The Original Seven Deadly Sins
• First formulated by St. John
Cassian (360-435 AD)
• Codified by Pope Gregory I (“The
Great”) 540-604 AD
• Made Famous by Dante Alighieri
in The Divine Comedy (cir. 1315)
• Still practiced today by millions of
business owners!
The Original Seven Deadly Sins
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Lust
Gluttony
Sloth
Greed
Wrath
Pride
Envy
Not ME! You Say…
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I work hard
I only want a fair profit
I treat my people well
I know that I don’t know everything
I put my customers ahead of myself
I run a clean, ethical business that
does the job right
The 7 Sins Aren’t About Your Ethics
• They are the things you do
• That make you a lesser vendor for your
customers
• That make you a lesser Boss to your
employees
• That make you a lesser provider for your family
• That deprive you of the appropriate benefits of
being a business owner
The Seven Sins of Business Owners
• Lust:
• Pointing your organization in any direction that
appeals to you
• Gluttony:
• Taking on all the challenges yourself
• Sloth:
• Settling for “good enough”
• Greed:
• Squeezing out a profit
The Seven Sins of Business Owners
• Wrath
• Driving employees
• Pride
• Thinking that you should have all the answers
• Envy
• Believing that no one else has your problems
The Original Seven Deadly Sins
had counteracting “Virtues”
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Lust : Chastity
Gluttony: Temperance
Sloth: Zeal
Greed: Generosity
Wrath: Kindness
Pride: Humility
Envy: Love
The “Business Virtues” that
Counteract the Entrepreneur’s Seven
Deadly Sins
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Lust : Planning
Gluttony: Delegation
Sloth: Benchmarking
Greed: Budgeting
Wrath: Empowerment
Pride: Leadership
Envy: Advice
The First Deadly Sin: Lust
• A passionate or overmastering desire
or craving
• Ardent enthusiasm; zest; relish
• To have a yearning or desire
• Usage:
• Lust for life
Signs that you may be guilty of Lust
• Projects that never get finished
• Employees complaining that they are
juggling too much
• Customers “Slip through the cracks”
• Bad surprises (you were looking the
other way)
• YOU feel that you are juggling too
much
Lust in Your Business
• A strategy driven by “Whim de Jour”
• We have customers that want us to offer this
• I heard a guy in our industry in Seattle is doing
this
• That doesn’t look too hard
• No Personal Vision
• I just want to make a decent living
• I just know that I don’t want to work this hard
• I just want to be successful
Lust in Your Business
• Planning to fail
• Let’s see what happens
• Those numbers sound about right
• There’s no reason why we shouldn’t just give it
a try
• Focus on problem employees or
position
• We always seem to be shorthanded
• Who was supposed to be responsible for that?
Lust in Your Business
• Focusing on problems
• I don’t have the time
• I don’t have the resources to do that
• I need to fight fires!
The “Business Virtue” that
counteracts Lust: Planning
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Know what you want from your business
Have criteria for assessing opportunities
Prioritize projects and tasks
Provide employees with concrete action
items, goals and deadlines
• Manage what you measure
• Start from TODAY- not 5 years from now!
Planning: Step by Step
• Start with your Personal Vision
• What do you want from your company?
• Be specific:
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A 32 hour work week
A house at the lake costing $350,000
Travel to Europe at least every two years
Put my daughter through medical school
Planning: Step by Step
• Your Personal Vision grows into a
Shared Vision for the company
• How much business is needed to generate
your target income?
• How many employees are needed to do the
jobs you are doing?
Planning: Step by Step
• Goals, Strategies and Action Plans
• Goal #1: Grow revenues by 17% next year while
maintaining profitability.
• Strategy #1: Identify areas where current customers could
purchase additional lines from our company.
• Action Plan #1: Bob Jones, Controller, to provide sales
department with customer purchasing analysis by line no later
than 2/15/08
• Action Plan #2: Mary Smith, Sales Manager, to present
spreadsheet showing opportunities by customer no later than
4/1/08
• Action Plan #3: Salespeople to deliver projections of new
business by customer art sales meeting of 4/15/08
The Second Deadly Sin: Gluttony
• Glutton: A person with a remarkably
great desire or capacity for something.
