One of the trickier problems for smaller businesses is accountability of “the boss.” Whether it is a sole proprietor, family owned business, or one that is majority controlled with “silent” minority partners, accountability is often a real issue. I’ve found that organizations where there is a strong measure of accountability perform better than those where accountability is weak.
While it might sound great to some to operate in an environment where they are not held accountable to a higher authority, the truth is that accountability drives results. It is easy to allow things to slide or not be as challenging as one should when no one is “looking over your shoulder.” It happens to all but the most driven of us.
I’ve worked (both as an employee and a consultant) for both kinds of organizations. Ultimately, I would much rather deal with the stresses of accountability than those that typically come without it, which is an organization that underperforms.
In any organization, it’s important for the leader to hold his or her direct reports accountable, for them to hold the next level down accountable, and so on down the line. The problem in an organization where the top person isn’t accountable is that it starts to set a precedent. That person doesn’t feel the pressure of accountability to a higher authority and over time this lack of accountability can creep into the organization. Sooner or later, you have an organization where people are showing up, but aren’t necessarily driven to improve performance day in and day out.
So, what should a business owner or manager do if no one is holding them accountable? They need to create accountability. While this can be as formal as having a Board of Directors, it can be as informal as finding trusted advisors or mentors who can provide a level of accountability on a monthly or quarterly basis.
One of the roles that I often play for my clients is to be this accountability factor in organizations. I either do this directly or by ensuring that there is regular reporting and transparency to the Board or other stakeholders.
If you are serious about improving your business, I’d suggest that you create an accountability framework for yourself. If you’re not ready to reach out to others, create a list of “MUST DO” items (not “should”, “want” or “hope” to do but “MUST” do) and hold yourself accountable for the results. I’d be surprised if you don’t see an improvement in your business performance after the first quarter. From there, things should only get better.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2010 Homza Consulting, Inc.
Monday, March 1, 2010
Water The Plants! (January 2010)
Believe it or not, one of the first things that I look for when I walk into an office is whether anyone waters the plants? While I care about the health and welfare of the plants, what I am really looking for is whether anyone goes above and beyond to take care of little things that are usually not in anyone’s job description. I think it immediately gives one a sense of an organization.
In any company, there are many items which fall outside of job descriptions. No job description anticipates everything that happens (or should happen) every day. And while most job descriptions have an “all other” category, it’s how people actually interpret those catch all statements that determines how an organization functions.
Last month, I wrote about how small mistakes, often at the lowest levels of the organization, can take significant time and energy to fix (and usually at a much higher level in the organization). The same is true not just of mistakes, but of day to day activities that are necessary for an organization to function. Ultimately, it’s people taking care of issues early and preventing them from becoming major problems that allows everyone in the organization to perform at the highest possible level. The further down the organization chart that a necessary activity can occur or a problem solved then the more effectively that organization is able to operate.
Organizational performance is governed by the performance of every individual within it. It doesn’t matter how great a sales superstar you might have in your company, if the people responsible for delivery aren’t doing so effectively, customers will eventually get tired of dealing with the organization’s incompetence and find another source. And if that sales superstar has to step in and “fix problems”, the time spent doing that can’t be devoted to making more sales.
Everyone in the organization only has so much bandwidth. Every time anyone is forced to deal with an issue that could have been handled further down the organization, then they are not operating at their highest and best use. This limits their effectiveness and the company’s ability to achieve its full potential.
As is usually the case, I could cite countless examples of people being forced to dive down into the organization to deal with something that could have (and more importantly, should have) been handled by another resource. As a fractional CFO, my job is to not only to oversee the finance function, but to take things off the plate of the CEO and other executives allowing them to manage items that they are uniquely qualified to handle.
Of course, by this point, it should be obvious that watering the plants is just an example (albeit a visible one) of day to day functions that need to happen smoothly in order for an organization to be achieve its potential. So, when you walk into your office next, do more, so everyone else can too!
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2010 Homza Consulting, Inc.
In any company, there are many items which fall outside of job descriptions. No job description anticipates everything that happens (or should happen) every day. And while most job descriptions have an “all other” category, it’s how people actually interpret those catch all statements that determines how an organization functions.
Last month, I wrote about how small mistakes, often at the lowest levels of the organization, can take significant time and energy to fix (and usually at a much higher level in the organization). The same is true not just of mistakes, but of day to day activities that are necessary for an organization to function. Ultimately, it’s people taking care of issues early and preventing them from becoming major problems that allows everyone in the organization to perform at the highest possible level. The further down the organization chart that a necessary activity can occur or a problem solved then the more effectively that organization is able to operate.
