Have you ever wondered what would happen if you cut out all extra service and personal touches from your business?  Would customers still come if you were excellent but detached? My recent shoulder surgery was an in-your-face experience of how this works.

After enduring shoulder pain for a year, an MRI confirmed that my rotator cuff was ripped apart. I found Pittsburgh’s best surgeon, and after a 15-minute consult, he booked me. 90 days later, I arrived for the surgery, and was quickly processed, IV’d, gurneyed and staged for the operation.  No visit from the surgeon, little small talk from the nurses, and no remorse for their 2-hour delay in pre-op.

When I objected, they sedated me to ensure my compliance and placed me in the queue. The surgeon never visited before or after the procedure, and three hours after the operation, I was sent home to heal.  A week later I had my ten-minute follow-up with the surgeon.  Running out of time with more questions to ask, I tempted him with the only lure I had. I suggested that he operate on my other shoulder.  At this, he gave me another ten minutes, satisfied all my concerns, and recommended scheduling the next one before the summer.

How did this make me feel? Am I a happy customer? What business lessons did I take away from this experience?

I am happy with my surgeon and the results to date. Yes, I felt deprived until I accepted that when it comes to surgery, I’d better get my loving at home. My surgeon and the procedure have my highest recommendation. If anyone needs a shoulder surgeon, call me at 412-973-2080, and I’ll put you in contact with the best one I know.

So what lessons can we learn on running our businesses in a cost-constrained marketplace where raising prices or offering more value is impossible? How do you provide your value when your market won’t pay you for it?

•    If you offer a small part of the total package your customer is buying (surgery vs. a fully recovered shoulder), you must be efficient at delivering the only part you can.
•    If you have to run a high-volume operation, focus all your resources on maintaining quality and efficiency at the highest volume possible and cut out any and all distractions.
•    Spend your non-delivery time on generating more customers.
•    Have faith that factors you can’t control — like physical therapy and patient commitment to rehabilitation — will make your work (surgery) speak for itself.

Many years ago, when I was a corporate manager, I sat in on an esprit de corps meeting during which a furious debate ensued over the impact of some corporate policy on how some employees might feel.  After listening to this debate, my favorite executive stood up and said with exasperation, “For God’s sake, they can get their loving at home, we run a business here.”

Perhaps there’s a lesson for many of our businesses. Despite every efforts we make to cushion and enhance the experience we offer, sometimes it’s only about focusing on your best and highest use and letting your customers meet their other needs on their own.

It is standard practice to qualify a prospect on the basis of time, need, authority and money, but why not by corporate culture as well? We all find it easier to work with some companies just as we prefer working with some employees more than others. In fact, as a result of outsourcing, with more and more work going to suppliers instead of employees, perhaps the supplier-customer relationship should (and will) start to mimic the employee-employer relationship.

If this is so, then as suppliers, we should start to assess our prospect’s corporate culture just as we did when deciding to accept a company’s job offer. While I’m not recommending pre-relationship psychological testing, we may need to run a relationship check just as we would a credit check. Since people still buy from people (as opposed to companies) some level of compatibility is essential. After all, customer-supplier relationships fail most often because expectations were not set, agreed upon and then met. Some relationships may be already doomed from the start!

So let’s take a few moments and decide whether we are picking good long-term partners or “one-time sales stands.”

• Does the decision-maker communicate like you do?
• Does he/she share some basic values with you?
• Does his/her company make decisions like yours does?
• How are disputes resolved, if they are resolved?
• Is it a conservative or progressive environment in terms of risk-taking, communications, problem solving, partnering?

While sales goals have to be hit, they are rarely accomplished through the first order. Therefore, developing an ideal customer profile before closing that first deal will help ensure that more will follow. Taking a few minutes when moving qualified prospects through the developed or proposal funnel stage before closing them will only enhance the chances of successful long-term partnerships. This profile can easily be added as part of your qualifying customer or pre-proposal questionnaire. Feel free to contact me if you would like some further thoughts on how to do this.

As a growth consultant for small businesses, I’ve enjoyed many opportunities to see how various small businesses function, especially those that have operated for a number of years. In an age of understaffed companies and conflicting and competing demands, most of these companies are so busy helping their customers that they don’t take the time to help themselves.

