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

The scary thing about artificial intelligence

The phrase “artificial intelligence” might bring politicians to your mind’s eye, but today, we’re talking about the real thing. Maybe you own an Alexa (or five of them), but I’m guessing many of you don’t have one. As with most “new” technologies, you’ve probably seen a number of articles that seem bent on inspiring fear about artificial intelligence (AI). Some of them forecast that AI is going to put everyone out of work, take over your life and eventually try to chase down John Connor’s mom.

Even Elon Musk has noted that our (society’s) failure to manage AI could have a bad outcome. Certainly, there’s quite a range of meanings for that phrase. I’m not so worried about Arnold’s metal, computerized alter-ego as some seem to be. My concern in the short term is more about taking advantage artificial intelligence in your business. As with any other technology, there’s the threat of wasting time and money by using it simply because it exists.

AI is already part of your business

Before we consider whether or not artificial intelligence has a place in your business, it might be worthwhile to accept the fact that it’s probably already there. Naturally, there are the obvious things like Siri, the directions providing parts of Google Maps, Waze and similar. They may not “feel” like AI, however.

For decades, software has assessed credit scores & determined risk for insurance underwriters. While that might seem boring to some, the folks in those lines of work still appreciate their value to the quality & accuracy of underwriting. They’re an important factor in insurance company profitability. To me, that’s like the feature of table saws that detect the touch of skin to the blade and stop it in milliseconds to avoid injuring the operator.  Cool, but not AI.

I remember seeing logs entering the then Plum Creek Columbia Falls mill a few years ago and being impressed at the laser-guided saws that assessed a log’s size and shape in an instant and then made initial cuts to maximize yield from that log. This sort of automation has been in place in large, highly-capital intensive manufacturing businesses for some time.

Small businesses have benefited from this sort of automation via CNC (computerized numerical control) driven routers and similar tools. While full-sized CNCs might be too expensive for smaller businesses, a Bozeman-based company makes reasonably-priced desktop-sized CNC.

Learning & problem solving

While all these things are cool, are they AI? The log sensing thing is the closest, but ultimately, the AI purist (there are always purists) might disagree.

Wikipedia describes artificial intelligence as:

when a machine mimics “cognitive” functions that humans associate with human minds, such as learning and problem solving.

Notice that “decision making” is not mentioned. All software makes decisions. A tool that can look at an apple and determine its variety (or its ripeness) based on a previously analyzed group of 10,000 apple images isn’t making decisions per se. It’s using AI based on the training it received by analyzing 10,000 apple photos. Every photo was associated with ripeness and species data.

When processing 10 million apples per year, production speed matters. If separating apples by ripeness and/or species is important to that process, then AI-enabled sorting equipment might be of use.

Software like Adobe Lightroom assesses & automatically “corrects” a photo’s color, contrast, color saturation, etc. Pro photographers who hit the “auto” button probably don’t accept the automated settings as their final choice, but the button still saves time.

Artificial intelligence & your business

Ask yourself this: “Does artificial intelligence have a place in my business and if so, where?

If you’re the apple processor, it probably depends on the price tag.

Is there (perhaps mundane / routine) work / analysis that must be learned to become productive at your company? It’s possible a system could be trained to perform some or all of it. Like the time savings associated with automation, it might eventually free your team’s time to focus on work that you’d never cede to AI. It’s still early, but it’s worth investigating for the right kind of processes. The scary thing is the number of unknowns when you get started, but you’ll get past them like you have with other new things.

This can help improve customer support, but don’t confuse that with customer service. Empathetic, knowledgeable people belong there, not AI.

Ever asked WHY you’ve always done it that way?

In the programming world, there’s a term called “technical debt”. Technical debt is refers to work created by existing systems, processes and methods. You might call it maintenance, upkeep, re-work, refactoring, re-design, etc.

