Running a business (numbers)

If a person does not know the numbers in their business, they do not know their business.

Most consultants have never met a successful business person, who does not know the numbers of their business.

Numbers do not lie, which is often why people do not want to look at them because they will say the truth which can be bad news.

Liars, cheats and failures will also not want to discuss their numbers in a business as they also reveal the truth of what they are.

Key performance indicators

Key performance indicators can be very revealing.


How many sales a salesperson got that month.

How many sales a salesperson per hour they worker that month.

The average length of time a customer will stay per account manager.

The gross profit of a product.

It is possible to manage very large companies, by just seeing who is doing well and who is doing badly from the numbers.  Just like and see which football team is good and which is bad, from their goal scores and matches.

Many people do not like this as it shows their failure or mediocrity.

Question everything to find out more

When find out a number, then ask questions.

Then research the answer to that question using numbers.

Then will find out new revealing numbers.

Eg.  How many purchased items returned to company. Then may want to ask how many  returns by the person that made it, product line etc.

Variance reporting

Variance analysis is a useful way to find things out.

Normally 20% of people are great, 60% okay and 20% of rubbish.  The bottom 20% do more harm than good and the organisation would be better off without them.

The top 20% show how it should be done and what is possible.
So look how well the top 20% are doing. Then everyone else is either less good, lying, or just being lazy doing the least they can get away with.

Can go further and look at the top 5%, 1% etc.

The big thing though is comparing the different numbers from different people, units, divisions, etc.

Thesw variants can be used for customers, suppliers, products, people etc.

Also look of variations over time, location, size etc to see if a change over time somewhere shows something has gone wrong.

Leadership (verbal communication)

Being a leader

A dog can be controlled with tone of voice.

High tone is telling well done.

Low tone is strict discipline.

Human beings react in the same way.

In a crisis

If there is a problem or crisis, speak slowly as then have authority.  The person will have this authority,  as are speaking slowly, so people can understand and carry out the order.  

Speaking slowly, slows things down so people can act correctly.

If shout at people when there is a crisis, it is like pouring petrol on the fire, the people get more anxious and it gets worse.

The problem is if the person panics they speak faster and they shout. Then they increase disconnect between themselves and those they are leading.

So in a crisis to ensure people listen to you, speak slowly and in a low tone.  Also if there is time ask people if they are okay then they will feel part of it. 

 Unless it is a crisis where there are seconds, then need people to just do it.  This is because the situation can lead to other bigger problems, so has to be resolved quickly.

If someone has a personal problem

If someone has a problem and are sad, then be more sympathetic and speak in a normal human voice, asking if they would like to talk about it.  Then you listen to them.

Must be very careful to use the right time of voice at the right time, or other people will fall apart.


A leader is someone that others follow because they want to.

A manager is someone that tells people what to do.

For example a leader will go up a hill and others will follow them because they choose to.

A manager will tell other people to go up a hill but not do it themselves.
Having people follow a leader because they want to and follow the leader’s example is the most effective.

Most people just want to tell others what to do and not do the unpleasant and difficult tasks needed to set an example.

To be a leader

1, help people all you can. The leader is there to serve and help the people in the organisation. This is also the only way of setting an example, that it is organisation that is positive and creative.

2, Set an example: it does not matter what the leader says it is the example that will cause the effect. The leader can say anything they like, but if they do not set example, nothing will happen.

For example, a leader can tell people to be honest, but if they do not set that example, people will be dishonest.

The leader must have passion and live it for real.

3, Reward and punishment: the leader needs to work out the behaviours they want to happen and reward and punish accordly.

The need to be in balance too much pain assessment they will hate you too little then the bad people take over and all is lost.

If the leader is too generous there is nothing left in the organisation and it goes bankrupt. If not generous enough, then nobody wants to do anything.
How to get people to follow you.

It needs to be the people follow the leader because they like, respect and think he or she is the best person for the job.

People think that the person is the best for them. So a leader must welcome people to come up and ask him questions. He answers them honestly, to the best of his ability. Also being honest about when he does not have the answer.

People will only work for a leader and as a team, when they know the leader truly cares about them.
It must not be because people see that the person has been promoted to that that position, but they do not think the person is worthy of that the position, so is having to gradually do what they told.

So people do what they are told because they have to, or they will be fored, not because they respect him, think he is the best for the job and want to.

The leader needs to have confidence in what are doing, only then will other people have confidence in them too.
People want love and support, people will go along with and go with others in order to get that.

If the leader looks like they are strained, few will follow.