• Usage:
• A glutton for work
• A glutton for punishment
Signs of Gluttony in Your Business
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You are the first one in each morning
You are the last to go home each night
You work weekends, the employees don’t
Your “to do” list can’t fit on one sheet of
paper, even with columns
• You work only on the next most pressing
deadline
• All of the above
Characteristics of Gluttony
• “I know each job in this company”
• “Never mind- I’ll just do it myself”
• You cringe at a big new customer, because
it means more work for you.
• The ‘Entrepreneur’s Catch 22”
• “I could really make this company take off, if only I had
one more really good person, but good people cost
money, so I can’t hire one until we grow a little more,
but I can’t see how we can grow, because I’m working
as hard as I can right now, and I can’t do any more
until I have one more good person.”
Characteristics of Gluttony
• Monkey Management!
• The employees are delegating to you!
• “Hey Boss, we have a problem on the Sanderson
deal.”
• “I talked to production, but they never got back to me.”
• “I’m not sure what to do next, can you review my
project for me?”
• “You know more about that customer than I do.
The “Business Virtue” that
counteracts Gluttony: Delegation
• Stop accepting assignments from your
employees
• Start teaching them how to solve their own
problems
• Develop a system for assigning tasks,
following up, and both ensuring and
insuring results
Delegation: Step by Step
• Develop Your “Straddle Reflex”
• “Since I didn’t have a problem a minute ago, I
assume that by ‘we’ you mean that you have a
problem.”
• “You aren’t asking me to go to production to
get your answer for you, are you?”
• “What is the next step that you were planning
to take?”
• What have you done to get up to speed on this
customer, so that you don’t need me to be your
reference point?”
Delegation: Step by Step
• Define the ‘next move’
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The issue and action are clarified
The first step is clearly defined
The task is reduced to a “bite-sized” piece
Focus is shifted to short-term action.
• Assign Responsibility
• (Sometimes (not often) it is really your problem
• Make sure the employee affirms that he/she is
the one who will act
Delegation: Step by Step
• Insure the risk
• Small downside: “Act, then inform me of what
you have done.”
• Big downside: “Decide what you are going to
do, but check with me before acting.
• Schedule the follow up
• Calendar a specific date and time for a report
on the outcome
The Third Deadly Sin: Sloth
• A disinclination to work or exert
yourself
• Apathy and inactivity in the practice of
virtue
• In business: settling for “good enough”
Signs of Sloth in Your Business
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Lackluster sales
Financial reports are late or inaccurate
No employee turnover
Eroding margins
No exit, succession or disaster plan
Characteristics of Sloth
• “That’s good enough to ship, we are
behind as it is.”
• I know that it’s supposed to be Bob’s
responsibility, but I’d rather you
handled it.”
• “That %@#$ bank wants to see our
financials again.”
• “We’re making a good profit, I think.”
The “Business Virtue” that counteracts
Sloth: Benchmarking
• Measure how your company stands up
• Against others in your market
• Against others in your industry
• Against itself
• Measure how your employees stand up
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Make expectations clear
Track growth and development
Identify performers
Eliminate losers
• KNOW whether you measure up!
Benchmarking: Your Company
• “Common Size” financial statements
• All expense items calculated as a percentage
of sales
• Minimum three years history to start
• Review all items that are a higher percentage
than 3 years ago. Why?
Benchmarking: Your Company
• Industry Comparisons
• Side by side with other distributors, contractors
or professional services
• Risk Management Associates (RMA) available
through many banks
• ProfitCents® available through many CPA
firms
Benchmarking: Your Company
• Market comparisons:
• Side by side with others in your specific
industry, or geographic marketplace
• Association surveys
• Trade group data
• Government agencies
• Salary surveys
Benchmarking: Your employees
• Detailed job descriptions
• Pay for performance based on job
description measurements
• Merit and incentive compensation
• Clear advancement paths and criteria
• Topgrading: elimination of poor performers
When asked to name the biggest mistake they had
made in their business, 61% of TAB members in North
America answered “Not firing someone long before I
actually did it.”