The term “technical debt” is typically used when discussing programming, but as a friend reminded me a week or so ago – programming doesn’t own it. It’s about any process, whether it’s new or has been around a while.

For legacy processes and methods (and yes, programs), the key phrase is “we’ve always done it this way”. For new techniques, processes, infrastructure and programming, a critical concern is planning, design and creation that intentionally minimizes the creation of more technical debt.

Technical debt appears, like it or not

Think about the handwringing that decision makers face when they find that a road, bridge, or other infrastructure requires substantial maintenance to continue to allow it to remain in public use. This tends to happen years after repeatedly putting off regular maintenance that used to be performed routinely.

Often times this situation is created because the work was set aside because of a shortfall, and sometimes because the funds were re-directed to another project in the same department. When this happens for a decade (or several), the costs of “catching up” are immense. They’re a form of technical debt – a particularly ugly form that can overwhelm an agency budget. The same can happen to a company that fails to maintain and update their processes, systems, and methods.

While it’s easy to say “Don’t create anything you can’t afford to maintain”, you often have no choice in the matter when “the thing” was created several generations ago (such as public infrastructure), or at a time preceding your arrival at the company with looming technical debt.

So what do you do?

“No one likes change, but everyone likes improvement.”
Chris Hogan

Deal with “Always done it that way”

Do you still do it “that way” because:

  • It’s so much cheaper this way?
  • It’s far more efficient?
  • You regularly review alternatives and those reviews have (so far) shown that the current process still works best.

As you might expect, the third answer is still a reason why your process hasn’t changed.

Even if your processes are reviewed regularly and are up to par, it’s important that your existing systems, methods are not only solid for existing uses, but ready to meet the challenges of systems and processes now under development – much less those being considered. A review of systems that fails to review readiness for the next three to five years of operation isn’t doing you any favors.

There will be investment to bring existing systems up to the standards needed to work with your next big thing. It’ll be expensive and time-consuming, perhaps seeming insurmountable. That’s no reason to let it sit unaddressed. even more important to minimize creation of new technical debt.

Triage and chip away

People get defensive about technical debt, so you have to be careful how it’s discussed. As with so many things, it isn’t about blame. It’s about improvement. The way it was done “back then” was very likely the best way at the time. Most of us (hopefully almost all of us) are smarter than we were five or ten years ago. When we look back at work we did years ago, does anyone think it’s as good as it should be when viewed through today’s eyes? Rarely. We all make the best decisions we can at that time with the info and resources we have. 20 years later, we may seem much smarter, but we have the benefit of the passage of time.

Prioritize / triage the technical debt in the context of your future. If improved and readied for your projected needs three to five years from now, what existing systems, processes and/or methods will have the greatest impact on the work you’ll do during that period? Chip away at that.

There will be people who need to be convinced. There will be some who see the challenges as insurmountable. There will be some in the middle of the road, waiting to see. Choose a small but important project, involve your influencers, and start getting some small wins. Use them to create momentum. Give your people and the work time to rise to expectations. Photo by ustung

The one thing you dare not automate

The personal touch your clients appreciated when you were small can get lost in the chaos of growth. It eventually feels like tedious, recurring, mind-numbing work. That’s when someone like me suggests that you automate it.

Just don’t automate the wrong things.

Why automate?

Automation outside of manufacturing environments is mostly about doing tedious things and doing so consistently as the business grows. When you’re small, it’s easy to send a thank you email or a follow up survey.

As your business moves from 100 to 1000 or 10000 clients – things will change. You’ll shift from doing to managing. Your ability to spend time to manually send emails for routine but important follow ups will disappear, but the need to send them will not.

While growing, we want to:

  • Create a consistently high-quality experience for everyone.
  • Reduce the amount of tedious, but important work that must be done manually.
  • Get things done that probably wouldn’t get done otherwise, either because of time constraints, the volume of work, or both.

