how do you have a great two hour board meeting?

I’m not going to go into the technical specifics of a board of directors, nor do we need to bring out Robert’s Rules of Order to help with running it,  I want to look more at you, the CEO, what do you want out of your board meetings?  But before we get to the meeting, and the agenda, let’s look at the board itself.

You probably have a board of five members each representing a skill set that you value:  someone who represents the customer (e.g. someone who would buy your offering and knows what will resonate), a few who represent “the money” (e.g. your venture capital folks) and are going to hold your feet to the fire on your financials/projections, someone who has CEO experience that can give you advice through tough times, and yourself.  You brought this team together because they will provide you strategic guidance, support and connections.  You value their opinions.

So why do my meetings feel so tactical instead of strategic? and go on for-eh-ver?

Well, fault lies on both sides.  The rookie mistake I see often is the CEO who brings every member of his executive team, each with their own slides, to show the board how awesome and effective they are.  At ten slides a piece, and two minutes a slide, that is over an hour gone right there on an operational overview of what happened in the past.  Add in discussion - your board has lots of experience and are there to question and provide an opinion - and a deep dive on each department will consume the entire meeting and then some.

what should a good board meeting look like then?

Just follow these easy tips for quarterly meetings (in Agenda format so that the minutes follow easily):

• Bring meeting to order: now, of course, you have already “pre-sold” what is going to occur at this meeting.  Boards hate surprises and they hate being surprised by bad news even more.  If it’s really bad news then actually reach out to speak to them in advance - this way they have calmed down by the actual meeting and you’ll have a feeling for what should be addressed to make the meeting more strategic.
• Administrative (10 minutes): this is when you approve the prior meeting minutes, stock option grant resolutions, etc.  This is the easy stuff to get out of the way quickly.
• Operational Overview (45 minutes):  your actual presentation should only take 30 minutes to go through but you know there is going to be discussion.  For me, personally, a good board deck shouldn’t be more than 20 slides (financials have been sent out in advance): 1 overview, 3 financial highlights, 3 sales, 2 marketing, 2 product, 2 services, 3 covering forecast for next period and remainder of year, the rest is unique to the story you want to tell.  The slides shouldn’t change much from quarter to quarter and helps keep the board in a rhythm of when/where information is going to be provided.  This is an overview (not an operational play by play) that really addresses: where are we at?  what is going right?  what is going wrong? Discuss.  Bring your CFO to help fill in the blanks but you are doing the pitch.
• Strategic Topic “X” (60 minutes): each board meeting you should have a strategic topic to discuss.  This topic has been mutually determined prior to meeting (see below).  Typically, you have a question or problem that you are mulling over and now you want to present a potential solution and solicit feedback from your experienced board (and then make subsequent changes).  You have provided all the material in advance of the meeting so this is just going over a quick deck and the options you want to discuss.  This is when you really get to use all that board experience you value so much.
• Suggestions (5 minutes): given where you are at with the company, and how well the strategic topic went, you as a board agree to what the strategic topic should be at the next meeting giving you three months to pull it together.
• Adjourn - yeah!

So, my young grasshopper, I hope you find this information useful.  Time to retire that 59 slide .ppt deck, stop playing ‘fetch and retrieve’ on useless one-time metrics and really get something meaningful out of your board meetings.  Your directors will thank you for it.

no longer being required to value the equity portion of a convertible note

Not to get too retro-grouchy but do you remember when we had to classify the proceeds received from convertible debentures into their liability and equity components using the relative fair value approach? Remember using the Black-Scholes model and discounting debt values?  Oh come on … you must remember the word “accrete” and “accretion” that just sounded like something you should be discussing with your gynecologist.  Ick!  Fortunately, the world will no longer have to be accreted which makes this template on the Business Ready website obsolete.  Why?

per CICA 3856.22(a):  The equity component is measured as zero.  The entire proceeds of the issue are allocated to the liability component.

