A Round Up of What’s Happening in Small Business

A Business Daily Africa article highlights an often-overlooked aspect of starting a business: a business plan. We've not really discussed these on this blog, but look forward to future posts, and soon.

"What needs to be implemented? Simply put, a strategy. It is the working plan that shows how all the elements of a business will work together to achieve the stated objectives. Whereas this working plan should be well thought out, it should never be static.  In a small business, things keep changing and getting more efficient in response to the internal and external environments.

"A small business must create a name that will set itself apart from competitors if it is offering services. It must always be clear what is trying to sell. The name of the product should closely associate with the expected service experience.

"Good and successful businesses do simple things well. They keep their promises time and again, that way they gain loyal customers."

Reuters reports that small businesses in the UK are feeling the crunch as larger suppliers slow pay schedules. This is a true sign that even the UK's economy is hovering. We're seeing a similar trend in the United States. Although productivity is up, there's still reticence on the part of many big industry decision makers.

"The Federation of Small Business (FSB) says that small firms are experiencing the biggest squeeze on their cashflows since the early 1990s as big companies are now delaying payment to their smaller suppliers by more than 100 days. The FSB says that the situation has worsened dramatically in the past few weeks and it took the unprecedented step of naming Alliance Boots as one of the worst payers."

Hispanicbusiness.com reports that inflation has risen to the top of small business owners' list of worries during this economy.

"Inflation is the top concern of small-business owners for the first time since January 1981, according to a June survey of the National Federation of Independent Business.

"Confronted with rising gasoline, energy and food costs, some business owners have raised prices, but many have found creative ways to cut costs and delay further price increases.

"Small-business owners are feeling pressure from inflation 'every time they open up the back door' to receive new inventory, said William Dunkelberg, chief economist at the federation. He said 41 percent of small businesses raised prices in June in response to this 'backdoor inflation.'

"'There has been a really dramatic increase, and it seems to be accelerating,' he said of the inflation rate.

"In June, 20 percent of small-business owners cited inflation as their top concern, compared with 8 percent in February, according to the National Federation of Independent Business."

And now you're all caught up with some of the latest small-business news for this week.

A More Straightforward Approach to Productivity

I figured it was time to make the case for productivity in other types of business environments that do not have the tendency or desire to grant Facebook time, goof-off time, or even nap time. Many of these companies do business in a very competitive market and it's a daily race to get ahead and stay ahead.

For instance, Tom Siebel, CEO of Siebel Systems, doesn't play by society's rules nor does he think much about making work comfortable for his employees.

In a 2000 article for Fortune magazine, Siebel says, "'Running a business is a fundamentally rational process,' Siebel says squarely. 'We unemotionally put things on the table, look each other straight in the eye, and state the facts.' The article also reports that "[I]f employees are offended by this perfunctory management style, then they're probably not right for Siebel Systems. Employees who perform are rewarded; those who don't are disposed of. Nearly everyone at Siebel is given a rank within each department, and every six months Tom Siebel lops off the bottom 5%. Siebel is intense, competitive, and driven[.]"

Think it a little extreme? If so, you're probably better off working in an adaptive management culture, one that encourages performance, but doesn't demand it. Remember, there is no right or wrong here. The adaptive culture may allow more free time, self-management, and self-expression, but Siebel's achievement culture (a phrase used in business management textbooks) may be a good fit for a high achievers who seek to make a lot of progress in a short amount of time. And it seems to work for Siebel and his company.

Fortune reports that "Siebel Systems is the only U.S. enterprise-software company to accelerate past $1 billion in revenues without running off the rails. Oracle, Informix, PeopleSoft, Sybase, and Baan have all had to clean up wreckage at some point. Oracle had an accounting scandal in 1993, which resulted in a $100,000 fine by the Securities and Exchange Commission and shareholder suits that cost Oracle $24 million to settle. Informix, too, was reprimanded for accounting shenanigans. PeopleSoft management fell into disarray. Siebel, meanwhile, is growing by leaps and bounds--analysts expect the company to do $1.6 billion in sales this year [in 2000] and plans to double its work force within the next 12 months."

In 2008, Oracle (who serendipitously bought Siebel Systems in 2006) has gone the way of most IT companies--"four consecutive quarters where its revenue and profit figures are sharply down on the same period a year before" and this reflects not on a certain management style, but on the state of IT as an industry.