Organizational performance is governed by the performance of every individual within it. It doesn’t matter how great a sales superstar you might have in your company, if the people responsible for delivery aren’t doing so effectively, customers will eventually get tired of dealing with the organization’s incompetence and find another source. And if that sales superstar has to step in and “fix problems”, the time spent doing that can’t be devoted to making more sales.
Everyone in the organization only has so much bandwidth. Every time anyone is forced to deal with an issue that could have been handled further down the organization, then they are not operating at their highest and best use. This limits their effectiveness and the company’s ability to achieve its full potential.
As is usually the case, I could cite countless examples of people being forced to dive down into the organization to deal with something that could have (and more importantly, should have) been handled by another resource. As a fractional CFO, my job is to not only to oversee the finance function, but to take things off the plate of the CEO and other executives allowing them to manage items that they are uniquely qualified to handle.
Of course, by this point, it should be obvious that watering the plants is just an example (albeit a visible one) of day to day functions that need to happen smoothly in order for an organization to be achieve its potential. So, when you walk into your office next, do more, so everyone else can too!
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2010 Homza Consulting, Inc.
Strive For Perfection (December 2009)
Everyone makes mistakes. I used to work with someone who said: “Show me a man who doesn’t make mistakes and I’ll show you a man who’s not doing anything.” While, true, this is no reason not to strive for perfection. While some mistakes are harmless and can even go unnoticed (an insignificant typo, for example) others are costly.
If one could take the income statement for a business and capture “mistakes” (just like we capture rent or any other line item), I think everyone would be surprised by the result. Mistakes have a ripple effect almost no matter where they start in the organization. Unless caught immediately, there is often substantially more work involved in fixing the problem than in performing the original task. Furthermore, the resources required to fix the mistake are usually “higher up the food chain” and are therefore more expensive. If we could calculate the cost of mistakes, we could make thoughtful decisions about how much to spend to address the various underlying issues. Unfortunately, unless you are in a manufacturing environment that tracks rework costs, the vast majority of the expense of fixing mistakes is “swept under the rug.”
As you think about improving the effectiveness of your organization, think about the source of mistakes and what you can do to eliminate them. While I’m tempted to cite some examples of costly mistakes I have seen over the years, I certainly wouldn’t want anyone to recognize themselves and take this article as an indictment of their performance. Moreover, I don’t want to give the impression that I’m above a mistake from time to time. No one is.
Since it can take hours to fix a mistake that often could have been prevented with a few extra minutes, it’s almost always worth the time to do some root cause analysis. Once the cause is understood, then “brainstorming” some ways to fix the problem is the next step. Below are some questions which are intended to provide some “food for thought” as you work your way through this process.
o Would a change to procedures help?
o Do mistakes stem from a particular vendor?
o Does a process need to be better documented?
o Does the person making the mistake know about the issue or are they in need of some feedback so that they can be aware of the problem?
o Is there a mechanical or technology fix that would identify the issue sooner or prevent it from occurring?
o Could someone inspect or review the work before it moves along in the process?
o Might a class or some training help the person doing the work?
o Is a change in staff necessary?
Obviously, this list isn’t all inclusive; rather it is intended to stimulate discussion.
I’d encourage every organization to take action to minimize errors in 2010 thereby improving overall business performance. The time and energy spent fixing errors can certainly be more productively deployed growing the business and better serving the customer.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2009 Homza Consulting, Inc.
If one could take the income statement for a business and capture “mistakes” (just like we capture rent or any other line item), I think everyone would be surprised by the result. Mistakes have a ripple effect almost no matter where they start in the organization. Unless caught immediately, there is often substantially more work involved in fixing the problem than in performing the original task. Furthermore, the resources required to fix the mistake are usually “higher up the food chain” and are therefore more expensive. If we could calculate the cost of mistakes, we could make thoughtful decisions about how much to spend to address the various underlying issues. Unfortunately, unless you are in a manufacturing environment that tracks rework costs, the vast majority of the expense of fixing mistakes is “swept under the rug.”
As you think about improving the effectiveness of your organization, think about the source of mistakes and what you can do to eliminate them. While I’m tempted to cite some examples of costly mistakes I have seen over the years, I certainly wouldn’t want anyone to recognize themselves and take this article as an indictment of their performance. Moreover, I don’t want to give the impression that I’m above a mistake from time to time. No one is.