Giddy-up!  Woohooo!  Finally, accounting is being simplified.  It’s a nice start and I, personally, am thrilled.  Below is the entire text but I encourage you to all to stay on top of all pronouncements should they change.  Cheers!

CICA - Financial Instruments Excerpt (3856), Liabilities and equity:

.20 Except as provided in paragraphs 3856.23, the issuer of a financial instrument shall classify the instrument, or its component parts, as a liability or as equity in accordance with the substance of the contractual arrangement on initial recognition and the definitions of a financial liability and an equity instrument. (Paragraphs 3856.A22-.A38 provide related application guidance.)

.21  The issuer of a financial instrument that contains both a liability and an equity element, including warrants or options issued with and detachable from a financial liability, shall classify the instrument’s component parts separately in accordance with paragraph 3856.20. (Paragraphs 3856.A30-.A38 provide related application guidance.)

.22 Acceptable methods for initial measurement of the separate liability and equity elements of an instrument to which paragraph 3856.21 applies include the following:

(a) The equity component is measured as zero. The entire proceeds of the issue are allocated to the liability component.

(b) The less easily measurable component is allocated the residual amount after deducting from the entire proceeds of the issue the amount separately determined for the component that is more easily measurable.

The sum of the carrying amounts assigned to the liability and equity components on initial recognition is always equal to the carrying amount that would be ascribed to the instrument as a whole. No gain or loss arises from recognizing and presenting the components of the instrument separately.

is there a moral obligation that should be included in directors liability?

A client recently asked me to calculate the directors liability for an upcoming board meeting.  I provided two numbers:

1. Directors Liability (legal obligation): in this case included wages owed but not yet paid, the employer portion of payroll deductions, accrued vacation, and HST still outstanding.
2. Total Liability (moral commitments): this included the director’s liability but I also included severance, employee payables (e.g. outstanding expense reports), customer liabilities (e.g. the technical support collected but not yet “earned”) and any lease commitments we had (e.g. how much to get out of them).

Why did I offer the second calculation?  The meeting was simply to see where the calculation was at (they still have two months of burn in the bank) so they really didn’t need it but if you were to have an orderly wind down wouldn’t you want to take care of your people, customers and those who were willing to extend you, the little guy, credit?  I thought so.  It’s just a thought.  Discuss.

PS back in the day, Tanya and I used to call these calculations “the Lalonde” plan (small companies have ears in the walls so you don’t want people to hear that you are calculating the wind down … it makes them nervous).  Why Lalonde?  Ah, yes, an old Finance Minister, Marc Lalonde, who implemented wage controls to stem inflation.  It’s finance humor during tough times.  Okay, not funny.  Hah!

In today’s world of IM, text message, twitter and other mediums that promote truncated/abbreviated words I guess the erosion (yes, I know it is evolution but I feel we’re going backwords) is inevitable.  But the dictionaries aren’t helping either.  I recently received an I’m that ended “nyte!”.  I scoured all the acronym websites to figure it out.  I even came up with my own: “now you’re talking, eh?”.  After a good ten minutes I realized the sender meant “night”.  Sigh.

So, this Valentine’s Day let’s show words some love.  Whole words.  As they were meant to be.  Let’s fall in love with the english language all over again.

That’s right: love.  Not <3.  Perhaps say: “Well, I’m afraid it’s getting rather late.”  Not l8tr.  Just a thought.

And, please, if you find this post “ridic” (ree-dick), although you may “aprec” (a-preesh), keep it to yourself, “k” (kay)?  and instead let this wash over you:

Variations on the Word Love, by Margaret Atwood

This is a word we use to plug
holes with. It’s the right size for those warm
blanks in speech, for those red heart-
shaped vacancies on the page that look nothing
like real hearts. Add lace
and you can sell
it. We insert it also in the one empty
space on the printed form
that comes with no instructions. There are whole
magazines with not much in them
but the word love, you can
rub it all over your body and you
can cook with it too. How do we know
it isn’t what goes on at the cool
debaucheries of slugs under damp
pieces of cardboard? As for the weed-
seedlings nosing their tough snouts up
among the lettuces, they shout it.
Love! Love! sing the soldiers, raising
their glittering knives in salute.

