Category Archives: Operations and Budgeting

Planning in Proverbs

Planning is an essential part of leading a business. There are two basic concepts of planning in Proverbs: Plotting (תַּחֲרֹ֣שׁ, literally to plan secretly, usually something wicked) and Planning (מַחְשְׁב֣וֹת, literally the content of what a person is thinking about). The first word focuses more on how the evil plan their future. The second word is more instructive for us as Disciples of Jesus Christ. Proverbs has much to say about planning, so let’s get started.

Proverbs 3.29

Do not plot harm against your neighbor,
who lives trustfully near you

This is one of four verses that gives four prohibitions against malevolent behavior. Verses 27-28 command the reader not to fail to do good whereas 29-30 prohibit malicious activity. Hence, in these four verses (27-30) we find four commands:

  1. Do not withhold good from those whom it is due when it is in your power to act
  2. Do not withhold giving to your neighbor
  3. Do not plan to do harm against your neighbor
  4. Do not falsely accuse your neighbor

For our discussion here, 3.29 is best illustrated by Jezebel’s conspiracy against Naboth and Haman’s designs on Mordecai in Esther.

Note also that the concept of deceit is assumed – the contrast between plotting harm against your neighbors who trust you indicates that deceit will be employed as part of your plan to harm your neighbor. The element of surprise via deceit is in view here.

Proverbs 6.12-15

12 A troublemaker and a villain,
who goes about with a corrupt mouth,
13 who winks maliciously with his eye,
signals with his feet
and motions with his fingers,
14 who plots evil with deceit in his heart—
he always stirs up conflict.
15 Therefore disaster will overtake him in an instant;
he will suddenly be destroyed—without remedy

In this section, a troublemaker and a villain is described by a cluster of character traits:

  • Corrupt (עִקְּשׁוּת, literally the act of perverting something by turning it to a wrong use) talk
  • Sinister non-verbal’s (winking, shuffling feet, motions with fingers – remember the movie The Sting?)
  • Plots evil with deceit
  • Stirs up conflict

Consider this cluster or matrix of character traits – if you see two or more of the six, be on guard for the others and stay far away from a person like this.

Proverbs 12.5

The plans of the righteous are just,
but the advice of the wicked is deceitful

Here, the plans of a just (righteous) person is compared with that of a wicked person whose plans deceive others. Note also that the concept of a “plan” and “advice” are compared, instructing us that when we create plans, we’re advising those who charged with implementing the plan. A righteous plan does not deceive – it does not mislead or contain deceptions.

Proverbs 12.20

Deceit is in the hearts of those who plot evil,
but those who promote peace have joy

This is the third time we’re seeing the connection between evil plans and deceit. We’re also seeing that evil plans create strife and conflict because the contrast is with those who promote peace. The opposite of evil plans with deceit is the promotion of peace that results in joy. The follower of God will be aware of this command to avoid deceit and evil and will take intentional actions to ensure that is not part of his/her business.

In business, we must be careful to ensure our marketing, sales and contracts do not deceive or mislead others. We should be intentional about not overstating the quality of our products and services or the positive effects our customers will experience after engaging us. When you hear marketing that sounds too good to be true, your guard should be very high.

Proverbs 14.22

Do not those who plot evil go astray?
But those who plan what is good find love and faithfulness

One’s moral behavior is usually the result of planning. When we plan evil, we go astray. But when we plan that which is good, we find love and faithfulness. Both love and faithfulness are characteristics of God and help us understand that planning “good” will also point us to God and demonstrates these two aspects of His character to a lost and broken world.

Proverbs 15.22

Plans fail for lack of counsel,
but with many advisers they succeed

Plans that are created without proper input from those with the right experience and expertise will likely fail, but if you include the right advisors, your plans will succeed. This instructs the business owner and leader to have a team of advisors around them who are allowed to speak into the owner’s plans and business. This is often a serious short coming of most business owners: they are often too proud and too independent to seek out help and collaboration with a team of trusted advisors.

Proverbs 16.1

To humans belong the plans of the heart,
but from the LORD comes the proper answer of the tongue

Biblical righteousness is fundamentally an attitude of trusting in God. We will “feel” that a certain plan is the right way to go – our intuition may point us in a specific direction. But from God comes the answer of logic and speech. God doesn’t intuit His way through time or our lives.

Proverbs 16.3

Commit to the LORD whatever you do,
and he will establish your plans

Similar to Proverbs 16.1, we find that when we commit all of our work to God, that He will “establish” our plans. The word for establish (יִכֹּ֗נוּ, literally, to stand up, to sit erect, to set up) gives a flavor of God making one’s plans firm and strong: when God establishes our plans, the storms of life will not sway them.