Since it can take hours to fix a mistake that often could have been prevented with a few extra minutes, it’s almost always worth the time to do some root cause analysis. Once the cause is understood, then “brainstorming” some ways to fix the problem is the next step. Below are some questions which are intended to provide some “food for thought” as you work your way through this process.
o Would a change to procedures help?
o Do mistakes stem from a particular vendor?
o Does a process need to be better documented?
o Does the person making the mistake know about the issue or are they in need of some feedback so that they can be aware of the problem?
o Is there a mechanical or technology fix that would identify the issue sooner or prevent it from occurring?
o Could someone inspect or review the work before it moves along in the process?
o Might a class or some training help the person doing the work?
o Is a change in staff necessary?
Obviously, this list isn’t all inclusive; rather it is intended to stimulate discussion.
I’d encourage every organization to take action to minimize errors in 2010 thereby improving overall business performance. The time and energy spent fixing errors can certainly be more productively deployed growing the business and better serving the customer.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2009 Homza Consulting, Inc.
Only The First Two Digits Matter (November 2009)
I spend a fair amount of my time developing financial forecasts. As we approach year end, everyone is thinking about 2010. What are expected revenues? What changes will we make in our cost structure (either by necessity or choice)? What will the bottom line look like compared to 2009?
This effort is (or should be) one of collaboration. Generally, the finance person responsible for actually producing the forecast should be receiving input from sales, marketing, service delivery, administration, production, research & development, the executive team and perhaps even the Board of Directors with respect to their thoughts about the upcoming year (or perhaps multiple years). Furthermore, it is best that this input be when “everyone is sitting around the table” as opposed to being sent only to the finance person. This allows everyone the opportunity to challenge each other’s assumption and make sure that they are all on the same page. It’s important that if the plan calls for a ten percent increase in revenue versus the prior year, for example, that everyone is planning their resources accordingly.
As you move through your planning process (either as the person responsible for pulling together the forecast or a participant), it’s important to step back, think strategically and not allow oneself to get mired in the details. Think about what is happening within your company, the competitive environment in your industry, and economic factors generally.
Often, I like to say only the first two digits matter! Why? Because we are dealing with a forecast. By its very definition, it is an estimate and therefore wrong at least to some extent! The question isn’t whether the forecast is wrong, rather it is by how much? I have seen people spend an inordinate amount of time trying to be very precise in their forecast, but miss the big picture. Too often, I’ll see people develop extremely complex formulas to forecast a line item without thinking about the big picture. To develop a forecast without the benefit of the context of historical trends, volume, and “the bigger picture” in mind is a recipe for disaster.
While I don’t mean to suggest one should not “sweat the details”, it’s also important to keep in mind that time is a finite resource and it’s important to focus your efforts where they will have the most value.
If you are forecasting an expense line item of some $50,000, then the digits after the comma are neither material nor predictable. The same is true if you are forecasting a profit picture of $10,500,000 dollars. In this case, even though the potential value of whether that “5” ends up being a 1 or a 9 is significant, one’s ability to forecast it is relatively small. For new businesses, even getting the first digit of the revenue forecast right can be a challenge.
If you are paying attention to how your forecast relates to prior periods, percent to revenue, month to month trends, industry norms and external factors, then you’ll probably end up with a forecast that is reasonable. With these thoughts in mind, I wish you the best of luck in developing your 2010 plans.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2009 Homza Consulting, Inc.
This effort is (or should be) one of collaboration. Generally, the finance person responsible for actually producing the forecast should be receiving input from sales, marketing, service delivery, administration, production, research & development, the executive team and perhaps even the Board of Directors with respect to their thoughts about the upcoming year (or perhaps multiple years). Furthermore, it is best that this input be when “everyone is sitting around the table” as opposed to being sent only to the finance person. This allows everyone the opportunity to challenge each other’s assumption and make sure that they are all on the same page. It’s important that if the plan calls for a ten percent increase in revenue versus the prior year, for example, that everyone is planning their resources accordingly.
As you move through your planning process (either as the person responsible for pulling together the forecast or a participant), it’s important to step back, think strategically and not allow oneself to get mired in the details. Think about what is happening within your company, the competitive environment in your industry, and economic factors generally.
Often, I like to say only the first two digits matter! Why? Because we are dealing with a forecast. By its very definition, it is an estimate and therefore wrong at least to some extent! The question isn’t whether the forecast is wrong, rather it is by how much? I have seen people spend an inordinate amount of time trying to be very precise in their forecast, but miss the big picture. Too often, I’ll see people develop extremely complex formulas to forecast a line item without thinking about the big picture. To develop a forecast without the benefit of the context of historical trends, volume, and “the bigger picture” in mind is a recipe for disaster.