Follow up is a good example. There are so many opportunities to follow up with our clientele. Many opportunities are lost because following up is time-consuming. When follow up happens consistently, it’s often because it’s automated. As long as your follow up automated emails (or letter, postcards, etc) are written to sound like you talk, it’s OK.

Automating this work doesn’t reduce its importance, it simply makes space in your team’s day to perform other tasks that can’t or shouldn’t be automated.

In 2018, there are still a few things that can’t be automated, at least not very well. More importantly, there are those things that you simply shouldn’t ever automate.

The magic you bring is one of those things.

Magic means many things

There are many things you can automate. What you simply mustn’t automate is the magic you and your people create.

Think back to your favorite speech. It might be from a President, or during an event keynote – like one from Steve Jobs.

We have plenty of easy-to-use technology that can read the text of a Jobs keynote. None of these tools can even begin to sell, influence and convince like Steve did from the stage. Apple could email the text of the speech to their customers and we could read it. While a few might hear it in Steve’s voice thanks to “our mind’s ear”, most of us won’t. It’ll simply be words in an email.

The impact of someone who can speak on stage like Steve is the kind of magic I’m referring to. Magic appears in many forms and it’s management’s job to nurture it.

There are robots that can weld 24×7 with incredible consistency and quality. Even so, there are people who can weld like they’re the combination of Roger Staubach, Tom Brady, and John Elway executing a comeback in the last two minutes of a big game. Robots can’t replace that welder and you wouldn’t want them to. You deploy robots so that your magician has more time where magic is needed.

Great leaders do their magic by calmly & confidently assessing a crisis situation with their team, then leading them to the solution. IBM Watson might be able to analyze 100,000 chess move sequences and probable responses in a few seconds, but it can’t lead a team through a crisis.

You can automate the assessment of thousands of resumes to produce an ideal short list of candidates. What you can’t currently automate is reading and assessing character, motivation, hustle and the like. Your best interviewers can do that. Magic is watching them interview someone as compared to a “typical” interviewer.

You can automate the collection of feedback. Assessing that feedback, discussing it with clients, and prioritizing what to do about it – you dare not automate this work. When clients invest their time in a response to provide you with feedback, how you consume that feedback is critically important. Scanning it for keywords and soliciting additional details is huge.

Leverage your automation against the mundane, tedious and mind-numbing in order to make more time to keep the magic and guard those who create it.

Lose the magic and your company is just another business customers don’t cling to.

Photo by audrey_sel

When problem solving, look for simple solutions

Problem solving discussions on news broadcasts, in newspaper op-eds, on social media, and in political speeches have a consistent thread: “We can fix it by changing (one thing).

Most problems are not particularly simple. Societal and economic problems are incredibly complex, even in a small community. Winning a game of chess against Bobby Fischer or IBM’s Watson might be easier.

As a result, problems usually require a multi-faceted approach. Unfortunately, that often tempts us to eliminate any “one thing” strategy under the presumption that it’s ineffective, naive, or “too simple”.

Problem solving cause & effect

Rotary has for decades funded and built simple hand pump water wells in villages where there’s no dependable, convenient source of clean water. Many other organizations do similar water projects.

Does convenient access to a dependable source of water (ie: eliminating a three hour round trip hike) solve 100% of a third-world village’s problems? No. However, gaining easy access to clean, disease-free water for a village’s people is comparable to the impact of U.S. rural electrification projects of the mid 1900s. Electrification didn’t solve every rural problem, but it had a huge positive impact on rural communities.

Vilfredo Pareto was an Italian engineer, sociologist and economist of the late 1800s and early 1900s. While he “invented” modern microeconomics, many recognize his last name thanks to his “Pareto principle” – what we call “the 80/20 rule”. The principle states that 80% of effects come from 20% of causes.

Is it accurate to six decimal places? Probably not. Does it describe cause & effect in 100% of situations? Probably not. Does it describe a large percentage of cause and effect in business and society? Pretty close, I’d say.

