May 2016

All Work and All Play

I want to introduce you to two scenarios:

The first takes place on a Monday morning. 9:00 AM. Your employees are tired, listless, slugging away at coffee. Someone yawns. Another passively reads an email. Productivity is low.

The second takes place on a Friday evening. It’s 6:00 PM. Your employees are at the pub. They’re watching the football match. They yell. They cheer. They’re excited. They follow each pass of the ball with focused concentration. They hold their breath with each shot. A goal is scored. They celebrate. They shake hands.

Now think about the energy of both situations. Which energy would you prefer in your office? Of course you’ll say the latter: you want passion and animation instead of boredom and listlessness. But you can’t very well turn your office into a pub! How can you elicit the same passion from your employees and channel it toward high-productivity?

The answer is simple: turn work into a game!

Games generate enthusiasm and joy. They encourage participation and camaraderie. As CEO, you can make small changes around the office to foster a game situation. I spoke with a student of mine, Richard, who is the CEO of an IT services firm. He was looking for ways to energize his lethargic staff and I shared with him insights about creating a game condition in the workplace. As I was preparing to write this post, I checked in with him to learn what he did and what results he had discovered.

“It’s been extraordinary,” Richard replied in his e­-mail. “The difference has been night and day.”

Richard explained that he adopted the five elements needed for a “game condition” to exist. These elements are:

● Freedom:Employees need the freedom to play the game.

● Barriers:Employees need to know the rules of the game.

● Purpose:Employees need a common goal.

● Choice: Employees need the choice of whether or not they’d like to participate.

● Scoreboards:There needs to be a way to measure success and failure in the game

These can be very broad and adaptable to your particular situation. For Richard, being in the IT services, he turned fixing bugs in network systems into a game. His employees were divided into teams and given the freedom, rules, and goals of the “game.” Employees were also given the choice of whether they’d like to participate. Richard also set the “scoreboard” ­­ whichever team fixed the most bugs by the end of the fiscal year would receive a prize.

“You can’t imagine what the office looked like on Monday morning,” Richard continued. “It was crazy. My employees arrived energized and started working immediately. When a bug was fixed, they rang a bell and cheered. Their productivity nearly tripled in the first quarter alone.”

By introducing a game, the energy in Richard’s office on a Monday morning looked more like the energy of a football match on a Friday night. Think about the issues facing you and your own employees. What can you do to introduce a game into your environment?


May 2016

The Magic of Acknowledgement

Our brains are magical things.

Think of times when you’ve been happy, pleased, or just plain felt great. In the moment, you probably didn’t realize that the root cause of that happiness were hormones being released by your brain; hormones such as serotonin (happiness), dopamine (pleasure), and oxytocin (love).

Acknowledgment is also a magic thing.

Think of times when you’ve been acknowledged for a job well done. How did you feel? Did serotonin, dopamine, and even oxytocin surge through your body? Did the acknowledgement push you to continue to work hard; possibly even go above and beyond expectations? I’m guessing the answer is yes.

Now that you are a CEO, it pays to remember the magic of acknowledgement. I know things at your company can be fast­-paced and stressful, that the simple things-­­such as acknowledgement­­-can be easily forgotten. But this is a mistake. If you acknowledge your employees for doing good work, they will feel valued, motivated, which, in turn, sets in motion a highly-­coveted success factor for your business-­­discretionary effort.

What is discretionary effort? Discretionary effort is the effort an employee will voluntarily make for your company, as opposed to effort which is demanded, forced, threatened, induced, or bribed.

In short, discretionary effort is a magical thing too.

Niousha Ehsan, CEO of LINKVIVA, is no stranger to the magic of acknowledgement. LINKVIVA is a high­=end events management company that was recently awarded a spot on the Top 100 SME Companies in Dubai list as well as named a Great Place to Work. In the past, despite being successful, LINKVIVA had a chronic attrition issue. However, as soon as Niousha began passing out deserved acknowledgement on a daily basis, everything turned around and the awards started to roll in.

Today, Niousha follows these three clear steps to acknowledge her employees:

1. Observe and acknowledge their contributions

2. Ask, “what do you want to be acknowledged for?”

3. Reproduce what they want to be acknowledged for

You don’t need to be a sorcerer to use magic. Like Niousha, all you need to do is slow down, observe, and acknowledge your employees for jobs well done. You will be surprised at the results that your company will see.


Alternative Sources of Energy

Alternative sources of energy are very popular topics of discussion in today’s world. Wind and solar are praised as innovative and efficient methods to help meet the power needs of our world while having a smaller impact on the environment than traditional methods.

