The Cost of Restructuring

A badly-done restructuring can, instead of restoring a business to health, bring it to its knees even faster. 

A business exists to provide a product or service that people want where and when they want at a price they are prepared to pay.  To this end, the business employs fixed assets (buildings, machinery, equipment), current assets (debtors, stocks, cash), current liabilities (trade and other creditors), debt and share capital.  The final asset is, of course, people. 

These days, the focus on costs results in things being seen very one-dimensionally as costs to be reduced or eliminated. “If you only have a hammer, you tend to see every problem as a nail” as Abraham Maslow said.  

At any one time, a business’ people, assets, liabilities and processes will be arranged and balanced in a certain way to deliver products or services to a certain standard.  When you remove one element (e.g. reduce staff), you alter the balance.  

One familiar example is reducing costs by offshoring customer call centres.  We hear frequent complaints about being unable to understand operators in another country, poor language skills, attitudes and problem-solving abilities.  Result: increased customer complaints (which cost more to resolve) and a shift to another service provider. 

If a process has been set up with a certain number of inputs in mind, it will have to be changed to cope with the new environment.  As many are discovering to their cost, you can’t change one side of the equation without changing the other.

One way of avoiding potentially disastrous scenarios is to review the business process before making changes and/or cuts.  If the changes proposed will result in a poorer quality product or service, then the question to be asked is “Will this result in a reduction in income, reputation or both, and can we afford it?”  Get it wrong and customers will switch, unless they are prepared to accept a poorer product/service in exchange for the same/a lower price.

This all pre-supposes that a business understands what its customers value, i.e. what its Unique Selling Proposition (USP) is.  Those deciding where to make the cuts may not have this information. 

If a business has to cut costs or risk going out of business, it needs to decide which cuts will result in the least “fallout” and then communicate to all stakeholders why it is making those cuts.  Generally, few will dispute the need to ensure the continuing health of a business that is providing a product or service that people consider important.  This is even truer in sectors where competition is intense.  In the latter case, you either reduce consumer choice by going out of business or maintain it by cutting back. 

If a business doesn’t know what its target market is, and what it values and is prepared to pay for, how can it make money?  If relocating a call centre offshore results in increased dissatisfaction (and therefore reduced need), this will reduce revenues as word of the poor service or product quality spreads.  As a result of this, one UK bank has relocated its call centre back to the UK.

I have spent more than half my life working in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy and work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.

Secure Your Business - Effective Business Continuity Planning

A number of the businesses with whom I deal have some kind of contingency plan for when something goes wrong, but a larger number don’t.  Faced by an ever-faster moving world where information is available almost instantaneously and where there is either more than plenty of competition or potential for hugely negative publicity and/or litigation, all businesses need to be aware of what events or hazards could seriously impact their ability to do business.

No one business will require the same solution as another, so each Business Continuity Plan will be unique.  The good news is that there’s a relatively simple framework that you can follow.  It doesn’t matter in which order you address the points below, but address them you should.  Here are some of the issues to consider: 

Location: Where is your business located and how easy would it be for staff, suppliers and emergency services to get there in the event of (say) floods or other disasters?  How do raw materials get there?

Product: What’s your product or service?  What could interfere with its production?  Suppose your main supplier of raw materials can’t deliver?  What if your distributor can’t take goods from the premises? 

Premises: What would you do if your premises suddenly became unavailable for whatever reason?  How long could you operate without them?  Do you need a “contingency” or “backup” office and/or warehouse?

People: Who are the critical members of your team who keep things going?  Who are the ones who must be functioning as soon as possible in the event of a problem?  (Hint: it’s not always who you think it is). 

Power: Most businesses need electricity, gas, water to function.  Suppose your utilities are cut off?

Technology: How reliant is your business on “the computer”?  What happens if “the computer crashes”, or premises aren’t available?

Finance: How will you make/receive payments if you can’t get to your premises?  How do you track which bills are becoming due and which debts owed to you are due?

