“The purpose of your organization is to meet customer needs. That’s the game. Profits are the score.”
That’s obvious, isn’t it? Well, it should be, but we often behave as though our customers must meet our needs. Think about it. Do you impose deadlines on your customers to make life easier for you? Are your pricing schemes aimed at getting customers to buy the way you want them to buy rather than the way they would prefer to buy? Do you try to sell your customers the products or services you want to move rather than the products or services they want to buy?
Clearly, we need to structure our organization to make it as efficient and effective as possible. But an efficient, effective organization is not at odds with meeting customer needs. The problem is change. We may have started out meeting customer needs dead on, but then their needs changed. The systems and procedures we put in place to serve the old customer needs don’t work so well with the new customer needs. But it’s expensive and time-consuming to change the way we do things, so we try to shoehorn the new customer needs into our old structure. We may get away with that for awhile, but pretty soon, someone else will figure out a better way to meet the customer needs, and then we’re out of the game.
Take an inventory of every rule and policy you have in place that affects customers. In each case, ask yourself if the rule or policy is there to serve customers or to serve you. If it’s there to serve you, it may be a red flag that we’re not serving customers as well as we might.
Better yet, have a frank discussion with your customers aimed at uncovering any unmet needs. And be open-minded with the feedback you get. Even though customers may want something that is seemingly outrageous, give serious thought to how it might be done. Remember, if you can’t figure out how to meet your customers’ needs, someone else will.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
Monday, November 30, 2009
Monday, November 23, 2009
Get a Life!
“If your business keeps you so busy that you have no time for anything else, there must be something wrong, either with you or with your business.”
Do you have time to do things you want to do outside of your business? Or, said another way, do you feel you have good “balance” in your life? Obviously, there are times when business activity is high and things can get a little hectic, but that’s not what we’re talking about here. Over the long term, are you so consumed by your business that you don’t have time for other things that are important to you?
If the answer is “yes,” you almost certainly have a problem delegating authority to others. Small business owners tend to keep all the important levers and buttons of the business under their own control. In most cases, they simply don’t trust anyone else to handle those critical functions. Yet if the owner continues to hoard all the important stuff for him or herself, there are usually some negative consequences.
One such consequence is a drain of talent from the business. People want to work where they can learn, grow, and get increasing amounts of responsibility, and if they believe they are not getting that at your company, they’ll go somewhere else.
Another consequence is owner frustration. The owner has rigged the game so that nothing of importance gets done without his or her fingerprints all over it. So s/he can never get away from work for any length of time without everything coming to a grinding halt.
The growth of the business is stifled. If the owner tries to do everything, the business stalls when it reaches his or her personal limit. There are only so many hours in a day and only so much one person can do, right?
But failing to delegate ultimately damages the value of the business. For most small business owners, the exit strategy at retirement time is to sell the business. Even though the business may be profitable, a would-be buyer will look very closely at how well the business will operate when the former owner is gone. If the buyer decides the old owner is the business . . . that he holds all the key relationships with customers and vendors, and that he is the “go to guy” for operational issues . . . the buyer will be unlikely to pay much for the business because, after all, with the old owner out of the equation, there really isn’t much of a business left. On the other hand, if the place runs like a top whether the old owner is there or not, the business will command a premium price.
So if you are in this predicament, the only way out is to begin grooming others to take on important roles of authority and leadership. If you don’t have them, find them. Bring them on board. You’ll be happier, your people will be happier, the business will operate more smoothly, and it will have greater value. What’s not to like about that?
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
Do you have time to do things you want to do outside of your business? Or, said another way, do you feel you have good “balance” in your life? Obviously, there are times when business activity is high and things can get a little hectic, but that’s not what we’re talking about here. Over the long term, are you so consumed by your business that you don’t have time for other things that are important to you?
If the answer is “yes,” you almost certainly have a problem delegating authority to others. Small business owners tend to keep all the important levers and buttons of the business under their own control. In most cases, they simply don’t trust anyone else to handle those critical functions. Yet if the owner continues to hoard all the important stuff for him or herself, there are usually some negative consequences.
One such consequence is a drain of talent from the business. People want to work where they can learn, grow, and get increasing amounts of responsibility, and if they believe they are not getting that at your company, they’ll go somewhere else.
Another consequence is owner frustration. The owner has rigged the game so that nothing of importance gets done without his or her fingerprints all over it. So s/he can never get away from work for any length of time without everything coming to a grinding halt.
