I have been around for a long time. Made some noticeably big decisions that have made some investors and myself a lot of money. But I have also made a lot of mistakes. Fortunately, not enough to sink the ship. And luckily some of them have turned out to be valuable lessons. So when someone asked me to write about those mistakes, I told them that I could literally write a book because I have made dozens of them…some big, some bad, and eventually, either repairable, avoidable or important lessons learned.
But I am not writing a book so let us focus on two of my mistakes that have been valuable. They fall into two categories: the first goes under analytics. And the second is almost directly opposite: intuition. Eventually, these two mistakes have allowed me to build healthy businesses, both for my clients and myself.
A little background
Early on, I never really thought or knew much about business. My father was an engineer, not a businessman. I went directly from undergraduate school at Washington University in St Louis to Columbia University to get my MBA. Today you can’t go to a good business school without practical experience and that’s what I didn’t have. During my undergraduate summers, I worked out for the football team and had a job as a summer camp counselor. So, while I had book learning, I had no practical experience, no internships. Just book learning! As they say, I was not from the school of hard knocks.
After going straight through to graduate school, I had really no idea what I wanted to do except get a job and no idea what business was about. But I was competitive and wanted to succeed and learn.
So here are two of my hard-learned lessons
Lesson #1: It’s all about the numbers!
You need a road map to know if you are moving towards your goal and without numbers, how do you know if you are there?
Remember, I said I went from undergraduate to graduate school with no business experience. Like so many of us, I started in a renowned training program of a large company, doing some small things that were tied to some bigger things. But I didn’t understand the bigger things or fundamentally how they all tied together to create a business! And no road map was created and shared by management. No key objectives of the business that were critical to understand were communicated…something to plot against and review on a frequent basis.
Fast forward a half a dozen years: I moved to a consumer packaged goods company in marketing, not finance, and I began to construct a picture of what it took to run a business, or at least, a part of a multiphase business. I now had sales and profit responsibility. So I began looking at sales almost every day. We used a syndicated service to understand the relationship between marketing dollars and revenue — a dashboard of sorts and a pretty good one — against the objectives of the organization. I also had to deal with production and manufacturing so my key indicators became broader and greater, again building on my dashboard. It was all about the numbers!
Then my last corporate job was running several divisions in a bank. Again, we had to create another type of dashboard since we were bringing in deposits or liabilities and lending them out to other parts of the organization, i.e., our assets. This was not a business one could understand intuitively. Learning the banking business was required and one key was establishing another type of dashboard.
While that ended my corporate life, I was still in the game. I started a company and needed again to construct a dashboard, albeit another type…This dashboard required information, not only on revenue and profitability but on service levels, through-put and other performance measures.
While I ramble, there are some lessons learned from my story. It is impossible to run a business without a road map! If you are going to assume responsibility for managing someone’s business, the first thing you need to figure out is: What are the critical measurements you need to pay attention to? What are you measuring and how are you going to report it? And finally, how often are you going to report? Thinking about and building on these questions will allow you to view, review and change course on a periodic basis. It will also allow you to forecast and anticipate change as soon as possible.
Today at SAMC, we often get hired by clients who have emerging or early stage businesses, and we encourage them and help them lay out dashboards. It forces them to think about their businesses in a much more disciplined way.
Lesson #2: The wrong people burn though assets quickly, and if they are not working out, you need to move quickly. Let your instincts be your guide.
Like a lot of us, I don’t particularly like the idea of letting someone go. I keep hoping that the person who is not working out will work out in the future. In some cases, I have let the inevitable linger for an inordinate period of time.
But how many times have you seen people change from bad to good? In the last business I ran, I kept putting off discharging several senior executives. I had sleepless nights, and guess what? Six months later I was where I was six months before. I had wasted time and resources and encountered lost opportunity.
So is there a lesson learned? You bet. Move quickly. First, your organization could lose its ability to meet your critical objectives with the wrong people in place. Second, your staff knows when someone is not working out. Third, putting off tough decisions negatively impacts your leadership skills. Move faster if you believe you are right!
So there you are. Two things no one taught me when I started in business: numbers and instincts.
For you to go a bit further, I recommend these blogs and podcast
- Blog: What Can We Learn From The Mistakes We Make?
- Blog: Why Is It Easier To Do Nothing Than To See The Obvious?
- Podcast: Andy Simon—Confessions of a Successful Entrepreneur
To learn more about what we do and how we might be of help
Mistakes have a lot to teach us if we let them. The biggest challenge for leaders and employees is to see it that way. If you’d like to learn more about how to leverage mistakes and use them to your advantage, contact us at Simon Associates Management Consultants. We specialize in helping organizations change, grow and thrive amidst today’s changing times. We’d love to have a conversation about how we could help you and your business soar.
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