If a single, simple strategy or tactic solves 80% of a problem, I’d call that a pretty good start. You may not have implemented a perfect solution, but you’ve made a boatload of progress.

Expectations matter

Managed expectations go a long way when solving problems.

Name the last time you solved a problem with a single solution and that solution performed perfectly 100% of the time, in every possible scenario so far – and can reasonably be expected to continue solving the problem in the foreseeable future.

A simple solution is often dismissed because it doesn’t solve the problem 100% of the time, or in 100% of scenarios where the problem can occur.

The “Do Not Call” system is a good example. Elected officials seem to agree that robocalls, cloaked and spoofed calls need to stop. Yet they’ve done nothing about it and continue to exempt themselves from existing robocall legislation.

While technology, laws, and a few vendors make it very difficult for us to solve 100% of this, you can solve 80% of it by using a Google Phone number when you don’t expect or want that party to call you. This is particularly true when the data is somewhat publicly accessible, such as voter or website domain registrations.

Google Phone will take those calls / texts, letting you avoid numerous unwanted interruptions via your cell.

Refining problem solving

Most solutions won’t resolve 100% of a problem’s scenarios. If they do, they’re often incredibly expensive, difficult to implement, hard to use, or all three. Even so, edge cases still find their way in.

Despite that, 80% isn’t always enough. Instead of looking for perfect solutions, try iteration. If your first simple solution solved 75 to 80% of the situation, look at what’s left.

What additional simple change can you make to fix the majority of the remaining situations? If you have 100 problem situations, your first 80 / 20 solution leaves 20 situations to resolve. Solving 80% of the leftovers leaves only FOUR percent.

Look at that again: Two simple solutions take you from 100% to four percent.

If you need to, refine again. At some point, the ROI of the next solution will tell you it’s time to move on to other problems.

Imagine that a single tweak to your sales process results in closing 80% of the sales you weren’t closing. Or that a single change in your manufacturing process reduces costs, in-use failure, or warranty claims by 80%. Neither are 100% solutions, but I doubt too many would object to that level of improvement.

If your approach to problem solving starts by looking for simple solutions, testing, implementing and iterating, the number of problems you face and the time and expense invested in dealing with them is going to shrink significantly.

What would you do with that newfound time and money?

Planning got you wrapped around the axle?

It’s that time of year: Time to assess the year as a whole, work-wise, and figure out how to go forward with what you learned. Yes… it’s time to finish next year’s planning. Yes, finish it. If you haven’t started, carve out some time over the next two weeks. I know, the holidays are here and your schedule is crazy.

Keep in mind that no one wants a meeting with you at 5:00am, so you have that time to yourself. Get up 2 hours early for a week or so. Use the solitude to complete your 2018 planning, getting yourself and your company ready for forward progress.

What didn’t go well this year?

Let’s get start by getting the ugly part out of the way. What didn’t work this year? What was unsuccessful? What didn’t live up to your expectations? What was a total failure?

Of those, which can be eliminated in the upcoming year?

For the things that didn’t go well, assess what happened. Was there a lack of planning? Did the financials work differently than expected? Did a project need more time, money and/or people than was allocated? Did the people involved need additional training or tools? Did you need different people involved?

Make a list.

What went well this year?

What went well this year? What things went so well that if they went the same way next year, you’d be pleased with the outcome? What has to happen to make things go that well for another year? Is there anything about these aspects of the business that can be improved? Is there anything you can learn from the year’s successes that you can use to improve the things that failed or disappointed this year?

Add whatever came of this process to your todo list.

What’s misunderstood about your products & services?

Failures often start as misunderstandings. With client-facing projects, it’s critical to watch what happened rather than assume why something failed.

Do you have a product that generates lots of returns that aren’t based on material or fit-&-finish complaints? If so, watch your customers try to use these things. This can be uncomfortable, but it’s hugely valuable. People will struggle, or make different assumptions than you would. You’ll see where they are frustrated & wonder how they got to that point.

