Purpose of Business
To understand what businesses do, you need to understand why they do it. To understand how to improve the business you are in, you need to understand its true purpose. That’s what this is all about.
When it comes to business, you can look at things in one of two lights: Good or Evil. The evil view is that the heads of major corporations exist for the purpose of taking our money from us. If you’re looking for a bad guy, few compare to the faceless evil of corporate America so often portrayed in today’s media.
If you bother to take a second look with the good light turned on, you will have to admit that successful businesses are there helping us fulfil our needs and desires at every turn in ways we could never achieve without them. Are they in it for themselves? Absolutely! Are they also in it for you? Absolutely again!
Fundamentally successful businesses are started for two reasons.
1. To help themselves
2. To help others
Yes, they can do both. In fact they need to do both to remain useful to themselves and to remain useful to others.
Think about your favourite store, maybe it’s a clothing store or even a grocery store. What happens if they raise their prices so high, or hire such rude sales people that you and your friends stop going there? They start losing money and go out of business. You probably wouldn’t care, but they would no longer be able to help themselves, at least not with that business.
Now what happens if that same business hires lots and lots of really nice people to spend extra time with you, and then lower their prices so you get everything at near cost? They start losing money and go out of business. The only difference is this time you care, because now you can’t go back to that friendly store. Now you can’t return that item you didn’t want, or get it fixed under warranty. Because they didn’t help themselves enough, they can’t help you any more either.
So what’s the solution? Simple, they help themselves by helping you. They want to do both. They need to do both. You also want them to do both.
What do businesses do?
When it comes to business, you can look at things in one of two lights: Good or Evil. The evil view is that the heads of major corporations exist for the purpose of taking our money from us. If you’re looking for a bad guy, few compare to the faceless evil of corporate America so often portrayed in today’s media.
If you bother to take a second look with the good light turned on, you will have to admit that successful businesses are there helping us fulfil our needs and desires at every turn in ways we could never achieve without them. Are they in it for themselves? Absolutely! Are they also in it for you? Absolutely again!
Fundamentally successful businesses are started for two reasons.
1. To help themselves
2. To help others
Yes, they can do both. In fact they need to do both to remain useful to themselves and to remain useful to others.
Think about your favourite store, maybe it’s a clothing store or even a grocery store. What happens if they raise their prices so high, or hire such rude sales people that you and your friends stop going there? They start losing money and go out of business. You probably wouldn’t care, but they would no longer be able to help themselves, at least not with that business.
Now what happens if that same business hires lots and lots of really nice people to spend extra time with you, and then lower their prices so you get everything at near cost? They start losing money and go out of business. The only difference is this time you care, because now you can’t go back to that friendly store. Now you can’t return that item you didn’t want, or get it fixed under warranty. Because they didn’t help themselves enough, they can’t help you any more either.
So what’s the solution? Simple, they help themselves by helping you. They want to do both. They need to do both. You also want them to do both.
What do businesses do?
They help others achieve their needs and wants, and they also help themselves in the process. The business that figures out how to help others the most becomes the leader. It makes no difference whether the owner’s motivation is for the money, or to help others. The only way to achieve long term success is to help others. There is no other reason for people to patronize a business, other than to get something they either need or want. If a business doesn’t help you get that as much as their competitor up the street does then they go out of business. If a business helps you so much they can’t make a profit, they also go out of business and are not much help to you in the long run.
Starting with you and your employees
How you gain the respect and the devotion of employees can ultimately take your business to the next level.
One of the planning steps I take with clients is to make them understand that building a team from the inside out is a powerful way to become an effective leader.
In my years of consulting, I have found that employees must believe that they are the “stewards of their own ship” and communicating this all too important factor can make a significant difference.
When you successfully communicate this message, you are diminish 3 HUGE obstacles:
1. Performance
2. Pay
3. Politics
I always encounter situations where employees have little interest in driving the business as they perceive that this is the responsibility of the owners. The owner is usually frustrated with the team and finds it ever more frustrating to extract better levels of work performance.
