Ahern Advisory Editorial Performance Management - Intellectual Capital

I am constantly stressing how important it is to have employees that care. I have stated in numerous newsletters that;

Phoenix, AZ (prHWY.com) February 8, 2013 - I am constantly stressing how important it is to have employees that care. I have stated in numerous newsletters that;

* The economy is not where it needs to be;

* It is going to be a very slow recovery process, and;

* I believe that the economy is going to be sluggish for some time, but the economy is what the economy is.

In order for trucking and logistics companies to survive and thrive, they need to constantly think "outside the box" and they need to recognize that intellectual capital is as valuable, or more valuable than financial capital. Improving your intellectual capital is vital for growth in this century.

High-performing employees are anxious to learn and develop; they are problem solvers. They help fellow employees needing guidance and they know if they can help make the company profitable, it will be repaid to them. This is the kind of individual who maximizes the company's intellectual capital.

In many of my transportation seminars, I explain to trucking executives that managing and building your company is all about building morale. Morale is one of the most precious elements in a business. Successful managers take pride in their teams in which they are captains. Morale and team spirit are the product of consistently high character and high achievers. Loyalty and efficiency are not created overnight, but they arise out of the personality of the managers.

For those of you who want to focus on building your business and creating the most shareholder value, there are six simple steps to success:

1. Cultivate energy - the first rule of success is to have energy.

2. Control laziness - too many of us fail because we delay tackling the difficult jobs that win recognition.

3. Be natural - many people spend their days locked in mortal combat with their natural habits and behavior patterns.

4. Boycott boredom - boredom zaps energy like nothing else.

5. Motivate memory - if you want your people to succeed, they cannot afford to forget things, and;

6. Dream dreams.

I cannot tell you how many times I have been told it is a mistake to dwell on the past, but if you note in my newsletters, I believe the past provides knowledge; knowledge is power; power equals success. In fact, successful people are usually those who have thought about their mistakes and have learned from them. When something goes wrong, face up to the consequences, do what you can to put things right, then think about how it happened and how it might be prevented in the future.

Many successful people acknowledge that they daydream frequently and their daydreams inspire them towards a given goal. I always say if that will put money in your pocket, then cultivate your daydreams; enjoy them and make them constructive; make them constructive by linking them to your goals.

One of the things that is most important is that you've got to look at your business as it actually is. If the business is losing money and is not cash flowing, you have a fundamental problem. Complaining about the problem or burying your head in the sand; or refusing to address the problem is not going to solve the problem. Even though the economy is bad, there are many things that businesses can do to succeed in any economic climate.

Last week, I was amazed; I wrote an article on the "Fiscal Cliff" and I received about a 90% positive response, but I received several responses that I was being negative or bipartisan, and that is not the case at all. The reason I discuss tax revenues and debt is because it directly impacts trucking. Anytime there is an increase in costs, it affects trucking; it affects highways; it affects jobs and so it is very important to understand the economy. If you read my newsletter last week, I said that the only way to balance the budget is to focus on expense reduction. Many people agreed with me, but some gave me a lecture on politics. It is not about politics, it is about economics.

When I reviewed the economy, what I should have done was set up a fictitious household budget, and you would learn quickly that if expenses exceed profits, you need to make some quick adjustments. I recently received a letter from a friend of mine that that runs a successful logistics business. In fact, he and his family have been in the logistics business for 20+ years. He provided an analogy that I believe is apropos to my point. If you were to remove a lot of zeros and pretend that our economy is a household budget, it would look something like this:

* The annual family income - $21,700;

* The money the family spent ‐ $38,200;

* New debt on the credit card - $16,500;

* Outstanding balance on the credit card - $142,710;

* Total budget cuts so far - $38.50.

This is exactly how you must look at your business. In reference to the debt ceiling, there is another way to look at the debt ceiling. If you come home from work and you find there has been a sewer backup in your home and sewage is all the way up to your ceiling, what should you do? Do you raise the ceiling, or do you remove the sewage?

The point: A significant part of profits and cash flow is expense reduction and the simple truth about profit performance management is there is nothing mysterious about it. You put the numbers out there; you teach people to understand them; you give the people a chance to move whatever numbers they can; you offer them a share of the proceeds if the numbers move in the right direction; and the business makes more money.

To put it slightly different, if you reward people for making money, you teach them that is what business is all about. If you give them the right information and control of their jobs, they can begin figuring out how to make more.

In closing, if there is anything I can impart to you about your business is, "plan, plan, plan"; understand the fine points of accounting; learn the difference between making money and losing it. I have experienced tremendous turnarounds with some of my clients when they stumble on the principals of profit performance management. Companies have done it with no big infusion of cash, no new huge customer, no new fancy technology, no expensive accounting firms, just a new system of management.

If is important that as you are building your business and you are trying to grow the business and maximize your profits, that you understand that profit performance management tells you what is supposed to get done and then it forces you to actually get it done.

Principals for profit performance management:

1. Get the information out there;
2.Teach people business literacy, how to understand and use information;
3. Develop a system of responsibility and accountability - empowering people to act like business people, and;
4. Give everyone a stake in the company's success.

Peter Ducker once said that, "Information lets people figure out what to do on their own without being told."

As you are challenged by the economy, please remember to keep a lid on cost, particularly if it is rising; watch your competition; make sure you receive accurate financial information and any problems that need solving, do it now, don't wait!

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Tag Words: trucking management

Categories: Transportation

Press Release Contact
Mr.Andre Ahern
CEO
2198 E Camelback Rd Suite 210
Phoenix, AZ
USA, 85016
PH: 602-242-1030
Claudia@ahern-ltd.com

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