The growth of the business is stifled. If the owner tries to do everything, the business stalls when it reaches his or her personal limit. There are only so many hours in a day and only so much one person can do, right?
But failing to delegate ultimately damages the value of the business. For most small business owners, the exit strategy at retirement time is to sell the business. Even though the business may be profitable, a would-be buyer will look very closely at how well the business will operate when the former owner is gone. If the buyer decides the old owner is the business . . . that he holds all the key relationships with customers and vendors, and that he is the “go to guy” for operational issues . . . the buyer will be unlikely to pay much for the business because, after all, with the old owner out of the equation, there really isn’t much of a business left. On the other hand, if the place runs like a top whether the old owner is there or not, the business will command a premium price.
So if you are in this predicament, the only way out is to begin grooming others to take on important roles of authority and leadership. If you don’t have them, find them. Bring them on board. You’ll be happier, your people will be happier, the business will operate more smoothly, and it will have greater value. What’s not to like about that?
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
Monday, November 16, 2009
Making Compensation a Non-Issue
“Compensation is an equity issue. People want to know that they are being compensated fairly compared to others doing similar work within the company, and to others doing similar work in other companies. After that, it’s a non-issue.”
It really is that simple, yet we continually find ways to complicate the situation. For example, let’s say we’ve got two employees, Bob and John. Bob has been with the company for 20 years, John for only 18 months. They both do the same work and do it equally well. In many cases, Bob would be paid more (in some cases, much more) due to his long service to the company. But is that fair? Should John be punished for achieving in 18 months what it took Bob 20 years to achieve? In truth, John should probably get a bonus for getting up-to-speed so quickly.
Or how about this. Bob has a spouse and two kids to support while John is single and lives at home with his parents. Consciously or unconsciously we may pad Bob’s pay a bit because we know he has a family to feed. That may be a compassionate way to look at the situation, but is it fair? No, it’s not. If both Bob and John do the same work and do it equally well, they should be compensated equally. Their personal situations shouldn’t enter into it.
Equal pay for equal work is such a fair and equitable proposition that it’s beyond reproach. We get into trouble quickly when we try to explain why we’re not practicing equal pay for equal work . . . because frankly, there is no explanation that makes sense.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
It really is that simple, yet we continually find ways to complicate the situation. For example, let’s say we’ve got two employees, Bob and John. Bob has been with the company for 20 years, John for only 18 months. They both do the same work and do it equally well. In many cases, Bob would be paid more (in some cases, much more) due to his long service to the company. But is that fair? Should John be punished for achieving in 18 months what it took Bob 20 years to achieve? In truth, John should probably get a bonus for getting up-to-speed so quickly.
Or how about this. Bob has a spouse and two kids to support while John is single and lives at home with his parents. Consciously or unconsciously we may pad Bob’s pay a bit because we know he has a family to feed. That may be a compassionate way to look at the situation, but is it fair? No, it’s not. If both Bob and John do the same work and do it equally well, they should be compensated equally. Their personal situations shouldn’t enter into it.
Equal pay for equal work is such a fair and equitable proposition that it’s beyond reproach. We get into trouble quickly when we try to explain why we’re not practicing equal pay for equal work . . . because frankly, there is no explanation that makes sense.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
Monday, November 9, 2009
Aim High, But Not Too High
“It’s not that our aim is too high and we miss it, but that it’s too low and we reach it.”
Michelangelo offered that advice about 500 years ago, but I think we have to be a little bit careful how we apply it in our businesses.
Clearly, setting goals that can be achieved at a walk is a bad idea. People don’t get much sense of accomplishment when the goal is too easily reached. On the other hand, setting goals too high causes another problem. People will quickly discern that goals are set absurdly high, they will become discouraged, and again they will be robbed of a sense of accomplishment.
In his excellent book, “CEO Tools,” Kriag Kramers offers an answer to this dilemma. He recommends a rigorous budget process whereby goals are demanding, but achievable. Then he suggests setting some big, over-the-top goals while clearly communicating that it’s OK if we don’t hit them. After all, we did hit our base budget goals, right? So everyone can take get a sense of accomplishment from that even if we go no further. But if we do go further, we can offer some really exciting incentives because we’re now playing with money we never expected to have in the first place.
