You Must Understand, We All Wear Many Hats Here
If you run or work with a small business, how many times have you said or heard the phrase, “We all wear several hats” to explain how work gets done? In these times, everyone is working harder and doing more with less. But in this ADD world of constant distractions, when are multiple hats more of a burden than a blessing?
Why Must We Wear So Many Hats? It will always be a challenge for a small business to get all its work done. Staffing up to run sales, production and the office in turbulent times often means sharing work. Today’s organizations may be leaner and flatter, but all the technology, systems and controls have created the need for many specialists whose unique skills are only needed on a part-time basis. So, sales staffs take on marketing responsibilities, software specialists manage hardware and the back office also serves as the front office. So, when is it an excuse and when is this fair?
Wearing multiple hats in a small business works when staff is proactively dealing with tasks and challenges. For example, if people know whose part-time task it is to communicate with customers before there is a problem or evacuate the building before there is a fire, multiple jobs are fine. Also, if multiple hats give a company the ability to focus on root causes, that’s fine. An example of this would be a cross-functional task force, assembled to reduce the reasons mistakes are made.
Wearing multiple hats is an excuse when staff is called upon randomly or by “who has time” to reactively solve a recurring problem. If your people are pulled out of their office jobs to make deliveries whenever sales people exceed quota, this would be an example of poor planning. Also, if part of someone’s job is to regularly redo the work of another, this is dealing with a symptom rather than the root cause of someone else’s poor performance.
Three things to do to make sure multiple hats work:
- Make sure people clearly understand the outcomes you expect. The mark of any good small business employee is their embracing of the goals of the business. If they are not working toward selling, delivering, developing or protecting the business, then why not?
- Staff must be personally accountable for their actions. Small businesses cannot provide direct supervision of anyone. The best staff works under general supervision and manages themselves.
- Any small business needs to ensure it is structured to implement its tactics. For example, if the firm wants to meet the unique needs of different customer segments it best not be organized regionally. Too often small business stays organized to implement old tactics despite claiming it is pursuing new opportunities.
Small business will always wear and lament they wear too many hats. Make sure the multiple hats are helping more than they are hurting.
Letter From The Editor: Trust Everyone; Trust No One; But Always Trust Yourself
In 1918 US Senator Hiram Warren Johnson said, “The first casualty of war is truth,” but in 2010 I say that the first casualty of our great recession is trust. In this dubious recovery, many business owners tell me they plan to expand their businesses if they could only trust:
- Their customers to pay on time
- Their bankers to guarantee lending terms even at higher rates
- The political insanity to stop
Well, they and it won’t. But I am watching the most successful business owners learning to run their businesses like a game of “wack-a-mole.” They don’t know where the next menace will pop up, but they do know one will appear and they have learned to trust their ability to beat any threat down.
What and How to Trust
As a younger executive, my bosses told me to “trust everyone, trust no one.” Because I took it literally, it seemed so insincere. But later, after starting out as a naïve business owner risking everything, I learned what it really meant, “Follow the golden rule but protect your assets.”
But now after these last 24 not-business-as-usual months, “Trust everyone, trust no one” is insufficient because:
- Lawyers say a contract is less of a promise and more a guide for resolving a dispute
- Government voids time-honored commitments but then create new ones with little rhyme or reason
- Buyers will save themselves first at any cost to their vendors
But trust is an essential ingredient to profitably grow a business. An owner must trust there’s a demand for their products, and that loyalty among their staff and suppliers will come through. So how and what can a business owner trust? My advice in 2010 is to trust yourself and remember the old saying; Age and experience will always beat youth and energy.
Recognize that your intuition and judgment are only getting better. No one can take away your experience, education and expertise. It is more valuable than the news, money or even a consultant!
Develop the confidence and conviction you need to profitably grow your business in 2010. And trust yourself. The best reason why you will make good decisions is that you will believe in them!
ModCloth: From fashion passion to profit
Andy in the news – a video case study.
Three Ways To Create Profitable Growth
In the new economy, it’s clear the rules have changed for maintaining profitable growth.
Watch my video on three ways to profitable growth: find your footing, maintain your focus and create a new path.
Time To Focus On Predictable, Profitable Growth: Open Letter To Credit Officers
An Open Letter To Chief Credit Officers
Dear Chief Credit Officer:
An open letter to Chief Credit Officers.
If your objective is to protect your bank’s assets while providing credit to stable companies with positive cash flow, then making good lending decisions right now must be very difficult.
Certainly, your portfolio companies have cut direct costs and overhead to the bone. But how good are these owners at forecasting top line revenues?
These days, most owners aren’t sure. After all their cost cutting, a borrower’s unpredictable sales revenues could now have a greater impact on your credit risk than controlling his costs. While $1 of overhead reduction means a $1 drop to the bottom line, a $1 increase in sales only increases the bottom line by thirty cents or less. But since most companies are already operating on bare bones, a positive variation in that thirty percent can quickly lead to profitable growth and reduce your credit risk. Or send the customer into workout if revenues just don’t come in as promised.
So if predictable sales revenues are critical to your customers’ need for credit and the quality of the loans you can make, how can you help your customers better predict the revenues and profitability?
If your customers’ projections (and your loans) are still based on historical sales or industry ratios, are they real? If not, are they too optimistic; too pessimistic?
In our post recession economy, changes in customers’ buying behaviour, on-line and off-line sales channels, and pricing are very likely. And these changes will mean your portfolio companies’ sales projections could be way off. Both over and under.
If you are interested in your portfolio companies taking a better approach to predicting profitable growth, here are three questions you can ask your borrowers:
- Explain how your existing customers have changed their buying behavior and its impact on your firm’s profitability.
- Describe how you intend to grow sales profitably without increasing your firm’s cost of goods sold or overhead.
- How do you plan to use new sales and marketing channels to reach younger buyers and create new offers that appeal to buyers no longer willing to pay more for better service?
If your borrowers have logical, practical answers to these questions, lend them what they need because they have a handle on their predictable growth. If they don’t, question their revenue forecasts. Have your borrower visit www.profitablegrowth.com for helpful tips on how they can get the answers you need.
PS. If you are a business owner, isn’t it a better idea to stay one step ahead of your banker. After all it’s your business, risk and profits!
