I have had a number of meetings recently in which the subject of how best to report on financial and business performance has been debated. Traditionally, detailed reports are presented giving chapter and verse on past activity, explaining why the results are what they were, and how the variance between budget and actual is accounted for.

All this is fine, but it leaves me asking the same question, “So what?” You know (I hope) where you want to go, so given where you are now (and it may not be where you wanted or expected to be), how are you going to get to Dave’s Bar?

I suggest that reports should spend no more than 20% on historical analysis, noting key events and any exceptional activities, and the remaining 80% on what you will be doing differently as a result of what has been learned, and what impact these changes will have on your forecast.

By reporting more on the future than the past, and incorporating lessons learnt as you go, you dramatically reduce the chances of being caught out.

This should spell the end of the traditional annual budget, and the start of regular reforecasting. Yes, it’s interesting to know how we got here, but of paramount importance is to know how we are going get from where we are now, to where we want to go, even if it’s only to Dave’s Bar.

If you have read my blogs over the last couple of years, you will know that I hold a particular view of the “recession”; it was patchy, not universal. Its impact ranged from the catastrophic (if you were in house building, car manufacturing, or banking), to the liberating (with interest rates at an all time low, many households were between £100 and £150 a month better off). Public money was drying up, but private/personal money was plentiful.

Reliance on public funding has become an increasingly high risk strategy. I speak from personal experience as the ex-treasurer of an excellent provider of arts education which closed due to withdrawal of its core funding. Other organisations I know well are also starting to think the unthinkable – what if we can’t rely on public funding anymore?

So what is Plan B?

Well, I think public funding will become increasingly scarce, and with the hoops to jump through and numerous forms to complete, it will become harder to maintain.

There has been an interesting debate on LinkedIn to do with factoring as a way of improving cashflow. What caught my eye was a comment that said “payment terms has, and never will, kill a good idea”. I see this as a clarion call to every organisation that has a good idea – if it’s that good, someone will pay for it.

Some lead, some follow – the world has always been this way. But what are the leaders trying to achieve? As a self employed person even I have to balance the “doing” with the “pioneering”.

But to what end. When I am no more, what will be left? What impact will I have made? Will the world be a better place?

The burden of responsibility rests on us all. Philosophers have always maintained that every one of us has the power to make a difference. It is not good enough to look around and expect someone else to make the difference for us. I agree with this.

I was recently introduced to a remarkable book called “The Tipping Point”. Its premise is that big things often happen as the result of the smallest of things. It is rarely possible to know what that small thing is until afterwards.

Standing still and waiting for everyone else to do something is not helping.

Is it your turn to be the tipping point?

A client of mine actually describes themselves on their website as “self-effacing”, and see this quality as helping make them attractive to potential customers, by being seen as not pushy. Others I have spoken to, talk about how they struggle with collecting money due from clients, and how they are worried about being rude. On the other hand, we can probably all think of someone who succeeds through relentless salesmanship.

As usual, I suspect the truth lies somewhere in the middle.

I would suggest that you can be incredibly persistent without being annoying; by being polite, or by pointing out the (potentially mutual) benefits of getting what you want, for example. In theory, with humour and good grace, it may be possible to be rude, without becoming annoying.

In business, and to an extent in our personal lives, persistence is a key skill to getting what we want.

The point of being persistent is to keep asking for something you want, until you get it. Becoming annoying suggests that the person you want it from has reached a point where they don’t want you to have it.

My client was without doubt employing some of the brightest, most knowledgeable, people in their field. But he was frustrated by their unwillingness to demonstrate through actions that they had bought into his vision, to take risks, or to stop “playing it safe”.

He acknowledged that the organisation’s culture was changing, from being fairly autocratic, to one of empowerment and delegation of responsibility, but he couldn’t get his team to take the initiative.

After talking with some of his managers, I had one of those “light-bulb” moments. I knew that my client was well respected, in his field, as well as by his colleagues, but I hadn’t realised just how well he was respected. His managers were afraid of failing, and in particular, of failing in the eyes of their boss – my client.

