?” before your actions and decisions in business too.

Thanks Mom. And Happy Mother’s Day.