The Fourth Deadly Sin: Greed
• Excessive or rapacious desire
• Dictionary Note: may be applied to all
avid desires, and is not necessarily
uncomplimentary.
• Usage: “He devoured each book greedily, as if
every bit of knowledge were precious.”
Signs of Greed in Your Business
• Not for personal gain- it isn’t personal
greed
• Profits come as an accidental result of
squeezing every expense
• Every major expenditure is an
unpleasant surprise
Characteristics of Greed
• No one gets a raise unless they ask
for it
• Computers and technology are dated
• Your Website looks like it was done by
a 14 year old
• Your office is a tribute to the durability
of faux-wood paneling
• Maintenance and Repair expenses
increase every year
The “Business Virtue” that
counteracts Greed: Budgeting
• Schedule profit as a normal result of
business activities
• Requires 2 other virtues: Planning and
Benchmarking
• Build in efficiencies from new
equipment and technology
• Present a more attractive face to
customers, vendors and prospective
employees.
Budgeting: Step by Step
• Revenues
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Which lines or services are most profitable?
Which customers are most profitable?
Where do you have unused capacity?
Where are there available economies of scale?
Where are your competitors weakest?
Budgeting: Step by Step
• Expenses
• What will have to increase? (e.g. fuel)
• What will not increase? (rent)
• What increases with sales? (COGS,
commissions)
• What needs to be held in check?
Budgeting: Step by Step
• “Discretionary” Expenses
• What should be upgraded this year?
• What would make the business better, more
pleasant, more fun?
• What is one the “wish list?” Pick one or two
Budgeting: Step by Step
• Profits!
• What represents:
• A fair return on your investment?
• Security for the future?
• Achievement of your Personal Vision?
• If it isn’t there, after all expenses, then:
• What prices need to be raised?
• What less profitable lines or customers need to be
dropped to free up resources?
• What new opportunities need to be realized?
The Fifth Deadly Sin: Wrath
• Belligerence aroused by a real or
supposed wrong
Signs of Wrath in Your Business
• Things don’t get done unless you see to
them yourself
• You are afraid to take a long vacation
• Employees tread lightly on your bad days
• Employee complain about each other…to
you.
• Management by exception
• Most of your internal processes are to
check for mistakes or omissions
Characteristics of Wrath
• “But I pay them to work”
• “Why can’t they think like me?”
• “Am I the only one who can solve
problems around here?”
• “I’m tired from pushing and pushing to
get things done on time.”
• “Do you understand the meaning of
the word ‘deadline?’”
The “Business Virtue” that
counteracts Wrath: Empowerment
• Helping employees think for the
business, not for themselves
• Much more than delegation
• Delegation is getting them to answer
the questions
• Empowerment is getting them to ask
the questions
Empowering your People
• Learn not to keep an eye on it
• Demand results, but don’t make them
happen
• Cut the people who can’t (or won’t)
take responsibility
• Accepting failure and (budgeted!)
additional expense is part of the
learning process
The Risks of Empowerment
• BIGGEST RISK- EGO DAMAGE!: You
don’t get to be the Answer Man (or Answer
Woman)
• You have to find something else to do with
your time
• Your voice mail, email and desk inbox are
empty
• You have to find out whether what you
have said for years (I could, if only I had the
time.”) is really true.
The Rewards of Empowerment
• Loyal employees who find working for
you to be rewarding
• Flexibility to focus on new things,
company improvements
• Business grows
• Profits grow
• Stress shrinks
• Work week shrinks
The Sixth Deadly Sin: Pride
• A high opinion of one’s own dignity,
importance, merit or superiority.
