An unhurried weekend provided enough time to finish the weighty tome that is Alice Schroeder’s biography of Warren Buffett: The Snowball. Despite its 800+ pages it was illuminating and interesting throughout. Schroeder paints a picture of an unusually sharp mind, with an ice-cold analytical approach to business, which was singularly focused on business and money-making from an early age. Yet Buffett the man is illustrated with all his human emotions and vulnerabilities, particularly when it comes to his late wife Susie. The human drama behind the deals was at times heart-breaking; no amount of money can insulate us from pain and suffering. Yet much in the book was amusing and at times hilarious, particularly describing the young Buffett.
Buffett is a man who is more than generous with his desire to teach and inform, yet one that few could emulate. Despite having followed his teacher, Benjamin Graham, Buffett admits that very few should attempt to invest their money in the way he has. For the majority he recommends a low-cost tracker fund. Oddly enough, the same advice about investing that I concluded after my six month long MBA finance course.
If you are interested in investing, business, or the life of one of the world’s richest and most thoughtful men, I'd recommend it highly. It has changed my attitudes to quite a few different types of businesses. You can't ask more than that, can you?
Monday, 8 February 2010
Thursday, 4 February 2010
What’s your time worth?
It’s a funny old question, what is your time worth? Do you know the monetary value of your time? Do you believe the figure and use it in your day to day thinking? Some do, but not too many.
In some ways valuing your time as if it were money is spot on. But at the same time it implies we are spending a small fortune as we relax watching TV, or take an hour or two to go to the gym. Yet both activities are needed unless we intend burning out early in pursuit of the holy grail of time management.
Whatever you think your time might be worth; very few think it is worthless.
Time is the basic building block on which we create value for each other and the companies we work for. Relatively few people, however, measure their time in the same way that they measure money. Yet as Jim Rohn pointed out “Time is more valuable than money. You can get more money, but cannot get more time.”
One of the reasons we don’t measure what we do with our time is that it is difficult. If someone came up with some software we could set running in the background that measured how we spent each minute we would find it quite illuminating – shocking even.
And what abut the time we spend thinking about problems – in the shower or driving to and from work. Half-time, if you like: half-thinking, half-driving, half-working and half-listening to the radio. Your maths teacher wouldn't like the arithmetic, but it’s pretty much how the brain works.
I routinely spend days recording my time in fine detail. It is always instructive. But it always takes some effort to do, and as I get more tired I find it more difficult to measure my time on tasks accurately.
As software developers we have to log the time we spend on project work. There are many other professional services companies who do the same – consultants, accountants, and solicitors all have to know how long they spend on each client’s work. Certainly our time records provide valuable insights into how long things actually take, rather than how long we would like them to take.
So measuring time can be a valuable addition in the armoury to improve performance. Either occasionally to gain insights into how you work, or systematically so you can see where everyone’s time goes.
Measuring time certainly poses some big challenges, but equally could reveal some big performance lessons. And it can be a great help in figuring out why something or someone isn't performing as they should.
In some ways valuing your time as if it were money is spot on. But at the same time it implies we are spending a small fortune as we relax watching TV, or take an hour or two to go to the gym. Yet both activities are needed unless we intend burning out early in pursuit of the holy grail of time management.
Whatever you think your time might be worth; very few think it is worthless.
Time is the basic building block on which we create value for each other and the companies we work for. Relatively few people, however, measure their time in the same way that they measure money. Yet as Jim Rohn pointed out “Time is more valuable than money. You can get more money, but cannot get more time.”
One of the reasons we don’t measure what we do with our time is that it is difficult. If someone came up with some software we could set running in the background that measured how we spent each minute we would find it quite illuminating – shocking even.
And what abut the time we spend thinking about problems – in the shower or driving to and from work. Half-time, if you like: half-thinking, half-driving, half-working and half-listening to the radio. Your maths teacher wouldn't like the arithmetic, but it’s pretty much how the brain works.
I routinely spend days recording my time in fine detail. It is always instructive. But it always takes some effort to do, and as I get more tired I find it more difficult to measure my time on tasks accurately.
As software developers we have to log the time we spend on project work. There are many other professional services companies who do the same – consultants, accountants, and solicitors all have to know how long they spend on each client’s work. Certainly our time records provide valuable insights into how long things actually take, rather than how long we would like them to take.
So measuring time can be a valuable addition in the armoury to improve performance. Either occasionally to gain insights into how you work, or systematically so you can see where everyone’s time goes.
Measuring time certainly poses some big challenges, but equally could reveal some big performance lessons. And it can be a great help in figuring out why something or someone isn't performing as they should.
Wednesday, 3 February 2010
What would you wish for?
I was asked a really interesting question yesterday. “What might small businesses measure if time was no object and metrics could be produced instantaneously?”
An earlier posting Why performance measurement is worth the bother talked about how business metrics are not freebies. They take time and effort to determine, collect and analyse. But that effort pays back handsomely; both in the performance feedback they provide and the focus they put on particular aspects of a business. So it strikes me that the question is not dissimilar to
“What sort of business plan would small businesses like if it took no time to put it together?” The answers will be as varied as the businesses.
