Business Finance – No Margin, No Mission

by Dr. Jim Sellner

A friend of mine, Neville Joffe, tells the following story as he was frustrated that his employees did not understand that a five-million-dollar business (revenue) does NOT make five million dollars (profit). 

Weirdly, many people do not understand this because they know their gross salary is not their take-home number.


Neville said his employees were skilled in the manufacturing process – not in finance, so he started teaching small groups of people why and how to improve profitability. Which he hoped they would understand would increase their job security as well as their pay.

He was not being effective, they were not getting it.

He then tried something outrageous. 

He withdrew $1,000 in small bills, crumpled them up, stuffed them into a bag.

He called a town hall meeting.

Standing in front of them he dumped the crumpled bills onto a table. 

“This is called revenue.”

Then, he placed a handful of cash in a bucket labeled “wages.” 

Continuing the exercise with different buckets labeled

“rent,” “maintenance,” “insurance,” = overhead or fixed costs, must be paid regularly.

Variable costs, “materials” etc. = cost to provide services or produce products.

He then started tearing up $20 bills.** and throwing them into a bucket called “waste”, lost tools, damaged equipment, project overruns, re-dos

People were stunned into silence when he tore up the bills.

“Why are you so surprised?” he asked. “You do this every day, but

you just don’t see it.”


At the end of the demonstration, some cash remained on the table.

He said, “What’s left lying on the table is called profit.” 

Neville shifted some of the remaining cash towards the crowd and said, 

“This is for all of you for your hard work this year. 

The remainder is for the owners/shareholders in return for all the financial risk they

take to support this business.” 

The team was stunned.

They finally understood the message he was trying to deliver. 

As a result of this eye-opening experience followed up with more information

key financial metrics dramatically improved.

Inventory levels decreased, accounts receivables were collected faster because . . . 

we delivered what we promised, low margin products were eliminated, people stopped saying “yes” to every change to a project, because they understood the principle of contribution margin, unprofitable customers were let go, discounting and “special offers” decreased.

Over time, having created a culture of financial accountability

with the right metrics, common language, and accountability, combined with wage increases and bonuses, the entire landscape of the business changed. 

Equally important people were engaged and committed to the sustainability of the business for themselves.

In a nutshell – NO MARGIN, NO MISSION

** No real bills were harmed in this experiment.

Accountable Hypocrites

Dear Dr. Jim,

My manager can be hypocritical. What can I do to hold them accountable?

– Gurjot*


Hi Gurjot*,

This is a difficult issue. There are a couple of things going on.

I’m going to assume that what you mean is that your manager doesn’t follow through and do what they say they’re going to do, or they ask you to do things and they don’t model it. This could be a big issue because a lot of managers are very busy—they get overloaded and then they just don’t follow through on things.

Another reason may be that this manager is not very competent in what they do. But the question that you have that is most poignant is: how do I hold them accountable?

Simply, you can’t! What you want to do is engage with them in a way that they can help you get what you need.

So one of the things I recommend is that you put it in the form of: “I need some help…” You may be very clear about what you need to do, but you’re asking for help and opening up the possibility that your manager is going to respond in a helpful way.

Another way of opening up is to say: “I’m really stuck and I’m not sure what to do based on what I heard your instructions for this to be”. It’s your responsibility, and I know this is very hard, but it’s your responsibility to stay as focused as you can, to stay specific about what you need, and what you want.

This is a very difficult situation. Keep at it. And, if it’s not working, then you might want to talk to a colleague or another manager. Be proactive.

In emotional intelligence, it’s called leader assertiveness and it’s really important for us to be assertive (not aggressive) in terms of getting what we want.

I hope that’s helpful.

Thank you for the question—that’s a great one!

– Dr. Jim

*names have been changed

Developing Leaders

Dear Dr. Jim,
I promoted our communications coordinator to manager. She is skilled and experienced, but her direct reports are still coming to me instead of her. How do I help her assert herself?
– Will*


Hi Will,

Your statement: “she is skilled and experienced”—yes, skilled and experienced in communications, as a coordinator, but not skilled and experienced as a leader or manager (yet).

So, your job is to help her learn how to become a better manager. If she’s lacking development, she’s going to become what we call an “accidental leader”, and she’ll likely not succeed in the new role. Here’s what you do:

  1. Identify articles for her to read about leadership and management.
  2. Initiate/establish weekly meetings with her to talk about (1) what’s going well in her new job and responsibilities, (2) what needs improvement, and (3) what might be missing.
  3. Finally, encourage her!

The other thing that’s really important—if her direct reports keep coming to you, direct them back to her. (I’m assuming you’ve been through significant leadership or management training and you know how to do these things.)

If you too are an accidental leader who has been promoted but not developed, that’s a problem. Consider connecting with us!