Proverbs 16.9

In their hearts humans plan their course,
but the LORD establishes their steps

Again, we make our plans, but God’s sovereignty determines our steps. This verse wraps up both major lines of theology into one verse: free will and God’s sovereignty. The Doctrine of Concurrency is so helpful at this point – the notion that both are true. We make our plans, but God determines our steps. Both are true.

Proverbs 16.27

A scoundrel plots evil,
and on their lips it is like a scorching fire

Slander is in view in this verse. Scoundrels (בְּ֭לִיַּעַל אִישׁ, literally a man of no worth, especially in regards to righteous behavior – “the term describes deep depravity and wickedness” (EBC)) plot evil and they have no problem slandering others. Slander is described like a “scorching fire” which speaks of the devastating effect of his words. This person digs for scandal and then propagates it with words which are on fire. Investigative reporting borders on this activity. Finding out dirt about a competitor and then spreading it around exemplifies the actions condemned in this verse.

Proverbs 19.21

Many are the plans in a person’s heart,
but it is the LORD’s purpose that prevails

Plans represent purposes. Plans try to accomplish that which is purposeful. Let’s remember that no matter what our purposes are, God’s purposes will prevail. Ultimately, this verse teaches the same core truth as that of 16.9: we make our plans, but God’s sovereignty will win every time. When it matters, God does not lose out to man’s efforts.

Proverbs 20.18

Plans are established by seeking advice;
so if you wage war, obtain guidance

True plans incorporate the wisdom of trusted advisors. Business leaders who draw up their own plans without input of advisors do so at their own peril. This need for advice is heightened when waging war. Business is sometimes war. If you’re going to compete head-to-head, be sure to seek the advice of other leaders and owners – you’ll need it to be successful.

Proverbs 21.5

The plans of the diligent lead to profit
as surely as haste leads to poverty

Plans, by themselves, are worthless. While they represent purposes and advice, in order to bear fruit, plans must be executed. This is where so many businesses fail – they spent time and money on building great plans – but then they don’t execute well. Poorly executed plans lead to poverty. Executing a plan is an intentional activity. Just like being intentional to spend time with God, tell your spouse you love him/her or saving for retirement, executing a business plan requires intentionality.

Proverbs 21.30

There is no wisdom, no insight,
no plan that can succeed against the LORD

There no nuance in this verse: God’s plans will win every time when in conflict with man’s plans.

Summary

  1. God’s purposes will prevail when our plans are in conflict with His
  2. We should seek advice from others in order to ensure our plans will succeed
  3. We must execute our plans well
  4. We must never plan evil or allow for evil in our plans
  5. We must be intentional in planning and execution of our plans

The Unvarnished Truth

One of my undeniable truths of business ownership is #69: The moment you hire your first employee is the moment at which you stop knowing about everything in your business.

Most owners really like to know what’s going on in their business and all owners need to know what’s going on in their business, but most do not know – and they don’t know how to get to the full truth from their employees. From my own personal experience, I’ve had employees lie directly to my face about important facts which, had I known them would have altered decisions I made.

When an owner makes a decision based on information given to him/her by employees who are lying to save face, then the owner has multiple problems to content with:

  1. Lying employee
  2. Making a decision based on false information
  3. You don’t know what you don’t know
  4. You find out it was the wrong decision long after the damage has been done

Proverbs 16.13 says this: “Kings take pleasure in honest lips; they value a man who speaks the truth”.

If you’re not getting the full, unvarnished truth from your staff, you need to ask yourself “why?” Why do they not tell you the full truth? Let me offer several suggestions for your consideration.

First, the problem might be you. Most entrepreneurs are highly talented people who are highly competent at something. Often, they wrongly assume that their competence in their given area extends to all areas of the business, including people management, marketing, sales and so forth. I’ve met more than a few owners who beat up their staff verbally, discount new or conflicting ideas and essentially killing collaboration and teamwork in their business. Perhaps you become angry or irritated with new ideas, thinking that since you’re the owner, all new ideas should come from you. Obviously, these owners are totally unaware of the negative effects of their arrogance, but if check yourself on this: if people rarely or never give you ideas on how to improve operations, sales, marketing and so forth, then ask yourself “why?”. You might find that you are your largest obstacle to getting the full truth.

Second, the problem is they don’t think to tell you because you don’t ask. There’s a phrase “what gets measured is what gets done.” If you’re not measuring it (whatever “it” is) or if you’re not asking about it, then they might think you’re not interested, so they can let it slide.