But your house, your car, your city aren’t the only places that could need new sources of energy ­­ your company could as well. Think about the morale in your office. The output. The company culture. Is it low and sluggish? Could it be improved?

While wind and solar might not help in this instance, you ­­ as CEO ­­ could be the alternative source of energy that your office needs to improve. Around the office, we don’t think about energy as a resource. We think of only time, money, and material resources. Recently, I spoke with a client of mine on this topic. His name is David and he is the CEO a financial services company. I asked him about the concept of energy in his work. “It’s funny that you should mention that,” he said. “Because I just dealt with this at my company.”

The financial services industry is volatile. There are ups and downs, highs and lows, that fluctuate with the global economy. David is a smart CEO but his company is definitely not immune to this volatility. “My office culture could be described as very bipolar,” David said with a laugh. “Some days we are high energy: enthusiastic and upbeat, and on others, we’re very low energy, almost depressed.”

David noticed that on the days when his employees were “low energy” productivity suffered. Mistakes were made. Tasks went uncompleted. “There was a high chance of employee burnout,” David continued. “The yo-­yo of emotions was not sustainable. That’s when I decided to focus on improving the energy.”

David went from being the Chief Executive Officer to the Chief Energy Officer. He solicited feedback from his employees and implemented it to make improvements. He held more social events, including catered lunches. He developed an incentive program for high achieving employees. He worked on creating group camaraderie through exercises and events. Instead of ignoring the problem, David searched out alternative sources of energy for his employees and succeeded.

“Promoting energy around the office was one of the best things I could have done,” David said. “Immediately, the yo­-yo-­ing stopped. Morale was greatly improved. Everyone just seemed to breath easier.”

Shutting the Gate after the Horse has Bolted

May 2016

After the Horse Has Bolted

I once visited a friend at the stables where he boards his prized horses. When we finished riding and led the horses to the stables, we found ourselves lost in a conversation (as old friends tend to do). Suddenly, a loud bang sounded ­­ someone had dropped a bucket. One of my friend’s horses, spooked by the noise, took off at a gallop. We, being lost in conversation, had forgotten to shut the gate on his pen. The horse stampeded out the gate and nearly knocked us over in the process. As the horse took off, I raced to shut the gate. My friend looked at me and yelled, “why are you shutting it now? The damn horse has already bolted!”

We eventually corralled the horse and everything went back to normal. But what my friend said stuck with me. Shutting the gate seemed like a very natural response at the time, but at by that time, it served no purpose. The horse had escaped. I then thought about all the times I had seen this same reaction play out in business-­­this urge to fix a problem after the damage has already been done.

An entrepreneur, Julie H., once came to me after her first business had failed. She was looking for coaching, for training to help her so that her next business would succeed. She explained to me that her firm, an IT company working in security industry, hemorrhaged money on just about everything from software to employees. However, Julie was so focused on the day­-to-­day operations of her company that she didn’t realize the financial issues plaguing her company until it was too late. She tried to respond by downsizing and renegotiating her vendor contracts, but the damage was already done. The horse had bolted and Julie was forced to call it quits.

From there, Julie and I worked together on a comprehensive, internal auditing plan that she would instate with her new company. She would create daily interim invoices that would track all of her expenses and break them down into daily amounts. These expenses would be compiled into a spreadsheet that would show how much Julie gained or lost on a given day. From these reports, she could correct problems before they became too serious. In essence, Julie would be making sure the gate was locked before the horse even tried to escape.

A few months passed before I heard from Julie again. One day, I opened my email and read the following:

Dear Rajesh,

My apologies for taking so long to follow up with you. The past few months, having started a new security business, have been hectic. But I wanted to write you and thank you for helping with my audit plan. It has saved my company a hundred times already. We are growing steadily and already seeing profits. Using the spreadsheet, I’m able to diagnose problems quickly and keep things on track. I finally have peace of mind.

Thanks again for all of your help and I’ll speak with you again soon.

Best wishes,


How well do you know the day-­to­-day financial health of your business? When was the last time you looked at everything line­-by-­line? I would recommend checking the lock on your own gate, because you don’t want to wake up one morning and be greeted by an empty stable.

Cashflow Bottlenecks

May 2016

Eliminating the Quiet Kinks

Kinks. Bottlenecks. Hang-­ups. Whatever you want to call them, they are pesky, dangerous, and part of every business. You can have the most efficient cash flow model in the history of business, and just one kink can slow or stop that money right in its tracks. Sometimes these kinks are obvious, such as “our shipping software is out of date and crashes all the time, delaying orders.” Sometimes these kinks are hidden; veiled under the surface, quiet yet still vicious.

