The Pursuit of WOW/Peters 57-64

62 Robert Fulghum/"All I really need to know I learned in Kindergarten" and suggests our business enterprises might run more effectively if we took a regular afternoon break for cookies and milk.

64 The new three Rs...Reputation, Resume, and Rolodex.

Today you are as good as those who swear publicly by your work (Reputation), the skills and results you can confidently and concisely brag about (Resume), and the number of contacts you maintain in your professional sphere of interest. (Rolodex)

GOOD TO GREAT/COLLINS 112-114

114 It took about four years on average for the gtg companies to clarify their Hedgehog Concept.

Hedgehog Concept is an inherently iterative process, not an event.

The essence of the process is to get the right people engaged in vigorous dialogue and debate, infused with the brutal facts and guided by questions formed by the three circles. Do we really understand what we can be the best in the world at, as distinct from what we can just be successful at? Do we really understand the drivers in our economic engine, including our economic denominator.

Mechanism for moving the process:
Ask questions (Guided by the three circles), Dialogue and debate guided by the three circles, Executive Decision (Guided by the three circles), Autopsies and Analysis, (Guided by the three circles)

Up Your Cash Flow / Goldstein 46-47

47 A budget is a living document which changes as conditions change.

Make certain that the salary you have established for yourself and the profits are adequate. It makes no sense to work for peanuts. Making a reasonable salary and a reasonable profit is why you're in business.

Controlling expenses means you must design meaningful financial statements, compare actual against anticipated costs, manage the exception rather that the rule, and ask appropriate questions to get sufficient information to make your business decisions.

Intellectual Capital/Stewart 155-157

157 To build customer capital, share-of-customer is a better strategy than share-of-market. Get your best customers to give you more of their business.

The technology of mass customization and flexible manufacturing isn't an issue. It's there.

Customer capital is wealth that's accumulated when the producer and the customers don't wrestle over surplus they have created together (cost saving, for example), but agree tacitly or openly to own it together.

The Pursuit of WOW/Peters 51-57

55 The customer comes second. ...if you genuinely want to put customers first, you must put employees more first.

56 As the marketplace becomes more and more demanding, the pace more and more relentless, it becomes especially important to bolster the renewal process. suggestions...
Take a serious daily break.
Do something different
Call "time-out"
Change the scenery
Put on a show
Curl up with a good book
Do some spring cleaning
Head for spring training
Celebrate

57 Equilibrium is death...Seek persistent dis-equilibrium

GOOD TO GREAT/COLLINS 111-112

112 By focusing on its simple, elegant conception--and not just focusing on "growth"--Fannie Mae grew revenues nearly threefold from its transition year in 1984 through 1996.

The Fannie Mae versus Great Western case highlights an essential point: Growth is not a Hedgehog Concept. Rather, if you have the right Hedgehog Concept and make decisions relentlessly consistent with it, you will create such momentum that your main problem will not be how to grow, but how not to grow too fast.

Up Your Cash Flow / Goldstein 33-46

46 You now have the best tool available for managing your business and controlling expenses. On a monthly basis, compare the operations of your company with the budget on a line-by-line basis.

Now you can avoid being a crisis manager; you can confine your management activities to exceptions, items that are significantly different from the budget.

Intellectual Capital/Stewart 153-155

155 As information and the economic power it conveys move downstream, it is vital that businesses manage customer relationships in new ways. They must invest in their customers, just as they do in their people and structures. Customer capital is a lot like human capital: you cannot own customer, any more than you can own people. But just as individuals but also to create knowledge assets for the company as a whole, so a company and its customers can grow intellectual capital that is their joint and several property. Make no mistake: These are real investments made in the expectation of a return. If you make them wisely, they entitle you to one, just as the right investment in human capital produce value that belongs to shareholders as well as employees. There's a world of investment opportunity.

The Pursuit of WOW/Peters 50-51

51 Work instead on developing friends, turning people who agree with you (a little bit or lot) into passionate and adherents. That is, surround your enemies with your friends.

Head-on fights are stupid.

The simple truth is (and I've been found wanting on this more often than not): A single, four-minute phone call (240 seconds) right now may save you a $2 mullion lawsuit 18 months down the line. (Hint: Ignore your lawyers when they tell you not to make the call).

GOOD TO GREAT/COLLINS 109-111

111 For the comparison companies, the exact same world that had become so simple and clear to the gtg companies remained complex and shrouded in mist. Why? For two reasons, First, the comparison companies never asked the right questions, the questions prompted by the three circles. Second, they set their goals and strategies more from bravado than from understanding.

