“I use excel all the time. It is great!” I hear that one a lot, but what does it really mean? Usually, it means that someone has figured out how to do tables in Excel and are happy to layout their information using the Spreadsheet tool. But, when I see a list of numbers and a sum at the bottom, but no formula I ask, “How did you get the sum?” “Oh, I used a calculator,” is the answer I hear most.

So why is this important? Because people are not using the tools they are given to make their work better and more efficient. As a simple example, I was given a list of invoices to double check for an import company. I looked at the list and started plugging it into excel, making each entry into a row in the sheet. “Do you have this in an electronic format?” I asked as I started typing. “No, all I got was paper,” was the response.

After several minutes of inputting number – BTW I hate data entry, I am not wired for it – I totaled the column, and my answer did not match the total on the invoice. With the previous statement about data entry clear in my mind, I went down the list of numbers to see if I had made a mistake in entering the data. Sure enough, I missed typed a few numbers, so I corrected and checked the answer, and it was still off. Now, I am not talking a few dollars off, I am talking over $10,000 difference between my answer and what the invoice showed.

I went to the person that gave me the assignment and asked, “how did you get the final total in the invoice?” She looked up at me and said, “I did not, I was handed the papers and after double checking one entry I figured I should check all of them, why?” “For the most part, they are wrong! Did someone use a calculator to sum the numbers?” I explained.

Growing up the son of a carpenter and General Contractor, we often times had to nail things together. Sometimes we were building a partition wall in a house or maybe building a cabinet. Most people don’t know that there are specialized hammers for each of those jobs, but in most cases a basic claw hammer will do the trick. So, most people only use one type of hammer and get things done, but they also make more mistakes by missing the nail and damaging the wood. If you are building a partition wall, not many people will see the dimples in the 2×4 framing, but if you are making a display cabinet, you can be sure people will see the hammer marks.

Knowing what tool to use and more importantly how to use the tools is vitally important if you are to increase quality by reducing errors and so increase profitability. Training people on your team to use the tools they are given is important. The Government makes sure to regulate training for certain tasks/jobs and machines, but what about office staff? There is very little regulating who should get training on Excel or other similar tools and what level of training is required.

I am not suggesting that every person in your office learn to do VLOOKUPs or use other complex macros in Excel, but the basics of summing a column of numbers or multiplying the value in Quantity column times the Price per Unit value to get a total should be a habit!

What tools are you using? Who trained you on the best way to use them? Who is training your staff and are they qualified? Maybe your “senior” person is the one that you task with training the new team members, but all they are really doing is showing someone “bad habits” or workarounds. Have you run a training audit on your staff?

If you would like help understanding which tools are being used in your company and if they are being used properly, just drop us a line at rick@gramatges.com.

I worked with a company that would routinely send out 6,000 invoices a quarter. Some were in e-mail form, but the vast majority were paper based. Upon seeing that situation I asked, “Why don’t we go electronic?”

The response to that question ranged from, “customers don’t like it that way,” to “the system does not do that.”

“OK, so got it, we are going to stick to paper. How are we printing and mailing these?” “Oh, we just use the printer in the office and then the admin staff folds and stuffs the envelopes and then we put stamps on them.”

This is a real situation I ran into; this is not a made-up scenario to prove a point. I pushed for changes and there was a lot more resistance than I could have imagined. “Got it, so how about we get a folding machine.” “What is that?” I got as a response. For those of you who are not familiar, there is a whole industry who specializes in printing, folding and then stuffing envelopes with your invoices, marketing materials and more. Do you believe that all that junk mail you get at home is done by hand? No, it is all done by machine.

So, why would anyone spend the time and labor to print 6,000 invoices, fold them by hand, stuff envelopes by hand and stamp by hand? The answer is usually, “That is how we always did it.”

This example is a simple view of how a growing business must learn to adapt to its own size. The process and procedures that you used to get you where you are, say a $2M a year to a $20M a year business, will not work to get you to where you want to go, like $100M. It also shows you how people become set in their ways and won’t move off of what has worked before to make things faster and cheaper.

