Business owners tolerate a lot, whether it is poor performing staff, process problems, cash flow, IT and the like. In doing this, the level of stress or pressure on the owner (and in many cases – the business) rises in direct proportion.
The two questions I pose are why…….and…..what is the cost?
In general terms, things are tolerated because of either a perceived lack of alternative or an inability to implement change. History shows me that there is always an alternative, albeit it may be painful, costly or difficult – but there is always a choice. The implementation of a solution can also have its fair share of challenges – but when in doubt, simply get help.
As to the cost, well this can vary from a little to a lot – depends on the issue. What does surprise me is when the cost to change is low and ability to change is present, yet businesses continue to tolerate issues which can be costing them a lot.
So here is what I see as the top 5 business tolerations……….along with some ideas on what to do about them.
Not surprisingly, many businesses are not making the money they want to, with approx 3 out of 4 in this category and roughly 1 of these making nothing or going backwards. This can be seen with owners taking very low or NO wages themselves or in the better circumstances – getting a wage but no return for the risk of running a business (ie. no dividends or wealth creation via growing business value).
Action Steps – check into the trading numbers of your business and see what’s actually happening. In broad terms there are only three strategies to improve the bottom line, Increase Revenue, Control Direct Costs and Reduce Operating Costs. By understanding where your business is faltering, you can identify which strategy is appropriate and then set about implementing the correct tactics to drive the bottom line up!
Typically – the toleration is around not being a team, with the business more a fractured group of people with no unity, purpose or clear communication. Frustrations around the people often come from a combination of poor communication, poor training, inappropriate recruitment (for skill set) and a general lack of honesty in performance reviews (or the total absence of them).
Action Steps – put in place appropriate communication and performance boundaries. Employees need to see that they are a valued part of the business, so strong two-way communication lines enable the flow of information. Communication needs to be respectful, but honest. Equally, there needs to be clear boundaries in relation to conduct, expectations and performance at an individual role level.
The Spinning Wheels
Processes and systems are tolerated due to a lack of understanding, adherence or existence. Poor processes in business will cause inefficiency and can cause the production of a poor quality product or service. Frequently there is frustration around a system not performing a function it was never designed to do (ie. cost analysis out of a basic accounting package) OR someone spending hours trying to do something that they don’t have the expertise to do (ie. building your own web site).
Action Steps – Processes and procedures should exist for all of the standard activities – starting with the more critical, dangerous and complex. Systems – be absolute on what they need to deliver and then manage to this. If you are not the expert in the system, then engage someone who is.
The Time Factor
There is a finite number of hours in a day, so each should be treated as the valuable resource that it is. A lack of time in business generally means that home/personal time is sacrificed with this not sustainable over the medium to long term.
Action Steps – Plan your time to minimise waste and maximise productivity. Consider concepts such as the Eisenhower matrix (ie. Urgent versus Important); look for opportunities to delegate; think about the sort of systems which can save time; time lock activities and finally, assess the quality of finish required – as many activities do not need to be perfect.
The Key Man
In many businesses, small and large – everything revolves around a single person – generally the owner. All decisions and many of the duties pass through their hands which mean two things – 1. there is a constraining bottle neck for the business as one person can only cover so many things, and 2. the high reliance on one person represents a significant continuity risk.
Action Steps – consider all of the core activities of the business, identifying the critical elements of each. These critical elements are the ones which generally require more oversight or control – so in the first instance, these should be what the key person is working on – and little else. Secondly, consider how you can then divide these duties across more than one person to spread the risk.
So the challenge is now yours for the taking – stop and consider what frustrations you have in your business and then set about identifying what’s causing them.
Next – work out the cost of these, be it in inefficiency, poor focus, lack of application or capitalising on an opportunity.
Now you have a list of what you are Tolerating and the Dollar Cost of doing this. The question is; what are you going to do about it?