Most business owners dream of growing their company. Greater revenues are a measure of accomplishment. Larger companies are trusted more and getting bigger makes it easier to get even bigger!
But, being big creates problems – the business becomes less flexible, less customer centric and all the aspects of being small are jettisoned: agile, frugal and responsive. So, can you stay small but continue to grow? This was a question posed at a recent Business Exposure Group meeting. It’s important as the business grows to keep thinking like a small company. So, consider:-
- Does adopting the formal trappings of a large company in order to appear more credible actually reduce performance?
- Employees function better when the rules and procedures are short and simple.
- Adding more staff often creates more problems, and it increases staff turnover.
- Working with fewer people creates conscientiousness and keeps everyone more involved.
- Employees wherever possible should be rotated between tasks, so everyone can multi-task.
- Decisions take longer to make in a large company. There are too many managers who create bottlenecks.
- Do we need constant regular meetings? There is often a mis-alignment between when meetings are scheduled and when a conversation is needed. So, be more flexible. Big businesses have too much reporting, too many meetings, too much training. Create a culture of action and hire people who get things done!
- Customers are happier when there are fewer layers of management and procedures. Several layers of management depersonalises the customer experience.
- Eliminate useless work practices, don’t issue a companywide rule that only applies to a few – eg everyone must write a report, but it’s only relevant to one employee who doesn’t communicate well.
- As the business grows the agenda will change, make sure everyone is working to the same project. Don’t let people continue on old projects when the needs of the business have changed. There is nothing quite so useless as doing with great efficiency something that should not be done at all
These points were raised at the Business Exposure Group meeting. It was felt that keeping teams small and agile with little bureaucracy, a flat organisation and smart employees was the appropriate model for a contemporary business.
E-Commerce is the name for any kind of commercial transaction that takes place through the internet. It gives customers the ability to buy from you without having any limitations imposed by time or distance. Its not restricted to a B2C business using a “shopping cart” and credit card.
The question is – are B2B customers ready for this?
This was the topic discussed by members of the Business Exposure Group at a recent meeting and some interesting observations were put forward by members, many of whom had implemented E-Commerce functionality into their businesses.
B2B suppliers know far more about their customers than B2C, so there is no excuse not to deliver relevant experiences to your customer.- a website should no longer be general but nowadays it needs to be specific to the customer browsing your site.
41% of manufacturers are now selling directly to your business customers, so your business needs to be prepared to sell against the same companies you consider as valuable supply chain partners.
Entering into the world of E-Commerce is a major decision and setting up your website is challenging. Consider the following points raised by our members during the meeting:
- Website needs to be user friendly with as few clicks as necessary to enable your customer to order as easily as possible. It should load within 5 seconds.
- Do you require multiple “shop fronts”, different languages, to only provide relevant products and services to the specific visitor?
- Does your website need a reminder email facility to remind your customer to re-order?
- Does your website need an email facility to notify your customer about new products or when products are back in stock?
- When logged into the website, does it recognise your customer and automatically bring up their previous order history? – It is important to segment customers and give them a different experience based on their industry requirements.
- If you have a complex catalogue, direct customers to the relevant products in as few clicks as possible?
- Should you put all your goods or services for sale on the website or leave the high end items for your sales team to sell?
- FAQ’s section is extremely important as it reduces the need to have an extensive customer relations team.
- With one click specific industry users can fill their ‘carts’ with everything they need for their particular requirements.
- It engenders customer loyalties. An order can be authenticated with a click of a button, instead of the process taking several days to be confirmed.
- It streamlines your ordering system. It reduces the bottle necks of tedious work.
Consider who is your real competition, your competitors or your customer expectations?
The buying experience is now more important than ever.
It was felt by the Group that B2B E-Commerce was certainly another route forward for most businesses and a great way to find a new customer base.
New developments have made the creation of complex applications and online tools easy to purchase. But what is included in the software? Does it really work as advertised, will the provider still be around in 12 months and if not what happens to our data?
A worrying scenario for businesses.
There is a lot at stake when deciding whether or not to invest in the latest technology. Research shows that a business should spend 6% of revenue on IT every year. So how do you decide? A technology partner can make or break your business. Does your company have a lack of IT skills, are you over dependent on outsourcing?
Choosing the right IT support company is vital. Are they enthusiastic about what they can do/do they understand your problems and needs/how flexible is their support/what services will the support contract include/are they local?
Integrating applications is another challenge. You may have all the features you like in one application, but how does it talk to another application? There is a rapid rate of change, so how can you vet appropriate systems? Has software and the Cloud made things more dangerous for small businesses? Do your providers have a data-destruction policy?