The cost of 3 or 4 people folding for just 1 quarter more than paid for a folding machine. So, the company bought one, set it up, showed the person responsible for invoicing how to use it and guess what…. It sat unused. So, just the economic benefits are not enough, someone has got to want to change! Someone has to drive the change.

Similar examples can be found throughout companies. Why would you type up the same email to a customer 20 times a day when you could set up a template in Outlook that would require you to only fill out one or two fields. Think about a form that you fill out that has your companies address, EIN, License info, etc. The information is mostly standard, so why not automate it? “Oh, no one told me I could do that,” is the most common response or, “I did not know you could do that,” is the other.

Outlook lets you set up standard templates for outgoing e-mail. You can pre-populate a form that is used for a particular process. Maybe the only thing you need to do is change the order number, the date or other minor things. So, why retype it each time?

The key to process improvement, cost reduction and efficiency increases is to look at what it is you are doing and ask, “Is there a better way?” Or, more effectively, “There must be a better way!”

Automation and especially computer automation have revolutionized many industries, but those improvements are not only available to large corporations. Anyone can benefit from the mentality of “set it and forget it” when computers are involved.

Are there tasks in your office that people just keep doing because that is how they have always done it? Are there tools you are already using, like Microsoft Office, that have built in automation and no one has figured out how to use them in your business? If you have those kinds of questions and would like some help figuring it out, just drop us a line at rick@gramatges.com

You have decided to change the culture of your company. As the leader, you have started to change how and what you communicated. You have changed some of your direct reports responsibilities and you start demonstrating the behaviors you want your direct reports to emulate, then what? You wait!

Changing the culture of a company is not unlike trying to lose weight. There are a lot of “quick fixes” that you can try. You can go on the protein shakes for 3 months or buy the specialty foods that will help you lose the weight, but that is all they do, they help you lose the weight. The real problem is keeping the weight off! Once you stop eating shakes all day every day and effectively cutting your calory intake to nothing and go back to “normal” eating, all that weight comes back.

The best way to lose weight and keep it off is by changing your lifestyle and eating habits. You need to eat like a skinny person, and not those people whose metabolism is so high hummingbirds have trouble seeing them, a normal person. That is not an easy thing to do and what is worse, the results take a long time to show. It can take weeks or even months for you to lose enough weight that you notice it in your clothing or the mirror.

The interesting thing about that lifestyle change, the one to lose weight, is that once you start to notice the changes, the momentum increases. You keep losing weight and it doesn’t require additional changes. You might lose enough that you start to exercise and lose even more and tone and feel better about yourself. Then you have to buy new clothes because what you had doesn’t fit and the new stuff looks better than the old and you get encouraged to lose even more…. Momentum!

Culture change in a company is the same as losing that weight. You have to change how you run your business and manage your people. At first, the changes will take a long time to show, but if you keep at it, the changes will accumulate and then accelerate as you build momentum.

One day, a customer or friend of the business will come by and walk the halls like they always did and at some point, they will turn to you and ask, “What did you do?” “What do you mean?” you might say in response. Then you hear about how people are happier, and they see a better attitude and you will smile and thank them for noticing. But is that it? Is that how you know?

No, having your friends notice you lost weight because they have not seen you in weeks isn’t when you know. You know when those people on your team who you always thought, “I don’t know that they are the best, but I don’t have a reason to get rid of them,” start to complain. They will start expressing how the company is not the same, just like when your jeans are not as tight after the wash or you run out of holes in your belt.

But that isn’t the biggest tell that the culture in your company is truly changing, the biggest indicator of cultural change is when people start to leave the company. I like to call it the “Auto Correct Effect.” When you have people, who were always in the margins, come up with excuses as to why they need to get a different job, you know that your company’s culture has changed. Now you have to replace them, but what you find is the person coming into the role has a better attitude and they get a lot more done without all the drama.