If a person is not confident in themselves, what they are doing and saying, then no one else will either. As a result no one will believe in, or do what the person is saying, so they cannot be effective. Also a person has to be confident to be effective.

If a leader is truly confident in themselves, then other people will be as well.

Also staff will want to do their own thing and even take authority away from the manager. If the manager is confident in themselves and what they are doing, the staff member is less likely to do that.

Other things

A leader takes people with them, so people want to come along. A leader does not boss and tell people what to do.

However in a crisis, someone has to take control as there not time for a discussion, so the leader does tell people what to do. However people should be trained and have practiced what to do in a crisis, so that should rarely happen.

This is because as many crisis situations as possible should have been prepared for and things need to continue even if the leaders is killed.

Difference between a leader and a manager

A leader people want to follow, a manager just tells people what to do.

People do what a manager tells them because for example, in the job they want the salery, or that manager has been put in charge even though people don’t agree with it, but they have to do what they are told.

With a leader people know the leader is good at it as they have seen them actually do it. The leader does it and they follow behind the leader.

So if a mountain needs climbing, the leader climbs the mountain and the other people follow him. Even if it is unpleasant and uncomfortable, the leader will do it if it is something they are asking people to do.

As a result people can see that the leader is the best one for the job, gets on with it and good at it. As a result they will follow.

A manager does not do this, people just do what they are told because the manager tells them what to do it. If there is something unpleasant uncomfortable the manager will not do it, just tell others to.

A leader is with people so that they can talk to them and people can ask them questions. A manager does not, just stays in their office giving out orders.

It is leaders who create great organisations, not managers.


A leader just tells people the direction to go in and they do it. It means the leader needs to spend a little time on the business as staff know the direction to go in and do it.

However a manager does not say this Direction, just the massive micromanagement details of what the person needs to do as they do not know this direction.

The manager has massive amounts of work to do as the staff do are not able to do it all themselves.

The leader is far more effective as staff know what direction to go in and just do it, this also means the manager can delegate and has to use very little of their own time.

Safe and happy

People working in a business want to be safe and happy. It is the job of a leader to make them feel that.

This also has the advantage of enabling them to perform better, because they are in a better environment. The staff can also take risks because they are feeling safe and happy. This is from Simon Sinek.

Why people think they should follow you

People will only want to follow you, if they think that you’re great, perfect, everything in your life is going great and you have the answers.

They think if your life is going well, then that shows you know what you’re doing and what you say must be working and worth listening to.

Of course if there’s something people know is going wrong and they ask you about it then you have to admit to it or they don’t trust you. However don’t lay all your problems on other people and show them, as then they will see you have concrete boots, not trust you and be so interested in what you have to say or do.



A good manager serves staff all that they can, the manager is focused on creating and serving.

The manager also expects their staff to do the same.

It is a bit like how when are nice to other people, they are nice to you.

If a manager is nasty to people, they will want revenge on that manager which includes doing a bad job.

Treat people with love and respect.

Trusting, valuing and believing in people means that they can achieve a lot.

Often when go to a business and receive bad customer service from the staff, it is often because the managers were rude to the staff.

If the manager is nice to a person and they do not want to be nice back, then of course they are not the people should be employed and working with. The idea is that you do all you can for them and they do all they can for you.

This means the person really does do a good job, not that they smile to you sweetly, but are not actually great at the job.

It is all about giving and service to the staff.

The managers who are the best, are just nice to people because it is the right thing, not even expecting anything in return. This creates a real feeling, reality and depth to it all. This is about being nice in every way, including what gives and does, not just about what say to people.


You must be horrified by waste in the businesses, it could be too many people, how work is done, what is purchased etc.

It is best done by seeking the reduction of materials used in producing the finished product and the human effort.

Also inventory is a huge cost of any business where there is stock, so inventory should be seen as bad.

Waste is normally caused by not understanding what the businesses does and how it does it.

Bad performers

Bad performers lower moral, because good performers and those who work hard, see that person doing a bad performance and is getting away with it, so why should they work hard.

This can be people who just do not care, or are just not up to it and should be doing a different job at another place.

Also the best people care about being the places that do the best work, so their morale will be lowered by such behaviour and they may leave for a winning company.

It is even worse for a good person, if they have to continually do more work to sort out the mistakes a bad person has made and management does not recognised this.

It can be a hassle for the manager to get rid of this bad person, also if they are malevolent it can be even harder.

The manager may leave it because they’re getting away with it, but it will cause problems and especially other could staff to leave. It

It must be dealt with immediately and as soon as you do the team will improve.