In contrast, not one of the gtg companies focused obsessively on growth. Yet they created sustained, profitable growth far greater than the comparison companies that made growth their mantra.

Up Your Cash Flow / Goldstein 31-33

33 The secret of effective budget preparation is to use a little effort as possible.

If this your first attempt at budget preparation, don't get yourself involved in being too precise. Concentrate on reasonableness and general ideas. Complex budget preparation can come at a later date.

Step 1 - Sales Forecast

Ideally, you should confer with customers, sales managers and/or representatives.

Here are two methods to help you predict the year's sales.

Alternative 1: Take the previous year's sales dollar volume and add to it the current year's expected price increases and anticipated volume increases. This may be referred to as a reasonable guess.

Alternative 2: A more precise method to compute sales dollar volume is to begin with units of product to be sold during the year, then convert units sold to a dollar value.

Step 2 - Sales: Month-by-Month Analysis

Once you have determined the dollar amount to be used for your expected sales, you must then project how the sales will be produced on a month-by-month basis.

Alternative 1: Predict each month's sales and use the results.

Alternative 2: Assume that the relationship of each month's sales to the year's total sales will be the same each year.

Review the prior year or past years' sales, month-by-month, to determine the relationship of each month's sales in your budget to the annual sales.

Step 3 - Cost of Goods Sold:..how much will you pay for what you sell.

Alternative 1: The Percentage Method

Therefore, if you have a variance between the actual percent of cost of goods sold compared to the estimated percent used in the budget, pinpointing the reason for the variance can be quite difficult.

Only when the actual is computed can meaningful comparisons between actual and budgeted cost of goods sold take place.

Alternative 2: For a more precise method of determining your cost of goods sold budget, begin with the number of units of a particular product that you anticipate selling and price the units to be sold.

Step 4 Estimate Expenses.

Intellectual Capital/Stewart 145-153

149 It is a principle of managing intellectual capital that when information is power, power flows downstream toward the customer.

153 A value chain, recall, shows how a product or service moves from first seller to end users, from raw material to goods on the shelf. Value is--or ought to be--added to each stage. The idea is to add as much value as possible at as little cost as possible, and to capture that value in your markup.

An alert manager can look for information everywhere in the value chain, and put it wherever it has the biggest return. Therefore managers have to ask three question of the value chain: What information drives the business? Who has it? To whom is it worth most?

The Pursuit of WOW/Peters 47-50

48 It is not wise to leap a chasm in two bounds. He leaped his in one...

49 The mushy compromise could be a mistake.

50 Take the rotten little assignments in the boondocks that no one wants. Then do it well. Do it very, very well. Innovate, create, make your mark

GOOD TO GREAT/COLLINS 108-109

109 But throughout the gtg companies, passion becomes a key part of the Hedgehog Concept. You can't manufacture passion or "motivate" people to feel passionate. You can only discover what ignites your passion and the passions of those around you.

The gtg companies did not say, "Okay, folks, let's get passionate about what we do." Sensibly, they went the other way entirely: We should only do those things that we can get passionate about. Kimberly-Clark executives made the shift to paper-based consumer products in large part because they could get more passionate about them. As one executive put it, the traditional paper products are okay, "but they just don't have the charisma of a diaper."

Up Your Cash Flow / Goldstein 30-31

31 You must not only prepare a budget to chart your progress, you must budget a profit. (makes no sense to budget losses)

Even nonprofit organizations budget thier operations to break even, and they, too, need to budget thier anticipated expenses to avoid any embarrassing cash short-fall.

If profits is the name of your game--and I urge you to behave as though it is-- you must make reasonable projections for the profit you expect to make.

3 Different Kind of Budgets
The Pie in the Sky Budget
The I hope and pray to God I make it Budget
The I hope and pray to God I never use it Budget: This is the last ditch budget that will assist you in surviving if you don't reach expected results.

I firmly recommend a survival budget because most people operating a small business generally don't react to change and economic conditions quickly enough.

The key triggering mechanism from going from a realistic budget to the survival budget is a sudden steady decline in sales. When things change, your best friend will be your computer. It is designed to allow you to change figures and re-run your company budgets at different levels of, let's say, sales. Thus, if your sales are in decline, you can project the decline for a sustained period of time and, in a very few minutes, have your projected results, This will give you an immediate view of the future and allow for a quick response to changing times.