Many called Siebel a control freak and many more chose not to take a job at Siebel Systems back in the years 2000 through 2006 just because of this achievement culture, but the lesson here is that there is no "one" way to approach business culture. And it is only up to you to choose which way you go, especially if your business struggles with productivity. Just don't fret if early efforts have not paid off. The market is tough on everyone these days, even those folks who still aren't on Facebook and never get naps at work.

Xobni improves your Outlook Inbox Productivity

xobni

In an increasingly data-oriented world, sifting through mounds and mounds of information quickly becomes more and more important.  Look at tools like Google Desktop and the Microsoft Search built into Windows Vista.  They are all about finding information quickly and efficiently.

It is with this goal in mind that Xobni developed their software.  Being able to click on an e-mail and see everything about that contact is an extremely valuable tool.  Automatically, Xobni has extracted the phone number from my contact’s signature, listed everyone else in my network that this contact has communicated with, as well as putting the files and conversations with this contact at my fingertips.  But Xobni goes further than that by actually quantizing the data and informing me just how important this contact is to me (in a strictly e-mail sense of the word – my wife won’t be happy to find out that she’s #5).  Having this data handy helps to better prioritize and respond to "critical" items in your inbox more efficiently.  My day is freed up from reading UPS shipping notices and standard report reminders and I can focus on doing my work, with the knowledge that Xobni is watching my inbox for one of my top e-mailers for me.  If one of my contacts has multiple e-mail addresses, Xobni automatically groups them together and shows me all communications with this person, not just from the e-mail address they sent me e-mail from.

It is an Outlook search engine on steroids, allowing a much quicker path to recent e-mail to and from each contact.  I would highly recommend it to people like me that have 8 GB mailboxes and desperately need to bring some order to their lives.

Can You Understand What I’m Saying?

Clear Communications

In the same vein as our previous post on business communications, "Can You Hear What I'm Saying?," a business communication problem may crop up if clients can't understand what you're trying to say. All the personal and two-way conversations in the world won't help if you are not making yourself clear. A few business-friendly tips to keeping it clear.

1. Define terms. If your clients won't know the acronyms in your business, don't keep throwing them around without explanation. If you're a stock broker, and your new wealthy investor does not know what an ETF is--exchange-traded fund--how will you convince her to let you put her money into them? Your marketing communications and/or documents given to clients need to have the definitions spelled out as if no one has a clue. Yes, even easy ones, like the CDC or FDA. When in doubt, spell it out.

2. Don't recite a list of features. If you're company that has been in business for 5 years, and can provide 20 different services, listing all that as the main reason to choose your business may cause your customer's eyelids to glaze over. How about explaining how your services will ensure that they never have to worry about their heating and air conditioning service again? How about promising that the years of experience guarantees that the service personnel will "arrive on time or the service call is free"? (Yes, I'm dreaming. But wouldn't that be nice!) Make sure your best attributes are there, not for you to look and feel good, but so that your client looks and feels good. See the difference?

3. The shorter, the better. Some of the best marketing I've seen is short and sweet. A quick tag line summing up just what the client is looking for. A handyman service promises that your leaking gutter can be fixed in an hour while you're at work. A tanning salon wants to help us all relax. Find out what your client wants and then keep it short.

Business communications can be daunting to business owners. Calm down, it's not rocket science. You can outsource it to freelance marketing writers/copywriters/corporate writers, depending on what they call themselves. Which one to choose? It's up to you and your needs. If you have marketing collateral to rework or a web site to enlarge, any of the above freelance service providers will work. They will generally have an established web site showcasing their brilliant writing skills and will have impressive references. You'll want to ask for samples and make sure you get some rewrites included in the hefty fee. Shop around and don't settle. Make sure you find the best fit for you.

Or you can do it yourself. If that seems especially scary, remember the more you communicate and the more you try to do it clearly, the better you'll be.

How To Help Your Employees Succeed

After a previous post about boosting productivity by allowing employees to surf Facebook (I’m sure you’re delighted to have me bring that point up again), I want to clarify exactly what I believe is a productivity booster and what is not. Some companies advocate naps at work (a few heavily creative jobs really do necessitate this) and others ban personal Internet surfing (which I really don’t think is entirely all good) and so I’d like to come into this discussion again squarely in the middle.