They tend to lose sight of what I call the extraordinary that lies at the heart of the ordinary in their operations–the characteristics that make them special and unique. Two such companies in Butler County are W.K. Thomas and Interstate Pipe and Supply.

The presidents of both companies lacked a formal marketing program and realized that traditional, relationship selling would not get them to where they wanted to be —in the scarce space of marketing and sales in their respective businesses. Now, they are both changing their companies to achieve that.

Thus far in our work together, they’ve focused on expanding their values and defining and honing what I call their individual Best and Highest Use®. Best is what they love to do. Highest is what they do really well. And Use relates to what their customers value and are willing to pay for.

Under the leadership of Brent Thomas, W. K. Thomas & Associates provides pre-engineered steel building and construction services to the commercial, industrial, community, and religious markets throughout Western Pennsylvania.  Brent’s father, Bill, now Vice President, established W.K. Thomas in 1974 as a custom-home builder and general contractor. Since then, the company has remained a privately owned, family company.

Other firms rely heavily on the service offerings of project management and estimating as commodities to drive business forward. They end up competing in a market where bottom dollar pricing and the resulting low-quality construction become the norm.  But Brent Thomas is linking the brand of W.K. Thomas to pre-engineered steel buildings as the company’s big differentiator and is driving revenues up. His company is growing a reputation in Butler County as the go-to company for these types of buildings.

“I’ve stepped outside of being jack of all trades,” says Thomas, “I’m focusing on pre-engineered steel buildings which is our Best and Highest Use, have taken on more responsibility for sales, and I’m reorganizing our team to help energize this new direction.”

Under the leadership of Brian McCarrier, Interstate Pipe and Supply specializes in water, steel, sewer, plastic, gas and culvert pipe and fittings, valves, tanks, and pumps. Brian’s father, William, founded the company in 1968 when he purchased a small, pipe-supply house in 1968 in Clintonville, Pennsylvania and gave the company its present name. He opened a second branch early in the seventies, and started the Butler, Pennsylvania branch early in the eighties. Late in the eighties, he opened a branch in Washington, Pennsylvania.

“I’m relying on our Best and Highest Use to move our business forward,” says McCarrier.
“We’re leveraging the culture of Interstate Pipe & Supply and our moral responsibility and
stewardship to better serve our employees, customers, and the community of Butler County.”

The result: As McCarrier’s competitors rely on cut-throat pricing to sell their commodity products, customers of Interstate Pipe & Supply now see the company’s differentiated
brand as worth more. 
 
When I began working with Brent Thomas and Brian McCarrier they both had strong, well-established businesses with great potential for growth and wanted to take their companies to the next level.  What made sense for them was my ability to find the extraordinary within the ordinary of their companies. My approach has been to find the characteristics that make them special and different from their competitors, and to cultivate these aspects into exciting opportunities to grow their businesses.

Working with them and their customers has led me to understand their product lines, how they add value, and how they develop special relationships with their customers, whose feedback is critical to our endeavor.

The upshot is that now W.K. Thomas and Interstate Pipe and Supply, are becoming more aggressive in proclaiming their value and more consistently educating their customers about what they can do to help them. Thus far, we’ve focused on expanding their values and defining and honing their individual Best and Highest Use®.

Throughout my years of consulting with businesses like W.K. Thomas and Interstate Pipe and Supply, I’ve deployed this approach to help more than 430 businesses owners identify the specific markets that’s right for them and their companies. This has had a $450-million impact on the economy.

Best and Highest Use also immunizes companies against the “Be All Things to All People” disease. This disease is as common as a cold, but it’s as deadly as the plague for small businesses.

When business owners fail to target specific markets in this way, a number of consequences occur, all of which are bad. Their companies aren’t special. They’re mediocre, forgettable, or worse. People can’t refer customers to them. Their companies attract unqualified prospects and waste resources on prospects who could care less about their offers. This, in turn, diminishes their efforts with regard to prospects who do.

What’s more, best use helps business owners to resolve the greatest pain or create the greatest opportunity for a narrow slice of a market. This creates a crucial intersection for them between their companies, their Best and Highest Use, and the needs of their customers.