Then there’s the two
of us. This word
is far too short for us, it has only
four letters, too sparse
to fill those deep bare
vacuums between the stars
that press on us with their deafness.
It’s not love we don’t wish
to fall into, but that fear.
this word is not enough but it will
have to do. It’s a single
vowel in this metallic
silence, a mouth that says
O again and again in wonder
and pain, a breath, a finger
grip on a cliffside. You can
hold on or let go.

So, what’s new with SRED?

Well, as of today there have been no changes to SRED and any changes that do occur have to be a part of the federal budget so the earliest changes will happen is March 2012.  However, you should be aware of the “Jenkins Panel” which was formed in October 2010.

What’s the Jenkins Panel? And what do they propose?

The Jenkins Panel is a Federal R&D Review Panel tasked with making recommendations to the government on the effectiveness of existing federal programs, including SRED.  In October 2011 it submitted its recommendations which many are hoping get passed in the 2012 budget.

In their proposal, the Jenkins Panel has recommended a simplification for SRED, specifically for small and medium-sized businesses (if you want to really know start at page 95 of the report), that includes:

• SMEs (CCPC’s) can only claim labour-based costs (direct labour, 50% contract, and 3rd party) - materials and capital costs would no longer be claimable. Most of us (the little guy) use the proxy method so this will still be less for us too.
• fortunately, the rate would be increased to account for lost material/equipment costs.
• tax credits would only be partially refundable to SME’s.
• the pre-claim review process would improve.
• changes will be phased in.

Please note the above are only recommendations for legislation.  What really counts is CRA’s interpretation, which started in December 2011by seeking public consultation that ends February 20, 2012.

So, really, nothing has changed?

We have to wait for the Federal Budget to be approved and then we’ll know more.  Stay tuned!

What was I up to?

Well, I did write the book (a sample chapter can be found here) and funnily enough I also started my own wine brand called Bella that will launch this summer so it’s not like I was being a total slouch.

Wow: a year off living in wine country, drinking the fabulous offerings of the south Okanagan, hanging out with winemakers, eating great local food and attempting to create the great Cascadian Novel?  Doesn’t sound too bad.

It wasn’t.  It was great.  But something was missing.  Even when I was volunteering at the wineries I was constantly thinking of ways to improve the process/work flow or introduce technology.  I couldn’t let it go.  I was observing how the wine industry approached social media and online purchasing and I wanted to scream out how to make it better.  I wanted to help the little guy!  Patience grasshopper.

I longed to talk about what was going on in tech.  I mean look what happened at TechCrunch alone!  Unfortunately, my new friends were interested in the weather, brix, the weather, ordering new barrels, the weather, getting a new pump, the weather …

Meanwhile I was trying to write a book.  Writing blog entries is easy.  Writing a novel is HARD work.  Don’t let anyone tell you other wise.  And when it’s hard you procrastinate and in my case that was being glued to my computer seeing what else was going on in the world.  I was cyber-stalking the tech industry.  It wasn’t healthy.

So, I finished the book.  Said goodbye to my wine friends (and brought a lot of wine home).  Got my ass back to the city and called up some old tech friends here.  I’m pleased to say I’m back in the game, hearing about some great companies on the scene and am excited to be back here on the website, helping you.

Let’s get your Business Ready.

PS the how to write a sales territory plan blog post was *very* popular doing my hiatus.  I’ll have to send all those folks out a sample as a thank you now that I’m back.  Cheers!

have you had a less than stellar first day on the job?