How long it takes for a company’s culture to change is dependent on how far you want to take the change – how much weight do you need to lose equivalent. What to do seems easy, but it is best to have a coach or partner to help you through the change – not unlike having a weigh in person that keeps you honest and on track. Then you have to adjust almost everything when people start to leave – you have to buy new clothes. How long it takes isn’t as important as accepting it will take time and rewarding yourself and the team as you make progress towards the goal. But, never forget that you can’t go back to your old habits without bringing back the old culture – you can’t go back to eating poorly and expect to keep the weight off!

If you want to know how to start culture change in your company for the better, or how to set up milestones to recognize the change, just drop me a note at rick@gramatges.com.

I grew up working with my father. He came from Cuba speaking functional English, but what he lacked in the language he made up for with a ton of talent and so he worked as a Carpenter and General Contractor.

My weekends were filled with a variety of assignments, like digging a ditch or helping him build cabinets or installing a countertop at a cafeteria. My favorite times where when we would remodel Cuban Bakeries, oh I loved to eat the free samples… but I digress.

My dad was a great Carpenter and after years of practice, I don’t even come close to mastering his most basic techniques, though some would tell you that I am not bad making saw dust and building things out of wood. As great as he was as a Carpenter, he wasn’t the best at running a business.

Don’t get me wrong, there was always food on the table, and we had a very nice home, but he did not own a business. He was self-employed and had helpers. Sometimes they were paid in free samples at a bakery, but often times they were guys he knew that he would pay a wage to during the week. He had businesses before, mostly in Puerto Rico where I was born, but he had help from a partner or my siblings – I am the youngest of 4 – to run the business.

Living in Miami, my father was always self-employed, and that worked OK. It gave us the income we needed, maybe not the one we wanted, but again there was a roof over our heads and food on the table.

When I come across businesses that have reached a certain level of growth I stop and ask myself, “Is this a business, or is this person self-employed with help?” Breaking that statement down you start to see situations where the owner of the business is just interested in making enough money to live the lifestyle they like, often called a “Lifestyle Business.” The business is there to promote the owner’s lifestyle and when it gets to a certain size and profitability, the owner does not see any need to grow it further.

There are examples of Lifestyle Businesses that keep growing because the owner’s lifestyle keeps getting more expensive, so it isn’t a “one size fits most” type scenario.

What if you built a business because you enjoy building new enterprises? What if you build them to a scale where they become attractive to others for purchase? There are many who do this time and time again, come up with an idea, build a company to make the idea real and then build it up to a point before selling it off and starting all over again. Those are the Serial Entrepreneurs.

There is yet another example where you build the business and grow it, but then as the founder, take a “job” at the business and let others run it. You stay on as “founder,” but the company is its own entity and will grow beyond you and provide jobs and income for many people for a long time. Maybe your children will inherit it, but the company continues on because it is structured to do that without the founder driving it.

So, what kind of business do you have? What kind of business do you want? It is important to know because if you are self-employed, you are the primary worker, and everything revolves around you. It is possible that the day you decide to retire, the company closes, and you are done. Or, maybe, what you want to do is build it up so others can take over and you simply benefit from the profits and just come by from time to time to check on things.

If you want to understand what kind of business you have and maybe follow it up with a conversation of what you want it to be, please reach out at rick@gramatges.com – you may discover that what you have is the tip of a very profitable iceberg.

Who is your best customer? Is it the one that pays you on time? Is it the one that just sends you orders without having to go through the sales process? What criteria do you use to determine who is your best customer?

Defining who your best customer is depends a lot on where your business is at in its operational evolution and its financials. Every business is different, and each owner/manager of that business must figure out what the “best” customer looks like. This is not a passive activity where you simply decide one day that this is what “best” looks like. This requires some real work on your part to understand what your business needs and what type of customer fits that need.

I worked with a Food Distribution Company that had grown quickly under the owner’s leadership. The business was running forward as fast as it could, but there were several issues operationally that kept it back, more on those details in another post. When I started to dig into the financials to figure out why cash was not bursting from every crack, I started to see a pattern of customer acquisition that went against what the owner had told me was their biggest selling point, “They buy from us because they believe in our story.”

