Reflecting on leadership

Recently, I’ve been catching up on the Jocko podcast. Jocko is a former Seal who has built a leadership training business. 

As you might imagine, the podcast tends to focus on military leadership. Sometimes there are guests on the show, sometimes they’re going over a book, which could be anything from recent works to a Chinese essay called The 36 Stratagems from 400 B.C. The discussions regularly turn toward how a business (and the listener) can leverage what’s learned during the talks with guests or the book being discussed. 

Listening to Jocko and guests – including men who lead platoons as far back as WWII (including one who lead teams in WWII, Korea & Vietnam), it’s interesting to see the parallels between the work of military leaders in the field & leadership in business – particularly when the latter is being done right.  One recent anecdote reflects on the current trend to badmouth “unmotivated millennials”, drawing a parallel between leading them and leading draftees in Vietnam.  

One thing recently stood out. There have been several discussions about what the guests see as their most important job as a leader, or as their most important / highest impact leadership role.

A substantial number have been training roles.

Things like training a team heading to Afghanistan based on the experiences of a team that returned recently so that when they get to their deployment, they already know the tactics necessary to succeed (and stay alive) rather than having to learn them from scratch while under fire.

It struck me that I couldn’t recall such a targeted situational / role oriented training going back 35 years – except at my first job back in early ’80s. That was at EDS, which at the time had a fair number of  former military as employees. Their training of new technical employees assumed you knew nothing (and many did). I watched music, foreign language & history majors become solid programmers in a few months. It was like boot camp for geeks, without the ten mile hikes.

EDS was preparing their new employees to “go into battle”, where the battle was taking on production tasks, supporting their apps, reviewing changes with others before the change was made, programming new things, etc. All of this was designed not just to make sure someone knew how to program, but to make sure new employees weren’t going to fail miserably in their first assignment. That’s a far cry from simply teaching someone how to program and then turning them loose with office supplies and a “Good luck!“.

The more I thought about it, the more disturbing this reflection became.

I thought back to any number of employers and client businesses and the training they offered to new team members. Training was never about preparing a new (albeit, sometimes experienced) employee to succeed / survive IN THE ACTUAL SITUATION / ROLE.

Nope.

Instead, the training was about how to get stuff from HR (if that), & perhaps the system managed by the team they’d be joining, oh & a pile of manuals, maybe.

This training was usually the MINIMUM that the company could get away with, if there was any training at all. Training isn’t “If you have questions, ask so-and-so.” A lot of this “training” happened when someone was taking on a role from a person leaving the company. I wonder what they forgot to tell the new person, even unintentionally. 

I thought back to this summer’s point of sale (POS) issues, where all but senior employees were struggling with the POS system. People at stores across several states made the same mistakes. It’s clear that the senior managers in these stores were trained or senior enough to figure it out. It was also clear that most employees received poor training (if any).  

Are you training your new staff to succeed in their situation / role, or are you cool with letting them fail until they figure it out? Combat team training ROI is obvious. Lives and mission objectives are at stake. 

Your training ROI is likely a bit less extreme. It might only be about lost orders or customers. Some training-related failures could have a higher price. What’s the best training you ever received for a role you were about to take on? Why wouldn’t you want a new employee to be prepared to succeed in their role at the highest possible level? Is that training too expensive?

If you lead people & you care, check out Jocko’s podcast. 

What’s your secret?

Has anyone ever asked you what your secret is? It’s kind of like being asked about your superpower. It goes something like this: “Wow. That’s really something. I could never do that. (pause while they work up to asking….) What’s your secret?” 

I’m guessing this happens to you right after you’ve done something that you’ve done so many times and for so long that you could do it seconds after I woke you from a deep sleep at two in the morning (after you yell at me for waking you, of course).

Why do they want your secret?

While they don’t realize it, asking this question is usually about them looking for a shortcut. Sometimes “I could never do that” translates to “that isn’t important enough for me to practice for years (like you have) so that they can be as good as you.” Mostly it’s wishful thinking that there’s a secret to your skill and expertise. 

