3 financial management lessons from my weekend DIY plumbing experience

I am happy to announce that I bought my first spanner last Sunday to replace the bidet showers in 2 of my bathrooms.  I am even happier to report that I did not flood the bathroom. I even had an epiphany of how similar trouble shooting post-installation leakage was to managing cashflow.

  1. Precision and attention to detail matters

My dad claimed that the replacement job would be a straightforward one, where all I needed was my bare hands to unscrew and screw the new bidet on.  In reality, I needed a spanner.  And initially when I replaced the shower, it was not aligned properly nor sufficiently tightened so I did get a little wet.

On the second try, I took extra care in ensuring every contact point was as snug as it could be, and the result was there was no leakage.

Similar to financial control processes, a simple installation of a “standard operating procedure” in itself is insufficient to prevent leakages, but every single potential point of waste or leakage has to be identified and tested for.  As an example petty cash management is not a petty matter – as an abuse of petty cash is a gateway to larger breaches of trust.  A tip would be to have a regular surprise audit of petty cash.

  1. Trouble shooting involves understanding existing state

After replacing the first bidet shower, I was brimming with confidence when I got to the second. But I was in for a surprise.  Despite taking all the precautions and care I did in the first, it leaked even more!   [Sorry no pictures of this fiasco as that was the last thing on my mind to get my phone wet.]

Despite knowing the impending result of my turning on the faucet again, I knew I had to do so in order to perform “root cause problem solving” (note to self: I learnt something useful for plumbing from an Ivy League MBA) and to observe the problem.  I isolated the problem to the grooves of the water valve and realized that some bright spark had applied sealant to it!  The nut of the bidet spray was never going to fit snugly to the grooves of the valve if there is white gunk on it.

While I was tempted to use my manicure implements for the precision removal of the white gunk, I opted for an unused screw and began scrapping.  After the clean-up, the leak was significantly reduced.

In the managerial finance world, troubleshooting a problem often times begins with understanding the existing processes and systems.  For example when speaking with employees in encountering data with discrepancies, it is not uncommon for them to point their fingers at the system. “It’s the system,” they say and thereby hoping to absolve accountability in tracking the error down as if the system is an inanimate object sprouting the autonomous intention to mess up the data and the humans. For scenarios like this, merely asserting the oft-quoted more often ignored phrase of “garbage-in garbage out” will not even put a dent into solving the problem.

In the cases where I’ve encountered these issues, approaching it with the mindset that ‘there are immovable stakes (be it defined by accounting double entry systems or the fact that physical inventory should always match the inventory data in the system) is a pre-requisite, the way in plumbing where you need to believe that the nut will fit with the valve.  Secondly, only a root-cause problem solving session in understanding how the data was entered, how it was maintained, and the process flow of the data can we begin to identify the problem areas. Solving it from there may require some out of the box thinking (e.g., not using manicure implements); but ultimately, if you believe in the immovable stakes; the discrepancies can be reconciled or explained.

 

  1. Sometimes you have to live with the best possible result, not “perfect”

Despite my efforts, I was unable to remove the white gunk entirely out, I felt that the installation of the second bidet shower was not perfect, but the best possible result and I could live with it given there was no further leakage onto the bathroom floor.

Similarly in resolving issues in the managerial finance world, we sometimes have to live with the best possible result. One of the common pitfalls that I have observed, is that some professionals being obsessed with cleaning data to a 100% level of sanitary standards; including data from more than 5 years ago.  How I would usually approach a problem as such is to first prioritize the 100% compliance of an on-going process to eliminate errors moving forward. Thereafter, I will start moving back in time, with lesser emphasis for older data.

Back to my little DIY incident, just like I accepted that I could not remove all the white gunk, but as long as it is not leaking onto the floor is the mindset I would adopt in approaching solving similar issues in business.

So until my next DIY project …

 

 

IMG_5133

Happiness at work: Money vs. passion

“Money has never made man happy, nor will it; there is nothing in its nature to produce happiness. The more of it one has, the more one wants.” – Benjamin Franklin, author, polymath and printer (1706-1790)

Do you live to work or work to live? More importantly, what are you working for?

Take a minute to observe your current work situation. Does your job pay you well that it allows you to afford all the things that you want? If you are working for money, where does your happiness factor into the equation?