Signs of Pride in Your Business
• You should be proud of your business,
but
• You weren’t given a magic ability to judge
people on sight
• You can’t deliver every order by yourself
• Just because no one can yell at you doesn’t
mean you aren’t accountable
• You don’t have every answer
Characteristics of Pride
• You are afraid to reveal “weakness” to your
employees
• You won’t ask for help, because you are
not supposed to need it
• You refuse to commit to personal deadlines
in front of employees
• You resist outside ideas, because “It wasn’t
invented here.”
• All action sentences use “I,” not “we.”
The “Business Virtue” that
counteracts Pride: Leadership
• Leadership is…
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Sharing a vision
Choosing a direction
Setting goals
Removing roadblocks
Allocating resources
Getting out of the way!
Leadership is…
• Helping people to be their very best
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You created the position
You wrote the job description
You set the performance requirements
You made the hire
You provided the training
You determined the resources available
• Before you decide an employee is
failing, did you do the six things above
well?
Leadership is…
• Vision and Direction
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Knowing where your company is going
Communicating it to others
Expecting results from qualified people
Recognizing and rewarding performance
“I must go now and
catch up to that
crowd…I’m their
leader!”
Eugene Debs
The Seventh Deadly Sin: Envy
• A feeling of discontent or
covetousness with regard to another’s
advantages, success or possessions.
Signs of Envy in Your Company
• Other people have better employees
• Other people make more money
• Other people have a better personal
life
• Other people don’t have these
problems
• “There isn’t any other business that is
as difficult as mine.”
Characteristics of Envy
• You reply to questions about your
business with a “rosy” picture that
avoids details
• You don’t have a relationship with an
attorney
• You talk to your CPA once a year
• You don’t know the name of your bank
officer
• You Think you are the only one!
The “Business Virtue” that
counteracts Envy: Advice
• The three legged stool:
• Financial advice
• Legal advice
• Business advice
Financial Advice:
• Your CPA:
• Tax planning
• Capital structuring (leases and purchases)
• Appropriate use of debt
• Your Banker:
• Treasury services
• Financing
Legal Advice:
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Labor law
Contracts
Intellectual property
Non-competes
Regulatory compliance
Product liability
Litigation
Business Advice
• 80% of running a business is running
the business
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Recruiting and selection
Marketing
Sales
Employee motivation
Purchasing
Business Advice
• 80% of running a business is running
the business
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Compensation and incentives
New technology
Judging economic conditions
Real estate, equipment
Collections
Understanding when it’s just tough to face it
alone.
Business Advice- where?
• CPAs, attorneys and bankers don’t run
companies!
• Financial and legal expertise is not
business expertise!
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Consultants
Board of Directors
Peer groups
Trade or Professional associations
SCORE, SBDCs, Universities
The Two Slide Commercial- Slide 1
• TAB Members receive:
• A trained professional, personal coach
• An outside Board of Advisors with 200 years of
ownership and management experience
• An objective look at their business
• Ideas and opinions other than their own
• People who get it “In the lying awake at 2
o’clock in the morning sense of owning a
business.”
The Two Slide Commercial- Slide 2
• Strategic Business Leadership® Planning
process
• ProfitCents® financial benchmarking
• TAB Vantage® operational benchmarking
• Personal Vision development
• Goals and accountability every month
All included for less than
the cost of a monthly car
payment
Resource List:
• Planning: Business Plan Pro, The E-Myth Revisited
• Delegation: The One Minute Manager Meets the
Monkey,
• Benchmarking: Banker, CPA or TAB coach, trade
association, SBA
• Budgeting: Internal Discipline: Just Do It!
• Empowerment: The Question Before the Question
• Leadership: The 7 Habits of Highly Effective People,
Good to Great
• Advice: The three legged stool (CPA, Attorney,
Operational Expert) see slides
Thank You!
The 7 Sins of Business Owners is available
as a 3 hour presentation for your trade,
professional or industry association
John F. Dini, CMBA, CBI, BCB
MPN Incorporated
12015 Radium St. Suite 100
San Antonio, TX 78216
jdini@mpninc.com
(210) 615-1800