RESIDUE

By Chuck Violand

Cleanfax Magazine – June 2014


The name Branch Rickey gained renewed recognition with the release of 42, the 2013 movie about Jackie Robinson. But long before, the real Branch Rickey, savvy businessman and owner of the Brooklyn Dodgers, gained fame on April 15, 1947 when he broke Major League Baseball’s color barrier by starting Robinson at first base.

Contrary to what some might think, I was not yet around in 1947 to witness that momentous occasion. Instead, it is a quote by Branch Rickey, learned from an early mentor of mine, which has provided me with inspiration throughout much of my business career. Rickey wasn’t just talking about baseball when he uttered “Luck is the residue of design.” He was talking about business and about life in general.

People engaged in the restoration and cleaning industries know a thing or two about residue. They deal with it every day. They know that soot residue on a fire loss is the result of a combustible material that has burnt and soapy residue on a cleaned surface is the result of an action that took place ahead of it. But residue is also found in other areas of our businesses.

From a global view we can say that even some of the fundamentals of our companies are the residue of the way we think and the beliefs that we hold. Advertising campaigns, position statements, even the quality of the services we offer are examples, but it doesn’t stop there. The people in our companies are the residue of the culture we’ve created. In the early years of our companies you can see this played out when the owner is personally involved in hand-selecting employees based on his individual attitudes about work, personal grooming, lifestyle, and sometimes even religious and political preferences, although for legal reasons these last two typically go unstated. You can test this theory by examining your own personal experiences with the early hires in your company. Think about the people who didn’t stick around—either because they didn’t see a future with you or because you decided to free up their future for them. How often were their exits due to disconnects based on one of these factors?

Over and over I see business owners who want to create an environment that attracts only the best talent to their companies. But over and over I see them go back to their businesses and continue to sabotage their efforts by hiring people just like them. For businesses to flourish, diverse backgrounds, opinions, and ways of thinking are needed in order to encourage fresh ideas and inspiration. Without this type of culture, you will find yourselves unable to retain the best talent you tried so hard to attract.

If we want to change the residue in our restoration and cleaning businesses we have to change the actions that take place ahead of them. Simply saying we want our people to perform better, or sending them to training programs and expecting them to perform better, doesn’t make it happen. We must first change our thinking about people, about ourselves, and about our companies. Only then will we invest in the right training, for the right employees, for the right reasons. And only then will we be left with the residue of better performing, more engaged people in our companies.

Borrowing from a page in the orientation handbook of Quicken Loans, Inc.: “Numbers and money follow; they don’t lead.” In other words, numbers in business are the residue of the decisions that are made and the activities that take place ahead of those decisions. If you want better numbers in your business, make better decisions and engage in better activities. Changing the numbers any other way is generally referred to as cooking the books. This applies to all the numbers in your business: top line, bottom line, and those in between. Here’s a look at just a handful.

Topline Sales. The company with the most topline sales isn’t always the winner in business. Just ask the guys who have big top lines but small or non-existent bottomline profits. They can tell you all about the lunacy of chasing topline sales simply for the sake of a bigger top line. Topline sales are the residue of the thinking you bring to your business and the decisions you make based on that thinking. Some owners are hard-wired for big top lines. Some aren’t. Either way, the sales you generate in your business are the residue of your beliefs and the decisions you make based on those beliefs.

Net Profit. I’ve written about this subject from several different perspectives, but it always comes back to the same bottom line: profitability in our businesses begins with the beliefs we hold between our ears. These beliefs are the residue of how we feel about money and profits. If we think marginal profitability is acceptable, then that’s what we’ll settle for and all the business decisions we make will reflect that thinking. If we believe we deserve and are capable of earning deep profits, then our decisions and actions will reflect that thinking and help us as we make the tough calls, even the tough calls that can bind your guts up in a knot when you make them, but are necessary in order to earn those deep profits consistently.

Cash Flow. Abundant or poor cash flow is also the residue of our thinking. The litany of reasons business owners give for excusing lousy cash flow could fill a book, but it all comes down to how we think about cash flow. If we accept that lousy cash flow is just part of the game of business, then our actions will reflect that thinking. It will determine how quickly we turn jobs and get them invoiced, and how aggressively we pursue money that’s owed us. It will also determine the customers we pursue and those with whom we choose to do business in the first place. All of these are choices and decisions we make based on our thinking. All produce a residue we either choose to live with or decide to change. At the end of the day, it’s our call.

Dan Gilbert, CEO of Quicken Loans, goes on to say in his orientation handbook: “Don’t chase money. Chase the skills that will make you great at what you are doing or what you are building. Become an expert. Become the best. Then, and only then, do the better numbers or the good money follow you.” Amen to that!

If you’re not happy with the pace of growth in your business, the people with whom you’ve surrounded yourself, the profits you’re earning, or the direction your cash is flowing then pay close attention to the decisions you’re making and the discussions you’re having, especially the ones with yourself.