People must rise because they do a good job, not because they manage to push other people around.

A bully will quickly pollute the culture of an organisation like putting a small drop of red ink in water.

This needs the manager to be strong and get rid of this disease quickly, before it spreads and grows. Some other people will start to copy, or even follow this person, because bullies try to control other people and take over.

So left unchecked the bully will think they can get away with it and others will see that they are correct and follow them. The longer you let them get away with it, the longer you are teaching them that it is okay. Then it grows from being a small problem, to a very big one.

The best people will leave because they want to work in places that are nice to be in, where people get things from good performance and not from bullying others.

These good people can easily get jobs elsewhere because they are good.

The bullies will take over, the business will die, because it will have been destroyed by bad people.

Producing Great Products and Services

Producing great products and services is a great way of motivating staff. Management should help workers do great work with policies and training that help staff create great things that workers can be proud of.

This also helps attract the best staff, because they want to work in the best place that produces the best things, so they can show off what they make.

Good Managers

▪Help people all they can
▪Set an example
▪Give a vision and show the direction to go
▪Reward and punishment
▪Let people get on with it and give them as much freedom as possible so they can create.
▪communicate with staff and be aware what is going on.
▪Give staff information as the transparency gains trust. Also so they know what is really going on in the business. This is so they can be involved and act in accordance with what is really going on in the business.

The biggest one is to set an example, the effect of which over rides everything you may say to them.

Companies that achieve greatness

The Michelin guide looks for:

1st: quality
2nd: originality
3rd: consistency

This blogger advises:
For quality a person needs to spend loads of time doing just one product type and getting better and better at their trade. They never achieve perfection. Be constantly watchful of how it is produced and consumed, question everything.

For originality a person needs to be true to themselves and not just copy others, that is the only way.

Consistency is to ensure no one gets a bad service, but make sure do not pull down anything that is better than anything that less good to achieve this.

Situations where managers need to be tough

▪the customer will go elsewhere if they are not happy and so there is no confrontation for them. However the manager has to fire staff if they are not good enough and many staff will hate the manager for that.
▪Some staff will try and take over and the manager cannot let people do that by force and not by merit.
▪Staff may think the manager is wrong, but the manager is ultimately in charge, is meant to be the one who knows best and is ultimately responsible. So the manager must do what they believe is right. So the manager must be able to cope with people disagreeing with them. Part of making a choice means some people will disagree with him.

Training and education

A business cannot go anywhere unless it invests in talent. This is not just finding the best people, but also training them.

A business has the best staff because they are the best trained. This means they will have a real feel, ability, knowledge and understanding of the business and how to do it.

If a business just tries to hire staff from other companies that have been trained by other companies, as it does not want to do the training itself and does not train them itself. It always ends up being a business that never really gets big and prospers.

The great companies with worldwide reputations are those that customers really want to go to, are those that have amazing people because they are amazingly trained. An example would be Goldman Sachs, customers want to go to them because their staff are so amazingly trained.

Yes you may stay train staff and they leave, but there are risks and losses with any investment. However if a company wants to be great, it has to do this big investment.

By training staff how to run the business, they may steal the business model and do the same thing elsewhere, but without this training, there will be no business and so nothing to steal.

Other things

The best managers are leaders, not collaborators (although they still put a lot of time and energy into listening to other people).

Do not let things go, others may not want to change and do it, but a good manager does not let these things go to ensure the organisation is the best.

Need to be a good communicator.

Not too much of a strong opinion of themselves and ego, this distances them from their staff and from their customers. Never take yourself too seriously!

Aware of the way if the world today.
Essential to pay attention to detail.

Knowing what is going on in a business

Needs just 5 or less key performance indicators.

Also to measure how a staff member is doing needs 5 or less key performance indicators.

You can get more details which give more information, but then as it is more complicated:
● mistakes creep in
●the people who are meant to use the results cannot work it out, or be bothered to use them.
●people cannot create the reports and develop them as are so complicated

So need to get figures that really are central so are affected by all the other factors around them.

For example:
●How long average customer stays
●How happy customers are
●revenue growth
●bad debt level

Then if can add all the 5 figures into one figure, people can see with one number, how they are doing compared to other times and people.

This is essential to make business a fun game. There is little point playing bowling, if a sheet is in front of the pins cannot see them drop and get a score of how doing. Very hard and boring for a person to drive a car, if cannot see out of screen to see results of what happens when they turn the steering wheel.

Setting an example

A person can do or say whatever they like as a manager.

