I’ll confess. I don’t have a system for backing up my files. Sure, I do make backups (offsite and onsite) at least every few months. And when I’m working on a critical document, I make constant backups by sending copies of my files-in-progress to an offsite mailhost. But I could do better. Odds are, you could, too.

Here’s a quote from and link to a PCWorld article on online backups, Back Up Your Files Online Without Even Trying:

I’m sure that by now all of you back up critical files weekly or even daily, and religiously refresh your full-disk-image backup once every few months, right? No? Well, you’re not alone. And while there’s no substitute for a genuine backup strategy, the move toward desktop-caliber online applications has made it easier than ever to get some degree of backup protection without even trying.

Happy easier breathing to you.

Winning companies make a habit of doing things that are good for their health.  That means choosing work (whether they be projects and clients, or products and market sectors) that adds to the company’s bottom line, assets, and general happiness.

What do you need for a track record of smart choices?

1.  Knowing what works for you.

2.  Evaluating projects (or clients, or products, or market sectors) before you pursue them.

3.  Pursuing only the projects that make sense.

4.  Working the projects you win to make sure you’re doing what you intended.

5.  Measuring your results, during and afterward.

6.  Tuning the process to make it better each time.

If you don’t care where you’re going, it doesn’t matter where you go.  But I suspect you care where you’re going.  And please, remind everyone on your staff (including yourself)  — financial success is measured by net income, not gross income.  And if your staff don’t know how to tell whether their work is yielding red or black net income, think about how to change that.  Pronto.

Demarketing requires discipline: the discipline to decide what you’re not going to do, and then the discipline to stick with the decision.  Some people have this kind of discipline in spades:

Xiang Yu was a Chinese general in the third century B.C. who took his troops across the Yangtze River into enemy territory and performed an experiment in decision making. He crushed his troops’ cooking pots and burned their ships.
He explained this was to focus them on moving forward — a motivational speech that was not appreciated by many of the soldiers watching their retreat option go up in flames. But General Xiang Yu would be vindicated, both on the battlefield and in the annals of social science research.

In The Advantages of Closing a Few Doors (New York Times February 26, 2008), John Tierney discusses the work of MIT behavioral economist Dan Ariely.  As Tierney describes, Ariely proves scientifically that brainpower is not a sufficient driver for discipline:

Most people can’t make such a painful choice, not even the students at a bastion of rationality like the Massachusetts Institute of Technology, where Dr. Ariely is a professor of behavioral economics. In a series of experiments, hundreds of students could not bear to let their options vanish, even though it was obviously a dumb strategy (and they weren’t even asked to burn anything).

The experiments involved a game that eliminated the excuses we usually have for refusing to let go. In the real world, we can always tell ourselves that it’s good to keep options open.

…Your child is exhausted from after-school soccer, ballet and Chinese lessons, but you won’t let her drop the piano lessons. They could come in handy! And who knows? Maybe they will.

In the M.I.T. experiments, the students should have known better…

But they didn’t act like they did.  Read the article and learn about the psychology.  Then remind yourself that discipline is hard, and prepare yourself for the effort.

A Toyota Motor Corp employee died of overwork after logging more than 106 hours of overtime in a month, a judge ruled Friday, reversing a ministry’s earlier decision not to pay compensation to his widow. …The employee, who was working at a Toyota factory in central Japan, died of irregular heartbeat in February 2002 after passing out in the factory around 4 a.m.Overworking is a serious issue in Japan, where an average worker uses less than 50 percent of paid holidays, according to government data.

In fiscal year 2005-2006, the labor ministry received 315 requests for compensation from the bereaved families of workers who died of strokes and other illnesses seen as work-related.

– Kubota and Kim, Court Rules Employee Worked to Death, Reuters News Agency, 30 November 2007

The first case of karoshi was reported in 1969 with the death from a stroke of a 29- year old, married male worker in the shipping department of Japan’s largest newspaper company [1]. Karoshi can be translated quite literally as “death from overwork.” The major medical causes of karoshi-deaths are heart attack and stroke, including subarachnoidal hemorrhage (18.4%), cerebral hemorrhage (17.2%), cerebral thrombosis or infarction (6.8%), myocardial infarction (9.8%), heart failure (18.7%), and other causes (29.1%) [2]. The Ministry of Labor began to publish the statistics on karoshi in 1987, as public concern increased [3]:

Nishiyama and Johnson: Karoshi-Death from overwork: Occupational health consequences of the Japanese production management (Sixth Draft for International Journal of Health Services). 4 February 1997.

By comparison:

GENEVA (ILO News) - US workers put in the longest hours on the job in industrialized nations, clocking up nearly 2,000 hours per capita in 1997, the equivalent of almost two working weeks more than their counterparts in Japan where annual hours worked have been gradually declining since 1980, according to a new statistical study * of global labour trends published by the International Labour Office (ILO).