Canada.com recently cited a study that indicates allowing people to goof off at work (surfing the Internet) boosts morale and productivity.
"[A] new study by a U.K. research group might help boost the Internet's image. It found that taking short breaks to surf the Internet at work might actually be beneficial to an employee's productivity.

Conducted by MindLab International, the study involved European women from seven different countries who were asked to complete computer-based intelligence tests designed to induce stress. They were then offered a 10-minute break in which they could surf the Internet freely before returning to further testing. Stress levels and productivity were monitored throughout and the researchers found that the break resulted in both a reduction in stress and an increase in productivity."

On the other hand, some companies struggle with workers goofing off by gossiping and stirring up trouble among fellow employees. That is not my idea of boosting morale.
AfricanPath.com, a site geared to reporting news of and by Africans around the world talks about the problem of gossip in the workplace and I really liked blogger Kwaku Adu-Gyamfi’s June 26, 2008 checklist on the subject.

"Do you:

  1. Spread rumors about other people?
  2. Have you good things to say about others?
  3. Judge others only on the basis of facts?
  4. Encourage others to bring their rumors to you?
  5. Precede your conversations with a "don’t-tell-anyone, and you-didn’t-hear-it-from- me"?
  6. Keep" confidential "information confidential?
  7. Feel guilty about what you say concerning other people?
  8. Have an okra (slippery) mouth?
  9. Like to hear reports of scandals?"
These examples should serve as a caution to employers who cite lost productivity as the number one factor impacted by employee turnover, according to TalentKeepers’ 2008 Employee Turnover Trends research report.

 

"‘It used to be that employee turnover was considered solely an HR problem, but now top executives are beginning to see the far-reaching impact of turnover and its implications,’ explains Craig Taylor, VP of Client Services for TalentKeepers and senior research author of the 2008 Employee Turnover Trends report. ‘It starts a domino effect that will eventually touch all aspects of an organization. The key is to stop the chain reaction by implementing tactical retention strategies before the last domino falls.’"

Is allowing goof off time a tactical retention strategy? According to many employed workers, the rigidness of an employer is also a measure of their willingness to stick around for the long term. I think every employer must ultimately make the call about goof-off time that best suits their particular needs. But I urge moderation. Polling employees about their preferences and discussing these issues openly is the best next action for companies seeking a definitive policy.

The Buck Stops Here

Leadership

Leadership. Even the word strikes fear into the hearts of those stalwart leaders and managers who must lead us every day. If you're a member of the leadership club, we've rounded up a few great news links to help you lessen the fear and actually become a better leader than you thought you could be. Yes, you can!

Furnitureworld.com highlights an important leadership quality that I think is so often overlooked in many of the top leadership how-to books and even in most news articles about leadership.

"You hear it all the time … aspiring managers or vice presidents want to know the most important key to an esteemed business leader's success. Thinking the answer must be something like inspiring leadership, technological innovation, savvy marketing or far-sighted financial planning — all of which are important — their jaws drop when they learn the truth.

Generally, a savvy leader's success is directly tied to his or her ability to focus on the business fundamentals — the daily blocking and tackling that every company must master to be a winner in its field. Strong, effective leaders stress fundamentals like discipline, accountability, strategic alignment, managing to his or her values, and empowering employees. Additionally, these leaders have mastered the six basic functions of management: leading, planning, organizing, staffing, controlling and communicating. But what's the one golden thread tying all those functions together — and the most important key to great leadership? Clear communication."

The Wall Street Journal hits upon a radical approach to leadership: group leadership.

"It's a common corporate approach to a problem: Build a team of experts from different parts of the company and ask them to find a solution.

But these teams could be a lot more effective if companies took one radical step: Share leadership.

This concept, of course, flies in the face of the traditional idea of how companies should operate -- one person is in charge, and the others follow. But in a team of specialists, one expert usually doesn't have the know-how to understand all the facets of the job at hand. Instead, a better approach is to share the top duties, so the person in charge at any moment is the one with the key knowledge, skills and abilities for the aspect of the job at hand. When that changes, a new expert should step to the fore."

These are two really good ideas for leaders seeking a renewal of their skills while in the midst of layoffs and harsh financial times for their company or department.

Take heart, leaders. These are interesting times, but the ability to look outside of proven typical solutions to gain new, bigger results is really quite smart. And just so you know, that's another sign of a good leader. Kudos to you!

Can You Hear What I’m Saying?

