Month: March 2009

Focused growth

I woke to a BBC program discussing economic growth and if the growth rates we’ve seen in the last 50 years are sustainable.

The real question is what sort of growth.

Much of that growth, particularly in the last fifteen or so years, has been a debt fueled binge on household goods and speculative assets.

Perhaps what we’re returning to is sustainable growth, where the economic engine is provided by things like improved health care, business productivity and real innovation.

Do we really need three thousand mile Caesar salads, three cars and a DVD in each bedroom to be the drivers of our economy?

The end of world! (or is it?)

Time Magazine looks at the end of the era of excess and asks “is it good for America”

http://www.time.com/time/nation/article/0,8599,1887728-1,00.html

One of the telling quotes in the article is the line “This is the end of the world as we’ve known it. But it isn’t the end of the world.”

Indeed it is; the era of cheap credit is over. The way we do business, the way we run our private lives and the how we finance that way of life is going to change.

That doesn’t mean the world is ending and the sky is falling, but it does mean its time for fresh ideas.

Hat tip to Fred Wilson for the article

Don’t keep your customers waiting

Keeping your customers waiting for you to do your job is bad business. With mobile communications there’s no reason for not keeping your customers in the loop.

They say it never rains, but it pours – and it never comes down heavier then when your clothes dryer breaks down.
 Ours broke down during a recent wet spell and a frantic call to the whitegoods repair centre resulted in an appointment time “between seven am and midday”.

Having run a service business for over a decade, I know scheduling field technicians is a challenge. No matter how good your telephone staff are, it’s impossible to estimate how long a tech is actually going to be on site.<

Most big companies overcome this with “appointment windows” where they give you a rough time frame of when to expect the service person to show up. You’re expected to hang around and wait for them to arrive.

Should slight inconveniences happen such as work, dropping kids off at school or even just not hearing the doorbell ring then tough luck, the tech drives off to the next job.

The bigger the company is, the worse this gets, there are legions of Pay TV and cable Internet customers who’ve wasted days waiting for technicians not to show up while post and courier contractors are possibly the worst for skipping past deliveries that have a hint of difficulty.

So I resigned myself to a morning of pottering around the house and the possibility of an irritated call at ten minutes past twelve to find out where the mechanic is.

As it turned out, I was the first call for the day. A polite, friendly and efficient service man arrived at the doorstep at exactly 7am. We now have a dryer working perfectly in time for a fortnight of sunny weather.

The mechanic was an excellent advertisement for the company and that’s why we use them.

But those well trained, courteous staff are let down by the company’s communications. A simple text or phone message could have kept me, head office and the field agent working together. Everyone would have been happier, the system more efficient and the business more profitable.

In this age of mobile communications there’s no real reason for the “service window” at all. It’s simply a symptom of businesses not prepared to use their tools to do a better job.

The business who are prepared to use these tools are the ones who will survive and prosper after this downturn passes. While the ones who expect their customers to sacrifice a day so they can show up at their convenience are as doomed as hairy mammoths once were.

There was anther pleasant surprise as the serviceman left a voucher for $100 off a new machine. Given dryers and washing machines are classic “deferrable purchases” as we discussed in an earlier column, this is a great way of getting customers to buy.

So it seems the marketing department is on the ball. Perhaps there is an argument for marketing people to run service teams.

Death of Powerpoint

I’m currently at the National Speakers Association of Australia‘s annual conference and one thing that’s struck me is the almost total absence of Powerpoint.

With the exception of Glenn Capelli‘s wonderful presentation that bought together teaching, his childhood, presentation techniques, his grandmother, mentor and the Sputnick satellite there wasn’t one Powerpoint.

Glenn’s powerpoint certainly wasn’t the heading, bullet point, bullet point, bullet point, corporate logo, next slide presentation we’ve become tired and jaded with.

Are we seeing the end of bullet point driven presentations?

Motivation

I was listening to a speaker yesterday describing the difference between public sector and private employees.

An interesting point was that the motivations are different; public sector staff are more motivated by a work/life balance while private sector workers are more motivated by money.

This started me thinking about recent blogs I’ve read by Valerie Khoo and Seth Godin regarding the motivation of Wall Street bankers and entreprenuers.

The question of money motivating people is vexed and I suspect overstated. As Seth says in his column, once you’ve an income over a million or so dollars money really isn’t that important; it’s all about status.

A point made by yesterday’s speaker was when he managed scientists he found most researches care about about peer approval. Money matters far less to them than appearing at conferences, presenting papers and being recognised for their hard work and discoveries.

In a strange way, that’s the real explanation for the financial industry’s massive salaries and bonus. The dollar amount is simply a yardstick to measure one’s status. The bigger the yacht, house and birthday party you can afford, the more recognition you have among your peers.