Communications: How will you communicate with staff, suppliers, buyers, regulatory authorities, banks, lawyers, accountants, etc?  Who needs to know if there’s a problem?  What will their role be?

Records/Information: What records and/or information are critical to your ability to do business?  How do you secure this? 

Environment: Could a problem at your premises affect the local environment?

There will be other issues that you will need to think about for your own business, but the list above covers the main areas of concern to most businesses. 

If there’s a disaster, how long will it take you to recover to “Business As Usual” (BAU)?  What intermediate stages will you go through?  You can only really know the answers to this by TESTING your plan and processes.  The first time that they tested their plans, one of my clients found out that their data recovery processes and plans weren’t effective.  They were able to address this with their external IT contractor, rather than find out “the hard way” that they had no information when it really mattered.

Although you might be able to “wing it” when disaster strikes, the likelihood is reducing for many businesses, so it pays to invest time in planning.  If you need help, talk to me.

I have spent more than half my life working in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy and work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.

Experience Counts

There seems to be a “bias” against hiring older workers, however much employers deny that this is the case.  Youth seems to be the dominant factor (especially as it’s often cheaper to hire a youngster).  If you have a younger person at the head of a company (or, as is more often the case, sifting through CVs and candidates at interview), it’s possible that their attitudes may interfere in the selection process.

Older people may be put lower down the order in the interviewing pile for a number of reasons:

Cost:                “they’ll be more expensive” (maybe in the case of minimum wage jobs), but ask what they expect;

Attitude:         “you can’t teach an old dog new tricks” (myth – age and experience often find a way around a problem); 

Health:            “they’ll probably need/take more sick leave” (myth); 

Longevity:       “they won’t be with us long before they retire” (does it matter if they add real value?  What are turnover rates amongst your younger staff?); 

Threat:             “they may have more experience than I do and I don’t want to be shown up” (insecurity). 

All of the above are prejudices which are not always founded on fact.  So what are the benefits of hiring an older worker? 

·         Maturity and experience.  An older worker is used to working and will have previous experience that you can use without providing additional training.  They may well give more value for money in less time. 

·         With the increasing ageing of the population, they understand how other older customers think and what they may need.  I watched a young assistant try to sell my mother a new mobile – he hadn’t a clue as to what might suit her, and tried to sell her something she didn’t want. 

·         Some jobs or roles may actually suit an older person better (see above).  I’ve spoken to a number of recruiters who have told me that their clients are looking for people with “gravitas” (credibility). 

·         Older people may suit the requirements of particular jobs more than younger ones.  Whilst they may not suit “heavy lifting” jobs, they may be ideally suited for, say, customer service. 

·         Younger people have different aspirations and may be more inclined to move jobs after a short period of time, whereas older ones show more “loyalty”.  

·         Younger recruits may need more training, meaning that the needs of business and customers take second place.   

·         Older employees with prior relevant experience can “mentor” younger ones, allowing business owners to concentrate on growing and running the business. 

Of course, where there are roles where a younger worker is more suitable, but youth and inexperience are, sadly, not ideal requirements for every job…

I have spent more than half my life working in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy and work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.

Are You Investing For Success?

Right now cash is tight, but with the general falls in business activity, you may have the time for those projects, that you didn’t before.

What could you be doing?

Everyone else is waiting for the recovery, and then they’ll all be playing catch-up at the same time. You could be ahead of the rest.

Here’s what you could be doing:

• Examining what opportunities there are – real and “imagined”. What could you do to prepare to take advantage (luck = preparation + opportunity)? What opportunities could you “engineer” to happen?

• Training staff – doesn’t have to be expensive. You could identify a book on a useful skill, buy a copy for each member of staff (or your “senior team”), agree to read it by a certain date and then meet to discuss how the business could implement the skill or ideas in it.

• Keeping an eye on the talent in the market – if others are retrenching, could you be building your staff strength (yes, I know it increases your costs) so that you’re ready for the good times again?

