Numbers Don't Lie, People Do.

It Takes Courage To Win.

I have not always liked the numbers my business produces.  In fact, sometimes the numbers my models produce are numbers I do not want anyone else to see.  I would much rather parade around some numbers that are healthy and include some good record breaking results.  Those are numbers that are more fun to have others see.  It is kind of funny how we tend to analyze bad numbers by looking for ways to justify how they were made.  Bad numbers are simply, bad numbers.

Bad numbers do not lie.  If something is wrong, the numbers will reveal it.  They will not always reveal it in the way that might be best understood, but they will reveal something is wrong.  Numbers do not lie.  Numbers cannot think or respond to questions.  Numbers can only reveal what has been done.  The people who gather the numbers, now that is a different story.  They will lie about how those numbers and how they were made.  People will make wrong assumptions about how those bad numbers were made.  They will make wrong assessments about what caused the numbers to become bad.  People will actually lie to themselves about what kinds of things produced the wrong set of numbers their business produced.  People will lie.  Numbers don't lie, people do.

I cannot tell you how many times I have set foot in a retail operation and within minutes I have passed judgement about how that operation is performing, financially.  Retail has a specific set of procedures that must be followed in order to produce consistently good numbers.  It ain't rocket science.  It is slippery grounds, however, but not rocket science.  Retail can be an unruly beast if you allow it to dominate how you manage what you should or should not be managing.  The beastly attitude a retail operation can harbor has been known to quietly kill good ideas, interesting opportunities, clean efforts of control and as a result...that beastly attitude will produce numbers that are not something an owner would prefer to parade around his contemporaries for fanfare.  Retail can be very slippery territory for producing good numbers to reveal.  Like I said, I have been inside many retail operations and in seeing how they operate I can closely predict if their numbers are good or bad.  There are some very telling signs that reveal what is not being done correctly.  Some of those signs of wrong doings will always produce negative results.  Always.  When I see them, I already know what the numbers are fighting to overcome.  Likely, however, the leaders of those retail operations producing wrong numbers are continuing to lie to themselves about how their numbers are going wrong.  The numbers are not doing the lying.  The people are.

If your numbers are consistently producing unwanted results, your likely producing excuses for why they are doing what they are doing.  You are also producing some wrong assumptions about why those numbers are not falling on the financials the way you want them to fall.  In fact, sometimes the leaders will adjust how they process their internal accounting to justify where the numbers went wrong and as a result, they will actually place badly produced numbers to be revealed in a way that fits better to their desire.  They lie.  Leaders will lie about the sources of their bad numbers in an effort to cover what they did not do well.  They will tend to disguise how they did what they did not do.  It is much like adding gasoline to a small fire.  I have watched great leaders make this simple mistake.  It is astounding.  I have done it myself.  Changes need to be made.  The numbers are wrong, they are wrongly portrayed and they are arranged to disguise why they are wrong.  The numbers don't lie, people do.

When I enter a small retail operation I can usually tell if the leader is lying or not.  Ego control is usually the first telling sign.  If a leader has not been able to control their ego, that usually means they do not make good decisions with what their numbers reveal.  They usually make decisions based upon what makes them look good.  Numbers do not usually care if you look good or not.  In fact, numbers do not know how to make you look good or not.  Numbers only reveal what your operation has done.  That's it.  Numbers cannot think.  They cannot go to the meetings with you and sit at the table to describe how you should have been treating them.  They cannot produce a lie.  They do not know how to do that stuff.  Numbers do not have the ability to manage emotional decisions.  Numbers cannot make decisions.  Numbers do not drive what you do or how you decide what to do.  They only reveal what you have done and what kinds of decisions you have made.  Numbers show up after you make the decisions you felt you needed to make.  When I enter a small retail operation, this is exactly what I am looking to find.  Who knows the numbers, how are they gathered and in what ways do they regularly use those numbers to make the decisions in their business model?  Big holes will surface here, immediately, if the model is struggling.  I usually do not need to look any further.  I already have my answer.  The business model is not producing good numbers.  Period.  Lie all you want, this is where it begins.

It Takes Courage To Win, It's True.

If you lead a business model or you own one and you do not know how your numbers are managed, how they are gathered, how they relate to each other, how important they truly are...you are not fully aware of what needs to be done to produce better numbers.  You are only hoping they get better.  They will not.

Numbers can be a sickening experience.  That is exactly why they are usually altered.  People alter them.  People hate what they reveal.  It takes courage to do the right things the numbers work to arrange what is needed to be done.  I hate it, too.  I hate what the numbers reveal.  I dislike them a lot.  I am never comfortable with bad numbers.  They tell stories I do not want to hear.  Bad numbers reveal icky stuff about how I have decided to manage what I felt was the right thing to do.  Bad numbers reflect what I did wrong.  I hate that feeling the most.  That is exactly why people lie.  We hate what bad numbers do to our inner self.  We hate the feelings we get when our numbers go bad.  We try to rearrange how those bad numbers were made.  We look for logical ways to adjust our accounting methods so we can somehow justify why those numbers ended up so bad.  People lie.  Numbers don't, people do.

We want to feel better about how hard we have been trying to fix what is wrong.  We cannot take another 'hit' from the facts the numbers reveal.  So we make a move to rearrange how we gather the numbers we see.  We try to soften what those numbers reveal.  We try to report a better explanation.  The numbers do not do any of this creative stuff.  People do.

If your numbers are not exactly where you would like them to be, quit rearranging them.  Quit covering how they are going wrong.  They are not going to accidentally get better.  They will only do what they will do.  They are not paying attention to how you feel about what they reveal.  They reveal exactly what they must reveal.  They report exactly what needs to be reported.  If you have big holes in your inventory control, you have big holes in your inventory control.  If you have big problems in your margin of profit, you have big problems in your margin of profit.  If you have old inventory that does not sell, you have old products that do not sell.  If you have too much dead inventory, you have too much dead inventory.  If you have too much interest debt, too much payroll, too little revenues, shrinking customer support, too much advertising, too much turnover or anything that is tracked that looks wrong, it is.  Quit trying to sweep it into a different set of analysis.  Instead, go look into a mirror.  That is usually where I find my villain.  Tell that villain to change how the decisions of this model are made.  Tell that villain to quit worrying about what others will think.  Worry more about how to produce better numbers.  Quit lying.  Quit making the decisions that support the wrong stuff that is being done.  The numbers do not care about that kind of stuff.  They never have and they never will.  Numbers don't lie.

I wished it was easy.  It is not.  Some of the people you employ need to go away.  Some of the people you employ need to be getting more swift kicks here and there.  Some of the things you do need to be done more often.  Some of the things you do need to disappear forever.  Some of the things you do not see need to be seen.  Some of the things you see do not matter like you think they do.  It is not easy stuff to manage.  Confusion can be an ugly friend.  We tend to attract more confusion when we begin the lies about how our numbers were made.  There is no profit to be earned when confusion takes over.  Profits hate confusion.  Profits hate disheveled organizations.  Profits hate inconsistencies.  Profits hate lies.  Profits hate when an owner ignores what the numbers reveal.

Numbers don't lie.  People do.

Until next time...