At a recent meeting, members of The Business Exposure Group discussed some of the challenges they faced on a day-to-day basis and came up with the following points
- Don’t scrimp on technology but shop around for the most appropriate system for your business
- How much do you lose in downtime from your old system, make sure your IT support is available 24/7
- Make sure your back up system saves all documents including drafts. How often do you test your back up to see what you retrieve?
- Know what your website is for and make sure it engages your customers
- Use analytics to harness on-line traffic
- Make sure you are mobile, customers won’t wait until you are back in the office
- Have a strong password policy to protect your system
- Take advantage of teleconferencing
- Choose a UK company for hosting, it will help with your SEO
- Have reliable equipment to help stay ahead and innovative. 40% of PC’s in small businesses are more than 3 years old and operating on old windows systems with a whole host of problems
- Accounting software – ask yourself, does it free up a lot of time?
Technology is constantly improving and it is vital that businesses keep up to date, to stay ahead of their competitors.
Successful outsourcing means more than just picking the right supplier. It’s now a mainstream strategy, it’s an indispensable part of small business operations.
But, what do you outsource? – IT, Human Resources, Wages, Training?
Should you avoid outsourcing areas of your business that directly impact your customers?
For example, is it better to outsource IT to one supplier or to contract with a few suppliers and choose the best one for each type of work? Failing to outsource effectively can cause damage to your business.
Outsourcing was the subject discussed at the Business Exposure Group meetings recently and members engaged in a lively discussion as to the benefits and pitfalls of outsourcing.
Successful outsourcing achieves:- cost reduction / achieving KPI’s / reduced time to market / process improvements / business agility / increased innovation / commitment to change with enthusiasm.
However, research shows that 15% of business owners think that outsourcing delivers reduced services, poor quality, and costs more when management and overseeing are factored in, and there is evidence of a high failure rate in outsourcing. The biggest hurdle to overcome is that the contract or piece of work must be commercially significant to the supplier, if the buyer is to receive an appropriate level of service.
Businesses can’t be as efficient in this day and age if we handle all tasks internally. But what is crucial to overcome the high failure rate is to have some sound service level agreements detailing: the minimum service offering / dealing with on time delivery / the volume of work / and the suppliers availability if your business needs a quick fix.
Time invested in managing outsourced relationships is time well spent but when choosing suppliers for outsourcing consider the following points:
-How do you get suppliers to collaborate with your established functions?
-How difficult will it be to swap outsourced suppliers?
-How often should you meet with suppliers?
-Lay down your terms of business clearly and set clear goals with service level agreements.
-What attitude should you expect from your supplier? They must show
a passion for excellence, rather than just satisfaction
commitment to success
take ownership of the work
bring brainstorming to the table
go above and beyond the contractual expectations
-Can you invoke penalties for failures in service / delivery
If you choose suppliers well then you will have a great resource, which is about much more than just saving costs. It’s about skill, innovation and giving your business a competitive edge.
The simple way to expand your business is through hard work, there is no short cut to growth. However, growth through acquisition maybe appropriate for small and medium sized companies looking to achieve rapid expansion.
What do you think of when you want to grow your business?
- Catch your competitors off guard
- Instant market penetration
- Eliminate a competitor through acquisition
- Is rapid growth too risky in a fast moving business world
- Will staff cope
So, is organic growth too risky in our fast moving business world? This was a question raised at a recent Business Exposure Group meeting.
It is easier to finance growth via acquisition than other routes of expansion. Lenders are more impressed with real financials than projections. Banks prefer to finance acquisition rather than projected traditional growth.
Ask yourself – does acquisition complement our services/does it align with who we are and what we want to become/does it enhance our profile. For a business to be well positioned for acquisition it needs to be doing well, have a strategic business plan, a strong management team and access to capital before the deal takes place. Is your foundation sound enough to acquire? Will your key employees stay?
Acquisition is about getting skills and technologies faster or at a lower cost that they can be built from scratch. Acquisition is even better than having a super-charged sales effort.
Acquisition is lower risk – expenses are predictable, but how do you find a company who wants to sell?
1. use your accountant/lawyer
2. contact the owner direct
3. look for people around retirement age
4. direct networking with business owners
With organic growth businesses, growth should be restricted to 5-20% per year. So acquisition assists to go beyond that with control.
If you don’t have the money to buy
- use the seller’s assets
- buy with someone else
- lease with an option to buy
- assume liabilities or decline the receivables
One of the Business Exposure Group members who acquired last year said ‘Keep the businesses separate for 18 months and let the teams develop – if buying the business, but if buying the talent then integrate them into your business quickly before they leave. Respect the existing product and/or services otherwise the newly acquired team will feel embarrassed and worthless’.
According to KPMG, on acquisition 15% of staff leave. If more than 15% this will affect the DNA of the team that you have just acquired.
