Full Disclosure Finance

By Justin 

I am always curious whether people really know what their strengths and weaknesses are.  I’m sure most people do, but there are a few that highlight the importance of knowing them.

The thought first occurred to me as I was watching an episode of Restaurant Makeover. The restaurant had been losing money since it opened despite a fabulous location, building, and an owner that thought he was the best in the world. Something was missing here. After a short time, the host figured out the problem, the food was awful!

The food was awful, but the owner hadn’t considered changing it because he “didn’t want to lose his current customers” that were not enough to run a profitable business in the first place. The show categorized this as the owner’s fear of failure because he didn’t want to lose what he had. Although this may be valid, I was interested in the idea that the owner was not a chef and didn’t know much about menu selection or design.  This was his big weakness.

A key point was that the owner knew how to renovate a building to make it look great. He knew how to go over to patrons and ask them how their meal was and how to walk, talk, and act like an owner.

Anything he didn’t know how to do (food) was done poorly because he didn’t relinquish control of the menu to the chef (who had a strength in that area).

Lesson: If you want to be a manager / leader / owner, you can’t avoid your weaknesses and have success. If you have weaknesses, team up or work with someone that has complementary strengths. For example, if you plan to start a company and know nothing about accounting or legal issues that affect your business you’re going to need a really good accountant and lawyer.

How can one ensure that they don’t turn out like Mr. Restaurant Makeover?  Try a reasonably objective method of comparing your skills to those required for success.  The method below has been useful to me.

Step 1: Assess the skills required to succeed in your chosen endeavour. List these skills with as much detail as possible.

Step 2: For each skill identified, write your level of competence from 1-5 with 5 being Sophisticated.

Step 3: Next to the numbers in step 2, record the competence rating required to achieve your goal. E.g Driving on an empty highway at 40 km/h requires a lower skill level to get to your destination than driving at 140 km/h in thick traffic.

Step 4: Calculate the following to obtain your skill gap:
Skill Gap = Skill Requirement Rating – Personal Skill Rating

Do this for each skill.

Step 5: For every skill gap greater than 0, clearly explain how you plan to address the gap. You can team up with someone else, educate yourself further, or be creative.

This is a useful, non-emotional way to evaluate what will be required to achieve your goal. Further steps will be involved in the execution of activities, but doing an assessment ahead of time will allow you to set realistic time targets.

It can assist in getting started or monitoring your progress every couple of months.I plan to complete a more detailed version for each area I want to achieve success.

I’ll let you know how it goes. Let me know if the skill gap helps you out!