If you want to be recognized as an employee who positively contributes to your organization, one of the things you need to understand about your company is the basic financial metrics that drive it. But, that is only one reason to familiarize yourself with the finances.
By understanding the financial metrics that drive your company, you will have better insight into the reason decisions get made the way they do and potentially even be better able to look into the future and anticipate change that may be coming.
To some extent a company’s culture is driven by the finances that underlay the business. For example, does your company make its revenue by selling something that is relatively low priced to many, many people? Or, does your company sell something relatively high priced and rely on only a few sales per year?
In the first case, you have something like Walmart. Millions of small transactions per year to millions of different customers each year. Compare that to something like an architecture firm that specializes in building airports. High price tag, and I imagine only 1 or 2 customers per year even come available.
All of the underlying decisions, strategies, and processes for these two organizations stem from how they make their revenue. So, if you want to understand your company better, you need to understand where the revenue comes from.
This applies to the cost side of your business as well. What makes up the cost structure of your business? Do you have costs associated with raw materials? How volatile are the costs of those materials? Or, are the majority of the costs related to labor? For example, software companies and professional services organizations have very little costs outside of the people who work there. If you work for an accounting firm and revenue decreases by 25%, the only real way to get savings to offset the lost of revenue is by letting people go.
The last thing I want cover in this episode is margin. Margin is defined as revenue minus costs. You can think of it as profit.
Understanding the margin that your company achieves will also help you better understand the drivers of your business. There isn’t 1 answer about what a good margin is. For example, grocery stores operate on a 1-2% margin, and that is considered good. Professional Services organizations operate on a 30% (ish) percent margin.
By understanding the level of margin, you better understand the size of the tightrope your leadership team is walking when they make financial decisions.
Investigate your company’s financials. Get familiar with the drivers of your revenue and costs. Understand the landscape that makes up the financial health of your company. Understand how it impacts you. Understand how it impacts your leadership team and the decisions they are faced with.
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Strategy is something that is traditionally left to the C-Suite or other executives. This is a podcast for those who are early in their career or are not interested in leadership positions, so you may think that strategy isn’t important for you to understand. But – you are the CEO of your career, so you do need to understand it. And, one of the things that you should think about is whether or not your company has a strategy that will make it viable in the long run.
What I want to do in this episode is give you another criterion to consider about whether the job you have or are looking at taking in the future is a good fit for you – it is called the inflection point.
The inflection point is a point in the future where the fundamentals of the business are going to change.
Meaning, everything the current business is built on becomes obsolete and a whole new set of rules apply.
A good strategy will
You want to work for a company that gets this.
In addition, you, as an employee, should be able to recognize and accept change that may come if your company is in the middle of executing a strategy to change the fundamentals of the business. Prepare yourself for changes that may come by assessing:
Stakeholder analysis is a good tool to have in your tool belt because it can be used to solve a lot of different problems. Stakeholder analysis is the process of identifying your stakeholders and analyzing them to understand their unique position.
The value of this tool is that it walks you through the process of identifying your stakeholders and their positions in order to make informed decisions. It helps you open your eyes to the different actors in the play and forces you to think about each one as a separate, unique person.
Who are stakeholders?
For any given situation, stakeholders are anyone who has a vested interest, or a stake, in your process.
When you want to get something done, you need to have your stakeholders onboard. In order to do that, you need to understand who they are and how you can best influence them. To do that, you should understand:
If you’d like to get a free Stakeholder Analysis Map, you can sign up for our newsletter, and we’ll give you access to it, and all of our other tools.
Being successful in corporate America means being good at teamwork. You aren’t going to be able to work effectively without basic teamwork skills.
Teamwork is something that you never master, so today, we are going to cover 5 things you can do to improve teamwork.
To new ideas, perspectives, people. When a team is working well, it is because of the openness of the team members to bring their ideas to the table without worrying about any negative consequences.
Everyone on the team needs to be transparent. This is tricky because some people, by nature, are not comfortable with transparency.
Teams are transparent when they say what they mean, when they listen to what others have to say, and when they don’t gossip.
Sometimes the mission gets lost because each department has their own objectives. But, every team in a company should be supporting the overall mission of the company. Great teams remember this.
Many companies fall into the trap that they go to the same people over-and-over. You should purposefully include people from adjacent departments to ensure you are getting different perspectives.
Good teams have a culture of accountability. They build into their framework tools that help with accountability because they recognize that it isn’t everybody’s strength.
Getting ready to leave for a vacation, and coming back to work after vacation are usually very stressful. Sometimes you feel like you need a vacation after your vacation just to catch up. In this episode, we cover some tips for how to productively manage the time leading up to your vacation and the day you return from vacation.
The process starts 2 weeks before your schedule vacation:
1. Add an out of office notification to your signature. This is going to alert people to the fact that you are going to be out. It will nudge them to take action on something that they might need before you leave.
2. Review your calendar for the time you are away. Make a list of any deliverables that you need to prepare during your absence.
3. Block time on your calendar over the next 2 weeks to prepare everything on your list. For example, if you have a meeting where you are responsible for preparing and presenting a slide, you would block time on your calendar to both prepare the slide and make arrangements for someone else to present the slide at the meeting. Learn more about Time Blocking from Episode 10.
4. Block an Inservice Day, or half day for the day before you leave and the day your return. An inservice day is when you block your calendar as if you are out of the office, but you are actually working. It gives you the time and space you need to catch up because people think you are still out.
5. If you have the type of job where someone will be covering for you while you are out of office, block time on the calendar for a meeting with them to manage the transition. You should block time for before you leave and when you return.
One week before you leave, you will start to:
1. Say no to any new request that comes your way – don’t take on more work when you know you have a hard stop in advance of your vacation.
2. Be extra diligent about your priorities. You are going to go into hyper-vigilant mode. If it isn’t absolutely necessary, it can wait.
Some other tips:
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