In the book “The Happiness Hypothesis,” author Jonathan Haidt explained that humans have the capability to adapt to any situation, regardless of whether they are faced with good fortune or adversity. For example, if you get a new car, you will be elated, at least for the first few months before the excitement wears off and this new level of comfort becomes the new “baseline of happiness.” At the same time, humans will never get tired of being around positive people, pursuing knowledge and having a purpose in life, but they will not be able to adapt to conditions where people are abusive or live in an environment that does not fully engage them.

Unfortunately, some people are stuck in dead-end jobs under the pretext that they have no choice because they have to pay the bills. These people see work as a “job.”1 Those who see a future with their current work and have goals to advance within their fields view work as a “career,” while the rest who find their work rewarding in and of itself see their work as a “calling.”2

It is also possible to shift the status of your work from a “job” into a “calling.” You can do this by first identifying your strengths and aligning your strengths with your work to make the work more meaningful.

One of the ways to identify your strengths is by reflecting on the things that you once loved to do when you were younger and find a way to incorporate your passion into your current job. Someone I know sold stones to his friends when he was in primary school for an art project. He single-handedly picked these stones because he knew that smooth-surfaced stones, which were hard to find would work better for the project than stones with a jagged surface. He found the market to sell his product and developed entrepreneurial skills early on in life that it is no surprise that today he is an accomplished entrepreneur.

While we acknowledge that not many people can change jobs with their financial situations, here are some ways you can turn a job into a calling. If you are currently working for someone, try to explore opportunities at your current workplace where you can contribute your skills. If you love to write, volunteer to write for your company’s blog or newsletter. When you find joy in using your strengths for the work that you do, you will become more optimistic in your role and attain fulfillment, knowing that you are devoting your time and effort into something bigger than yourself.3

So, what do you want to work for?

Credits

1,2,3. Jonathan Haidt, “The Happiness Hypothesis”

3 things to do before you quit your job to be a full-time entrepreneur

Spanx founder, Sara Blakely kept her day job selling fax machines for two years while working on her hosiery company, which has now become a multi-million dollar business. During those two years, Sara used the time she had when she was not working to do research for her company. Her big break came when Oprah chose Spanx as her favourite product of the year and that was when Sara became confident enough to quit her 9-to-5 job, knowing that she will still be able to fully support herself through her entrepreneurial venture.

For some people, they wait for the right moment to quit their current jobs to pursue entrepreneurship, while others just jump right in and start working on their business full-time.

So, how do you decide when it is the right time to give up a steady paycheck to be a full-time entrepreneur? Here are some tips to help you determine whether or not you are ready to make the switch.

  1. Do your research

Do you have a business idea that is different from what is being offered out there? Is it a practical idea that solves a problem? It is important to do your research to see whether there is a market for your products or services and to determine the value of your business. You can start by using search engines to get more information on your business idea as well as find out the kind of skills that you would need to acquire to help you run a business. In addition, do not be afraid to ask people you know – friends, family members and former colleagues for their opinions on areas of business that you may not be familiar with. Perhaps, a walk around the neighborhood can do you good and help you find some sort of inspiration for your business.

  1. Don’t put all your eggs in one basket

If you are unsure whether your business will work out, try pursuing it part-time at first. This also allows you to test the waters to see whether you are passionate enough to run the business full-time. Someone I know left his comfortable job in digital marketing to focus on his gadget business, only to find out that he did not understand how certain things work when it comes to running a business. He failed to recognize that distribution is an important part of the business and did not factor in the thin profit margin, which resulted in a serious overbuy. Eventually, he had to give up on his business venture and found another full-time position in digital marketing. Some people get too consumed by their “passion” that they get oblivious to other more important things that matter.

  1. Sort out your finances

When you start a business, there is a possibility that you will need to use your own money to fund your business, especially in the first few years. It may also take a while before you can pay yourself back.

It is also important for married men to know that as breadwinners of the family, they need to take extra measures to ensure that they can fully support their families, or else the financial stress may get the best of them. If this happens, it will be very difficult for them to keep a positive mindset needed to focus on their business.

The transition from working at a stable full-time job to become an entrepreneur with an uncertain future is not easy. There are many factors that have to be taken into consideration such as your emotional well-being and physical capability, mainly because it takes a lot of commitment, long hours and hard work to be a successful entrepreneur. A positive attitude comes a long way when you are hustling and trying to grow your business. Once you know that you can handle these aspects of life, then maybe it is time for you to take a leap of faith and work on your business full-time!