Observation will usually provide the insight needed to fix the problem. With any product or service experiencing substantial returns (or churn), dig a little deeper into why people return them. There’s always something customers aren’t telling you. They bought a product, so they care about what it does. They haven’t told you the important thing because they haven’t been asked the right question.

Got a few more things on the list? Keep going.

Little hinges swing big doors

With that list of new tasks, you might feel a bit overwhelmed. It might look insurmountable, but it’ll be fine if you break it down into achievable chunks. It’s easy to look at the list you’ve made and freak out a little.

Take a deep breath.

There are probably things you do now that someone else could do, or that could be automated, or that when you really think about it… don’t need to be done at all or as often.

For the next four days, set aside 30 minutes per day:

Day One: Review your daily / weekly todo list for recurring items. Eliminate one that really doesn’t have to be done, or that doesn’t have to be done every week.

Day Two: Identify one daily or weekly task that can be automated and get the automation process going. It doesn’t matter how. Use IFTTT, ask a programmer, ask someone else to help you automate it, etc. Don’t let the how get you stuck. Ask for help.

Day Three: Delegate one daily or weekly task. “I don’t have time to train someone” & “It’s too easy for me to do this” are common refrains. Do it anyway. Invest 30 minutes to teach someone how to do something so you’ll never have to do it again. You’ll improve both your job & theirs.

Day Four: Review what’s left. Try to consolidate any of the tasks that remain.

A week later: Now that you’ve seen the impact, can anything else be delegated, automated or eliminated? Open time in your day for higher value tasks that only you can do.

Plan a 2018 that leverages what you do best.

Photo by Infomastern

Quality management’s slow ROI

We talk about numbers, metrics, & dashboards from time to time. One of the more difficult things to measure, much less manage, is quality.

Is there a single measure?

Some might suggest Net Promoter Score as an ideal single measure. NPS ranges from -100 to 100. It represents the willingness of a company’s customers to recommend their products & services to others.

If your business makes / sells cars, what single measure indicates your overall quality? Number of recalls per model year? Number of cars returned under lemon laws? Annual average cost of warranty repairs? Repeat sales?

Quality management is difficult

What makes it so hard to manage & measure quality?

Cost: Quality management systems are expensive, at least they feel that way. If you manufacture things (including software), the investment necessary to measure & report quality can easily approach the cost of producing the product. Finding the ROI is difficult at best, while the price sticks out of your P&L like an ingrown toenail.

Time: Quality control isn’t easy, fast, or simple. Measuring & reporting quality either during or immediately after the manufacturing process is a complex, incrementally-built thing. It takes time to build. If your team’s culture is focused on speed above all else, quality management may not make your “projects to implement” list.

Quarterly expectations: Time-to-return-on-investment compounds the difficulty. Quality control feels like an expensive, plodding animal, making it easy to view as an extravagance rather than an investment.

Accountability: Quality measurement can feel like blame creation, rather than data collection. Accountability must extend beyond the head/hands of the worker to the team’s management, systems, and to the training & tools provided to that worker. Quality work is accountable by design, and rarely happens by accident. It’s resilient, running for days or weeks at a time without stopping. It’s ready for the edge cases that try to inject chaos into your customers’ world. Customers appreciate when the products they buy can take a punch.

Culture: Quality isn’t a job. It’s a value. If your team sees it as an incumbent part of their job, it will change their work, how they work, & how they think about their work. If someone doesn’t see quality as part of their job, they may need training. If training fails, they may fit in better elsewhere. People who value quality don’t want to work with those who don’t value it. Who would you rather lose?

Every job is a quality job

Years ago, a leadership instructor moped into the room after a break & started droning on in monotone. He sounded like he was having the worst day of his life. After a few minutes, he took a break. When he returned, his mood was positive & very happy to be there – despite being in the same room with the same people.