While I don’t mean to suggest one should not “sweat the details”, it’s also important to keep in mind that time is a finite resource and it’s important to focus your efforts where they will have the most value.
If you are forecasting an expense line item of some $50,000, then the digits after the comma are neither material nor predictable. The same is true if you are forecasting a profit picture of $10,500,000 dollars. In this case, even though the potential value of whether that “5” ends up being a 1 or a 9 is significant, one’s ability to forecast it is relatively small. For new businesses, even getting the first digit of the revenue forecast right can be a challenge.
If you are paying attention to how your forecast relates to prior periods, percent to revenue, month to month trends, industry norms and external factors, then you’ll probably end up with a forecast that is reasonable. With these thoughts in mind, I wish you the best of luck in developing your 2010 plans.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2009 Homza Consulting, Inc.
Too Many Lines (October 2009)
During the last couple of weeks, I’ve had the opportunity to review a few new income statements. What I saw was pretty typical . . . too many lines. Both had over 150 line items. It is clear that the information that I reviewed is not being used to manage the business. There is just no clear organization to the income statement.
The issue is less the actual number of line items than the fact that they are not subtotaled into any logical order. I organized one of these income statements into 23 lines. The largest expense item was for employee costs which accounted for 77% of total expenses (more about that later). My “all other” line item (I almost always have one of these) accounted for only 7% of total costs.
Income statements like the ones I describe often fail to use account numbers. Lacking account numbers, the usual default is that the income statement is organized alphabetically. Just what are the chances that the most important line items in any business start with “A” and the least important ones start with “Z”? Obviously, the answer is “very little”.
Capturing 77% of your costs in one line item provides no detail on the single biggest expenditure of the business. Knowing that 77% of your cost is for payroll doesn’t tell you anything about how those dollars are deployed across departments or activities.
I also see too many line items that just aren’t material to the business. Some are so small that they have only had a few hundred dollars of expenditures in them on an annual basis. As long as you can get to the detail, these should be grouped into a few larger accounts which will likely provide some month to month consistency for forecasting purposes at the same time as well as being easier to review each month.
Hare are a few thoughts about organizing financial information in a way that is meaningful to the reader (usually the executive management team). Ultimately, the goal of these statements is to be a tool. With that in mind, I’d suggest:
o Organize around your most significant costs – use cost centers rather than more line items if you want to understand costs by department.
o Know that you will have some miscellaneous costs, but as long as you can get to the detail, you don’t need a line item for every $200 item.
o Use account numbers to avoid confusion between income and balance sheet items.
o Talk to your accountant about where non-operating costs should be captured. Too often these end up in the middle of the income statement. Typical examples are interest expense and interest income (I frequently see the latter in the revenue category).
o Learn how to properly record payroll expenses; these are usually booked incorrectly every pay period and the outside CPA makes a correcting entry at year end. Why not book them correctly each payroll period?
o Book an estimated depreciation amount every month. Sure, there will be a true-up at year end, but you should know approximately how much fixed asset depreciation you need to cover each month.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2009 Homza Consulting, Inc.
The issue is less the actual number of line items than the fact that they are not subtotaled into any logical order. I organized one of these income statements into 23 lines. The largest expense item was for employee costs which accounted for 77% of total expenses (more about that later). My “all other” line item (I almost always have one of these) accounted for only 7% of total costs.
Income statements like the ones I describe often fail to use account numbers. Lacking account numbers, the usual default is that the income statement is organized alphabetically. Just what are the chances that the most important line items in any business start with “A” and the least important ones start with “Z”? Obviously, the answer is “very little”.
Capturing 77% of your costs in one line item provides no detail on the single biggest expenditure of the business. Knowing that 77% of your cost is for payroll doesn’t tell you anything about how those dollars are deployed across departments or activities.
I also see too many line items that just aren’t material to the business. Some are so small that they have only had a few hundred dollars of expenditures in them on an annual basis. As long as you can get to the detail, these should be grouped into a few larger accounts which will likely provide some month to month consistency for forecasting purposes at the same time as well as being easier to review each month.