Check out this video where successful entrepreneur, Mark Cuban talks about what it takes to be an entrepreneur.

3 ways lawyers and their clients can better communicate

Legal Drafting Cartoon

As a legal practitioner, I was often instructed to capture various forms of commercial transactions into a legal document. Many times, even after scouring the legal library for precedents, I was still left with a feeling that the legal document was not ironclad due to the lack of clarity of instructions from clients and the lack of business experience as a young lawyer on my part.

Fast forward to my career as a professional manager, I am yet faced with long forms of documents, full with superfluous words and clauses. Worse still, I am sometimes faced with poorly drafted standard form documents that I have to execute and have little room for negotiation simply because they are ‘standard’.

Now armed with both viewpoints of the legal advisor and the client, here are 3 typical communication pain points and some suggestions as to how to overcome them

Issue 1: Legal format and language

Chances are that in your professional career you have had the misfortune of encountering a poorly drafted legal document. Whether it contained unnecessary phrases such as “hereinafter referred to as” when a simple (“ “) would have done the job; or having to flip back and forth across the main document and the schedules, one cannot but help feel that perhaps their time could be better spent.

The legal document is not structured like a typical article or book. It typically starts with a definitions and interpretation clause up front, that contains prosaic and often repeated information such as registered address of the parties and the likes, even before we know what the subject matter of the contract is about. It is akin to a work of fiction introducing its characters in chapter one, in the absence of context.

TIP to the client: Skip the definitions and interpretation clause, and use it only as a glossary as and when needed.

TIP to the lawyer: In my later drafting I would enclose the definitions and interpretation clause at the end of the document, to provide a more natural reading flow to the business reader.

Also as to the multiple schedules at the back of documents, these are usually created with the end goal of being able to produce mass documents from a master document (think commercial tenancies in malls) in the fastest possible time by isolating the variable components to one area of the document for the paralegal or legal secretary to work on. For the client, it translates as cost savings in exchange for the hassle of flipping through pages.

Issue 2: Commercial lawyers function in their silo with little hands-on business operations experience

Have you ever sent a document for a lawyer’s opinion only to receive an opinion which primarily was correcting grammatical errors? This is not only frustrating, but evidence that many lawyers (especially those in early practice) do not put on a business lens in evaluating contracts before them.

Yet conversely, sometimes the instructions received by lawyers are not with sufficient clarity. In another case, a client had instructed a lawyer to prepare an employment contract with a profit sharing element, without defining what profit is. When asked for more information, the client proposed, “Why don’t you advise.” This is not an ideal situation for this requires knowledge of the company’s financial performance and expectations which a typical lawyer is not trained for. Professional managers would know that profit could range from gross profit, to operating profits, to profit before and after tax, and any other definition in between which the parties could agree to.

To overcome this communication challenge, a commercial lawyer should ideally equip him/herself with basic business and accounting concepts; while the client should be able to elucidate the transaction he is trying to reduce to a legal document, be it by a way of a simulated financial statement or a process flow document, as examples.

TIP to the lawyer: To draft a commercial transaction, obtain more instructions from clients if you are not able to visualize the transaction steps fully.

TIP to the client: Do not rely too heavily on the lawyer to advise on commercial and economic terms; these are business decisions. The lawyer’s role is to ensure that a commercial transaction can be performed and enforced.

Issue 3: Good lawyers excel at negative distortion thinking, good business people excel at positive distortion thinking

As commercial lawyers, you sometimes get the feeling of being the person in the church responding to the question “Should anyone objects to this marriage, let them now speak.” Face it, your clients are happy and racing to get the contract signed and making money, and there you are the naysayer lawyer, telling them all the 20 ways or more the other party could basically sc*w them over.Guns Pointing

The best documents that I have drafted gave both parties sufficient incentives to perform. The mental images of guns drawn and pointed are at the back of every obligation or warranty drafted: i.e., for every obligation there must be an incentive to perform, otherwise it is a meaningless clause.

Nowadays as a businessperson, in crafting a deal, the mental image is to achieve a win-win situation.

