Special Contributor Danielle Moga, Barker Associates
If a picture paints a thousand words, the
charts and graphs being compiled for reporting packages should tell a very
colorful story; however, the dashboards and scorecards being created, though
visually appealing, are lacking a strong story line and worse yet…a plot.
Accounting and financial professionals spend hours compiling data from disparate systems to provide an “at a glance” view of information, but often times the rainbow of colors is the best part of the document. The information is typically flat, one-dimensional, and lacks actionable data to help the audience improve financial and operational goals.
By following these steps, you can create
meaningful visuals that tell a story and provide actionable insights to your
1. Begin with the end in mind
Determine if the time creating visuals is worth the time and money it takes to compile. Most leaders don’t understand the hours it takes to pull data together and create meaningful visuals; rather, they see a pretty cover page leading to traditional financial reports. If the visuals are not connected with actionable goals and socialized with leadership and the teams responsible for the measure, they are a waste of time and add no value to the final product.
2. Define what you want to measure
If leadership wants to use visuals to tell a story, then they should use the correct tool to tell that story. “Dashboard” and “scorecard” are tools used to deliver periodic metrics. The two terms are often used interchangeably, but they are different. A dashboard is typically linked to multiple systems, provides real time data, and has flexibility in design, depending on the person or team using it. A scorecard is a snapshot in time, of a specific measure to a pre-determined goal. Leaders who are actively engaged in selecting the measures to be used and the delivery tool can ensure the measure is tied to a specific organizational goal as well as gain the buy in and support for achievement from their staff.
3. Discuss the strategy
I’ve seen too many organizations go through painstaking efforts creating a strategic plan, only to have the completed document sit on the shelf to collect dust. Strategic initiatives, if designed properly, should propel an organization forward and those are the items that should be measured and reviewed regularly. Ideally, senior leaders should review progress towards goals with internal teams and leadership quarterly; review goals semi-annually with the board.
4. Tie results to performance
“What’s measured improves.”
It doesn’t make much sense to design a measure if you don’t have accountability tied to results. The individuals and the teams responsible for achievement must have the ability to successfully complete goals without barriers that prevent performance. For instance, I’ve seen organizations tie cost savings initiatives to the accounting team without including the purchasing or sales teams that actually spend the money. One of my favorite examples of poor planning and misaligned goals is an organization that had a goal to use new software for the organization; however, no one consulted with the IT team or the project management office to ensure resources were allocated to support and implement the project. All parties that can impact the successful outcome of a project should buy in to the project outcomes and performance goals attached to those outcomes.
5. Enable the change
culture that supports and enables change when introducing changes to repetitive
reporting packages. Initiate change with a concise project plan that includes
metrics and milestones, team accountability and ongoing engagement from
leadership help ensure success. Uncover what measures and milestone leaders
need to make informed decisions and then incorporate them into reporting
packages in visually informative ways.
Leaders who intentionally communicate
with visual measures will have a greater success rate at achieving their goals.
Use the rainbow of ink for visuals that tell a compelling story of your
progress and actionable opportunities.
Barker Associates works with leaders to understand and identify meaningful and actionable goals for their organization. We can design indicators to measure progress and actionable tasks to keep your organization on track for achieving goals and executing successful projects.
Most founders and CEOs are certain their business is a good investment and that others should see it that way. Unfortunately, that is not the case in a high number of instances when we dive deeper into the aspects of a company.
We each have a unique set of characteristics that drives us and puts us in situations where we are comfortable. Every time we make a choice to put ourselves in a situation and stay in it, something about that situation is working for us. Solid self-awareness and emotional intelligence help us make choices in life that work for all aspects of our lives and align with our relationship with money and our core values. A culture is developed around that. In business, the governance over this culture is ultimately driven by the purpose of the investors, shareholders, or founder(s). They determine the “Why” of the organization.
The culture and purpose of an organization can be several things.