Hare are a few thoughts about organizing financial information in a way that is meaningful to the reader (usually the executive management team). Ultimately, the goal of these statements is to be a tool. With that in mind, I’d suggest:
o Organize around your most significant costs – use cost centers rather than more line items if you want to understand costs by department.
o Know that you will have some miscellaneous costs, but as long as you can get to the detail, you don’t need a line item for every $200 item.
o Use account numbers to avoid confusion between income and balance sheet items.
o Talk to your accountant about where non-operating costs should be captured. Too often these end up in the middle of the income statement. Typical examples are interest expense and interest income (I frequently see the latter in the revenue category).
o Learn how to properly record payroll expenses; these are usually booked incorrectly every pay period and the outside CPA makes a correcting entry at year end. Why not book them correctly each payroll period?
o Book an estimated depreciation amount every month. Sure, there will be a true-up at year end, but you should know approximately how much fixed asset depreciation you need to cover each month.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2009 Homza Consulting, Inc.
I Love A Good Audit (September 2009)
Last month, I wrote about the many questions that are part of our business day. To some extent, an audit is all about asking and answering questions about the financials statements of a business and whether or not they accurately reflect the underlying health of that business. The title of this article might surprise many because it actually stems from a comment someone made to me when I mentioned the audit process. They said “that sounds painful”. I suppose some people view the financial audit process as painful and in fact, I suppose that they can be in some cases. But I think there are three important factors to avoid this situation.
First, it’s attitude. One has to review the audit process as an important feedback loop. It’s an opportunity to have an objective review of the financial practices of the business and find opportunities for improvement. If your view is to defend every journal entry you have made throughout the year so that there are no changes, then the process will indeed be painful. If on the other hand, you view it as an opportunity to understand another point of view and reconcile and agree upon any differences, then it becomes about understanding your business better.
Second, it’s important to accept this feedback and work it through your subsequent year’s financial process. It makes no sense to have the auditors provide adjusting journal entries at the end of each year if you continue the same practices as before only to have the auditors make the same adjustments period after period. I recently came across a company that was making payroll entries incorrectly every two weeks. When I questioned this, the person said that the auditors gave them adjusting entries to fix it. I never understand the thinking behind this process. So I asked, “What if we spend thirty minutes and I show you how to do this correctly?” She said, “that would be great, no one’s ever offered to do that for me before!” To me, this makes far more sense. The person doing the work has learned something new and increased their skill set. Management gets a more accurate view of the financial results sooner (rather than waiting for adjustments) and we’ve taken an unnecessary piece of work away from the outside accountants thereby reducing fees.
Third, it’s having the “right” auditors for your company. The firm should be able to give your company the attention that you need and staff it with people who take the time to understand your business and are comfortable dealing with the level of complexity that your business entails. No one audit firm is right for all companies. The big firms tend to be overkill for the small companies and small firms can’t handle the complexity or staff to the needs of Fortune 500 companies.
If your firm isn’t helping you move forward, I’d recommend asking business associates for referrals and interviewing other firms. Many of the companies with whom I work are small to medium sized businesses with a fair degree of complexity and need a firm that will take the time to understand the business, can handle relatively complex issues, work hard to improve the process and are sensitive to costs. I’d be happy to recommend just such a firm to anyone who might be interested.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2009 Homza Consulting, Inc.
First, it’s attitude. One has to review the audit process as an important feedback loop. It’s an opportunity to have an objective review of the financial practices of the business and find opportunities for improvement. If your view is to defend every journal entry you have made throughout the year so that there are no changes, then the process will indeed be painful. If on the other hand, you view it as an opportunity to understand another point of view and reconcile and agree upon any differences, then it becomes about understanding your business better.
Second, it’s important to accept this feedback and work it through your subsequent year’s financial process. It makes no sense to have the auditors provide adjusting journal entries at the end of each year if you continue the same practices as before only to have the auditors make the same adjustments period after period. I recently came across a company that was making payroll entries incorrectly every two weeks. When I questioned this, the person said that the auditors gave them adjusting entries to fix it. I never understand the thinking behind this process. So I asked, “What if we spend thirty minutes and I show you how to do this correctly?” She said, “that would be great, no one’s ever offered to do that for me before!” To me, this makes far more sense. The person doing the work has learned something new and increased their skill set. Management gets a more accurate view of the financial results sooner (rather than waiting for adjustments) and we’ve taken an unnecessary piece of work away from the outside accountants thereby reducing fees.
Third, it’s having the “right” auditors for your company. The firm should be able to give your company the attention that you need and staff it with people who take the time to understand your business and are comfortable dealing with the level of complexity that your business entails. No one audit firm is right for all companies. The big firms tend to be overkill for the small companies and small firms can’t handle the complexity or staff to the needs of Fortune 500 companies.