Thirdly, the problem is you don’t have system in place to surface dysfunction in your business. I see this more often than I care to talk about: business owners whose world is only what they can see and touch. While they are highly interested in their product or service, they lack curiosity about the business aspects of their business. Besides, most of them are too cheap (not frugal – there is a difference) to spend adequate money on infrastructure systems. As long as they can live the lifestyle they want, they really don’t care all that much about the health of their business.

Fourthly, the problem is they confuse accounting reports with an accounting system. I can’t tell you how many businesses simply send their bank statements and receipts to an accountant who magically transforms their data into a monthly income statement with a balance sheet. I can’t begin to tell you how short-sighted this is (sorry to all you CPAs out there) because A) the owner really doesn’t read the statements and B) taillights information only goes so far. Without an accounting system, an owner can’t go in to look at the current numbers. The owner can’t slice and dice the numbers to see where they are really at. And in these scenarios, you can forget cash management. As long as they have money in the checking account, they’re fine.

Lastly, the problem is they trust their employees too much. I see this often as well: owners who don’t check in with their employees because they don’t want to micromanage, so they rarely, if ever, hold the employee accountable for anything. They employee creates his or her own little kingdom within the company and doesn’t share information as s/he should, so the flow of critical information becomes constipated.

Nearly all of this can be mitigated by a few simple, but profound actions on the part of the owner:

  1. The owner should become curious about his or her business and stay in touch with the critical systems of the business
  2. The owner should have systems in place to surface health or dysfunction across the core processes and accounting practices
  3. The owner should have clear, outcome-based expectations for his senior leadership team and hold them to achieving those outcomes on a regular basis
  4. The owner should have a balance between trusting his employees and verifying their work product

Owners who don’t get the unvarnished truth are often the reason for it. Most employees are not nefarious. They simply meld into the culture and processes of the organization. They next time you don’t have all the information you need to make a good decision, ask yourself the question “why?” and then see if you need to change your behavior first before trying to change the behavior of others in your company.

Bill English, Founder
Bible and Business

Essential Planning: Management, Directors and Advisors

Proverbs 24.3-6 says this:

3By wisdom a house is built, and through understanding it is established;

through knowledge its rooms are filled with rare and beautiful treasures.

The wise prevail through great power, and those who have knowledge muster their strength.

Surely you need guidance to wage war, and victory is won through many advisers.

If these verses are applied to running a small, family-owned business, it is clear that a business (just like a “house” literally, a place or dwelling for one or more families) is built through wisdom, understanding, knowledge, guidance and advice. It is by knowledge that the rooms are filled with “rare and beautiful treasures”.

You might recall that when Peyton Manning was a two-time Super Bowl winner and was the MVP of the NFL several times. Peyton never lost sight of his need to be coached and to learn from those who were willing to pour into him their knowledge and wisdom. If only small business owners could grasp how important it is to be always learning, growing and improving – not just their technical skills – but their business skills as well.

This is why I recommend that small business owners realize and accept that as their business grows, they will need to develop and invest time with three different groups.

Management Team

The first group small business owners need to invest in is a management team. The management team runs the day-to-day operations of the business and the folks paid to lay awake at night and worry about the business. If you don’t have a management team, then most decisions will route through the owner and the business will only scale to a certain size, then stagnate. When your business is $250K/year, that’s not a big deal. But it will be rather difficult to run a $5M or $10M business without a management team. The largest I’ve ever seen is $23M – but they were paying the price in people leaving the company for better environments.

How you management team is comprised is up to you, but there are two basic ways: Organizational Chart and the Value Process. Most business owners will build their management team off of standard organization charts: managers for sales, operations, supply chain, finance and so forth. They departmentalize their company and then appoint people to manage parts of their company. It’s very common to see this. How well it works all depends on how well the business owner is able to build a team.

Advisors

This is usually the second group that most small business owners put together, but they do so grudgingly and really don’t like it because the cost of engaging and building a team of trusted advisors. Many take the position that advisors – consultants – are just there to take their money and not offer much of anything in the way of value. And while it is possible to waste money with trusted advisors, my experience is that most business owners end up paying more in other costs when they don’t properly build and engage their team of trusted advisors. Good trusted advisors will save you money, even though they have up-front costs.

Most small business owners are really good at what they do, but they are not good at accounting, contracts, compliance, hiring, firing, benefits, financial reports, banking and so forth, so it really is a good idea for them to have a team of trusted advisors who can help them work better “on” their business. And they will offer real expertise at a fraction of the cost of having the business owner him/herself read and learn the same information on their own.