It can be a hobby, and you are okay with not making any money. I know many business owners who have built a lifestyle company that provides enough cash to pay their bills; they may also run all personal expenses through the company. They are examples of “Lifers.” This practice is great if they happily accept the annual income they produce and do not have any desire to sell the company one day.
Entrepreneurs who are aware they need to build Enterprise Value will focus on establishing and monitoring metrics with the understanding they are building a business that can survive in the ecosystem of the investor world. They do not commingle their personal and business expenses. They listen to experts and focus on the important aspect of building a business. They may not take a salary from the business in the early years, opting instead to reinvest in the business and build a loyal customer base and revenue.
The problem arises when the Lifer wants to raise money from or sell the business to an investor – which really means they want the investor to fund their lifestyle.
Which Are You?
Before you get ready to pitch to investors, evaluate which type of business owner you are and if pitching to investors is the right thing for you. Do not waste your time and energy if it is not.
C-level executives, particularly financial executives, historically have relied exclusively on their technical abilities and work ethic to advance up the corporate ladder, within the same organization. My father talks about when recruiters came to Georgia Tech in 1959 to discuss with upcoming graduates their potential future with the company, including their retirement plans. The expectation was that graduates would get a job, work hard and stay with the same company their entire career. Today you must manage your personal brand – especially CFOS, who have approximately a 2.5-year lifespan at a company.
Unsure how to get started managing your brand?
The CFO Leadership Council is a dynamic, energetic organization that provides countless opportunities for professional development and to keep up with the changing role that CFOs face. Jack McCullough, founder of the CFO Leadership Council, offers his perspective on the value of building and maintaining a personal brand.
“In the modern business climate, it is no longer good enough to be good enough. Any up-and-coming executive, or even one who is well-established, needs to understand and own her or his personal brand. This is especially challenging for financial executives who are hampered by a “humility gene” that prevents that from taking credit for their accomplishments. But, it is also critical for these leaders to cultivate these brands, since there are still many who consider CFOs to be glorified controllers. Every executive has a personal brand. The question is, are you going to control it, or is it going to control you.”
Jack McCullough, Founder, CFO Leadership Council
CFOs and other senior financial executives are invited to join the Jacksonville CFO Leadership Council on September 25 for a panel discussion on Elevate Your Personal Brand & Executive Presence. Click here for more information or to register.
Entrepreneurial growth companies, nonprofit agencies, and governmental organizations are all becoming alike in one way – they are seeking capital to carry forward their mission; however, they also compete for the same pool of high net worth individuals, venture capitalists, and private investors.
From this evolution comes the new challenge for each American – to step up and grasp their responsibility in this new world. To take responsibility, we all must accept the impact of this change: no longer can social and business issues can be addressed separately when funding involves the same pool of resources.
Entrepreneurial growth companies are led by individuals who have left the corporate environment to start a new venture, in part to do good for the community. They are social-minded, routinely volunteer or get involved in nonprofits one way or another. Generally, these entrepreneurs are seeking capital to push forward and provide the product or service they are selling.
On the flip side, nonprofit organizations are beginning to realize that they have to perform as social entrepreneurs, seeking funds from donors as if they were investors. Historically they have sought funds from governmental entities through grants; however, this avenue is becoming increasingly difficult to pursue, as the governmental entities do not have enough money to fund the nonprofits. Governments struggle to hire and maintain employees and provide services to the community so elected officials can remain in good favor and get reelected. The constraint of human and monetary resources leads to a direct hit to the nonprofit world.
For example, nonprofits struggle when they have multiple grant managers within the same governmental organization with a different interpretation of the impact of the grant guidelines. The result is that nonprofits find themselves funding services they expected to be reimbursed from the government, only to learn that they must raise the funds from donors to maintain sustainability because of misinterpretation of the rules.
In both the nonprofit and the entrepreneurial growth companies one of the major funding sources – the high net worth individuals and donors – are more insistent on monitoring outcomes for promised results from their investments. Both types of organizations must have the right infrastructure and process to capture metrics that support the promised result.