Over time, I’ve had the privilege of learning, using, and teaching a variety of growth tools for organizations. We’ve used a variety of names for these processes, including strategic planning, management by objectives, sales management, and incentive compensation. Too often, these systems steamroller over the interests of the users. The fact is that old-fashioned, autocratic tools just don’t work anymore.

More than a few times, I’ve had people challenge my concept of Best and Highest Use, saying that it’s just another term for distinctive competence, one of the buzz words that periodically make the rounds of corporations and MBA programs. In one way, they’re right. Best and Highest Use is essentially distinctive competence for business owners. The difference – and it’s a large one –is that although distinctive competence speaks clinically of skill sets and marketplace advantages, Best and Highest Use involves an owner’s emotions, goals, and personality.

One concept I hear kicked around is the term, best practices. But this assumes that all firms start out and grow and stay completely equal. To center your business on best practices is to deny, ignore, and disrespect your Best and Highest Use^®. How can you ever tell if you are better or worse than you should be if you only judge yourself on the basis of the lowest, common denominator of other companies?

Working together, Brent, Brian, and I continue to focus on their individual Best and Highest Use to translate new customer demand into substantial, dramatic growth and confidence in their abilities.

In the short and medium term, we’re tailoring initiatives designed to achieve profitable sales growth. At the same time, both of these company leaders are experiencing a renewed excitement and passion for their businesses. At a time of economic hardships when competitors are pulling back or taking cover, their passion and excitement is giving them confidence to make it work.

As we reinforce the abilities of W.K. Thomas and Interstate Pipe and Supply to deliver higher value at lower cost, we’re decommoditizing both companies.

This is not to say it’s easy. For one thing, Brent and Brian have had to break old habits. That’s difficult. But my goal is to push them out of their comfort zones in a way that causes willingness to raise new behaviors while preventing them from making ultra-risky, bet-the-company decisions like introducing price changes to gain market share, hiring non-producing sales people, or getting rid of a sales force.

As I work with companies like theirs that have enjoyed years of success, I’ve enabled them to make course corrections a step at a time. The end result has been that they’ve sharpened their views on the kinds of businesses they want, the kind of services they deliver, and they’ve stopped trying to be all things to all people. These are hard choices that emerge from recognizing that everything they may be involved in is not a business.

Andy Birol is the Founder and President of Birol Growth Consulting, www.andybirol.com. You can reach him at 412-973-2080 or at abirol@andybirol.com.

As business owners, we know that no one can intimidate us or our firms, right? But if the prime minister of England can be wiretapped while learning of his child’s cystic fibrosis, and his entire government can be bullied by a single media company, what  recourse do we have we when we are intimidated?

How do we “Davids” face the “Goliaths” in our businesses? If you face bullies in the form of customers, investors, vendors, or partners, what can you do? When negotiations with bullies become pointless, here are four logical actions you can take to get out from under their thumbs:

• Create alternatives: No resource (people, money, expertise, or energy) is irreplaceable when you discard your assumptions.
  
• Pay the cost of just walking away: Realize that you can recreate what you have lost and more the sooner you start over.
  
• Expose your bullies: Go public with their malpractice or take it to legal and any other authorities they respect.
  
• Don’t let yourself get screwed in the same way again: Understand how and why you got taken and don’t ever make the same mistake again.

As the News Corp. scandal threatens to spread to U.S. shores and to violate our privacy, it’s clear that power, technology and desperation will further encourage bullies everywhere. If you’ve been wronged, stand up with your integrity, confidence and righteous indignation and then take the right steps to never again put yourself in the same position.

If your business outsources work to, or does work for another business, you understand contracting and subcontracting. But no industry knows contracting better than the one that invented it: the building trades. Last week, I was invited to lead a workshop/meeting for the Master Builders Association. As part of the program, I gave this hardened group of building- trade executives, those next in line to run their family businesses, an exercise whose results reveal valuable insights for any business.

Each participant was given the following key success factors that dozens of my building-trade clients have taught me matter most. The group was asked to rank the ones they felt were most critical to master in the next two years.  Here are their ranked responses which could apply to your business too! 