So it’s really a perfect solution. We set tough but achievable goals so that everyone can take pride in accomplishment, but then we set some over-the-top goals, acknowledging that we probably won’t hit them, thereby eliminating any sense of fear or guilt or failure. And by the way, once you get into the over-the-top goals, have fun with them! Make it a game! Challenge one another! After all, at that stage, you truly are playing with found money.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
Michelangelo offered that advice about 500 years ago, but I think we have to be a little bit careful how we apply it in our businesses.
Clearly, setting goals that can be achieved at a walk is a bad idea. People don’t get much sense of accomplishment when the goal is too easily reached. On the other hand, setting goals too high causes another problem. People will quickly discern that goals are set absurdly high, they will become discouraged, and again they will be robbed of a sense of accomplishment.
In his excellent book, “CEO Tools,” Kriag Kramers offers an answer to this dilemma. He recommends a rigorous budget process whereby goals are demanding, but achievable. Then he suggests setting some big, over-the-top goals while clearly communicating that it’s OK if we don’t hit them. After all, we did hit our base budget goals, right? So everyone can take get a sense of accomplishment from that even if we go no further. But if we do go further, we can offer some really exciting incentives because we’re now playing with money we never expected to have in the first place.
So it’s really a perfect solution. We set tough but achievable goals so that everyone can take pride in accomplishment, but then we set some over-the-top goals, acknowledging that we probably won’t hit them, thereby eliminating any sense of fear or guilt or failure. And by the way, once you get into the over-the-top goals, have fun with them! Make it a game! Challenge one another! After all, at that stage, you truly are playing with found money.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
Monday, November 2, 2009
Poor Employee Performance Is a Management Issue
“People don’t come to work each morning to do a bad job.”
Mostly true. Sure, there’s the odd malcontent who’s mad at the world and wants to challenge authority, but as a rule, people really do want to do what’s expected of them. When they don’t perform as expected, there are generally two reasons, both of which are failures of management.
The first failure is we tried to put a round peg in a square hole. We placed someone in a role where s/he couldn’t be successful. Maybe the person didn’t have the right skills, talents, experience or personality for the job we put them in. And why would we do that? Sometimes because we’re desperate to fill a position and we think someone in that job is better than no one. Faulty logic. If the job is too important to be left vacant, then it’s too important to be done badly. Or we’ve got an opening, we like to promote from within, and we’ve got a loyal, veteran employee who we think deserves a shot at it. More faulty logic. Why reward an employee’s loyalty and hard work by putting him or her in a no-win situation?
The second failure is one of communication. Management has one picture of what a good job looks like, but unfortunately, the employee responsible for doing that job has a completely different picture. For instance, the employee knows that on-time delivery is very important to the company and spares no effort to get the product shipped as quickly as possible. S/he doesn’t understand that quality is an even higher priority with the company and that quality trumps on-time delivery. Seems like this sort of miscommunication shouldn’t happen, but it does. All the time.
The message here is this: when you have an under performing or poorly performing employee, don’t jump to the conclusion that you have a bad employee. Start with the notion that the employee wants to do a good job, but something is getting in the way. Then check to make sure s/he is fully qualified to do the job well and that s/he understands clearly what a good job looks like.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
Mostly true. Sure, there’s the odd malcontent who’s mad at the world and wants to challenge authority, but as a rule, people really do want to do what’s expected of them. When they don’t perform as expected, there are generally two reasons, both of which are failures of management.
The first failure is we tried to put a round peg in a square hole. We placed someone in a role where s/he couldn’t be successful. Maybe the person didn’t have the right skills, talents, experience or personality for the job we put them in. And why would we do that? Sometimes because we’re desperate to fill a position and we think someone in that job is better than no one. Faulty logic. If the job is too important to be left vacant, then it’s too important to be done badly. Or we’ve got an opening, we like to promote from within, and we’ve got a loyal, veteran employee who we think deserves a shot at it. More faulty logic. Why reward an employee’s loyalty and hard work by putting him or her in a no-win situation?
The second failure is one of communication. Management has one picture of what a good job looks like, but unfortunately, the employee responsible for doing that job has a completely different picture. For instance, the employee knows that on-time delivery is very important to the company and spares no effort to get the product shipped as quickly as possible. S/he doesn’t understand that quality is an even higher priority with the company and that quality trumps on-time delivery. Seems like this sort of miscommunication shouldn’t happen, but it does. All the time.
The message here is this: when you have an under performing or poorly performing employee, don’t jump to the conclusion that you have a bad employee. Start with the notion that the employee wants to do a good job, but something is getting in the way. Then check to make sure s/he is fully qualified to do the job well and that s/he understands clearly what a good job looks like.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
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