Can you imagine the answer you’d get if you asked your favorite musician about the secret to being an unbelievable musician? 

I’m guessing they’d tell you that they’ve played their instrument since the seventh grade, if not longer. They might even tell you that they hated it at first and perhaps even hated it a little later. Those days are gone now. They know that it’s become a part of them and that they’ll do it as long as they can – even if no one listens to them anymore. Possibly the worst thing you could do to them these days would be to take their instrument away for the rest of their life.

Shortcuts exist, but …

There’s nothing wrong with asking for help or seeking a shortcut, but expertise isn’t developed through shortcuts. It might help you get there, but developing expertise is about one thing. Practice. It might not be hard work, but you need the experience to gain the expertise. 

You can show someone a shortcut, but you can’t give them expertise. Expertise is learned.

Shortcuts can accelerate your learning process. They’ll probably help you avoid a few mistakes or skip a few things in the learning process – but they can’t make you the expert. Only doing the thing creates that level of skill. You can watch YouTube videos of Bob the curly haired guy painting happy little trees for weeks, but until you pick up a brush and start painting, you’re not getting anywhere. 

Taking shortcuts is useful when learning, but are seldom useful when it comes to developing a valuable skill that people will pay “your price” for, and without complaining.  

Do the thing. Over and over.

Do you know how to become a better hiker? By hiking. Does it help if you eat better, workout, etc? Those things will help you become healthier, stronger and better able to hike more, but they don’t make you a better hiker. Hiking does that.

The same goes for playing an instrument, drawing cartoons (something I’ve been thrashing away at for the almost a year), marketing, ice climbing, kayaking, cutting down trees, working metal, building web sites, or making a perfect sous vide steak.

Doing the thing that you want to become an expert at doing. Doing it again. Even when you’re horrible.

Educate yourself, practice the thing, repeat the process. Do the thing. Keep doing it until people start asking you what your secret is. Then keep doing it.

The other secret

There’s one more thing that grows your expertise: Teaching.

Teaching others what you know is a powerful way to refine your expertise and see it in a whole new way. Some say that you really don’t know a subject until you’ve taught it. Perhaps.

If nothing else, teaching the skill or subject that you’re an expert in will certainly remind you of the baseline skills you’ve taken for granted for years. Questions from those new to your expertise (ie: newbies, or “noobs”) will often shake you a bit. They tend to make you rethink that which you know so well. They’ll ask, horror of horrors, “Why do you do it that way?

Nothing wrong with that. Sometimes the answer to that question is the shortcut they never knew they were looking for. Sometimes, reflecting on and changing how someone looks at a problem or a challenge is the best shortcut of all.

The Self-Managing Business

If you get enough email from “gurus” and you see enough Facebook ads, you will find yourself reading discussions about that unicorn of unicorns, the self-managing business. It sounds amazing. “You mean I’ll have the freedom to go skiing, hiking, or fishing and when I return, my business will better than it was when I left?” Yes, they say. If you dig deep enough, they will begrudgingly admit that your business will be no worse than it was when you left. In some cases, that’s normal because the business actually gets more and better work done when you’re gone. But they leave out a lot of detail, or more often, people read far more into the title than is really there.

The four hour work week

Take Tim Ferriss’ Four Hour Work Week. Tim’s built an integrated team and systems that allow him to spend his best, most productive four hours of the week working on things he loves to do that no one else in his business can do as well as he can. It’s real work to create systems and train people to work autonomously, or at least close to autonomously. It’s worth it, of course. He shows how to build a business that lets you work from anywhere. Could you turn your bait shop into an absentee business? Sure – if you’re put the time into developing systems and training people.

However, it isn’t just about training people to do the work. That’s the easy part. If you are truly going to disappear, someone will need to make decisions for you. Presumably, you’ll want their decisions to be the same ones you would have made. Otherwise, it becomes more like the business of the people you left behind, not the business of the person taking the three week horsepacking trip. Upon your return, you might not like what you find.

What does self-managing business mean?