• Talking to customers - to see what they value about your business and making sure that you keep doing it.

• Increase your business’ profile in the local community - offer some low-cost sponsorship, train people in a skill (if that is possible and safe), provide something that costs you little or nothing but that is needed (e.g. old, unused office furniture for a charity, a van or truck to shift heavier items). People will remember that you were there during the hard times.

We’re all working hard to keep our businesses going, but we also need to “work smart”.

I have spent more than half my life working in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy and work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.

Keep your Promises - Effective Customer Management

A number of authors and speakers have referred me to the "Emotional Bank Account”. This is like a regular bank account, but deposits and withdrawals have disproportionate effects on it.

Your emotional bank account is opened by family, friends, colleagues and customers for you, but without your knowledge. You may not be aware of it, but it’s a part of your personal and corporate “brand”. According to Stephen Covey (author of The Seven Habits of Highly Effective People), keeping a commitment or a promise is a major deposit into the Emotional Bank Account; breaking one is a major withdrawal. Equally, our most constant relationships require our most constant deposits into the Emotional Bank Account.

Put this into a family or business context and you see what he means. Every day I read complaints on various blogs, websites and Facebook about people waiting for a delivery man, plumber, electrician or other to turn up, but that person never does turn up. It’s happened to me, and I’ve been guilty of it as well.

When you promise to do something, the person to whom you make that promise has an expectation that you will do it, and builds an emotional anticipation around that promise. If you keep it, what happens? Answer: you earn trust, respect and credibility. These are major “deposits” into other people’s or customers’ emotional bank accounts. You create a positive feeling towards you or your business, and a “good brand”. You get more business – often without any advertising. If things go wrong, you are given more room to manoeuvre because you have huge “credit” balances in the emotional bank account.

Equally, if you don’t turn up when you say you will, or don’t carry out the action that you promised, what happens? Someone in a call centre once referred me to the “small print” as an excuse not to provide a service. I told them that I wasn’t interested in small print, but in the spirit of our agreement - they lost my trust.

There’s no excuse not to warn those waiting for you that you will be delayed or may not even arrive. Almost everyone has a mobile phone these days, and a quick call can be made in seconds.

The bond of trust takes a long time to build, but only moments to break and do irreparable damage to a company’s reputation. This then takes more management time to repair. One statistic says that for every example of great service, a customer will tell three others. For every example of bad service, they will tell nine others. In other words, sorting things out well could earn you three new customers, whilst sorting them out badly (or not at all) could lose you at least nine. It is cheaper to retain an existing customer than find a new one.

A friend who wanted to buy two new trucks recently complained on Facebook that a particular truck company had promised to call him back within 30 minutes with a price, but as at midday on the following, day they had not done so. That friend has 150 friends on Facebook. All 150 will have seen the same story (which named the company) and at least five commented…

Your business can stand out simply by understanding the “emotional bank account” and its importance. I have spent more than half my life working in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy and work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.

Effective Risk Management - Back Up your Information

One of the most valuable assets that your business owns is information.

My clients have information on customers, products, prices, competitors, new markets and prospects, deals in process, cash owed, bank accounts, certificates and registrations and any other number of vital items needed to run the business. This is held on paper, or “on the computer”. However, when I ask them how they back these up, the answer’s often silence.

Anything can happen to your records, whether they’re in paper form or stored on a computer. Your ability to continue doing business hangs on being able to recover vital records at critical moments. Do you really want to be telling that valuable prospect that you need more time to put in the tender, or the tax man that you can’t respond immediately because “there’s been a problem with the computer”?

Equally, if you store all your vital information at the office and you can’t get there due to bad weather, other natural disasters or for other reasons, where does that leave you?

It’s easy to take a few simple steps to secure your most valuable information. Here are a few suggestions and questions:

• Identify what’s important (e.g. customer contact details, business registration documents, certificates of compliance, deal files, invoices, prospect files, and so on). What can your business really not do without?