The effort required to think through a strategy, articulate it as a business plan, and then communicate it to those who need to know, is actually of more value as having the business plan. And so it is with metrics.
All plans and strategies are different. And the measures required to keep businesses on track are as varied as the plans. Measures are a reflection of strategy, not just what is available or easy to measure.
I suppose the hidden question within the question was “How do you encourage small businesses to use metrics to grow and improve quality?” I know from my own experience that many small businesses pay close attention to the financials, but not much more. Yet the number of large businesses that have sophisticated performance measurement systems suggests there is a high correlation between success and the use of metrics.
So what is stopping smaller businesses? Is it time as the questioner was suggesting? Is it lack of knowledge of what and how to measure? Or is it just plain lack of energy with everything else that has to be done? It’s an interesting question.
Having said all that I think there are some measures that many businesses would like, if they were not so time consuming to gather and I’ll post my thoughts shortly. In the meantime, what would you wish for if time and effort was no object?
An earlier posting Why performance measurement is worth the bother talked about how business metrics are not freebies. They take time and effort to determine, collect and analyse. But that effort pays back handsomely; both in the performance feedback they provide and the focus they put on particular aspects of a business. So it strikes me that the question is not dissimilar to
“What sort of business plan would small businesses like if it took no time to put it together?” The answers will be as varied as the businesses.
The effort required to think through a strategy, articulate it as a business plan, and then communicate it to those who need to know, is actually of more value as having the business plan. And so it is with metrics.
All plans and strategies are different. And the measures required to keep businesses on track are as varied as the plans. Measures are a reflection of strategy, not just what is available or easy to measure.
I suppose the hidden question within the question was “How do you encourage small businesses to use metrics to grow and improve quality?” I know from my own experience that many small businesses pay close attention to the financials, but not much more. Yet the number of large businesses that have sophisticated performance measurement systems suggests there is a high correlation between success and the use of metrics.
So what is stopping smaller businesses? Is it time as the questioner was suggesting? Is it lack of knowledge of what and how to measure? Or is it just plain lack of energy with everything else that has to be done? It’s an interesting question.
Having said all that I think there are some measures that many businesses would like, if they were not so time consuming to gather and I’ll post my thoughts shortly. In the meantime, what would you wish for if time and effort was no object?
Tuesday, 2 February 2010
Jump up and down metrics
Many businesses use metrics or KPIs to measure their performance. Metrics are vital if you want to understand your current performance levels, and where you need to improve. And most business leaders want to improve. They want their people to perform well, be happy in their work, and contribute great ideas to strengthen their companies.
So why are metrics considered boring? Why do we not jump up and down in excitement at the possibilities that metrics show us?
The answer is that metrics are often imposed rather than figured out together.
When metrics are worked out in the spirit of learning they become a tool to help improvement, a way to figure out what works and what doesn’t, and a way for everyone to get involved in improving whatever it is you are trying to improve.
Metrics that are figured out together have more chance of being the right metrics for the job: teams are great at plugging the gaps in others’ thinking, and creating lively debate that highlights the good or bad in any idea.
So if you want your metrics to get everyone jumping up and down with excitement at the possibility of it all, make your metrics inclusive and focused on learning.
Interested in consultancy on action-centred performance measurement? Or automating performance measures for your business? Send me an e-mail to see if we can help.
So why are metrics considered boring? Why do we not jump up and down in excitement at the possibilities that metrics show us?
The answer is that metrics are often imposed rather than figured out together.
When metrics are worked out in the spirit of learning they become a tool to help improvement, a way to figure out what works and what doesn’t, and a way for everyone to get involved in improving whatever it is you are trying to improve.
Metrics that are figured out together have more chance of being the right metrics for the job: teams are great at plugging the gaps in others’ thinking, and creating lively debate that highlights the good or bad in any idea.
So if you want your metrics to get everyone jumping up and down with excitement at the possibility of it all, make your metrics inclusive and focused on learning.
Interested in consultancy on action-centred performance measurement? Or automating performance measures for your business? Send me an e-mail to see if we can help.
Monday, 1 February 2010
The secret of success
I’m a voracious reader, and am currently enjoying The Snowball by Alice Schroeder. It’s densely packed 800+ pages recount the life of Warren Buffet, the second richest man in the world and a billionaire many times over. I have just reached the part where he meets Bill Gates, the richest man in the world, and they surprise themselves by getting along so well.
In one very telling line, Gates’ father asks the pair what they would attribute their success to. Both answer simply: “focus”.
As advice it has been echoed many times by many people, but coming from arguably the two most successful men of our time it is worth noting. Despite having a strong link with Microsoft I know relatively little about the life of Bill Gates, apart from what I read in Malcolm Gladwell’s insightful and entertaining book Outliers. Buffett, however, is portrayed in some detail by Schoeder, and he clearly has the ability to focus intensely for long periods of time.
Of course, the simple statement “focus” leaves out as much as it includes. Buffett is famous for his razor sharp mind and making dispassionate decisions only after careful analysis. However, both Gates and Buffett started early in their lives on their chosen paths and have never wavered in the pursuit of their goals – they both have the ability to focus for the long term.