To some, it means that all the stuff that can be automated has been automated. A self-managing car might drive itself to the dealer (or your preferred mechanic) if it detected a problem that wasn’t enough that it meant the car couldn’t be driven. It might know when to get gas (etc) – and to go to a station that offers full-service, since it can’t fill itself from a standard pump.

It isn’t simply about automation. Automation simply buys time / speed, and reduces / eliminates human error. While automation is getting better every day, someone has to tell it what you want it to do. The same must be said about your staff. They need to be told HOW you want things to be done, but also, how to decide and prioritize those things. Everything, in fact.

Making decisions is also work. Sometimes it’s the work that makes a difference for the business – and it’s often the kind of work that repeatedly pays off. So how do you replace that?

Being Like Mike

This is the real work of “systematizing” a business. Building & implementing automated systems isn’t nearly enough. You need people who are prepared & ready to make decisions close to as fast as you do, based the same points and considerations you use, and after all that – make the same decision you would have made (mostly).

Until they do that consistently, how can you leave for a month?

Write down a short note about the last five decisions you made. I don’t mean major like “we bought a competitor”. I’m referring to the kind of decisions you make daily or weekly. With list in hand, take your best staffer for a walk. For each decision on the list, put your staffer in the scenario you were in, provide them with whatever info you had, and then ask them to make the decision they thought you would make. Now ask them to tell you how they arrived at that decision. After a few decisions, is the staffer on track?

If they aren’t, think about the training that’s necessary to get them there. Are your managers ready for that? If you left for a week, would they have the data, tools and decision-making process (from yours) to make it for a week without calling, texting, or emailing you?

Start slowly. Train them, give them the autonomy they need, & coach them. When they’re “ready enough”, start leaving them for longer and longer stretches.

Photo by Colynn

What makes your customers safe?

We have attorneys, insurance, OSHA, safety regulations, procedures, safety gear, training, etc to help us protect our business, while keeping our staff members & customers safe. We know that in some markets, someone still might get hurt despite all our preparation, training, safety equipment, etc.

If you run a hotel with a pool, offer zip line rides, take people on boat rides / float trips, lead hikes or offer horseback rides into the backcountry, there are obvious risks, but almost every business has some level of risk like this. Have you wondered how you’d respond if something horrific happen to your customers while they were at your place of business? It’s one of a few worst possible nightmares for a business owner. Could you, much less your business, recover from something like that? Could your staff?

There are (and will continue to be) a lot of what ifs related to the recent duck boat disaster in Branson. It’s difficult to comprehend, much less try to relate to what the victims’ families, the employees and the business owner are going through. While it’s the worst possible time for all involved, the rest of us owe it to ourselves, our team, and our customers to learn from it.

If your business involves activities that could put your employees and/or customers in a scenario where they could get hurt, you should watch the process closely as they talk to the media, address safety issues that are discovered, and change processes while customers are in their care.

Review. Look for clues. Ask for help.

What you’re able to see from the public perspective of this accident will help, but the opportunity to learn won’t stop there. There will likely be additional considerations discussed by your advisors that they will want to share with you. As an example, you’ll want to talk to your attorney, insurance agents, licensing and related safety enforcement agencies, as well as industry groups.

As details come out about what went wrong in Branson, you may find subtle gaps in your tools, gear, processes, inspections, or training. Even if you have 40 years of experience in your business, as the boat tour business does, you can still learn from the lessons and discoveries that come out of this.

Your customers know they’re putting themselves at risk to take part in adventures. They expect your team to be experts. Reviewing your current procedures, training and equipment use is at least as important as making sure that you’ve developed enough of a sales pipeline to have the necessary cash flow to make payroll three months from now.

One more critical tool

There’s more to this than safety equipment and training.

When bad things happen, time has a way of changing. For some people, time stands still, or more commonly, slows down a good bit. For others, it accelerates.

