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Written and recorded by Mac Mackay, DAW Ltd.
Hello. Welcome to you. Listening online to this datable program management calls stage to a new version that we have created very recently for you. My name is Mack Mukai on I worked for the marketing on training Consultancy Dear, have you limited and I head up the division looking after legal sector. The eight of you know, my backgrounds in marketing and in management on we've created this program to give you mawr off the CPD for those of you looking to develop your experience both in managing your own firm, managing a department on more senior roles within the organization on programs made up off to parts, really. One is this series of films which you can watch in your own time, your own space on your own particular device and you can stop it. And I will invite you to do so from time to time to refer to some elements off the workbook. And I've created a workbook off some 60 or so pages for you to explore some of the areas in a little bit more detail. So I hope you'll engage with this on. Get a lot of useful things from it. Just have a look what we're going to be able to achieve. So by the end of this program, there's a number things you can do from a management point of view. You can manage your business from a leadership, your firm or your department. Whatever situation you might be a practice manager or senior receptions, whatever your situation might be to look at your role as a leader within that organization, then we need to look at how we can manage the economics elements off the business, the finances. This isn't to train you as an accountant, not an accountant. On the marketing on management guy on, I do have to deal with numbers. I've been running D A W for 25 years. Now I have to get a handle on what the accountants are doing. But as I will probably repeat, sometimes through this you need to get your own accountant. But at least you know what he or she is doing so managing as a leader, managing finances but then managing operations more efficiently and also mawr effectively. And we look at efficiency and effectiveness in the role off the operational part of organizing business, the business world succeed without managing marketing more effectively to get clients coming to you might have a quick look at Web pages as well social media and so on. I have a diploma in digital marketing. Post Grad Diploma recently attained Andi I developed, despite my clear age in some ideas, help you think through what your Web pages doing on none of the above will be achieved without managing people. So we will look at managing staff with MAWR engagement, and I think that's one of the very crucial parts off that. So without further ado, let's get into content and start looking at the first part of that. How do you manage when you lead a group of people? We need to put management in context. We need to understand what's meant by leadership on something made for me. That I think very recent, very useful is getting to your Why, on that really can make quite a different perspective on the business now. I don't know what your situation is, but certainly from my point of view, whenever I'm looking at the business, the organization, it is very difficult to change people after they've been engaged. But it's very helpful to start in the right way. So start right matters don't go wrong. In the end, they go wrong at the beginning, like wires with your staff. So although you may not be recruiting anytime soon, it is worth thinking about a number of things when you are in a situation to bring somebody into your department, transfer another area, move into a more senior role and start right, of course, is the name of a brand for Children's shoes. So what? All those first steps? Well, let's look at what we mean by these words we've used Manager Leader mentioned those were ready or whether they will about well, your role may be different levels in the firm. If you're in a senior position heading up the department, you are a leader off that department. If you head up the firm, your partner, then naturally enough, you're heading up part off the organization as well. You're managing what's going on. Well, there's a subtle difference between these two on Duh. It would be interesting to think what your definition of these things are and how they differ from the word supervision with data log. We've run the legal aid Agency Supervisors program, looking very much hands on supervising people, not the legal aspects of the job, but all the other parts of it, managing people, briefing people and so forth. And there's a a lot of useful ideas there, some of which you repeated the end of this program, but in a little bit more detail. Then we have on the supervisors program. But there's other things in that program that you may find really helpful. So supervision, management, leadership. What do they have all about? Well, I am no, a Latin scholar, but they do. Each word have a Latin derivation on leadership comes from the Latin, which means doctors to find the path so that gives a clue about what leadership is about is identify the direction the path to be followed. A management comes from the Latin derivation, meaning to follow the path. So these two very simple terms help clarify what is meant by leading by management. Now, if you are indeed heading up a department rather than the firm overall, you may be a senior associate but not yet partner, for example. Then you will be following the partners guide as leaders and your job is to make sure that your department is heading in the right direction following that path. Well, as you know, if you are a supervisor off other people in the department that maybe older, maybe younger, but less senior than you that supervision that comes from the Latin Cura, meaning to care on, as with, if you were having embedded in hospital needing intensive care than that care goes into the water that what goes home and so on the care changes over time on. That's exactly the same as what happens with supervision. You will supervise more junior people more intensely until they get more able to follow the rides that you're giving them. So this. If you've got a senior member of staff with lots of experience, then clearly it doesn't need to tell you that you don't need to give minute by minute, moment by moment, supervision of something like that. But if you have more, junior person is very unsure about the way forward. Then you may need to give a lot more supervision. So those help, perhaps to put it into context on this program, is very much about all three in various guises. But it just depends on what your situation is in the firm supervision, management leadership you could always look at. Supervision was being something fairly short term. By that it may be on a daily weekly basis. Monthly refiled reviews or what have you management perhaps take a longer term. How we doing this month? This quarter? Are we on track this year? Leaders are there to identify where the root is on how to take things forward on to see new ways. And, of course, as we find in business and the leader of business for 25 years, I still get pulled into day to day activity. But unless I still keep an eye on the future and take things forward, well, okay, I mentioned about recruiting people. This socialization is induction. If you should be doing this, then this will give you a few ideas. Obviously caveat to this. There are more details in the notes as we go through, and you can pick those up any time you like. But for May I think this this is you know, there's four king areas to look at when you are introducing people to your department thinking about your department and so on so forth. 1st 1 of which is well, how did people behave? How should they behave? Well, we have in data, Lord, on a couple of programs. I've recorded them on ethics, integrity and ethics for professionals. 28 minute program. Looking at ethics, how we assess individuals against that stands behavior. Uh, how you can sit in something. Affirm what it means for recruitment. What it means for the staff. Andi as an employee but also the professionalism talked about stands of behavior as a professional, CPD is a standard off behavior for professionals Are pick that up a T end of this program. So something to think about What? How do you fit in to on organization what is expected from very everyday things, Like sort of behaviors. Expect in terms of day to day coffee breaks, tea, bread, you know? Well, that sort of thing, making other people brew. What have you house hell, that's expected on also the bigger picture things. And of course, some of these are governed by statute. Anti money laundering, compliance and so forth will be at the other end of a very broad spectrum of behaviors. Then, of course, How do we belong to the department? What we do, how do we work? And in that sense of belonging is a very powerful motivating. We'll look at that when we talk about managing stuff later. All but how to get you spell out apart from just for in the office manual how people are expected to belong to the workgroup, anecdotally behave in a particular way. Now on individuals. Job is not on island off itself. It fit in with the rest of department. Or where does this individual persons job fit? Not just in their situation of their career, but then, more broadly, how does it fit with the department out of this department, fit with the firm and so forth on that again to be very important on? Of course, if you're managing people, then how will work be reviewed? How will people know they're doing a good job? No beatings. This week is not a very good indicator or everything's going well. We need to indicate when you have established on how we do reviews on how those are managed and so forth. And this is something I mentioned on the legal aid agency program. We look it out. Brief work on how to review work. Process it afterwards. So there's quite a bit with that. And it may be an annual review that maybe quarterly reviews on CPD is all about reviewing what you've done. As you know, from the IRA's conferencing framework. It's about reflection on reviewing what you need to know in order to deliver proper snack service says quite a bit within that. Once you've established those things and understood what they are, everybody's on the same page of song sheet. Then, of course, like does become a lot easier because the rules are established, then people stepping outside the rules will recognize where the conflicts can occur. Keeping within them makes not so that everybody is switching their brains off and falling, or Thompson sort of behaviors. But they are focused on getting with work and delivering a good client service that you did you look for. Okay, well, that's some of the tactics off induction of people and subdivision on the day to day basis. Well, what about leadership? Well, that's something that I'd really like to explore in a little bit more detail now, so the complete leader on the world that I recognize that comes up quite a lot is flexibility, balance keeping everything. You've got so much to do as a manager leader of business stage to resolve about keeping alive the things rather like those spending plates on sticks in the musical comedy acts, keeping those plates spinning, you've got to keep those plates spinning on, keep them all function. And if you're juggling all these priorities, not a drop a ball. So for for balance and the flexibility to maintain a low these various things, keeping the mania is very important. But of course I have to be fairly cautious about which leader I choose to put up on screen. Teoh illustrate leadership, but what I do know is well been working with the Center for Leadership Studies in Europe. They were looking at a model for lead ship, and this is what I have to share with you again. You've got the information in the notes, but let me build it for you and then demonstrate how you can use it practically in house in your firm to explore how the whole thing can be put together. The model is presented as a steering wheel, and like any wheel, you should be at the center of the hub that's you in control, right? Center on the spokes are very, very important. One of the spokes is that leaders know where they're going. Entrepreneurs have an idea. Have an image, have a dream on having some idea about where they going? So remember what I said about leadership. Leadership is about direction. Leadership is about finding the path. So what is your business gonna look like? If you're opening a new entity? What's it gonna look like in maybe next year? Three years, 36 months, 45 years from now? So can you paint a picture in words about that business that you're creating? If you're head of the department, then what's the what's the direction that departments headed with? What is it doing? What's its contribution to the firm? Overall, can you create a picture of that? Are you expanding? You can consolidating what you've got. Let's have that picture so that people can follow where they're going and see where terrible cliche they're. Part of the jigsaw fits into the bigger picture, so there's no where they're going How do you know you're getting there? So, of course we need to have some measures in place. Are we getting on our way? On the path we're staying on the path on? What are those numbers? Obviously they're going to be financial numbers. They could be time numbers. They're going to be clients. They're going to be caseload and so on and so forth. But there's other things that we need to look at to whether or not we're living up to that. A model for the business, that sense of purpose that we've got. Are we actually getting there? So the second spoke to the wheel, but the third spoke, which is very important to is How are we going to do it The way we do things around here. What is the culture off the department? The firm you're creating? What's it going to be? Is it a collaborative? One is, it's Keep your head down, do the numbers type thing. What is it? What are those words you would use to describe now? I'm no great his mechanic, but what I do know is the wheel has got a broken spoke on a wheel has got too much weight in one area. It needs balancing that weren't balance again. You get your tires changed on your car. They are balanced together a little on what this is all about. Is that you as a leader off your entity in the department of the firm, you keep things in balance. We're not banging on the norm about vision all the time, not banging on about measures. All that I'm not banging on about ratifying ways of workings of society, that we've created a society with a small s. We keep these things in balance. And when you do, what's interesting is the links. Because that sense of purpose that why you do what you do related to whether or not your success in doing it is the results, the results means different things for different people. Hold on to the thought of the balanced scorecard will have a look at that some way through this program. What are the results? What's results for Star Force results for clients? What's results for firms results with stakeholders. What's the result for those investing money in the business? Results of different things for different people on what gets measured gets done on bond. On the other hand, the way we do things around here are those systems. You have hard systems of case management systems, time recording systems, financial systems, I t systems, car relationship management systems. They could be hard systems thinking, process driven. You got some soft systems. The degree to which support staff looked to help look to solve problems. Look, to save you is a feeling of some time. Those systems need to be the assistance or ingratiating clients, new clients on DSO for building up the brand hard systemsoft systems. And then I think, what is there between a sense of purpose in the way we do It is the passion within the business passion for defending clients interest that give the most vulnerable people in society access to justice. That strong, passionate don't know that from working legally firms across the country. But also there must be a passion for good service, a passion for professionalism or when all those things come together. Then you're driving the business forward. That's what we buy into. That's what people want to join. That's what people to follow. So how do we work this in practice? Well, the next series of slides and they are in the notes will take you through some questions that is worth exploring. When you're dealing with your staff that use this on, it's on page eight off the notes, he said, looking at the screen down here. So let's explore what we mean by that. Well, if I spoke to everyone in your firm, what they have the same view off visual sense of purpose. You know, a number of times I said, What's the purpose of your business on the juniors listers 35 years p. Curious about making money? No, it isn't about providing good service to clients is about providing a good service that builds of reputation, brings clients back or brings their recommendations to you. And it's about hiring people who are committed to that sense of purpose on of by the way we actually make some money out of doing that. So is it shared through the firm? I don't like management speak. Despite being management adviser, the mission, the sense of purpose is expressed clearly on. Are those goals the key performance indicators actually going to reinforce it now? Yes, its financial great, but what other things. What about loyalty of clients? What about loyalty of staff? What about those other things that are important? Worst exploring in a conversation, occasions with your staff on that image that they're on Page seven of the notes is on the wall of the office so that it's a reminder about the way we do things around here, Actually, enough. When we're talking about the way things are done, how would you describe it? Is it common through the firm is understood? Are there things written about codes of conduct I didn't think I needed in a small entity like D aaw to have a code of conduct in forest exploring the Internet is concerned with some junior staff coming in to do so. Data entry and market research had a particular interest on the Internet. I didn't realize I needed that. What about the use of mobile phones in the office and private calls and so forth using the phone for private use? What, All those things now there's sometimes written down in black and white in an office manual, but what about those things? Informally, I did a survey ever staff in a law firm 47 employees and I found five separate teams in this firm in north east London. They have the senior management team, three or four partners. They get himself themselves, and they got together once a month into what was described by the rest of firmas a coven. Then there's the senior Fiona's, who were only waiting for something to die so I could get you get into the partnership or just coasting along, keeping it going. Junior Fiona's were there, waiting till they got certain amount of experience before they moved on, a sort of a revolving door with Virginia feared as paralegals and so on. And then, of course, the senior have been people the i t the accounting bit closer to the coven off partners, but nonetheless look looking at things from a client service point of view. But more from an operational. Let's just keep this thing ship on water point of view. I don't quite know where it's going, and then, of course, you've got the support staff, reception staff and so on and so forth on. But they were a normal under themselves, and they were called support staff, described as an oxymoron. They were staff, but they weren't very supportive. Now have you got a culture like that when you've got 20 or more employees and you want to explore how engaged your people are? Well, this is a place to start. If you want to take to the next level, get in touch because it's so important. That's what we can do to help you improve your business. That's for more 20 plus staff type of businesses. But then, of course, what measures do you have? Do they reflect the overall ethos? Is the business is that information shared? How does it done? We'll look at the numbers in some detail in the next section. Manager Finance and how the numbers presented to a member staff can not be as good as they could. What about other things that are worth measuring, which you need to get the full picture? Yes, you could measure the chuff chart scale of things at the end of a matter when a client has just received their cheque because you've done some litigation for them or just completed the house when you said may, good luck in your new home card or something like that may have good feedback from those who could be bothered to give it to you. But what about applied on staff satisfaction? Engagement again? Very important. Here's and things that you might think about measuring the competence of people in communications team working the creativity, coming up with new ideas. The drive for self motivation that the degree to which people plan and organize themselves the degree to which they managed client interface and expectations. Management skills, the ability to bring people on to develop people, manage their CPD marketing activity needs to be looked at. Work ethic needs to be looked at, so I hope there's a lot in there for you. I hope it's worth exploring in a bit more detail with your firm because that is such a difference for you that could drive the business forward. Remember that steering wheel well, have a look at that and explore some of those questions to find out what's going on and begin to make some changes on along that route on quite an important part, which we're looking at here to finish off this leadership session is to think about what you do in your business on why you do it because if you get to your why you do what you do on us to say that takes a little we run monthly or, more frequently, Supervisor Webinar conversations and these people doing remarkably good work for the most vulnerable in society that why is very, very powerful that effects recruitment that affect staff that affects team. So what do I mean by why? Well, so often, firms start with situation where they said, Okay, this is us. We are conveyances. Let's take that as an everyday example. We're all complaints is that's what we do. We recruit some convincing people because that is what we do. And that's why we like to do it, because we like to do conveyancing. So we start with what you got to Web pages of any law firm. They will tell you what they do, what we don't do. Let's see how they do it in terms of appreciating clients and surf. Now that we're conveyancing on, we recruit some of the best convinces in the world, wanted by some convincing. Well, I might do, but it sounds like a commodity, a problem, little price and see. That's what happens so often have. Look at the notes on pages 9 10 and explore this because what I think makes life more interesting is people don't buy what you do. But they do buy why you do it. Now if we turn that concentric picture around, make it look a bit like this and start with why, then the story comes a little bit different. Okay? You start with my Why we appreciate the movie House is very stressful. And we like you too. Move home on. Be happy with your new situation. That's why we are doing what we're doing. We are there to help you move home. How did we do that? Well, we do have some very pounded people. Sublicense convinces some solicitors to help you with that move on, helping with the stress and strain with that do it efficiently and do it promptly. That is what we do. Would you like us to help you move home now? A little bit more words there, but I've embellished it a bit and put in the context off a situation like that Quite important, because that is much more impactful from a leadership. You see what we do in the a w. Well, why? I like sharing knowledge. I like accumulating information and ideas and sharing it. Why do I want to share it with you? Because we can share in that economic prosperity. You can prosper from sick these ideas. That is what The white How do we do that? Well, we provides resources to data law. What do we do? Oh, have a look at our portfolio and you're more likely to be engaged with that. Then you would be. We've got this course this cause this girl's this goes this course That's not interesting. Anyway, I leave you to think about that. There are three takeaways and although it might be in 634 to know laughing about Big Macs on this one. But there are three very important takeaways for leaders like you taking the marketing business forward. Think about why you do what you do in your own firm. Put that down in one line, and if you could do that, you're well on the way to incorporate the Y into your copy. Why did you do what you do? We are committed to giving people access to justice. That's a really powerful Why I should pay attention to. Then, from there we move to situations where we're not looking for customers because customers know best if it comes to conveyancing. Of course, I bought sold houses over the years and therefore, as a relatively sophisticated user off legal services, I know that the price is very important, and I know I could get it cheaper down the road. Well, that's what customers do. You know, People go by car by kicking the tires and trying to beat you down on price. But what is a client with a client knows that you know best. If you knew everything that was to know about marketing on about management, please come along and tell me because I don't I want to share with you the knowledge I've got. And I hope you feel that I know a little bit more about it than you do. And it's worth exploring the options and ideas that data will have to pass on those ideas to help you the prosperity off your foot. That's what a client is all about. So I hope that's been useful. I hope that's interesting, because once you've got that in place, we can then look at the next stage, which is managing. The numbers give you opportunity to explore not how to do a set of accounts, but how to understand how they put together, what is sensible for the business and each department working. So the best way to do this is to get hold of a couple of sheets from the workbook. If you get into a printer getting printed out, then you can scribble away on Get hands on experience off doing it. And there you can stop the program in the appropriate times for you do a little bit of work on. Then I'll take you through what the calculations are doing and so forth. So again you are in control of the speed with which we run through this. If it was an open program with 17 people looking at May well would get the rate that's appropriate for the 17 people, so you may go through it a bit quicker. Take your time. It's more important you understand what's going on. Worry about your arithmetic per se. So let's have a look at managing finance to go through some off these documents to understand what's going on. So the first thing to think about with finance if we need to understand profit loss. So what is a profit? Well, a profit in financial terms is somebody that I didn't buy. The income less the costs equals. The profits have been like that for 500 years since the Elizabethan period. Profit is the money left after paying the costs trade, So expenses. If you want to make a profit, stop spending money equally. If you're gonna spend money, you need to make sure that you're getting a good return on the capital employed. So let's start off with understandings and costs on. Classify them in an appropriate way. Now these are listed for you in the workbook to understand what's going on there on the bottom of just checking the page for you. The bottom of page 12 and we can get a handle on some of the costs. So at the way in which your organization deals with these, you'll have some costs that are things like professional staff costs. There the cost of the fee owners doing the work. You'll have some variable costs that change with them or work. You do so the more things I put in the post, the more my posted use, the more phone calls I make, the more my phone calls are, the more things I print through my printers than the higher my station. It costs, and they vary with the level of work so fairly straightforward. Indirect costs are parts of the business costs that aren't related directly to the fee earning the engine room, if you will. The the bits that make the money per se they are the overhead costs. There indirect costs and some will be fixed because they fixed for year. You have a indemnity insurance quote, and that's fixed for the year. You have a cost of replacing computers, and there's your budget that is fixed for the time period because profit lost. Paying the cost of trade is taking the costs off the time that the trade was done. So if trade is being done on an annual basis, then you take off the annual costs and you're left with annual profit. You could do it on a monthly basis, quarterly basis, but most often we're doing on an annual basis because the prophet has a distribution element to it, on attacks element to it, depending how your business is structured, so we need to get a handle on it. Okay, Well, um, with that in mind, have a look. Then at the next page in the workbook, that's page 13. You'll see this table on. Stop the film on. Define the costs as you see them in this particular table and you'll see the value of those costs in the middle column. Okay, well, I hope you've been able to do the table. First of all, let's see what the cost are. Well, depending on how you manage the D X, but particularly the postage, the telephones and stationary they vary. More working, do more during its 40,000 year high computing. That's to replace the hardware. Well, there's an indirect cost. Maybe computing is a A software license or something like that. It's not directly related to any given place of the business. It is a fixed cost on its indirect cause. You'll have it for accounting. You have it for case management for all sorts of things. So it's not directly and solely related to the feeling insurance. Well, that's name directing fixed for the period employer liability buildings, insurance, whatever you've got will be fixed year support staff who support the feeling function of direct costs. Of that, we've got maybe four or five people. Their professional staff costs people actually doing the work. That the professional costs is one way of describing them. Marketing costs well, that's fixed as a selling costs, and some firms will separate that out. Rent and rates, of course, is again. A fixed cost for the years in directors is covering everybody in the building, not just the feeling function on. Then the admin staff costs that bottom. There again, that is a direct cost off, running the business and directly related to how the whole thing hangs together. So that's a way of looking at costs. It's well worth exploring how your firm deals with those costs. Is it the same as this? Then there will be variations. Doesn't matter. It's the way you do things so important. But if you're new to this and you get a handle on what's going on, well, haven't got those costs. What I'd like you to do now is to put that into a spreadsheet on That's the table at the bottom of page 13. It looks a bit like this. All right and co turns over a 1,000,000 on. It has income across three departments on that is illustrated there. That's a £1,000,000 income across those three departments, Then put in all those other costs on as we've got in the example shown here. Income fee income, less professional staff costs gives gross profit. Now your firm may put the gross profit at a different level. It doesn't matter. It's convention. What's your convention house? The finance officers, accountants handling it in this illustration. That's where it's put. So then, after all the other expenses have taken off, the bottom line is net profit. So take those numbers from the table we had before and put me to the spreadsheet and then tell me what the net profit of your business is. Does your spreadsheet look something like this? We've got a situation of over a 1,000,000 income 350,000 for professional staff costs, leaving 652 3rd That's gross profit. The other costs listed there as you can see support staff admin stuff, all of those building towards feeling function, plus the variable costs we get those there. Then we get the fixed costs. The building rates, insurance and so forth on selling costs separated out in that particular way, giving a net profit. We see here this 1/3 1 3rd 1/3 rule tends to apply to most businesses. So what am I talking about here? Well, income off a figure one ther is for the professional staff costs. 