Overwhelmed

Here’s a business parable for your consideration.  An interesting definition of a parable is a story that never really happened… and yet it happens all the time.

The business owner slumped in his chair as he described his sense of despair.  He and his wife have owned the business for 9 years.  The owner’s wife does the bookkeeping and some administrative work, but also has a full-time job, which contributes significant income to their family and more importantly provides health care insurance that they don’t feel they can afford without her job.  The owner would like his business to be more profitable so that his wife could leave her job, but neither one sees that as realistically happening in the next year.

The owner works long hours; on average 12-15 hours per day.  Evenings are spent catching up on “paperwork”… usually emails, quotations, or other followup.  During the day, he handles dozens of phone calls, while also fitting in the key operation task that only he can perform.  Weekends are taken up by business projects that he doesn’t have time for during the week.  The family hasn’t taken a vacation in five years. 

The employees are a mixed bag.  Their individual wages usually exceed what the owner pays himself.  One of them is quite loyal and dependable, but the others are unmotivated and uninspired.  One of these is a particular concern, showing up late, calling in sick, and usually has a poor attitude when she is working.  But she does perform an important function for the business that seemingly would be hard to replace.

The owner feels tired, trapped, and betrayed by his dream of creating a life-supporting and wealth-creating business for himself and his family.  He is overwhelmed by the work, and doesn’t see a way to break free.  His sense of responsibility to his customers and employees won’t let him quit the business and get a job working for someone else.

Along with this sad story comes a sad truth, which is that there is no easy way out of this sense of being overwhelmed.  But who said it would be easy, anyway?  The good news is that there is hope, and even a certainty that this business and this owner’s life can be much better.  A business coach might be a good place to start, because the change that is required will be difficult to implement alone.  If that were the case, it would have already been done.  But if the owner is really motivated by the goal of a better business and life, they can certainly handle the extra effort it will take.  After all, the one thing that is evident in their life is their work ethic and dogged determination.  They just need to channel that into the changes needed.

If this parable sounds like you and your business, please ask yourself if you are at a stage where you could use some help to make the changes that will transform your situation.  And also ask yourself if you are willing to actually change yourself to accomplish your goals.  If the answer to those two questions is yes, you’ve already made the first step on a path to a brighter future and a new, fun story about success.

Are You Giving It Away?

Many of my clients… it doesn’t matter the industry… complain that competitors often low-ball price, thus forcing them to discount themselves in order to compete.  In the shaky economy of the past 8-9 years, discounting is almost an addiction, and continues to lower the expectation of what the customer is willing and able to pay.  Universally, when I suggest that it is time for a price increase, the reaction I get is fear, and it’s based on the perception that a price increase will cause a loss of customers.

I get it.  It’s not like we have the magic ability to charge whatever we want and have customers flocking to our doors.  (That’s called monopoly.)  But I’d like small business owners to consider their feelings on this topic seriously against the backdrop of these reflections:

• Your business costs have risen, haven’t they?  In my experience, operating costs continue to creep up.  Why?  You name it… phone & internet charges, utility costs, insurance (health, worker’s comp, liability), office supplies, professional fees, etc.  It’s unsustainable to absorb these costs without an offsetting rise in revenue.  One of the few areas where costs have come down is fuel costs, but who among you thinks that will last?

• More to the point, we’ve recently seen a growing problem with employee shortages.  The demographics of this is real simple… more people retiring than coming into the workforce.  Simple supply and demand tells us that because of this labor rates will rise.  It’s already started.  And since labor cost is usually our greatest expense, how will you pay for the help you need to run your small business if your prices are barely providing a profit at current wage rates?

• In practice, reasonable price increases do not cause a loss of customers.  Oh sure, you may have an example where someone left you for a lower price, but in nine years of coaching, I have seen only one client report the loss of one customer directly due to a price increase.  Instead the feedback is more like “Surprisingly, I’m not aware of any customer who has left.”

• What are you selling… low price or high quality & service?  Selling on price is the result of “dumbing down” our sales process.  What I mean is that we fail to comprehend and communicate the value in what we offer, and that our price is worth it.  Instead we take the easy way out and offer a discount.  Think about it.  The message you convey is then that your product/service is the same as anyone else, but you can sell it cheaper.

o   The irony with this is that many who sell on price (yes, I mean you!) will say about their competitors that their service is terrible, their products are inferior, their business pitch is dishonest, customers tell us about their horrible experiences with them….  And yet we try to match or undercut their prices!