Chris H. is a former student of mine, and fitting the analogy, runs an online retail store that sells commercial gardening supplies to large landscaping firms. And where a kinked hose is an inconvenience to his clients trying to water plants effectively, kinked cash flow is equally bad for Chris’s business. Recently, Chris reached out to me when he was having an issue locating a bottleneck in his cash flow. He had a quiet kink that he was having trouble locating.

As I recommend to all of my students, when you have a problem, sit down and look at everything starting from the bottom and working your way upward. Especially with bottlenecks, the issue is usually something small causing larger headaches. Chris and I started by creating a map of his cashflow model ­­ a flowchart of where the money originates and where it finishes. As we went along, it didn’t take much time to find his kink. We discovered that Chris’s company was not invoicing their vendors on time, thus slowing down the cash flow immensely. “I can’t believe that this whole issue,” Chris said at the time, “stems from something so small and so easy to fix.”

And this is the trouble with quiet kinks and bottlenecks. Bigger issues, while possibly traumatic, are easy to spot and immediately remedy. However, smaller, quieter problems can exist for months, possibly even years, before they are tracked down and solved. And in some cases, the damage has already been done.

Luckily for Chris and his company, he kept close tabs on his cashflow and was able to fix the issue quickly. His cashflow quickly recovered. And since the time he and I worked through his problems, I’m happy to report, that his business is blossoming. Pun intended.

Hypnotized by Top Line

May 2016

See the Forest, Not the Trees

You have succeeded in business because you have goals. Goals are a fantastic motivator. They are what keep you hungry; what keep your business growing and expanding. But what about when those goals you set are a bit too high; a little too unrealistic? Think of the runner who is trying to drop his lap time to under a minute. He’s never been below a minute, ten seconds. He pushes himself and pushes himself and pushes himself. He gets incredibly close. But then what happens? He fails. He’s exhausted. He’s possibly even injured. Maybe he even quits running.

This same thing happens in business. I’ve seen it many times. A business owner sets a top line goal that is a little too ambitious. He pushes himself and his employees too hard. He then fails. His employees are disgruntled and unproductive. His business is stagnated, fragmented, broken. Maybe it even fails.

I spoke recently with a former student of mine, Brenda W., and put her on the spot. I asked her, “have you ever set your goal too high and suffered because of it? Have you lost sight of the forest for the trees?” Brenda runs a highly­-efficient services company that is very sales orientated. When asked this question, she shook her head and responded, “who hasn’t?”

A few years ago, Brenda and her company had an expense base of USD $150,000 per month with a need to generate sales of USD $200,000 each month to balance cash inflow and outflow. Brenda’s top line, her revenues, showed a healthy year growth. However, her company continued to miss their sales targets, quarter after quarter. “All I could think to do was push, push, push,” Brenda says. “I was convinced that we would achieve our goals eventually.”

However this wasn’t the case. Brenda and her employees were risking complete burnout and frustration. “I can’t count the number of times we worked late, slept at the office. It wasn’t healthy. It was very unsustainable.”

When all seemed lost, Brenda decided to sit down with her leadership team and assess their goals. They decided that their desired sales target was shackling them and they all felt trapped. They made the difficult decision to reduce their sales target to match what they could achieve with little effort, reducing their cost base from USD $150,000 to USD $100,000. They left that meeting feeling uneasy, but a little more comfortable.

Three months later, there was a euphoric turnaround. “We all of the sudden had money in the bank,” Brenda says with a smile, “stress levels reduced dramatically. Work­-life balance improved. The company was even making money again.”

Time, fresh perspective, and space allowed Brenda and her team to step back and focus on innovation. Instead of focusing on the trees, Brenda and her company were again looking at the forest.

And she noticed that the forest was the same color as money.

Faulty Thumb Rules

May 2016

When a Shortcut isn’t a Shortcut

Last week, I was driving to the office, taking the same route I have taken everyday for years. I have always been proud of this route; considered it my “secret.” It dodges the main street, has little traffic, has more scenery, and gets me to the office ten minutes quicker than the thoroughfare. Or so I thought.

On this particular drive, I was with a friend ­­ a lifelong resident of the area. As I turned onto my “secret shortcut” he asked, “why are you going this way?” I smiled and bragged, thinking of all the hours I’ve saved myself over the years: “this is my shortcut. I take it everyday.”

My friend nodded and replied: “you do realize they put in three more lanes on the thoroughfare last year. It’ll get you to your office about twenty minutes quicker.”

The next day, I tried his route, and he was right. My shortcut was not a shortcut. In fact, it was the opposite. This reminded me of something I see in businesses all the time, what I consider to be “faulty thumb rules.” These are rules that we take for granted as being true, as shortcuts, that when left unaudited over months and years, actually turn out to be false. I caught up with a former student of mine, Greg W., a very successful entrepreneur and asked him if he’d ever suffered due to a faulty thumb rule. He frowned and nodded: “for years and years, I hate to admit.”