“Who is your best customer and why?” I would ask the owner. “Oh, it is this restaurant group. They offer great food and a great price and lots of it. They always pay their bills on time. They are the best.” I then went to the person responsible for accounting and asked them the same question and got, “Oh yes, they are great! We do a lot of volume with them and they always pay early and when that check comes it, we all feel good because there is money in the bank.”

Sounds great, so if they account for the largest single source of volume and they pay on time, they are the “best” customer. So why is the company always struggling at the end of the month to pay its bills?

Digging into the financials I built a simple model of what profitability looks like, I calculated a “break even” point. I looked at all expenses and debts, calculated the monthly cash needs and offset that by the revenue per month on average. From that I then calculated the margins necessary to keep the company going and used that as a benchmark.

To my surprise, the “best” customer looked really good from an Accounts Receivable point of view, but all of their business was below the break-even point on margin. “No, that can’t be!” I was told by the owner. “They are great!”

But why are they great? They are great because you don’t have to chase them for money, and why would you since you are paying them 10 cents on the dollar to do business with you. This news did not sit well with the owner. He could not understand why I would be so negative towards his best customer. I came back with, “I have zero emotional investment in that customer, all I did was look at your financials to see how much money you make from each of your customers and in this customer’s case, you are losing money.”

Numbers don’t have an agenda; they simply reflect where your business is at the moment. You can create a “story” around the numbers and feel better about your decisions, but you better make sure you are using sound criteria to determine what “good” means.

After several weeks of analysis and spirited conversations, the owner decided to raise prices for that customer. Not big changes, just small incremental changes that would eventually result in a “break even” situation. A couple of months into the process, the customer called and asked why prices were going up. The owner responded that there had been price increases for the items, and he was simply passing those costs along, but assured the customer that they were getting the best price of any other customer. That was true, even with steady price increases, the restaurant group was still getting a better price.

A couple of months later, the overall margins for the business had gone up and the bank accounts had a bit more money in them to pay some past due bills. Not the amounts of cash that given the volume you would expect, but a considerable improvement from previous months.

Defining your “best” customer is an important exercise and often times a painful one. If you simply use a “pain” factor to determine who it is, you might be selling below margin just to avoid uncomfortable conversations about payments. This at first seems like a good thing, but in time you might find out that you gave away your business just to avoid an uncomfortable conversation.

So who is your “best” customer?

If you want help understanding your numbers, or if you simply don’t have any financial tracking of your business, don’t hesitate to reach out at rick@gramatges.com and ask questions. Who knows, you might find out that your best customer is really the one you want to keep and you can ignore all the rest and still make more money.

Culture change comes from the leadership of a company. It does not start with the front-line employees, though you could argue that a “Grass Roots” movement within a company can make changes, but for the most part it is the leader or leaders that make it happen.

So, what is the first change that has to happen? The leader/founder/owner has to let go of doing the work themselves. You built the company, you know how it all works, but you can’t do it all, so stop.

I met a Husband and Wife while visiting Cuba that had two businesses, he restored classic American Cars and she drove them as cabs. I say she drove them because she was one of the drivers. She would set up several people to drive for her, but then she would take the wheel and drive one of the taxis.

All that changed when she got pulled over for using her cell phone and had her license taken away for 6 months or so I recall. 6 months without driving! How was she going to generate money? She decided that what she would do is be the dispatcher and simply have others drive the cabs.

Turns out that having her license taken away was the best thing that could have happened. Their income more than doubled when she stopped driving. She could spend more of her time setting up customers and coordinating drivers. Before she would have a limited time to do that because she was behind the wheel and always ran the risk of being caught on her phone setting up the next customer.

That was a cultural change in the business, having the owner no longer be one of the drivers. It was forced upon them, but they figured out how to make it a good thing.

In your business or your job, are there “tasks” that you are doing that prevent you from doing the work that you should be doing? Are you busy with things each day just to find out that yes work got done, but the business did not get better, it just stayed in place? Getting lost in the tasks of the day it a very easy way to hide from the tough decisions, but it does not make your business better.

