Have you often heard people say things like “ I wish I didn’t work here” or “I cannot stand that customer” or even stuff like “I wish that my colleagues fail miserably.”
These are real expressions that I often hear from employees or business owners working in small and large companies. Just take a momen and think about the specific comments above. am sure some of those were made on the spur of the moment or inadvertently.
Nevertheless, just imagine not having a job to look after your family or pay for your mortgage. Imagine if you cannot stand to be in the presence of most of your customers, or even if those customers that you cannot stand come to know of it. Further, just Imagine if the other teams in your company fail and if they affect the overall profitability of your company. Also, just think about losing a valuable employee whom you deem to be “paying too much”.
In other words, the proponents of these miscalculated statements are not ‘connecting the dots’.
Business and life itself, is made up of a series of dots that appear so discrete and disparate. Very often, instances, cues, actions, suggestions, choices, decisions appear so unconnected. Despite the seemingly inconsequential image it gives, there are significant consequences to each of those choices that we make. When the series of actions, words and deeds are connected, they give us a truer picture. This is called ‘connectin the dots’ in business.
Not ‘connecting the dots’ when making hiring decisions
A long time ago, in a distant country that I was based in, a small business hotel owner was seeking to hire a General Manager to run his business. The key qualities he was looking for were, experience in the hospitality industry, good people and communications skills and the ability to develop and drive new and incremental business to his hotel. He had many candidates to choose from and there was one particular candidate that stood out from the rest. This candidate had more years of verifiable experience. The only problem was that the stronger candidate was not his preferred ethnic origin.
The owner was in a dilemma. He had another candidate that did not have the same number of years of experience and his entire experience was not verifiable. This other contending candidate, (albeit the weaker one), was the same as the small business owner’s ethnicity.
I know that most people are comfortable around people with the same cultural and social background. Please do keep in mind that there are also laws in most countries that ensure that discrimination based on one’s race is illegal. Also, do reflect that these laws were obviously put in place as there was blatant discrimination taking place.
This small business owner called me for my advice. He had a personal dilemma. He felt more comfortable hiring his “own kind”. However, he admitted that the other candidate, who was not of his own ethnicity, was far superior than the candidate who had the same ethnicity as the owner.
Just think about the irony of this situation. Here is a man who had invested a considerable amount of his own money. This man who took such a risk in investing in this hotel had let his personal feelings and emotions blur his decision making.
I encouraged the SME owner to go back to his original objective, as to why he wanted to hire a General Manager for his hotel. I further requested him to answer honestly, as to who can deliver his growth ambitions. I asked him to “connect the dots” , as to why he would, or would not, hire any one of the other candidates. The owner did the right thing and he hired the stronger candidate.
Do not judge the person based on his or her looks, colour, accent, sex, height, weight or the colour of their hair. Just go back to your objectives and connect the dots; don’t blur your decisions with non relevant emotions and issues.
Not ‘connecting the dots’ is more common than you think
In my over 30 years of professional experience across different countries, in both emerging and developed economies, I have often experienced many instances where I had observed small business owners or SME investors not connecting the dots.
I am not suggesting that small business should not be prudent and economical where possible. What I am suggesting is that you reflect upon whether an action or a decision is optimal, and whether it is in the best interest of a small business owner to take such ‘unconnected’ decisions.
Please also read my previous article which i relevant to this discussion at www.smeadvisor.com/2011/10/virtuous-vs-vicious/
Hiring cheap labour for customer facing activities
Imagine not having enough people to serve your customers. To add to this conundrum, there is the expectation that the existing employees will have to work harder to serve your customers, with lesser pay than what is normally paid in the industry for a similar job, working for a similar company. However, as you would know, unhappy employees mean unhappy customers. What this also means is that, unhappy customers don’t come back to buy more. Unhappy customers will tell other potential customers of their dissatisfaction. Further, unhappy employees leave the business. Just imagine that you have just lost all your learning curve cost advantages as you have lost some experienced people in your business.
In other words, you just lost your competency. Your core competency (especially in a service business) is derived from your experienced employees! Think of the consequence of this unseeingly trivial action on your business!
Location! Location! Location!
I have seen many small business owners establishing their businesses far away from the main business district in which they operate, just to save money on rental. Getting into a location just because it is the cheapest is not the answer.
Your customers, employees and business associates need to access your place conveniently. If they cannot, they will exit at the earliest opportunity and bring with them your potential business opportunities.
Not treating employees with respect and as professionals
Some small business owners treat their employees with disrespect and at times with disdain.
Small business owners and SME investors need to know that they have to treat their employees well.
Please do keep in mind that most human beings respond to empathy, kindness and respect. They will give you much more than what you expect. You don’t have to show them that you are the “boss”. They already know that. Remember and “connect the dot” when you respect and treat your employees professionally, they treat your customers with a respect and as professionals.
Not creating an environment conducive to employee contribution and productivity.