It’s easy to find stories about highly accomplished people (athletes and others) who describe what happens when they get really good. They’ll say the game or activity “slows down”. It means that they are so ready, so fit, so well-trained, and so mentally prepared that the activity feels as if they have plenty of time to do whatever they’re good at. It looks easy when they do it because to them, it is. For the rest of us, the game or activity feels like it keeps getting faster and faster. When we try to keep up at a pace we aren’t used to, we start making mistakes.

Leadership works this way too.

When bad things happen, preparation slows things down. When you’re the owner and 20 people are asking questions at once, preparation, experience, and practice help you keep your bearings, calm everyone, and handle the questions.

You aren’t the only one who needs this preparation. Your ENTIRE team needs leadership training. When everyone else panics (and perhaps rightfully so), they will need leaders to help them find a safe way out. Leave no one out. That kid in produce might be the one who takes charge and guides your customers to safety when the worst happens.

Train your entire team. All of them will need one another to get through it, both during the event, and afterward. You’ll need their leadership most of all. If the worst never happens, you still have a team of leaders. Your customers will notice.

Photo by Symic

Are you testing your training?

By the time you read this, we’ll have finally arrived home from an almost six week long work / play trip. What that really means is that I worked as we travelled and she played. Ok, I played a little bit too. The beauty of having a business that isn’t tied to a single physical location is that you can do that work from anywhere. BUT… that isn’t today’s topic. I think I’ve harped on the value of remote work enough, at least for now.

This was a long road trip. We saw long “lost” relatives we hadn’t seen in 20 years, had a little bit of beach time, spent time with family and college friends, as well as knocking off a few things on our “gotta do this” list. One of the constants of a road trip – particularly one that takes consists of a lot of time in the high desert plains and mountains – is thirst quenching. There’s a certain drive through place we visit that has a happy hour twice a day – half off or very cheap drinks (no, not THOSE kind). These places are (almost) everywhere along our trip’s path, so we managed to visit quite a few of them.

At almost every one of these places, we found that we had ordering problems. An unbelievable frequency of them, in fact.

The problem is not the problem

At first, we thought it was my accent. I don’t have one, according to me. Ok, I really don’t have one and I have had enough trouble with this at drive ups that I tend to be that guy who enunciates every word slowly so that even Siri could understand it.

Didn’t help. When you’ve had this issue in Louisiana, Texas, New Mexico, Arizona and a few other states whose people talk far differently accent-wise, you start to get the idea that it isn’t you.

The same data and experiences that help you figure out that it isn’t you also help you figure out that it isn’t the person on the other end. That was the good news.

Eventually, we started asking questions. Yes, I know. Who does that?

The real issue?

At first, it really wasn’t clear what was creating this issue at so many locations. While I was still thinking it might somehow be me or engine noise, the problem was consistent in too many places, even with the engine off. Plus we were driving a Subaru, not a diesel pickup.

What was clear was that employees of this franchise system were having massive problems all over the West, Midwest, and as far east as the Florida panhandle.

After talking to a few employees at different locations (after we had trouble ordering at each of them), we found out that they were having terrible struggles with their point of sale ordering system. It wasn’t clear if it was new, poorly designed, unclear, and/or if an awful lot of people hadn’t been getting trained well, or all of those things.

It eventually became clear that the more experienced employees were doing ok with the system (think: Morning visits usually staffed by a manager), while afternoon visits were the source of the struggle. It finally seemed to come down to newer employees who may have recently started for the summer. They would be less familiar with the menu and the point of sale system, as well as the challenges of voice ordering.

In one case, the flustered person trying to take a two drink order finally called over their manager, who cleared up the point of sale issue almost immediately. The manager was very apologetic to us, but I don’t think we deserved an apology. I think the employee who perhaps hadn’t been trained enough or mentored enough was the one who should have received the apology (and some additional training).

The point? Test, train, repeat.

We encountered similar things at other businesses during our trip.

If you implement point of sale, tech support or order management systems in your business – whether you own/run a restaurant or a heavy manufacturing business, find a local fast food joint that has deployed do-it-yourself ordering kiosks.

Every manager (including senior ones) will benefit from watching the general public as they use these systems. Having done that… watch newly trained employees do the same with your systems. Only then will you know if your training is working.

