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: You wrote in your last article about the importance of giving customers what they want. What if customers want lower prices and cheaper quality? That is not the kind of company we would like to be. What do you do then?
Some consumers prefer high quality to price. Others find spending less money today is more important. People have different interests, priorities and needs. That’s why we have brands that produce premium luxury, brands that offer cheap quality products and brands that fill every gap in between. When you start a business, you usually have a passion for a specific product or service. Alternatively, you have spotted a gap and you decided to fill it because the sound of cha ching sounds great to you and you can see it happening. Either way, there’s a specific market segment that’s style and needs fit with what your business is about and that segment becomes your number one target. Any other type of customer is icing on the cake, unless you actually produce a product that is a game-changer in the market.
The key thing for any business is to identify that group and focus on it. In most industries, you just can’t sell to everyone in the marketplace. Bearing the above in mind, if consumers are telling you they want lower price and quality, then you are either asking the wrong segment, asking the wrong questions, or you are in the wrong market altogether. However, your own existing customers shouldn’t give you answers that are far away from your values and standards because these are the same things that attracted them to you in the first place. The only time where it could be acceptable or at least understandable is if there was a major sudden shift in market conditions – like a financial crisis – that forces them to change their purchase behavior…and that’s just my two cents.
Q: I know that as a founder and CEO of my business I should trust my team more and micromanage less, but I’m having serious difficulty trusting that others will do what’s best for my business. Is there a cure for this condition?
Have you heard about the Trustol? These are new pills made for entrepreneurs with trusting issues. Unfortunately, they’re not approved yet. So you need to do this the old fashion way. The good news is that nobody is asking you to include your employees in your legal will. You just need to trust them at work. So before anything else, empower them to make decisions. If they have to come to you for every action, lack of trust is a big sign over your head. Once they’re empowered, give your employees the standards you think and work by so they can get closer to what you want. Next step is to set the criteria of success for every major project or task so that everyone understands what you consider ‘right’. By doing so, you minimize the chances of wrong decisions being made.
Now, to make the transition less challenging for you, don’t give the employees full trust at once, give them proportional trust; that’s trusting each person gradually based on his/her performance. The more an employee understands your standards and proves himself/herself, the more you have to let go with that individual. Ultimately, you want to reach a mindset of “I trust and empower everyone and I support them with success criteria. And if one individual is proven untrustworthy, I will continue to trust the others.” Of course, some side effects are quite common with such a prescription. Expect some headache, a few sleepless nights, and mild anxiety, but that’s only at the start because you’re changing your style…and that’s just my two cents.
Q:After serving a client for nine years, the son of the founder took over and terminated our account. By failing to change his mind half our team has been laid off. How can companies have no concern for the impact of their decisions on others?
Change comes with discomfort and sometimes pain. It’s human nature. In such times, the managing team or the owners can get desperate and lose focus. Basically, all written and agreed to plans go out of the window. However, it is those very moments that force you to look differently at your business journey, which is something you wouldn’t necessarily have done had the status quo remained the same. Here are a couple of obvious lessons to learn from and avoid in the future:
- If losing one client caused you to let go of half your team, you need to increase the number of your clients so that no single client generates more than 20% of your gross profit. Otherwise, you’ll always be under their mercy and that’s not a healthy way – mentally and financially – to manage your own business.
- Loyalty means different things to different people. In general, the bigger the client the riskier it is to retain them for the long term. So be realistic and seize the moment. Price your services strategically to create a balance between developing a strong relationship for the future and today’s profitability knowing that the next order may be their last. Change happens all the time. What you need to ask yourself is what external changes might occur next? And what internal changes do you need to make to be prepared, or better yet, to benefit from it all?…and that’s just my two cents.
For Loaay Ahmed’s advice on business or work matters, send a short email to [email protected]. 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.