Have you often heard folks say things like “ I wish I didn’t work here” or “I cannot stand that customer” or even stuff like “I wish that the other teams’ in my company are not successful in that project” or stuff like “”I wish I don’t have to pay so much for my employees”.
These are real expressions that I often hear from employees or business owners working in small and large companies. Just take a moment and think about the specific comments above. I am sure some of those comments above were done by folks at the spur of the moment or were inadvertent.
Nevertheless, just imagine not having a job to look after your family or pay for your mortgage. Imagine if you cannot stand to be in the presence of most of your customers, or even if those customers that you cannot stand come to know of it. Further, just Imagine if the other teams in your company do not succeed and fail and if they affect the overall profitability of your company. Also, just think about losing a valuable employee whom you deem to be “paying too much”.
These statements, feelings, thoughts and actions are often dumb, myopic and self destroying and do not give any credence to its end consequence. In other words, the proponents of these miscalculated statements are not “connecting the dots”.
I am sure most you have come across a kids’ game known as “connect the dots”. These are games given in family restaurant to ensure that kids are occupied and are not bored, whilst they are waiting for their food to arrive. In this game, the player is required to connect the numbers which appear random on a sheet of paper. Once the numbers are all fully connected, those random dots will reveal an image or picture of something.
Business and life itself is made up of a series of dots that appear so discrete and disparate. Very often, instances, cues, actions, suggestions, choices, decisions and others appear so unconnected. Despite the seemingly inconsequential and illusory image it gives, there are significant consequences to each of those choices that we make. When the series of actions, words and deeds are connected, they give us a truer picture. This is called “connecting the dots” in business.
Let me share a few examples wherein I personally have noticed small business owners not “connecting the dots” to the detriment of their business.
Not “connecting the dots” when making hiring decisions
A long time ago, in a distant country that I was based in, a small business hotel owner was seeking to hire a General Manager to run his business. The key qualities he was looking for were, experience in the hospitality industry, good people and communications skills and the ability to develop and drive new and incremental business to his hotel. He had many candidates to choose from.
There was one particular candidate that stood out from the rest. This candidate had more years of verifiable experience. The only problem was that the stronger candidate was not his preferred ethnic origin.
The owner was in a dilemma. He had another candidate that did not have the same number of years of experience and his entire experience was not verifiable. This other contending candidate, (albeit the weaker one), was the same as the small business owner’s ethnicity.
I know that most folks are comfortable around with people having the same cultural and social background. Please do keep in mind that there are also laws in most countries that ensure that discrimination based on one’s race is illegal. Also, do reflect that these laws were obviously put in place as there was blatant discrimination taking place.
This small business owner called me for my advice. He had a personal dilemma. He felt more comfortable hiring his “own kind”. However, he admitted that the other candidate, who was not of his own ethnicity, was far superior than the candidate who was had the same ethnicity as the owner.
Just think about the irony of this situation. Here is a man who had invested a considerable amount of his own money. This man who took such a risk in investing in this hotel had let his personal feelings and emotions blur his decision making.
Despite the obvious, this businessman was in a dilemma. The decision was obvious for me. I encouraged the SME owner to go back to his original objective, as to why he wanted to hire a General Manager for his hotel. I further requested him to answer honestly, as to who can deliver his growth ambitions. I asked him to “connect the dots”, as to why he would or would not hire any one of the other candidates. The owner did the right thing and he hired the stronger candidate.
Just imagine folks, that if an individual owner is so clouded in his hiring judgment, what about all the businesses that have institutional investors run by managers who have neither risks nor not invested their own money. Not many connect the dots around them!
The next time you hire or make an offer to a prospective candidate, please connect the dots! Do not judge the person based on his or her looks, color, accent, sex, height, weight or the color of their hair. Just go back to your objectives and connect the dots! If your objectives call for a “green, short, fat, one eyed jack” – then, so be it! Nevertheless, don’t blur your decisions with non relevant emotions and issues.
Not “connecting the dots” is more common than you think.
