Getting A Tax Refund? Think Before You Spend It...

Here in the US, April means "Tax Day" (April 18 this year). Filing your taxes can be a hassle, and it's particularly harsh if you have to pay additional taxes.

However, some people look forward to getting a tax refund. If you're one of those people, you might want to just go out and blow it on something fun, or a night on the town. Hold your horses! That may not be the best way to use that money.

Consider The Options For How To Spend Your Tax Refund

What are your options? The good folks at Earnest have put together a great infographic that take you through some of the stats, options, and the pros and cons of each - check it out:

Considerations for using your tax refund wisely - courtesy of Earnest.

When I look at the options in this graphic, my bias would be to pay down outstanding debt first starting with the highest interest rate. You should also consider “refinancing” high interest rate debt by transferring it to a lower-interest loan or line of credit. For example, you could refinance your student loans for a lower interest rate. This will give you more leverage from the money you earn, and your future self will thank you.

A Big Refund Is Probably Not A Good Goal

If you got a big, hefty refund, I'd talk with a tax advisor about how to adjust my withholding allowances to reduce the size of next year's refund. While it may feel good to get a big check for a refund, a big refund means you overpaid taxes and effectively gave the US Federal Government a free loan for most of the year. Changing your withholding so that you get a small refund at the end of the year means you have more money in your pocket each pay period.

Of course, if your tax refund is the only savings plan you have, that is another story. A financial advisor can help you develop a more strategic savings plan.

If you want to build a better plan on your own, I know people who swear by "The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness" by Dave Ramsey. It is a no-nonsense approach based on sound advice and no gimmicks.

'Trump' Your Competitors: 4 Business Lessons Learned From "The Apprentice"

The harder you work the, "luckier" you get. That's an interesting statement. If you think about it, the harder you work, the more chances you have to be successful, so, in turn, you feel "lucky." On "The Apprentice," Donald Trump has a lot to say. His business advice is generally sound, honest and can help anyone succeed if they are willing to follow it. Actually, not just follow it but take the bull by the horns and charge forward.

Trump is a multi-billionaire because he is knowledgeable and bold. He's an educator and - above all - he's a great showman. Whether you love him or hate him, he knows what he's doing and he is a champion, when it comes to business (I wouldn't ask for his advice on hair styles, but business is another matter). Here are a few business tips to help you triumph in your own world and "trump" your competitors.

Be Coachable

Separate yourself from the "pack" to stand out and get ahead, suggests Trump in an NBC interview. The humility in accepting the fact there might be a better way to do a certain task, defines you as a person. It shows you want to improve and know that no one (even yourself) is perfect. By allowing leaders to coach you in business, you actively take responsibility for improving your life and increasing your knowledge. Some people consider being humble to be a key attributes of a successful human being.

Admitting faults can be hard; however, the grace you show in turning constructive criticism into opportunity keeps you humble. Being coachable can take practice and discipline. Getting rid of a negative, sour, defensive attitude can completely change your direction.

Money Isn't the Primary Goal

Don't get me wrong - money sure is nice when you get it. However, the key to making money is not letting it be the reason for your actions. Ask yourself, what happens when you attain the amount you are going for? You may hit a ceiling and could begin to make bad decisions and slack on your business practices. Stick to the rules of saving by separately budgeting your business and personal finances.  Don't be afraid to get creative with financing, either.  If you're a small business owner, you can solidify your credit with an American Express cash flow card, for example.

While Trump is known to say money is a scorecard you can use to gauge how well you and your company are doing, it should not be your driving force. Keep in mind you are always wanting to move toward something.

A good driving force? Strive to become a better version of yourself.  Personally, learning new things, helping others and solving interesting problems is a big motivator for me - I've just managed to find ways to make money by doign that.

Communication is the Relationship

Communicate effectively. Learn to express yourself in a positive manner and avoid attacking people or "going negative." Go into challenges asking questions and don't assume it is someone's fault; there could be sound explanations for happenings. Also, while you are in it to win it, it often takes teamwork to prevail. In teamwork, communication can make or break you. "The Apprentice" is all about working together. Strive to be the respected leader of the pack.

Transparency and genuine communication is also important - that is how you build trust with others.  That isn't to say diplomacy isn't necessary, but open communications go a long way toward building stronger relationships with others.

Create a Personal Brand

Because business is an "every man for himself/every woman for herself" enterprise (according to Trump), it's important to know your audience and for them to know you. A big part of confidence and success relies on your personal brand. How do you want others to perceive you? While first impressions are essential in building positive relationships, you must continue to impress and stimulate your audience's perception of you.

A good guideline I've heard is to "continually do the things you want to be known for."  This is a key when creating your personal brand, which means focus is important.  Decide the top 5 (or so) things you want to be known for and figure out the things you need to do to demonstrate and be known for them - make it a habit and your personal brand will develop.

[Review] Innovation You

I just finished Jeff DeGraff's book, "Innovation You: Four Steps to Becoming New and Improved," and I really enjoyed it.  I'd heard about DeGraff before  -- that he had good techniques to help people come up with creative solutions to life's challenges -- and I've learned a lot more about him through this well-written book.

In "Innovation You," DeGraff provides some very practical advice for how to approach problems and go beyond your "default" approach for innovation. The notion is that we all have preferred ways of handling various situations, but that we don't always do well at adapting our approach to better fit the situation.  The result? We stay in our comfort zone too long, while our situation fails to improve.

Why do we do this?  I think it's mostly habit and fear of trying the unfamiliar.  As DeGraff says so well, "To grow requires that we temporarily suspend our need for certainty and control."

Four zones - where's your comfort?