One of the biggest issues facing businesses today and in the next few years is communicating effectively. The ability to communicate effectively is still the same: know your audience, speak in their language, and hear their questions.

But how do businesses do it?

The Business Ledger for Suburban Chicago discusses keeping current clients as the best way to navigate through the current economic conditions, and cites warmer, more personalized communications tactics as the best way to go.

"A continuing dependence on technology is also a barrier for attorneys to overcome when trying to develop more personal relationships with clients. With the emergence of e-mail as the primary communication tool in business, attorneys now must make a conscious effort to stay in close contact with their clients through phone conversations and face-to-face communication.

'I try to continue to have face-to-face contact with clients,' said Kenneth Clingen, a partner in Clingen Callow & McLean. 'Some younger lawyers are a little reticent to pick up the phone and call clients. They're more comfortable communicating by e-mail.

'It's an advantage to those lawyers who will continue to try to have face-to-face contact with their clients. If you don't have that, it may affect your ability to strengthen the relationship.'"

A surprising truth to most business leaders or managers seeking better ways to improve their leadership skills is learning to communicate.

Furnitureworld.com cites the importance of looking at communication as a two-way street and provides a helpful (and doable) list.

"First, you must realize and accept that clear communication is always a two-way process. It's not enough to speak clearly; you have to make sure you're being heard and understood. To facilitate this, use the following two-way communication primer:

1. Prepare how you'll communicate

  • Clarify the goal of the communication
  • Plan carefully before sending it or meeting in person
  • Anticipate the receiver's viewpoint and feelings

2. Deliver the message

  • Express your meaning with conviction
  • Relate the message to your larger goals
  • Identify the action to be taken
  • Confirm the other person understands

3. Receive the message

  • Keep an open mind
  • Identify key points in the message
  • Value constructive feedback and use it to grow
  • Confirm your understanding

4. Evaluate the effectiveness of the communication afterwards

5. Take corrective action as necessary"

In short, if you're talking in a vacuum, who is listening? You need to make business communications personal and relevant to clients, and above all, think of it as a conversation, not a lecture. Sometimes the most important things you'll ever learn about your business are things you'll "hear" from your own clients.

Another Multifaceted Approach to Team-Building

Channel 8 News in Austin recently reported on a story that highlighted the philanthropic aspect of team-building.

"It was a double surprise when dozens of Frito Lay employees thought they were assembling bikes Wednesday as part of a team building exercise.

Later in the day, rather unexpectedly, 44 kids turned a corporate exercise into a much more meaningful event.

With numbers in hand, the children walked into a conference room to discover the bikes were for them.

One Frito Lay employee said it was the most worthwhile team building exercise they've done so far."

The London Free Press reports on a team-building exercise that has seen marvelous results from participants.

"Viewers of the Amazing Race know that participants rarely emerge from the contest unchanged.

Sometimes the twosome is drawn closer together, their friendship strengthened by the intensity of the experience. The more entertaining couples go the other way, bickering their way around the world, straining whatever relationship they began with.

The creative minds behind Conundrum Adventures Inc. hope their clients fall into the former category, working together to solve puzzles that lead them through downtown London.
‘It started with the idea of corporate team building, but we've also had a large family reunion do a Conundrum,’ says Teresa Boere, a recent addition to the company. She runs the London arm of the business, which is based in Toronto."

And to dig a little deeper into this subject, Ephraim Schwartz of InfoWorld.com talks about the essentials of global team-building, which focuses less on activities done together to build a team, but highlights essential education and knowledge required when going into a truly global team space.

"Just as a company puts a localization strategy in place when opening a new plant or launching a new product overseas, company leaders must learn about communication styles, attitudes toward meetings and deadlines, even the very notion of what makes a good leader in a given culture before entering into business negotiations with an organization overseas.

In the United States, a direct approach -- even when critiquing a team member -- is admired, but in most of Asia, directness is not regarded as highly. A leader who practices that approach humiliates the person she is criticizing; moreover, in the eyes of the other team members, she humiliates herself."

As business deals spread across the globe, taking care that your communication and assumptions are correct and appropriate goes a long way toward a strong team effort, probably more so than just solving a puzzle or building bikes for children. The essence of team-building is more complicated than a simple exercise, and we’ll be discussing this much more in the near future.

Happy 4th

We hope everyone enjoys a wonderful July 4th this year. Make sure to watch fireworks, eat hot dogs and spend some time with friends and family.

Happy 4th