Today I thought I’d jot down some of my learnings from the past fifteen or so years of running smallish to biggish businesses. I sincerely believe that many of these are lessons you can only learn from experience – and that if you have your own business you probably have to make these mistakes yourself before you can learn them. But nonetheless I’d characterise these as: the things I’d wish I’d known 15 years ago.
1. Medium is Beautiful
Good businesses grow. They have to for two key reasons: first, they have to keep pace with the increasing costs (and thus threats to profits) in the economy; and second they have to remain competitive for work and skills.
Unfortunately this often means they grow in staff size and costs at the same time. The phrase “victim of your own success” is never more true than in a services business where the more you succeed the more work you win, the more people you need to do it, the bigger the office space required etc. Wrapped up in that “etc” is a lot of other expensive shit.
My contention is that the perfect size for any business is 50 people or less. In other words, the number of people you can fit into one large room. At this size you barely need any systems or processes, you know everyone well (and they all know each other), and weak people are obvious and quickly pushed out.
This is tough because the need to grow puts pressure on small businesses to get bigger – and at first it seems like doubling a recipe. Twice the sugar, twice the flour and you have a bigger cake. But there are exponential complexities that emerge from growth that make this a terrible analogy.
We have solved some of this challenge by breaking our business down into semi-autonomous units. There may well be other, better ideas out there but I’ll say it again: find a way to keep it small. Or at least medium.
2. Great People are (Really) Hard to Find
This may sound obvious but I’m not sure most business owners understand just how hard it is to find a truly great person to join their company. So most of us settle for finding “people with potential” which is usually code for someone who doesn’t fit ideally but who we hope eventually will.
Sadly, I bring the news that you cannot turn someone “ok” into someone “great”. And “great” is not an absolute measure of someone’s worth in the world – most people are great at something – but it’s a measure of their fit with you, your other people, your business’s goals, your customers, your style of working etc. Another “etc” packed to capacity.
We all spend a long time, with many errors, choosing a life partner – wife, husband et al. And of course that is a critical choice in all of our lives. But it’s worth considering that the people we work with can be people we spend even more time with, under even more stressful conditions, than those we’re married to. Would you marry someone after one date? Because that’s often what happens: one great interview and off you go.
In South Africa “firing” someone is tough. The process often also triggers a fight or flight response from an employee which makes them cling even harder, despite it being worse for them than simply moving on. And so hiring ought to be a much bigger deal than many of us make it.
Suffice to say if you own a company you will only rarely hire truly great people, people who fit perfectly. And if you’re finding them faster than this you’re making hiring errors that will ultimately drop the standard of your business.
3. Service is a Verb
Ok, well it is actually a verb so this is no great revelation. But if there’s one truth I wish I could hardwire into every employee, vendor and member of the human race, it’s that you have to work at doing great service. And, if you’ll forgive that bad grammar, this is something most people screw up. And it’s not hard to understand why. It’s extremely hard.
Great service has, at its core, the ability to empathise. And empathy requires that we step out of our own perspective and judgements and look at things from another’s point of view. And this is an unnatural ability that has to be practised and refined. Our natural inclination is to be defensive, self-interested and to win our side of an argument. These are sure fire ways to break any relationship, no less so one with a customer.
I say “natural” but actually different countries and cultures have different relationships with both empathy and service. South Africans, in my estimation, are particularly unwilling to see the other’s point of view in a service context. Perhaps someone can offer a psycho-historical explanation for this but to me it seems an obvious fact. It is far too easy to provoke us into annoyance in situations where we are supposed to be servicing.
The ability to service well is a selling point for any business at any time. Great service becomes legendary and poor service is instantly viral.
It is profoundly difficult to get everyone in a big organisation (refer to point 1) to offer great service to its customers, particularly since many people simply do not find any inherent value in providing it. Most people want to be right and want to win. Great service requires that you let the other person be right and that you not only lose, but that you love losing for the sake of the relationship. And if you bristled at that last comment you have some small idea of why great service is hard.
4. Everything has a Solution
There is no such thing as an unsolvable problem in business. Or in human relationships. In metaphysics, maybe. But business and relationship problems, whilst they may be “wicked problems” (http://en.wikipedia.org/wiki/Wicked_problem), can be overcome. What they demand, though, is not logic or talent but perseverance and patience. They require a steady heart that is willing to return to the problem again and again, trying multiple strategies, and which, despite repeated failures, is never entirely drained of the energy to return. There are times where it’s not worth it, of course. The return on all that time investment may just not justify it. And being able to tell when it’s economically sensible to get the hell out is another important life skill. But I do know that if you return to something enough times with continual hope you will eventually find your way through it. At least in business and other human endeavours. Metaphysics not so much.
Remaining hopeful – which is another way of saying this – is terribly difficult. Hopelessness is another natural human response to repeated defeat. But whilst you may think what lies ahead is even more defeat, most things do eventually yield. Which is why the winner is often not the smartest or fastest but the one with the best pacing.
Life can be hard.
Thanks to Sarah Blake for putting me onto the literature on “wicked problems”.