And herein lays the fundamental crux of the tension: great lawyers excel at negative distortion thinking (how things can go wrong) while great business people excel at optimistic thinking (how great things can be if everything goes right).

TIP to lawyer and client: A way to overcome this tension is for all the risks to be listed down, and have both the client and the lawyer weigh each probability of occurrence. Thus, doomsday scenarios are tempered; and the client will walk into a transaction with eyes wide open.

[Metamorphic Training offers workshops on Commercial Drafting to Junior Lawyers seeking to understand common business concepts and transactions and Essential Law for the Business Professional for professionals, managers and executives. For more information: visit www.metatrainings.com or email enquiry@metatrainings.com]

Dining etiquette: 5 tips to dining confidence

In the movie Miss Congeniality starring Sandra Bullock and Michael Caine, there was a scene where Sandra Bullock’s character was chomping down steak at a fine restaurant, at which Michael Caine’s character was appalled and remarked, “I’m sorry, what was the question? I was distracted by the half-masticated cow rolling around in your wide-open trap.”

Such etiquette gaffes are not constrained to Hollywood movies. At a formal dinner in Kuala Lumpur recently, a second generation business owner not only erroneously claimed the bread on her right as her own, she chided the guest on her right who had touched the bread roll, “The bread is MINE!”. For those of us who sometimes will have problems remember which bread is yours and which drink is yours, the simple left “b” and right “d” hand [see picture] are fool proof discrete reminders in times of social emergency such as these.

Bread and Drink

 

These two scenes nonetheless reminds us that dining etiquette plays an important role in your personal and professional lives. However if you do not have access to a Henry Higgins or a Harry Hart, you are not doomed to be an uncouth Eliza Doolittle or Eggsy Unwin forever.

Here’s five easy tips to dining confidence:

  1. Think you have impeccable manners already but want to have a check? Eat alone in front of a mirror. If there are any half-masticated cows rolling around in your mouth, you will see it.
  2. When in doubt, watch the others on the table. Not sure which knife or fork to use? Watch what the majority on the table does and follow.
  3. Be sensitive to cultural norms – a quick google search will help if you are going to be in an international dining environment: for example, Westerners rarely share food off their plates unless its family style dining, Muslims eat only with their right hand, Chinese frown upon chopsticks stuck upright, Japanese do not use soup spoons, to name a few.
  4. Eating is not a race neither is it a solo journey: Do not start eating until everyone else’s food has been served, unless you are urged on; and try not to be the first or the last to finish on your table as it will hold the rest of the table back.
  5. Last, if the food is hard to eat; you will have to make a mental trade-off in your mind of whether you are going to make a mess or leave the food. Foods potentially to avoid during a business setting are french onion soup (imagine how you are going to break the gruyere cheese crouton with your soup spoon), steamed artichokes, crabs, fried chicken or even sloppy burgers.

And with that you’re equipped for your dining “Ascot”.

Bon appétit!

[Metamorphic Training offers bespoke presence and confidence executive coaching for C-level suite and candidates by senior ex-C Suite officers with international Fortune 50 experience. For more information, please email enquiry@metatrainings.com]

5 Tips for Giving and Receiving Feedback Effectively

“If you cannot say anything nice, don’t say anything at all.”

Growing up, we have probably heard that line being repeated over and over again by our parents. In Asia, people tend to avoid giving feedback, fearing that it might hurt the other party’s feelings. Yet effective feedback is a critical part in any organization’s ability to drive and improve performance.

This is why it is important to give feedback effectively. Below are some tips to help you provide feedback at the workplace:

1. Don’t beat around the bush

Confront the colleague associated with the incident once it has been witnessed. Speak in private, but be fact-based and avoid generalities. For example, “Our agreed timeline was 12 noon, but your email was at 130pm,” as opposed to “You are always late!”

2. State how the incident made you feel

Tell the other party how the incident has made you feel as a result of his or her actions. The receiving party is not in a position to deny the fact of how you feel. For example, if your colleague was late for work, inform your colleague that he or she made you feel anxious and concerned about the impact to the company and its client.

3. State future actions

Discuss with the colleague on the things that he or she can do to prevent the incident from happening again. In the example above, you can ask your colleague to give you a call to inform the team that he or she will be in the office a little later that day.

