My Thoughts by Rick Stephens

Getting a Grip on Your Business

Posted in Business Control,Developing Processes by Rick on the May 11th, 2007

Get a GripI am adamant about the use of processes. I believe that everyone who is organized and interested in minimizing grief in their business as well as their personal life uses processes. For me, processes are an integral part of my life. I use them everywhere and often. Some people would say that I am too process oriented at times, and maybe I am. I, however, find that my life is simplified by processes and they allow me to spend my time thinking about the important things in my life instead of the routine.

I first realized the value of creating and following processes way back in my youth and have allowed them to be a part of my life ever since. When I was in the military, I found that while in basic training many of the recruits, as well as myself, were struggling to respond to verbal commands from the drill instructor. He would fire these orders out rapidly and with a vengeance. “Left Face. Column right.” When a recruit would turn left instead of right or right instead of left the drill sergeant would get right in his face and make him look and feel like a fool for not knowing right from left.

The problem is, that when you are under stress and responding to rapid fire orders it is very easy to make that type of mistake, turning the wrong way. So I realized that to keep from making that mistake, I had to create a process that would allow me to turn immediately in the correct direction without having to think about it. It had to be subtle and consistent. Here is what I did. While standing at attention I would slightly grip the seam of my right trousers. While marching I would grip my right index finger and thumb together as if I were gripping the seam of my trousers. (Because your arms move while marching, I could not keep a grip on my trousers, so I gripped my fingers to get the same feel.) I then told my brain that when ever I heard an order to turn right I would turn in the direction of my gripped fingers. It worked, and I never had to endure the drill sergeant yelling at me for turning the wrong direction again.

I don’t know why this worked, but it did. Your brain is an amazing thing and when given a process to follow, it will take over for you. This is why it is so important to have processes in your business as well. Your company must be able to run on autopilot for all of the routine situations. This will allow you to concentrate on the important things in your business, such as customer service, product development, marketing strategies, etc.

If you will establish processes for all of the routines in you business, amazing things will happen. So taking a lesson from my military basic training let me just say, “Get a Grip!”

To Your Success –
Rick's Signature

Do People Really Make the Difference?

Posted in Blogroll,Developing Processes,General Business by Rick on the April 15th, 2007

Help WantedI was having a discussion with a banker friend of mine who suggested that businesses that were successful were good at identifying and hiring high quality people. I disagreed. Ouch! That is totally against the grain of conventional wisdom, right? Not really.

More important than hiring high quality people is establishing solid and proven processes that make your business work. Take a look at McDonalds. This business is successful, not because of the quality of the people, but because of the quality of the processes that the people follow. This is why over 75% of franchise businesses succeed while 90% of start-ups fail.

So what is the lesson here? As a small business owner, you should focus your attention on defining what works and what doesn’t in your business. Measure your activities to a point, so when asked, you will know exactly how long it takes for the fries to cook, when to flip the burger and exactly how much secret sauce to put on the bun. If you have defined your business processes to this level, all you need are employees willing to follow your rules. The rest will be automatic.

That’s not to say that you should hire just anybody. On the contrary, as you grow you will want to hire people that are loyal, trustworthy, innovative, and talented. These people will become the backbone of your company. In the beginning, however, what you need are technicians, workers who can free up your time so you can work on growing the business.

In the early days, the secret is loyalty. Employees that are willing to follow your rules are more valuable than experts that think their experiences will contribute to your success. If you have done your homework, you already know what works and what doesn’t. Hire those who are willing to follow and your profits will be better than those who pay a premium for the experts.

To Your Success -

Rick's Signature

Loyal Customers Will Persevere

Posted in Customer Service,Developing Processes,General Business by Rick on the March 23rd, 2007

Being in business for yourself is tough. It gets really hard when you come to realize that you need to make a significant change to the way you do business and this change will impact the customer. Perhaps the change is an increase in price, or a change to the way you extend terms, or maybe your product line has to be updated.

When this happens, owners will formulate what I refer to as SID, Self Induced Doubt. They become afraid to make the needed decision to improve their business practice for fear of loosing their customers.

Loyal customers (and you do have loyal customers, right?) may show some resistance, but that is a natural response by everyone when it comes to change. Astute owners will recognize that loyal customers have chosen them as their company of choice, and hopefully you have nurtured that relationship and demonstrated that you truly care for them as customers. Loyal customers will understand that change is necessary to stay competitive, to continue providing top quality products or services, and to ultimately stay in business.

The trick to successfully transitioning in these instances is to position the change as a benefit to the customer. Give them notice of the change and offer assurance that the change is a good thing for them. Your loyal customers will stand by you, your satisfied customers will complain, but stay, and your unhappy customers may leave. So, am I saying that some customers will leave? Possibly, but those that do were probably problem customers anyway, late with payments, asking for unreasonable service, etc. If they leave, perhaps it will be a good thing. Your company will be stronger for it.

Don’t be afraid to change. Without change there is no improvement, there is no progression, there is no growth.