Your trusted advisors should include:

  • Law firm – look for those who can help with contracts, policies, shareholder disputes (if you have a partner(s)) and HR/employment law.
  • Accounting firm – Have them do your quarterly and annual filings. Be sure to ask them about things you can do to lower taxes. And they should help you with your personal will, since that will be highly affected by the size and profitability of your business
  • Banking – look for a bank that can scale with your projected sales and size for the next five years
  • Financial Planner – be sure to pull out value out of your company on a regular basis and invest it personally for your retirement
  • HR/Benefits – you *will* need someone to help you with human resource elements such as payroll, policy manuals, job descriptions, benefits and so forth
  • Executive coach – believe it or not, an EC is become more and more common as small business owners look to sell or transition their business to their children. While most second or third generations know how to run the business, they often don’t know how to lead or how to think outside of what they have seen in their mom and dad. And often, the coaching has to help mitigate the family’s dysfunction so that the business can survive.

Board of Directors

As a business grows, so does the need for accountability and outside perspectives. A small business – even if completely owned by family members – will need outside perspectives both at the management and at the governance layers. While this is usually the last of the three groups to form, it is an important one for ensuring that proper governance is followed. Why is this important? Well, for family businesses, it is important for the family members to have a place where they can put their owner hat on and express themselves on matters pertaining to their role as an owner. What should not be happening is family members acting as owners during the day when their employee position doesn’t require it and, in fact, would negate that role for them during the day. For example, if one of the family members is an owner of 20% of the business but is employed as the Vice President of Sales, they s/he shouldn’t be talking or acting as an owner during the day.

Be aware the “outsiders” should be on your board – not just family and friends. You may want to include some trusted advisors on your board, but the board is there mainly to hold you – the business owner – accountable to accomplish certain things that you wouldn’t normally do yourself but you know you need to do. It’s a form of self-discipline. If your business is owned by your family, we highly recommend having non-family members on your board in order to get outside perspectives at the Board layer.

Summary

As your business grows, you will need to build and engage these three groups. And you, as a small business owner, will need to value what they bring to your business. Yes, it will cost you some money, but in the long run, these groups will save you money as they help you grow, become more profitable, streamline your operations and mitigate risk.

One caveat – as your business grows and you groups are formed, remember that your role will necessarily change and through delegation, you will need to know how to get more done through people than doing it yourself. This is where many entrepreneurs flinch and just say that they’ll stop growing the business so they can stay in control. That’s a legitimate business decision. But if you want to grow and sell for millions in the future, you’ll need to recognize that your role will change and you will be surprised as little you actually control after these three groups are formed. Your focus will be working “on” the business more than “in” the business, so reserving the things to yourself that allow you to work within your strengths will be very important.

Bill English

Kano Model and Christian Business Ownership

The Kano model is a theory of product development and customer satisfaction developed in the 1980s by Professor Noriaki Kano, which classifies customer preferences into several categories. The core idea is that customers come to a purchase decision with certain expectations about the mix of price, feature and quality. Depending on what they find, they might become delighted, discouraged or have a neutral, “ho-hum” experience.

Fundamental (green line)

These attributes are taken for granted when fulfilled but result in dissatisfaction when not fulfilled. An example of this would be a new flat-screen TV that doesn’t contain a remote. When I was growing up, a remote was a big deal – it was an innovation that customers found exciting and new. Today, it is an expected part of the TV package. Lack of a remote will result in dissatisfaction.

Linear (light blue line)

These attributes result in satisfaction when fulfilled and dissatisfaction when not fulfilled. In the TV example, this means enjoying the latest in pixilation for High Definition. You’ll enjoy it when it’s there, but will be dissatisfied if it’s not what you expected.

Exciter (red line)

These attributes provide satisfaction when achieved fully, but do not cause dissatisfaction when not fulfilled. In the TV example, perhaps it has additional inputs that you weren’t expecting or the remote also has the feature of running your other media devices. Generally speaking, you would not have been dissatisfied if these features were not present, but you’re additionally happy if they are.

Christian Business Ownership and the Kano Model

When it comes to a customer’s perception of your business, we would suggest that when the business fulfills God’s four purposes for business (Products, Passions, Profits and Philanthrophy), that your customers will find themselves rating your business on the Delighter line rather than the other two lines. In addition, we would suggest that this “delightful innovation” would not be something that diminishes over time. Instead, their delight will remain constant because, at our base, we’re always attracted to that which God has created us for, even if we don’t know it. People will naturally be attracted to a company that balances and fulfills these four purposes because we’re always looking for that which achieves at a high level and yet doesn’t fade or spoil.

As a Christian business owner, you won’t achieve a Delighted customer base with high loyalty only through persistent innovation, as important as this is. You see, product innovation is the fulfillment of only one of the four principles. Instead, you’ll need to be succeeding on the other three as well and doing it with authenticity and transparency. Once your there, those on the outside will want to align with your company, either as customers or partners and over time, you’ll develop a strong base of Delighted supporters who are, sometimes, also customers.

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