1/3 is for the other costs on leaving 1/3 for profit. And that's a common, uh, way of describing businesses. So if you've ever wondered why you're expected to bill three times your salary as a round figure there, that's where the figure comes from. Naturally enough today. Conditional fee agreements, fixed fee working has changed it a little bit, but nonetheless, that's still the model that seems to persist and cause Some entities will have higher demands just on the basis of the sort of work you do on the costs of being located where you are, you may have to do for 56 times salary I've met, but that's because officers are based in places that a lot more expensive than others. If you're in a city centre, the office basis and mawr expensive than being the rural area. We are in the centre of England here, dear w, but we're in a rural location on our office. Costs are pretty modest. Okay, So what are we gonna do with this profit and loss account? Well, not a lot, really. This is a set of financial accounts. Why? Because that profit can then go distribution, taxation, and so on, so forth. And if you were a limited company than this document here would be put up onto the company's house website giving a p NL profit sales account for the business. And if you wanna look a day W's going, have a look. But it's not a set of management accounts management accounts is that you can manage the business. This is a a profit loss account for financial purposes and in terms of management, what it does is to say well next year, as this is a year's trading next year, Then if we turn over a 1,000,000 has shown here these sorts of things weaken budget to to have expenditure to still make the same net profit. And yes, you can use it to save where are the costs. Can we limit those costs in any way? Andi, beware off Those organizations that have a death by 1000 cuts by keep cutting here keep cutting their so four 100,000 for support staff. That seems quite high. Maybe get rid of somebody, Uh, and we'll explore the effect of that moment to anyway. That's what we've got. A set of financial accounts shows what's going on. But what I'm really interested in because I'm a manager of my business is that we have income in three departments. Totally. It's making a 1,000,000. But how much comes in from each department, and it's a reasonable question to ask of my accountant. Please tell May what profit is off my three departments. It maybe I've got a a convincing department, private client department, commercial crime department, legal aid, whatever. Let's have a look and see what happens. So we've got three departments, and this is where something very important happens with accounts. Because if you ask an accountant, what is two plus two? What is the correct answer? No. Two plus two is No. Five. The correct answer is, what figure did you have in mind? And that's not just a digging, ribs poking fun at accountants. It's actually quite true because there are different conventions on how the numbers are handled. It's a very, very important question. What is the profitability of the department? So it's bear that in mind from home and turn to the distribution of costs to the various departments. And this is being explained and down at the bottom off page 14 In your notes. We've called different partners in three departments, ABC. Andi, uh, we get the income across each department, so let's have a look at this. How are we now going to allocate the funds to the various departments? Well, the professional staff costs in department B and R 110,000 being an increment off that 350 distributed to the other two. Okay, now I'll support staff. We have one secretary that cost the business salary salary on costs, etcetera, £25,000 she works solely in department. B department be occupies 25% of the office space, so it makes a lot of sense to allocate 25% off the office space insurance, rental rates, computing those things. Two department 25% of as we using 25% of staff, 25% of building, then it makes sense to allocate 25% off the marketing costs Web page and the other social media. Other bits and pieces that going on allocate that on. Absorb. This is the word up here on screen. Absorb those costs in two department. Be So with those figures in mind and those distributions in mind there at the bottom of page 14 then I'd like you to complete this table on the top of page 15. Divide the cost up, which are illustrated here on. What you can see is that the computing insurance, rent and rates because they're all allocated in the same way than instead of dividing up, obtain on 25 45 3 times we most will just group the whole lot. Together. It's £80,000. Guess what 25% of £80,000 are. Yes, you're right. £20,000. So for the computing insurance rental rates, we could allocate 20 £1000 to 25% of the 80 into department. Be So. Have a look, Onda. Uh, what's the allocation? Look like Does your table looked like this? As you can see there, we know the absolute cost off the variable expenses department be spends 12 the other to spend the same amount. 20,000 of set off the 80 computing insurance rental rates allocated, absorbed into development. Be with the equal amounts by the other two. 25% off our secretarial staff. One person she works for department be on the other two departments have some full time, some part time support staff. Professional stuff costs. We know exactly what they are in department B on, then 25% off the marketing costs 25 cents. 20 is 5000 of course, and that's allocated, absorbed into and then the stuff Admin staff. It's 80,000 on will absorb £20,000 into department. Now this is really, really helpful because I want you now to take those numbers and put it into the next spreadsheet at the bottom of page 14 because now we can see numbers down the right hand side. They are exactly as we had before. £1,000,000. Turnover. 1/3 on the professional staff costs, giving 1/3 onto the net profit of the bottom 1/3. 1/3. 1/3 rule seems to apply, but here we've got the income across those three different departments. A, B and C. Then stop film, populate the spreadsheet. Now, before the department A could be a commercial department department. C could be private client on department beat. Look unlikely today that there's individual departments doing legal aid, but that may occur. Of course. Maybe the department B is something more modest. I will to prove it got a lot of wills and will Bank not yet done much probate, but it's doing 175 eso. Let's allocate those costs and see what the gross profit per department is. And indeed, the net profit. Because then, as a manager, I can take some decisions on business. But does your spreadsheet look a bit like this? Well, again, if you want to compete yours, fill it, pulls the film. Andi, I'll explore what the issues are here. Now you don't have to be a wizard, that arithmetic to recognize that minus 12 as gross profit department is a lot less than 171 191 Indy through the attitude departments and indeed, by the time you allocate the one quarter off the marketing costs, the Web pages and other things brushes. What have you? £5000? And then Department B has now returned minus 17. And if you were a partner in department B talking to the partners in the other two departments, Well, what's going on here? Difficult one, isn't it imagined apart, meeting, talking about department? Well, question I have for you is what you going to do. If you're a manager understanding a set of accounts like this, you've got some decisions. That's what management council about management is to take the decisions. And I'm so forth. Well, you might come up with a number of different options. One of the options might be when it's costing you a lot of money to have department be it about time you got rid of it may be acceptable. That is an option. Uh, it may be that that's a that's a penny blood option, I have to say. And I I'm sorry to tell you that's not a very good option, you see, because department be what we don't know about Part B is how recently it was sent up it, since the first year of trading is 1/10 year of training is gonna close anyway. You know, all things moving forward, it tells us nothing about that. We don't know whether the work of department be feeds the other two departments. We don't know whether it's say that something important to brand of all right and co. But we do know that minus 17 is a small number of 1 63 1 83 are big numbers, but therefore the temptation is to drop this one through the floor. It certainly needs to be looked at. Certainly you could think about getting rid of secretary or something like that as soon as you change and I don't have. You have worked in an area where one department has gone, but my cakes completely in the middle of my souffles or gone flat. If that's gonna happen, what's gonna happen to the other two departments? If you should have the night of the long knives close department be? What's that morale effect on the other two departments? You see, the short term knee jerk reaction is three. Effect off the set off rules that we've created. There's a logic to them. 25% of the support staff working department be. Therefore, we will department being will absorb the admin staff, the accounts marking a charge. It's a part time people in those roles fixed costs 25%. 25% went page and so forth. There's a fallacy in this approach to absorb from costing. It's a common approach, but what I'm interested in is not allocating costs to a department on the basis of headcount or on the basis of floor area, but actually to look at things in quite a different play. So what? I'd like you do that again. It just requires you to stop the program a little bit, uh, look a different approach. And that is the approach on this slide here, where we are structuring our spreadsheet a slightly different way. Okay, what do we got here? Well, the information in the notes will tell you on page 15. What's going on? But it's century. We've got the fee income and that hasn't changed. You can see the right hand column of the spreadsheet says we're still making a 1,000,000 professional staff costs of 2/3 leaving us the same profit. But what we're doing this time is we just allocating the costs directly related to the department on looking at the gross profit in a slightly different way before and in a way that we will call contribution margin. In other words, what contribution do we get? So we get income to department miners that costs directly related to doing the work in each department equals a contribution. Because if we take the former example when we close department be, would we make any savings on admin Start? We still need bookkeeping marketing in a job part time people still cost is 80,000. We would still need to have some rent rates, computing and insurance. We may in years to come make a modest change on our insurance costs, but they're fairly modest in the wider scheme of a £1,000,000 business. You wouldn't sub let the office to somebody else confident, challenging all that sort of thing. Of course not. You're still need a Web pages. Still, Nick have marketing activity to bring the business in, So take the same numbers before completely spreadsheet and tell me what the contribution is from each department. Does it look a bit like this. You should take the cost of professional staff and the support staff and then the things they're expending to do the work. What we see is that Department B is contributing 28,000 business. Overall, we're still going tohave £181,000 with costs, but by absorbing them in some way or another into those two departments doesn't make that much sense because there no separate entities. They share space. They share officers. Now I agree that 28,000 is a lot smaller than 231 or indeed 251. But if you had close department, be quite apart from the morale on the staff in departments A and C, you've actually taken away 8.5% of your profit because you wouldn't have made that much savings, if any at all on the other areas represented in blue here, So would you want to get rid of 80% of your profit because department is making a contribution to that Now, what we've done here is a different system called marginal costing. Talk to your finance officers about this talk. What's going on? Look a set of numbers. When you get to see the numbers on, begin to ask questions from the basis of what we've been talking about here. And that's really what I wanted to get to that you could ask smart questions. So with department be on how it's behaving here looking its contribution. But here's something else you could consider. We've got a £1,000,000 worth of turnover, but if you're a commercial department, one department lots and lots of different clients, turn the words the department on the slide here and put it to client client, a client, be clients see and so warm. And would it be therefore, much sense to pick client? See, that's that's very client be into touch. Maybe not because they are getting £28,000 worth of gross margin contribution gross profit on its making a contribution to the business. Overall, that is a very, very powerful tool when you're looking at revenue streams, where they're coming from and whether or not they're worth keeping. So I hope that's quite useful for you. You've been ableto look at the numbers in a slightly different way on get a better handle on what is going on within the business on that marginal costing approach may be something worth exploring. So from there, that's the profit and loss account looked at. Let's uncover the mysteries off a balance sheet.
00:52:12
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Written and recorded by Mac Mackay, DAW Ltd.
So while a profit loss account is the income over a period, uh, on minus the expenses over that period equaling profit loss that is a document showing the trade of your time and very often at the close or business at the end of that month or the end of the quarter. Or more often, of course, the end of the year profit loss of year, then a balance sheet is also produced on the clue is in the title. It's a balance between or liabilities. Those are things that could be drawn from the business because it means it is liable to be paid. Not that it's a concern or something against businesses. Just what is going to be paid from the business and that is always balanced by the assets on. We'll take you through how we put the whole thing together. Let me just explain, first of all, what the components of balance sheet are on. Then we'll take you through the process of actually designing one for your business. So what about cheap? Will show is the speed with which the finances off a business can be turned into cash so you'll have liabilities in other words monies that is owed coming out of business fairly quickly. And remember, this is a snapshot and it changes will demonstrate almost as the day unfolds. But let's just take this in a very simple format. At a given point in the business cycle at year end, it may have some capital set up into the business to has to be built with some current liabilities. I'm short term cash demands on the business paying back capital staff, UH, wages, salary payments there a payment from the business by capital coming out off business service, it is liable to pay wages. You may have some longer term liabilities that you're paying back over a period of time. So if you get a bank loan on the office that I'm talking from, we borrowed a go back alone for that, and we have to pay that off over a period of time. The equity, of course, could be share capital. We have a limited company, doubly limited. We have share capital, and they are owned by myself on my wife as the two directors off the business, and that's equity that's there on the business, make and perform well and produce some profit on until that has taken out of the business that profit figure would pair in. The business is liable to pay the directors profit or different end on the shares or whatever it may be that comes out led. The directors may take directors remuneration as drawings on that will be demonstrated. Their pretty brackets is a a za figure to demonstrate its coming out of the business, and we'll see that the balance sheet and the balance of both things on both sides will grow on contract through trading as well, demonstrating a moment. So these are things that will come out of the business, and it is balanced by the cash in the business Now. This, of course, does call some people a little bit concerned. How can about you have cash on both sides when it's the same amount of cash? Well, because it's a statement of the business showing what is going to come out and where the money sit so you may have some current assets. This means the current is in the speed with which the asset in turn itself into hard cash. It's a natural enough cash sitting in the petty cash tin. If you recorded that, kept that demonstrated their, then that was the most liquid off those assets. You know what it flow. And in my experience, cash doesn't flow on my pocket rather quickly. You may, of course, put cash into the bank that is pretty liquid because I could make payments from that. But naturally enough, I've got drive to the bank and get the money out with my cash card. So it's slightly less liquid and money in my pocket, so it converts from bank to cash. It's still a current asset. Those are flowing around the business now. The data's is an asset because this is work you've done probably owes you the money. And when they paying money that will come into go into the bank, it's a slightly longer flow. This'll program that produced for data law will be invoiced, and then the invoice will be paid on. They pay quite probably. So this work that I'm doing now becomes an asset business because I could turn the work into and some cash so the invoices that haven't yet been cleared will be an asset to the business because cash will come in now. If you were buying stock and that you're gonna sell manufacture to produce something, then that again will be an asset. It takes lightly, longer to turn stock into cash. But natural enough, it's going to turn itself into cash at some stage and probably within a particular timeframe. And that's treated. It's a current asset now when you buy something and it may not to turn itself to cash very quickly and you make by some fixed assets. What you can see behind me is a fixed asset of D aaw limited. It is building on that is fixed on. We could sell the building, take a while to do that and release some capital, of course. So I'm talking to you looking at a Web camera, got a a laptop underneath the screen. Look at that, use a computer and so forth, and that it will be some of the machinery like your mighty systems. Well, on other things might be like buildings. They are a fixed asset on. What we've got here is a very straightforward way off looking at the balance sheet, and I'm simplifying it just so that you could get a handle on this as of entry level as to what's going on now. Remember the key thing here that a ballot sheet is about trading, and it's about demonstrating the where the money is and how it flows in and out business. So balance sheets very useful. Very important. Let me take you through how they are dealt with, how they handled now on page 18 of the notes. You've got the various transactions that are going on un invite you to print out those two pages and then just right in the answers to the question when you're looking at setting up a balance sheet and you'll get a handle on how the whole thing comes together, but I'll take you through it. So what you're going to do is to set up your business. Okay, doesn't matter what the business is. That's not important. But let's imagine that it's going to be a fairly straightforward business, and you draw out of your bank building society or your or your money box sitting underneath the mattress. Whatever it is on, decide to put £10,000 on your kitchen table. First transaction. So what are the assets off your business. What are the liabilities off your business? Well, if you've been paying attention to what I've just been say, then you'll see that those that £10,000 is one of the same but sits on one side. It's capital of £10,000 because you'll be able to draw that out if you wanted to. From the business. That's the capital presented up, and you also have the cash sitting on your kitchen table off £10,000. I don't have the two sides together and suddenly make 20. It's just that this is a balance sheet on these things balance, because that's what the balance sheet looks like. It's got liabilities off 10,000 and it's got assets of 10,000. Yes, they are one of the same some, but it's just demonstrating that the cash sits in the business on one side, and it's a liability because you, as the sole equity partner in this situation, could draw the money out, and that is where you sit. Now that's the snapshot at that moment. One random Thursday morning when you're sitting at your breakfast table. Okay, well, let's imagine that sitting with £10,000 in your kitchen table is not a good thing. You'd like to put it somewhere securely. So transaction to is you decide with your capital that you'd like to take that cash on. Put a very large dollar, poppet £9900 into the bank. Now, look, what will your parent she looked like? Well, you still got liabilities of 10,000. That hasn't changed. It's still liquid capital, but the assets are now into forms of liquidity. One more liquid on the other. Cash that's left is £100 on. You opened up a bank account with £9900. Just ignore the fact that turning up to a bank with £10,000 worth in cash today would actually looked form is rather unusual sick. But bear with me on that one. So what? We've got his assets there still balanced 10 10 on either side, still the same amount of 10. But now we've illustrated that £9900 off that is sitting in a It's a bank account. It's a slightly less liquid than the cash sitting on your mythical kitchen table. So there's your second transaction on having set the business up in this way. You realize that really what you need to do on this is transaction number three. You'd like to get yourself down to your favorite computer store on by yourself a computer using the bank debit card that you were given with your bank account. What will the about sheet look like on the third transaction? Well, clue here is it still 10,000 on pie beside the capital hasn't changed. But how of your assets changed? Well, now you've got yourself the cash, which is still on your kitchen table. The bank is lighter and by £1000 because you bought one of your assets or fixed assets of a computer, have mind about calling it a fixed asset for liquid asset. It's an asset on its presented in that way. And as you can see, we've got a hierarchy off liquidity. The lower down you get, the less liquid things are. The higher up you go, the more liquid things are on. When you add that little up, it's still £10,000 on. Now we're demonstrating that the assets are being distributed in some way or another, so that's transaction number three. Now your businesses want to trade on that. Simplify everything because you now decide that you'd like to go and buy some stock. You'll maybe sell whatever. It might be worried about what stock is, but you're going to go buy some stock for resale on. It's gonna be £5000 you're gonna pay again by that debit card and then transaction number four, What will your ballot? She looked like value capitals the same. Nothing changed. There are still 10,000. What's your assets? Your assets are going to be the £100 cash on your kitchen table. But be very careful about leaving you Probably Kitchen window. Of course, you will now have 3900 in the bank because you've taken 500 out 5000 out there, you've got some stock and you still got your computer. So stock is going to be turned into cash a lot easier than your computer will be turned into cash. So it became that particular So here we've got snapshot on again. We're looking one day next day, next day, next day on the about you changing. Although the value off the business still remains that it is which is shifting some of the assets around to acquire various assets for trading business. Life is good. Now they gets suddenly more complicated because what you're going to do Transaction number five, you're going to sell some of these goods whenever they are selling for £1000 that you purchased for £500. So when you think about that, you're gonna be paid by cash, whatever that WAAS, what are you going to do with the profit? What's gonna happen to the value of your stock? What's gonna happen to your cash situation? So let's have a look at transaction number five. What have we got? Well, we bought stock for £500. We sold it for 1000 then clearly our profit is 500 40 for 500. Sold it for 1000 made an extra 500. There's profit. So the prophet and you could now take out of the business as a liability will sit there on it sits alongside your capital as it did before. So now we can see things have changed because you were paid by cash apart for £100 that you had on the kitchen table now discretely tucked away from the kitchen window. You've got another £1000 worth of cash. Okay, you haven't put it in a bank yet. It's still sitting there, a two home. But you obviously need at some stage to put it into the bank, your stock. And now, then your stock, which you paid £500 has now decreased. So your stock of 5000 has now decreased to 4500 and you still have a computer. Now you can see what's happened here that you have grown the balance sheet because your liabilities, they what the business is liable to pay has grown by the profit of £500.10,500. The cash off 1000 has come into your assets, but your stock is reduced by that 500 on. The whole thing balances. So here life is looking pretty good, and that's how balance sheets grow on how about sheets? So let's have a look at the next stage where you decided end of your busy month. You'd like to take some money out of the business. So transaction number six, you decided that you would draw £1000 for living expenses from the bank. When you drawn that out, paid into your private account, got it away from the banking business Bank account. What's he gonna look like? Well, your income or 500 profit still sits there. The capital still sits there, but now you're making a drawing off 1000 looking across the assets and you've still got the cash. Which let's suppose you haven't yet paid into bank. Your bank is going to increase by that 1,003,900 to 2900 as it's paid by backs transfer or what have you to your private banking? You're stop remains. You haven't trends, transferred any stock into cash and sold anything in addition to what you've already done in the last transaction and you stood up computer. So now your balance sheet has declined, as we've demonstrated with taking liabilities of drawings out of the business, and now the whole thing is changing. Weep it of that, of course, is what ballot sheets are all about. So I hope that's been useful. I hope that's been helpful and giving you a bit of an idea about working round balance sheets I would like to do now. You can review this program, of course, at any time you like. What I'd like to do is to explore a look at the balance sheet on that balance sheet I've made up as an example on that is on page 21. Off the balance sheet, we can analyze that it is a mythical balance sheet for my business. D and W L A. W. And exploring that will give us an opportunity to understand a little bit more of another layer off complexity. If there's anything you're not too familiar ways, rewind the film and you can have a look at my taking you through the various stages. How about sheets will change. Turning to page 21 of the notes, you'll have first top half off the door law balance sheet as we got here, shown on screen What I'm doing here. On the liability side of the current liabilities balanced by the current assets, what conclusions can you take about this snapshot of business at the end of trading Lee Year, December 2017? Well, as we can see, the total current liabilities off around 53,000 exceed far less rather than the total current assets off 70,000. So we can s it's up 70 current liabilities off 53 then generally is very quick ratio. That looks pretty good, pretty good, that characteristic succeed. Count my abilities. Well, that is very true. This is a snapshot off business, remember? And it does change as trading moves forward. Let's have a look, though. But the other thing we need to take into account when we're looking at total current assets its cash position because on the liabilities, the's A current liabilities, so the business is liable to make some payments. Now we work Associates Associates have got invoices outstanding of 6500 little bit. We've got wages for staff, which is usually the number of months that their contract of employment is that they're on a monthly contractors months worth or three months, three times three months worth so forth. Wages off 4000 800 or so. There is high purchase interest payments on the vehicles that have to be paid. We're not sure because the balance sheet doesn't tell us what period that might be. So if it was going to be what was outstanding as a liability to be paid that maybe over a 12 month period it isn't shown. It's still a current liability, is it? Still, things are gonna be a cash drain on the business. But let's say it's going to be a couple 1000 of that which certainly got the tax is going to be due in January on the Vac is also due in the next period. So if we look at that, we've got circular £11,000 with accounts payable, wages payable for staff associate work for us. We've got tax, we've got fat and so forth. So we've got 27,000, 34,000 or so. Plus, some of that HB interest payments 35 £36,000 is going to come out in January. Oh, gosh. Now let's have a look at the current asset side. I don't see how much cash we've got. What? We got £2000 of cash in the cash account with the bank petty cash for the biscuits and posted one over US temper investments. £10,000 was in a modest interest earning account, so we can access that fairly quickly. So we've got 12,000 accounts receivable. We have debtors of 40,000. What the balance sheet doesn't show is how long those debts have been around Now. If they were debts that occurred in December that the chances of that money being received in January when that liabilities is due may be fairly limited. We don't know because the bounce she doesn't tell us what the average debtor days are now. If the average days was two months of 60 days, then how much of that 40,000 is gonna be received before the in general experience says The longer the debt's been left is a debt accounts receivable. The lower the likelihood is off receiving it. So you get a bit of a bell shaped curve. You're gonna get some money in the short term. Most of the money around your average debt days on some depending on your business, may struggle to recover it for whatever reason. So where's your cash? Well, sure, you've got working progress that today's program that I'm recording here is working progressive. I'm doing it. I'm I haven't get invoiced it, but you know there's work in progress. I have some computer supplies, some toner cartridges on. I have prepaid insurance on vehicles in the business, and if I had sold those vehicles, I may get some of that insurance coming back. So though I've got £70,000 with the current assets within the balance sheet current assets, I haven't got much cash. Let's be generous. And let's say that maybe 10 off that 40,000 is going to come in in January were not sure of that. We still have only got about 22. Balanced against the 35 liabilities were like having January. So on the face of it, this business is in trouble. Did you spot that? Well, let's look at the other half off. The balance sheet will come back to this in a minute. When we look at the longer term liabilities, The good news is there are no outstanding debts and loans from the bank or other providers. So the total liability to still just show 53 We have invested with the Business of Bones, and I saw when we don't know whether it's valued at that, it's that that's what was playing. It may be worth more, may be worth rest. We don't know so Where will you find the cash going back? We could see we haven't got much cash here. As we say, we probably 22 but we need 35. 