Tag Archive for: 80/20 Results

Are You Playing All Four Quarters?

I recently had an excellent discussion with one of my Clients about how the last 12 months had turned out. As many of you know, early 2020 presented an incredibly challenging time with the onset of COVID-19 and its extremely low milk prices, particularly during the second quarter.

However, he had maintained his production levels, despite the fear in the markets, and it had paid off. He was solid on his Cash Flows and the details of his herd management, but then at end of his year, he seemed to “take his foot off the gas…” Maintenance of his facilities seemed to fall short of their normal levels, and milk quality started to suffer.

When I asked what had happened, he seemed a little defensive. However, helping people stay on their “A Game” is part of what Clients pay me for. Then, he informed me with the following: “John, I’m tired. My employees are exhausted. These last 12 months have been very taxing.”

Believe me when I say that I did, indeed, understand. I had overcome several serious Client challenges on the banking front, facing off against some of the most ridiculous financing challenges I have seen in 23 years of consulting. However, I worked with my Team and my Clients to overcome those hurdles.

You know what made the difference? We “played all four quarters!” Every game is won or lost in the fourth quarter. You can plan an excellent game for three quarters and then lose it in the fourth quarter. Guess what? It is no different in the dairy business. You must play all four quarters each & every year. Defeat and its willingness to take you down is on call all the time, just waiting for you to let up the slightest little bit!

I want to encourage you to “fight the good fight,” and I mean all year long. Here are some suggestions for “winning the game” by playing all four quarters:

  1. Complete regular monthly Cash Flow Analysis, not just occasionally, but each & every month. My Clients see this information from me every month. There is no better way to stay ahead of the game. While I am an advocate of regular quarterly CPA prepared Financial Statements, a lot can happen in 91 days. I want to catch any expense items that are getting out of control before they get “beyond repair.”
  2. Regular Management Team Meetings – These should be held with your Financial Advisor, Nutritionist and Key Employees on a regularly scheduled basis. As I said earlier, you have to play all four quarters to “win the game.” However, you also have to have a winning team, all of whom are pulling in the same direction. If they are out of sync with you or each other, this can create real challenges to your overall success.
  3. Regular Finance Team Meetings – These can be crucial to making sure that your Team stays on track. Measuring your Cash Flow monthly is one thing, but making sure that your Team is aware of challenges that arise is crucial. How can we expect them to keep costs in alignment if we never share our concerns with them?
  4. DMC & DRP – These programs are, simply stated, a “form of insurance.” Like any insurance program, they provide you with a safety net against any severe downturn, in this case a falling milk price, which, of course, can wreck your Cash Flow. Think of these safety nets as an investment, not a cost. Just as you would not call your insurance agent at the end of a year & and complain about the premiums you had paid, although your house didn’t burn down, you likewise shouldn’t complain about these premiums. Both DMC & DRP are a form of financial insurance.

I hope you’ll consider playing all four quarters this year, even the frustrating ones, because that is the only way for you to WIN!

If you would like to learn more about these concepts, just shoot me an email (john@success-strategies.com) stating “NLT Workshops,” and I will be sure to include you in future invitations.

Are You Using “Pareto’s Law?”

Are you taking full advantage of Pareto’s Law? Vilfredo Pareto was an Italian economist who lived from 1848-1923. Of course, he was initially known for his observation that 80% of the property in Italy was owned by 20% of the population. This was later summarized into the Pareto Principle, which states that 80% of our results typically come from 20% of our efforts. This is also known as a Pareto Distribution.

Take some time and list all of the tasks that need to be completed in your business. You are probably already thinking, “John, all of these tasks need to be done!” Maybe so, but do they all need to be done by you? Not necessarily… Please allow me to explain. Even in the early years of my business, when I couldn’t necessarily afford to hire a lot of staff members, I had my children (Ages 10-13 at the time) complete filing, do inputs for Inventory spreadsheets & Client Activity Summaries.

This actually accomplished several things. They learned how to work, they took part of the load off me and they also funded their future college tuition through their efforts.

After you’ve made your list of tasks, I’d like you to categorize them into four categories:

L – Lead on these tasks. They are the ones that you do best in your business, simply because you have what my Business Coach Dan Sullivan calls a Unique Ability. You are really great at this, others recognize this positive skillset you have, and you enjoy it so much that the day just seems to “fly by.” They are the tasks that will likely also make you the most profits.

E – Eliminate these tasks. Do you really need them? If you are spending 80% of your time on these, and only getting 20% of your results, you are limiting your profitability.

A – Automate tasks whenever possible. I use tools like Auto-Responders on my website to expedite replies to some of my website requests. I also use some e-mail responses that cover Frequently Asked Questions or FAQ’s. What tasks can you automate in your operation? In this world of rising labor costs, you simply cannot afford to overlook this question!

D – Delegate tasks whenever possible. There are some tasks that just make sense to delegate to others on your Team or to a third-party provider. The question to ask is, “Can someone else do this task, perhaps even better than I can complete it?” In my own operation, I use a third-party provider to do my billing, payroll & several other tasks, which frees up more time to spend with Clients. In most cases, delegation will free you up to focus on more profitable tasks. I know this certainly has been true for me.

The ultimate question for you is “Where, in terms of your efforts, can you place 20% of your efforts and achieve 80% of your results right now?” Talk to your Team about this idea and where it can be applied. There may be some tasks that are 70/30 or 60/40, but they are still worth looking at.

If you will continually do this, I guarantee that you will continue to expand your future opportunities and profitability results!

I urge you to please join me in making the changes we need to in order to succeed and prosper! As we move forward with my Next Level Thinking™ blogs, I’ll start my focus on the benefits of “Upstream” thinking from Author Dan Heath. If I can assist you in any way prior to that, please reach out at john@success-strategies.com or at 209-988-8960.