Many small business owners are unnecessarily paranoid and secretive of their business development activities. I am not suggesting that you cannot be paranoid about your competition. Don’t extend the paranoia to your employees. If there is a bad apple in the midst, ask that person to leave. Don’t exert excessive control and be paranoid of all your employees.
Remember that it is the same employees whom you depend on, to run your business. Employees respond to trust with trust. I have noticed many trusted employees contributing significantly to the growth of many small businesses, that they are working in.
Almost universally, these employees were empowered, fully trusted and committed to the business. ‘Connect the dots’ and remember that paranoia and trust is a two way street!
Not getting rid of non performing employees
The odds are high that there will always be some employees that don’t perform. Get rid of the non performer, immediately as the costs are three fold to you.
1. At the onset, you are paying some one for doing nothing.
2. Secondly, you are bearing the opportunity cost of not getting that incremental revenue from a potential new employee who should replace this non performer.
3. Thirdly, you are bearing the opportunity cost of other employees having to chip in for this non performer, thereby reducing their contribution.
Limiting your marketing investments to save money
As a marketer, I am acutely aware that many small business firms try to save on their marketing spend with very limited or no promotional activities. Many of these small businesses think that they have done enough promoting by just releasing a press release, or participating in some exhibition or event and blasting social media messages to an untargeted world wide audience. This is counter-productive.
Keep in mind that you cannot be all things to all people. Segment your market and target appropriately. Blasting a communications campaign to all and sundry is just a waste of money and can be counter-productive to your brand image, as most people are annoyed at being slammed with junk mail.
You receive loyalty and repeat business only when your target market is aware that you exist and once they know that the functionality of your proposition works. Your target market has to connect emotionally as well to your proposition. Keep in mind that the emotional relevance of your proposition can only happen if the experience works.
Saving money by limiting channel incentives
I recently came across a company that limited its pay out to its sales employees. These front facing sales employees’ incentives were capped at 110% of their expected target delivery.In most companies, 80% of the incremental new sales come from about 20% of the sales people.
These employees are driven by their need to be the top earners. Most of these high performing sales staff kept their new prospects close to their chest, as they were limited to the 110% achievement target. Just imagine the potential if this compensation target was designed around 200% or 300% cap on their variable pay.
The owners of this SME obviously did not connect the dots. They were (and still are) limiting their own growth with this artificial limitation based upon some purported belief that top sales performers are not necessarily motivated by their incentives.
Please also read my other relevant articles, the art of pricing, www.smeadvisor. com/2011/06/the-art-of-pricing/ and how to fight a price war, www.smeadvisor. com/2011/07/how-to-fight-a-price-war/
SMEs not connecting the dots
• Please do keep in mind that is not a Mutually Exclusive Completely Exhaustive (MECE) list, but rather a sampling. The summary of the examples below are real. Its implications and consequences for an SME business is insurmountable.
• Not putting in place structures, processes and people with clear empowerment, responsibilities and accountabilities
• A large number of SMEs give limited or no empowerment to their key employees.
• Quite a few small businesses invest in excessively large number of people for non-core and administrative support services.
• Not all SMEs invest adequately in information and telecommunications systems.
• Most SMEs take short cuts in the design of the customer value proposition including products or services.
• Most SME owners keep their prices artificially high, based on ill-informed advice from their accountants, who do not necessarily have a cross functional view of their business.
• SME often set unrealistic margin expectations and also expect higher commitments from customers.
• Limiting incentive payments to channel partners with no accelerators for increased business.
‘Connecting the dots’ is an important concept that most SMEs should know.
The ability to reflect and see the implications of an action or decision are most critical for most small businesses, as their very survival might depend on it.
The principles discussed here are not limited to entrepreneurs but rather are relevant and fully applicable in one’s personal or professional life.
As the famous Indian Mahatma Gandhi said, “An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it.”
John Lincoln has over 20 years telecommunications experience in the USA, Japan, Europe, India, Dubai, Malaysia, Latin America and various other countries. He has extensive senior expertise in international telecommunications sales, marketing, business development and customer service delivery. John also has executive experience with general management, marketing, P&L, product development and revenue management responsibilities in both consumer and enterprise segments for both the fixed and mobile sectors. In addition John has an impressive operational and management portfolio of established proven expertise in incremental business value creation and management of large multi-cultural teams in Vodafone Global in the UK, Japan Telecom in Tokyo, AirTouch and Pacific Bell (now AT&T) in San Francisco and Tokyo, Airtel in Delhi and other telecom and technology companies. Additionally he has extensive large scale business development, M&A and operational project experience across the USA, Europe, Asia and Latin America. John has an MBA and MS in Telecommunications from the Golden Gate University in San Francisco, California, USA. You can find John’s personal blog at johnlincoln.blog. com. He can be contacted via: john.lincoln@ gmail.com, Twitter: @lincolnjc.