• It comes out of your pocket.  What I mean is that when you discount, you don’t offset the discount by negotiating better supply costs, or cutting back on wages or commissions, or implementing improved efficiencies in your operation.  Instead, you pay yourself less as the owner of your business, don’t you?  Is that really what you wanted when you got into business in the first place?

Nobody wants to pay more than they have to for things, nor to see higher inflation in our economy.  But at the same time, it sure doesn’t help the economy if small businesses are not making money to buy things, hire people, and invest in growth.  Don’t give it away.

The Fear of Meetings

Because I facilitate a fair number of strategic planning meetings for clients, and because effective strategic planning usually begins with a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis, I have become fascinated by the fact that one of the primary Weaknesses in virtually all organizations is perceived to be Communication.  Or as it’s more commonly stated, “poor” or “lack of” communication.  At the same time, when we get to formulating strategies for the organization, this communication weakness is often left out, whereas other Weaknesses and Opportunities are addressed.  Is it because we can’t figure out what to do about it?  Could it be that the solution is simply too uncomfortable to deal with?  Or is it because our problem-solving management tendencies can’t figure out how to measure when we’ve solved this problem.  I suspect the answers are yes, yes, and yes.

My observation is that ultimately, the issue comes down to Leadership.  The leader(s) sets the tone for the business by both action and example.  If the leader is stuck in the corner office and has little interaction with the troops, the organization may follow suit.  If the leader is overbearing and demanding, there may be good one-way communication, but little dialogue that can help solve problems or enhance teamwork.  If the leader is gregarious and friendly, the workplace environment might be fun and relaxed, but with little substantive communication that feeds results.

There is new thinking that meetings are a waste of time, and eliminating meetings is actually a good thing for organizations to do.  I respectfully disagree.  Lack of meetings is usually the problem in the first place.  And the reason meetings aren’t held is because they may be perceived as:

• Taking too much time.
• Involving too many people who have nothing to gain or contribute.
• Rambling discussions with no outcome.
• Contentious and argumentative.
• A place to cast blame, or “throw somebody under the bus”.

Here’s the thing…  In the vacuum of a meeting-free organization, communication is still going to happen.  We are human beings, and that’s what we do.  The problem is that the communication channels will be informal.  Watercooler talk, whispers and gossip, speculation and innuendo will run rampant, and ultimately become the belief about what is really going on in the business.  There is no alignment of thinking, and thus no consistent direction for the organization to take.  And thus a source of extreme frustration for the leader(s) who likely created this scenario in the first place.  I wonder if recent dialogue about lack of employee engagement isn’t also directly tied to this “poor communication” issue.

So what’s the antidote?  We can’t altogether eliminate informal communication channels, but we can lessen their impact with strong formal communication channels that include well-done meetings that are characterized by the following traits:

• A time limit that recognizes human tendencies to socialize and waste productive time.
• Limiting attendees to those most responsible for the agenda items, but with the expectation that information can and should be cascaded beyond the meeting to others who need to know.
• Purposeful, short agendas that keep meetings on track and recognize highest priority items as well as topics to enhance employee alignment toward company objectives.
• Assigning specific accountability for tackling assignments, and following up on progress in future meetings.
• Taking personal or contentious issues outside of the meeting.
• Blame or critique in private, but praise in public.  A fast track to poor morale is to cast blame for all to see, or dress down an employee in front of peers.

Although all leaders would like their organizations to stay nimble and entrepreneurial, the fact is that the larger the organization, the more critical strong communication practices become.  So if you are a small business owner who would like your business to grow, start practicing good meeting habits now, so that as you grow, your team alignment, morale, and effectiveness will yield great results.

Are You a Victim of the 8 Deadly Wastes?

Business writers often describe some advantages of small business as being more flexible, more nimble, faster-acting, and responsive than their big business counterparts.  Based on my experiences working with both large and small businesses, I agree with that assessment for the most part.  What I don’t see much written about is a comparison of efficiency.

Most large businesses seem to have embraced efficiency improvements. These initiatives can go by the names of Lean Manufacturing, Six Sigma, Continuous Improvement, etc. Efficiency improvements are made not only in the Operations areas, but throughout the enterprise. But in big business, even though work is being done more efficiently, there are still a lot of people and processes that are taking place, and efficiency doesn’t necessarily translate to responsiveness and flexibility.