Photo by familymwr

Two out of three

Recently I spent some time in the town where I went to college. One of the things that tends to happen when you meet old friends from those days is to check out your old haunts and see if how they fare against your (probably) inaccurate memory of them. From the business perspective, it speaks of consistency – but also of gaining return clients. Any college town that hosts a school with sports and other major events is likely to be judged like this on a regular basis.

Still holding their own

The first place is a rather old barbecue place, but not the one I mentioned last week. It was closed for a little bit, bought by a competitor some time later and has remained without significant changes for the last three decades.

It’s a unique place in some ways. You order your meal the same way you did over 30 years ago – via an old school wall phone in each booth. The current owner has a few other local BBQ places under different branding – and all of them are solid locations. More importantly, the current owner of this old BBQ place has kept the qualities that people remember from decades ago. They’ve kept most of the menu, the funky booth ordering phone system, and did so while keeping the food quality at the level of their other locations.

Recognizing and promoting the story of this old place and the memories people have for it wasn’t all that hard to do – but someone had to recognize the value of retaining these things and execute them well. Keeping all of that intact despite having a multi-location barbecue business with different branding is a good example of understanding what makes customer retention and return visits happen.

Fresh face, old place

This place is unrecognizable compared to the original. It’s on the same site, but the original building was torn down back in 2015. The new place is bigger, brighter and frankly – a serious improvement. I worked at this place back in the early ’80s while I was in school. The business has changed hands at least once since that time and there’s a lot of water under the bridge. However, this place also had a lot of long-time customers and, of all things, is “famous” (if not memorable) for the old building’s iconic blue metal roof.

Customers remembered it so much that when the new building went up with a silver metal roof, you might say they received “a little” feedback about it. So much feedback, in fact, that they changed the color of the roof on the newly constructed building and included a reference to the roof (and its color) in the new name of the business.

Best of all, when you walk in the door, you see a large photo of the original building on the wall, along with another large sign next to it that tells the story of the business. While all aspects of the business have moved forward and improved substantially, they’ve remembered their past and helped their customers do so as well.

No mas

Unfortunately, not all of the old haunts in my alma mater’s town are showing the life that the previous two displayed. Many are closed, replaced by new things and / or new buildings. While the loss of some of the more revered ones is sad, after 30 plus years, you have to expect it.

One of the old joints now has numerous new locations, but has closed the original location on the college’s main drag / hangout street.

Unfortunately, the resemblance ends there. While the menu is largely the same, not much else is. The food’s gone downhill, even from our last visit two years ago. The service? Missing. Locals now comment that it has become a BYOF (bring your own food) restaurant because the food and the service are so bad.

The lesson?

The lessons in all of this come down to a number of things:

  • Knowing why people love your place, even if it wasn’t (and still isn’t) perfect.
  • Knowing why they come back to a place you recently bought.
  • The importance of the story that existed before you were involved – so that you can respect & leverage it, even if you need to make big changes.

Talk to your customers. They’ll tell you what you need to know. Don’t make it harder than it really is.

Photo by greatdegree

Horseradish & the pursuit of perfect

Last week we talked about what it takes to be the perfect place. Not really “perfect”, but something that feels perfect. Thing is, perfect is quite often different for each person. That’s why it helps to decide who your ideal customer is and zoom in close to eliminate who they aren’t, AND more importantly, zoom in super close to determine who they are, what they do, who they do it with, and so on.

When you zoom in that close, you’re far more likely to notice the small things that are important to them. Whether you look through a telescope or a microscope, you have to pay very close attention to what’s in view in order to know what to do next, what decisions to make about what’s important and what’s not.

Under the microscope

When examining something under a microscope, you’re looking at tiny little things, but in the context of the viewing area, they’re still important despite their size. The same goes for little things that your ideal client cares about.

While the lack of those little “insignificant” things might be ignored by your ideal client, the situation changes when those insignificant little things exist. It might not make sense, but here’s what happens: That little insignificant thing isn’t expected in most situations, so it doesn’t count against the business that doesn’t provide whatever that little thing is.