Ya, you know what I’m talking about: no training on the company product offering, hiring manager not there when you arrive, desktop/laptop not configured and ready to go, you have no idea where the bathroom is let alone how to get your morning coffee and you are staring out at a ton of people you don’t know like a socially awkward conference reception.  It rattles your confidence.  It makes you question your decision.  But you have hope and are willing to give a bit.  I’ve always brushed off this first day less than optimal experience as the price of working for a small company.  They’ll understand.  It’s charming.  But then I was the “FNG”

what is F.N.G.?  The Fucking New Guy.

I recently started work at a winery, with no experience, and on my first day on the job it was, uhm ya, less than stellar.  The winemaker didn’t explain anything: the process, what my part was, how it fit into the bigger scheme, the resources I would be required to have/use, what was expected of me.  What he did offer was his motivational speech, or corporate values:

“Let’s get this clear, FNG - you don’t think.  You don’t speak.  You focus.  Fo-cus!  FOCUS!  Everything that goes wrong is your fault ’cause you’re the FNG.  Whether you fucked it up or not, it’s your fault.  Got it, FNG?  This is just like war.”

Right then.  Now that he’s made it clear I’ve got to get all GI Jane, with my new title of FNG, I know exactly what is expected of me. I’m going to rock this mo-fo of a job and prove to him that I’m the best FNG there is!  No training required.  How hard can it be?

My confidence was rattled in the first 5 minutes: I was given quality control on the bottling line to take my ego down a notch and realize that it was really hard and did require an element of experience.  I was quickly demoted to an easier task (strapping closed case boxes).

how could they have made this first day better?

If the winemaker had simply: introduced me to the team, walked me through the assembly line and explained what each role was, showed me the optimal way to inspect the bottles (quality control) so I could mimic best practices, explained how many cases we were going to bottle and where we were in the wine making process it would’ve changed everything.  A 30 minute conversation would have turned a demoralizing experience (which made me question why I had left my perfectly good CFO job) into one where I would feel empowered, contributing, doing my part for a small winery.

What should new hire training, orientation, or the latest fad term: “on-boarding”, include?

Just like above, the elements are pretty much the same for any industry:

• provide key information about the company, products, services, composition, etc.;
• make the person feel welcome and good about the role they’ve just started;
• review the cultural values of the company so a new hire can fit in quickly (preferable not in the army commander version I got);
• assign a “mentor” or buddy on day one so they feel comfortable asking questions;
• give clear direction of what is expected of them and the overall objectives;
• have their work environment set up and ready to go;
• provide any skills training if required;
• review paperwork/benefits (everyone wants to know how they are going to get paid and how their benefits work).

By following these simple first day rules you can win a new hire over quickly and gain their trust/respect with your own conduct.  They feel good and you get a happy, fully-functioning staff member who is excited to come back for day 2.

I’m still the FNG.  I wear my title with pride … they’ll be t-shirts made shortly.  But never again will I brush off spending time with a new hire on day one.  I’ve spent so much time as management/consultant, I forgot what it was like to be staff.  That is a shame.

At first I approached friends and family to see if they were willing to support my idea.  Of course they were enthusiastic as to the new direction my life was taking me but, and this is no surprise, none were willing to support me financially to essentially drink wine in the country and write about my adventures (the first book is called:  “Crush: Innocence Lost in Wine Country” - shameless self promotion.)

Next I looked into grants available to Canadian fiction writers (think of this as the angel round).  I reviewed the options provided by the Canada Council for the Arts, the Writer’s Trust, combed the Association of Canadian Publishers and every other option that popped up under the google search: “canadian women fiction writing grants”.

Surprise!  If you are not: a previously published, financially destitute, mid-career, lesbian, under 35, promoting Japanese themes in a children’s book, well, you’re out of luck for funding options.

Of course, there was tons of guidance on going to writer’s festivals, seminars on pitching your book, how to write a proposal, etc. but nothing really concrete.  Sounds a lot like all those Angel monthly pitch sessions, drinks for entrepreneurs at the pub, and general networking events we have in tech (by the way the Vancouver Enterprise Forum provides a great “quick links” list to most of the standard options in town).