• How do you currently store it (on paper, on computer) and where (with a lawyer, in a bank safe deposit box, etc)?

• How often do you need to get at it and what would happen if you couldn’t get at it for any reason (e.g. fire, computer crashes, etc)? Would it matter if you couldn’t get at it for (say) one day, two days, five days?

• Do you have an up to date list of all vital contacts – names, telephone numbers, email addresses - (e.g. customers, suppliers, bank, accountant, lawyer, local emergency services, business/industry group, regulating group)? Is this available wherever you are?

• Do you have secure fireproof storage on site sufficient to hold all sensitive and vital files or documents?

• Do you have access to secure, fire and flood-proof storage away from your business premises?

• What is your “contingency business site” if you can’t get to your business premises for any reason - can you access your vital information there?

• Can you obtain copies of all vital business documents? How easy would it be, how much would it cost you and how long would it take?

• Does your business have the ability to scan documents and store them electronically?

• Do you have the ability to back up what’s stored on your computer(s) to a secure offsite location and to access it from outside the office?

If you answered “Don’t know” or “No” to more than five of the above, your business could be at risk. The good news is, you can take some very simple action right now to improve the position.

The concept of the “paperless office” (which doesn’t exist, by the way) has resulted in “computer complacency”. As long as it’s “on the computer” or “online”, people think they’re secure. However, when you lose your computer due to a virus, “system crash” or to the office being inaccessible, you have a problem.

One answer is to back up vital computer files at the end of every day to a secure external storage device (I do this) which is kept overnight in a separate location. The separate secure device might simply be a memory stick or a portable external hard drive (I have a 1 TB drive which has more than enough space). Don’t forget that Data Protection laws may constrain you on what confidential information can be kept outside the office. Make sure that any data on external memory devices is encrypted or password-protected.

My appointments, contacts and ToDo list are on Apple’s iCloud service, allowing me to access all these wherever I am (as long as I have access to a computer). Equally, Microsoft and other providers offer “Cloud Storage” for a price to which you can back up documents. Your only issue then is whether you want to have your vital information in the hands of someone else. If you have one, speak to your IT service or outsourced provider and see what solutions they have.

Statistically, the longer things run smoothly, the more likely it is that one day, you’ll have a problem. Act now to make sure you can survive.

I have spent more than half my life working in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy and work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.

Encourage Customer Loyalty - Positive Customer Experience

You don't need to swim faster than the sharks... just faster than the other guys in the water with you!

What keeps customers coming back for more? The answer is the experience they have of dealing with your business.

Businesses have to work hard to get this right all the time, although some don’t seem to bother. These may be “monopoly providers” (a lot of government departments, for example), of being the only provider in a particular area (so they have a “captive market”) or being the sole provider of a particular product or service.

The problem is, if another business with the same (or similar product/service) comes along and provides a better experience, customers will vote with their feet and go to the new competitor. Customer Experience is often confused with Customer Service, but the two are different. Service is a very important part of the whole experience.

Often, the problem lies in awareness (or in a lack of awareness) of what makes the difference. From experience, trial and error, I’ve developed a list of a few areas on which to concentrate - a basic “Customer Experience Audit” checklist. This can be used by any business and changed or added to suit its own needs:

• Entrance
• Exterior
• Reception/Greeting
• Waiting Area
• Interior
• People
• Uniform
• Attitude
• Checkout
• Returns
• Telephone
• Complaints
• Loyalty awards
• Consistency

Every one of the above is a “touch point” on which customers judge their experience, and you will find others for your own business. The point is that there are areas that make critical impressions on customers and will either have them “coming back for more, or running out the door”.

Different businesses will want to deliver different customer experiences. The experience at an upmarket store will be very different from a “low-cost” provider in many ways, but you’ll be surprised at the similarities.

Make sure that you agree a Customer Experience Policy with your team and then put it into action. A positive experience in your business will ensure that you stand above the competition and that your customers keep coming back for more.

I have spent more than half my life working in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy and work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.