However, those customers are always looking for those little things. They might not be disappointed when they don’t find them, but their sensitivity to their presence is always high. When that tiny item IS present, everything changes. The ideal customer is looking for it and the presence of that item, no matter what it is, is transformational.

It changes their opinion. It changes everything because it changes the lens they see that business through. Suddenly, that business “gets” them. It understands them. They know that this business understands the minute little things that “fussy customers” are looking for.

You don’t miss what you don’t care about

Like a rest area on the highway, people who aren’t looking for them don’t miss the ones that don’t exist. Even when one appears after many miles, they won’t necessarily appreciate it if they don’t use it. Likewise, those who have been waiting for that rest area are thrilled to encounter it, even though it’s only a rest area.

It’s a bathroom and maybe a place to have a picnic and walk the dog.

Even so, it’s what you want, when you want it. You can probably name a few examples of this kind of appreciation that you have in your world.

Horseradish

Here’s a simple example: horseradish. Years ago, I stopped into a barbecue place for the first time with a couple of friends. This place had a special take on things. All the walls in this place were lined with three rows of various hot sauces, barbecue sauces and the like. I had never heard of most of them, but I surely tried a few.

That, however, was not the thing that brings me back to this place. Their barbecue is excellent, but even that is common in the southern midwest.

What brings me back every time is the fact that in addition to their barbecue and vast array of sauces is, of all things, the cole slaw. While this is not uncommon given that you can get into downright religious arguments about cole slaw (acidic, on the sandwich, on the side, etc), what’s different about this place is that their cole slaw contains the perfect dose of horseradish.

Yes, horseradish. That’s it. I drove by this place today, as I happened to be in the same town for the first time in 16 months.

Of course, I haven’t quite perfected this touch on my own, as simple as it might seem, so that makes it even more of a draw. Anytime I’m in this town, I MUST visit that barbecue place (For those hankering for detail, it’s Buckingham Smokehouse in Springfield Missouri).

This is a perfect example of a trivial little detail that raises your business’s game above others every time. Do I have high expectations of them as I do every business I return to? Sure, but that detail is what pulls me back.

That is how a tiny insignificant thing can pay off.Photo by mbtphoto (away a lot)

This place is perfect.

Have you ever said “This place is perfect” after spending some time in a store, restaurant or other business? What made that place “perfect”? Many times, it’s little things.

Sometimes, it’s about the things you might normally forget. Other times, it’s about things you simply don’t expect. Or a lack of the things you’d normally expect. No matter which one creates the perfect experience, seek out these things.

Odors or fragrances?

At times, it’s about cleaning things that will never stay clean. I was walking down a New Orleans sidewalk a few blocks down from Bourbon Street on a recent Saturday morning. Across the narrow cobblestone street from me, a man in a waiter smock was mopping the sidewalk. Not sweeping it, MOPPING it. If you’ve been in any “party zone” area of town on the morning after, you know he was making sure today’s customers wouldn’t smell anything left by revelers who happened to pass by after his restaurant closed.

Strong, unpleasant odors have a way of making a sizable first impression. Mopping the sidewalk was one way to make sure that that morning’s customers didn’t get the wrong first impression as they entered the restaurant. Imagine if you were part of one of the groups entering the restaurant that morning and were accompanied by your best client, or someone who would be – if they said “Yes” at that lunch. Or perhaps you’re meeting someone to pop the question. Suddenly, a simple mopping job on a sidewalk takes on a different level of importance. Mopping the sidewalk has transformed from a chore into something much more important.

When did you last sweep and mop (or at least hose down) the sidewalk in front of your place? What could a “little” change to the experiences of entering your business mean to your customers? Maybe you should ask them. They might surprise you.