36. How you gonna find 16? Well, you may or may not get the ice. You may not get back what you put in, depending on how long it's been around. Well, of course, we have land on the buildings. The building that we're talking from has been put into the balance sheet. That price there. But we have something else that occurs, which I didn't mention before complicates things. Is that when you bought the computer in our Thelma before, May buy it for 1000 but you need to appreciate it because it's not worth £1000. Um, since you've actually said it up, put in your office, you will appreciate that. As you know, if you black brand new car on rolling out of a show, Rome put it on the road. You've written off a lot off depreciation on that vehicle. Some times a vehicle made appreciate, really quite rapidly. So here, what the count has done is to demonstrate depreciation of buildings, the motor vehicles and so forth. A particular value is there off minus 25 in training a year. So again, there's no cash to be had. By all means. Of course, one way of getting yourself out of cash problem is to go get a long term liability on, set the buildings and land up against that. I go and borrow 10 grand, 20 grand or whatever the numbers happen to be. The problem is, banks are very keen on lending against buildings, of course, because they don't really want own lots of properties when people default on the loan so it can be done. But not on a short term basis can be done for mortgaging. That's quite different about that. If you are private, I have a private mortgage on the property and you're living in a one. Have you? We have that particular problem So way may or may not get a loan against that building and so forth. Somebody did suggest that they would, that we could sell the partners cars. I dismissed the stupidity, of course, but it's always an option. But whether you get back likewise, the building, you don't want to lose the building trading base secret. How on earth would I get in station on Wednesday when I'm off the Leeds? It's those sorts of things that need to think about. There is still no cash. So let's look a little bit further down the balance sheet and see what we find. And we got partner Equity Capital Count have 100,000 put into it. No further capital has actually been produced, but profit off £97,000 has actually been put into the business. So the finance on the liability side of things is a healthy £197,000. But looking across then on, you just take the 52 9 on that 1 97 on, you'll get 250 1/4 of a 1,000,000 power business now that is balanced by 250,000. But where has the prophet gone? Where has the money that was put into the business? Where is that gone? Well, as you can see, the buildings land, there's motor vehicles and so forth equipment has been purchased for the business, and that's being appreciated. Ondas. You can see there it was around 70 or so 1000. It's now 46,000 year after so £100,000 may have been put into the business to buy the land. Put building the office on it, get the vehicles for the business equipment so forth. That's where 100,000 walls it's been depreciating out about you is no cash. So what's happening? Well, this is a bit of the in inverted commas, smoke and mirrors. It has been decided that the goodwill of the business is worth £75,000 on if it's making a profit of £97,000 then 50 £75,000 for goodwill, maybe as a scientific calculation on this one particularly. But it is a modest amount off goodwill. So would you, uh, you buy into the business? Would you put 50,000 dead by that goodwill on Duh. Help us out of that particular problems that we could raise Mawr equity from the partners if they had deep pockets. I haven't so has a bit of a problem. We could bring a new partner in to add some cash to the business, but there's no cash in it. At the moment. The trading name of D A w dot co dot UK door law is also another entity, and it could be given value that's been put here for £45,000. All always debatable. Have looking for years and years of trading to decide whether or not so what's happening here. Then we just look back at the we got a balance sheet liabilities and assets. It is owed some money. Cash situation is very dodgy. It may not survive the next three months because of this cash problem that it's got. It may not be able to raise capital. It may do it by factoring when you've got your back. When you've got accounts receivable for £40,000 you could go to the bank and say, Will you by my debt? I owed money by some reputable companies like Data law except etcetera on the bank will say Yes, we will recover that £40,000 we'll give you a portion of that fact that we might give you 35,000. That is actually the one way with Lois Risk. It's a high cost, but not in terms of risk. As we hand over the debtors, mature debtors in the past and so forth, no recoveries and so on. They made use to buy that and give us a £35,000 risking five for not collecting 40. It's gonna cost 5000 of course, of our expensive way of boring money. But factoring selling off your debts is OK, but has a law firm. You'll find that very difficult. Of course, client confidentiality will make it impossible without Clyde agreeing that you, if you're owed money, can't always factor that by selling debt something to be aware of. Obviously, we need to turn work in progress, whip into invoice invoice into cash because the end of the day, despite this quarter of a £1,000,000 business on the balance sheet, it's likely to go to the war unless we could raise some capital pretty quickly on what can happen and all suggesting this is happening here. But the artificial inflation of the intangible assets it's been created because the profits been burying into business because we're trying to sell it when we will sell the business at a much higher figure, £250,000 quarter £1,000,000 more valuable than if we haven't left that profit in. There were taken down year, for example, or distributed directors remuneration. 150,000. It may be that we're trying to artificially inflate the business with these intangible assets and trading name to attract somebody into the partnership, too. Bring in a new partner and so forth, so lots to play with their single band up sheet on so forth. But nonetheless, I hope you'll find that useful little exercise. This is a completely made up balance sheet. It does not look anything like this in reality, not least of which that when it comes to accounts receivable, there are £40,000. I have good trading record. Is anyone days consultancy in 25 years that we haven't recovered? And that's basically what we did for a major clients, no associates who, in fact, trading insulting fashion. We didn't know the big like that we worked with didn't know, and that was one day in 25 years we didn't recover. So what we're gonna look at now is managing the money from a different point of view. This is putting to one side the financial tools or profit loss account on balance sheet on looking at different ways in which we might stimulate the business. What sometimes happens is that we think are we've got a short term problem. Let's reduce our headline price and hopefully catch a larger part of the market that will bring us a revenue stream a lot faster. Just for illustration. We try to simplify everything on Do not Changed too Much for me. Look, one situation. Compare it to another. But this is a an example where one is pricing to achieve particular profits and therefore aims to see some competitive pressure. Let's imagine this is a sole practitioner on. She's running her business in a very straightforward way. She does residential conveyancing, and she charges £500 plus VAT plus dispersement. So that's that's a fixed fee from work £500 pound on. In order to do that work, she does some herself, but she also engages some other license conveyances or paralegals or what have you, and she will pay them about 70% off the fees as a fixed price for doing the work on so forth. So that's a fixed cost there. Her aim over the year is to make £30,000 drawing from business profit okay, that's what she aims to do. So how many completions at £500 say? Is she going to have to make to get that amount of profit at the end of the year Now, then, because of competitive pressure in the marketplace because of other online conveyancing and norms, This to firm conveyances or whatever is going on in her region? She reckons that she is chasing a tailor a bit and you do a lot better if she cut her price by just 10% not £50 off the headline price. Annette Nicholls will stimulate volume. If you Stephen, that volume will stimulate cash flow. So what will that mean? Well, her costs per completion remained the same. So 70% of £500 is £350 on they remain the same. Although her headline prices now 450 her aim is to make the same man a prophet. Of course, at the end of the year. So how maney completions will she have to make in this new scenario on what percentage published is there from that? So this is all put together for you on page 24. So have a little girl with your calculator before we finally put it away on. See what you make of this. Well, let me take you through the numbers, then taking the effort to do them yourself, of course, but let's have a look. Well, £500 or thereabouts per completion, she's making £150. Profit a se 70% off. 500 is £350. So with £150 profit, divide that into 300. She's gonna do 200 completions in the air, roughly two per working week on. That may be fairly easy to attain, but now she's cutting the price by £10 at Sorry, 10% £50 off the headline there, What's gonna happen while the way she structured her business Because she's got consultants that's working with her, she pays him a fixed amount. She's getting £450 per completion. Be 80. Of course, her costs remain the same to her. Profit per case has dropped £200 from £150. So in order to make the same net profit herself, 30,000 drawings divide that by 100 instead of waiting 200 completions. He's now gonna do three, 300 in the year. And as we can see, that's all working a lot harder than she did before. Now they are You surprised that just knocking 10% off the top line is gonna make such a massive difference to the business? Yes, if you're in a very modest margin business as represented here. So very interesting when we're explores that because the object of the exercise, of course throughout business, is that cash should be foremost in one's mind. Clearly, profit will come as a consequence of managing business. Well, so it's cash king in your business. Well, indoor law, it is our deity. It's higher than a king. It's so important now. When we did to work with a firm of teens, we were looking at the matter related hours per full time equivalent recorded over a number of years. And as you can see here, not very much gets recorded in August. People seem in the Northern Hemisphere, the Gulf and celebrate the longest day on go walkabout on two beaches and so on and so forth. What's not to like? But also in January because of celebrations at the end of the year, there seems to be less work being done, so the income, as you can see, will go up and down, up and down, up and down, while a lot that's going up and down. The costs of the business are roughly the same each month through the year because your salary gets paid in 1 12 Allah quarts of your annual salary. So every melts. You get 1/12 of your annual salary. Your utility bills are paid, probably on a monthly direct debit. Your average costs could be paid out mainly then monthly Anna courts. But you've got that income up and down. So cash is so important to the business. Because if you think about the definition off, insult INSEE insolvency isn't anything about profit. In a business sense about having the cash to pay the debts when they fall due on as you could probably realize, the biggest debt each month is the creditors off staff. I work for the months I want to get paid the end of it. I'm sure you wouldn't fancy on Melo coming around. An email that says actual cash the moment keep up the good work will pay you two months worth in a further months time or three months off the end of quarter. That just isn't and help you to pay your debts where they fooled you, the rent, the food bill, mortgage or whatever else is going on repayments on the car. So managing cash flow is very, very important on. We need to look at how we can speed of how we can turn cash into, uh, work into cash. So money for dated the activities is very important. We need to have some capital. We've talked about that on the balance sheet on. We need to explore that. So managing, working capital so important Page 26 of the notes does that. And what I'd like you to do is to look at that table on. I'll take you through the process that looks at managing working capital. Okay, there's a number of straightforward stages to working this out. If you look at how long it takes an invoice to be produced from the start in particular project, then there is a certain period of time there this'll decision to re record management course stage two data law was decided a month ago. So it's getting me a month to get it recorded after all the other things I've been doing on, and then I will produce an invoice. The time to produce an invoice from the brief is probably a month in this situation can be a short of a list ist recognize there will be no time and then waiting for somebody to pay. The invoice will be better, so if you add those two periods together, you'll see the amount of effort work being locked up. In other words, effort. Not yet turning it into cash. Now your salary, the beginning of the month isn't required because gonna be paid at the end of the month. So you are a creditor and therefore I could deduct the cost of your salary from that lack of lock up to give me a figure that illustrates how long I've got to cover my costs, for. I've got to cover my costs for ALS, the period off work being done, plus the period of the debtor's. But I can reduce that by one month because I don't need your salary. I need it four days before it gets transferred to your private account. But then I've got a months grace, and that's a common thing. There's very little to be gained by law for not paying. Suppliers like you, their staff, a creditor try and save any money because a major part off the monthly cost, of course, of salaries. But then you get appeared. Time costs have to be covered. So if we know what the costarring 12 months, that number of months that we have to cover our costs is going to be our working capital. So if it's six months that we've got to cover our costs than its half of the total costs in the year three months, it's 1/4 exception, etcetera. Now, if the business has on the balance sheet, got partner equity or shareholders funds put into the business seventies itself and run it separates lost most left over is an overdraft. So on page 26 for these two entities, a b calculate the overdraft that you want from the bank, instantly get it wrong and your business goes to war. No pressure. Then all jokes aside very important calculation to make, so have a go and see what do you think? Hopefully you've got something a bit like this for firm A. Between the work starting and actually appearing as an invoice will be four months. And for whatever reason, it will take 90 days for the the debtors to be cleared. So we add that together about seven months in total on the creditors of one month. I don't need your salary until it's due for unpaid. So I'm gonna wait a month grace on that. I've got to cover my costs. Therefore, for six months. Seven months. What cost in the air? Six million, then. My working capital is not 12 months worth off six million, but six months worse. In other words, three million. Half the year, half off the costs that have to be looked at in a whole year. Half of that. My working capital. If the partners between them stumped up a £1,000,000 worth of equity, that's on the balance sheet, then the deficit is two million. If you've got that calculation, then well done. But here's an important point of your costs in the air are going to be about six million into the 1/3 1/3 1 3rd rule I mentioned a while ago suggests that a business that has cost six million may be turning over nine million or 10 million or thereabouts. They're not that many £10 million businesses with very little assets and as you in the building that will find it easy to borrow overdraft facilities of unsecured loans of two million. And therefore Firm A has a particular problem now. Alongside that, you were asked to look a firm, be on exactly the same calculation quicker and turning work into invoice. Quicker recovery on the lockup is three months less than months. For the creditors, your salary is two months. Two months of the 12 months worth is going to be 1/6 of it, So 1/6 off six million is one million. Part Refugee is a 1,000,000 on Firm B does not need the injection of any overdraft facilities. So as we can see speed turning work into cash, covering the costs is going to be a lot not easy. And I think your sleep a lot easier. If you're trying to manage for B now again, we change the world firm on put the word department some departments in multi department businesses may take longer to recover. So if you're doing person injury on the bigger, more catastrophic the person injury, click elections, whatever it is, then of course, your time between starting the project and actually getting paid from income from it may, of course, be much longer. Therefore, needs department B, which might be, say, conveyancing or something like that that increases the speed with which money comes in. Very important calculations Domenic on. But if you're looking for further clarity, want to review it? Then by all means, rewind on. Go through it again. But hope that's mean clear for you. Now here, of course. We've got invoicing producing debtors and debtors coughing up. Sometimes debtors don't so we can have a leakage when things don't go as we suspect, leakage is a very important concept. To get a handle on particular, you're gonna be running your own business. And that's what I'd like to look at here on. We're taking as our example on Page 27 looking at the kids from a number of different points of view. Here we've got two entities firm a firm, be let's see what's going on. They're both doing a £1,000,000 worth effort. That's the value of work done that's known. But the amount of that gets recorded were very come on. Sometimes I do work on the on a daily basis for some client, particularly helping people set up their business. We'll set it in a particular mount per month on. We'll work a number of hours to help people through that process. So I record time and very often, probably bit like you might be in the office early in the morning. Get to new, and I think, Gosh would've done Have I got there four hours done recorded? No, I've been interrupted of her phone calls. I've had this that the other so I haven't actually recorded. While I said I would does the leaked there, then when I might look at the end of the year, as it were on the end of the month, you know, I said I would do, you know, 50 hours for this person, and I've done 55. Well, you know, we'll probably get it back later on. I will not invoice all of it or whatever it might be. Teoh knock a little bit off there, so that it's invoiced. And when I look at cash for saved, my business is good because we do get cash for the invoices. Don't recover UN invoiced work. But it may be, for whatever reason, the big client has says, Well, type this time or that's a bit much actual. Could we reduce that courtesy of your warm heart? You reduce the amount that it's actually gets received. So if you look at the leakage recorded a number of different ways, you look at work done compared with cash received, there's a certain amount actually gets recovered on what doesn't get recovered has been leaked away. It's here, of course. It's been leaked in three different ways. Work done, not recorded recording, not invoiced invoice. Not, uh, received his cash. So we need to look at that recovery. And then if we know the income you cash received less, the costs equals the profit. On a cash accounting pace is not an invoice to counting paces, and that is different. Your finance officer will tell you a little bit more as to why, but on a cash basis for me alone, working very much on cash because cash is king all cash received basis. Cash. It's talks, costs profit. So what I'd like you to do for these two entities firm A and firm be here's to calculate the leakage. There's two bits recovering. Leakage will add up to 100. Calculate those two and then from your cash situation, less you costs. Tell me the prophet and then the second part of it has invited on Page 27 is to say, What are you going to do about these two entities if you were managing them to improve things? Profits particularly. Okay, look, this is what you should have. Full firm A doesn't 1,000,000 but it only records 925. It invoices 875 50,000. For some reason, I was not being invoiced on then it has debtors and 55,000 so 730 is being received. So from the work done is 73%. You see that 7 1,030,073%. The rest of it is leaked three different levels that's 27% firm be just complete. That one is a lot being a lot smarter, tighter but more effective. Work more efficient recording the value of work done records, most of it invoices. Most of it receives most of it. So the league cheer is only 10%. The recovery is 90% 90%. The effort comes in it's cash. So on a cash basis 730 minus that 600,000 costs. And we've got a profit. 130,000. Firm A while firm B is rolling around in 300,000 So far are so simple simple arithmetic. But now the management decisions have to be made. You're the manager of firm A or you're the manager firm. Be what you going to do to improve things? Well, of course we firm a leakage is no good on def. You leak, You need to go wash. So what we do here? Well, this is the key thing here about good daily activities. We talk about health, talk about hygiene a bit later on. What we need to do here with a is to start mopping up this leakage, and I would tend to start from bottom upwards. Why is it that you're only receiving 730,000 when you've invoiced? 875,000 because the difference between invoice and cash received is a lot of money. Okay, there's a lot of money that's not being recovered. Teoh need to explore where all that money has gone. A lot of it is not being recovered. A lot of write offs, a lot of being lost. Who's doing it? Which Erin businesses doing it on start to correct that No invoice work that you're not gonna recover. So get onto that. That will turn the business around really quite rapidly, because in total, across three areas, there's £270,000 of effort of work done not being recovered. Yes, having recorded £925,000 with the work, then there is obviously a £50,000 worth of mawr to be looked at by invoicing. Slightly better to improve the client relationship. Recover what you've been voiced, Andi. Then start to make sure that you're demonstrating value you ready and so forth. Eventually you'll be able to double the profits a firm A quite quickly. Yes, there £75,000 further to come from, not recording the smart needs you care. But I would start with the cash and they move upwards in that way that they double the profits offer made quite quickly. That's good. Housekeeping. Let's get your house in order now. Of course. Let's turn to Furby on. I don't know what £100,000 is to you, but to me is watering that money. There's £100,000 with no being recovered, But the problem we've got with Firm B is that if you do exactly the same thing and expect it to outcome, that's a sign of a bit, but it won't double the profits. Infirm. Be okay, 200,000 worth having. But we are talking about just £25,000. Not being recovered is the effort to recover that £25,000 worth the effort to recover £25,000? Yep, 25 k is 25 k certainly worth doing, But berating your free owners to mop up every last drop may give you diminishing returns. It's something to consider. I'm not saying it's not to be considered is to be considered, decide what actually gonna take by all means berate people for recording the money, how they work and effort on. For whatever reason, not invoicing. Well, you know that can happen. There may be good reasons why that happens. And, of course, berating people record every single minute e and get the cook the codes correct for the recording and so forth for the efforts being done. Time. YSL Very good, But how do you feel when people are micromanaging every action you're doing to what up this mop up £300,000 here, 1/3 of all. So this is a pretty good effort. There is a little bit being leaked. It's a number of different levels, but that's not really going to make a big difference. So hold that thought for a moment. Of course, you welcome to the screen with me and micromanage if you will. But there's other things we do to make a big difference for B. Well, of course, it's always costs, costs 600,000. That's 2/3 pretty much off your room Turnover work done. Rather, it's 2/3 of the cash received on. There may be an opportunity to reduce the cost for the big costs are salaries. So put a concern. A recap don't replace people when they leave natural wastage in that something share extra work around on. Well done. You you'll save yourself a salary. Maybe that's 30 taels, and so you'll have 10% online. Well done. But what chance have you got next year off achieving that £1,000,000 worth of effort? Where will you compromise the opportunity to do that? You may end up with problems. I'm not saying Well, it's just something to consider. And again, I wouldn't necessarily look that the phone be as my first choice. It started cutting costs. If you can manage with the costs, you should have done it ready to shaving more off a shaving, more off their squeezing, more blood out of Stone world. Not necessarily give the result. No, I think the Furby may has a bit of an entrepreneur had been approached. This will say, Look, if we're making £300,000 with profits, what I suggest we do is to take some of that profit on turn it into effort. So we took £10,000 with profit, and we were able to win ourselves £90,000 worth of extra work next year. We know we did 1.1 million next year without increasing our staff based without increasing costs. What does that mean? Well, an extra 10,000 to win another £90,000 worth of work that could be shared out amongst the persisting team. You don't have to. The costs will have £90,000 profit next year. So you may make instead of 300. You spend it. You're gonna be talking about spending 10,000 next year, but you add another 92 bottom line. That is a pretty good return on capital employed for every pound spent. You're gonna turn that with a modest increase in the amount of work to people to do high value work More interesting work will in fact, increase the profitability of be firm A. It is not doing too well. But my goodness, diseases good with, ERM A because straightforward things to do to improve that one on probably double the profits quite quickly. Firm B is a lovely situation to be in a much more difficult thing from a consultant advises point of view, because you've gotta work quite hard now to increase the value in firm B. So there we go. A couple of thoughts, cup of ideas, some financial models. What I'd like to do now is to talk about another way of looking at the numbers. You won't have to do any number crunching at this point, but nonetheless something quite useful that that is something called the moving annual total. So let's explore that this is actually a very simple device to help people track their performance on dime. Surprised it's not used more frequently. I've used this since I started my own business on. Did Something I Got from Industry is to look at things in a slightly different way on the information is in your system currently, and you'll find this quite interesting. So moving annual total. Well, the clue is in the title. It is an annual total, but it moves, you see when we've got a profit loss account that's over 12 years trading. So rather like human tip sales shown there on the left hand side, we start with figured. The yellow line starts, it goes up, it goes down, finishes somewhere, and then the next year starts the back again. So far, so we have that sort is slowly reaching the top and then straight back down to the bottom again. And so it goes forward. And that isn't very good from a human point of view. Tracking performance Let me see what you think off this as a suggestion. What you do is to record 12 months of activity now that maybe hours or phase or even expenditure and then what you do and having got that 12 months of activity has had the next month's performance. Whenever it might be that, of course, being among 13. And then if you take off the first month off the annual Siri's, you'll have 12 months that rolls forward. So first of all, you have months 1 to 12 you summarize that, and then you go plus 1 30 taken with the first. So your annual Siri's now the some off month, 2 to 13 and then 3 to 14 someone. What you get then is something quite different. So, like, do introduce you to the spreadsheet are that we've got from a client from a firm we worked with in Milton Teens on This is summarized for you on page 28 of the Notes Colin Waas working for this firm. He's non contentious commercial firm Contention, Metal Department and he started at beginning of the financial year, and the year ran from January through December. At the end of each year, you didn't know whether he's getting anywhere near to his allotted target on. Then he started back from ground zero the beginning of the next year, and his spreadsheet looks a bit like this because if we had only used on em 80 on, rolled Forward on a monthly basis, life would have been so much better, right? This is it. Okay, Never mind about the time that year dates. Let's look at his his billing each month as we go through now. Year one. His billing. In the first month he was there, he built 2500. Okay, now he was given a target for the year of 85,000. Okay, three times is their salaries. Is a new recruit. Okay, 85,000 as he goes through month or month. As you can see, we contract not on his monthly Billy, but also his committed billing. And it's not until November, where he's just shy of 80,000 that he has an appraisal, although in his firm, the firm anecdotally used to call it punishment week. It's out because at that appraisal, November having jumped 80,000 then there was a bit of, well, you know, we were expecting 85 he said. If I have a good month fight my other months, that'll hit 85. Problem is, he doesn't know how he's doing is tracking his cumulative. It doesn't know how he's doing really until the end of the year. So it's hardly inspirational, hardly gonna be motivational, just to see the deficit slowly come down. And as it is at the end of the year, he does 83 spot 4 83,400 shy of 85. So during the year, he's just seen this line grow. Okay, well, that's what it would be because that's his first year off work. But then what happens the following January, January 12. He then has his monthly recording done on January is the quiet month and people's lack over from the new year. That sort of thing here, too. Young Children of school age Mr Taken see the the goals that was taking a break in that and then what happens is re comparing January 1 year to January 12 months ago. And that seems to be a little bit curious that we should compare his performance now to what happened 12 months ago in the whole world is different. And then we can see those red figures down there. The monthly variants off year one against you to look at it minus 740. How you feeling with this dark cloud of a red number hanging over you? Well, it continues because in February and in March, he still got negative figures. So not so good. So let's look at the behaviors then, going back to the first year. You see, By the time he's got six months into June, he's cumulatively done 45 a half on its supervisor, comes in and says, Well done, Colin. You're more than halfway through your halfway through the year more than halfway toward your target. And he has a revision of his target from 85 to 91 expecting him to do twice 45 off, and he says, well, whatever at each month, he is told whether he is ahead or behind his expected 1 12 Alicorp off the annual figures and in the first month, he was told. I kid you not. He had an email came around, said the following Pick them up three targets. The following people are sub optimal and his name was name and shame underneath that, not good behavior in my my view. So OK, ball calling steams away gets six weeks, six months through, and then suddenly they double his target. It's forecasters put up to 91,000. Hardly motivation. He goes off on holiday. He takes his Children down to Brittany on Brittany ferries out of Portsmouth. Andi goes glamping, nice campsites and puts the kids into the crocodile cover. Whatever any of his wife get, get into a few paperbacks and playing tennis. What is no toe like it sounds very good to make. Trouble is in August. He then comes back. At the end of that month, he told his sub optimal because he wasn't achieving his mostly target, being 1/12 of the annual well. For goodness sake, he's been on holiday, not acknowledged. It's just produced by system and, as you say, gets to November on, Then everyone's a bit disappointed that he's only on 80 expected 91 when you expected that I didn't expect that. That was my original Target. 