To Your Success –
Rick's Signature

Scalable Processes

Posted in Continual Improvement,Developing Processes by Rick on the February 25th, 2007

Scaling MountainI talk a lot about the importance of having solid processes in your business operation. Establishing processes that have been tested, refined, and continually examined for improvement is probably, in my humble opinion, the most important thing a business owner can do to insure success in the business enterprise. When you have good working processes in place, your business runs more smoothly and the stress levels associated with the “daily grind” are minimized.

I was working with one of my clients the other day and we began discussing a process that he had put in place to display his product in the show rooms of some of his buyers, on consignment. His plan was simple and seemed like a good one. He would allow the buyer to show off his product in their showroom without invoicing the buyer until after the product was sold to the end customer. There is nothing really unusual about this process except that my client’s product was the only one that the buyer was keeping on consignment. Because this was not a normal practice for the buyer, the buyer had no process in place to notify my client when the item was purchased by the end consumer. So I asked my client how he would monitor that.

My client is a small startup company and is currently doing lots of marketing by hitting the streets and knocking on doors. So he said to me, “While I am out cold calling on new prospects, I can just drop by and see if the item is still in the show room. If it isn’t, then I’ll invoice them and send them another.” He added, “This will also be a good way for me to stay in touch with my new buyers.”

This sounds like a good idea until you begin to scale this process into a larger version. There are two important concepts one must keep in mind if you are developing a good process. The first is that it must be simple and easy to follow. The second is that it must be scalable. By scalable, I mean it must work when you are small and also work if your business explodes and becomes extremely huge. In this example just given, my client’s process would work fine while he is small, but if his business suddenly expanded and instead of two or three businesses displaying his product on consignment, there were hundreds, the process would fall apart because there is not enough time in the day for him to visit all of these businesses. Eventually he would lose track of where his products were and whether or not they had been sold.

Sometimes we will develop a process that appears to be a good one, and over time we discover that it does not work as our business changes. That is ok if you are continually examining the process and improving it as you grow. The important thing is to have the process, make sure it is scalable, and continue to improve it.

To Your Success -

Rick's Signature

Everything is Broken

Posted in Attitudes,Continual Improvement,Developing Processes by Rick on the February 10th, 2007

Have you ever heard the phrase, “If it ain’t broke, don’t fix it?” I was attending a seminar just last week when I heard the moderator say exactly that. Of course, everyone in the room understood his meaning, as we all do, but in the business world, doing things the way we always have can cost us customers, money, and good employees.

Instead of allowing processes to go on just because they seem to work, we should adopt an attitude of Continual Improvement, always looking for a way to make the process better, even if “it ain’t broke.”

Mother and Daughter CookingThere is an old story about a young girl helping her Mother cook dinner. As the Mother was putting the ham into the pan, she cut off a small piece on each side. Curiously the young girl asked, “Why do we always cut the ends off the ham before we put it in the oven?” The mother replied, “I don’t know dear, it’s just the way Grandma always did it. Let’s call and ask her why.” So they did. When asked, the Grandmother responded with the same answer, “It’s the way my Mother always did it.” So they called the young girl’s Great Grandmother and again asked, “Why do we always cut the ends off the ham before we put it in the pan?” The Great Grandmother replied, “I don’t know why you do it, I did it because I never had a pan big enough to hold the whole ham.”

So you see, we can go along forever doing the same thing, the same way we always have, even though nothing seems to be broken, when in fact, if we would adopt the attitude of Continual Improvement we would begin to ask important questions, the biggest one being, Why?

If you want to make your business “the best it can be”, to borrow from the Army slogan, look closely at those processes that “ain’t broke” and improve them, and the next time you hear someone say, “If it ain’t broke don’t fix it”, let it remind you to fix something today.

To Your Success,

Rick's Signature

If Penguins Can March – So Can We

Posted in Developing Processes by Rick on the November 27th, 2006

Emperor PenguinsI just finished watching the amazing documentary “March of the Penguins” and could not help but think how incredible the animal world is. Even without an MBA or any other type of formal training, animals (in this case penguins) have somehow captured what many business owners fail to grasp, even after years of education and experience.

Over the years, these penguins have managed to evolve (read: continuous improvement) and adapt to the most brutal of all climates. Every year they leave the comfort of their home and march over 70 miles, overcoming enormous obstacles to gather in a place where every penguin for thousands of years has been born. According to the documentary, they endure temperatures of over 58 degrees below zero and winds in excess of 100 miles per hour. They do this while procreating their species in a manner that can only be appreciated by watching the movie.

We as business owners should observe these creatures and learn at least 2 valuable lessons from them. The first is the requirement to be continually improving our processes, and the second is to follow the processes with absolute precision.

Too many times, business owners run their company by “winging it.” Though they may be successful for a period of time, the odds are overwhelming that eventually they will make a fatal mistake and all will be lost. Taking our cue from the animal world should be a lesson in humility for us. The animals probably don’t understand why they do what they do; they just know that it works.

Entrepreneurs don’t need to understand why developing processes and following them work, they just need to do it. Nature didn’t happen by “winging it”, but rather methodically through continuous improvement and doing what works, every time. If penguins can march – so can we.

 

 

To Your Success -

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