So small businesses generally maintain that advantage. But where small businesses really stumble is in the area of efficiency. There may be several reasons, including a simple lack of attention to it, or lack of understanding of what it means, or how to go about improving it, or even a fear that it is a big initiative that the business simply doesn’t have the time or money to accomplish.

So I like to make it as simple as possible. And the simplest definition of efficiency improvement I’ve found is elimination of waste. If small business owners would take even a few minutes per week to look around their operation or discuss with their staff where they see waste, and then work to stop doing it, they could immensely improve their efficiency. But the trick to seeing waste is to know what it looks like, and for that, a good guide is the “8 Deadly Wastes”. So for those of you who aren’t familiar with these, let’s recap:

• Defects – What things in your business are mistakes? How much rework do you perform? How often is data entered incorrectly?  How much time do you spend correcting mistakes?

• Overproduction – Do you make more products or perform greater services than you are getting paid for? Do you produce paperwork or reports that no one uses?

• Waiting – How much do your employees stand around waiting for materials or instructions before starting tasks? Do you find that your customers spend time waiting for something to be delivered to them (not just products, either… how about quotes, samples, or callbacks)?

• Not Utilizing Talent – If you trained an employee or two, could they do some of what you do? Do you listen to and act on employee ideas? How high are your absenteeism or turnover rates?

• Transportation – How much are you moving products around before using or shipping them? How much paperwork gets “walked around”, and how much time does that take?

• Inventory – Do you really need all that dust-covered stock on your shelves? How much space is taken up by stuff you don’t use, or that customers don’t need right now?

• Motion – How much time does your team spend looking for stuff? How could you organize workspaces to reduce the movement employees are making?

• Extra Processing – Do you perform quality checks that help catch mistakes not done right the first time? Are you providing more than your customers want or expect (and not getting paid for it)?

Every business has waste, and constantly looking for and eliminating that waste is what continuous improvement is all about. It leads to efficiency, and the result is more profits, more capacity, and easier working conditions. Look around your business, and be honest with yourself. What waste can you eliminate?

2 Things Create Business Success – Blocking & Tackling

Are you driven to take your business to higher levels of success?  If so, you probably read and search for the wisdom of others who have built and sold successful businesses.  There seems to be no end to books, articles and blogs about the keys to success.  Many of the popular topics today include such things as culture, hiring, continuous improvement, social media marketing, technology utilization, and of course, planning.

My own book shelves are filled with books from terrific authors on all aspects of business that contain excellent advice to help us improve and grow.  And since I subscribe to various online article feeds, my inbox always offers up new ideas and recommendations to ponder for myself as well as offer to others.

The great thing about all of this material is that there is so much of it on every topic we can imagine.  The bad thing about all of this material is that there is so much of it on every topic we can imagine!  What I mean is, where do we start if we sincerely want to work on improving our business?  How do we begin to improve profits, get more sales, build better teams, work less, have more fun, and create a valuable asset that someone else could one day take over and take to even greater heights?  With all of this business wisdom at our fingertips, why does it seem so hard to duplicate that success for ourselves?

The answer, I think, is to go back to basics.  As Vince Lombardi preached to his Green Bay Packers, it’s all about blocking and tackling.  He knew that if the Packers blocked better and tackled better than their opponents, they would win championships.  While others might chase the latest razzle-dazzle plays in the National Football League, he focused on fundamentals.  Not that the Packers didn’t come up with a few inventive plays here and there, but these were built off a foundation of solid performance that stemmed from the basics.

In business, success also starts with the basics.  Ask yourself, what fundamental areas of your business could use improvement?  Then go to work on these.  But what are the fundamental areas to consider?  Well, a real simple answer is these three:  1) What do we make or provide, and how; 2) How do we sell them; 3) How do we count the money?  Thinking about being excellent in these three areas will improve your business.  If you need a broader, “categorized” approach to defining the basics, consider the “Seven Centers of Management Attention” proposed by Michael Gerber in his book, “E-Myth Mastery”:

• Leadership – Vision, direction, and planning
• Marketing – Determining your target markets and customers and why they buy from you
• Lead Generation – Implementing the tactics that attract customers
• Lead Conversion – Turning prospects into customers
• Client Fulfillment – Delivering the product or service of your business
• Money – Measuring and tracking the results of your efforts
• Management – Building the team, systems and resources of the business.

Regardless of what list of “basics” you choose, put your efforts into improvement of your business fundamentals.  That strategy will help you cut through the clutter of business advice, and put you on a track toward success.