Surprising experiences

A couple of weeks ago, I stopped at a highway rest stop in eastern Idaho. A state facility, not a Federal one. Ever seen a spotless highway rest stop? During the summer? On any highway? I have. I was floored. It was perfectly clean and smelled like anything but a highway rest stop, particularly one along a busy highway. Spotless, yet not antiseptic, or smelling of mildew. Shockingly perfect. We’ve all been in heavily used rest stops that were nothing like that one.

Something as mundane as a highway rest stop is still memorable weeks later because someone who takes their job seriously has done more than simply clean the place.

What little improvement or consistently higher-level attention to detail in the mundane work around your place could produce that kind of surprising experience?

Mea culpas everywhere

The reverse of these little things that create perfect experiences often happen when we forget why we’re in business, who we’re serving, and why. You may have seen recent advertisements where Facebook, Uber, and Wells Fargo grovel for your forgiveness. Maybe they’re legitimate, maybe not. The trouble they have to overcome is that many people still aren’t sure if their apologies are real. Likewise, you still aren’t sure they’ve truly learned a lesson from their mistakes.

These are the questions you never want to create in the minds of your customers. It takes a great deal of time and effort to re-earn lost trust. When a woman no longer feels safe doing business with your company, you may never regain her trust. This isn’t solely an Uber issue, but their safety issues make an ideal example. You can create unsafe or uncomfortable situations in almost every business. Even woman-owned businesses have to reconsider situations they may not personally be concerned about, as customers have experienced things that they may not have had to deal with.

Finding what makes yours perfect

By now, you may be wondering what sort of little touches or improvements would make your business perfect. Look back at your customer service logs, complaints and suggestions received. Taking the perspective of a customer, review the ones that seemed petty, tiny, “little and unimportant”, or similar. More often than not, these situations tend to provide clues to finding angles to approaching “perfection”. They may not be the keys themselves, but they’ll often point you in the right direction. The key to creating so-called perfection is wanting to.

What’s your growth plan?

Last week, we talked about the mechanics of growth, focusing on the important of renewals / repeat business to your growth. We skipped over one of the more important aspects of figuring out how to grow: what you want your business’ growth destination to be.

Are you the “doer”, the “p and p’er” or both?

Figuring out your preferred role is critical. It drives how you feel about growth. Few people like both roles, but they do exist.

Some people are doers. They love the work. Whether it’s drywalling, programming, operating heavy equipment, or defending clients in court, they love the work. Some doers don’t even want to think about stepping away from the work to deal with employees & other trappings of growth.

Some doers decide not to grow their business (or grow it beyond themselves) because they’re seriously allergic to the “people & paperwork” aspects of business. They know that growing the business is all but guaranteed to pull them away from the work they love.

The “people and paperwork” role I’m speaking of is “the back office”. We’re talking about sales, operations, marketing, hiring, people and project management, etc. Unlike the doer, there are some folks who love the “people and paperwork” thing. They’d be happy to let people who love the work of the business actually do that work while they take care of the p & p duties.

Few people relish both roles, but they do exist. No matter which of these roles is your favorite, you need to figure out where you want the business to end up. Once you figure that out, the path to growing it (or not) will be far more clear.

Thinking about growth

At this point, you might be wondering what your options are. Only you know which one’s right for you, but you’ve got to figure it out. Really, it’s about where you want the business to go combined with where you want to go.

Some would like to do the work until they retire, close it down and walk away. Some would like to grow the business and sell it. Others might want to grow it and pass (or sell) it to their family. You might be looking at some combination of those things.

One thing I like to ask owners is to describe how they see their life 10 or 20 years down the road. Does the business need you around at least a few days a week? How does your team (and your customers) feel if you disappear for months? Does the business disappear if you disappear? Does it not even skip a beat? Is there work that you do now that you’d rather not do because it takes you away from work you love?

It helps to have an idea which of these scenarios you want to live because the scenario drives what your growth plan looks like and what you as an owner and manager need to focus on.

Getting out

If you want to be the person who disappears for months and has a business at home that never misses you, then your growth plan needs to include (if not focus on) replacing each of your roles. Most of you wear multiple hats. Start by giving away the hats you can delegate easily. Automate a hat or two if you can.