I always encounter business owners in sheer exasperation trying to “find” competent staff. In many instances, the problem is not that bad. It requires a bit of faith and an investment in systems and feedback.
Giving something to employees – in this case – responsibility and accountability can be an extraordinarily powerful tool. But you can only succeed by building a bridge.
The secret to inspiring people is helping them see something different in their life and this involves investing time and energy and careful planning.
Remember, motivation, is not something you operate but a something you cultivate.
You can’t make someone motivated, but you can influence their motivation.
Some of My Own Experiences and Observations
1. People can’t genuinely say yes unless they have the ability to say no.
2. Manage people as if they were volunteers.
3. Listening is not the same as Agreeing.
4. Welcoming ideas is a powerful tool for cultivating high levels of motivation.
5. Building rapport.
6. Increased communication always brings increased miscommunication. Always remember that human communication is not perfect and you need to work at it.
7. Real trust is given just before it is earned.
8. What risks are you willing to take to initiate trust?
9. Assume competence. Why not start thinking the best?
10. Treat people as fully competent until you see compelling evidence otherwise.
11. Encourage conversations about big questions that can never be fully answered.
We are always told that natural talent is what drives top performance, yet, I will challenges this notion.
A common factor for top performance is the “deliberate practice” of active feedback.
You may have raw talent which provides motivation and acceleration, but it is the practice that creates the performance.
I have seen employees with “average talent” achieve expert-level performance by diligently exercising best practices based on ongoing feedback.
Always remember, that the best performing businesses always want feedback from customers and employees. Businesses who want to be top of their game use advisors to get feedback, both within and outside of their organisation’s performance system.
Pushing the Limits
I always reinforce to clients that knowing more does not necessarily contribute to better performance – for this you need diligent practice based on feedback.
Consider the two following questions.
1. What are the goals for my business this year?
2. What would the world miss if my business didn’t exist?
Both are important and they will impact your thinking in very different ways.
When you have answered the first question, you proceed by taking action on the information, by ensuring that your activities and plans align with your goals.
The second question provides great value by what is NOT answered.
I have found that by keeping your answer always open and a work in progress, you are seeking higher standards. It is the unanswered part that keeps your mind searching, giving you potential for deeper insight and raising the bar.
Keeping a big question in front of you for an extended period of time keeps your subconscious and well as conscious mind digging for insight.
We rely on questions of the first type for everyday business.
· What are our goals and objectives?
· Did we generate sufficient revenue?
· What does the customer want?
· Were deliveries made on time?
Questions of the second type help us arrive at what differentiates our business from our competitors and what makes our effort worthwhile.
One of the most important elements of ongoing business success is gaining and maintaining competitive advantage. Lots of businesses talk about it, lots of businesses strive for it, but very few businesses really understand it.
Research shows that normal people are all the same - they use their mind the same and behave in the same reactive way.
So, in the post GFC, it is quite bizarre that businesses seeking to achieve ongoing success continually endeavour to recruit only those with a proven track record and past experience in what ?
Answer:
In doing the same things, the same way that led to the economic disaster that we are now living through.
Real leadership comes from vision and presence.
Presence is the hallmark of all great leaders. If you want to deliver real and tangible results, you're going to have to develop your ability to be present.
There is no complex formula for doing this.
You have to re-learn how to pay attention and I call it focus or single-mindedness.
In simple terms, I tell my clients to come to their senses and I mean this quite literally.
You need to re-learn how to pay attention to what your senses are telling you and not what you think you know best.
So, how to get you closer to your holy grail ?
a. ask the question: “What would the world miss if my business didn’t exist?”
b. pay attention!
c. begin each day with a quiet reflective few minutes to set your mind appropriately for the day ahead.
d. develop the necessary mental discipline and attentiveness.
e. get the right team !
f. always seek feedback.