In addition to giving feedback, it is essential to receive feedback to help you see where you stand in terms of work performance. Some of the things that you should do when receiving feedback include:

1. Keep an open mind

Avoid getting defensive and wait until it is time for you speak to explain your situation to ensure that both of you are on the same page.

2. Establish future goals and action plan that can help improve your performance

Discuss with your supervisor to help you identify the things that you need to do to improve work performance and advance your career. These goals can be as simple as clocking in early for work and completing projects on time.

On a lighter note, these tips has also been proven to be effective in communication amongst spouses and significant others. 😉

Why train when people leave?

There is an oft-shared exchange between a CEO and a CFO that goes:

CFO: “Why train when people leave?”

CEO: “What happens if they don’t?”

The key learning from the exchange is that the decision to train should not be affected by potential attrition. In fact studies have shown that people do not leave companies, but they leave poor managers (Buckingham, 1999).

On the flip side, a company’s performance is driven by its managers. Thus if a company is battling an attrition issue, the logical action is first to ‘fix’ its managers.

I was once approached to provide customer service training to a hotel in tourist town, and when I asked the owner-operator if he was considering training his General Manager first, his response indicated that he felt that training his General Manager was not a good use of resources due to his resistance to change. But think about this, what if the hotel had proceeded to train the staff and having completed training goes back to an environment where expectations from the General Manager are different from what was trained? The training would not have stuck, and the training investment would not have been realized.

Here is another typical exchange when owners tell me about how they feel that their people need training.

Owner: “My people need training.”

Me: “What do they need training in?”

Owner: “They need to be better managers.”

So what constitutes being a better manager? My definition of a good manager is quite simple: an effective manager is one who is effective in driving business outcomes and retaining people.

But what are the actions and habits of managers that are effective in driving business outcomes and retaining people? How do you define and measure that?

Research has shown that employees who are in an environment with the following 7 traits belong to business units with good business outcomes and high retention rates (Buckingham, 1999). The 7 traits are as follows:

  1. They know what is expected of them at work
  2. They feel that they have the materials and equipment to perform their job
  3. They are given the opportunity to do what they do best every day
  4. In the last week, they have received recognition or praise for good work
  5. They feel that their supervisor, or someone at work, care about them as a person
  6. There is someone at work who encourages their development
  7. They feel that their opinions count at work

So here lies the necessity for training of the manager:

  • For the manager to deliver items 1, 3, 4, 5, 6, and 7 well; they need to possess skills that are commonly known as soft skills – yet soft do not imply easy. These are communication, coaching, problem solving and execution skills that typically require years of on-the-job training. Yet, a good starter leadership development course that is experiential that involves role-playing will be able to cultivate an awareness of the skills a manager is required to perform better.
  • With regards to item 2; these are function/technical-based training as well as tools (e.g., software) required for their jobs. This does not mean a carte blanche for managers to ask for sophisticated customization on their software. When faced with a RM20,000 software customization request once, I asked if the executive could generate an increase in revenue of RM2,000,000 with it. And when he could not make a case for an increase in revenue, the customization request was abandoned.

As for the subordinates, continued evaluation of what it takes for them to perform their current job better as well as what skills they need for a promotion demonstrate continued organizational development. Often times, in emerging markets, employees are promoted mainly because they expect a salary increase, not because they are able to perform in the role that is above them. For example, a high performing writer may not automatically perform well as a managing editor. In an ideal scenario, the Human Resources and Training Development function will be actively monitoring the progress of high-performers and be working hand in hand with business functions to craft career paths for these individuals.

So why not train to improve your business performance?

 

[Metamorphic Training offers 2 signature 5-day General Management Workshops that focuses on (1) Leadership Skills and (2) Functional Skills. Additionally a host of other workshops and ready to go courses are available. We also offer training needs analysis to ensure that any training investment is focused. For more information: www.metatrainings.com]

Works Cited

Buckingham, M. a. (1999). First, Break All the Rules. London: Simon & Schuster.

 

 

To quit or not to quit: The truth about goal-setting

When I first started college, I declared mathematics as my major because I thought that was the right decision at that time – I didn’t know what I wanted to do and math was one of my strongest skills. After pursuing the course for almost four semesters, I soon found out that I did not enjoy math after all, and that was reflected on my grades.