In my over 30 years of professional experience across different countries, in both emerging and developed economies, I have often experienced many instances where I had observed small business owners or SME investors not connecting the dots.
I will discuss a few examples with some of their implications below. I am not suggesting that small business should not be prudent and economical where possible. What I am suggesting is that you reflect upon whether an action or a decision is optimal, and whether it is in the best interest of a small business owner to take such “unconnected” decisions.
Please also read my previous article which is relevant to this discussion: Achieving business breakthrough by accentuating your virtuous cycles and avoiding a bust by disrupting your vicious cycles
Hiring few or excessively cheap labor for customer facing activities.
Imagine not having enough people to serve your customers. To add to this conundrum is the expectation that the existing employees will have to work harder to serve your customers, with lesser pay than what is normally paid in the industry for a similar job, working for a similar company.
However, as you would know, unhappy employees mean unhappy customers. What this also means is that, unhappy customers don’t come back to buy more. Unhappy customers will tell other potential customers of their dissatisfaction. Further, unhappy employees leave the business. Just imagine that you have just lost all your learning curve cost advantages as you have lost some experienced folks in your business.
In other words, you just lost your competency. Your core competency (especially in a service business) is derived from your experienced employees! Think of the consequence of this unseeingly trivial action/s is on your business!
Location! Location! Location!
I have seen many small business owners establishing their businesses far away from the main business district in which they operate, just to save money on rental.
Getting an optimal location with the lowest rental possible is the right thing to do. Getting into a location just because it is the cheapest is not the answer.
Your customers, employees and business associates need to access your place conveniently. If they cannot, they will exit at the earliest opportunity and bring with them your potential business opportunities.
Please “connect the dots” the next time you have to make such a decision.
Not treating employees with respect and as professionals
I have noticed in the many markets that I have worked; many small business owners treat their employees with disrespect and at times with disdain.
Small business owners and SME investors need to know that they have to treat their employees well.
Please do keep in mind that most human beings respond to empathy, kindness and respect. They will give you much more that what you expect. You don’t have to show them that you are the “boss”. They already know that. This does not mean that you cannot chide them when they slacken in their performance. Remember and “connect the dot” – when you respect and treat your employees professionally, they treat your customers with a respect and as professionals.
Not creating an environment conducive to employee contribution and productivity.
Many small business owners that I know are unnecessarily paranoid and secretive of their business development activities. I am not suggesting that you cannot be paranoid about your competition.
Don’t extend the paranoia to your employees. If there is a bad apple in the midst, fire that person. Don’t exert excessive control and be paranoid of all your employees.
Remember that it is the same employees whom you depend on, to run your business. Employees respond trust with trust. I have noticed many trusted employees contributing significantly to the growth of many small businesses that they are working in.
Almost universally, these employees were empowered, fully trusted and committed to the business. “Connect the dots” and remember that paranoia and trust is a two way street!
Not getting rid of non performing employees.
The odds are high that there will always be some employees that don’t perform..
Get rid of the non performer – He or she might be even your spouse’s kith and kin. Fire them immediately as the costs are three fold to you.
- At the onset, you are paying some one for doing nothing.
- Secondly, you are bearing the opportunity cost of not getting that incremental revenue from a potential new employee who should replace this non performer.
- Thirdly, you are bearing the opportunity cost of other employees having to chip in for this non performer, thereby reducing their contribution.
Always connect the dots when dealing with a non performer. The costs are much more than that meets the eye.
Not firing a prima donna or a disruptive employee
Get rid of disruptive employees and ones who walk around as though they are the prima donnas with whom the business is solely dependent on. Communicate clearly that no one is indispensable. Never sell you soul to keep a prima donna. It is not worth it. As a famous CEO of one of the largets telecommunications companies in the world once said “You don’t need a team of stars. You need a star team”.
Prima donnas and disruptive employees are “party poopers” who suck the air out of everyone. They affect employee productivity and morale. Connect the dot and recognize the opportunity costs that you bear by keeping such disruptive employees. Know and make it clear unequivocally, that your business is not and will not be built on one or two people!