– Dr. Jim

*names have been changed

K.I.S.S. Your Data

Dr. Jim,
There is so much employee data available now, how do I decide what to focus on?
– Connie*


Hi Connie,
I always always operate on the principal of K.I.S.S. the data: Keep It Simple, Silly! That means, first of all, make sure you really know why you want to collect the data.

Is that data going to be used to improve performance? What is your objective? Will you be able to easily report back to the people you got the data from? Finally, are you willing and able to take that data and show whether there are improvements or not and how that relates to business results or increased engagement?

There is another aspect to consider, and that is data around learning and development, which is our specialty. Some is personal stuff, like how the person operates, what their values are, etc. Then there’s teams. If most of your work is done as a team, it’s really important to have data on how well the team is operating. That’s going to help you increase productivity, effectiveness levels, and the overall satisfaction of people working on the team. If there’s mostly individual work, then you collect data based on that.

Yes, data can be a struggle. Make sure you pare everything down to only the amount that you really need. In a sense, it’s better to have not enough than too much. If you’ve got too much it can be expensive and people won’t pay attention to it. Hopefully that’s helpful!
-Dr. Jim

*names have been changed

Building Remote Culture

Hi Dr. Jim,
What are some more ways to build culture when working remotely besides team meetings?


Hi Sandy.
My definition of culture is the series of behaviors that are going on within a team or within a company. Now, we have the definition of a culture, but then we have the reality in terms of the actual behaviors.

One of the things I would do is ask people to send each other, maybe to a central place everyone can access: In one sentence please describe our culture. Another thing is to ask people every once in a while, during an online meeting or in a chat, to shoot out to the rest of the team members a win they’ve had in the last week. Or what’s a challenge they are having that they would like help with.

It’s the interactions of people sharing and connecting with each other that’s really important.
– Dr. Jim


*names have been changed

Connect Casually

Dear Dr. Jim,
What are some ways I can grow and develop my team virtually? 
– Anil

Hi Anil,

Think about what you were doing before working remotely to grow your team. Go through those elements and see what you can apply virtually.

I would recommend people meet with one another in a less than business-like way maybe once or twice a week to do a check in. At Vivo Team, we call that a D.O.S.E. (a Direct, Ongoing, Swift, Encounter) in which people do a quick check in about what their priorities current are, what problems or stuck points they’re and the impact on the team, as well as a ‘win’ they’ve had in the last seven or ten days and the impact on the team. That helps people stay connected.

I would also encourage people to check in with each other on a casual basis, with those colleagues that they feel close to and actually did connect with when they were in the office – that’s another way. One of the other things to do is to get together once a week or every two weeks and have a presentation on some new thing that you or somebody in the team has recently learned. These ways of staying connected can be really helpful.

There are lots of webinars, for example Vivo Team puts out lots of what we call “Swag Bags” for people to check-in. Watch one of those (videos), they’re only one or two minutes and then stay together after that to have a conversation about what you learned, how you might apply it, etc. It’s all with the intention of staying connected with one another, because what we’re noticing, working with a multitude of teams, is that people generally don’t tend to do the more casual connecting like they did in the office. You can do that virtually, it just takes a little bit more discipline to do on a regular basis.

So there are some tips to try!

– Dr. Jim

*names have been changed

Zoom Zombie?

Dear Dr. Jim,
We’ve all heard of Zoom fatigue, but what else should I be aware of or watch out for?
– Marie-Hélène


Hi Marie-Hélène,
During this time of Zoom meetings that seem to be back to back, by the end of the day you’re like a marathon runner who’s run out of gas – you’re struggling and trying to keep your thoughts together.

So that’s one thing: too many meetings too close together. Another thing is going to meetings you shouldn’t be in. You should also be aware of taking time off during the day. Go for a walk. Even 15 minutes can make a big difference.

Now, I want to explain something that goes on when you start getting Zoom fatigue, and this research is from Dr. Travis Bradberry (see diagram in video):

  • Boredom/Depression: When we’re down here, we’re kind of bored, depressed, and wondering “What am I doing?” We hear this from little kids: “I’m bored, Mom,” because there’s not much going on and there’s a low stress level.
  • Increased Attention/Interest: What happens as you start performing more and there’s a little bit more stress, you have increased attention and interest, and that’s why it’s really important to be doing things that are of interest to you because you can handle a fair bit of stress (which is part of life) and do well in terms of what you need to do at a certain level.
  • Optimal Performance: Then you get up to this optimal performance level, and that’s where we’re at our best. It depends on:
    • Skills
    • Motivation
    • Surroundings
    • Organizational impact (e.g., too many demands, not enough demands, unclear demands, etc.)
  • Strong Anxiety: What begins to happen when our stress levels get higher, but the demands are still there, people start feeling strong anxiety and then performance starts going down.
  • Complete Meltdown: After which you can get to an awful place of complete meltdown, where you just can’t function anymore.