“The difference between a boss and a leader is that a boss declare, “Go!” While a Leader would say with enthusiasm, “Let’s go”
The 8’C’s of Small Business Management
It’s an unfortunate fact of commercial life that the world of business does not have a theory on everything. Each situation is different and poses different challenges and opportunities for everyone engaged in the business world. Were there to be a template that all small businesses could use then life would be fantastically easy and the rewards bountiful for all.
However the economics of the marketplace and human factors dictate that this is an impossible scenario and that those business people that “play the game well” will have heightened success when compared to those that do not.
There are eight basic principles that can be used in every small business during the current economic climate to maximise the chances of current and future commercial success.
There are eight basic principles that can be used in every small business during the current economic climate to maximise the chances of current and future commercial success.
Each of these principles is discussed in depth in other articles; the key to reading this article is to provide small business owners with a checklist and a brief explanation of why each principle is important. The list is by no means exhaustive but it is this writer’s view that these 8 are fundamental building blocks for success.
(1) Costs.
One of the problems of boom times is that it breeds inefficiencies since unnecessary costs are left unattended as the company focuses on grabbing “the low hanging fruit” that these good times provide.
(1) Costs.
One of the problems of boom times is that it breeds inefficiencies since unnecessary costs are left unattended as the company focuses on grabbing “the low hanging fruit” that these good times provide.
Who wants to spend days looking at the” leaky pipe” when there are so many opportunities of bounty?
In leaner economic periods the easy revenue dries up, but the pipe of inefficiency continues to leak. Thus it is key that all small business take a long look at all of their cash outputs and trim where necessary. This is often a painful decision, but it is essential for the future wellbeing of the company. This has to be the base point for all small businesses during hard times.
Consider Ryanair who famously cut costs by asking employees to stop using company electricity to charge their mobile phones! Excess fat can be found everywhere and in a world where cash is king, costs have to be trimmed (often to allow the money freed up to be spend elsewhere as investment in the business)
(2) Customers
Do you know who your customers are and more importantly do you understand them? Loyal customers are the commodity that everyone is scrambling for at the moment.
(2) Customers
Do you know who your customers are and more importantly do you understand them? Loyal customers are the commodity that everyone is scrambling for at the moment.
It is imperative that every small business has a heightened knowledge of their base. Whether you are someone that has long or short buying cycle it is incredibly important that you are viewing your customers as assets to be nurtured and developed rather than simply transactional. There is so much data that can be mined from knowing your customers and you don’t necessarily need sophisticated CRM systems to have a rudimentary yet effective customer data base.
Customer relationships can allow you to understand and predict, it allows you to foster emotional ties that are key to the customer lifecycle. If customers are the lifeblood of every business then how you interact with your customers before, during and after the transaction is the oxygen that helps keep the business alive. Your staff, if you have any, are also a key for communication strategy. How much input are you getting from them about what customers are talking about?
(3) Competition
Business is often a zero sum game. If you aren’t winning someone else is. That someone else is your competition. It constantly amazes me that so many businesses (a) don’t know who their competition is and (b) don’t know what their competition is up to.
Business is often a zero sum game. If you aren’t winning someone else is. That someone else is your competition. It constantly amazes me that so many businesses (a) don’t know who their competition is and (b) don’t know what their competition is up to.
In a world of easy access to information it’s a sin not to be constantly looking at your competitors activities.
Your competitors are looking at your business so you must be looking at theirs and be constantly thinking about what you must do to get an edge. If customers are not buying from you, where are they buying from and why? This basic thought has to be at the centre of all strategic decisions that you make. In my business of training the market is ultra competitive so when I am not successful with a pitch I need to understand why. Sometimes I can do nothing about it at the moment, but at worst its valuable information that I can use the next time I am selling.
Walt Disney remarked that he “couldn’t operate without competition”. Walt Disney knew his markets and knew the importance of competitor analysis in order to get better.
(4) Communication
It’s a sad fact of business that if you wait for business to come to you then invariably you will struggle. In the age of mass communication all businesses have to be communicating what they are doing. Don’t wait for the phone to ring, pick it up and call someone.
