Balhiser LLC Financial Handbook

Even though it is very unlikely that Balhiser LLC will do any hiring in 2010, it makes sense to lay out a rough sketch of expectations and policies.   In many ways I’d like to follow the HP Way as outlined in David Packard’s excellent book.  So here is a first pass.

Balhiser LLC is:

  • A for-profit financial company seeking to produce long-term returns for its shareholders.
  • A company where every employee is a shareholder.
  • An innovative, conservatively-managed company that values bold ideas and prudent actions.
  • As true of a meritocracy as humanly possible.

While I as president retain final say-so, salary and other financial information will be governed as follows (as permitted by law):

  • Transparency.  All employees and stockholders will have access to the company’s financial books.  This includes salary, other compensation, and ownership information.
  • Employees will play a key role in hiring their co-workers.
  • Employees will, as much as possible, have say-so on who is on their project team.
  • Friendly competition between project teams is encouraged.
  • Competition between project team members is generally discouraged.  Teamwork is strongly encouraged.
  • Salary and compensation adjustments will be based on the following (in descending order of precedence):
    • Company performance
    • Project performance
    • Individual performance
  • Company performance is #1 because without reasonable performance the wants of the shareholders and employees simply cannot be met.
  • Project performance is #2.
  • Individual performance is #3 because:
    • It is often difficult to measure objectively.
    • Competition between individuals for salary, position, etc is frequently at odds with teamwork.
    • Time spent on “getting credit” and “looking good” is time wasted.  What matters  is enjoying work, finding solutions, and making money.
  • In the long term individual performance is still rewarded because:
    • The teams with the strongest individual performers will tend to be more successful.
    • The importance of project team success will result in high-performers being highly sought-after.
    • Long-term low performance that is detrimental to the team is unlikely to be tolerated by the team.

As a final bit here is what currently constitutes Balhiser LLC:

Business:

  • Invests company resources to make cash-flow and profit.
  • Financial commentary and general (not-individualized) investment advice.
  • Financing long-term investments and constructing a long-term financial portfolio with a strong balance sheet.

Assets:

  • An investment property (that is currently generating positive cash-flow).
  • A business checking account.
  • A handful of websites/domains.
  • Over 75 articles on various financial topics.
  • A computer, and other office equipment.
  • A modest collection of accounts receivable.

Disclaimer:    The Crazy Ivan Account (CIA) is not a Balhiser LLC asset.  Commentary about the CIA is.

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