However if they themselves do the right thing, thers will do the right thing.

If the manager does the wrong thing, then it does not matter what they say, others will do the wrong thing.

When others would like to do the wrong thing, the manager can say what they do to themselves. Their own honest, decent and human example, done with humanity, is more powerful than anything else.

The manager needs to spend some of their time doing the job with the staff. This is so staff see how to do the job, they are not above doing the job, it is all about doing the job.

Stay calm

Stay calm, do not panic

I Know it’s hard sometimes, but when you are calm, the people you are managing feel more secure.

For employed staff, security and job security is a big thing, without this they will leave.

The more insecure staff feel, the more they panic and worry about their plight. Then their time, energy and focus is used up with this and they cannot so proper work with good judgement.

It also means that the person makes rational decisions, having really thought and investigated things. Not just reacted to things without thought or judgement.


Many people when they get promoted get seduced by power, it goes to the heads. They become nasty and bullying. As a result they quickly have to be removed from their positions.

Just like in a prison, the staff under the manager want freedom and not to be controlled.

A manager should use their power over staff as little as possible. If a person has a manager that uses their power over them, it is not nice for the workers.

As a result the staff members will want to leave, also the revenge for them doing this leads to revenge and uses up goodwill with the worker.

The worker knows the manager can sack them, tell them what to do and there is no need to show it off.

As long as the lines have been drawn and the workers have been told as gently as possible from the beginning what the lines are and those lines are enforced if needed, then there is no need to go over it again.

So a manager should point the direction, standards needed, where needed show how it should be done and then leave them alone.

The manager should check the work and what they are doing, but as little as possible. This can often be done more by the manager offering the person a bit of help, doing the job with them, of course the manager will see what is going on at the same time.

This reduces how the manager is taking from the staff member, by checking their work wanting things from them. It makes it more that they are helping the staff member to do things.

Staff want freedom, but also to be protected. So if a manager gives them this, but makes a staff member accountable, then the staff can just get on with it.

Many managers give orders and push their weight around as they want the power.

It is nicer for a staff member if a manager asks them if they can please do something and the staff member has a choice. Of course the staff member knows if they do not do it, there is no job for them, but no need to emphasise what they already know.

Also most decisions do not really matter, so the manager can leave the decisions that do not matter to the staff. The manager just gets involved in the important ones, this means the manager sets the general direction. An example would be a decision for if the uniforms are red or blue, that does not really matter; but if staff may choose something where a customer is going to be ripped off and so the staff are going to choose the wrong choice, that does matter.

A good manager hires the best people, sets the underlying values, direction, industry etc. for a company. Then from those fundamental principles, the staff will know which direction to go in.

Getting the best decisions

A manager needs ‘every brain the game’, staff will see things that you do not. They will be right on things when the manager is wrong.

“Constructively debating tough issues and getting somewhere is only possible when people can speak their minds without fear of punishment.” Andy Grove.

For this to work, it needs to be that people discuss, debate and the idea that is right that wins.

It cannot be acceptable for a person to win an argument with aggression. Be it psychological, emotional, tone of voice etc.

this means that the most strong person wins, not the best idea. It will also put off more quiet people, shyer and those with less good communication skills from saying things and they can have the best ideas.

The head manager listens asks for and listens to all ideas.

The manager needs to really ask staff what they think, be fine with them disagreeing and not just do the idea because it is their own. The manager needs to choose the idea that is the best.

Respects each person’s opinion.

Knows that if everyone thinks the same thing, then each person is not honestly looking at things for themselves, thinking for themselves and saying what they really think.

At the end decides what they think is right.

The head manager admits he could have taken the wrong decision, he could be wrong and the people with the suggestion he currently thinks is wrong, could be right.

To do this the manager has to have the right intentions to just do the right thing and not just glorify themselves. This means not just wanting people to flatter him or her and be able to cope with the friction of people having ideas that are different or honestly thinking that the manager is wrong,

However of course the head manager has to make the final call as to what is done because they are responsible for the outcome.

The best manager listens to all views, but in the end takes responsibility for making the decision once has heard them all.

Ultimately what wins is not what staff think is best, but what the customer will buy and in reality is what will work.

The staff can think it is best to make a bridge out of paper instead of steel, does not mean that is the truth.

Treating like adults

A film director of the 1976 movie Bugsy Malone managed to get the 13 year old actors and actresses to produce the acting quality work of adults. He did this by treating them as adults.

Treat staff as children and they will behave like children.

Treat them like adults and they will behave like adults. If they cannot do that then they should not be employed by yourself.