Greg runs an international shipping company. He moves merchandise all around the world, quickly and efficiently. Logistics and attention to small details are something that Greg prides himself on. For years, he had been working with one large international courier. And for years, Greg thought he was getting the best rate on the market for the volume he was shipping. “At the time that I started the business,” Greg says, “this was the best rate, hands down. It couldn’t be beat.”

So this rate became a thumb rule. But over the years, competition in the global courier sphere heated up. The rates of the other companies dropped, some to points well below the rate Greg was paying. However, Greg, convinced he could continue to rely on a thumb rule, continued to stick with his original shipping company.

It wasn’t until Greg decided to audit his business’s expenses that he realized he could have been saving money. “I felt terrible,” Greg laments. “It was almost as if I was throwing money away.” As a result of the audit, Greg negotiated a much lower rate with a competitor’s shipping company. “And you can trust that I will be looking at new rates every month now.”

Though it took Greg some time, he was able to correct his mistake and grow his business’s profits. His solution was correct: taking a look at every facet of the business he had taken for granted to ensure he wasn’t relying on faulty thumb rules or shortcuts that were actually not shortcuts. Greg learned his lesson

And I learned mine as well. After I post this blog, I will be pulling up Google Maps and taking a long look at all of my “shortcuts” around the city to make sure I’m not spending more time in my car than necessary.

Wishful Thinking

May 2016

Stuck in the Fantasy Cycle

Who isn’t guilty of wishful thinking sometimes? Who hasn’t daydreamt of that perfect vacation on a far­flung Caribbean island, sipping fruity drinks while digging one’s toes into the warm, sunbaked sand? What does it matter that you don’t have the money for the airfare and that the doctor warned you about drinking alcohol­­anything is possible in the fantasy. Fantasies are healthy, they keep things interesting, that is, until they don’t.

This brings us to the Fantasy Cycle. No, this cycle doesn’t involve wizards or dragons, heroes and heroines. But it does involve a fair share of danger and peril. The Fantasy Cycle is a very common way of thinking that can have devastating effects on your business. To help shine a light on the dangers of the Fantasy Cycle, I recently met with Frank K. at his business’s headquarters. Frank is the first to admit that he was caught up in the fantasy cycle, but luckily broke free before his company sunk.

Five years ago, Frank was a computer science major at a major university. “I have to admit that I spent more time bicycling than I did in class,” Frank says with a chuckle. It was his passion for all things two­wheeled led to Frank to build a website dedicated to selling hard­to­find parts to bicycle enthusiasts. “There was need for a business like this,” Frank tells me. “So I set up the online store from my dorm room and two months later, there was more demand that I could keep up with.”

At this point, Frank rented warehouse space and hired two employees. He soon found himself wrapped up fully in the Fantasy Cycle; it’s first stage being the Dream Stage. Frank says with a sigh, “I had no business experience, no experience with finance or supply chains, but I kept telling myself that these things would work themselves out and I’d soon be rich and successful.”

However, things soon moved from the Dream Stage to what we call the Frustration Stage. “Orders were delayed or lost, invoices went missing, bills went unpaid,” Frank continues, “all of the sudden, my business was starting to fall in all around me.” Frank continued down the Fantasy Cycle, finally hitting rock bottom in the Nightmare Stage. “My employees were frustrated, some had quit. I was running the real risk of losing the lease on the warehouse. It was a very depressing time.”

This is the moment when many businesses fail. Faced with seemingly insurmountable odds, spiraling within the Nightmare Stage, it’s only natural for even seasoned entrepreneurs to walk away from a sinking business. But Frank wasn’t ready to the throw in the towel just yet. He says: “I was sitting in my office one night, feeling very overwhelmed. I started thinking: why don’t I start over? Why don’t I just start a new business, a new website? And then I started daydreaming about how it would be great. How it would be different this time. Then all of the sudden I realized that I was doing it again. I was lost in wishful thinking, without giving one thought about the practicalities of running a successful business.”

At this point, Frank broke free from the Fantasy Cycle. That same night, he stayed at his desk until the early hours of the morning and made a list of all of the problems his company faced. Then he started working through them, line­by­line, creating practical solutions to solving them. Almost immediately, things started to improve. He hired a warehouse manager to handle his shipping logistics. He outsourced some of this web work. He made management changes and employee morale improved. Frank started living in reality and his business thrived as a result.

So now that Frank is free from the clutches of the Fantasy Cycle, what does he plan to do next? “I could use a vacation to the Caribbean” Frank says with a laugh.