Edition 443 – Listen Up
When I’m working with our clients, I love it when I’m right! Not because my ego is severely lacking. It means we have a breakthrough…a real “a-ha” moment, from the client.
We’ve been working with a new client recently and the numbers aren’t stacking up. Profit is low. Cash is tight. There’s a bit of robbing Peter to pay Paul to make things happen. It was one of the reasons we were called in, in the first place.
I asked them to pull apart their numbers during some of our meetings together. We’re trying to work out the margin they’re making on the jobs they’re working on. It’s been a slow process, partly driven by some education of them, on my part, of how the numbers work in a business. Part of it is because their financial systems needed more than a renovation. The quality of your analysis is only as good as the quality of the information that goes into your system.
The other element at play was mindset. This client was convinced their jobs were profitable and was using old parameters in quoting new jobs. It was a classic situation of someone who has been doing something, the same way, for so long, that the behaviour had become ingrained. Some might call it stubbornness.
In the end, what generated the “a-ha” moment was a comment from me in one of our weekly catchups that, perhaps, our relationship wasn’t working. They weren’t listening and we weren’t creating the impact in the business, nor the change in behaviour, that we had achieved with others. Perhaps that was the wake-up call they needed – some very tough love!
Next meeting, proceedings opened with a huge serving of humble pie from the client. I was right and they were wrong!
They proceeded to show me how they’d miscalculated some elements of their work. Once they improved the quality of the information going into their system, they could see quite clearly that for a number of jobs, their margins were horrible, and nowhere near the target band I’ve told them to aim for.
This was a real breakthrough as it meant that we were making progress on them changing their mindset about what it took to make this business work. No one likes to be told they’re wrong, if for no other reason, than it hurts their pride, let alone their ego. But this opened up a whole series of other conversations about the type of work they’re doing, where they’re making money, and where they’re not. It was very powerful.
In the end, whilst the quality of the financial information has improved, and the owners of this business devoted a bit more time to looking at how they made money, rather than getting out on site and “doing-the-do”, this shift only came about because, finally, they were prepared to accept that:
- I’m challenging them about how they do business, to help them, not judge them.
- If you’re going to call in an expert, you need to listen to what they have to say.
- In order to change the business, they had to change the way they went about doing business.
I’m excited for the next stage of this journey, with this client. Things will be tight for a little while to come. However, my confidence in their ability to change the course of the business is considerably higher than it was looking like, not that long ago.
This Week’s Tip
“Having worked with small and family businesses for 37 years,
you get to the point where, if a client isn’t listening, it’s time to move on.
Life is too short to do work that isn’t rewarding, irrespective of how much you charge.”