The big job is replacing you. While there are people qualified to run your business, they probably don’t have the “you” brain. They’ll make decisions based on their experience, values, ethics, etc. If that’s OK, then you’re in great shape once you find and train that person.

However, most small business owners aren’t OK with that, no matter how great their hire. Why? They want the decisions to be made the way they would make them. Be patient selecting and training this person so you can sleep easy later.

Staying in

If you want to stay, do the “real work” & avoid the p and p tasks, it’s time to find someone you can build trust in so that they can take on all those operational tasks. Focus on what allows you to step away from the things that annoy and frustrate you and the things you put off. Procrastination is a great way to identify what you hate to do. This person may need to take on partner status, which is OK for the right person.

 

Photo by Atli Harðarson

Growth, market size and renewal rate

Everyone I talk to wants to grow their business. Yet in the last ~20 years, I can’t recall a single growth conversation that included their renewal rate or the size of the market that remained, until I asked.

How big is your market?

It’s the question that often provokes people to look away and give a laser beam stare at a fluttering leaf on a distant elm tree as they think about what the number is and/or how they’ll figure it out.

For example… “So how many programmers, accountants, cities under 20,000 population, dog kennels, or whatever are there right now?

In other words, how big is your market? If everyone who actually should be your customer was your customer, how many customers would you have?

If your customers buy $30,000 industrial drills, you’d better know how many companies use a tool like that, how many each of those companies would typically need, and how many companies still need that kind of drill. You’d also better know who in China is making a knockoff to clone the one they bought from Samsung, who already knocked it off.

Renewals matter

The other troubling question affects some businesses and not others. That is, “What’s your renewal rate?” In other words, for a service you sell on a recurring basis (or a product that requires “refills”), what percentage of your customers buy their next purchase from you?

Lots of people know. Lots of people don’t. As you might imagine, I think you should know.

Imagine that you run a company that makes $200,000 a year. You’re in a recurring sale business model where your product or service requires “refilling” on a regular basis.

So, you want to have a conversation about growth. If you want to get to $600,000 by the end of 2025, a major impact item on getting to that number is “How many people want / need what you sell?”. The other is how many customers can you keep of the ones you get. Of course, we need to determine if your market will support that number, but there are always ways to deal with that – market expansion, reaching beyond the edges, looking for markets whose needs mimic your market’s needs, and many more.

It goes deeper than knowing the numbers. You need to know why they renew. Why they don’t. Growth depends on renewals in these businesses.

Are you part of the 92%?

Customer service is a good example of an area that can transform renewal rate. Most of us are in an alternate reality zone about how much our customers love us. The quote below speaks directly to that, even though customer service is only one place that causes you to lose renewals.

According to research by Bain & Company, when asked, 80 percent of companies say they deliver “superior” customer service.

The customers’ perception of the service level was very different.

Only 8 percent of customers felt the companies delivered “superior” customer service. – Joey Coleman, Never Lose A Customer Again

What do your customers think?

When leaving you is easy

Your highest chance of losing a customer is in the early going. The first 30, 60, 90 days.

Early on, they get their first exposure to your product, service, support, billing department, documentation, deployment team and so on. They haven’t yet developed a commitment to you. Your products & services haven’t become an integral part of what they do. As such, the friction to replace / discard your stuff is low.

At this point, the decision has low political cost, despite the embarrassment / reputation loss someone will take for approving the purchase. However, if their entire company is being on-boarded like they’ve never experienced before, the political cost increases substantially.

Given that knowledge, what can you do to make it incredibly easy (“frictionless”) to adopt your products / services in the first 30, 60, 90 days? What can you do in that timeframe to help new clients make your stuff such an integral part of their business that no one dares stop it?

That’s what good on-boarding does. It starts working on your renewal rate on day one, when most others think “sold = done”.

Most companies aren’t good at this.

There’s so much headroom available above the average that you have lots of room to play with. Competitors tend to not be exposed to these changes. Even if they find out about them, they frequently think they’re little more than frills and puffery.

Just what you want.