He stopped for a minute & asked if anyone wanted the old, depressing guy to return. No one did. His lesson from that little act was that “Every job is a sales job.” If you’ve ever been “greeted” by a sullen receptionist, the meaning of “every job is a sales job” is obvious.

The point? Every job is also a quality management job.

Like the sullen receptionist, it only takes one person, event or action to make us forget the good work a business has done. Similarly, when one department’s role in quality management fails, it devalues the work of the rest of the company.

Quality management systems help us monitor & correct these things before they cause reputation damage.

Forests, forest fires, and reputation

In a world dominated by short term views, quality management’s slow ROI & difficult to identify returns seem too expensive & time-consuming to invest in. Even for those who invest, a ROI search in their accounting system comes up empty.

As a result, a bad financial period makes it easy to cut what seems like an extravagance that isn’t contributing to the bottom line.

Think twice.

Quality & reputation can be both sturdy & fragile, like a forest. It takes decades to grow a healthy forest. Reputations grow similarly.

Like a random lightning strike, a carelessly discarded cigarette butt, or an abandoned campfire can destroy a decades-old forest in hours, a change in quality that goes undetected can cause reputation damage that takes months or years to recover.

Does your business have months or years of staying power? In a pinch, you can borrow to bridge a short-term cash flow gap.

You can’t borrow reputation.

Went to the gym once. Didn’t work.

You’ve probably heard about things that didn’t work in someone else’s business. The story probably included an assertion that whatever isn’t working for someone else also wouldn’t so won’t work in yours. The tool itself is generally irrelevant. More often than not, the problem is a lack of consistency.

Execution isn’t easy. We do the wrong things. We do the right things at the wrong time. We fail to prioritize, or prioritize poorly – often doing the urgent rather than than the important. Each of those things have their own solution, tactic, or cure. The challenge is executing every day, every hour, every appointment – as appropriate for the solution, tactic, or cure. To be as effective and efficient as possible, all of these things require consistent execution.

We all have a ton of things to do. It takes a systematic intent to consistently eliminate tasks of no / low value, making room for the high value work our peers and customers need most.

Consistency gives

Consistency has a number of benefits. If you are consistently good, people will depend on you / your company – and soon get to the point where their expectations are that you will always do, say, and deliver what they expect. This clientele will tell people. Some of them, the most rabid types, will tell lots of people. A small percentage of them will practically take it as an insult if one of their friends or colleagues don’t use their consistent vendor.

Consistency gives your clients something steady to latch onto at a time when many of them feel there is little they can depend on other than themselves. Outside of your spouse and perhaps a few others, do you have a vendor you can depend on no matter what? One that you would bet your business on? Think about the peace of mind that would give you if you had that kind of vendor (or vendors) in place.

Consistency is a quality you can sell, price higher, and use as leverage when competing for a new customer. Anyone can make a single sale. Consistent vendors make that sale while claiming an asset – a new, long term customer.

Consistency takes

Do you have vendors or places you do business with as a consumer where you always have to remind about delivery or deadlines? Do you frequently have to correct a vendor’s work or invoices / paperwork? Do their work habits force you to be the one who must consistently follow up about promises, on-time delivery, service windows, quality and completeness? Is that the exception or the rule?

How does that make you feel? What’s it feel like the next time you have to purchase or get service from a vendor like that? Do you dread it?

Are you repeatedly changing vendors in an attempt to find one that you can consistently depend on? How does that feel?

Does your business track churn?

Churn happens when a business gets X new customers and loses Y customers each month. If you have to track it, you’ve probably got a churn problem. Maybe it reflects the direction and growth of your MRR (monthly recurring revenue) due to your business model.

Churn happens because customers cannot depend upon multiple vendors in your market. Yes, others are part of this as well, otherwise new customers wouldn’t be filling YOUR bucket that’s also leaking customers every month. Some may be new to the market, but a reasonable percentage of those new customers are coming from other vendors who aren’t taking good care of them. How long will you keep them? Consistency is a factor.