85 has this conversation about hitting that 5000 in December. December, of course, has a celebration, the end of December holidays and so forth. It's acquired a month, and he falls below. So what's gonna happen to him come the new year? Well, of course, he's gonna have his target put up. Didn't hit 85. So make it really inspirational looking. The target off 90 or something like that. Happy Christmas College. So he comes back in January, his performance slightly behind his first month. For whatever reason, then he's talking sub optimal, except exceptions. Got these numbers hanging over him. Happy New Year College. Okay, then gets to June 2012 and he's done 48 a half under course. Things surprising says I will well done. Got more than halfway by six months, and they will double it. Then to make 12 months on. He's expected to do 96 97 or whatever numbers might be joy. And then, because early booking on Brittany ferries goes a little bit earlier holiday here slightly less in July than he did you previously, he's now nearly 2000. Down from that, he now gets the sub optimal letter or email comes around again. Well, you see the picture kids, Then when they were in the crocodile cover, Whatever is going on, August is slightly better because he's around this time that it was last time. But that just carries on. He gets to October, and then November is only November, and he's been there for 23 months. That he sees his billings for the year has actually seen a head off last year's original target of 85. What a cloud to be under for all that time. And then, of course, he says, well, a bit disappointed. Calling expected you to do 95 96 or whatever, and he says, You have a year, a month like last year, Then I will get my target gets to target of 19 exceeded by a small amount. There's 91 a half. So not a good environment to be a not very happy about this, because what's happened is this terrible, terrible sort of a well are we getting the over again? They know now. We put it a bit higher. Start at the bottom and off you go all the way up. And then he has this particular situation. And there is a sort of unwritten rule that if you don't hit your targets two years in a row, you ought to start revising your CV. 14 years, a stay of execution. Happy Christmas. Coming. So this is a Colin situation. Not very good. What are we gonna do about it? Well, what we did is the green line at the bottom. We took the 83 4 and we have the end of the year. We added the next January and took off the January before we end up with a moving and total. These are the green lines underneath. Now that doesn't make a lot of sense. Let's take those green numbers of bottom screen on form. This graph here Now you can see on the left hand side, but it starts at 76,000 goes up to 94 5000 OK, and then each month as we go along, what we can see happen is that his blue line is what the M 80 is month on month on the, um, black line straight black line is the trend now that if you are calling working as you are, you are there just over 80 to January beginning of the year. You think? Well, okay, I need to be up around 85. Target. His job is to get into up up there. He works on it, turns his work into invoices, chases up the invoices, get the invoicing going at the money in and so forth on that. Trained is growing, isn't it? So within two or three months, when every three months April, he's pretty well there or thereabouts, hitting the 85 level that he was arrested achieved. So he's feeling a lot better. Go back one slide than seeing those red numbers on a spreadsheet still behind, still behind, Still behind. But here we see something positive, not where we want him to bay, but its highest would like him to be. But that trend line is following. Then he takes an early break. It dips down. Why is it dipped where he took a lonely break? This has changed, but he's back in August, back in in September, and it's moving up on. Then, as we can see by November, he's gone his M 80 above 90,000. That's what was expected of him, and that is a lot more positive now. If I was running a business, one over do is detect the M 80 of all the fear nous like that, and you have a graph running across the screen on underneath that I do the expenses provided those two lines or off buildings income over expenses are still apart, pushing apart that every month I get a view off profits and provided those two are keeping apart. And that's what I need to track. Are they going now? They're keeping apartment keeping apart. Then I get a very early signal of any particular problems. Moreover, if I want to predict where I might be at the year end and I was part way April, May June I instead of taking six months doubling blindly to form 12 12 months worth going back, that's what we had here each year come six months, it was doubled to revise the forecast. Not helpful. I can understand why partners might come in and said, OK, we're gonna be the end of the year. What have you got to go on? You got sore tooth. So up and down, up and down, up and down. It's all too naive in autumn, quick and easy, just to take six months doublet to get 12 months worth. But it moving any of total smooth things out and deals with the vagaries or vacation and so forth as we see here, where are we likely to be? We're falling the black line, which doesn't actually change that much. Despite the slight dip, June to July does give a fairly good prediction of where we like to end the year as we're looking at it. In that way, that information is in your system. That information is free. That information, I hope, helps manage the business and makes it a lot better for people like Colin who? And it quickly, I have to tell you. After three years in, the firm decided to up sticks on form, its own firm dealing with simple sort of matters in a similar sort of area on, uh, good luck to
01:07:09
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Written and recorded by Mac Mackay, DAW Ltd.
now, when it comes to managing the finance for business in these concepts of health and hygiene may not have been something you've met before, at least not turned in this way. What I'd like to do is to look at the difference between these two from a business development point of view on managing the finances More specifically, Uh, I hope you don't mind me asking, but have you washed recently? Well, I hope that a courtesy to people around you listening online that you indeed have washed recently. You see, there's a key question about your business because what we need to think about is good Housekeeping on it once you wash your wash unless you're O. C D. Obsessive compulsive disorder, terrible disorder view to be a sufferer. When you've done it, you've done it. Now you remember the example we had on managing cash flow about dealing with leakage? Well, a zoo we saw in that example talk about leakage that when there was leakage, a number of different levels, they're good housekeeping would mop up that leakage on your double your profits. Remember that. But has anybody ever trained for the Olympics? Well, I have to tell you that I haven't either. If somebody can run to automated in 19 seconds and a shade that does make mine look a bit silly because I would have been 50 meters behind it grants, of course. And several centuries ago, before he was born. But nonetheless, you're saying Bolt was obviously very, very talented individual, but likewise not as he tends to be, very healthy. Those business development activities actually bring in mawr profitable work. So we have this balance between short term get the house in order. Hygiene, Andi, longer term health things on. If a sprinter Mr Shower more frequently, he or she isn't dead before their improved their performance and it's a bit like in business. You've got to get down the gym, you've gotta exercise. You got to strengthen up. You've got to become more agile and those bring rewards in the money in terms of short and long term issues are really what we're looking at under this heading here off health and hygiene. So what I'd like to do is to invite you to have a look at page 29 of notes on DTI to explore a number of different activities that we've got that because the profitability tactics you've got if you look they've toe 17 off them, you could add a few of your own. Some of those have a quite quick impact. So, for example, if I'm going to chase debts, then I'll improve my profitability short term. But chasing debts again, JC debts again, once, chased them and chased them. So not having a debtor is as far as I can go and improving my profits. I got to do something else. So there are things like chasing debts for a quick impact when you've done it, done it. But there are other things, like justifying higher fees, innovating anymore value, which would have a permanent impact going forward. So there's the 1st 2 columns that you're looking at there. And then the third column. How is your firm performing? And if you are like most other firms, you're probably quite good at the short term stuff and not quite so good at the longer term things. So I will give you the results of that. If you like all these things, the priority order in terms of profitability, tactics and where they stand. But you need to look at things like lowering the overhead costs. We used to rent an office that was really quite high. We took a hit borrowed money, build our own office on our overhead. Costs have dropped down quite tremendously. That's made it more profitable over the longer term, increasing the volume doing mawr work. While we're trying to do more of the same for more people, that's increasing volume. And, of course, that is a quick fix. And once you do that, you've done it. Maybe you've gotta fix underperformers. What that won't happen overnight happen. Take some while. But once it's done, as you can see, that's a longer turn. Profitability. If you're dealing with the performance issues, changing the structure, getting work done by more junior people who are less costly to the firm is a way of increasing leverage that three show off senior Fiona's partners to junior Fiona's. That will help there. And then finally, as we suggested, raising prices innovating, adding value would be the top of the tree in terms of beating yourself up, becoming more agile, moving faster on so forth. So as we've gone up this list very generally, we've increased the health related activities of our business. As we've come down the list, we've increased the hygiene related activities off the business. So it's for you to have a look at in your own time and explore that it's easy to do the short term stuff. Easy to control expenses. It's very straightforward, but it's the higher order stuff. Brings in bigger clients, more valuable clients and so on and so forth. That's the difference. Okay, what's the, uh, broad bands as we've got here in the five of them? Well, this light will illustrate where the hierarchy is. I'm not gonna go through this if you want to track that. They pause the film and summarized the findings on Page 29 off the workbook to help you move that forward. But as you could see through the higher fees, marketing, better work, speed up, skill building and processes and so forth, investing high value services is clearly going to be a longer term initiative. And as we've said, going up the top is health related issues and coming down to speed of building speedy collections, reduce space and equipment costs. Would you support staff costs once you've done it, you've done it that will improve profitability. But you've got to look at the high order level one level, two sort of initiatives here to secure prosperity, going forward in your business. So key issues there. And in this we've dealt with those economic issues. There's income generating parts, the business before we move on to talk about managing operations. There's one other thing I think it's worth bringing all this together on helping us introduce to landing the operations, and that is to deal with the other drivers or financial success askew. See what gets measured gets done. And I'm gonna focus on these four areas f for financial over operation. See you for custom, Clyde on s for the staff. And I'd like to explore that with you. I mentioned before on this program that much of management is about balance. The, uh, the leadership complete leader was about balancing vision. The measures in the, uh, culture of the organisation get those right. But when it comes to measures, the key economic generating, the function finance from drivers are not just the financial issues that we looked at, but also getting the operations are operating well. Get the current interface operating well, get the staff operating well. So when we say here, what gets measured gets done, of course, as it everything in business, that's very simple, but it's also very true. So I would like to invite you to do is to look at this thing about balance and see whether or not we can look at what's called the balanced scorecard. This is there on page 31. Off notes we have those four different components on our job is to keep things in balance Now. Clearly, I don't get out very much for being able to make my little pebbles bounce around like this, not fall off. Of course, it's a great triumph for me, but no seriously. Let's have a look at these various components. They are financial, operational, kind related to customer bits. And the star, for what I've done on Page 31 is to give you four different areas in each of these four areas to look at this know what 16 total? The goal is different in each case. Some of those goals could be directly related to a particular measure. Some there is an indicator rather than their scientific measure off. What's going on? So I would like you to do Maybe share this with some colleagues is to have a look at each of those areas and then see what it is you think you could measure in order to achieve the particular goal. I'll set you off with some off them on. But if you don't know what, just leave a space. But the cognitive process thinking of it talking about it may begin to illustrate what's going on. But as I say, you come further down. There's 24 in each of those four areas when they get indicators off rather than a specific measure. Okay, well, let's set you off when you're looking at survival. What is the measure of survival in business who are not profit? Because that's what you get A. The end of a period of time income less costs over time equals the profit figure. That isn't an indicator survival, because if you don't have money to pay their debts when they for you, you are bankrupt, even if you are profitable. So survival measures in terms off, measuring a possible measure for survival. Easy that cash in the bank balanced against the demands placed on view. In other words, you've got more cash than you have costs in any particular month. That's your survival. But success in business, many would argue, would be profit. Success can be other measures, like winning new business or gaining new clients. But very simple measure, of course, going to be very straightforward financial ones. So connection, profit, prosperity. What's that? Well, have a look through and see what you think prospering in business is not. Turnover turnover is your vanity profit is your sanity on. Therefore, I'm not interested in turnover at the A W L Ow! I'm interested profits of it on. While since the recession our turnover has declined. But our profits have gone up because we've changed the model off business. And so that's quite important. Okay, well, let's move on and look at the operational issues. What do we need to measure in terms of efficiency? Well, if you're efficient, it means you do things quickly. That would be efficient. So it's a time based measure, But effectiveness is achieving outcomes, so efficiency is doing things in the right way. Effectiveness is doing the right thing. Rules by the way. So a couple different measures you might have their kind outcomes effectiveness. It's no good having people working quickly at the wrong things. Now accuracy is often measured in terms off the wasted and how accurate are by when I'm recording these programs. What I am to do is to speak clearly and concisely during a presentation and not have to stop him. Rewind and stop on record and sometimes, and you won't know it necessarily. I have taken three attempts to get something sorted out. Once I mean flow, then that is accurate presentation and recording. So accuracy has to get it right. First time, different measures there. Now quality does depend where you set Legal Aid agency, since quality mark license conveyances except etcetera, lex L. Accreditation or measures of quality and cause. He means fit for purpose and achieving what you said it would be so replicating the thing, our quality and voices, one that gets paid promptly on there's no Arab medical or grammatical or typing errors in it, for example, so quality is different things to different people. They don't actually enough. Measuring the customer's perspective was a number of things. They're much of which comes out off looking at things from the client survey. Point of view. Satisfaction may be measured in terms of survey. It's not the only measure. Satisfaction could be that the bills get paid on time. The bills get paid in full the that there's no discounting. Maybe another indicator. By all means, you'll get people acknowledging what you've done. Verbal comments, written comments, cards and so on and so forth. That's all very good. But don't rely on just one area. Satisfaction cannot be measured in terms of no complaints, because I'm sure that you'll have complaints about something a bank or another service provider. You don't take your time to feedback. You just get on, go somewhere else. Well, we like to hear from you in terms of how you feel about things. By all means, contact me. Contact Well, content here, datable or other issues. So satisfaction is not just measuring complaints completes. Responsiveness has to do with time measures. So we have helped firms surveyed client work. OK, you keep waiting for 10 minutes and I got two o'clock employment receiving temples to you've been busy is anything. How do they feel about that? How responsive, are you? We did for legal Aid Agency firm set up a four working out response time as a standard off time care if the client phone befor then somebody who knew about the case matter would phone back four working hours on the feedback that we had had thousands of client questionnaires come back. We're acknowledging this pretty good, and they were quite surprised and very pleased. How many times have you organize something? Your carriage. The garrison will phone you back about your car after filling them to find that they have old mentor phone your Yes, this part is in. But didn't we tell you responsiveness is very loyalty. Maybe in terms off that kind coming back again. Same problem. Repeat clients that something if you don't have repeat clients loyalty, maybe in terms of recommendations, that sort of thing, that may be important in another one of loyalty. Difficult to find out, but well worth exploring. If your commercial lawyer how much portion off the spend of a given client on legal services come through your door to give the big issues to big firms and the more modest issues to your firm. So share off their expenditure in retail, it's called share of Purse may be looking at things through a client perspective. Market share well depends on the world you're in. But how many cases to go for the local courts? Crown courts or what have you are ones that you handle divorces per month to come through? Your For what about the land registry? Which firms are doing? Which completions? What about the market? Share off the local housebuilders. You get ALS their development work of Europe. Convey Answer. Do you get part off it? Landlords, tenants and so forth. That's an interesting area to explore horses for courses, of course. And then finally, staff matters interesting to explore what you think. It's an indicator off the motivation staff. We're going to explore that a lot of details. The end of this program dealing with people. What about motivation staff? What's the indicator off staff motivation? Well, one of the indicators is timekeeping. Do they arrive on time to They take no more in their allotted lunch breaks, too. They complete the work, productivity and so forth. People throwing stickies. Are they always on a Monday or Friday? That's something to think about motivation is often observed behaviour. That sort of internal growth is the degree to which you promote internally. If your supervisor leaves, do you bring somebody on internally, or do you bring somebody from the outside that sort of thing? Staff motivation by way, could be looked at the pretension of good staff, not just retention staff per se may keep the Muppets, and the good ones go off somewhere else. Innovation is uninterested concept that is a better way to do something or better thing to do so in your meetings, you get, have people putting forward ideas, have improved systems, procedures, things they follow, soft systems and so on and so forth from looking improvements on that development has to do with CPD has to do with file reviews. Has to do with looking at things like appraisals and so on. When we'll talk a little bit about how we evaluate performance while we look at people management as well. So that is the book ballot school card that gives you 16 potential areas to look at and do. Please remember that if you want to run a good operation, then you've got to keep these plates spinning up on down. Make sure that all of these are being looked at because what gets measured gets done. When these things get done, you're running a good business that's going to be operating well. Clients will come back your improved brand, and you'll retain good talent about school. Count the very powerful tool. If you need any help, neighbor mentioned, Well, that's what we do. So, of course, when we're looking at managing our operations, there are a number things we have to look at. But it all comes down to balance. This issue of ballots is very, very important, and I think in the three goals that you will find in most business, and I think this when I look online and check out Web pages of various firms, there are three things going home. You tell your audiences, which are obviously going to be for clients. Principally, you want to frighten off. The competition, of course, won't attract staff three audiences for your Web page or say you're successful in some guy's. Rather has to do with some financial element of it. You will say that you're different because you look after clients and you say that you will recruit retain the best staff now. I don't wear the consistently, okay. Lawyers are because they play out working for I've seen online, but tongue in cheek comment. Those are three goals. You can't be successful without looking after clients. You can't look after kinds without getting good staff. Good staff don't come cheap. So it's a balance between 33 often in opposing forces that you need to control. And that's all they get d. W in the middle of it. So what do we have to think about when we managing our business, wanting to make a success of it? What we need to do is to follow the rules. Always fallen rules is quite a good thing to remember. When we look at this is an acronym. What are the rules? Will cover five key areas. First of all, we have to think about how much you're charging for the work that we do. What are the rates, fixed fee working, conditional fee agreements, hourly rates? Sally rates declining, of course. But what are we going to do? What sort of rates do we get on by stopping doing the lower order stuff on focusing on the higher stuff. If you have that flexibility, obviously outside of the legal aid agency environment he's gonna have a great impact on that is about managing the operation to provide extra value. Theme utilization of people is very important within the phone. We look at this in a moment. Who does what work there are if we're running in house training courses on finance and go further through financing more than just the two hours down on this program, more like three hours for morning Obsession on Finance will be looking at the effect of utilization within project work, the effect that can have on business growth. The L has to do with the ratio of senior Fiona's mentioned this briefly before senior Fiona's to junior. Fiona's leverage on there's different sorts of work can be delegated down to more junior staff. We've already talked at length about expenses controlling those different costs, how we allocate the costs, margin costing, absorption costing and so forth you'll remember from the earlier part of this program. We've also talked a little bit about getting the work done, getting it invoiced, getting it recovered on that speed. The work is very, very important from a managing working capital point of view, cash flow and so on, so forth. So key elements there to be looking at now, uh, not for me to talk about the legal aspect is a non lawyer to folk like yourself who are. But clearly, rates have to do with not justly rate, but the blended or average rate. We look at training courses from day rate. Some days are less than others, some days more than others, but we average them out. During the recession, the average rate went up by about 20% to higher order. Stuff just stopped doing the more straightforward stuff for chambers of commerce and business link there. Very good stuff that they do, but they don't pay quite the same way. So that's an important issue because different work done by different people, four different clients is going to happen in a multi practice firm. And we need to look at what the average rate is are not gonna talk about sisters termination order that's in the notes. If you needed to get a reminder up, it's all about the importance off the matter to the client. The one bright idea of my accountant has that can save me £1000 on tax personal tax is going to be well worth it. In that brief moment, he thinks about it, so that's very important to me to get those sorts of things together. So assisted rumination orders there. But if you look at the study this study I was involved with a few years ago, about five years ago how much of your billable time is spent doing something that could be done by somebody less qualified across the bottom, we got percent of respondents in each bark in the bar chart. The amount of time 80% of responders could be spending back a day. A week on something done very simply, is qualified. So what are the issues here? Well, from a rates point of view, if you are doing work that things could be