If you are a for-profit business professional reading this post, consider serving on a nonprofit Board or Finance committee. Learn more about the differences between for-profit and non-profit financials by participating in my free webinar, Financial Stress or Success, Which is your Nonprofit? then with your new-found knowledge, go out and volunteer.
Working in a professional environment is overwhelming – there is always too much work to do and not enough time or resources to get it all done. It is easy to convince yourself if you do one more task, your to-do list will look better in the morning. That one thing can turn into a couple of hours of work that robs you of time with your family, practicing self-care or participating in other activities that build a healthy body and spirit. Working overtime to get through your work to-do list may seem like the right thing to do, but in the long run, failure to pay yourself with personal time erodes mind, body, and spirit.
I’m not making this up. According to a recent CDC study, on average, only 28.8% of working men and a dismal 20.9% of working women meet the guidelines for aerobic and muscle-strengthening activities. Of note is that, in general, Southeastern states were consistently rated “below average” in study categories.
Balanced professionals have learned how to set a weekly goal to pay themselves first. They succeed because they are very intentional about maintaining the discipline to do it.
To get started, make a list of the things that energize you and make you a healthy person. Here are some options:
Talk a walk outside
Attend a new gym class to do a workout you’ve never done
Read a book you’ve heard recommended
Schedule a special dinner with your family
Dare to take a roller coaster ride
Then take that list and turn it into your commitment to yourself – your Personal Payday reminder. Make an appointment on your calendar for each goal you set. Block off that time and hold it sacred.
As a business professional, you are looked up to by employees and family as a role model of success. What message are you sending? Time and money are the same thing when you are building a business or a professional career. Paying yourself with an investment in health is essential to long-term success.
As with any business relationship, finding the right fit with your investor is the first step in a long and successful association. This may sound like dating advice, as there are many similarities. For example, identifying potential investors through word-of-mouth or introductions from mutual friends has a better chance of success than selecting the first name your search engine delivers.
But don’t stop there, ask your acquaintance why they recommend this or that one. Understanding your goals is critical with whomever you choose to ask for money.
With potential candidates on your list, think of a few “speed dating” questions to narrow it down. You should know yourself well enough to already know which questions/answers are deal-breakers. What do I mean by that? Let’s say you want a silent investor who is hands-off. Ask how they work with their current clients – hands-on, hands-off or somewhere in the middle.
Other filtering questions might include: who are some of their other clients (besides your referring friend); are they local; in which industries do they specialize? Are they a solo investor or in a group? What type of client do they prefer – are you that client?
By doing your due diligence you have reduced the risk of having to break up with your new investor sooner than planned.
One of your goals in securing an investor should be that once they have reached their goal with your business, they stick around as your #trustedadvisor. You just may need them again when your successful business is ready to rise to the next level of success!
Building trust takes time and an investment from both parties. At the end of a successful pitch to gain an investor, the trust clock with that investor starts ticking. You both must deliver now on the promises made during the courtship; nothing builds trust quicker than doing what you said you would do. And when you follow through, the role of trusted advisor just naturally evolves.
At Mindy Barker & Associates we help entrepreneurial businesses prepare for meeting with investors to pitch their business and obtain funding. If you think you need an investor, but don’t know where to start, contact me at email@example.com to set up a no-obligation 30 minute discovery call to discuss how we can help.
My final word of advice: this process should begin the minute you start a business – not when you need the money. If you are trying to raise money at a time you are getting ready to lose money – you lose leverage.
Part 1 of the Equity series.
Virginity and equity have a lot in common: human beings do not spend enough time thinking through how to give away either of them, but once they do, the results have the potential to be rewarding or devastating.
This article focuses on giving away equity – virginity is a topic for another time, maybe even under a pseudonym!
As an entrepreneur, the day you think of an idea, you own 100% of the equity and intellectual property (IP). The power to give the equity to others in exchange for their time and money is one of the most important decisions you will make. The devastating consequences of misappropriating equity can ruin even the best of ideas.