Does this mean I give up on the dream?  NO!

Just like a technology start up it means I’ve got to put a little skin in the game first.  Invest my own resources, time, money (e.g. leverage the hell out of my line of credit) to get the first prototype out the door.

My focus is on one chapter: the freebie, the teaser, the give-away.  Something to give them a taste and inspire them to buy more.  Sound familiar?

If I do make it big as an author (hey! Margaret Atwood has got to be rolling in a few bucks …) I will create my own award.  It will be available to: anyone experiencing a mid-life crisis, scared, first time, not published anywhere writer promoting adult themes in perhaps not too funny fiction format.  What shall we call it?

recently I’ve been having pause for thought on just how much we work.

Why?  I recently visited some great friends who work at Apple.  They work crazy hours.  It was a sheer honor that they took an afternoon off to visit with me (although they spent that Sunday afternoon feeling guilty and talking about work constantly among themselves - I felt like I was at a staff meeting).  One even mentioned that they would never hire anyone who wasn’t available 24/7 and didn’t think no amount of work is too much work.  Really?  When I mentioned it would be very unrealistic to sustain that level of pressure, burnout and health issues would surely slow them down, I was told it was more like a badge of honor to almost kill yourself over delivering a product.

wow.  are we literally willing to give life, health and happiness to take something to market?

Well, it seems so.  Last week I was at F5 Expo and I had the pleasure of seeing Tod Maffin speak on work/life balance.  Here is a little taste from his talk “Taking Crazy Back”:

If you have a chance to see him speak, I would highly recommend it.  He is a man who really almost died for the success of his company and has come back to tell his tale.  It really made me think about the side effects of my “anything for the venture” mentality.  For instance:

What about all those people who don’t stay late?  Who work reasonable hours and still get the job done?  If everyone else is “giving 110%” do they feel guilty?  do they then develop the “ass in seat” mentality (e.g. they stay at work out of obligation not really being more productive)?  Resentment?   Hmmm, how do we reward them?  where is their badge of honor for working efficiently and effectively?

I think it’s time for me to find a new phrase.  We need to take crazy back.

so what is the alternative to glean solid information on how to start, build and grow a small business?

Take a little over two hours of your life, $30 and go buy and read Rework the latest from the fine folks behind 37signals: Jason Fried and David Heinemeier Hansson.  I’m not big on management books but this one is pure genius, easily digestible and spot on in a very humorous way.

For instance, many software companies offer a free trial as sort of a teaser - an easily digestible introduction that allows people to try without investing a lot of time or money up front.  Hopefully they come back and buy the full product.  Many management books set aside whole chapters to review the importance of this topic.  Rework has one page that starts:  “emulate drug dealers … they know their product is so good they’re willing to give a little away for free upfront.  They know you’ll be back for more - with money”. And it goes from there.  Using dry wit drives the point home (and makes it unforgettable).

There are so many gems I wanted to highlight but really I’d just be retyping the whole book so the only alternative is to encourage you to buy and read the book.  I few of my favorite “chapters” (remember a chapter is at most two pages long):

• planning is guessing / your estimates suck;
• enough with the “entrepreneurs”;
• scratch your own itch;
• outside money is Plan Z;
• start a business, not a start-up;
• four-letter words;
• inspiration is perishable.

There is a quote on the inside jacket cover from Mark Cuban, cofounder of HDNet and owner of the Dallas Mavericks, that sums up the must read nature of this book:

if given a choice between investing in someone who has read Rework or has his MBA, I’m investing in Rework every time … Mark Cuban

Nice.  I hope you enjoy it as much as I did.

————–

this post is dedicated to a very dear friend.  I was in a bit of a writing funk and in order to kick my ass she gave me a copy of Rework to inspire me to get back on this blog and continue to share with people the little, unknown but highly valuable, details behind starting, growing and building a business.  It worked.  Thanks, D.