If your firm isn’t helping you move forward, I’d recommend asking business associates for referrals and interviewing other firms. Many of the companies with whom I work are small to medium sized businesses with a fair degree of complexity and need a firm that will take the time to understand the business, can handle relatively complex issues, work hard to improve the process and are sensitive to costs. I’d be happy to recommend just such a firm to anyone who might be interested.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2009 Homza Consulting, Inc.
Questions (August 2009)
My work day is filled with questions. Depending upon the day, the client, and the specific role I am playing, determines whether I am the one asking the questions or answering them. But in either case, the underlying motivation is almost always the same. How do we improve the business?
Perhaps every question sent through email, vmail, text message, IM, fax, memo, etc. ought to begin with the phrase “In order to help me better understand and improve the business, would you please . . .” But the truth is that almost none of them begin this way.
As a result, it’s easy for people become offended by some of the questions that are being asked and the implied “tone” in the questions. This happens to all of us, and can often be more frustrating than the question itself. With that in mind, it’s important to take a step back and remind ourselves of the actual motivation . . . to better understand or improve the business.
Most important business decisions are made by getting input from people with various backgrounds. The required expertise may include product, technical, finance, sales, marketing, manufacturing, operations, etc. Even in the same company, and even when that company is small, people from various disciplines often speak “different languages”. Terms, phrases, and abbreviations that may be clear to people who work together all day, may not be clear to people from other departments or to people who operate outside of the company walls (bankers, Board Members, consultants, and the like).
As a result, it’s critical that people do their best to answer questions in a way that is clear to the person doing the asking! This means taking extra time to provide information and detail that may be second nature to the people answering. It may also mean “taking people back” to the last conversation and reminding them of a few of the basic facts and context that they may have forgotten.
For example, I recently got a request to spend $5,000 on capital equipment at one of my clients. While this request was fairly well presented I still went back and asked how it tied to the capital equipment budget we reviewed the week prior before signing off. I wanted to make sure it was for a budgeted item and the amount was in line with our prior discussion.
It’s also important to keep in mind that the answers to questions tend to beget more questions. As people build their understanding of the business, they will continually drill down to the next level of detail. And if a question remains unanswered, it’s a pretty good bet that it will keep coming up until they are ultimately answered.
So, the next time that you are answering a business question (perhaps the same question more than once), remember that it’s probably worth a few extra minutes to provide the context needed so that the person asking clearly understands the answer . . . and even then, be ready for “the follow-up”!
Next month . . . “I Love A Good Audit”!
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2009 Homza Consulting, Inc.
Perhaps every question sent through email, vmail, text message, IM, fax, memo, etc. ought to begin with the phrase “In order to help me better understand and improve the business, would you please . . .” But the truth is that almost none of them begin this way.
As a result, it’s easy for people become offended by some of the questions that are being asked and the implied “tone” in the questions. This happens to all of us, and can often be more frustrating than the question itself. With that in mind, it’s important to take a step back and remind ourselves of the actual motivation . . . to better understand or improve the business.
Most important business decisions are made by getting input from people with various backgrounds. The required expertise may include product, technical, finance, sales, marketing, manufacturing, operations, etc. Even in the same company, and even when that company is small, people from various disciplines often speak “different languages”. Terms, phrases, and abbreviations that may be clear to people who work together all day, may not be clear to people from other departments or to people who operate outside of the company walls (bankers, Board Members, consultants, and the like).
As a result, it’s critical that people do their best to answer questions in a way that is clear to the person doing the asking! This means taking extra time to provide information and detail that may be second nature to the people answering. It may also mean “taking people back” to the last conversation and reminding them of a few of the basic facts and context that they may have forgotten.
For example, I recently got a request to spend $5,000 on capital equipment at one of my clients. While this request was fairly well presented I still went back and asked how it tied to the capital equipment budget we reviewed the week prior before signing off. I wanted to make sure it was for a budgeted item and the amount was in line with our prior discussion.
It’s also important to keep in mind that the answers to questions tend to beget more questions. As people build their understanding of the business, they will continually drill down to the next level of detail. And if a question remains unanswered, it’s a pretty good bet that it will keep coming up until they are ultimately answered.
So, the next time that you are answering a business question (perhaps the same question more than once), remember that it’s probably worth a few extra minutes to provide the context needed so that the person asking clearly understands the answer . . . and even then, be ready for “the follow-up”!
Next month . . . “I Love A Good Audit”!
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to
your cash is flowing. know where.®
Ken Homza
Copyright @ 2009 Homza Consulting, Inc.
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