 What conclusions can we draw from these data and the comments of the group?

 The (sub) contracting business remains a tough one where providing top quality at a competitive price is the key success factor.

• Managing projects, materials and labor is perceived as the next most important factor.
• The group is concerned that subcontractors who don’t manage these key skills will likely go out of business in the face of reduced project-funding sources and increased competition.
• In the face of government cutbacks, the sector is counting on private projects to take up the slack.
• The group understands that differentiated skills and services, like value-engineered solutions and LEED certifications produce better margins. Although they are hard to develop and protect from copycat competitors, new products, markets and technologies have historically ensured profitable growth for the industry. 

My thanks to Brett Pitcairn of PJ Dick Construction and Jon O’Brien of the MBA for giving me the opportunity to present to the Master Builders Association.

Do real-life stories hit home for you? Years ago, I had just been engaged by a partnership. After contracts and checks were signed, one of the partners waved me into his office and said, “There is something I need to tell you.” Closing the door behind us, he anxiously confessed his need to tell a secret. I responded, “OK.” Then he said, “I’m having an affair with one of my partner’s wives, is that going to get in the way of our growing the company?” Stunned, I responded, “You’re telling me this for a reason?” And he said, “I want you to know this because no one else here knows.”

What would you do if someone said this to you? 

When I ask this as a case-study exercise in a workshop, most respond, “Void the contract and return the check.” Although this is the safe choice given that the client was trying to entrap me in his turpitude, there is a better win-win decision. 

If you’re faced with a similar situation, don’t confuse the bad judgment of business leaders with the needs of the business. Despite the owners poor leadership, their company dearly needed a growth strategy to best support its customers, employees, vendors and their families and charities.

What happened? I told the irresponsible partner that I would not divulge his sin, but if asked I would not deny I knew. I took the project and helped grow their businesses, as it was clear their company needed to be split into two firms. Surprisingly, the other partner never discovered the unholy alliance. 

The teaching moment: Small business serves many good causes and feeds many mouths besides the owners. Too often the brave, risk-taking intentions of owners get undermined by the actions they take (and don’t take) as ill-trained leaders. If you are running or trying to help another small business succeed, talk to the owners about the actions of their leaders, even if you are speaking to the same individual!

Recently, I had an experience here in Pittsburgh to join several dozen local executives who were divided into a day-long game of coexisting as four cities. Unfortunately, my fellow citizens were given no money, jobs, opportunities, or options to survive.  Simply put, we lived in a ghetto, had had to fend for ourselves and to rely on charity from the richer cities.  Conventionally, our group bonded, organized and negotiated, but to no avail as ultimately we perished from illness and incarceration.

Being on a losing team with no hope was tough, but for an out-of-the-box problem-solver, the experience of losing control over my own survival was crushing. As owners, we assume we can at least provide for ourselves, let alone what society demands of us. If you want to feel this futility for only two hours, just rent “The Pursuit of Happiness” starring Will Smith. As business owners, we take risks based on our confidence to control our destiny. What can we learn from being in the very condition we spend our whole lives avoiding and our taxes and charity trying to fix? Here’s what I learned:

1.   Before offering charity or solutions, ask a destitute or damaged person or customer what their goals are. The more we were offered options to abandon our homes, the more resolved most of us were to remain. All we wanted was the opportunity to get a job, make a living and have the right to seek our own destiny.

2.    When offering help, don’t assume that your money, direct involvement, or your lifestyle is necessarily what someone wants. Some of us who chose to relocate, returned as we were unhappy despite clearly better conditions.

3.    Whatever your agenda is for fixing a problem or situation, don’t assume it’s shared by those with the problem. It was remarkable how well-meaning our benefactors really were and how we misread their pure intentions.

This brief experience of absolute destitution and total futility was eye-opening for me. As a firm believer in the free-enterprise system, the experience validated my optimism that most people  want to take responsibility for improving their conditions, as long as they can do so their own way. The experience also reinforced how important it is as a benefactor to ask and understand what help someone wants, and then to understand what other alternatives they may pursue as they act on their good intentions.

