As an E-Myth Coach (Licensed coach for Michael Gerber’s The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It) for ten years, I quickly recognized in small businesses there were often two kinds of business owners: Objective and those who were Subjective.
Shortly after becoming a Gazelles coach I wrote a blog for Gazelles on the subject: Subjectivity & Objectivity – Required Business Disciplines. From this blog I wrote: I’ve worked with countless business owners who rarely see the value of the opposite condition of their strength. A business owner with an objective dominance sees no relevance in the subjective aspect of the business. He runs his business by the numbers, and while his business generally lasts longer than one that is predominately subjective, he has constant turnover, customer dissatisfaction, and poor relationships. Eventually, if they fail to see the value in the emotional aspect to running a business, the business fails. Subjective dominant owners run into the same challenges in the opposite side. They rely on their gut, optimism, courage, and their relationship skills. Customers, employees and vendors often abuse them. Because they measure very little the business fails faster, however they are often more readily agreeable to change and fix their subjective focus.
The imbalance I’d seen in small business occurs in mid-size businesses.
Organizations that focus exclusively on productivity often get a lot of work done, but have high turnover rates and poor cultures.
Companies that focus too much on people and culture often struggle to be profitable. Striking the right balance becomes an important objective.
In order to have a healthy culture AND productively get work done, a balance of priorities and KPIs in the areas of people and productivity is vital.
Balance - Counterbalance
Several of my businesses I work struggle understanding this concept. The example we use to help businesses understand the need for Counter Balancing Productivity/Process and People/Relationships is best exemplified by Delta Airlines which I shared in Balance Productivity and People. Getting flights to take off and arrive on time, isn’t a growth strategy if passengers bags fail to make it to their destination. Delta adjusted their productivity priority by creating a customer satisfaction counter balance.
Should you need a further refresher on the value of a counter balance read What’s a Counterbalance – Why Quarter and Annual Plans Need One which includes a short account of one of my customers, and IT service provider, incredible call center customer service turnaround.
Newton's Third Law
For every action, there is an equal and opposite. This is Sir Isaac Newton’s third law of motion.
In essence this is the principle behind creating a counter balance. When your business focuses on productivity or improving a process, there are consequences or an equal and opposite reaction.
A productivity focus can significantly affect the relationship or people driver in your business.
Changing a process may be uncomfortable for your team. It may require change. It might require more hours, effort, or an increase in a strength or weakness of your team. Your employees are one of the first concern with any productivity focus.
A customer of mine is achieving 33% growth through the first quarter. The result has been a significant increase in workload, resulting in millions of dollars in back orders. Sales, admin, managers have been asked to work additional hours to reduce backload and meet deadlines. The President of the company provided all expense paid vacations to those most affected by this increased workload, and investment in additional personal time.
This will no doubt compensate short term for the inconvenience and stress. It is not a long term answer to fixing the problem.
It’s often been said “Growth Sucks Cash!” Growth can also suck the life out of your people, when they are required to work additional hours without being compensated or recognized for their super efforts to meet customer satisfaction and deadlines. Even with additional compensation and recognition, people will not endlessly put in additional hours forever.
Customer’s need to be measured as well, Qualitatively, and quantitatively. This is why we recommend in your weekly leadership meetings, each leader is speaking to one customer a week. Quantitative measurements are often lagging indicators. A phone call to speak to a customer provides immediate feedback and can quickly correct a challenge, often leading to increased customer satisfaction and business.
At the very top of the One Page Strategic Plan the form is flanked by People (Relationship Drivers) on the left and Process (Productivity Drivers) on the right. Often customers don’t begin to fill these metrics in until they’ve begun the Quarterly and Annual Planning Process for six months. Time invested in meeting rhythms, One Thing priority, Metrics (KPI’s) immediately offer the greatest ROI. When these People and Process Drivers begin to emerge as measurements, the intention of counter balance crystalizes.
A productivity priority should always have a relationship counterbalance. Just remember, every action has an equal and opposite reaction, and you will remember to counter balance your Priority ever quarter.
Growth demands Strategic Discipline.
The 3 Strategic Disciplines: Priority, Metrics and Meeting Rhythms immediately focus your business to dramatically improve your forecasting, alignment, and empower your team to acchieve accelerated growth.
Positioning Systems helps mid-sized ($5M - $250M) business Scale-UP. We help you align everyone in your business to focus on Your One Thing! To achieve growth, you need to evolve in today’s rapidly changing economic environment. Are you avoiding a conversation with yourself on how to can successfully grow your business? Contact firstname.lastname@example.org to Scale Up your business! Take our Four Decisions Needs Assessment to discover how your business measures against other Scaled Up companies. We’ll contact you.
Who Needs a 3-5 Year Plan Today – Next Blog
The pace of change, new technology and innovations occur so quickly, plans for the future often appear pointless. Should you have a 3-5 year plan for your business? We’ll explore this question in our next blog.