Focusing on the task in hand can be done, with a little effort, by young or old, rich or poor, educated or uneducated. You don’t need training or a book to teach you how to do it. It’s very simple, really. But it does need determination and a willingness to forgo other things. Buffett has a computer in his office, but it’s not on his desk. When flying he buries himself in reading, rather than chatting to his travel companions. To Buffett these may seem obviously good uses of time, but they make blunt lessons for the rest of us.
In one very telling line, Gates’ father asks the pair what they would attribute their success to. Both answer simply: “focus”.
As advice it has been echoed many times by many people, but coming from arguably the two most successful men of our time it is worth noting. Despite having a strong link with Microsoft I know relatively little about the life of Bill Gates, apart from what I read in Malcolm Gladwell’s insightful and entertaining book Outliers. Buffett, however, is portrayed in some detail by Schoeder, and he clearly has the ability to focus intensely for long periods of time.
Of course, the simple statement “focus” leaves out as much as it includes. Buffett is famous for his razor sharp mind and making dispassionate decisions only after careful analysis. However, both Gates and Buffett started early in their lives on their chosen paths and have never wavered in the pursuit of their goals – they both have the ability to focus for the long term.
Focusing on the task in hand can be done, with a little effort, by young or old, rich or poor, educated or uneducated. You don’t need training or a book to teach you how to do it. It’s very simple, really. But it does need determination and a willingness to forgo other things. Buffett has a computer in his office, but it’s not on his desk. When flying he buries himself in reading, rather than chatting to his travel companions. To Buffett these may seem obviously good uses of time, but they make blunt lessons for the rest of us.
Thursday, 28 January 2010
Why performance measurement is worth the bother
Have you ever set out to do something badly? Ever carefully planned to fail? At one time or another, most of us have monumentally screwed up. By accident, though, not design.
We normally try to make a success of our work, projects, and relationships. Most of our planning efforts go into things we want to succeed at; most of our thought goes into what we want, rather than what we don’t want.
Yet when things go wrong, it’s normally because we haven’t paid enough attention. We didn’t bother to think through what we were aiming for, or to put plans in place to meet our objectives. Stuff goes wrong because we couldn’t be bothered to give it the time and trouble it deserved – whether it is a work project, a committee, a personal relationship or a personal goal. How many New Year resolutions were made and then forgotten just as quickly?
Of course not everything is worth the bother of doing well. Sometimes we try to do too much and have to let things go. But projects or relationships that are important to us need time and attention, and are worth the bother - which is where performance measurement comes in.
Measuring and tracking performance, and learning when things go off course, is time consuming. But it means that those projects go well. Those projects get the attention they need. Performance measurement and improvement isn’t a freebie – it takes a little time and a little effort but is well worth the bother. At least it is for those things that we want, or need to get right.
We normally try to make a success of our work, projects, and relationships. Most of our planning efforts go into things we want to succeed at; most of our thought goes into what we want, rather than what we don’t want.
Yet when things go wrong, it’s normally because we haven’t paid enough attention. We didn’t bother to think through what we were aiming for, or to put plans in place to meet our objectives. Stuff goes wrong because we couldn’t be bothered to give it the time and trouble it deserved – whether it is a work project, a committee, a personal relationship or a personal goal. How many New Year resolutions were made and then forgotten just as quickly?
Of course not everything is worth the bother of doing well. Sometimes we try to do too much and have to let things go. But projects or relationships that are important to us need time and attention, and are worth the bother - which is where performance measurement comes in.
Measuring and tracking performance, and learning when things go off course, is time consuming. But it means that those projects go well. Those projects get the attention they need. Performance measurement and improvement isn’t a freebie – it takes a little time and a little effort but is well worth the bother. At least it is for those things that we want, or need to get right.
Wednesday, 27 January 2010
How focused are you?
Stop a moment to consider what you are working on. Look at your work and take a few minutes to consider:
Being super-motivated to achieve a goal requires a good plan, broken down into do-able tasks that move you closer and closer to what you want. Your plan enables you to figure out, in advance, what needs to be done and by when so you can always be ahead of your deadlines. By making your work measurable and quantifiable, you can monitor your progress and know whether you are on track.
Being super-focused on an activity is a wonderful thing, and when a whole team is focused to achieve something important work can be truly fulfilling. Metrics and data help you keep focused on what is important, and ensure you stay on track with your most important objectives.
- Is what you are working on brining you closer to your goals?
- Is it in your plan?
- Are you confident that what you are doing is the right thing to be doing right now?
- Are you able to measure how well you are doing with the task?
Being super-motivated to achieve a goal requires a good plan, broken down into do-able tasks that move you closer and closer to what you want. Your plan enables you to figure out, in advance, what needs to be done and by when so you can always be ahead of your deadlines. By making your work measurable and quantifiable, you can monitor your progress and know whether you are on track.
Being super-focused on an activity is a wonderful thing, and when a whole team is focused to achieve something important work can be truly fulfilling. Metrics and data help you keep focused on what is important, and ensure you stay on track with your most important objectives.
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