Which brings me to entreprenuers. Unlike Valerie, I don’t think business builders are interested soley in amassing banker like piles of cash. The cash is nice, but they are more interested in doing great things with their businesses or invention.

Cash is a useful measure and it’s nice to have some spare, but that’s as far as it goes. Far more important for most people is the recognition of their peers, security of their families and the satisfaction of a job well done.

Why small business will be the winner from this recession

An interesting post by Peter Bregman on the Harvard Business Review;

http://blogs.harvardbusiness.org/bregman/2009/03/why-small-companies-will-win-i.html

While I agree with the sentiment and Peter’s conclusion, I think there’s a more compelling, fundamental reason why small to medium businesses will be stronger when the world economy recovers.

Responsibility.

The notable thing about the current collapse is the total absense of repsonsibility from those who created the problems. From the overpaid villains of AIG through to the politicians and regulators who, at best, stood on the sidelines and allowed the excesses to happen.

The main cause of this is because managers have become isolated from the consequences. They take their pay packet, and their fat bonuses, home regardless of the shareholder wealth they destroy.

With small to medium business the owners and managers have to deliver the service they are paid to do. Otherwise the business goes quickly broke along with the proprietors.

Big business grew big because they had the technology to do so. They only big because they had the market and political power to protect their position.

Technology levelled the playing field between small business long ago, the current market turmoil and the political changes that will follow will strip most of big businesses’ advantages.

Which will leave the well motivated, well managed and responsible companies to succeed.

Only a few of these will be big businesses.

Stallers, deniers and enablers

Seth Godin has a look at the three types of people you meet in business-to-business sales. 

I think he’s wrong.

These three types are everywhere. Whether you are a consumer or a business, whether you’re dealing with sales, support, billing, enquiries or any other businesses function.

The stallers will do their best to get rid of you, the deniers will say “no” and the enablers will do everything to help you.

For a successful small business you need to be known as an enabler and hiring enablers  has to be your priority. Once you’ve done that you have an  advantage over most of your competition and almost every big business.

Ignoring your customers

The new Facebook design has picked up lots of critics with nearly 800,000 users giving it the thumbs down.

However Dare Obasanjo claims Facebook founder Mark Zuckerburg doesn’t care. Apparently Mark’s view is “the most disruptive companies don’t listen to their customers“.

That’s true – Steve jobs ignored the howls of protest when Apple dropped support for floppy disks and the Apple Desktop Bus which left millions of Mac users stranded with obsolete equipment.

Even more famously, Henry Ford told customers they could have any colour Model T they liked as long as it was black.

Both were right and the customers followed them, although not without some grumbling.

So you can succeed by knowing your customers needs better than they know them, but it’s a risky ask as Microsoft found with Windows Vista, Ford with the Edsel and Coca-Cola with New Coke.

Time will tell if Mark Zuckerburg’s right. It’s a high risk strategy though.

Managing your reputation

Keeping track of what your customers and others are saying is important for your business. Luckily there’s a free tool to let you keep track of your reputation on the Internet.

This article first appeared in Smartcompany on 17 February, 2009

Last week at a major telco’s product launch a respected tech journalist piped up that while their new gadget was nice, their network was rubbish and so the gadget wouldn’t work very well.

The telco’s reaction to this deserved comment was instructive on how large corporations deal with criticism.

Rather than take the comments on the chin, the telco’s spokespeople canned the journalist and waved around a report stating their network was the greatest thing since sliced bread, or at least since somebody thought of connecting two cans with a piece of string.

Personally I’d be tempted to point out to the esteemed and highly paid writers of the report that two cans of string are probably a touch more reliable than their client’s network in notoriously remote locations like North Sydney and Martin Place.

While telco managers usually get away with head in the sand behaviour, business owners in the real world can’t. Their reputation with customers matters.

In the current business climate, you can’t afford to be dismissing your customer’s concerns. When a customers complains, action needs to be taken and lessons learned from that complaint.

How business leaders deal with complaints is a real test of how good they are. Handled well, a complaining customer can be turned into a raving fan of your business and a complaint should be an opportunity to review how well you do your job.

You don’t need to be hosting press conferences with stroppy journalists to find out what people think of you. One Internet tool for managing your reputation is Google Alerts.

With this, you can set up an email summary of each time your target word or phrase has popped up on Google and have it delivered to your inbox.

I have all my business names listed with Google’s alert service so I can see when others have mentioned them on Internet forums, blogs or websites. It’s also very handy on keeping an eye out for anyone breaching your trademarks.

Incidentally, the journo was right, and that particular telco’s network problems have been widely discussed on the net and in the media. It beggars belief the managers and PR couldn’t have expected this sort of criticism if they’d been running these tools.

The web’s a pretty effective way of getting good and bad news out about a business. If you watch it closely, you can anticipate problems before they bite your bottom line.