If you ever ask a former customer who churned away from you, they will almost always say they left because of price. Price is an easy excuse to use and it’s one they know you will be least likely to argue about. However, churn is rarely about price. More often than not, it’s the last straw after a customer has lost patience in the consistency of your product / service quality. First they get frustrated, then the investment seems like a waste, and finally, they’ve had enough.

No one gets into business to intentionally be bad at something. It takes effort. Wasted motion. Lost focus. Lack of intent.

Process by process, employee by employee, consistent execution improves quality. Going to the gym once doesn’t produce ideal results. Neither does inconsistent execution.Photo by Dan Harrelson

The ingredients of effective criticism

Today we’re going to use a common political event (and some football) to discuss the effective delivery of criticism.

Recently a new candidate joined a local political race. The new candidate’s campaign has spent plenty of time pointing out things that are broke, need attention, or didn’t go well. That doesn’t mean the candidate has nothing to say, nor that they have nothing valuable to add to the conversation about how their community is run. Even so, this “list” dominates their campaign while offering no specifics about their qualifications for office.

Criticism is not a qualifying skill

We all have the right to bring attention to things that aren’t working or need improvement. Even so, the ability to identify problems doesn’t qualify us to run the organization exhibiting those problems.

For example, my alma mater is (putting it politely) having a rough decade on the football field. It’s easy to note my team’s problems (or at least the symptoms), including their consistent inability to win a game after trailing at the half. When this doesn’t happen for six years, it stands out.

The ability to identify the team’s problems doesn’t qualify me to run a NCAA football program. That’s why I didn’t offer a solution. I might have theories, but management expertise doesn’t make you a coach.

The same kind of expectations exist for that political office. It’s real work. The ability to criticize isn’t enough. The job requires related experience.

If you want a job that requires leading the management of a $25 million budget, people expect that you’d have a fair amount of experience successfully managing a budget of at least low seven figures. Criticizing your opponent’s handling of the budget is fair game. Likewise, so is the public’s desire to hear about your experience and specifics about what you’d do differently and why.

If you want a job that requires leading the management of a team of ~900 employees, you should have experience successfully leading the management of a team of 100 or more. Tell us about your management successes, what you learned from your management struggles, and specifically how you’d make things better. Don’t think we won’t be taking notes and coming back to them to remind you of your suggestions if you win.

Criticism in the workplace has similar demands. If you provide context and propose specific solutions, great. If you’re simply complaining – does that help you, the company, or your target?

Embarrassing people isn’t criticism. It’s ego.

While I frequently discuss inept, unfortunate, or unproductive business behaviors I’ve experienced, I avoid mentioning the business. Why? Embarrassing an employee or business owner serves no purpose. It doesn’t improve the lesson / advice. It doesn’t positively serve the reader, or the business. It’s the kind of criticism that accomplishes nothing.

I prefer to shine a light on things a business can improve how they serve their customers. In turn, this gives the business a better chance of not just surviving – but thriving. It should also build job security for their team, and help the owner’s family benefit from the risk they took wh en opening a business.

To make your team’s feedback loop more valuable, teach them how to deliver effective criticism.

Criticism delivery determines the response

Whether running for office, grumbling about your team, or criticizing how you were treated in a local business, how you deliver that criticism says more about you than it does the recipient. It also plays a substantial part in how your criticism is received and the response you receive.

Criticism is not a bad thing. We all need it. It serves the recipient, not the one delivering it. Much of the criticism people given these days serves only the ego of the person doling it out – and does nothing for the person receiving it.

Ego-driven criticism looks like this: “(business / org / person) is terrible at (whatever). Fire them.

Effective criticism is intended and designed to help those receiving it, rather than drawing attention to the provider.

When delivering criticism, include specifics and where possible, suggestions for improvement. Describe the problem behavior / activity / outcome. Compare it to the desired behavior / activity / outcome. Discuss solutions. Ask how you can help. The outcome is usually what needs to be fixed, not the person.

