MAY 2018 • FOGHORN 33 BUSINESSMATTERS people inside corporate boxes. I’ve had dozens of leaders rotate through all departments, mastering each through hard work, enthusiasm and earning the respect of their peers. It all starts with curiosity. Remember that accounting is essentially 8th grade math. Wall Street types will shroud it in complexity, but account- ing at its core is basic addition, subtraction, multiplication, division and not much else. Good attention to detail is far more important than being able to manipulate big numbers in your head. Remember that only simple messages have a chance of transforming your organization. Understand your metrics. What are the key numbers or ratios in your business? GE and Ford have recently gotten lost by having over 500 metrics prepared monthly. You only need the key ones to make a difference in your business. For example, a sales increase is composed of the revenue increase over the last year, or maybe over the last plan. But revenue is composed of passenger increases and average check (or yield). A 5% sales increase composed of flat passenger increases and 5% increase in the average check will generally be more prof- itable (less passengers to service) than one composed of 5% more passengers and a flat average check. (That being said, you do lose the oppor- tunity for positive word-of- mouth.) Some metrics, such as accident rate per passengers or crew hours worked, should be looked at per cruise. On the other hand, metrics like marine costs (fuel, etc.) will not be impacted by incremental changes in passenger volume. By brainstorming with your team, you’ll quickly come up with 5-10 key metrics that will impact your business. Then develop these into monthly (ideally weekly or even daily) scorecards and your team will thrive trying to improve them. Never look at a number without an eye on others. I went to a location on the west coast that was celebrating a “big month”of $500k in revenue. They asked why I wasn’t ecstatic, and I said that I was missing the context. I asked 2017 2018 Sales $1000 $1060 Costs $950 $990 Profit $50 $70 Operating Margin % 5.0% 6.6% Incremental Profit/ Incremental Sales $70-$50 = $20 $1060-$1000 = $60➝ $20/$60 = 33% Complete control and steering systems for vessels of all types and sizes. +1 (604)572-3935 • Surrey, BC, Canada sales@kobelt.com • www.kobelt.com KOBELT MANUFACTURING CO.LTD. Each year, thousands of preventable maritime accidents are caused by operator inattention, cited twice as frequently as the next leading factor. The Furuno BR500 Bridge Navigational Watch Alarm System (BNWAS) helps to prevent these accidents. Scan this code with your smart phone for a Guided Tour of the BR500. www.FurunoUSA.com