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Sunday, 23 October 2016

Customers Who Give You Grief? Like The Dalek, Terminate Them!

Conventional wisdom has it that we must above all else, tend, nurture and cherish our customers because without them we don’t have a business.

All very logical but what happens when our relationship with a customer turns sour?  Do we still try to tend, nurture and cherish them or do we become a little more assertive to bring the relationship back on to an even keel?

One or two examples.   I had a member of my Vistage CEO peer group who had developed a strong link with a large high street retailer who had become perhaps 50% or about £3 million of his turnover.  This made him very vulnerable and the customer knew it.

The consequence was that there was a concerted campaign to make him reduce prices, put punishing procedures in place to make him work to their demands and other even less charming controls on his business.

This all meant that he had to employ four people who were totally dedicated to satisfying the demands, both reasonable and unreasonable, of this retailer and to make things worse, the overall result was that margins almost evaporated.

He brought the issue to a meeting of his Vistage group and he said that he had decided to ditch the customer and reduce the size of the business so that he could retrench and get back into a sensible was of working.

This he did.  He told the customer that he wasn’t prepared to supply him any more to which the startled customer said that he couldn’t do that.

Just try me” he said and within three weeks had terminated supplies.

It took about a further six weeks for the customer to come back and with a newly polished relationship things came back to normal again.

On another occasion a member of the group did much the same thing saying that he was so fed up with dealing with a particular customer he had decided to ditch them and once again it cleared the air so that normal service could resume.

It takes a deal of courage to take this action and a good deal of confidence that nobody else could or would give the same service that they had done.

In the end it is far better to do business with people we like, people who appreciate the service that we give, who don’t take liberties and who don’t use their buying power to make unreasonable demands.

Yet another Vistage member had a business with around 200 customers 190 of which were small wholesalers, the balance being in the main, large retailers.

In this case he decided to bunch all the smaller customers into one group and offer them as a job lot to a very large wholesale customer who accepted with enthusiasm.

The member then concentrated on the few very large businesses and was able to achieve truly remarkable growth as a consequence.  The truth was that the small wholesalers were very demanding, usually placed very small orders, were always complaining and were terrible payers all of which took time and effort to administrate.

The key to all this is to make sure that your customer research is kept up to date, that each customer and sometimes each category is ruthlessly examined on a regular basis and the acid test of gross margin levels is implanted into the day-to-day operation of the business.

It all sounds rather dramatic but in the end it is worth the effort.  Poor customers are usually a very small proportion of the total so why bother to keep them?  It could open the door to new opportunities.

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Sunday, 16 October 2016

Invictus – a Bleak Poem? No, It’s a Call to Action!

Some time ago, one of my Vistage Chairman colleagues posted a poem called Invictus on the website.   For some reason it has followed me around and at every touch and turn I seem to hear or read about it, especially the last couple of lines.    It is by William Ernest Henley (1849-1902) a Gloucestershire poet, critic and author and this is it:

Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.

In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.

Beyond this place of wrath and tears
Looms but the horror of the shade

And yet the menace of the years
Finds, and shall find, me unafraid.

It matters not how strait the gate,
How charged with punishments the scroll.
I am the master of my fate:
I am the captain of my soul.

HRH Prince Harry linked the name of the poem for his championing of the wonderful series of Olympic type games set up especially for disabled veterans of wars around the world and one can see how the last couple of lines resonate.

My Vistage colleague in the USA said that when he showed Invictus to his girl friend she said, “That is a very bleak poem” so he ditched the poem and married the girl.

It is pretty bleak in places but I must say that the last two lines are very powerful.   We live in a world where the perpetual cry is “Someone should do something about it” or “Why doesn’t the Government sort it out?” or worst of all, “I’m entitled”.

Yes, someone should do something about it, whatever that may be, and that someone is the individual him or herself who needs to take on the responsibility.

Until we realise that we are the master of our own fate and the captain of our own soul, then this perpetual harping on wanting other people to sort out our problems will never go away. 

I heard the other day a piece on the radio by Darren Campbell, Gold Medal Olympic sprint relay winner, of his struggles in his youth and his determination to get himself out of the life he was living.  He did this to some effect and it was exactly what Invictus offers.

This is not a political rant for or against the welfare state or even the nanny state but rather a plea for the understanding that unless we take responsibility for our own lives then we will be perpetually in thrall to “someone else”.

Of course and sadly there will always be some who by dint of circumstance are unable to control their lives and it is right that government and the charities step in to heal the breach wherever possible.

This does not absolve those of us who are in a safer place in life to do something to help and at least make some sort of contribution to alleviating suffering of whatever kind.

The grace before and after meals in Freemasonry gives thanks and exhorts us "ever to be mindful of the needs of others less fortunate than ourselves" and, by implication, to do something about it.  A very worthy objective.

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Sunday, 9 October 2016

What Don’t You Know About Your People? Ask Them The Story of Their Life!

A couple of years ago during the summer we (my wife Hilary and I together with Bailey, our Cavalier King Charles spaniel) took a day out in Cheshire finishing up in Chester.  While Hilary went into a well known store to buy something to eat that evening, I stood outside with Bailey and did some people watching.