done percent more junior trying, overcharging no good, they charge people high headline rates photocopying, for example. Secondly, of course, uh, if you're doing work could be done by some less qualified, it reduces the opportunity cost off, doing higher order. The only work. So there is a financial side of going a number of facets to that. But there's also a human side of the coin. How do you feel? Been spending a lot of time doing Admit, You know, it's only a day a week here by 80% but the average is half the time. You are in the office for 40 50 hours week, half the time you spent doing something fairly straight forward that could be done by somebody less qualified equally. How do you feel if the more senior people take the interesting cases and you get the more straightforward cases, that isn't inspiring. We like to do interesting work, so there's a human dimension. Not only you doing less interesting work could be done about something that's qualified on if there was somebody there to do the work. Every firm has more junior staff. But if there was something there to do the work, then you're denying them the opportunity of learning by doing the work yourself. So the human facet to the the other side of the coin isn't important. So when we're looking at the operations and what we're trying to do with the business, there are ways that we can look at the work. From the point of view of two dimensions. One is the volume of work, and that's growing left to right on the screen on, then the ability to add value. And in general terms, there is lots of work around the higher volume work where the opportunity around value is less. There isn't quite so much off the higher added value work. So there is this exponential curve, and if you like one end of the scale of the left hand side, there is high value work where your expertise, it's very, very important. On then, at the right hand side of the model, there's a higher volume off relatively straightforward work with the Opportunity Valley is less on. This is further notes on this. If you want to explore, that is expertise sort of work. Khan has the same problem again and again. Once you experience on efficiency, work is how quickly can be done at the most modest cost. So terms of buildings you might have might argue there's a higher volume of private home being transacted at the right hand side of this model way. Transaction conveyancing is relatively straightforward, relatively quick. The price is obviously an important issue. If it's more complex matter with boundary disputes or unusual matters, then experience comes to bear when it comes to properties. Then, of course, commercial residential properties are leasehold enfranchisement. Whatever that is I heard about it would be at that end of the scale. Same with person injury slips and trips efficiency. End of it, catastrophic injury at the other end of it, less body important. But the opportunity that value is obviously important there in terms of leverage. And one could look at three different levels of people in a firm. And here, at the expertise end, we have three levels. Find work, managed to work in third level. They do the work, not my terms, but find us Minders, grinders. You may have heard it. We'll hear the opportunity. Delegate down. Complex stuff is limited. So have a shard like sort of structure to the operation. So getting the structure right, its operation important. Most firms operate in the middle band here with experience being a delegate, that down and so on, so forth. And then there are some firms out there. I worked with one on one qualified solicitor on 50 people attached to telephones doing slips and trips on. That's what they advertised in their situation. So a Zoe can see leverage is quite an important issue when we're looking at how the business functions so summary of the rules, right, 100 times, please on board. I will follow the rules. We'll give you a very clear idea of the sorts of things that we need to look at managing the operation General. Well, moving it on to the general to the specific. I think so important we could recognize that most work we handle is basically a project. What is a project? Well, it's a series of activities in succession lead to a particular outcome, so we could look at the project process from a number different points of view on at each point, there are risks on each point. There are decisions to be made. When you have a client, you take instructions Well, that fine. You have to go through a number of different processes for our boarding, any client opening a file doing due diligence, so forth, money laundering and so on and so forth. Then there's engagement letter making sure no conflict of interest except except etcetera on then decisions need to be made moving to the next stage through that gate. How am I gonna handle this particular case? Case planning place, managing systems, different people working on this off it and so on, so forth. They get on with the work itself. Must be done by certain timeframes and so forth. Then that stage with end delivering or signing off the project. From the point of view of the client's point of view, more decisions made at that stage before within review. How did it go? What we do and throw all this project process and simplify it clear on screen. Here there are a number of different issues to be taken. First of all, what are the risks? Each stage what must be satisfied before moving on to the next stage and then also looking at this from the point of view of stakeholder management, fierceness, support staff, clients, management feats, fees, billing and so on. So so within a lot that we have to deal with risks I would like to share with you is a tool that I've gained from dealing an industry with a total quality management over the years on developed this for use in the use with confirms it is called. It's a very simple tool. It's called the roll effectiveness model on. All it does is to take a given step off the project process, looked number off a moment ago and look at them and said, Okay, what's going old? Where are the risks at each level? This is a little bit or process mapping the notes. Look at it in a lot more detail, but it is quite a powerful tool. Essentially, what we're doing is taking any particular step to looking at it in a very simple fashion for any particular step they will have on output. So we take the first to take the brief from required. The output of that is a client care letter. They taking the accepting the matter. So those are the outputs water. What is the process? But the process has to do with identifying people conflicts of interest, checking this, checking that, checking the other. You're very familiar with those elements within that. Then that process leads to the next stage, the client better. What are the inputs to that process? Mostly information inputs that come in on details that you'll get, and then you'll manage that part that step and then produce the engagement letter. So that's a very simple step. And you can use this in any particular project that you're looking at any stage on the quality. It comes down to a number of different areas. Not only being very clear about the outputs of next age are what steps are within the the process to produce those outputs of engagement. Letter on what information must come in then, around that there are four different areas that one could look at and that will define whether those outputs are actually achieved or not. May never have analyzed things in this way, but it's a very simple tool, very quick tool and one that gets other people thinking about how they can improve their operational activity, so encouraged to explore it from your point of view. Okay, what you need to do is to start to define the process step that we're talking out without put for the next stage of the process. Simply process the short process better, and then what? All the inputs of information and other things into that around the outside, we put four different areas. We need to define what constitutes good quality. Well, when it comes to client care letter, you will know what constitutes good quality. There are steps taken within your firm to make sure that it's put together in the right way. Client Care letter covers all the marriage bits and pieces that's required on the loss side. He produced very useful document on practice management. On second edition. I'm looking to show for it got on somewhere looking at the various processes that go through in practice management to produce a good complaints can let that define the quality standards. It will define the procedures. There are procedures for money laundering. There are procedures for identifying individuals. Exception. Exception exception Those laid down quite clearly in the operation. You've got people blow the procedures. The knowledge of managing that process is very important. I have an overview I run. These is part of the professional skills courses, part of the client care and professional standards. But I don't have the hands on knowledge to do it because I'm not a liar. I haven't worked in that environment, but I do have the overview on guide people where to go to find the knowledge required to manage the process. So what's needed to complete the process? Well, some sort of facilities and probably I t case management systems file and so on. So when it comes to just straightforward taking information from a new client putting together a file opening system on producing engagement letter, there are four different areas to be looked at that if there's a shortfall in any particular area, then you cable. If they things are known, then we are going to successfully produce those outputs that we will. It's no more than that. Very simple, that very, very powerful when it used to look at process mapple in your firm on improving those processes and just to leave it with analogue tape from our own organization, we looked how long it takes. It took to produce an invoice from having completed a piece of work. There is processes we went through the process map ran over quite a few different steps in the process. Opening spreadsheets, open word documents, making calculations, collecting data, collecting information, printing, posting, packaging, dispatch, Aries feedback sheets from open program, if that's what was involved. Of what we were able to do is to look at that process on, take various steps off it and spot where the problems can occur. As to why the output wasn't an accurate invoice got paid first time on these areas are very useful to understand processes to put together a map of the processes on. What you've just discovered here is elements or business process reengineering, given a very fancy title, need not have it. It's something you could do yourself. I hope that therefore inspires you to go into your part of the organizations. I don't know what all the processes are we producing output? If not, then those four areas, maybe something we need to explore in order to improve what we do within the organization. Because when you've got the operations right, and then you just need to bolt on some good marketing. Peter Drucker wrote back in the 19 nineties that the purpose of any business is to make more keep a customer. So whatever it is you do, you can't do it unless you've got some people who want to have that service from you. So managing the marketing function is in fact, a very important part. But I think most people, unless they've actually studied marketing, may misunderstand what it is. It's not just going to be dealing with elements of publicity. It's not about sales, because in my experience most professional people, lawyers, accountants and so forth. They don't like selling. But they do like sales. There was the work that comes from that process. The problem I've seen with marketing is that most people don't understand it, and secondly, they think it's a department of function. What I think works really, really well is what I would call marketing advocacy. Marketing advocacy is the degree to which every single member of staff knows what businesses about and can explain very simply in 20 seconds on being advocate for the firm we've done studies with nor firms where one department doesn't really know what the other department does or somebody who's in the conveyancing area. We go out, we start talking to estate agents and say, This is it. My neighbor works for you. I didn't you did conveyancing because they were in litigation or something like that, or family members. Even so, it's not just about your neighbors and your family knowing what you do. It's about being able to understand what businesses about on managing the marketing mix. So marketing advocacy is really what we should be aiming for on the three areas that I'd like to look at in this particular program On first, which is to deal with the modern marketing mix. What is the what all the mark but are the mix of things that you must get a handle to be successful? What do you do that's important to your clients on? How do you perform against the competition? This is a model that you may not have seen on doesn't necessarily appear in every marketing book either. Then we can't go very far today in the approaching 2020 without talking about digital marketing. And I think that most firms haven't really progressed with what the Internet waas what the Internet is today. So I would like to explore some of those things as well, so let's get straight into it again. As always, it's backed up with the information in the workbook, and we're on page 37 of where we are. Is it when people are talking about marketing, they think it's publicity, but there's other things on back in the mists of time, the 19 sixties, when I'm still in short trousers. Not a pretty thought. Marketing was being talked about in terms off the four, please. Marketing on the first coloring book marketing that you might have a pick up read will be talking about that, and that's a very traditional view. So what are those? Peace? First of all, what is the product? Well, the products that you produce it clearly service products. They are moving home products. They are keeper of jail products. They are sue them because they've wrong do products, a whole variety of different ways of expressing what the product is. That, of course, suddenly must decide what it will be, costing the customer to go get hold of it. Well, what the price is it the hourly rate senior partner, This rate junior person in this rate, paralegal that rate. Maybe it's a fixed fee. We for this price. This price for that price may be conditional fee agreements. It was a lot of different pricing models coming into the legal sector, of course, and then we say, Well, how do we make people. How do we get to have access to this? What? We have an office near the courts. We have an office on the high streets. We have office that's out of town, low cost on. We do things over the Internet or over the phone or remotely, so the place is moving around on. Then, of course, everybody knows about promotion bit the advertising. What's really, really interesting? I've worked in marketing for many years. I worked in London advertising agencies on The curious thing is that we do recognize technical skills when it's there, we have to go to company. Secretaries get legal advice. We go to the accountants to get counting advice. And so we get a production managers to work out how the product gets produced if we're in manufacturing or we've got the technical people who deal with technical parts of it. But when it comes to the promotion bit, we're all customers off promotion. You get it on your smartphone. You get it every time you turn a free view on to get it. When you die on whatever it is, commercial channels will be advertising at you. You can't pick up a newspaper color magazine. We can without getting hit by advertising, and we all know about advertising because we're receiving end of it. We have an opinion. That's one of the problems I think that many marketing people have is that everybody has an opinion and that's valid. But they may not have that opinion based on necessary of full enough understanding. So this was all very good, and it worked in the sixties and worked in seventies. And then Cotler realized, Philip Cotton realized that the products are going to be having a service element. Even when you go into a fast food chain and something flips burger, there is a service element with that tangible products. So what is it that is in the marketing mix for people who are offering services? Well, first of all, you need to get people to deliver it. Who is their order? Their skills. What can they do? One of people then, of course. And we know this from some of the international fast food chain brands McDonald's, Burger King, etcetera, etcetera, etcetera. There is some physical evidence wherever you go, you know that there's a similar sort of style, and I've seen McDonald's in Lagos. In Nigeria, I've seen Donald's in Dubai. I've seen McDonald's in downtown Banbury on they will look pretty much the same. So OK, there's that physical evidence. Is that Brian? The waiting room that you have even the documents that you have, the folders you put them in become part of the physical evidence event. Of course, there is often a process Have case management processes like cell accreditation, whatever it might be. There is a process procedure outside of the legal sector. International standards. I s O define processes. Now. This is a very good because what it shows is the breath off things that impact on the customer. I grew up with this and I understood this and I've been examined on it. Fine diploma and all. They have a bits and pieces that comes with studying a subject like that. But then working with John Williams Hurst, my business colleague, W or D A. W. As it happens, he's savvy number with us. We're looking at this and saying, Well, hang on a second, somebody produces the product. Somebody decides the price. Somebody else decides where it's gonna be located. All the facilities somebody does the publicity, the promotion, the advertising, direct marketing, the Web pages, somebody else hire staff. Somebody else deals with some of the more tangible aspects of our service environment. Somebody decides I t or whoever decides what the processes will be. So who owns the marketing mix? The poor marketing manager? He or she doesn't because all he or she does pretty marches be expected to do the promotion that everybody knows about promotion. Unless they like it, they were run with it. Where's the customer in all this? You see, For May I even Cotler himself. Ettakatol recognized Aziz. We moved into the new millennium that there was something missing here. So what we needed to do was to move from the ego centric, company centric view on Put the customer centric to everything. So what color did? As in Let's hey, look to the more modern mix on John on myself, extended it to be something a little better. So here's a much more modern mix, and other food mixes are available. So what does it look like? Well, what is it the customer values you see when you're leading sustenance, you may value hamburger going into hamburger you may want sustenance from a different sort of sit down meal somewhere in a different nationality restaurant. You want to go for Italian, you want to go for a pizza. You want to go for a Chinese. You want to go for a curry or something like that, you will value something different on. Indeed, depending on the situation you're in, you might want to spend five or so pounds on a A meal very quickly in a fast food restaurant. You might want to spend 15 £20 in a cafe or something like that for me. You might want to, because you're trying to impress somebody. When have a particular occasion and take your lovely mother out for Mother's Day. Whatever it might be, you might value something quite differently and then inherent within. That, of course, is going to be the cost cost of ownership cost of engagement. And these are intimately related story against myself. When I moved up from West Country in Bath, where he used to live, I had a job move on and I was getting fixed budget to help me relocate. That's the package in industry at the time. Andi, I want to make sure that I didn't exceed that budget. I needed to move myself family across the country. So I went around and had a look for some convincing. This was quite a few years ago. I went to something called a library, which may have heard off in the past. And they had books in there that were yellow on these yellow pages to duck through the 14 separate water. Cambridge, where I was going to be moving to, Went through there, picked up the phone, and then I bought some convincing on Price. Nice chap sounded good. He I think he had Werther's original on his desk, and he called me do Boy. So I engaged him and he was actually find it was the cheapest on A moved in and life was good. Neutral came along. We moved on, but when moved, we could sell the house. Onda. We discovered that the fourth bedroom about the garage didn't have planning permission. I bought the house, I said to my then sister, who was in the area moving to into the East Midlands, and I said, Well, don't worry, Sylvia. I didn't build it. I don't need it, and she chuckles in it. Well, the person buying it definitely needs it. And we've cut a long story short. We discovered that indeed, there was no planning permission. It had been built. Without that we had to apply, respectively. This chap had no retired, and it costs a lot more to chase in the most sophisticated. The rest is history. I ended up renting for year as way lost a sale on, therefore, lost the purchase that we're aiming for. But we have to move for the next job anyway. Cost of ownership? Yes, you could buy cheaper any time and every time you to do make sure that you have saved some money because you're probably by again said by cheaper by twice cost of ownership. You see when you buy a car. Now, if you buy a brand new car mentions before you roll it out of the dealership in the moment you do that, then you wipe out a lot of depreciation, assumes you drive it out by a second hand car with a demonstrator vehicle that's got 2000 miles on the clock, and you'll get it for 2/3 of the original price. You know, it's it's cost of ownership on depreciation is a king thing to think about when it comes to acquiring something So customer value, cost of ownership. What about the place where I don't really think that diets matter as to where you are. Just want to know that your convenient because you got disabled parking because your town centre because your opposite the NCP Car park. Because you can be accessed easily through a different media. Social media you can be accessed through the Internet. You could be accessed over the phone. You could be convenience and so forth. So if I wanted to get some comm painting done, and I'm sure those components is listening in, be very, very helpful. But I live in the West, these middle initial pretty close to these middles. I probably wouldn't but again for you because I would think that I need to be closer, but it's more convenient to drop in and sign the forms or whatever is needed. So that's what a customer looks at on then. I don't about you, but I hate being having being advertised to, but I don't mind people listening to me there is always in advertising terms. Push advertising. There is skeptical and approaches on. Do you know if I could advertise to 1000 people? One respond? Well, I don't mind of upset. 999. You know what we do want Do customers of yours are like this. They want to listen to and respond in the appropriate way the appropriate time. So instead of publicity's, which suggests a a company centric pushing the message out communication is much more of the dynamic, which is what your clients want. They want to listen to, and they want you to respond accordingly. Now, I mentioned people Well, of course, people important. But I want to not just have people there. I want to know that they're competent. So what is the conference see Needed? Much of the work that I do it I've got a meeting on Thursday is to help a firm identify the competencies, not just off the senior people, the junior people. The training is we're going to set a competency framework in a career path document for the new firm so that they can advertise and recruit the right people and demonstrate on retain the talent because we have a competency framework on when you're a customer oven organization, and you probably like may end up in retail from time to time. What sort of competency do you have there on? Sometimes it is very good, and sometimes, and perhaps it's just me. But very often the competency isn't quite what you wished it waas. So from a customer point of view, they want to know that your company not just technically competent, but you have emotion, intelligence, competence, that you have communication competence. You have a competence into into a number of different areas and that wide a portfolio of soft skills that we're providing the data. Little demonstrates that there's wider set of competencies that are required of professional, not just technically certain, no. But if the physical evidence was going to be important, I put that in customer value. What I think relates to compensate relates to communication is that you've got good C R and systems customer relationship management. When I am going through conveyancing, I want that customer relationship management to go through the duration off that matter which may take a number of weeks, one hopes probably get sold and transacted, flows accordingly. Maybe that's three former process. Top end of it, Uh, if it's going to be a litigation, it may be a different situation, but the relationship I have with my accountant is something that's is endured for in pretty much 20 years. So custom relationship management is fundamental to your business and your clients and reflects very much on the degree to which they will engage you and will recommend you and so forth. But I think there's a better part of the marketing mix on then. Finally, it's not so much the that we have a something process because that is within customer relationship management, within competencies, communications and so forth. What I think is important. He's context now. What is context lean in terms of marketing? Well, you know, if you are dealing with a client on the client, is a young individual. That person may have parents who also get involved because whatever's going on, maybe it's a divorce matter. Maybe it's a criminal offence matter. The context is quite different between the individual and the parents. Off the individual, for example, just as creator, a simple example. The context off, um Patrimonio is quite different from the context. That same person going through conveyancing. The context, often employees in a commercial situation is different from a business owner in the context off the commercial situation that you're advising on. So context actually puts it in puts the customer on the relationship with the customer into distinct. It's, uh, clarification of what the individual might be needing on what somebody wants. Because I know when I deal with employees off clients, let's face it, they need to look good in front of their bosses. Quite obvious isn't the context there, But if I deal with their boss the context, there may be a little bit different because there's a hierarchy, there's a situation has changed. Private client. Uh uh, commercial clients, Legal aid client context changes all the time. So let's step back for a second. So okay, what's all this mean? And what does this, uh, mean for us in managing your business? Well, let's have a look at this. Well, who affects these seven areas on the seven seas of marketing? Well, I got good news for you listening. Now you have an influence on all seven areas. It doesn't matter what you what situation you're in for. If you're a feeler, you know what is going to be important from the client's point of view of client value. The kinds cost, not just price cost means the degree to which that you are proactive solving problems for them, the degree to which you are responsive to them. Why are your convenient person to work with? Well, because you have a mobile phone and Europe allow X access to that at different times of the day and so forth. Your communications are understood on a very intimate basis with your client. You know what you have to be good at. Just technically aspects off, no area of law. You know how to manage that relationship with a client over time and you know the context of the situation. So here, rather than we had go back a slide to that marketing mix, which was scattered throughout the whole organization. What we've actually got is a situation where you manage all of these now in the program that I put together kind care managing support staff. Your receptionist provides value taking messages appropriately, making sure they're comfortable getting messages through to the person they're going to be seeing properly that they don't take up too much time. Cost is often expressed in terms of the time it takes to get to see something. Convenience, communication. They've gotta be competent. Various things. They deal with the relationship immediately. In the short term, on understand the context of situation they're in on so forth, your veterinarian being all the example, the context of the of the parent to the person going through the divorce. So if that was what was happening, everybody has hands on the marketing mix. And that's actually really quite powerful because the thing that we talked about on setting up your own business of managing business interactions is down to moments off truth moments off, truth mocked. So what are the Mozz? What other things? The moment of truth. No matter how good your advertising isn't about, how could you were paid, used them and how good you are. It could be completely undone by somebody who worked in reception. It isn't actually up to speed and doesn't manage these elements Well, so deranged up. I mean, very, very good Support staff in small firms generally really do want to not quite so good. So there we are. That's your first blush on marketing. What can you do with it? Practically well, if you have a look in the notes, you'll find that there is a very useful chic. Where you could look at this is Paige Page, 42. How to Make the Seventies Work for You. You are asked to define a customer or client group conveyancing, matrimonial wills and probate, whatever it might be, Then identify what it is the customer client needs. Wants desires. I need food. I want to burger I desire. But King. There's those levels off consideration on Get the debate going amongst the department, your colleagues about what it is that you think they want under each of the seven headings. And then this is a really powerful thing. Find out, talk to attain client and discuss it with them and see whether or not you've actually got it right. Because that is that most powerful marketing you could do and about the time involved won't cost you too much to do it, because that, of course, will drive business development. And that's what I'm going to look at in the next section
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Written and recorded by Mac Mackay, DAW Ltd.