(4) Communication
It’s a sad fact of business that if you wait for business to come to you then invariably you will struggle. In the age of mass communication all businesses have to be communicating what they are doing. Don’t wait for the phone to ring, pick it up and call someone.
The internet has now provided a relatively cheap medium for all businesses to communicate with the world. Marketing doesn’t have to be hugely expensive, a wise man one said that “advertising is what you do when you can’t go and see all your potential customers yourself”.
(5) Cleverness
If the definition of insanity is doing the same thing day in and day out hoping for different results then a large proportion of businesses are trading insanely.
If you have struggled for the past 12 months and are doing nothing differently then what’s the end result going to be?
Use people to brainstorm new ideas. Try new things. Do things that you don’t like doing to get you out of a comfort zone and change the game. It’s incredible the numbers of new avenues that are open to business when they tweak what they are doing and adopt new ideas.
You must be clever with what you do and run with it.
(6) Closing
If you are not selling you are not trading.
(6) Closing
If you are not selling you are not trading.
Selling is the cornerstone of every business, without it your product or service is just another commodity. Selling brings your offerings to life. It’s a simple fact that those than can sell do better than those that can’t. Selling is a fluid dynamic ongoing process. Every interaction you have outside your company should be about the sale. You don’t have to be hard selling all the time but you must be aware that you are at some stage of the sale process constantly. Always Be Closing, never were truer words written. A lot of small business owners don’t like selling, it’s not the reason they got into business. Some people see selling as a dirty word and view it as beneath them.
These businesses will fail unless they have are lucky enough to have something that sells itself. Read any business book, the giants of business all knew the importance of selling and were willing from the start to get their hands dirty. Without the sales there can be none of the trimmings of happiness or success that most business owners aspire to.
(7) Concentration
Business has to have a focus. Business people have to understand that business is simple but that it’s not easy. By this I mean that production of wealth is not overly complicated but it’s something that need time effort and concentration. Hard work i.e. concentrating on your business is essential.
(7) Concentration
Business has to have a focus. Business people have to understand that business is simple but that it’s not easy. By this I mean that production of wealth is not overly complicated but it’s something that need time effort and concentration. Hard work i.e. concentrating on your business is essential.
We all must train ourselves to do better, to be more efficient with our outputs. This requires focus and concentration and it’s often a long process. Malcolm Gladwells theory in his book Outliers is an example of this. To be fantastic requires huge time and effort.
The only place success comes before work is in the dictionary.
(8) Calibre
You must be good at what you do. The offering that you make to the marketplace has to be of sufficient calibre so as to be more desirable to customers than your competitors. This means that small business cannot be all things to all people and has to have a focus.
(8) Calibre
You must be good at what you do. The offering that you make to the marketplace has to be of sufficient calibre so as to be more desirable to customers than your competitors. This means that small business cannot be all things to all people and has to have a focus.
The point here is that it is essential to understand that business leaders find a way of bringing something to market and then tweak it until it’s as close to perfect as they can get it. How often have we read of people who are always scrambling for new ideas that sound great but are in fact taking them away from their core offering?
“Big think” is great fun and it’s often the “sexy” side of business however a core fundamental is that big think is useless unless the minute details are managed. The distinctly unsexy side of business is often the implementation and management of ideas, it is this attention to detail that determines the calibre of your offering and will define your success.
I firmly believe that there are no small businesses that cannot successfully adopt all of the above.
This is not a magic formula for successes. Unlike too many business books out there I do not advance a claim that success is a just “an add water and stir” process. Reading about business is great and understanding business an ongoing necessity. However success comes only from another C word, competent.
The above tips are essential for all businesses but they will not remotely guarantee success without being competently applied to your business.
At the Standard Edge, we help small business by helping them develop key strategies and plans to grow the business and take a long term role in your business.
For a free consultation, please contact us at your earliest convenience.
standard edge
Level 7, 131 Wickham Terrace
Spring Hill 4000
T: 617 3831 0077
F: 617 3319 0964
No comments:
Post a Comment