Think about the best criticism you’ve received. What made it so valuable? Consider that when criticizing the work of others. You’re giving them a gift.

Photo by AutrementDit Toronto.

Why your growing company needs to work slower

You might have seen last week’s discussion of automating administrivia and clerical work simply as a systemization of the E-Myth. That’s fair, but remember that the goal was to reduce cognitive load on focus workers. We didn’t eliminate ALL administrivia and clerical work – and you can’t. Discussions on scaling a growing company rarely cover the burden this work creates. The key to keeping this work from bogging things down? Work slower.

Work slower?

A few years ago, Richard Tripp and I were talking about the challenges of installation and on-boarding in complex enterprise environments. He started the conversation by asserting that “Slow is smooth and smooth is fast.”

As he explained, you have to slow down your processes to improve them.

On a rough road, potholes, dips, and washboards make it difficult to drive safely at high speeds. On a smooth paved road, accelerating to and maintaining cruising speed is easier, safer, and more comfortable. The situation is exactly the same for a growing company’s admin and clerical work.

Note the emphasis on “and maintaining” in the previous paragraph. It isn’t fast to repeatedly accelerate, slow down, then accelerate back to cruising speed. It’s jerky and disruptive. If processes aren’t streamlined and capable of consistent speed and volume, then the work is neither smooth nor fast.

A flat tire on a busy highway

Process disruptions kill you when you’re trying to scale operations.

Fits and starts are demoralizing. One-offs to deal with random failures and issues consume a ton of time and take your team off task. This frustrates your team and delays work output – often backing up other work as a result.

These problems impact your operations like a flat tire affects travel on a busy highway. When a car has a flat, the impact isn’t limited to that car – it slows down the surrounding cars.

In your business, work (traffic) backs up, plus the task that suffered the failure (the car with the flat) is completely halted. Any work dependent on the stopped task is also at a dead stop. A shipment stuck in production can hold up packaging, shipping, the loading dock, invoicing, or other areas.

When you work slower, you create time and space that makes it easier to identify and eliminate the bumps and potholes in your processes. “Slow is smooth” takes shape. It’s about reviewing fundamentals, but also about the deconstruction and review of each part of the process.

Hummingbirds and governors

If you’ve ever watched a hummingbird fly, there’s not much to see. By naked eye, the wings are a blur at best. The bird hovers and appears to veer about as it flies. It seems anything but smooth.

In a slow-motion video, the beauty of a hummingbird’s flight is revealed. Every motion is smooth and consistent – motion that looks much different to the naked eye. Likewise, slowing down your processes and analyzing them step by step allows you to identify inefficient motion, poorly designed screens and paperwork, as well as unnecessary steps.

The elimination of inefficient motion isn’t the reason for a governor, but the idea is similar. A governor is a physical device that changes position as rotational speed of the governed mechanism increases. Eventually, rotational speed reaches a point where the governor moves into a position that cuts the throttle or otherwise limits the speed of movement.

Like speed, scaling reveals flaws

Governors are used to limit machine speed, giving the machine a means of protecting itself.  A mechanism without a governor could gain enough rotational speed to tear itself apart.

Your processes at at risk in the same way. If your business is used to shipping 100 items a day or onboarding 15 new customers a month, things change when you double those numbers – or add a digit. Where 100 shipments a day sustained you, 1000 a day might put you out of business. Under those conditions, an ungoverned not-so-smooth business can tear itself apart.

Smoothly-operated, well-rehearsed processes can accelerate to high speed and high volume without exploding – thus “smooth is fast“. You may need to get faster equipment to handle the volume, but faster equipment won’t fix a broken process. It simply breaks it at high speed.

Improving the efficiency and effectiveness of your work processes allows you to be ready to “remove the governor” at any time, without allowing the business to destroy itself.