One of the cues to look out for when you’re working is whether you can still have clear thoughts and move through your priorities that you have set. If you find yourself staring at the screen, unable to maintain concentration, you’re getting into anxiety area, and that, on a long term basis is very self-destructive to your health.

Take care of yourself.  Thank you.
– Dr. Jim

*names have been changed

No Show

Dear Dr. Jim,

My new manager is insisting we use our video cameras during virtual meetings. Is this really necessary? My previous manager was fine with us having them off.
– Holly*



Would you go to a face-to-face meeting with a bag over your head? No you wouldn’t.

That’s what it’s like to be in a meeting where people are not on video. You can’t see them. Most people are probably multitasking and not fully paying attention, so it just kind of screws up the whole thing.

Now, I realize there can be connection problems and things like that, and that’s fine, but everybody should be up on video – ready and present, so you can SEE one another, and interact with one another, like you’re together, almost face-to-face. This helps reduce people not paying attention and multitasking.

So when you’re in meetings, whether it be Zoom, Microsoft Teams, Workplace, etc., come on video, look at one another, and be interactive and pay attention. Also look at the camera – that’s really important, too.

Your meetings will become much more interesting and you’ll be able to see each other. Get over your shyness – it’s fun! Once you get over it, you’ll find it much easier. It’s just a matter of moving into a different way of doing things. Hopefully this is helpful.

– Dr. Jim

*names have been changed

I’m Skeptical

Dr. Jim,
My company is implementing a coaching program for all managers. I’m skeptical. Will this be a waste of my time?
– Hayden*


Hi Hayden,
It could be.  Some items to consider:

  • Have managers been trained how to coach people in addition to their many other responsibilities?
  • Are managers rewarded for coaching people?
  • And finally, and perhaps most importantly, is there a way to measure whether the coaching is successful or not?

At Vivo Team, we have a method that we use to identify the five requirements of a good coaching program:

  1. Evidence – Behaviors. Is there evidence of the behaviors that are going on right now that you would like improved? This allows you to take a look at what the task-specific behaviors are that you’re hoping to see – behaviors that will indicate improvement.
  2. Relevance – Deal/Goal. Is what’s being talked about in the coaching session (which should be no longer than 20 minutes) relevant to that person and the goal that they are working on, in terms of their everyday roles and responsibilities, that lead to the results of the team and the strategy of the organization as a whole.
  3. Consequence. Measurement comes into play here. For example: You were here. I see the progress here. Now it looks a lot better here. There should also be some kind of consequence in terms of whether there is an agreement about required improvement, i.e., what is the consequence if the person doesn’t move forward? A consequence – not a punishment. For example, if an employee wants to move into a supervisory role, then you might say to them: “I notice you’re doing this thing and I think that might interfere with your effectiveness as a supervisor. Your probability of moving into a supervisory position will be greater if you do these things instead,” and you list the kind of things you’d like to see, your expectations of what you’re looking for.
  4. Agreed on Action. At the end of every coaching session there should be an agreed on action with a timeline tied to it. This step requires the person who’s being coached to send their notes (that they’ve taken throughout the coaching session) to the manager, so the manager can get an idea of how well the content was understood, and the person who’s being coached gets a clearer idea because they’ve written it down.
  5. Follow-Up. This is where you look back, you go over what’s working well, what needs improvement, etc. This is very important in terms of results.

Hopefully this is helpful!

– Dr. Jim

*names have been changed

Coaching and Mentoring Remotely

Dr. Jim, 
What are some best practices for coaching and mentoring my team remotely?
– Cheryl*


Hi Cheryl,
Some basic things to start with. One: make sure you have good connection. Two: make sure people are on video–with cameras on, really important–so you can have a life-like conversation.

Make sure that everybody understands what you’re coaching about. What would they like to get out of the session? What would you like to get out of it?

Next, keep it short. I like my coaching/mentoring sessions to be no more than 20 minutes. Everything virtual these days is fast-paced, I find people have difficulty if you go over the 20 minute mark. It gets too long and there’s too much information.

I also ask that the person I am coaching writes the notes, and at the end they send them to me: what we talked about, what the agreements are, and by when. That’s a really important thing.

A structure for coaching I sometimes use, before the session we each write down: What’s working well? What needs improvement? If I’m the mentor/coach, what can I do that will help you become better at what you do? Finally, what you might do as the coachee to improve yourself.

Just imagine it’s like you’re face-to-face, that’s a good mindset to come into it with.

– Dr. Jim

*names have been changed