When Leadership Pittsburgh offered me the chance to witness live police work, I jumped at the chance and chose Pittsburgh’s highest crime zone on a Saturday night, graveyard shift.  Arriving at midnight just hours after two murders in the precinct was jarring, but the sergeant’s calm, terse orders gave me no time to reflect.  After roll call, I was introduced to my officer and we drove off in response to nonstop calls about gunshots, domestic violence, armed intruders, crack-addict beatings, fugitive surveillance and after-hour gang hangouts. Amid the adrenaline, false alarms, driving into forbidding alleys and criminal behaviors, I was struck at the incredible judgment an officer must have just to stay safe and work effectively. Here are 5 lessons I learned that apply to all our businesses.

1.    Confidence is survival. Watching all the officers in action is a primer on courage. Every stop is dangerous, and one cop remarked that he feels there is a 60% chance he will be hurt or worse each shift. “You can’t show fear or you will be hurt on the job,” he said. “But you can be afraid and then you can confront it.” As business owners operating in risky times we all need to balance confidence and conviction with objectivity and perspective.

2.   Fighting insurmountable odds means setting boundaries. When working as a team, officers must prioritize which 911 calls to cover first. Covering a horseshoe-shaped territory requires coordinating who’s first, second and third on the scene. This maximizes officer safety, response time, situation assessment and quick reassignment to the next call. How can and should your business respond to challenges and opportunities?

3.    Errors of omission mean life or death. Errors of commission mean punishment. Forgetting which gangs, after-hours bars and meth labs are “running hot” spells certain trouble for an officer. Misjudging a domestic disturbance call can mean disciplinary action. Experience on the job enables an officer to categorize mistakes and make fewer and fewer of them.  How does your staff make mistakes and react to your rules?

4.    Work with what you have. Officers don’t let their lack of resources compromise their abilities. Old vehicles and communications technology are facts of life but texting and personal cell phones provide adequate work-arounds. As business owners, all of us  are used to working without all that we need. Are you aware of all the ways your staff gets their jobs done?

5.    Communicate, communicate, communicate! You can manage adrenaline and fear by checking with your teammates. It takes only ten seconds to get a second opinion or plan a better response from a trusted peer. How much trust has your staff built with and without you?

Police work in a crime zone is a study in watching expert human beings react and respond to symptoms of dangerous, intractable problems. Without the resources to resolve the root causes, these fine men and women learn how to rely on each other and stay alive so they can help whom they are able to as much as they can. Passing  judgement on their performance without understanding the context for the decisions they make is impossible from a distance.  As a business owner, the biggest lesson I took away from this unforgettable night is how critical it is to always gain and respect field knowledge from those who have it.

Thank you, Pittsburgh’s finest!

Recently, a group of partners of successful law, accounting, investment, and M&A firms met me for lunch and explained why their partnerships worked so well. I was most taken with how their success contrasted with the pain suffered by so many small businesses. Why do partnerships work so well with professional services firms and are so challenging for the rest of small business?

Here are the lessons I took away from the discussion:

Lesson I: Partners with the same professional degrees and training form tight, loyal and like-minded groups.

Implication: Small business partnerships are founded by experts with unique and complementary skills. Don’t expect different owners to think or act similarly. It will be harder and take longer to achieve the same esprit d ‘corps among small business partnerships.

Lesson II: The real definition of any Partner is to be a Rainmaker, who can land and grow clients, regardless of whether they have managerial duties in the firm.
Implication: Small businesses require strong operations, finance and sales/marketing in equal measures, so different Partners proficient in different functions are needed.

Lesson III: Successful partnerships do not pay compensation to equity partners based solely on their shares but on their performance and contributions to their firm’s profits.Implication: Regardless of ownership percentages, small business Partnerships would be well served to set up compensation plans based on their partner’s job descriptions and performance.

Lesson IV: Professional services firms make new partners, regardless of their experience or financial buy-in, work in their firm for a couple of years before bestowing formal partnership titles. This ensures they “fit” with the Partners regardless of how they “look on paper”
Implication: Small businesses would be well-served to similarly “date before marrying” instead of rushing into the arms of new partners, VC’s or private equity firms.