At the heart of this book is a model that DeGraff uses to articulate the most common approaches to innovation and problem-solving.  The model is known as the "Innovation You Model," which is what is represented by  the 4-color circle inside the letter 'o' on the cover (at right).  Each of the pie slices represents a different approach or bias for solving problems or pursuing innovation:

• Yellow is "Collaborate," which means you are most likely to team up with (or tap into) others as a default method for solving problems.
• Green is "Create", which means you are most likely to try to create your own new and innovative solutions to a problem.
• Blue is "Compete," which means you have a need to 'win' and are going to try to find a tangible goal within the problem space and doggedly pursue it.
• Red is "Control," which means you'll collect the facts, figure out the rules, and be very systematic in solving the problem.

if you're like me, you can easily figure out which one of these is your dominant approach, which ones you can use effectively, and which one you have the most trouble applying (green is my favorite, I'm good at yellow, I am handy with red in a crisis, and blue is my least natural position).

Throughout the book, DeGraff uses interesting and relevant stories to share how these approaches can be used to solve problems.  This includes some analysis techniques & tools you can use to try to figure out the best innovation approach to use, or diagnose why your current approach isn't working.

It, we, or I?

Another model used in the book is one that DeGraff describes as a sort of 3-layer Russian nesting doll.

• The outermost layer is the "universal" layer, or the "it" layer.  Things at this layer sort of happen to us and are not really within our direct control. Think natural phenomena, market forces, etc.
• The middle layer in is the "communal" layer, or the "we" layer.  Things at this layer involve our relationships with others, whether at work, in clubs, churches, and our family.
• The innermost layer is the "personal," or the "I" layer.  This is the layer that defines us as people - our values, health, intelligence, motivations, etc.

The interesting notion here isn't that we need to "pick a layer" when we solve problems or try to innovate - it's that we need to "consider other layers."  In other words, trying to find solutions that work on multiple layers - not just solve for a local optima at a single layer.

Again, DeGraff provides some great examples and stories (I think of them as mini case studies) to help you internalize what this really means.

Become new and improved, a step at a time

This book is an easy read - the concepts are straight-forward, the chapters are short, and the stories are engaging.  I think the thingI like most about "Innovation You" is that it is both prescriptive and practical.

This book would be a great gift if you know someone who feels stuck or overwhelmed by a difficult problem.  One line I liked from the book: "Where is the pain so high that trying something new would be an improvement?" - if that hits the mark, get them a copy of this book!

It is also the sort of book that would be great for a book study group, particularly if you wanted to go through the book with an intact team (at work, in an organization, etc.) that needs to work together to solve problems.

What if you *are* what you want to be when you grow up?

[Note:  Corrected broken link to Seth Godin's blog 6-April-2011]

I was just reading a post on Seth's blog about resisting the urge to conform to other people's expectations for you.

He talks about a chef who resists the pressure to open other restaurants, get a TV show, and that sort of thing - in favor of sticking with one, popular restaurant location.

This reminds me of some of the conversations I've had with people during career planning sessions.  How many times to we, as managers, try to push people to do more, get promoted, take on a lot more responsibility, etc?  And how many times is that the right thing to do?

In many cases, it's probably the best thing for the person and the company, but it is worth asking if it's OK for that person to stay in their current role and only stretch within that role.  For some people, staying put will be better than pushing them to the next level where they may not be well-suited for the job.

What do you think?  Have you been promoted beyond where you should've been? Have you ever pushed an employee to do something more grand and regretted it?

I'd love to hear your perspectives.

Connecting Top Managers

A couple of months ago, I received a copy of "Connecting Top Managers: Developing Executive Teams for Business Results," written by Lisa Haneberg and Jim Taylor.  I read it weeks ago but am just getting around to posting this review due to a busy schedule.

"Connecting Top Managers" is a tremendous resource for any organization that wants to build a more effective management team, or would like to address dysfunction or ineffective teamwork at the managerial level.  One of the things that makes this book particularly impactful is the research behind the text.  Haneberg and Taylor engaged with a variety of organizations through direct observation, project work, surveys, and other means and learned a lot about the ins and outs of executive teams.  Those learnings fed the recommendations and techniques presented in this book.

Be and be perceived

One aspect of the book I really liked is that it not only deals with how executives interact with their peers in the management team, it also addresses how the management team can improve or repair its image with the rest of the company.  Of course, some of the root causes of poor perceptions of management are a direct result of ineffective relationships within the management team, so it's not surprise both of these are dealt with in the book.

One of the sections in the book, "Dysfunction Reverberates," sums it up nicely: "...leaders [can't] expect their management and employees to be any more committed and passionate about the business than they demonstrate through their own actions. The same goes for teaming. You cannot expect the rest of the organization to work well together if the leadership team itself does not seem to care enough to work well together."

This book contains a lot of practical advice and strategies that you can apply within your own team, as well as some techniques you can apply personally to effect change even if the rest of the exec team is not on board.

Change begins at the top

Another element that is discussed very effectively in the book is how to influence the culture of the organization overall.  Much of this comes through willingness to address conflict rather than avoiding it, and setting a tone of constructive engagement and accountability throughout the organization.

Of course, all of this works best when there is consistent "tone at the top," which begins with the executive team. In other words, leading by example is not just a saying - it's a mandate.

Another notion in the book with which I am in enthusiastic agreement:  the most effective organizations are open to learning, and encourage learning as a part of how they do business.  What better way to make this real than to embrace learning as an executive team and tackle the challenge of becoming a more effective, high-functioning team?

I loved this book.  If you want to improve your executive team's effectiveness, I highly recommend Connecting Top Managers as a tremendous resource.