Culture change can be forced upon you, but it is often best if you make a decision to just get out of the business’ way and let others that can specialize and become better at it than you do the work. This does not mean that you lose touch with that work. You can still supervise, set expectations, write the procedures you want followed, but it does not mean you do the work.

If you want some help figuring out what you should STOP doing in your business, don’t hesitate to reach out at rick@gramatges.com.

I am putting together my thoughts around driving Cultural Change in a company.

You will find many books on “Driving Change” or “Business Turn Around” and they are all good. There is always something in there that can help. No one book is a “fit” for every organization, so keeping yourself educated on the majority of permutations is good because every company will go through one of those at some point or another. Not unlike Chess where players can see the board with all the pieces in place and recognize possible strategies to win. Companies are the same, you will see patterns of behavior in customer, staff and systems and you will recognize very quickly what stage of development or change the company is in at that moment.

The trick after understanding where you are in the change curve is deciding what to do next.

In Chess, you might take a defensive posture, but as someone who I used to play Chess with – he beat me the majority of the time – once told me, a solid offense is your best defense. Don’t be afraid to go on the attack to win, keep the opponent busy by attacking them and keeping them off balance. Know what pieces are not required for your win and let your opponent go after them and believe they are winning.

In a company, you have the same choices – protect what I have or go after what I want. Most people will build to a certain point and then stop for fear of loosing what they already built. Those companies tend to stay where they are at and for an owner that might work since they are really using the company to pay their lifestyle. Others would look at that situation and ask, “what do I give up so I can take this to the next level?”

My experiences in these situations and with companies, usually happen at a transition in ownership or leadership. Maybe the company was acquired recently, and the owner stayed on as the leader or maybe the company is moving from one generation to the next, in all cases a change in culture is required.

The staff at one company I dealt with would use words like “mom and pop” to describe where the company came from and “corporate” to describe where it was going as part of a merger/acquisition. So, the challenge was to move a company made up of over 200 employees and several thousand customers from a “mom and pop” to “corporate,” and he first place to start was with all the people who described the company using those terms.

Since I came from large corporations, I spent over 15 years and AT&T and then Lucent Technologies, many people in the “mom and pop” culture would look at me and express that I was more familiar with the “corporate” world and knew the next step. The reality is that nothing could be further from the truth. What they saw as “corporate” was just another flavor of “mom and pop” that had a bit more polish in certain areas. How did I know this? I knew because the culture of those running the HQ and their way of communicating and expressing what needed to happen was not structured by design but had grown organically.

Have you ever walked into a company, even if it is your company, and realized it is totally broken? If you have not, then I am going to suggest that you take some time to rethink the situation because your company is probably broken, it just still does what you need it to do.

The check engine light on your car is on, but does it still run?

So your company is probably broken because the minute you set it up, the model you created is outdated. It will work for a long time before you fix it, like when your car has the check engine light, unless you really push it. If you push it to its limits, it will probably break where you least expect it and then you go into recovery mode and have to get it working again.

What if you took your company to a specialist and had them look under the hood and they came back with all the things that are broken and need fixing? Well, like taking a car to the mechanic after years of neglect, it will be expensive to fix it all!

But, what if you did not fix everything? With your car the mechanic usually gives you a list of things to fix and yes, they want to fix it all because that is how they make a living. But is that really what you have to do? What if you ask, “What are the things I must fix to keep it running for a while longer?”

Your business is just like that. It is broken, and so what! It still produces, but what can you do to it to get to go further down the road?

For most businesses, this model will take care of the majority of the issues that will keep you from growing. Some need a bit more help, but you don’t have to fix it all at one time. It is good to get someone to look at it and give you a list, but don’t fear the it all has to be done at one time.

What if I want to be my own mechanic? That is great, but do you have all the diagnostic tools to figure out what is wrong? Would it make sense to take it to the shop and have them check it out and give you a list? Is that noise a $5 problem or a $5,000 problem?

So the lesson is that it is a good idea to have someone look over your work and give you a list of things to do, but you don’t have to do it all at one time and there are plenty of things you can do on your own.

If you want to have someone look over your business and give you their opinion, just send me an e-mail and lets talk – rick@gramatges.com.