Episode #393: Houseclean The Team Every Year
THE Leadership Japan Series
Japan has a wonderful year end tradition where the entire house is given a massive clean up. Dust is dispatched, junk is devolved and everything is made shipshape. We need to do the same with our business and I don’t mean cleaning up your desk. We have two types of people working for us. There are those who receive a salary of some dimension, be they full time or part-time and then there are those who get paid for their services. Some of these services are delivered regularly throughout the year. Others are intermittent, on a needs basis. Regardless, we need to take a good look at these every year to make sure they are still fit for purpose.
As a training company, we have some regular suppliers. Our landlord charges us rent for the space we use and that lease pops up every two years. Regardless of the economy, the office space vacancy rate, the consumer price index or any other intergalactic factors, the numbers always go up at renewal time. It is no good finding ourselves at renewal time and thinking “maybe I should have investigated if there were more appropriately priced alternatives”.
Too late by that time, because it takes quite a while to find the size of space you need, in the location and configuration you require, at a number that makes sense. Better to engage a real estate broker early to start telling you what the alternatives are so that when the time comes you can have some choices available. That data is also a potential bargaining chip in the arm wrestle for the next two years of tenant penal servitude.
Another key player is your accountant. If you outsource your accounting to a firm, they will receive the data from your people and then get into a P&L and Balance Sheet format that you can come to terms with. It also enables someone externally to see what are the patterns of spending and spot any anomalies. Japanese staff are very honest. However, like staff in other countries, they can find themselves in the newspaper for embezzling vast sums from their employers, sustained over breathtaking amounts of time.
If you need an English speaking accountant, we are now fishing in a very small pond. This tends to mean that we lock someone in to do the books and we just keep them forever. We all seek an equilibrium comfort point. We get the service, we are happy with it and we are generally too busy to investigate if we can better it. Once a year, list up some accounting service delivery alternatives and have a conversation about what they offer. Existing suppliers can become robotic in their delivery of their services and they have pruned their services down to the minimum necessary to maximise their return. It might be a good time to see if you can maximise your return instead.
In our case, we need things designed and printed, because we distribute flyers to clients and training manuals to class participants. I am using the same printing company now which I have used for over ten years. I know there are other companies who are slightly cheaper, but I need high quality service, delivered at speed. Being able to get things designed very quickly is something I value highly and will pay more for that service. If that service was diminished then there would be a reason to change. The point here though is, I need to keep track of the size of the disparity between what I pay and what they deliver. I can’t just go to sleep at the wheel and keep using the same folk because I am too busy to know the relative price, quality and scope of the service I am receiving.
Labor lawyers do well here in Japan. The regulations are changing, there is government pressure to not have unpaid overtime and numerous arcane labor rules abound. Our labor lawyer is a pretty good businessman and signed my firm up on a monthly retainer. I took my COO’s advice on this retainer, though I had my doubts. I reviewed that service need and that retainer and guess what? After I cut it, there has been no difference in what we needed as a service. Instead we are saving that money every month now.
Maybe at one point there was a point. My point though is, don’t let these things just drift along, without making a conscious decision to decide if the service is really what you still need or not. End of the year clean up time is a good time to survey new potential providers and clean up unneeded service expenses too.