Early on in my career I was fortunate that one of my first employers gave me the opportunity to go to the Executive Management Program at the University of Pennsylvania’s Wharton School and I learned many things that have served me well throughout my entire career. Here are some of the top lessons I learned at Wharton:
- No one plans to fail but most people fail to plan. I never cease to be amazed when I find that a company that I interact with doesn’t have a strategic plan or even a budget. As another friend has said many times, “If you don’t know where you’re going, any road will take you there”. Take the time to plan and budget. It always seems worse than it actually is. In a previous post I mentioned the one-page strategic plan we use in our company. If you didn’t see that post here is a link to it.
- It’s all about people. I would rather have an inferior company with a mediocre product and a great team than the inverse. I have seen great people take a less than stellar product and make it a winner and I have also seen an inferior team destroy a great product or company. If you surround yourself with great people then managing is easy and going to work is fun. If you don’t, work becomes drudgery.
- Invest in education. A lot of companies don’t spend any appreciable money on educating their employees. A lot of times I hear, “It’s too expensive” or “We can’t spare him or her”. My standard comeback to that is, “If you think education is expensive, try ignorance”. Ignorance is a hell of a lot more expensive.
- You cannot improve that which you do not measure. The mid-20th century quality expert, W. Edwards Deming first coined that phrase and it is as true today as it was then. If you want to improve something (quality, fill rates, response times, etc.) you need to measure it and better yet, post the charts publicly or on your company intranet.
- It’s all about cash. Many companies manage for profits not cash. Through accrual accounting you can post a profit while you’re going broke. Never forget that you pay your bills with cash, not profits. Manage the business to generate cash because there is nothing worse than not being able to make payroll or pay a key supplier because you’re out of cash.
- Invest in technology. Early in my career, I had a mentor who taught me to spend money on leading-edge technology because, as he pointed out, computers don’t get pregnant, they don’t go on strike, they don’t ask for a raise, and most importantly, they don’t join unions. In my current company there were eight people in the accounting office when we bought it and there are now three. Oh, and by the way, sales have almost tripled since we bought the company 10 years and two recessions ago.
I learned a lot of other things in business school but these are the main lessons that come to mind at this time. If you have anything to add to the list, let me know.
Copyright 2012 by Jim Sobeck. All rights reserved. This information may be reproduced as long as full credit is given to the author.