So if your business is all about making keeping customer, how well do you know no customers? Because it's only knowing your customers that can really drive business develop. You could do all you like to develop your business, produce things that customers don't want. But you won't grow the business that way. So if markings anything is about being customer centric, it's about understanding customers. Now I find in the work we do consulting with law firms, large and small, a number off different, quite interesting problems. The 1st 1 of these problems is that so often law firms going to vote the marketing strategies, but they haven't got either the right people there. In HR, strategy means not just recruiting right people training people in the right things. So they've got that problem. And secondly, they haven't got the I T infrastructure strategy to develop the capabilities to engage clients in right way. So all the marketing isn't gonna happen unless the organization and heads operational management is so important. So it's dovetails into that section is while the second problem on I couldn't put my hand up and say a little bit guilty of this myself is that marketing initiatives been driven by the requirements of small groups of individuals and often the business owner. I give you a very simple example. I'm a A very keen. I have been a very keen rugby player. I support Premiership rugby sides. I'm a former rugby referee East Mission Society referee on their 44 Before the bribery it came in. We used to go on have days out at Twickenham four, for example, the vast match Cambridge Blue not May, but colors and where it's OK, that was driven by May know driven by the customers, particularly so some initiatives get driven by the wrong groups of people. So what does that mean? Well, I think what it means is we need to think about our business in a little bit better way. The top level strategy must be a blend off the external environment, but we're operating the macro environment that we have no influence over directly. Just have to deal with it and then Secondly, we need to look at the internal environment stakeholder, the cultures, the remember that driving wheel, the complete leadership, those issues because it's the blend of external market on the risk assessment model off the Sisters Regulation Authority looks at the political, economic, social technological change, legal changes, a swell as ethical issues on environmental issues. So they call it pestle or steeple, depending on the acronym, Pest is good enough. Political, economic, social, technological. And that's what we debate on Stage one programs that I get import with. So it's a blend of external to internal produce. The firm's strategy, and it's from there become a number syriza thing. What is that sense of purpose getting to the Why? How are we going to do that? What's the ethics off the business? Have a look at the Data law ethics program to pick up some ideas there? What's our approach to them? To the market, our strategic approach to the market? And what are those targets business we can hopefully achieve? So decisions have to be made about the approach to the Marchioness. Take strategy for an example. This'll matrix is a very powerful tool, uh, produced by a jackal and self on. What he showed across the top is products of services that we currently produce or we could develop. And then on the left hand side, there's those markets or customer groups with types that we could have our existing market on what we could develop into new areas. What he said was, is that this is a very simple way of analyzing the opportunities out there and deciding which we're going to do to manage risk. So four quadrants produce four distinct strategies. So which is the least a risk area for you as a business to operate in at this time? Well, probably your existing products and services to existing markets or customer groups. So if you're in a regional firm, you'll deal with Region and you'll look at the services you provide and try and win Morris the same on that is pretty good stuff. Market penetration, good strategy. Well, where you go having done that, if you're gonna do that in the next 12 months, what do you do in the 13th to the 24th month, second year trading going forward now, which, for you is the least next least risky area. You may say that you were developed a new products for your existing customers, so if you did conveyancing, but you didn't do wills and probate, you could get a low commend and offer that service to those clients walking in through the door for comm painting, for example. Or you might say, Well, actually, it's quite easy. Open up in office at somewhere else because there's a firm that's closed, be absorbed by somebody else, whatever it is. So either of those two service development, new services or market extension Well, that's fine. It's a decision. You got the strategy plans and you roll it forward. Now. Moving to new services for new clients would be moving away from your core, but maybe something you look at to diversify into new areas. Diversification can mean different things to different people, but by that it might be that you're doing financial advice for new areas. If you're doing wills, you're doing probate. You're doing lasting parents of attorney. You're getting some financial advisors in to help clients deal with trusts and so on and so forth. And it's not a very big step to start offering broader areas of financial services open above the legal advice, for example, now, clearly, this is a great tool. You can produce this on white board in the office that's got one over there in my office and I play around with this to talk through staff that they can see what's going on, and we're gonna do this this time and then that next time and so on so forth. It is very useful again to visualize it. Get people on board of a team building skill opportunity there, people contribute to it. But I would. I have one word of caution, and that's this. Remember the rounds for jam rule? Very important. What's that? Well, raspberry jam, as you may know, doesn't taste too good if you spread it to simply So what does that mean in this context? But what it means is that you have many, many opportunities in this little discussion here. Half an hour over coffee visits with your team, and you'll come up with ideas in certainly the 1st 3 areas that market penetration, service developed or market extension. Now, the problem most firms have is there put too much effort and spread too thinly. You've got a finite amount of time. You have a finite amount of money. You could a finite amount of expertise, therefore do things in succession rather than allow once that then suggest that you've got short, medium unlock er toe strategies. So what does that mean? Well, the top level strategy that you develop here about a sense of purpose and from there then develop a marketing strategy. So that's the next stage of this. Just to say Okay, where are we now? Where would we like to be that entrepreneurship? That leadership finding the path. So these financial targets, we've got a certain amount we can't services current markets, market penetration, short term, longer term that medium term, maybe 23 years. We develop new services and or new development market's depending on the situation. You've got resources. It may look advances in know how artificial intelligence is coming to affect the legal sector? Quite a bit. Market dynamics are going to change waken track all that on. Then we can see whether or not we're gonna be in the market for this new type of work. And that's something quite important. That I think firms need to look at is if you do conveyancing, you qualify for conveyancing. If you do criminal defense, you qualify for criminal defense work. But just because that's what you do doesn't automatically mean that you're going to win in the work. I think a lot of firms struggled with this thought. Just because you you do what you do doesn't actually mean people gonna beat a path to the door. And what you have to do is to look not any to be in the market to qualify for work, but what you gotta do to actually win the work. And from there you should get some marketing plans to demonstrate how you're going to win the work. And these two things order qualifiers and order winners is really top level thinking from the firm's point of view, because the order winners may mean that you've got to do something with your training development, your CPD or HR. It may mean on artificial intelligence is one area that we mentioned. You may need to look at your technology, the communications infrastructure, the I T systems, so that they take through from a marketing strategy to an operation strategy that you need to think about those two areas off what we need to do to get into the market. What do we need to do to win? We can look at our current capabilities, decide What if you got to change in order to improve on, then from there we can say Okay, if you will win more work, grow our business or not grow volume so much, but grow value and we want to move to higher value stuff, then we need to look at the improvement requirements on as a trainer and training business. That is what we have done because we've moved from a situation where shooters will be out 120 days a year, delivering face to face training across the country or deep. I've got wide of matter worked overseas, moving to the sort of thing we're doing now, which is delivery online training on you have your view us to me value of this sort of thing. So we trained ourselves up in order to deliver the program. We've got the I t by large, sorted out on. We need to make continuous investments as programs get more and more complex, so that gives us a thought to our overall strategy. So let's now look at these things here. The difference between an order qualifier on order, winner on what is it you're doing? It is actually use it all off. No interest to a client at this time. You see what we're looking at? All three levels in terms of developing this matrix. So order, winners and order qualifies have to be differentiated. So what we've done, we're gonna take you through a case study that we did with a firm that was, uh, patent attorneys. They were West London based. They did high order stuff. They were facing competitive pressure from patent attorney in Cambridge who were working with the spin out companies off University College, London, on Imperial London. And that's where they did their i p work on. They were facing that competition from those people in Cambridge and gazed just to find out why they weren't winning as much as they could, what they need to do to improve. So I had 13 conversations with decision makers and all these spin out companies that were technology, environments, science, technology, engineering, mathematics, biotech and all those things stemmed 13 off. What I asked them, it was to say OK, what does this firm in West London do? That means you give them work on. We had three levels here, a crucial vantage point advantage useful advantage. What is it being fully expect to get up to a good standard professional standard on? Then what do they do that isn't particularly important to you? So we had this scale 123 order. When it's get this right, we'll give you the work thes things we expect to be up to standard on. It's a given qualified to work if you've got these things and those things that aren't particularly important to us. What the firm wanted us to look at through discussion, we came up in these areas. He said, Okay, what awful. The things they do is important to these. It's been out cos their existing client base. Uh, we had eight different areas. They patent attorneys were technically quite brilliant. They were people with two PhDs in a variety of things. They do not any pattern work on returning is they knew little. They knew the technology. They only recruited people from Oxford or Cambridge. I have to say when they said to may really recruit people from from Oxbridge, I thought they said expiration couldn't see what was quite so important about Oxbridge s a a center vaksince another vest. It was Oxbridge their client care activities. That documentation is for owning produced documents on 160 GSM Conquer laid. That's a shiny, almost bored like paper. Twice suspected that she to paper on your desk this morning, probably case management systems and do the deliver what they said they would do. They sponsored youth orchestra quite highly, spent a lot of money on that. Then they flexibility their service and their cost. They were charging £650 an hour, and that was sort of starting rate. But what we did was to ask people to school that now all of them had a little barrier views. But we ended up with these mean schools across these eight areas. So each of the conversations which is saying 123 this is so important to us. We give you work based this 456 That's the sort of thing that we expect people to get up to. A good standard 789 is really particularly pork to us on. This is what we found on this slide is actually taken from a stack that I showed to Uh huh. Affirm that the five partners So as we can see technical solution. Client care. Very important cost. Very important cost to clients. More than just a price, of course, was very satin sponsorship. Wasn't particular port so far, so good. But that's anyone Dimension what we needed to look at. How does this firm in West London compare with that firm up in Cambridge? What? They were losing a lot of work. So what we had was three levels. Is the firm in West London better the same? Or are they worse than the firm up in? And they were quite happy to give a judgment without giving too much away. They would talk to May in these were people pretty much in London on Home County, so I could get to these companies quite quickly, quite easily. Had these conversations and people happy to give anonymous view, were they considerably better than competition marginally better or worse, competition? Andi, across the same areas, they were evaluating the performance of these key issues against the competition and again, 123 is better than the competition for us. It's the same 79. Worse. What we saw here across these things is that there can't predict good their cost a client six. And if it was a really big nation rooted, why they were losing work to fees of 225 or so £50 an hour. So what we've ended up with here are two dimensions that we're looking at. What we do is to produce a very simple map matrix off, uh, with falling simple format, the importance performance metrics. What we've got across the bottom is, you can see is what's important to customers. Remember how I know the numbers? 123 is winning areas 789 Not very important to us. It all across the access on the left hand side. Why access? We've got performance against competition. Better, Same worse, very, very straightforward. And across the middle there, for we have a boundary off acceptability. So clearly what we want to be doing is whatever we do needs to be above the life. It's below the line. We need to improve. But of course, if you're doing anything that is worse than the competition on things that really matter order winning things, then you have a problem. And that would explain why you're losing business if you're above the line well done. U P D. That's appropriate. But if you are outperforming the competition on things that don't matter, you're wasting money. You're wasting time wasting teas. So let's take those coordinates off those importance. Performance and competitive differential. Let's take that on. Put it into the Matrix. This is the coordinates before what's been going over met. Remember, they were really very, very proud of their technical competence and so on and so forth. But they were big plexus, right? Even anything business. Well, this is exactly from the staff that I produced for the partners. This is where it sits Now. If you were managing that particular business, it's not rocket science. That is complicated. I know a son who is a space engineer, so he does complex stuff. I can't do that. What would your reaction be? Well, the partnership said, what it is confirmed, technically brilliant, were head to head of the curve. That's brilliant. They were very chuffed about that because they ignored two important areas. One, of course, with the client care. On the other was the value or cost a client, and so forth on they were a little bit Bush they felt that if you want the best people on the in the country to do patent attorney work on an international scale, then you need to come to us. When we got some lovely offices, but what the customers were saying, we want your people to come and see us. We want your people to get to get her hands dirty a bit. Come and see what we're doing on. We need to make sure that we got pricing differentials between the top level work on the every day work. Now, I don't know so much about patent work but attorneys, but I do know a little bit about brand names on copyright and so forth. In fact, I did work with one of the biotech companies. A spin up looking at the repairing damaged tendons in coins on that business was quite an interesting one. What we saw, of course, is that they would be more than happy to go to the boys and girls in Cambridge in because they got off their bottoms, not on the train, came down to see them quite a lot. They also charged more modest rates for things like international brands and so forth brand naming, uh, protecting copyright and so on and so forth. And that's a very good work done there. They also shows up the problem that I have sponsorship because they're outperforming the people in Cambridge on things that don't matter. Well, hang on a minute. You do remember that I said they sponsored a youth orchestra they were doing was spin out companies from the top two universities in London. So what would they do? Really? Well, it's because that nephew or niece of one of the partners played Trombone School Orchestra, and it's sponsored them to the Paris schools, competition itself and so forth, and they're really good at that. But it was not very important if that actually sponsored PhD student that far more effective, probably as a thought on idea. And as you can see here, their documentation is a little bit overkill as well. Why doesn't need to be so good? Because just expected that things will be correct written on paper. And so it's not a key differentiator. Why were they doing this? Almost Boston paper. God knows what else. So it's a very, very simple concept, a very simple concept, but What do you do that really important is gonna win the work on. It's not just price understanding what customers need, understanding what's important and the difference between what you need to do to qualify for the work, what you need to do to, um, win the work for this firm here. They were rather reluctant to change their model. They had a few problems on. They have since merged that ceased to function as a single entity. So there we go lessons to be learned. I hope you found that interesting hoping kind of useful on. You've got a few notes on this within the workbook, of course, because what I wanted to do now is to move to an area that we all know everything about. That is digital marketing. These are some notes that I took from a conference I was speaking at on the license Conveyances conference a a few months ago, and it talks about what happens with Web pages. And I think that as I mentioned in the introduction to the marketing section that we need to step up to the plate and understand what Web pages are all about. I used to be described, perhaps, is where pages, a virtual billboard, that you provided information on the Internet demonstrating how competently were various things on life was good, but I think we've moved beyond that. I think, where pages are becoming a lot more interactive, more dynamic and Web two is, is often called is recognizing the way there's not a repository like a library off information, but actually is a dynamic tool that could be used now, by all means. If you think about a webpage and take a note out of the S on his own figures, they say that 70% off clients will find out about a firm in some other way and then go and check the Web page. You see a lot of people think, Oh, Google's it. Now we must be first page or to Google looks beyond the 1st 2nd page so forth. 94% of people don't look to the third page or whatever. Well, come on, let's think about this. Don't ignore the statistics, but if only those firms on the 1st 2 pages of Google. If you go for solicitor in Banbury, you'll end up with hundreds and hundreds hundreds, hundreds thousands of pages. You telling me that the only those firms on the 1st 2 pages are actually in existence and the rest of the firms that search term I'm not doing any work at all. Come on, There must be something else going on. I think what happens on this is so important. There's, ah lot of activity that's going on. Yes, it's Internet based. Yes, it's social media based. Yes, it's all sorts of things that bring people to your page. Then do something from that. So Okay, let's look at it this way. If you were running a corner shop, okay, Andi, every now and then you would recognize that door would open and somebody walked in with a balaclava. You don't know who they are, but you do know where they walk. They walk up and down your isles. They looked at everything on after a few minutes, knew where they been. They walked out empty handed. Now that probably wouldn't be a very good model for a successful corner shop. Why are your Web pages perhaps the same? What is happening with us? Where pages on what interaction is there? You see? It's no point having a Web page on. If you could do the Google analytics or any other search engines analytics, you'll know who visits where they came from. I s pay generally on where they are, but go to next when where they exit from and has been loved time with various organizations Looking at those sorts data on. We know where they come from, and we know where they go to where they are. But how often do they leave a calling card? How often do they did? So look, a Web pages now take one firm working with Andi. I've tried Teoh, disguise that bits of the image isn't perfectly won't find out who the firm is just by looking at it. But this is a rough idea of what you'll get off what they went. Pages looked like. Okay, the name is taken away and you got loads in their telephone numbers on. Then you got home page and about us, and for you and all these different areas of law that they do and so on and so on and so on. On their illegal 500 recommended law firm, they're very big, and they do private client commercial. So when you look at all that, you think, well, that's That's an interesting picture. That's all very confusing. Let me kick on something else and have a look are here. We get the news and events now, as you can see that they've got history, their legal updates. Archive. It goes back 2010 to 2015. So a few years ago on, they've got on archive there, which is covering quite clearly. Five years, 5 12 60 different months off legal updates on within that they've got dozens of different newsletters about various bits and pieces. So, in fact, they have a library now or then headed off 750 different articles. It was wonderful. It's much better results on. I'm sure if I wanted to practice law, uh, get a qualification. I could sit and read all of those articles on to get a very, very good update on what's going on. But what do you do? Having seen that you got the telephone? But that's it. No, I could look at that and then just move on. So you know what's happening with the Web page? I mean, I might look at that I go through these really know stuff. They do not see stuff as it is dead. And I just think Well, okay, I have a look at this. This is interesting. Yes, I bought a second home. Yes, I've, you know, looking overseas development. Yes. I'm interested in divorce. Yes, I'm interested. Convinced? Yes, I'm interested in investigation or whatever it might be, but I look at it on again. So what do you want your web page to do instead of having there is a virtual billboard filled with the great and good mass amount of information that I'm sure impresses your delightful mother. It's not going to impress very many out others. And if you want a web page, then it really ought to do some smart things. And here for May, I'm cheering you 10 smart things that I think your web page do. The first thing that I think it should do is make sure that it's not gonna get you into a mess on. Why have I shown your picture off this little terrier out there on a lead? Well, so often we discovered this Is that so often firms are using photographs not shut to stop particularly, but they're using photographs on Believe That's okay, because I got this from Google images or wherever I've gone. To get hold of it, they put it on the Web page. But that whip page now has a algorithm embedded in the photograph. On there is a software that concert the Internet. Find this on, then pick up A. It has been used and send you a demand of $400. Teoh, pay this within seven days. We're going to sue you for breach of copyright. Quite interesting. I have to say that we are involved in Web design development and it happened to a client of ours. They said, we want to use this picture. It's from a newsletter off one of our clients. Please, can you use this? I didn't know that she the client was in breach of copyright. They copied it, used it on their Web page on Bush. Things happen like that. So first thing to do is to make sure that you know enough about copyright law when you're using various things on the Web page. So go back to that example I showed earlier. And how much of those images are those that are stopped. Help me of those images are ones that copy. Okay, here's the first thing you need to do is to turn visitors your web page into buyers of your services. It sounds a blatantly obvious thing, but very, very important. In other words, you need to capture some information about them. If I told you while you're sitting wherever you are watching this, that in the room down the corridor there were 50 clients with money in their pockets itching to buy what it is you do. What would you want to do when I think you put wonder off down there and have a conversation with him? And I'm sure if there were 50 people with money in their pockets, wanted to buy what you do, You could convert some of those people in to clients, if not all of them, because you're quite good at that sort of stuff. But why isn't a Web page doing that? So there's the first thing. Okay, we want visitors to our webpage to engage with us, So what we need to do is to turn our Web page into a customer acquisition engine. What does that mean? It means that captures stuff. What should it captured? Well, here's a clue. It is the Internet. So why don't you capture N e. T? So what's that? Well, here we are. This is thought to make sure that you capture the name, the email and the telephone number. Now, then, I'm not going to give you my name, email and telephone number. Really? Really? Because I'm fed up my inbox being filled with a load of nonsense from loads of people. I only do that if I'm going to get something useful. So here's a thought. What it is you do, why not give people some of that information as a free report? Not as a newsletter buried there with 750 avenues letters? It's not that isn't the wise thing to do. What is designs? Okay, if you'd like to have a report on 10 things to improve the sale ability of your property if you're looking to sell your home now, if I was planning to move because hunger that ideas, what is it If I'm gonna buy a property? 10 smart things that you could tell May I should be asking the seller on the estate agent of a property before I visited. Or what have you may be something that I would want to get. Hold off on how to get hold of that when I just give you my name, my email on a telephone number on. Then you will give me my free report and it's automatic. You don't have to do it. You just collect the information and off you go and information flows from that. So why not do that? If you look at those versions off slides that we were looking at before, there is nothing suggesting that anybody's calling card would ever be left. There's information there, but it isn't showcased, and it can change frequently. You could do this every month, every quarter, developing new information. You know, lots of stuff about what's going on on things that need to be done. You put those together on. Of course, if you're managing it in this way, then you're able to automate the system's very easily, because what will happen if I am at work getting almost work on? Then I'm looking on the Internet for gonna be selling my house someplace on looking around conveyancing on. I get part way through this process. Then there are simple algorithms that will pick up this and will be able to promote to the person landing on your Web page. That's something worth thinking about. So okay, moving on. What's asserting we do well is make email marketing easy because it's possible. If people are asking for things, they are leaving your their calling card and then you are permitted to send them information. It is not cold calling. It is sending two random lists. It's getting around the data protection regulations, of course, which will be familiar with 2018 Onda. Uh, email marketing can be automated. In that way you can decide the frequency with which you send people information. I am personally don't like to be sent information every day, but I don't mind valid, useful information once or twice, or something like that. Email marketing can be made easy because its automated and then you can follow up that sequence. It's easy enough to send information is using after ask more questions. It's easy enough to follow up that sequence and offer more value. Offer online support off uh, an opportunity to engage with people now. I mentioned earlier on artificial intelligence because this is something that is coming that allows the information to be put in that way that automates it for you. It brings your potential applied closer to, uh the Internet is a multi media device. Online video can create more customs people by people. So why not have an introduction from the client care partner to your firm and invite people to contact by looking at the contact details below, So that will do it on. It is very, very simple to do on easy to do. I'm sitting here in front of a webcam in the office with a little bit software to create this. A training program don't have long training programs. They can be 90 seconds. Well scripted, well presented information. Look at using social media in the right way because these things get shared on the mentioned Facebook. But there's plenty of other types off social media that is being used to communicate and being shared and so forth. So if I was looking to sell my house and I met somebody who's also itself, so I got a really good report earlier on, let me send it to you. It is wrong. Blocks and CO. They're in High Street, so it's that something that could be very, very powerful. It is not just faces and people talking heads thes explainer videos, which you have seen before where somebody sketches, information, almost a cartoon fashion speeded up video. Those things are called explainer videos. They're very powerful. Why? Because they engage people. They like to look at it. They like to have a story much more than have a bid. One of your colleagues isn't very enlightening speaker, but much more interesting than people like me sitting there talking face to face those things engage people. Then one needs to say, OK, well, if we got a good Web page, then we need to work on lead generation. How do we get people to it? And I think that Rather, General implies there are many, many tools and techniques out there, but I think you find out which is the best one on Make it happen. It can be fairly straightforward. A lot of people have phones, mobile phones with scanners. So where is your QR codes to so that people can scan and get straight to your firm from that. Where do you put those things? How do you do that? Well, should be, perhaps business cards, not just giving your Web page, but on the back of it, a QR code scan that you'll find out about us. It opens up one of your interactive videos and get people, uh, contact you through that method on only five. I think that you might need to do because you get the opportunity, particularly through through the use of the Internet with re marketing. Now I know that a lot of people don't like this. I don't like it because it's overkill. But if you find the people fitting in part of that information on the name email, telephone their end on part of it that come out of it, then it's possible using a cookie that's perfectly legal. It's not gets the code of conduct and so on and so forth to send people a reminder to come back to that on When they go on another commercial site, they'll get a reminder of these things. Pop up with a reminder to Don't forget your free report on conveyancing. It's here and they'll come back to the filling and they'll complete that. Impressed, they send week. The free report that is re marketing paper is very powerful as well. Google made a lot of money. What are you doing To make sure you're using these things That is right for you because you need to be in control with the degrees to which these things happen. In my experience, people find a tool or technique and they overplay it and they kill it. So think about those things and then think about when you've got that set up. Whether you've got ongoing training for the people in the firm ons, you've got the mentoring off individuals within the firm on a 1 to 1 basis to actually manage these things in a particular way. On this is one. It's outside the legal sector just to illustrate what it can look like. A very simple landing page on here. You can see the yellow stars are all about the telephone number. They come across very, very quickly, very, very clearly claiming free report on growing your business and so forth. A copy is very well worked on the image on the top right hand side with the hand is the explainer video on that looks for that request to call about lots and lots of places to capture. And it isn't overkill. This is about the complete official marketing system. How much better is that to get people engaged very quickly than having a look at this bewildering view? So how do you do that? Well, how do you do it? Well, you need Teoh. Just assemble your team to do it. And in your team you'll need a number of talented individuals 1st 1 of which, of course, is you're going to need somebody who's able. Teoh designed the Web for you. Andi also, you'll need somebody there who's going to be a techie person to manage the whole thing. You're going to need somebody who's Google expert. To deal with that, you're going to need somebody who is able to write killer copy on scripting matters. You're gonna need a video guy to put the whole thing together for you. And of course, this may be how you feel about all of this. Oh, my goodness. Well, get some support. Those sort of things are available. And instead of doing yourself, you can come up really, really powerful online marketing, development, business development strategies. So I hope you found that interesting. Uh, it's a exploring that very important aspect of your business. And now I'd like to go on and talk about the people in your firm.