The discussion at the meeting finished with an agreement that time should be set aside each month to work on the business and consider if an acquisition should be targeted, but note that acquisitions usually stem from the sellers desire to get out rather than the buyers desire for a purchase
To create distinctive customer experiences, businesses need to push the boundaries and adopt next-generation thinking in six key areas.
Some companies are moving fast to adapt, applying a range of approaches to improve customer experiences. A great experience that delights customers and earns their loyalty is needed. Improving a customer experience from merely average to something that wows the customer can lead to a 30/50% increase in measures such as likelihood to renew or to buy another product.
Here are six areas discussed at a recent Business Exposure Group meeting.
- Measure customer behaviour and spend time with customers to understand them
Companies need to empathize with customers when they experience difficulties and obstacles.
This means embracing new techniques for understanding customer journeys. Such approaches allow companies to uncover new insights that allow them to design and deliver truly great customer experiences.
One of our Business Exposure Group members is an insurance broker specialising in the farming community. He was developing a new product and took time out to observe the daily activities of farmers.
He learnt that farmers are pressed for time but also very tech savvy, relying heavily on PCs and mobile devices in their daily activities. He had originally planned to market his new product through traditional channels, but lessons learned from an observation trip led him to create a digital solution, which allowed farmers to gather information and buy policies online at night and at weekends.
- Designing the complete customer experience
Design is not about making devices and screens look pretty. True customer-experience design involves each interaction customers have with your company. Design is not just what it looks like and feels like. Design is how it works.
To design a customer journey, companies must enlist everyone who has an impact on any part of a customer’s journey, not just people with the word “design” in their title—in particular operations and IT.
A Business Exposure Group member has a marketing agency whose client specialises in visitor attractions. After a 12 month effort to root out pain points in the experience of visitors to theme parks, their clients introduced wrist bands. These brightly coloured wristbands allow visitors to board rides, pay for meals and gifts. More important, the bands and the technology behind them—which is in every part of the attraction—allow visitors to select exactly what they want to see and do in advance. That has helped turn a day out from a series of highlight attractions interrupted by waiting in line to a smooth end-to-end experience.
- Completely rethink the customer experience
The focus is addressing customer needs, not improving a process. Many of our members bring in people who are not normally involved in the business to encourage fresh thinking. Looking at the best experiences employed in other industries can be extremely enlightening.
- Become an agile organisation
Managers responsible for developing new offerings need the authority to make decisions quickly and to hold staff accountable.
One of the Business Exposure Group members who has an IT software company shifted entirely to cloud technologies, which allowed new software developed by their team to go live on the clients websites in a matter of seconds. By making the whole organisation agile, the IT company dramatically reduced time to market for their clients products and services.
- From delivering a product to constant tweaking
Many businesses figure out what new product or service offering they want to create for customers and then launch pilots.
It’s impossible to know in advance how an experience will be embraced by customers. It’s better to launch sooner with fewer features and a simpler interface and learn what works, based on real customer input.
Using this approach, one of the Business Exposure Group members was able to build a new tablet-based app in just 6 weeks. It then tweaked new versions based on user feedback, improving the process. After these tweaks, the app was scaled across new markets and more products within the company’s range.
- Working together spontaneously
Companies need to push their people to move beyond traditional roles and work together to reinvent customer journeys. Improvements come from having motivated, empowered frontline employees driven by clear purpose.
Many of our members are working hard to reinvent their customers’ journeys. The ones that win will be those that push the boundaries and adopt new practices.
Simple tweaks in communication can nudge employees into top form and create a more productive environment for everyone.
Everyone knows that it’s not easy to suddenly make your employees and colleagues more creative, adaptable, or collaborative, however well-intentioned you may be.
One Member of the Business Exposure Group is the MD of a successful technology consultancy and wanted to forge a culture that would enable people to be innovative and focused, collaborative and emotionally balanced. He did all the usual things—hired carefully, developed an inspiring vision for the company, and designed an inviting workspace. Improving work life, one day at a time.
Multitasking is such a problem! Each switch from one task to another—from email to reading to speaking on a conference call—wastes a little of our mental energy. And those switches cost us dearly. People are less creative, more stressed, and make 2-4 times as many mistakes when they deal with interruptions and distractions. The decision-making quality drops the longer people go without a break, and we are more prone to sloppy thinking in general.
But, if leaders can encourage people to go offline when doing their most important work, as well as taking more frequent breaks, they’ll see an increase in productivity, innovation, and morale.
Our Member thought about this and knew that a stumbling block to taking breaks and avoiding multitasking was that people often feel they need to show their responsiveness to senior colleagues by being constantly available, whether on email, instant messaging, or in person.
He knew his own behaviour would be crucial to changing what normally happened in his company, so he decided to place a timer on his desk to signal that he was taking 25 or 45 minutes to go offline – to re-focus. This role modelling worked and it became the norm within the company. Everyone now agrees that breaks are a legitimate use of time because they get so much more done afterwards.