Giving equity or IP away may start with a conversation over drinks with a friend. When you start to tell friends and family about your entrepreneurial venture, be prepared to hear their version of your great ideas, along with their advice.
The conversation goes something like:
Friend: “That is a great idea and I have been thinking about doing something like that for a long time. You are great at technical development and I can help you with sales and operations. I can quit my job and help you with this company.”
You: “Wow, I am so flattered you think so much of my idea that you would quit your job and help me!”
What you are thinking: “You are absolutely right, I hate to sell and it would be great to have someone help with that. After all, I do need a team to help me launch this idea.”
So your friend then says, “For only 10% in options and a salary of $100,000 a year, which is a lot less than what I make now, I will be part of your team.”
You are thinking, “You are a great sales person at ABC Large Company ABC selling to other huge companies – you will be great at helping me with getting my company off the ground.”
The two of you toast to the future with visions of a wonderful partnership dancing in your head – this is exactly what you need to launch the business.
Stop Right There!
You have just given away 10% of your equity with almost no forethought of the consequences.
Think of starting a business as a real-life personal development plan where you learn quickly how to deal with the ultimate emotional highs and the down deep lows. Most of the down deep lows result from lack of cash. Your friend sounded very generous when they offered to take a lower salary and accept $100,000 per year. However, when cash is tight and you are fighting to find the money to make payroll, it may not feel so generous. In order to pay them you make sacrifices. Paying their salary keeps you from paying yourself, which means your personal finances are in jeopardy, which causes you stress. This stress may turn to resentment toward your friend and cause tension, especially when the sales are not coming in at the rate you expect them to.
You can see where this is going, right?
According to Fortune magazine, 9 out of 10 startups will fail. The exuberant valuation and success realized by Jet.com. Amazon, Airbnb and Uber are clearly the exception, not the rule. If you have boot strapped this Company, not taken a salary for 5 years because you haven’t realized the success you once dreamed of, you are not going to want to pay your friend 10% of the $500,000 proceeds you may be offered for your company after Year 5.
Here is the advice I give to enthusiastic entrepreneurs who are eager to cut their friends and family in on a share of their big idea – think before you give it away.
The allocation of equity should be properly documented early on in a Stock Option Agreement that lays out the terms of vesting and other criteria that work for all. Even simple agreements should be undertaken by a business attorney who can prepare you for scenarios you currently could never imagine.
To help you start a conversation with your attorney about a stock option agreement, read Part 2 of my series on Equity, Considerations for Equity Allocation Agreements.”
Until then – remember that barroom conversation, and think before you give it away.
Mindy Barker & Associates (email:firstname.lastname@example.org) works with entrepreneurial growth companies to help maneuver the many questions of funding, employee compensation and other decisions and is available to discuss your questions on equity.
I am often asked how to find the right investor to invest in an entrepreneurial business. The question often comes from an entrepreneur who is about to run out of money and wants me to introduce them to someone that is going to write them a check by the end of the week. For the investor/entrepreneur relationship to work effectively, a relationship of trust and understanding has to be cultivated during the pitch and due diligence process.
How prepared are you to ask investors for funding?
Would you ask a friend of yours on Monday to introduce you to a spouse you can marry on Saturday? I hope not! So why would you think an investor relationship would work that way? The message you are sending is essentially, “I’m a poor planner and waited until I was in trouble to take action.” Not a good way to start a relationship involving asking for money, is it?
Getting ready to find an investor begins long before you think you will need the money. Preparations include thinking through how to build a business that investors will want to invest in, that they can identify with. You have to maintain credible data on your financials and your potential client base so that each time you meet with an investor you can definitely and consistently communicate your position.