We were accosted (in the nicest possible way) by a charming African American lady who insisted on showing me pictures of her Cavalier back home in the US and then took several photographs of Bailey.

I wished her well for her trip to England and she said:

Oh, I come here often.  This time I’m here to speak at a conference”.

Intrigued, I asked her what the conference was about and she said:

It’s an Anglican conference – I’m a Bishop” and went smilingly on her way.

I hadn’t even considered her occupation during our chat.  Looking back I suppose that I could have imagined her being a senior administrator in a business or a head teacher, but that wasn’t relevant in the context of our meeting.

The fact is that unless we ask our people or at least give them the opportunity, we frequently don’t know or even think anything about them other than their interaction in the business and their performance.

Too often our people are allowed to come in to work, take off their coats, take off their brains, hang them both up and then do their allotted time until they go home again having put on their coats and their brains.  What a waste of talent.

I have fond in my one- to-one sessions with business people particularly at the first meeting that it can be disarming to say to someone: “So, tell me story of your life” and the result can be remarkable. If the leader then keeps quiet and listens he/she can find just how happy people are to talk about themselves.

I recall an occasion in a previous business that was developing a coated fabric ostensibly to be used for wet suits for divers.  One of the machine operatives asked the technician the purpose for designing the product.

The operative told the technician that it wouldn’t be suitable for use on wet suits and the technician rather patronisingly asked why would he have an opinion of any value.

The operative told him that he was, in his spare time, the secretary of a nationally based sub-aqua club and he was an acknowledged expert in the subject.  To give the company the credit they pulled the operative off the line for a period so that he could give of his expertise and help to develop a suitable fabric.

It is always a matter of giving people the respect that they deserve and of showing genuine interest in them and their lives.  Of course, trust and confidentiality are vital and need to be stressed.

Even more importantly, we can learn so much more about our people, their interests, their hobbies, their families. There is the constant surprise when we find out that someone does something remarkable in their spare time.

And why shouldn’t those hidden talents be brought to bear in the business to the advantage of the company and, more importantly, to the advantage of the member of the team?

Most of them aren’t Bishops, of course, but they are all individuals with feeling, interests and aspirations, and they deserve to be respected as such.

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Sunday, 2 October 2016

Planning a Project? B-HAGs Release The Potential In Your People!

I am a great admirer of the work of Dr Steve Peters and his life-changing book, The Chimp Paradox.  For those of you who don’t know, Professor Peters is a consultant psychiatrist who advised the very successful Team GB cycling team at the 2012 Olympics as well as many other elite athletes.

Reluctant as I am I have to take a very minor issue with Dr Peters.  In the book he suggests that we can’t win all the time and the important objective is always to put in maximum effort and do our best.

We can’t argue with that as an aim but my query is, how do we know what is our best?

Some time ago I was inducted into a fitness programme that included some fiendish exercises to increase mobility. One of these methods of torture involved sitting on the floor, legs outstretched, and reaching forward with both arms, the resulting position being measured.

Creaking a little I attempted the best possible result that turned out to be no better than average to say the least. The instructor insisted that I could do much better and suggested that another 20 cm was attainable.

He then exhorted me to concentrate on this new mark, visualise it being attained then go for it.  This I did and succeeded easily much to my astonishment.

Again the question, is how do we know our real potential unless it is tested?

Athletes use the visualising process to increase their performance and at the top level they are able to achieve great feats.

There is no reason why these techniques cannot be transmitted and used in business and indeed in everyday life. Moreover it doesn’t always need to be in physical terms.

More often we set goals and objectives that in retrospect are easily attained with minimum effort.  Ask yourself does the successful achievement of your goal drive things forward or merely strengthen the status quo?

If the answer is the latter then you are in danger of digging yourself deeper into the comfort zone.

In Vistage we like challenge. Goals and objectives we consider need to be stretched if not to the limit at least enough to make their achievement significant. We use the acronym B-HAG or Big Hairy Audacious Goals (that being the clean version).

I was told a story by a colleague in the USA of a food company that was in need of an injection of energy. Turnover was around $20m and when asked for his projection for next year the CEO just added 10% because he could do that in his head.

The consultant demurred and said that he thought a better objective would be $40m.  This elicited all the usual arguments against such a ridiculous idea until it was suggested that they look at it another way.

They asked that if they were to have $40m as the objective then what would they need to do in the way of resources in order to achieve it?

Please note they didn’t ask how are we going to do that?  A “how” question in that context is almost negative in its intent.

After some discussion the CEO put the question to his team and they went for it. They did the analysis and failed to achieve the goal. They did however hit $37.5m and that is not bad at all.

A caveat says that if you go for a goal that is manifestly impossible to achieve then it will only create dissatisfaction.  Far better to make your objectives SMART, that is Specific, Measurable, Achievable, Relevant and Time-based.

That way the goals can be stretched way out of the comfort zone to next level.   To say the least this gives a great sense of achievement all round and it proves that we don’t always know the true level of our abilities.

Vistage keynote speaker Dr Balaji Krishnamurthy says that the primary function of leadership is to release the potential in people, intentionally.

For your next project set a B-HAG and go for it after first selling the idea to the team. Then make sure that you all celebrate the eventual success.

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