Monday, 3 July 2006

Gaining Some Perspective in Business.

Though I don’t have any, a fair few of my friends and colleagues have children and, increasingly, I can conclude they are a strange (though endearing) species. A good friend of mine has a young girl who insists she is an adult, and goes to the point of dressing up in her mums clothes and jewellery and happily waltzing around the house repeating conversations she’s heard, and generally acting like a bit of a madam. While she is totally convinced that yes, she is indeed a thirty year old Sloane-wife, the rest of the world giggles lovingly at her!

A strange example you may think, but one which holds much relevance in the business world.

Part of my work is to go into businesses which have reached a ‘wall’, whether its financial difficulties, an inability to grow, or another reason. Often, in these scenarios I would liken the business to the girl wearing her mum’s clothes.
Example: I went to see a small (but superb!) design agency that had a problem retaining staff. The company (including directors) consisted of 4 people, and in their efforts to grow, had haemorrhaged through eight business development managers in under a year. The problem? The guys at the helm of the business were running with a ‘big business’ mindset in a small company!

Big businesses NEED to have certain levels of control, reporting, management information and so forth to survive. Often, they pay better, and can offer perks to individuals who take part in this often ‘anal’ bureaucracy (which afflicts many large firms) but, ultimately, the behaviour is warranted and accepted because of the size of the enterprise. Remember, also, that large businesses have the PEOPLE to cope with this level of control!

The difficulty occurs when small businesses try and apply the same levels of reporting and control on themselves and their employees.

In the design agency example (above) the business development managers who were tasked with growing the firm, instead of winning new accounts, spent most of their time engaging in reporting and paperwork creating specifications of NASA detail for miniscule accounts! Relative to the fees generated, this simply was not warranted. This tiny firm was also running for every accreditation they could think of (including ISO, IIP and more), generating more paperwork and (unfortunately) wasted time. So, instead of getting out there and developing new accounts, the sparkly new business development managers ended up leaving (usually on bad and frustrated terms).

Net result? The firm wasn’t growing….

Solving this problem was quite arduous and involved convincing the two business owners to be considerably more flexible, allowing a greater degree of autonomy, and implementing different methods of target management and reporting. Also changed was ‘management attitude’ stripping away the boss/minion hierarchy and replacing it with more of a ‘team’ mentality. Net result? Turnover increasing from £500k to well over £1.5m over a two year period!

In our ‘debrief’ one of the things which cropped up was also a massive change in client perception who, with the new relaxed attitude, also saw the firm as more professional, and were more likely to recommend them to clients (thus generating even more new business). A poignant remark, for example, left by a client (friend of the firm) on a email when asked about the changes, “I remember when [company] first came to see me, from their outgoing materials, I expected a global corporation but was confronted with two-guys-working-from-their-garage. It always made me laugh, though got frustrating at times. Now, though, they behave more like a small business, and doing business with them is altogether more fun! Point proven?… I spend more with them”

The motto here? Instead of being the little girl wearing her mums clothes, your enterprise needs to behave more akin to its size. Much like children, companies grow, and clothes change to reflect that!

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