How confident are you that if the right investor comes along, you are prepared with accurate historical and projected financials? Can you show the investor you have thorough knowledge of the financials, cash flow, burn rate, use of proceeds and return on investment? You have to know your product inside and out as well as the financial numbers behind it. You will get drilled on it when you meet with investors and it will feel like the worst spelling bee you ever participated in if you are not prepared. Do you feel confident?
If the answer is, “Not confident…” make the investment in your business to prepare. Let’s schedule some time together to dive in to gain financial clarity and understanding. Let’s talk. Contact me at email@example.com to set up a no-obligation 30 minute discovery call to see how we might work together to prepare you to meet with potential investors.
Mistakes happen to the best of people and organizations. When I was promoted to Chief Financial Officer at the age of 29, I articulated my fear of making a mistake to one of my mentors. It was overwhelming to accept and consider the responsibility of the lead financial role. I would be the last one to review information before it went to the President and Board. The response I got from expressing my concerns was great – You will make mistakes, I guarantee it. What sets great leaders apart is how they deal with the mistakes.
What I learned from that experience is that leaders can impede or even stop the ability to develop and execute strategy if they do not take responsibility for their own mistakes. Lack of execution can cause the organization to miss revenue opportunities and quickly burn through cash.
When you are a leader of an organization one of the toughest responsibilities you have is leading by example. The Type A leaders who are bold enough to put together a start up or buy a company may not be sufficiently self-aware to take responsibility for their own actions and, as a result, when something goes wrong they can turn into one of three personalities: the Victim, the Judge or the Warrior. What happens next depends on which personality the leader assumes.
The Victim says, “I can’t believe the team did this. They are out of control and now this project is ruined.” This is followed by public accusations that humiliate workers.
Leaders, put on your big girl or boy pants and take responsibility as the Warrior.
The Judge says, “I can’t believe this happened. I am so stupid for trusting the team and I am never going to do it again. The project is ruined.” This is followed with micromanagement and control freak like activities.
Either personality can lead to turnover in the organization, which significantly slows down the organization’s ability to develop and execute strategy. A Star player on your management team will not stay and live in chaos. The star players on the team are all updating their resumes and keeping their ear to the ground to determine what other positions they can pursue. They will resign and say something like: “This opportunity was just too good to give up” or “They approached me, I was not looking.” They were not looking until the leader turned into the Victim and/or Judge and created chaos and an uncomfortable working environment. The culture is such that the star player cannot contribute in a meaningful way and they will leave you. Baby boomers tend to have a deeper sense of loyalty, so they may stay and hope the situation will change. The Millennial generation, in contrast, will bolt quickly once the Victim and/or Judge show up. They are very focused on making certain they can personally contribute immediately.
The Warrior says, “I’m responsible for this team and actions. How can we correct and learn from this mistake?”
Instead of using blame and shame to work through the dissonance, Warriors use tools like awareness, compassion, integrity, and ownership. Warriors empower their team to fix issues with customers at the earliest point possible. Warriors take responsibility and execute. Execution leads to building enterprise value and higher existing values.
Leaders, take an honest assessment of your leadership style and adopt a Warrior attitude!
Responsibility can be scary. Leaders put on your big girl or boy pants and take responsibility as the Warrior. Stop the blame and shame, micromanaging and control freak ways that keep the organization from executing. We all have the ability to change once we become self-aware – take an honest assessment of your own actions.
Board members, investors, coaches, and mentors – challenge the leaders of the organizations in this area. Although it can feel distressing to challenge a leader without it sounding like a personal attack, it comes with the territory. I have sat in many a meeting when I knew the Board wanted to ask these types of questions and did not because it is uncomfortable. You have a fiduciary responsibility to address the issue if you think it exists. If you suspect it exists – it almost certainly does.
Star players – before you update your resume and bolt, try to effectively manage up and have a frank conversation with your leader about the situation. Even if it does not work and the leader does not change, it is good practice for you. To help develop the dialogue, consider reading the book, “Crucial Conversations, Tools for Talking When Stakes Are High,” (Patterson, Grenny, McMillan, and Switzler), before initiating the conversation.