00:39:58
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Written and recorded by Mac Mackay, DAW Ltd.
everything we've talked about so far is not gonna happen unless you got people able to do it confident when they're working and indeed motivated to do your bidding. So what we're gonna be looking at here in managing your staff are those three factors that I've user came. My nickname is Mac. The Mac Factors that helped to drive performance in other individuals. Andi indeed, explore summer issues to do with CPD. Very important. Now, if you were mindful off studying a diploma in management, for example, then the people management module off the post Grant diploma is 200 hours worth of study. I know I have done now that there s so much we can achieve in a relative short period of time. But I do hope that the content I'm gonna be covering here will give you some ideas and models and frameworks and tools to add to your took it on. Use them in the appropriate way to look at the development of individuals. So I've called them the Mac Factors. Well, why wouldn't I? Because in my experience is a manager. Then nothing gets done This people are motivated to do it in my experience is parent job melt going to do anything less? They're motivated to do it on as my experience as a sports coach for 16 years, track and field athletics is one of rugby for juniors, Children at school, on the clubs and so forth. Then nothing's gonna happen unless they're motivated to do it. But in your wall three of those roles I realize that no matter what the motivation is, unless it's matched by ability, then things could go a little bit. Hey, why my first degree university several centuries ago while physiology, biochemistry, quite interested in neuro physiology so that sort of thing. So if you have a grumbling appendix or something like that, I'm quite good at a dissection, so I'll give it a go. I am really, really keen to do it, because that wouldn't be a wise thing today. I am keeping the Buber, but I think that maybe there's other ways of dealing with those problems, that my motivation outstrips mobility, and I'm therefore quite dangerous. So no wonder I'm doing this out of work and not anywhere near sharp objects. So motivation ability is great on that improved performance, but and this is. The interesting thing is, if you go on to your search engine Google and you put in a word motivation, get hundreds of millions of hits if you go into put ability or training or get tens of thousands off 100,000 of hits. But the key differentiator in performance terms is whether people have confidence. It's confidence to do. Even if I got the ability, I dare not have a good I want to do it. But I stop doing it because I might get it wrong and I'll get into trouble in that up. That happen. Confidence is key differentiator Most of the occasions when you look at the, uh, the gold medalist ahead of the silver medalist, it is mindset, confidence, which is different yet. But if you put the word confidence into a search engine, you won't get quite so many hits. There isn't that much around on confidence building. There is outside work. There is a confidence building in sports terms, but there isn't that much for building competence within the workplace. So quite interesting. What I've done is to explore different models, different frameworks, a little bit of theory to underpin the practice on this is a quote from a former English prime minister, Disraeli, more extensive man knowledge of what has being done. The greater will be his power of knowing what to do on. I have researched, and I have published works on 100 years of management theory if you're actually that interested. But the key thing here is what we because in practice, when we think about motivation, there are two types of motivation. There is. Go away, motivation. I don't want to be over there. I want to come here on. There are things I might move towards. They might go over there because I'm to it. So if it waas a cold day, I wouldn't go over there and hug a block of ice or go outside, come into a warm room. If it was in a situation where there was a hater over here, then I'd go towards that. In that situation, Converse Data is very, very hot day. Then, of course, I might go to the air conditioning unit or whatever, so we will go away from things we don't want way toward things we do. And that's a basic a philosophy of how organisms work. They go towards things they like away from. You don't like Karen's dick is we have a short cut version of this, but what's interesting? This isn't work done by these characters. 10. About Schmidt a long time ago. We're looking at this continuum because all people are the same. There are degrees, two issues a manager must manage. Interact with Andi. Deal with another person's work. There are situations where the best thing you could do is to keep well out of the way that sounded. But it's a real. What they did was to represent this. Continue on over here on the right hand side, there was situations when the manager should use his or her authority, and there are situations where the freedom off the individual group could be quite high. But this was represented with his dad in line across there, over on the right hand side, there are situations where you have to intervene so he doesn't want to dio How to do aren't doing it, according to the described procedures. Then the manager supervisor will use his or her authority to make sure the job gets done right. That may be micromanaging briefing. But you don't want people to stay over on that side where the manager is controlling things, monitoring things on so on, so forth. What the manager walk to be able to do is to grow their staff so that the staff are able are motivated and are confident, too. Do the work with a minimum amount off supervision. This continues. I suggest that we need to know where people are and moved them to the next stage as we go through. So a very straightforward concept, very straightforward idea on you will recognize as an employee if you don't know what to do. You need somebody's help, but what you don't want is to be micromanaged over the other things. So it is a movable. Continue. Mint isn't a one way street, it's no. But the manager needs to know where the individual group are to determine what's required for that particular task. Very simple concept, but nonetheless very powerful, so fairly straightforward. The other piece off theory that's been around a long while is Maslow's hierarchy of needs. So give me before this is incidently older than I am, but it's represented Pyramid. Maslow was an occupational like Kyra psychologist, and he was looking at what people are expecting in the workplace on what he built. A representative was period. I've never built a pyramid, But I do take it on good authority that if you want to build one, please start bottom on, then build up from there. Very started the apex and tuck things underneath. So the fundamental means of people in the workplace is physiological. There's the foundations on in the workplace. That means that people need to be kept comfortable, mentioned temperature and can't be too cold, not too hot, somewhere within a comfortable range. We need to have chairs that are comfortable. We need to have workstations that come from. We don't need to have. Things have changed the blind as the sun has come across this morning and so on and so forth, making it comfortable on. In my experience, you can spend a very small amount to improve the working environment so that people can focus on the work and not worry about their work environments and breaks and the comfort on the refreshments and all those sorts of things. Not really quite important that I think worth giving a audit off your staff at least once a year just to make sure that there isn't anything that needs to be fixed, because it doesn't take a lot to do that. And if you got just a hand for the work, you got five workers working there alive. The year, then £500 is an incredible amount of money to spend on improvements each year, but then, at £500 is actually £100 per person. That's to quit £2 a week. Perfect weeks. A year on £2 of course, is 40 today, just to make sure that people are comfortable in their workplace, I thought Now, okay, in terms of motivation theory, what's mares? No saying. Well, once we feel comfortable work, then we want to know we've got job security with lots of things you could do to make sure people have job security. You can give them a job description. You give them a key performance indicator, given things that work towards you could bomb it to them, giving feedback and so on and so forth. And job security, A so far as you are able, is of course, very, very important terms conditions, contracts and so on and so forth. Give people that security and engaging people is so, so important in the workplace. But when it comes to security, in terms of motivation, I would say that you hear is a job. You do the job, you get paid any clarification. Okay, If you don't want to do the job, please let me know because we may need to find something else to do it. If you don't want to do it, it's your choice. And in that respect, I pick this up again in a moment. Is something quite quite powerful. So we have that job security and then what is so important in the workplace that we have a sense of belonging? This is the firm. I belong to the group. I belong to the department. I belong to the professional I belong to. And although things about complete leadership have to do with that sense of purpose, been longing to the firm the way we do things around here. What I bring to the team is very, very important where my job fits in with everyone else and so forth. If people didn't feel as if they belong then that goes away on job security is a concern. If they don't feel as if they've got some security in the job, then pour for. They're gonna go somewhere else to find something that is going to get in security on the sense of belonging. So once you've got those layers in the next floor, is one off self esteem Really good about what you bring to the team on? This is why I think managers can improve self esteem by giving them opportunity to demonstrate their abilities and competence on so on. So on. A lot of CPD has to do with increasing self esteem. I'm working quite hard, developing CPD initiatives for the professions on developing self esteem. He's quite important. If you want to build something self esteem, catch them doing something right. Helpful feedback is very important. Self is the key word on the esteem. No master did accept that in his day and go back fix before much of organizations was about manufacturing environments. Manufacturing environments had production processes and you were not able to change. The process is because the car came along and you put wheels on it tightened for nuts or the conveyor belt brought something and you did whatever. But the high level here, eyes self actualization, really annoying. Okay, uh, pyramid trying top self actualization is that people could make a difference to their workplace and in the knowledge economy, which is where you and I set their self actualization is extremely important on Does a great opportunity for the firm to develop and improve. Yes. You've got case management systems. Yes. You've got defined processes. Yes. You've got work structures. Yes. You've got office manuals and compliance and so on and so forth. But self actualization ability to innovate. However, modesty is so important on Muslims said most people don't have that. Therefore, they don't feel too good about themselves about the picture up for work on. They'll get on with Skiving like everybody else. But if you want to engage people more than their self esteem on being able to make a difference to how the work is achieved, achieved political outcome for Klein is tremendously powerful. This is all about engagement on engagement multiplies. So there's that little bit of theory. It's a ton of our Schmidt massive hierarchy. Hope. I've explained that in terms that make sense to you would like to do to explore the first off the Three Mac Factors motivation on I'll share with You my motivation development model that I created on published in In Texts published online, published in textbooks for students and so on so forth. I think in terms of motivation there is, you know, this carrot and stick kick in the pants and a pat on the back are a few feet apart, but a world of difference. And for me, as a manager on indeed apparent already in sports coach is what happens when you are not there. That's so important in the one minute manager. Bland child, one minute manager. He's one of the authors off the one minute manager. He was also one of the offer's off the situation leadership model that we've Dr Paul Hirsi Foundation on the ideas that I've developed here. There's no incompletely my work just developing other people's idea. Now, when it comes to motivation, I think most managers misunderstand it because, oddly enough, motivation isn't something that you can do. Motivating is the process of stimulating individual to take action but will accomplish a desired goal. Now you cannot motivate somebody else. What you can do is provide the stimulation, but if your stimulation is not actually very attractive, then people would be motivated by it. There's a lot of people I don't want to become senior compartments in orphans. They're working orphans but don't want to come see any partners they don't want. They want to climb to those heady heights. There's a lot of people, maybe 75% of your employees and not looking to be motivated by becoming the boss, ultimately off the firm. Oh gosh, what is it that is motivating People provide the right stimulus. I am a motivated individual. There's lots of things I do both inside and outside of work. But give me a great buzz. Becoming a lawyer isn't one. Often that's not remotely motivating for me, so I can't be motor. It doesn't mean I'm not motivated. Have you ever met anybody that's unmotivated? Well, there are some folk out there who actually are quite motivated to avoid work and lay on the sofa and drink rather curious American beer. So motivation. What is motivation? Well, I think motivation is different levels. It's not at all or nothing and it's different for everybody. And people will go through different levels in their own way. So in terms of tasks, in terms of doing the job that you want done, I could see that there are four levels of motivation. This is picked up in the notes on page 46. You got that with you on, you could probably define the lowest level of motivation is turn up eventually for work. But they're fairly. I'm willing to do anything fairly unmotivated and indeed characteristic of very low motivations, their destructive on other people. So in terms of a task, to what degree you will you want to intervene or just leave me alone to sort itself out? Well, it's not black and white option there. But what I'm trying to suggest is that if people are not motivated, you need to find out why this low level motivation isn't something you know. So the task motivation, control for yourself might be quite high in their situations. Okay, we'll come back to them. So what is it looking like when people are slightly more motivated than just begrudgingly getting work face? Well, I think the second level of motivation is an observed behaviour. People come slightly better, something better attitude. But when it comes to doing some elements of their job, their find excuses. Why they haven't done that bit. And if they don't do that bit, then somebody else will have to do it in order to have it done. So somebody else has to cover form. They'll do the bits they really enjoy, and they won't do it. They don't enjoy. So that coverage by the rest of the team, it's quite reporting indicator here on something there for that suggests that you two, as a manager, would need to intervene in some way or another. Now the interventions will talk about in a moment. The third level of motivation is much, much higher. Enthusiasm is growing. They get keen to get most of the tasks of being done. But those grizzly bits that we all have off our jobs may get left out Now. I spend time traveling on the country, running workshops in various places for various people on, and I have to collect my expenses. I have to record my expenses, and I do find filling numbers in a spreadsheet he's on boring to a high degree, even though there's an interest for me to get my funding recovered on pay for my expenses, going to fill the car with diesel or stay in a hotel, that sort of thing. I need to be reimbursed by the phone. I should be motivated to it, but I just don't do it. So there's those bits and pieces I did not spell. Things are quite so again. How would you do with that? And then the highest level of motivation is full steam ahead. Very willing. Takes the initiative on new things. On is a highly motivated, hopefully contagious individual. So with these scales of steps in motivation, what is your approach to those? What's the task? Motivation. Control. So you're as a leader. What's your orientation? Well, if something is a low level motivation, never one you'll have to examining to intervene. If somebody's at a really high 11 motivation that your degree of control that would obviously be a lot lower keep out the way of a highly motivated individual. So what we can see here? The players with town Obama Schmitz. We can see that at the left hand, the right hand side here. You could be high intervention on, but the left hand side could be low intervention from you. The manager. So what can we do with this? What can we there is a will recognize these various behaviors. Then there is a number things that we could do on the two dimensions of this twofold two dimensions would be twofold. On the one hand, we get what I would call motivation maturity on. Sometimes this is low, and sometimes it is high now, low motivation. Maturity for May is when somebody thinks that they pitch up work to absolutely nothing and still get paid. I think that's pretty childish behavior, because my my Children would be quite happy to know that they're gonna get fed three times today. I mean, you have to do very much when you were very young. To do that, they just pitched up and managed to sit at the table, face the right way and use a knife and fork. Then they were, you know, their fate. So that's a that's a fine thing. But as they get older, more mature, they realize that they stop growing up a little bit and become older Children and teenagers and eso people who able to get on do their job, do it well, take initiative, the high maturity in their motivation. They will push themselves further forward to get more rewarding than just me. Financial there find more interesting work. They'll find more interesting ways of spending their time in contributing to the firm overall. So that's the task. Maturity. Low maturity is pitching up, not doing work. High maturity is taken initiative on developing on the other two dimension in terms of individuals, one is the task to be done on the other is the sort of interaction they expect from the manager on a Sfar. As the persons concerned, sometimes we may not need to do this very much. Rarely is zero, but we just don't have to do it quite as much. For his reasons on other situations will be much mawr involved in the people. So what we end up with in a simple situation here is four broad areas. Now the world doesn't fall into four boxes. It's not a sharp difference between one place and the next, but is trying to illustrate that in general terms there are four different stages of motivation and four different ways off being with it. So what we see is that the first level of motivation, as we describe people, are destructive than they're not willing to do it on. The reaction, of course, from the manager is to focus on the task being done and not so much on the person provided that there's always this caveat. There's nothing else I work that's affecting their well being within work. There aren't any underlying mental health issues or social issues that are compromising people, which will happen from time to time. We need to be sensitive to set it once. Take that. Except that it's always going to be understood. So low amount of maturity. Well, we're just getting a job done. And as people start to become more mature, they demonstrate that they are getting on a little bit with some things but not everything. And therefore this better attitude is fine up to a point. But they're finding excuses, Why not doing other things and others will have to give cover that's quite immature, but not quite as bad doing nothing. Then, when people get to a slightly higher level of motivation, enthusiasm growing, but key actions may be missed on, therefore, is a particular problem there. Now, in these stages two and three, there's more dynamics with the manager, okay? And we'll come onto that in a moment and then finally, before the very willing, highly motivated individuals getting all taking the initiative on tasks. So what I've done with these four stages is put it in this bell shaped curve that starts when people are in a poor level. Off motivation on we follow them through the blue Bell shaker through various stages of motivation until they're highly motivated, highly dynamic on what we can see in this model ready is that if people are very, very low in their motivation, maturity, then it's all about the job, not about the person provided. There's nothing outside of work as mentioned equally at the other end of the scale, highly motivated, highly dynamic people they don't expect very much from the boss. They don't need to have too much. Just to know that you're there to help them as and when they need it will indicate when they are in that situation. In the those are the extremes that moments in between That's when the person is much more involved with the manager and the different approaches at Levels two and three moving people forward to slightly higher levels of motivation. So with that in mind, what I'd invite you to do is to have a look at the Page 46 off the workbook on. You'll find this situation illustrated there on that slide. What I'd ask you to do is to look at the four different ways of handling situations. Match the stages off motivation development as administrated on screen with the actions below. So for level one, would you do a, B, C or D on so on? So just scribble A, B, C or D on your version off the notes you've got there to see how you deal with it. Poor's film complete that when you've done that, check with somebody, whatever it might be. If you're watching this with somebody else on, then we'll move it forwards. So starting at the bottom here with unmotivated people moving right way forwards. What I've developed here is a motivation development model across the bottom. You've got your behavior task director behavior on on the Y axis on the left hand side. We've got the degree off supportive relationship hanging with people so tasks. But on my people, people do tasks, those of the two dimensions. So what we have here is that if somebody is it a low level of motivation on their starting at this very, very low level in situation one. What is the motivator? What is the driver they've got? Well, in this situation, they must decide whether they do the work to get the pay. It's that security 10 years in the workplace, because, let's face it, I would never, ever use the threat of redundancy as a way of motivating somebody. What I would say is that you have been recruited to do a job. You are able to do the job to understand it. I'd like you to do that in order to receive pay. If you should choose not to do the job, then I'd understand that that's your call, and that will lead to a set of circumstances. Please let me know what you would like us to do because he's down to you. But of course, and the individual has then the choice. You see, when I was a referee. I would say to the players, Look, this is what I want you to do this what's going on? These other laws game? I'm here to enforce the rules on I would take to somebody. It is your call. If you choose to break the law, then you will suffer the consequences of that within the game situation. And it is your choice if I tell you not to do something and you carry on by doing it. That was your decision to ignore me. Andi. Therefore, you give me no option, but always in that situation. It was the players responsibility and to follow my instructions. And it's entirely up to them whether or not they did, whether they had a free kick, a penalty. Small, severe, the yellow card, a red card. It's their choice. And I would say to players, Really big and ugly individuals on a Saturday afternoon. I've got two counts in my pocket and yellow and a red one. Your behavior of what I see in here on the picture will determine where they stay there, not my choice at all. Entirely your choice. Any clarification? Now? I don't say that very often you'll have these sorts of conversations for people at low levels off motivation. But that, of course, is the option C. In the workbook Dave Spec Specific tasks reaffirmed the job. Raw monitor closely reinforced the outcomes. Why? Because that is what you want and people don't stay there very long. They tend to look to level to what we doing at Level two. What is the motivation? And once I got job security, well, of course it's belonging. I don't want to let the side down. I want to belong to work group. Belonging to Work Group is a strong driver because if other people giving cover, what A. Using some visible look. If you don't do that part off your job, then somebody else has to cover for you. But I know you don't want to let your colleagues down in that situation. Of course, really, that's what we're saying. D is. You give the wider picture of jobs it effects on the people and seek peer group positive feedback reinforcement on agreed that milestone in to monitor that becomes a situation where you develop a team approach to working. People join in and feel good about that so that's about people. Whereas level one is about the jumping down, level two is about the job being done in the context of everyone else. So when we moved to level three, remember the next level from Maslow. Beyond security and social belonging, is to feel good. Is toe have self stain the self worth of Anne to others. So when the little bits are not being dumb and most things are being done, but a little bit so not what's the dialogue that you're having with people I'm suggesting be has let them explore their role work group, and I asked them how they feel about attending to the that's all print, if you will, on a particular job, get then to monitor their own feet back. So it becomes all about itself. That requires a slightly different approach in conversation, but it is important that we developed people's robustness to get on and do their own job more completely on. They'll get a buzz out of that because they are. Yeah, I'm correctness. I've done it myself. It is self worth self esteem, self improvement, higher levels, motivations like that, which then leaves a spin the highest level of motivation, then people able to innovate. Look, this is how this is how we do things around here. This is what the client wants. I leave it to you as a professional. Teoh achieve those outcomes its outcome. Focus regulation, after all, limit to you, then not intervene directly, but show appreciation when it's appropriate on What we're doing is to grow motivation for various aspects of the job through these four levels. Do remember that we're not alone, motivated to the same degree by the same things, and neither will we go through these. I might be highly motivated about some areas of CPD, but on some aspects of my job, I might be slipping down a wee bit because not doing various bits and pieces. So it's not all or nothing on everything. But I hope I suggest that there is a continuum on approach that's a balance between the detail on the job and help and support on others. That is the, uh, the motivation development model in practice. So let's explore what it looks like in a a simple case study. Okay, well, let me tell you about Andrew. He's a new recruit. Took to W. A while ago on Duh. He's a graduate physicist. He studied. Calm to physics. Make sure that is, Babe was crude bars. Short term contract worked in I t. On a specific project. Nice bloke, actually, very capable. Gets on well with others in the firm. And he has. This is a short term summer job effectively, but he has a problem getting up in the morning. He's still in student mode. When he does get in, he's just a very gregarious, chatty bloke and working on the simplest task public. It's very easy on. He's a descriptive, disruptive influence of others in the firm. Off those four levels of motivation, where is he? 123 or four? Well, as you can see, he's not getting on with the simplest of things. Make jobs too easy for him. That's his choice, I think is a level one on that level one. We're thinking about security of tenure in the workplace and conversation that one of my colleagues would have had. The name is Andrew. You join us to do the job. If you want to get paid, please do the job. If you don't want to do the job. Please let us know because we do want the job done on if you don't do it, when you find somebody who will good given the course that there's nothing going on outside of work in that situation. So that's a fairly straightforward, an obvious one. But let's have a look several weeks later. 