Got business problems or challenges at work? With his Two Cents page, Loaay Ahmed shares his expertise in strategic management consulting to help managers, employees and entrepreneurs thrive.
Q: We’re in the engineering project management business. It’s crucial to our profit that we deliver on time, within budget and set quality. Clients usually delay projects with late feedback and approvals, which affects our bonuses and morale for not finishing on time. How can we avoid financial loss and job dissatisfaction?
If your next meeting with a prospect takes place 30 minutes away by car from your office and you leave 30 minutes earlier, but you arrive late due to a traffic jam, is it your fault? The answer is on your Maps app. When you add your current and target locations you’ll receive multiple timings; one time shows the normal duration for the distance and another with consideration to the current traffic condition. Your clients might be overloaded, slow at making decisions, or they may have a complicated process. Regardless of the causes, think of their delays as a high probability for any upcoming project. Factor those delays in your costing right from the start when submitting your proposal and find ways to add more value to justify the price and remain competitive.
Now, since you can’t control the ‘traffic’ let’s talk about what you can do. Focus on your team’s tasks in between the projects’ milestones. Break them down by duration of each task your team needs to deliver to the client and judge their performance according only to that timeframe. For example, phase one might be about submitting initial research findings. If this phase was given six weeks including the time your client will take to select a direction for the next phase, concentrate only the time it took your team to submit the findings to the client and that’s what you can judge your team’s performance by. This way, even if the client delayed the project, you could still fairly evaluate your team’s productivity, keep the morale high and not lose any profit because it’s all calculated…and that’s just my two cents.
Q: I want to hire an assistant to free myself from tedious tasks. Somehow, I feel that you might stop me. Am I right?
It’s not my company, so you’re free to do whatever you want. However, let’s assume for a second that I’m one of your investors and this is a small startup with two investors and a loan from a bank. Any decision you make will directly or indirectly affect the bottom line for the investors. Wise moves might strengthen your relationship with the bank and generate higher return on investment for your investors on the medium or long term. Hasty decisions, on the other hand, might backfire. What’s that? “What’s hasty about hiring an assistant?” you say? Sure, a large number of managers, directors and CEOs make this decision on a daily basis worldwide. Yet, I doubt that many of them ask themselves some precise questions and reach definitive answers before making the position available.
For example, how many tasks will your assistant be needed for? How frequent are these tasks? What will the assistant do between tasks? How will the quality of his/her performance be evaluated? Do you have a budget that includes attractive benefits, training, bonuses and occasional ‘well done’ gifts and treats to retain this great talent you’re hiring? How will you keep this employee motivated and challenged? Will the value of the tasks performed by the assistant contribute to generating higher profit for the company or saving cost? Will the profit generated or cost saved be greater than the budget assigned for the position? What will you do with the time you spared by hiring this assistant? And how much revenue will you generate and/or cost will you save by using your spare time? Is your head spinning? Welcome to management…and that’s just my two cents.
Q: Competitors keep cutting prices. What can we do other than give in and match or beat their rates?
What happens when you keep an eye on your business and another on competition? You get cross-eyed. Many managers and business owners are obsessed with competition beyond the time and attention actually needed. I’m not saying ignore your competitors, but you’re competing with more than you think. You have direct competition that will be happy to steal your customers and then you have indirect competition that got to your customers’ wallet before you and depleted their cash and now they don’t have much left to spend on your products and services. And if you’re in the middle of all this noise and rat race, you just can’t isolate yourself and your team’s minds to focus on what your company wants to be in the future and how it will reach that destination.
Having said that, it doesn’t hurt to quickly analyze your competitors’ latest price drop. Ask yourself: Is it for a limited time or permanent? What’s your strategy to add more value without dropping prices? If you follow it, how will it affect your sustainability? Maybe you can offer a range of lower and higher end products – think suits vs. key chains – to get customers used to buying from you, have an emotional connection with your brand and with time buy more of the upper range. Following competitors every time they do something means they are running your marketing plan, not you.
Obsessing with the competition is like trying to keep up with the Joneses. They’re the ones who are doing new things while you’re busy trying to catch up to what they just did last week. Are you following?…and that’s just my two cents.
For Loaay Ahmed’s advice on business or work matters, send a short email to loaay@knightscapital.com. Regrettably, only the questions chosen for publishing will be answered.
Loaay Ahmed is a management adviser and strategic expert. To learn more about Loaay and his consulting service, strategic business therapy, visit www.knightscapital.com .