It needs to be that staff are expected to take responsibility which is of course the adult thing to do. If the manager does not do this, then the staff will not and so will be behaving like children.


Need to hire the people who perform best and are the most honest.

Need to get rid of people who do not work.

This must be totally separate to friends and family. This is especially a massive issue in businesses with friends and family in.

Need to be impartial to who is nice to you and sucks up to you.

Business is business and needs to be separate to those things.

Only by the best person getting to the top and being employed on merit, will a business be able to succeed.

The customer buys the best product and service and this is what enables the company to produce products and services.

Demonstrating power and authority

Staff staff know that you can sack them, they know you are the manager.

Showing this off with status symbols, bossing them around and so on may lift you up, but also makes them feel small.

So just being nice to people gets the best results and not just showing off and demonstrating that you are the boss.

There are managers who are weak and ineffective, because when someone does something wrong, they do not do anything about it such as disciplining the staff member or sacking them if needed. However this is about doing the right thing at the right time, not about being a nasty manager to people.

Getting the best people

In reality the businesses that do best of those with the best people, management is actually a secondary thing in just to make sure those people have not gone off the path.

The aim is to get the best people. Also those are people that also really want to do the work and so do not have to manage them.

It is a bit like in golf, how it needs the best player to win. If the person is not the best player, no systems or processes can change this.

Then once have someone really great, better than yourself. Should just get let them get on with it as otherwise you were getting in the way.

The only way to hire, is to find people better than yourself. If you are in a company meeting and are the smartest person in the room, then the company is in trouble.

As a manager, need to be that everybody else you hire in the team, is smarter than you.

The company only grows by each person having someone better than themselves

If each time a person hires someone else, hires someone less good than themselves as otherwise they feel threatened. The company shrinks in its capability each time it hires someone. Until the company is useless.

Steve Jobs said that A grade people, hire other A grade people.

B grade people, hire C grade people.

C grade people, hire C grade people.

As a result have to make sure only hire A grade people.

If a manager has useless people, they will be running around trying to sort out their mistakes. They deserve to be running around with everything falling apart, as they hide rubbish people.

The great manager has great people, so there is nothing left for them to do. These people are doing a better job than they can do.

It is very hard to find these people, they are about 1% of all workers. It is like how there arre many footballers in the world, but only a few of the winners. Your job is to find the best golfer of footballer in the world.

So manager needs to be traveling the world finding the best people and this is the biggest and most important use of their time. Just finding talent.

Most people want to do as little work as possible, so just finding people that actually want to work and create is hard.

High standards

A manager needs to set standards of being the best.

The manager needs to focus on the customer and giving them insanely great products and services.

This is what is the target that make staff focus on and be measured by.

In communications, communicate the customer. Most staff will just look at their own conditions and what they want, not on the customers.

On average staff will do as little as possible, so have to set the bar very high, So staff get up to that level, or have to leave.

So if staff produce something that is not insanely great and the winner for customers, the manager has to communicate this to them, that sadly it is not good enough.

This needs to be done nicely, but one of the biggest barriers stopping in manager from doing this, is wanting to be liked.

This is normally caused by the manager’s insecurity, wanting to be friends with people he or she works with, get love from them, or the biggest of all is vanity.

Vanity means that he or she wants people they manage, to think he is great and be loved by them.

People managers often think it’s because they care about the staff and want them to feel good, sadly it is often just vanity.

A company becomes a great place to work, that people want to work at because it produces great things. This is what attracts the A grade people to want to work there.

A grade people care about what is produced and created, so producing anything less than A grade means the company is not going to attract and retain those people.

People who are not A grade, just do not care about these things.

Examples of great managers

Carlos Tavares turned around PSA Group

It has Renault, Peugeot, Citroen and then took over Opal car company, from them having massive loss to the best profits in the industry.

He cut about half the number of models, by cutting the under performing ones.

Cut the many car platforms down to two.

Move the head office from the centre of Paris to 8 miles out into the suburbs to cut costs.

Got workers on side by saying it was not that they were not working hard enough, they working really hard. Went up the body shop manager and asked him how he is adding value and what is return on investment is. The body shop manager had no idea, but that’s how they got back on form.

Told the staff that they had to get back into the race and every day they are competing.

Unions appreciated they had to make job cuts from this, but losing money and there’s no other way to stay open.

Staff got a massive bonus when business doing better, so was no need for Union to do anything.

Different distinct car models from different brands going down same production line, one after the other.

Each team member has to go the extra mile.