I had read recently about the poor results of the England rugby team. There was little debate about the quality of the players, and how their collective ability was, on paper, excellent. But they were lacking that something special, that bit of magic, which turned them into a winning team. The writer surmised that they were in complete awe of their manager, Martin Johnson. Johnson is an inspirational leader, who has achieved the ultimate goals in the game (including captaining the England team that won the World Cup). The players, so the theory went, were afraid of taking risks, of trying something adventurous, in case they failed.

My suggestion to my client was simple. He needed to convince his team that he had trust and confidence in their abilities. Telling them was not enough. He needed to demonstrate through examples what his reaction would be when they failed. I even suggested that he create a situation in which one of his staff was “set up to fail”, so that he could show them how supportive he was.

Empowering people who are not used, or willing, to fail is not easy. Demonstrating your trust and confidence in them requires a special kind of management. I hope for England’s sake that Johnson has cracked it. Have you?

I appeared on BBC Radio Coventry and Warwickshire this morning, to give my views.

www.bbc.co.uk/iplayer/episode/p0062shx/Annie_Othen_28_01_2010/

I start to talk about an hour and 20 minuites into the programme…

I was talking to a client today about how they should structure their companies (they operate a charity and a trading company). The answer lies in what they want to achieve, and to work backwards from there. The answer may be wrong, but the premise they base the decision on will be right.

When faced with a difficult decision, I learnt a long time ago that the best way of deciding was to toss a coin, having decided what to do if the coin lands heads up (it works best if there are only two possible solutions!). The hard bit is to listen to the little voice in your head that tells you whether you are glad, or sorry, with the result. Rather than go with the coin, always trust your gut reaction to the result.

This would suggest that we know what to do all along; it’s just that too often other factors crowd our thinking, making decisions harder to reach.

Even in business, unless there are compelling reasons to take one course of action over another, there seems to be a lot of sense in going back to the reasons why you are in business, remembering what you want to achieve, and start from there.

Much has been written about the “demise” of the Birmingham Post, and the genuine concern at what will happen to the journalists who are losing their jobs. I sincerely hope that those skilled at writing will find new employment, albeit in a different market. I would far rather read, or listen, to someone who knows their subject and can present it well, than someone who writes and broadcasts just because they can.

The proliferation of Blogs, and the ability for anyone to write when, and on whatever subject they choose, has been cited as the end of quality reporting. I would disagree. I have more faith in readers and listeners exercising their choice to read and listen to what they like, and to switch off what they don’t like.

I also believe that there is a duty for those who know what is going on to share their knowledge and expertise.

I have been very lucky to work with a number of entrepreneurs and business owners. If I had to identify a common characteristic, it is a simple determination to succeed. Not necessarily financially, but in getting their product, service, or message, out there. It never seems to matter how much they have in the bank, their passion to succeed leads them to find innovative and often unusual ways to achieve their goals.

Passion really is a form of currency. To illustrate this, I can remember presenting to a bank for a significant loan to support a business. On paper, the business was in trouble. It was losing money, it was losing good staff, and it had issues with its governance. What it did have was a charismatic leader who conveyed a tangible sense of passion to succeed. Failure simply wasn’t an option. The bank was convinced, and the loan was granted.

If passion is a form of currency, then starting with little cash is no bar to success. The ideal combination is a sound business plan, presented with passion.

Some are facing choices between two or more potentially lucrative opportunities, some are having a tough time, some are sitting back and questioning what it is that inspires them to keep running their own business.

There are easier ways to earn a living than by running your own business. But are they as satisfying?

The answer is very personal and, in my experience, changes over time. A whole host of factors continually change and influence the kind of people we are.

In my work, I try to understand what it is that motivates a business leader. From this, I try to ensure that business goals link into personal goals.

Running a business is not for everyone, the stress alone can ruin your personal life… But the rewards for those who are willing and able to put the time and effort in can be great.

Even if you are not running a business, what you do for work is a key part of you.

Life is like a three legged stool. Each leg represents work, home and friends. If they are not balanced, you will end up slipping off the stool.

Thinking you have a good balance is not the same as knowing you have a good balance. If they are not in balance, what are you going to do about it?