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Edition 29 – Bogged Down

One of the great joys of working with family business is observing what works and what doesn’t in different businesses. It’s interesting that, irrespective of industry, geography or size, there are issues that apply across a range of family businesses.

One observation I’ve made over the past few months is the number of businesses that are bogged down. They are focussing on the 1% of problems that are causing an issue, not the 99% of the business that is working. Too many family businesses at the moment are letting the small stuff derail them.

Now, granted, sometimes those 1% of problems can be important. I also understand that, at times, they are the squeakiest wheel requiring the oil. However, I don’t understand why most family businesses take note of the negative stuff (a problem) rather than focus on what is working.

Some examples I’ve come across amongst family businesses in recent months include:

  1. Recalcitrant clients — be they late payers, make unreasonable demands or have a poor attitude, they are causing stress for a disproportionate number of family business owners and managers at the moment.Businesses spend too much time bending over backwards for clients whose level of importance is inflated. Focussing on the demands of the “C Grade” clients means the good clients are generally ignored. The “A Grade” clients tend to make few demands, pay on time and are good people to deal with. If you spent time visiting them, perhaps you may generate more work such that you could offload the recalcitrant client.
  2. Underperforming staff — they turn up late, they don’t do the job they’re supposed to, they undermine the management team, yet they’re not managed by management.If you have underperforming staff, get rid of them. Simple. If they’re not working out after six months, don’t extend their probation. Tell them the opportunity has gone. Unfortunately, family businesses focus first on what the Fair Work laws say because they are scared of doing the wrong thing. Except, that doing the wrong thing, in my opinion, is retaining staff that aren’t doing what they’re supposed to be doing, or causing disruption. Calculate the cost of keeping them, not the cost of getting rid of them. The cost of keeping them may include the cost of losing a good staff member who decides they’re not prepared to work in a business where management is weak and allows poor performance to continue.
  3. Inconsistent supply — whether it is the quality of the stock you receive, or the length of time it takes you to receive it, many businesses are struggling with suppliers at the moment, particularly if they are internationally based.If you have suppliers that are letting you down, tell them. If the quality of supply is inconsistent, they need to know the impact on your business of this happening, for that same impact will soon happen to their business. On the other hand, if you have good suppliers, let them know how much you love them. Find out whether there is more work they could be doing for you.

Don’t allow your family business to get bogged down. Deal with the 1% swiftly. Then focus your energies on the 99%. Your return on investment could be enormous.

This Week’s Tip

Embrace the type of client, staff member or supplier you love to deal with. And pull away from those you don’t. It’s derailing your family business.