Lesson V: Professional services firms recruit talented individuals by offering partnerships, especially to those with books of business that can produce immediate revenues for the firm. Partnerships also provide the firms with the ability to institute and enforce non-competes’ on Rainmakers, protecting the firm’s long-term cash flow and revenue streams. Implication: Small business partnerships are usually created when partners bring different resources to the table including technology/inventions, operating ability, money and sales/marketing. As a result of these divergent contributions, it is not as easy to protect the firm from the power or departure of any one Partner.

Lesson VI: Partners in professional services firms build long-term client relationships which are leveraged through having less experienced/expensive professionals perform most of the actual “work.” Having the right amount of these professionals is critical to the Partnerships’ profitability.
Implication: Despite the personal relationships small business Partners build with their customers, much of the actual delivery of their firm’s value cannot be done by the partner.
Consequently, maintaining the same level of trusting relationships is difficult. So is the actual delivery of consistent “work” in the form of products, especially through distributors or inexperienced professionals.

Lesson VII: The recurring nature of relationship sales allows Partners in professional services firms to wield extraordinary marketplace power by closely managing their clients.
Implication: The transient nature of most buyers and customers makes building relationships much more difficult, especially since sales are usually more transactional than they are relationship-driven. Few Partners in small business know their customers as well as their counterparts in professional services do, despite spending more time and money on formal sales and marketing.

Partnerships in professional services firms have been around for centuries and laws and business practices ensure many of these will continue for decades and centuries to come. The goal of the small business Partnership should be to learn and apply the characteristics that can work in their businesses and not try to imitate what cannot be applied to their businesses.

As businesses struggle to succeed in our economy, mistakes are often deadly. And we see many businesses making deadly ones all the time.

Too often, insufficient capital, poor controls or inadequate customers are blamed as the main reasons a business flounders or fails. While these reasons are obvious, I believe they are symptoms, not root causes of business failure. The root cause of most business failures is the owner’s reaction to adverse events. Long before a business sinks, its owner has likely become distracted, detached or depressed. Why?

Business owners are still about the most independent citizens in the world. They act on their free will and build companies by pursuing their irrational dreams to deliver a product or service to customers who will pay for it. If you see an owner making one of the following three mistakes, admonish them to change their ways as soon as possible if they are:

1. Not exhibiting confidence and conviction in their actions to “Get There,” wherever “There” is for them.

Owners are excellent at implementing plans within their comfort zones but in tougher times often develop ambivalence or apprehension about what works or what to do. They

a) Don’t take quick and decisive action,
b) Straddle between multiple goals and
c) Implement tactics half-heartedly.

Lack of confidence and conviction saps their money, their energy and eventually their passion for business. The easiest remedy is to force or create a defining point in the business to rekindle confidence and conviction. Terminating a problem customer or employee, changing pricing or replacing vendors all can force a defining point. These shocks to the system open a business owner’s eyes to new possibilities.

2. Not refocusing on their Best and Highest Use (BHU) which is:

a) What they and their business are good at doing,
b) What they and their business like doing and
c) What has been valued by the market for what they do.

Businesses often get complacent and distracted from BHU. What would a detached, unbiased, outsider with “fresh eyes” learn from talking to your customers? Is your company still selling the same things your customers say they want to buy? After interviewing over 5,000 customers of my 450 clients, I have never seen a company who can’t better align what it offers to meet the needs of customers.

3. Not recognizing when their personal goals and actions are diverging from goals and objectives of the business.

When asked, “What are your goals?” fulfilled owners always list business goals alongside personal ones. When an owner gets bored or disheartened, his or her personal goals often diverge from their business passion.

If an owner admits he or she has lost their mojo, they have three opportunities to regain it fast by:

a) Reconciling their personal goals with those of their business,
b) Outsourcing their responsibilities to a president or
c) Selling their firm.

As long as a company is run by its owner-operator, he or she still plays the most critical role in its failure or success. Before their company fails or succeeds, that owner repeatedly faces (and hopefully overcomes) their own crises of confidence. If they are acting focused, engaged and optimistic, their firms will succeed. If not, they must confront and eliminate their doubts. For our economy to return to profitable growth, we need every business and their owners to hire more people, introduce new value and expand their capabilities. And that’s no mistake!