By the time I realized that I was in the wrong major, I had already done two years’ worth of schooling. That was when I thought to myself – should I continue pursuing mathematics since I was already half way through my major? Or should I switch my major and use my time doing something I truly enjoy?

What about those two years, where countless hours were already spent studying and completing math courses? If I change my major, there was a chance that I might graduate later than my peers.

I was torn between the two years that I had spent in school (sunk cost) and the things that I could be doing should I decide to change majors (opportunity costs).

It was a tough decision to make, but I ended up changing majors and graduated within two years.

The main reason that I was able to graduate within two years even after changing my major was because I had set my mind to achieve that goal. Goals are important because they give you a sense of direction in life. Setting a goal is the easy part.

Following up with that goal, however, is another thing altogether.

For example, if you are working on a fitness goal, it is easy to give excuses to skip your workout session. Below is a 3-step routine that I have found helpful in following through goals:

Step 1: Prepare your workout gear the night before. On the day of your workout, break down the steps of your morning routine by getting out of bed, washing your face and putting on your exercise clothes.

Step 2: Monitor your performance. For instance, you can observe your fitness level by looking out for improvements such as running at a longer distance within a short space of time. As you get closer to your goal, employ different tactics to mix up your workout routine so that it does not become mundane.

Step 3: Celebrate your achievement with rewards that are aligned with your goals. For example, instead of cheating on your next meal, you can buy new clothes that you can now fit into as a form of reward.

This principle of goal-setting also applies to business and management. A classic example is providing training in sales to café employees:

  1. Start with smaller and more attainable goals such as teaching employees on the right way to greet customers.
  2. Acknowledge employees’ success and set the next round of goals by introducing new tactics of selling to keep employees interested in the training.
  3. Celebrate employees’ success with congruent rewards such as “free drinks” for employees who perform well.

When you feel like slipping after setting a goal for yourself, remind yourself of why you set the goal in the first place. If you really want to give up, then the goal that you have set for yourself may not be a good fit for you or may not be worthwhile after all. In life, we need to know when it is time to quit. In my case, the emotional cost of pursuing something that I love offsets the sunk cost of spending those two years in the wrong major.

Quitting does not mean failure. It may be a sign for you to revisit your goals so you do not regret your action 10 years later knowing how far you have come.

Motivation

If you love your job, you have every reason to be excited when you wake up everyday. Your passion is what motivates you to move forward in your career. There are, however, times or days when you feel demotivated to go to work, especially when work becomes mundane and you keep on procrastinating on your tasks. So what do you do when you find yourself stuck in this situation?

 This article by Edmond Lau clearly explains that your level of motivation depends on the type of goal (either mastery or performance) that you attach to it.

5 things to remember when attending a fair for the first time

As a self-proclaimed certified barista (I took a short barista course last year!), I was more than excited when I was asked to attend the Café Malaysia fair, the first international café equipment, supplies and technology exhibition. Truth be told, it was my first time attending a fair and my visit has taught me a few things to keep in mind when attending fairs. Below are five things to remember when attending a fair for the first time:

  1. Get as much information as possible on the fair that you will be attending. Find out the vendors that will be in attendance, the fair’s target audience and some of the highlights that will be held during the fair such as activities, contests, etc. You will get a better idea on what the fair has to offer, which will then help you prepare for the event.
  1. Expect a crowd on the day of the fair. I did not think there would be so many people at the fair, so I decided to come an hour later. As soon as I entered the building, however, there was a long queue – attendees waiting for their turn to register for the event. Keep in mind that some fairs are only open to the public on certain days, and for other days, they are by-invitation only. Be sure to check which days you are allowed to attend.
  1. Know your business well. In order for you to get more information from the vendors (eg. quotes), you need to have full knowledge of your business such as the type of business you are running, the capacity of your business, etc. This will give the vendors a good idea on the status of your business.
  1. Remember to bring your business cards on the day of the event. If you do not have your business cards ready, you can always print your contact information on a piece of paper. Most vendors at the event will have a contact form that you can fill in so that they can get in touch with you.
  1. Take notes. This is very, very important, especially because there will be too much information given to you that it can be a bit overwhelming. Most vendors also provide brochures and leaflets for their businesses, along with their contact information to make it more convenient for you to get in touch with them in the future. A word of advice: Summarize your findings as soon as you get home while your memory is still fresh. This will help you identify the vendors that might be suitable for your business.