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 …

 

 

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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.

Getting awareness to change

I recently watched the movie Freaky Friday, a story about the strained relationship between a mother and her daughter and how they resolved their issues. My favourite part of the show was when the two characters switched souls and woke up in each other’s body. It was not until the switching happened that both realized the other person’s life is not as perfect and easy as they initially thought. Once they were aware and understand the challenges faced by each other, only then their souls were switched back and their issues resolved. After the souls were switched back, their attitude towards each other changed for the better and the mother-daughter relationship was restored.

The story above shows how important it is to have awareness in our daily lives. Awareness is the ability to be conscious of your current situation and realize whether or not change is needed to improve that situation. In the movie, both mother and daughter became aware of the challenges faced by each other only when they start living in each other’s shoes. Believe it or not, people get awareness to change when bad things happen (in the case above, when both protagonists switched bodies and had to live each other’s lives). This is because when the situation is at its worst, people will do almost anything to get out of it, knowing that they have nothing to lose since by that time, they have probably lost everything. A classic example is the predicament faced by major corporations during financial crisis, where some will survive, while others collapse. The companies that last survived because they were aware of their situation and decided to make changes such as developing new procedures and revisiting company values.

Awareness involves changing your current belief of what you think is the right way to do things. In order to develop awareness, you have to get to know yourself and reevaluate your values. You have to be able to view things from a different perspective and most importantly, keep an open mind in this process.

As a result of awareness, you will either decide to make a change, or choose to stay in your current situation. The choice is yours. If you decide to make a change, be prepared to go through ambiguous circumstances, where at times things may be difficult, but you will grow from your experience. You can also choose to stay in your comfort zone, but there is little opportunity for growth. It is when you go through tough times that you will actually make progress.

Here’s a short exercise for you. Ask yourself the following questions to analyze and be aware of your current business situation:

  • In the last year, have your business objectives and targets been met? If yes, congratulations! You are on the right path.
  • If not, have you and/or your team been doing the same activities? I.e.,
    1. Have you and/or your team reviewed your business processes and sought improvement opportunities? Do you have discussions about this and craft plans to be implemented?
    2. Have you performed a market / competitive analysis?
    3. Has anyone attended training or development? And if yes, have they applied the knowledge back in their day-to-day work? How is this tracked?

If you had answered “No” to any of these 3 questions; while you are not meeting your business objectives; you should probably be aware by now that there is a case for trying out new things that may lead to change.