– International Labour Organization press release “Americans work longest hours among industrialized countries, Japanese second longest. Europeans work less Time, but register faster productivity gains New ILO statistical volume highlights labour trends worldwide”, 6 September 1999.

Among your outside advisors, your account is likely to have the greatest impact on the success or failure of your business.

– Jacquelyn Lynn in Start Your Own Restaurant (and Five Other Food Businesses) (Entrepreneur Magazine’s Start Ups).

[what we first learned in the 80s is that...] Firms that earned superior levels of customer loyalty and retention also earned consistently higher profits–and they grew faster as well….[W]e learned that customer loyalty is inextricably linked to employee and investor loyalty and that major improvements in the one often require improvements in the other two.

– Frederick F. Reichheld of Bain & Company, Inc., in his preface to The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value.

…[T]he true mission of a business is to create value. Any business muddled enough to believe that its real purpose is producing profit is probably not long for this world. Profit is absolutely essential, to be sure, but it is a downstream outcome of creating value, and so it functions very poorly as an objective in itself.

– ibid, p. 186.

Reichheld published this book in 1996 — a few years before the “balanced scorecard” entered common parlance. Indeed, “balanced scorecard” appears nowhere in the index, but it seems likely from the above two quotes that Reichheld is on the same wavelength. If you don’t take care of all the stakeholders, you’re not going to be around long.

On advice-giving:

People don’t care what you know until they know that you care.

– source unknown

One of my favorite Far Side cartoons shows a man in his bedroom getting dressed for the day. A sign by his mirror reminds him, “First Pants, Then Shoes”.

This cartoon and the above quote remind me that there’s often a sequence to things. Knowing how to do the last step and knowing that the last step needs to be done are not enough if other things have to happen first.

Related blog: David Maister on Being Helpful

Chief executives at charitable hospitals in Massachusetts received substantial pay and benefit increases in fiscal year 2005, for the first time boosting their overall compensation to more than $1 million at most of the largest institutions.

Also, the highest-paid hospital executive in the state, Partners HealthCare chief executive James J. Mongan, broke the $2 million barrier, another significant milestone.

“Just because the hospitals are nonprofit doesn’t mean they can afford second-class leadership,” [Partners HealthCare Board Chair] Connors said. “I really feel we’re doing the right thing by paying these guys top dollar in the field.”

– from Hospital CEOs join the $1m Club, Boston Globe, August 31, 2006.

What do you think?

Some of you will be going into business. For that you need two eyes. With one eye you have to check accounts receivable and accounts payable, overhead and profit margins, payroll and insurance costs. With the other you have to attend to your employees – are they receiving just reward for their labor and can they find fulfillment in their work, and you have to think of your clients – do the products or services that you provide enhance their lives rather than diminishing or debasing them. One eye is not enough.

– Nicholas Wolterstorff, in his Commencement Address at Calvin College, May 20, 2006.

Wolterstorff is Emeritus Professor of Philosophical Theology, Yale Divinity School, former Professor of Philosophy at Calvin College, and a member of the Calvin College class of 1953. Though Wolterstorff doesn’t mention the Balanced Scorecard by name, I suspect he would find it sensible.

Link to full text: Wolterstorff Commencement Address at Calvin College

“We’re more than a business — we’re a family”"I like to think of us as a family, not just a business”

I hear statements like this far too often. At best, they’re spoken by small business owners whose employees all feel a strong personal connection with each other. At worst, they’re spoken by business unit managers who erroneously assume that their 50 or 250 staff feel the same level of investment in the business that they do.

Your business is a business. Your employees have roles to play, and your job is to lead the way, and to compensate your employees for their efforts and results. If you do your job well, there’s a good chance that your employees will enjoy working with each other, will feel pride in their association with your company, and will support each other in gaining more and more success. Your employees may become friends. Your employees and their real families may build meaningful relationships outside office hours. But your company is not a family.*

“Real” families have a different set of rules.** And perhaps the most important difference for an patriarchal executive to remember is that in a family, no adult has the responsibility or privilege of directing another’s efforts or deciding how much to offer as compensation.

The 2nd-worst division VP I ever worked for often referred to our 100-person office as a family (even after I told him that I didn’t consider him my “dad”). When one of our colleagues was thinking about joining a competitor, the veep confronted him and asked him declare, “Where does your loyalty lie?” The colleague pointed to a photo of his wife and son and said, “Right there.” That’s family.

————-

*On the off chance your business is a real family business, with all or most of your staff related by blood or marriage, please ignore this blog post and go read one of the Family Business columns by Jim Lea, business consultant and professor at the University of North Carolina at Chapel Hill’s Kenan Flagler Business School.

**The best “real” families I know take care of their own, from cradle to grave. They share their resources. They love unconditionally. Individuals put the needs of others ahead of their own. No one gets ejected except for the most egregious of offenses. Even when families fail to meet all these ideals daily, they continue to see the wisdom in trying. This family model is self-consistent and sustainable. But it is not the model for sustainable business.