Limiting your marketing investments to save money
As a marketer, I am acutely and keenly aware that many small business firms try to save on their marketing spend by very limited or no promotional activities. Many of these small businesses think that they have done enough promoting by just releasing a press release or participating in some exhibition or event and blasting social media messages to an untargeted world wide audience. This is counter-productive and plain ignorance.
You need to invest in promotional activities to create awareness before your proposition is relevant to your target base. Connect the dots and think about this. Even, before your proposition is relevant it has to work and be functional for your target market. Also, therefore, do not take short cuts in the design of your proposition. Don’t save money in the basic experience of your proposition.
Keep in mind that you cannot be all things to all people. Segment your market and target appropriately. Blasting a communications campaign to all and sundry is just a sheer waste of money and can be counter-productive to your brand image, as most people are annoyed at being slammed with junk mail. Remember
You can get loyalty and repeat business only once your target market is aware that you exist and once they know that the functionality of your proposition works. Your target market has to connect emotionally as well to your proposition. Keep in mind that the emotional relevance of your proposition can only happen if the experience works or rather if it is functional. Only then can you think of repeat business. In other words your business will not grow without sufficient investment in your brand.
In other words, you need to connect the dots and know that taking short cuts means that your business will limit its growth potential and might even not sustain in the long run.
Saving money by limiting channel incentives
I recently came across a company that limited its pay out to its sales employees. These front facing sales employees’ incentives were capped were at 110% of their expected target delivery. The SME owner who came out with this policy have not connected the dots! In most companies, 80% of the incremental new sales come from about 20% of the sales folks. These folks are driven by their need to be the top earners. Most of these high performing sales folks kept their new prospects close to their chest, as they were limited to the 110% achievement target. Just imagine the potential if this compensation target was designed around 200% or 300% cap on their variable pay. In fact, I would even go as far as to suggest why many SME owners and or small business investors even limit the incentives achieved over and above given targets! The owners of this SME obviously did not connect the dots. They were (and still are) limiting their own growth with this artificial limitation based upon some purported belief that top sales performers are not necessarily motivated by their incentives!
Please also read my other relevant article on “what is the the art of sales leadership?”
Other examples of SMEs not connecting the dots
I have many other examples where I have personally observed small business owners not connecting the dots to their own peril. However, for purposes of dexterity and clarity, I will not attempt to elaborate all of them nor will I attempt to explain why in each of these scenarios the owners are not connecting the dots. However, please do keep in mind that is not a Mutually Exclusive Completely Exhaustive (MECE) list, but rather a sampling. The summary of the examples below are real. Its implications and consequences for a SME business is insurmountable. Take a moment and figure yourself as to why these SMEs are not connecting the dots.
- Not putting in place structures, processes and people with clear empowerment, responsibilities and accountabilities
- A large number of SMEs give limited or no empowerment to their key employees.
- Quite a few Small businesses invest in excessively large number of people for non-core and administrative support services.
- Not all SMEs invest adequately in information and telecommunications systems.
- Most SMEs take short cuts in the design of the customer value proposition including products or services.
- Most SME owners keep their prices artificially high, based on fallacious advice from their accountants, who do not necessarily have a cross functional view of their business.
- SME investors often set unrealistic margin expectations and also expect higher commitments from customers.
- Limiting incentive payments to channel partners with no accelerators for increased business.
“Connecting the dots” is an important concept that most SMEs should know. More often than not, the implications of an action or decision that they make about managing their business are more important than that meets the eye.
The ability to reflect and see the implications of an action or decision are most critical for most small businesses, as their very survival might depend on it.
The principles discussed here are not limited to entrepreneurs but rather is relevant and fully applicable in one’s personal or professional life.
Please do connect the dots always. Do remember that just because you keep doing something, over and over, it might not be the right thing. Conversely, just because you are not doing something it may not necessarily mean you are doing it because it is the wrong thing. It could just mean that you have not connected the dots! As the famous Indian Mahatma Mohandas Gandhi said “An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it”.