34 months into that into Osama, several weeks working on the project, it required development to the connectivity in this little box beside here, the local area network. So my laptop in this main computer talking to each other while working together Things were fine, okay? But he also got hold of the MIT media station, made somewhere for staff in the refreshment area from one of the outdated workstations he renovated to put us some other thinking it a lot of super V g a car, but something beyond whatever one of those is. And he did that himself one evening. What's his level of motivation? Now he's a very high 11. Motivation was, everything's being done on. He's able to innovate on so on and so forth. So a couple of examples there, I hope that's been helpful for you on once we've taken some time to go through that model on, you can see that those various levels and if you look at page 47 of the workbook will have that motivation development model outlined for you on those are the four key stages about job security fitting with other people feeling good about my contribution on self actualizing. Don't do those the four. When you see a situation, you decide where. What's the situation? Where does it fit? What interaction should I give to improve the performance of individuals within that so lots of notes there lots of ideas on. With that in mind, we can move to the next age, which is about developing abilities off individuals. The ability to the model is very similar, inasmuch as it has the same dimensions to think basis to it, although the activities and so forth will be a different so ability. Development, of course, has to go hand in hand with motivation on the notes Within, the workbook will take you through something called the Company and the conscious competence model. There are those people who are unconsciously incompetent. They just don't know the Muppets right through to those who are unconsciously competent, only do it without thinking. So. Ability clearly is very, very important. This is a Dilbert cartoon. Andi Hey was saying he couldn't remember whether he was Marshall Jeep. Well, clearly what we need to be looking at here is the degree to which people stand out from the crowd, unable to do a job particularly well on it. Is your job as a manager of business to make sure that you develop the ability off your people to solve problems on do that in an appropriate way? No, Rather, as before a sweetin. There are different stages off, no ability. The's representives four stages the lower stage where people are not sure what's required off them. They then get some ideas on stage, too, but the basics get done, States three. They're performing much better, but the little bits and pieces may not be known. Everything in detail very quickly in the fourth stage clearly is when people are able to do it to a very high standard. So we'll see a progression of continuum in terms of ability, a little bit right, a little bit more little bit more, get it all so similarly when it comes to managing this. If people don't know what to do, then you'll need to intervene. It's something that does know a lot about what's going on. You don't need to intervene in that aspect. Their tasks they're doing, Ah, highly competent person. Giving a new task would go back down the scale as far as that task is concerned, But other tasks are handled much more comprehensively. So a flexible approach from your point of view, of course, is very important to your leader and control orientation. If people don't know what's required, then you need to know what's required off, then how to do the job. Clear instruction on those very highest leveled off competence for given set of tasks or behavior is clearly quite different. On that you will be around as and when they need help but not really intervene. So rather as before. We can express this in a simple diagram that illustrated here, and I've called it again task, maturity, rather motivation, maturity. People don't know what to do. That's a low ability, low task, maturity on. People know quite a lot about what's going on. Then there are quite capable and they got higher task maturity. So what does it look like in practice? Well, at this lower level, how we define that they may not be fully aware of the skills required nor they fully aware of task. But then number less willing to learn that fundamental level, of course, is important. Not willing to learn. Well, then, of course, big not going toe. You have to find ways in which people will be willing to learn on if it's about dropped security, then so be it, so that the fundamental level particular set off behaviors are required. And you'll see this developing on page 51 off the notes so high level off ability, slightly better some task for being done. But they'll have limits, and they will make errors when they go to other areas. So here, rather just basically the instructions they'll need to have some training from you to explain how to do it on get better at that job, much higher task maturity Here Level three schools being performed well, that aware of the task being done, but they're having to start projecting Stop check in. They're not thinking automatically, and clearly these two levels at stages two and three do require a lot more to do with a person dynamics of interaction and so forth. Then level one, which is all about Just tell me what to do when I get on. Do it on a much lower level off relationship behavior again, as before, never zero so similarly when people are in really, very, very capable second nature intuitive do it quite well. So, for example, if you drove to work this morning on, do you have a shift stick car, a gear change car? You probably think about gear change Just got on. Did it because I didn't really have to stop and think about every gear change. Put it in. You may need to check from time to time when you are driving as well that you could. So in that situation, as we can see, we've got a continuum. As before, we're developing skills in a particular way. What I'd invite you to do is to have a look at the cheek on page 51 off the notes on match each of those stages with the A, B, C and D as before, to see how you would help people at each of those stages. Often it's a lot easier to find how to do something very low level. I never want on the very high level, Level four and then try and sort out how you would do deal with things at those levels two and three somewhere in between. Okay, we'll help you had to go that have chapters, somebody else about it. Maybe see whether or not you can spot what's going on. Because when it comes to developing people's abilities and remember, I've done this is a manager and as a parent, and this is thoughts, coach. When you first learn how to do a particular sport, you need to understand what's required to do it and you need an instructor. This is how the game is played. Whatever the game is, then you need him instructed to show you what the rules are. You remember If you get people together around on your playing a particular board game, for example, something's going to read out the instructions, asshole. How the board game is played and you might then Okay, well, that's fair enough. I know what to do there, which is be in our example where you are giving a play, a guide on how work should be done, what the standards are and so forth, you making sure people do that and reinforce the success that having so that's the first level. So whether it's triple jumping or scrummaging or how to use a case management system, you need to start at fundamentals with instruction now, once you get off that level, the next level, of course, is to have some training on the difference between instruction and training. Is that instruction? These are falling rules incident. Question the rules. You accept the rules. But in a training situation, there is dynamics with job holder. So again, task direction. High task is about the task. Not so much about the person yesterday. Check that they've understood on Jessica. You've been clear in putting the information across, but when they start to form stopped doing the job. Then you may spot things that going wrong, and you will show them how to put right now that in our example here is a your gauging in a dialogue about the job, particularly fits in with other people how they can improve how make improvements to what they do achieve better outcomes. Your monitor held how well they're doing now. Some people work very well as instructors, trainers. Certainly when they we've been talking with the legal aid agency people on our interactive live webinars on. We explore their particular approaches to various situations in a lot of people. End up is instructor trainer because they've got some trainees they got junior people on. That's clearly what they need from a supervisor. But this is the interesting thing. Is people get better at their job. They become able to do it, not more what they need from you or something slightly different. And if you are the sort of manager who has an open door policy on, do not Know, people coming in time and time again interrupt you in your job. Funny how to do things. What they've learned is that you know the solution, So in order to develop their skills, you need to let go of being a trainer of behaving. It's like a different way. The difference between the trainer and a coach is a trainer will see what's going wrong and explain how pretty right a coach sees what's going wrong but asks the person doing the task, how to put it right. That is what we're doing at D de is asking them to define how they're make improvements. Consider new ways to solve the problem, because do you want people who are solution seekers? Solution Seekers? Come on, interrupt you to find the solution from you, whereas problem solvers well, think like you do rather just blindly do as you do. That's the stage maturity in learning, and it's very important. And I've seen this in sports field. When kids are playing the game, something goes awry and they'll turn to the touch line to try get advice from whoever it is that's been guiding them well. In my situation, when I was out on the sports field during various things in a game situation simulation, things go role, as they invariably do. I would just shout game situation what you gonna do now? And I would just blow the whistle, repeat the exercise because I want people to think during the game, not just blindly follow instruction. So Instructor training coach is about developing skills in different ways on then. Finally, of course, when people are fully up to speed. Then what do they want from you? Well, please keep out the way I know what I'm doing. I want you to be there if when I need it. So you're not actually getting involved, you're there. And to indicate your available as and when required. So this is how we develop the competencies of people. As I said, I've been involved very much in CPD and competent development. And sometimes way think that a one size fits all this is how I learned. Then you must learn this way too. My experience in those three roles as a manager was apparent. And as a sports coach has been developing me as a sports coach, too, recognize what the different stages are in developing the performance off individuals. So there we are. That is the ability developed model that I've developed. It's about the job on the person doing it, and clearly you need a flexible approach to mentor those parts of the job where people perfect cape incompetent. You change the phone systems, given the new handset on their everybody's back to level one, and they need somebody to explain how to hold a call, how to call two or three extensions and then get back to the external caller and not lose them. So let's have a look at some examples of that. As we're going through on. You can recognize this on the theme. The notes in their page 52 of the notes. Let's take Jane on her first day. This isn't Dexter Jane, by the way. But Jane Nice administrator, Joining the in laws, office manager, good keyboards, girls, good shorthand. Pitman's shorthand, Good Lord and way that she seems to have that likes to use it actually very organized now in that situation. Suppose on the first day if I was a partner, I could ask her to do a couple letters or something like that. I could have written notes. I could hand imitation tape, whatever it might be or indeed, take control head. I think I've done a pretty good job. I just need to get on with it, because clearly I'm giving her the instructions, and I think I've been effective, and I can now get on with my own work. But where is she? As faras letters, a concerned laying them out to the house style. Uh, we have produced these slides here, which is using open sands as a typeface That changed now suddenly had to tell me that that was there because a Sfar as laying out letters, Do you range letters left and right? How much based you want between parallels? What typeface to use. Easy times. Roman. Is it aerial? Is it open sense? What is it she's not going to know, So she years at level one. These are the four phases of development off ability that you put into the notes on page 52. She's at that level and needs to get some guidance, some instruction, so something will tell her what the rules are, what the system is, and she'll get it right first time. But if you look at him instead of the end of the week or something like that, the bosses then said, How do you feel? We might do the job better, how to feel things to be improved, and she's as well. You get me going to the car files, uh, to file as i g o. But from her point of view, if you make several journeys to a central file to the same file time. Time again, she says. I tell you what I'll do. I'll keep an entry given entry on my desk on. I'll do defining once a fortnight. So how would filing once a fortnight fit with you? It sounds like a good idea, but to her, not to you. Now you could say to her, Do as I told you or breaking kneecaps, but I stopped going to the filing quite frequently, but it would be helpful. You could give the instructions, these aerial stick to those. But her maturity is growing. Therefore, what she needs from you is not instruction training. She needs a training that will help see it from other points of view. Other people seeing the file, other people getting involved. So again, it's about developing people through those tasks. Flexing your approach. And it's far more effective on this story is about mention people in effective manager because you manage their motivation in a way that we've talked about manage their development in the way we talked about. So I hope that's been helpful hopes. Give me some ideas. I hope you can see your people at various stages of development and that you'll flex a style to match what they need to bring them on to. The next stage of different people will go through this bill check of different speeds, but least you're able to track it. I helped him through that to develop their learning to the next stage. Well, with motivation and ability managed, it's now a matter to explore confidence. As I mentioned earlier, one of the defining characteristics of high performance is somebody who is confident they're not only motivated able, but also they have the confidence. And as we know that developing confidence in the work place isn't something that's looked at very much is not that much from the Internet about it. But I've developed some ideas and build on those two models of motivation, develop model and the ability developed model in the confidence to the model follows something very similar. Now, the best quote I could find with from Thomas Edison, who, trying to bend to light bulbs here I didn't fail, just discovered a new way not to do it. Now you don't want people to fail with your clients and then just turn around. No, I didn't fail. I just learned a new way not to. I represent a colony Court that that's not what I mean, What I'm looking at here, his ways of developing confidence to do the job properly. So when it comes to task, confidence, control, we have a similar sort off thing. Now, through the notes in the workbook, you'll find a way of assessing confidence, way of evaluating your own position of confidence and look at it in a number of different ways. On what we're aiming to do here is to take you through some of thoughts and ideas on confidence, development, low level of confidence and requires some intervention from the manager on. It may be that the individual isn't confident enough to playing up to the manager that they are lacking confidence. Uh uh. Dilemma here. How are we going to deal with people who have very low levels of confidence not coming forward? Slightly higher level of confidence suggests that their performance will be improving. That goes with that confidence, but they're not assertive in the rest of the work level. Three much higher levels of confidence may have dialogue with manager competent to talk about things, but when you question about areas that they like some confidence in some tasks, they may be a little bit shy and not forthcoming or, in fact, in denial. On the very highest level of confidence, people can read forcing themselves and surf. So the way that we've looked at this and you can see this represented on page 57 off workbook Confidence maturity at the lower end growing much higher on relationship with the manager being looked at here again task confidence in confidence, being developed through interaction with others, low level of confidence, then people lacking confidence. And they may not confined in the manager. But the manager needs to do something. So who will they confide in? A second level of confidence that got more confidence may be coming forward. Some performance is okay, but they're Nala sell it if we're dealing with others and so on and so forth from not taking the initiative. In some areas, high level of confidence is pretty good, and there's very robust ideas. And as soon as Ron challenges them about areas off low confidence, they may be in no on the highest level of confidence. Looks good because they got fully competent and confident people. Taking the initiative in those new tasks on your job as a manager is to grow people through these stages as we're seeing early stage. Lacking confidence. The degree of relationship behavior with manager can be a little bit lower because they don't have the confidence to talk about it with you because you are in a position of authority. For example. Conversely, at the other end off the confidence scale, very confident people don't need you to reinforce their confidence because they are taking the initiative themselves and they are able to demonstrate their own confidence. So with each of these, and I invite you to do exactly the same as before is to have a look at this case for page 57 see if you could match a B C D. The four different approaches that you might take to help people develop confidence on Daz before it's probably easier to identify level one and four behaviors from you. The manager on that then allows you to separate out the other two. I hope you and do stop the recording, go through that exercise and then have a look and see whether you agree with some ideas I've got here because a confidence development model looks at the task of director behavior that one needs to give if somebody is a very low level, because they're not confiding in you, that manager, what we do see is that they will confide in somebody else. So who might they confide in? Well, somebody amongst their peer group a body. Unless, you know with new recruits, you may take through the case management system, but they sit next to and product because he's good guy. He knows what to do or calling. Ethan showed the new recruit or Jane. She can show the new recruit that birdieing system is something you need to organize and manage and so forth on that helps build confidence. Then, as I discovered on the sports field, oh, instantly, that's d finding a buddy you can see Page 57 when it came to the next level Confidence. What I realized is that again, it's not necessary. The manager of the the leader in this situation is reinforcing all the time because you can't be only present. What you need is a group dynamics, which is mutually supportive now in the sport situation of kids playing a team sport, that we wanted to have the team mutually supportive. So if somebody is playing a sport may give a lousy past, recipient doesn't want to turn us. Who was rubbish polls? That was. They won't say. Never mind bass pedal up next time with me and we'll make mistakes or whatever we saw when we were looking at team games, off kids at school or clubs playing against other teams. When the other team were self critical of each other, we knew that we have the ascendance because they were beginning to fall apart. That group dynamics is where you look to the group to reinforce the help. So instead of being with a buddy one on one, somebody has confidence to have a dialogue with others within the group, and the group is mutually supportive. So getting the individual to get feedback from others on insurance positive reinforcement is a way of doing things, a cultural thing, and that, of course, starts talk. Now, a slightly higher level of confidence will open up to a manager if the manager manages that conversation appropriately, the manage you can help explore how a person will develop their own confidence. It's so important that we wean people off dependency on others to reinforce. Now again, with ability, you don't want people turning to somebody else to sell for problem. You want to develop some visibility by being able to solve their own problems. Likewise, you won't do through dialogue get people to demonstrate how they can deal with problems to grow their self confidence. And that's an important stage. That level three and then finally, of course, instantly is a example. And then, finally, self confident people comm prove their own assurance. They will do their own neck up check up when faced to a new situation. So that, therefore, is deliberately not intervening on the part of the manager relatively low supported behavior, giving people that opportunity to make a difference on their own. On again. That's taking people through this process. So I hope that's explained it to end building on the experience you've heard with the motivation and the ability developed models. You can see how this fits in quite nicely. Okay, well, let's have a look. A practical example I wanted used to this guy, Alex. He's a big unit Hey was left University. Hey, played rugby quite a bit. Hey is much taller than may. I'm only a little squirt at six foot 4 £200 but he is the six foot 678 I don't know something like that. Onda, uh, is pushing 18 stone, most of it from the waist upwards. He's a big lad and he's joined us in a short term contract. Was here a while ago, dealing with life coach training programs. Nice bloke. Good, good with the special ism. Got on well without. But he's not so good at computing. He doesn't profound his proper first job because he said big in the reason to mention that he doesn't like to look silly in front of other people. He's just too big to do that. Maybe that comes from his youth being very big and, you know, can be a shrinking violet for hideaway. He didn't do quite so well with the I T unique, has problems despite taking ballots from people's on his fingertips. So enthusiastic about the project, got good confidence put on one across a discussion on the project meetings. But he's not as confident with some of the I T elements, and he shows us the work, he says. You'll probably accidentally delete Diego be webpages. Looks any what have you. So what we need to do here is to say, wearing easy at the moment when he's a level one. Hey, work turned to the manager necessary to boost his confidence from somebody who was. The body will remember Andy, that guy from a long while ago. He's grandeur, physics or whatever. On, uh, they are very similar ages and so forth. So level one, find a body and he can help him with that, talking through stuff on 1 to 1 basis and nobody else need. No, and that's helpful to get him off at first base. Now take you three or 45 10 weeks into the project, he's got some good feedback from the apartment and from other colleagues in the firm's Is on the senior people looking what he's doing Associates And what have you talking to him about it on exploring it early. Going out socially went with Andy and rest on went 10 pin bowling her. My daughter was, uh, home that evening. She might have abuse, but looking at the project here we had some young people who were doing data entry, mostly students on market research. We're doing for a large firm data entry. A lot of people doing a lot of work on they they were all female, as it happens, were rather scathing about his Web, uh, efforts. The efforts He booked Web pages as you illustrate these presentations, and they were a bit of a giggle behind his back apartment becomes aware of this on. Speaks to Al expanded. So is he. Where is he? Not now. Busy it. Level two, Level three, where he's already getting feedback from his colleagues. So he might be a level three. So the manager will have a conversation on What does that look like? Well, in partner those his conferences building and knows you've got some criticism. So she wonders how he would react so dressing it straight on bluntly, which may undermine his confidence in any way. She says generally how the new developments on the Web project going down with the others. Fine now is exactly in denial. It's just no opening up about it, so she could be very directing. What about this? That or the other. But she says about the market research team, What did they say? That the presentation you gave yesterday. So she's not letting him off the hook, but not really sort of putting him into opening up. And he responds with something along the lines of what? Not a lot, really a few bemused looks, a few whispers. But there be some form, but that's of some way down the line. So he's indicating that he's aware of it. Indicating may have a solution. How do you deal with any objections they raise about the place of the project in the area of work? In other words, no telling him what to do, not saying This is what you I think you should do in this situation. But asking those questions on he come up with a solution. Market research well, Charter Management Institute, Mintel studies on life coaching in workplace. In other words, he has developed a solution to a problem. What will that do to his confidence? And that's really what we're trying to do with these various stages is to help the individual develop solutions to problems so that they grow their own confidence. So I hope that's useful. I hope you can see these three factors running in parallel. They do work in a relationship way about motivation, ability, confidence. People will go through their processes off, developing their own motivation, their own abilities and their confidence at different rates. If you want top performance, then you need to get everybody a Sfar to the highest levels as you can. So just in summary. And this is on the back page workbook. People are motivated to job to get the pay. That's the basic fundamental of motivation. And I want to do the job. I want to get paid. But I want to do the job to fit in with my workmates because they're a good bunch of people around here. And I would feel good about what I bring to the team on. Feel as if I'm making a difference on If I feel that good, I'll have a look at that ways of improving what I do like other people do in their area as well. That motivational development is something that you could help people in different interventions along the route over to improved motivation, performance now, in terms of ability, well tell me what to do, so I get the job right. That would be good. Give me some instructions. Then when I think about my job in the context, how does this fit with others? Explained why we do it that way. How to correct? I load that. You know the answer. Now, instead of giving me the answers every time, let me develop the answers or options. I have to make no improvements, and then you could delegate on. I'll get on it and do it my way. So again, it's developing abilities which matches different ways. The stages off motivation now in terms of confidence. Please give your buddy who want a while can help me deal with all bits and pieces. I'll feel more confident to open up. A group of the group would be mutually supporting on. Help me to develop my confidence. And then my manager could help me develop where I need to improve, not by telling me what to do but by asking and coaching that improvement in my self worth and self belief in myself, myself, development off my confidence and then find me. Of course, I become self away so that is the Mac factors, motivation, ability, confidence building in people is fundamental people management, and that's a catchy title for a book, motivation, ability and confidence building. People available from Amazon handle with bookshops. I couldn't resist that. I hope that's helpful to you. I hope that's give me a lot of ideas. I hope you can see that developing those things becomes very, very important because the developing of the professionalism individuals is what your business is all about. So I'd like just to finish off this section by talking a little bit about CPD. It is something that I've explored in a lot more detail on. I find it really quite fascinating. But there are number of things that people do or rather mistakes they for themselves into not get to their CPD addressed in the right way. And I wonder whether your team fall into any of these. Do some of your team think that they don't need to do CPD because they too experienced Well, as you may guess, I've been in industry for a few years and I m or I'm in industry. The more I know, I don't know. So it's never an excuse for me now they're being too busy or doing it later. Well, if you did three minutes a day every day, then of course, your build up over 12 hours worth of CPD in a year very easily, and it won't take a moment to so having a construct to be able to do it can overcome that. But a lot of people say I'll do it later. Look at the rush at the end off October that used to be their people racing around like headless chickens, booking themselves courses. Some say that CPD is too difficult. I don't want to travel to a city. I've got problems Have this to do with what to do with care above a problem. I don't know. It's too difficult. Well, there's lots of things you do. You already do on a day by day basis that this CBD, anyway, hoping feel the data. No solution is a very good one. That makes it a lot easier for you. You hope. Therefore, the people don't feel they can't afford to go on courses, and I hope that the options from data law cost efficient for you. Some people say they find training courses boring. Well, I can imagine sitting listen to me for five hours to be particularly boring. But breaking it up into bite size chunks Aziz, we've done, I hope, makes it more interesting for you. In fact, have you ever attended one of my life courses? You know that my training courses are some people saying they're not sure what to do. Well, if you want to be taken through the competent framework and understand what actions are needed within that, then that's a solution to on the seventh Common mistake is the bureaucratic way off recording Their CBD, of course, makes night difficult. But if you want to find how to do it in three minutes a day, 15 minutes a week, if you want to find out how to do that, you want to track it on two sheets of a four paper, then please get in touch. If you're really interesting, your CPD drop me an email advice at a w on our explain a little bit more on offer you a very useful guide to solving that problem for you. Okay, that then completes all that I wanted to talk about on this program, looking at management call Stage two and well done on the journey we've covered in about five hours. Complete leadership. How you could manage to drive your firm or department forward. I hope you've got a handle on some of finances. You could manage those more successful. I hope you have been able to step back and look at the operations to see how you could be more efficient in those operations to deliver what your business is all about. I hope you've been able to pick up some ideas on marketing a very big subject in his own right, of course, and I hope you feel Zeidi's there being more effective on that. You think about your Web page as way of capturing clients. Rather just be a virtual billboard information. And then, finally, how you could manage your staff with MAWR engagement your interest in engagement staff. That's what we're about. So thank you very much for getting this far. I've been back Mukai from JW and thank you for all the good people of data law, the opportunity of running this program. I don't look forward to seeing you on the next program. Do look out for the key Siris on some soft skills that have to do with managing your business more successfully. Thanks very much. Goodbye for now.
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