He also created a “Monday meeting” for all staff to discuss how they were working together as a company. After some time, it emerged that pressures were mounting, threatening to derail their commitment to focusing and recharging. “It was an emerging cultural behaviour, and we wanted it to stop”. So, he set some rules, like ‘encouraging people to have lunch with each other’ and ‘scheduling breaks between meetings.’
Most important, he felt, “leaders had to take responsibility for our behaviour and give out the right signals, use the right language, celebrate the right behaviours in others. So we cheered people for leaving the office to go for a run. Later, we adopted the phrase ‘leaving by example,’ encouraging people to use it instead of a mumbled, guilty excuse for taking a break.”
Also in the Monday meeting, the leaders took one further step to reduce overload, by asking everyone to name their two priorities for the week. Our Member says “the ‘two priorities’ rule encouraged people to be realistic and focused in their work. Decide what really matters this week!
The meeting is also used as to look at the company’s workload. When it looks like someone has too much on, people are encouraged to offload rather than suffer in silence.
The result: great creativity and camaraderie.
Another Member of the Group owns a healthcare company. Budgets are tight and the outcomes of his team’s work are often subject to scrutiny. He has to help his staff stay energized and motivated, even when the going gets tough.
Our Member has put this insight at the heart of his leadership style. He creates a positive frame for difficult tasks or discussions. He always begins meetings by talking about what the team has done well. This calms everyone down and helps people think more clearly. It’s not about trying to spin or gloss over the problems. But, beginning with what’s working well puts everyone in a more open frame of mind, meaning we can look at what’s not working without people getting defensive.
By focusing on something positive before getting into the tough stuff, bosses can help people stay in high-performance mode. It doesn’t take much.
Usually, when a colleague has an issue, leaders help by offering advice or direction which can backfire. A well-intentioned “have you tried this/that . . .” can be subconsciously interpreted as a judgment, as in: “why haven’t you tried this/that?” This mild threat can be enough to constrain the deliberate system and make people less creative in their own thinking. The alternative: create space for people to do their own best quality thinking. Our Member uses the “extreme listening” technique. He asks someone what they want to think through, and lets them talk without interrupting or making suggestions. Usually within five minutes, the problem has literally solved itself.
Our Member is clear on the lesson for owners: helping colleagues feel capable of handling matters on their own “is one of the greatest gifts you can give someone,” providing a great boost to their resilience and confidence.
Another Member of the Business Exposure Group is Chairman of a Marketing Company. Marketing is evolving fast. Traditional marketing requires creativity. Modern marketing still requires that, but we now get to benefit from new analytical tools that allow us to track return on investment of our marketing campaigns.
This requires quite a different type of skillset—much more quantitative which means our Member had to hire new types of people in the marketing department of his Company, alongside existing staff.
The challenge was “Whenever you have a very new group of people joining an existing team, you’ve got to pay real attention to motivation,”
Of all threats, social slights are especially high on the list of needs if we want our staff to flourish:
- Inclusion:“Do I belong?” Existing staff were worried they were going to be excluded from exciting new work. The newbies, meanwhile, were wondering whether they truly fit in.
- Respect:“Do people recognize the value I bring?” Everyone on the team wants to feel that their efforts are useful and appreciated.
- Fairness:“Am I being treated just like everyone else—or do I at least understand the reason that things are the way they are?”
If the answer to any of those questions is “no,” people quickly go into defensive mode—which is a sure recipe for dysfunctional behaviour. Our Member said “people were clearly feeling anxious and nervous and as a result, they started complaining about things they’ve never complained about before—making snide comments or questioning things that they saw as scope creep. People here are generally polite and friendly, and passionate about their work. So they weren’t hostile. Just unsettled.”
To boost feelings of inclusion, our Member created opportunities for all staff to get to know each other and to later work together on new product innovation.
Our Member also takes the time to make everyone feel respected for their individual contribution. “You have to make sure to give people ‘spotlight moments.’ He looks for opportunities to get them in front of the management team. If people have done the work, they present it, not the boss.”
He personally takes time to balance his time between the creatives and the technical folks, and if someone’s giving up some responsibilities to one of the new hires, he says, “I make sure to explain why that’s happening and emphasize the opportunities they will have to do new stuff in other areas—often areas that they’re better at and enjoy more.”
All staff are learning and growing by being exposed to each other. The company never stops changing. The people who are currently ‘new’ will become the ‘old guard’ and then there will be a new generation of skills needed.
Staff will behave more like their best selves, more of the time, if owners take a few modest steps to foster an environment where people’s brain’s aren’t overloaded—more focused on rewards than threats—and have their fundamental social needs met. With a little behavioural science in your toolkit, business owners can build a more productive team—and a happier one.