The “business-end” of the coating business
Financial Management
Accounting is the language of business. Accountants turn business activities into numbers.
You don't need to become an accountant. That will never get you rich, but you do need to learn the language.
That's because, assuming you went into business in order to make money, you need to take what the accounting software is showing you and figure out how the business activities need to change in order for the numbers to change.
The most important number that you want to increase is operating cash flow. Profit is a theory. Operating cash flow is the reality.
Speaking of reality, the sad truth of the world is: if you took the operating cash flow that a lot of businesses generate and divide it by the dollar value of the assets the owner invested to create that amount of operating cash flow, most business owners would have been better off putting their money in a general index fund than starting that business and exposing them to everything.
If you've read this far, I believe that your call, just like I am, to steward resource is better than that.
I'm going to share the best information I can here, but I'm no guru. If you really want to step up, I'm happy to refer you to the teachers I've sat under, and I reckon you'll take it farther than I did.
Operations Systems
Operations systems are things like information technology, administrative stuff, supply chain management, and those kinds of boring things that are required to go out and do the work.
The greatest thinking around these things in my opinions belong to Elon. Here are his legendary Operational First Principles
Question every requirement.
Delete unnecessary steps.
Simplify what remains.
Accelerate the process.
Automate last.
What it's all for
Every process exists to support creating value for a customer. The goal is not to be busy; the goal is to create value.
Cash, time, attention, and trust are your scarcest resources. Spend them like it.
Measure only what helps you make a better decision. Everything else is decoration.
Find the bottleneck. Improving anything that isn't the bottleneck just makes the line in front of it longer.
Delete before you improve
Simpler beats smarter.
The best process is no process. The best report is one nobody has to create.
Never automate waste. If you shouldn't be doing it at all, doing it faster makes things worse.
Standardize before you optimize. Optimize before you automate.
Systems, not heroes
Do it twice, document it. Ten times, systematize it. A hundred times, automate it.
Build systems ordinary people can run consistently. If the process breaks when one person quits, it was never a process.
Every recurring problem is a system asking to be fixed. Fix the system, not the symptom.
The people doing the work already know where the waste is. Ask them.
One truth, one owner
Store every important fact once, reference it everywhere. One source of truth per fact.
Every task has exactly one owner. "Everyone's responsible" means nobody is.
Every handoff creates friction and drops information. Minimize handoffs.
Own less, finish more
Minimize inventory. Own only what increases profit, quality, or speed — rent the rest.
Half-finished work is inventory you can't sell. Finish things.
Technology should remove work. A tool that creates work is a hobby.
Organizational Development
Organizational development is everything associated with attracting, developing, leading, and retaining people.
The purpose is to help people become more capable, more trustworthy, and more valuable while returning more than $0.20/year of operating cash flow for every $1 invested (see financial management section at top)
Core Principles
Hire for character. Train for skill.
Treat the people that you bring on to your organization more like kids you're adopting than mercenaries you're hiring.
Never hire someone without a training plan. Then keep training them as long as they work for you.
Love people and use money. Never love money and use people.
Every person deserves clarity, dignity, and accountability: they know what success looks like, who they answer to, and how their work serves the mission.
Every problem is a leadership problem.
High expectations are a form of respect.
Accountability without relationship feels like punishment. Relationship without accountability breeds mediocrity.
Hiring
Hire carefully with a default answer of “no” because hiring somebody you shouldn't have is vastly more painful than missing out on somebody you should have hired.
Never lower the bar because you're desperate ( see above)
Character beats talent. Past behavior is the best predictor of future behavior. You can train skills much easier than you can change behavior patterns
A players attract A players. One toxic hire can undo years of culture-building.
Onboarding
From day one, every new hire learns four things: what we do, why we do it, how we do it, and what success looks like.
People should experience the culture before they experience the rules.
Training is an investment, not an expense.
Never hire someone without a training plan. Then keep training them as long as they work for you (this bears repeating).
Management
A manager's one job: make the people entrusted to them more effective. Managers own the system; employees operate within it.
Systems without feedback become wicked.
Most performance problems are clarity problems.
Frequent short conversations beat occasional long ones. One-on-ones are leadership work, not administrative work.
Ask more than you answer. Listen first, diagnose before you prescribe.
Praise specifically. Correct privately. Criticize behavior, never identity.
Feedback
Feedback is timely, specific, and honest — given because you care about the person, not to vent.
Feedback must regard behaviors, not character traits.
Truth and encouragement delivered together is how people grow.
No surprises in formal reviews. The annual review summarizes a year of conversations; it never replaces them.
Development
Every employee should be growing. Teach people how to think, not merely what to do.
Increase responsibility as competence increases. Promote on demonstrated capability.
Train your replacement. Build bench strength before you need it.
Create opportunities for people to succeed — then opportunities to lead.
A paycheck is compensation; development is leadership.
Retention is a byproduct, not a program. People stay where they're known, challenged, and growing.
Parting Ways
When it's not working, act with speed and kindness. Keeping the wrong person in the wrong seat is unfair to them and to everyone carrying their load.
How you let someone go teaches your team more about your values than how you hired them.
Compensation
Pay fairly. Compensation communicates values.
Incentives reinforce behavior: reward contribution, ownership, and results.
Generosity and accountability can coexist.
Profit is necessary to serve employees, customers, and the mission.
Culture
Culture is the collection of repeated behaviors — and it is what leaders tolerate. The standard you walk past becomes the standard you accept.
Values are demonstrated, not declared. What gets rewarded gets repeated.
Trust is built through consistency.
Excellence is contagious. So is cynicism.
Integrity matters most when nobody is watching.
Every organization is teaching its people something. Make sure it's the right things.
Business as Ministry
This one is personal for me. I never would have made it as long as I did, working as hard as I did, if I didn't have some real high-octane fuel outside of just making money . I heard once that not everyone has a pastor, but everyone has a boss, and that I needed to use the platform I was given and built to “bring the kingdom” (consider how the Lord's Prayer goes) to Earth. so I don't mean to get all religious on you, but I do believe that there is something to the Protestant work ethic, and my theology led to these bullet points here. if they resonate with you, I hope they make it better. If they don't, I hope they don't throw you off .
Every person bears the image of God.
Work has dignity.
Leadership is service.
Authority exists to benefit those being led.
Success is measured by results, but even more so by the development of the people that touch the company.
So, leave people better than you found them and build organizations worthy of human beings.