Plan for the Bad Times Too

The recent tragic events in Christchurch should make business owners everywhere stop and think, “What would happen to my business if a big earthquake struck tomorrow?”

Just the basics of business interruption insurance, data security and off-site back-up should be considered as a minimum. Once that is sorted attention can then be directed as to how you would continue to service your customers from another location and what would be required to achieve this in the shortest possible time.

I recently received the following article from Brian Tracy and although it is fairly general in nature, it does suggest a practical process to go through in the disaster planning process. Thanks to Brian for sending this through.

Two Techniques for Turbulent Times
By: Brian Tracy

There are two techniques that can be useful in developing the foresight that is a hallmark of effective leaders.

Practice Crisis Anticipation
The first is called "crisis anticipation" and it involves looking ahead as far as you can and asking, "What could possibly change or go wrong that would threaten our survival?"

Think About the Worst Possible Event
For example, what would you do if interest rates doubled, as they have done in the past? What if your best-selling product, or service, suddenly stopped selling, as often happens in high-tech industries in times of rapid change. What if a key executive died unexpectedly or your offices with all your records were destroyed by fire? What if you lost your key customer or major source of revenues?

These and other questions can only be asked and considered by the leader, the person ultimately charged with the overall responsibility for results. The failure to think through possible crises in advance can open you and others to fear, panic and confusion if something goes wrong.

Plan for a Crisis
The Greek philosopher Epictetus said, "Circumstances do not make the man; they merely reveal him to himself." A crisis is the genuine test of courage and effectiveness in a leader. You can greatly improve your abilities to function in a crisis situation by thinking it through in advance and by developing contingency plans - just in case.

Determine What Can Go Wrong
The second technique is called the "master method" of decision making. It involves asking, "What is the worst possible thing that can go wrong in this situation?" Once you've asked the questions, you must decide whether or not you can live with those consequences. For example, in an investment, or new product introduction, or new promotion, the worst possible outcome may be that you will lose every penny. Can you live with that? Can the company survive? There are many different types of decisions and one of them is the decision you cannot afford to make. Most big failures result because someone made a commitment of resources without carefully considering the worst possible outcome.

Do What Billionaire's Do
John Paul Getty, the great oil billionaire said that one of his secrets of success was to always determine the worst thing that could happen in any investment - and then make sure it didn't happen.

Action Exercises
Here are two ways to apply these techniques to your own situation:

First, make a list of the three worst things that could happen to your business or your department. Then develop a strategy to deal with these situations if they occur.

Second, practice "crisis anticipation" in each key area of your life. Look into the future and imagine a major setback. What would you do if they happened?

For assistance in reviewing your business, where it may be vulnerable and what to do about it, contact Andy at andyburrows@iconbusinesssolutions.com

Is Everyone in Your Canoe Paddling the Same Direction?

As a business owner you can spend all your precious time and a stack of money developing a killer product or service that should be successful. All these efforts may come to nought however if your team is not on the same page as you and shares at least some of the passion that you do for your business. How do you get your staff really engaged in the business and working with enthusiasm in their daily tasks?

There is no silver bullet, but to generate job satisfaction and an environment that will stimulate and encourage your team to attend work, you will need to assess and apply the following where possible;

· Encourage internal promotion and select new recruits with care if this is part of your job. You will need to help new staff member settle in their positions and old staff members to feel comfortable with the new recruit.

· Review and assess jobs regularly so that your staff member knows you are aware of their activities and responsibilities. You like to enjoy your job so you need to ensure you can help them enjoy theirs.

· Recognise and give regular feedback to your employees. Understand the importance of their work and show your appreciation, even in small ways. Do it often.

· Ensure people are paid fairly and competitively. Remember money does motivate people and they should be rewarded accordingly.

· Provide acceptable working conditions for all staff. Where possible implement new systems and technology and give your staff as many facilities as possible.

· Always have regular meetings which identifies work in progress. This can also be an ideal time to have group discussions and input for certain business activities or decisions.

· Set and revisit objectives or targets. These must be clear, concise, measurable and regularly assessed to ensure that everyone is on track.

· Measure individual staff members contribution towards company goals.

· Set high standards. These may require people to take an extra step or go out side of their boundaries, however this is what it is meant to do. You want your team to be able to take calculated risks and grow with your business.

· Never make promises. You shouldn’t make promises if your intentions are otherwise. Offering rewards and then retracting them will make your staff angry and lack confidence in you.

· Be honest with your staff. If you have bad news tell them as it is better coming from you instead of anyone else. Honesty also relates to good news. Praise them where you can.

· You must set an example to your staff as if you imply a bad or unprofessional impression then they will assume that this is the standard the behaviour will be accepted.

· Measure absenteeism and staff turnover. This will be clear indicator if staff are finding their positions difficult or unsatisfying and will present a pattern of what the company must do to ensure that the position is filled should staff leave.

Having a fair, diplomatic and structured environment will keep your employees active and enjoying their jobs.

By simply applying the techniques above you will be able to have a more efficient and accepting work environment for your employees to attend to every day.

For more help with creating the right environment in your business, contact the author or visit the Icon website at http://iconbusinesssolutions.co.nz/

Andy Burrows

Senior Business Advisor. andyburrows@iconbusinesssolutions.com

When Restructuring, Follow The Process or Suffer the Consequences.

When business conditions have reached a situation where you are chronically short of cash and/or sales, you may have no alternative but to resize the business to fit the new environment you find yourself in. Delaying this difficult decision may in fact jeopardise the whole business and just as a ship may have to jettison some cargo in a storm in order to stay afloat, you as the captain of your ship may have to take similar action.

Having to face up to employees and make decisions on who goes and who stays is never easy. Don’t under-estimate it. You are dealing with peoples’ livelihoods and how this may affect their families, so the TV image of the steely eyed boss calmly saying “You’re fired” is far from reality, especially under New Zealand employment law!

What will help you both avoid costly personal grievance claims and the emotional trauma of loosing valuable and often long term employees is to FOLLOW THE SYSTEM. The key is to share as much information as possible with employees, consult with them and invite their suggestions, and then follow fair and reasonable selection processes, if that step is also required. The mere fact that you lay your cards on the table and show the difficult situation that the company is in will help minimise the likely shock and anger that employees naturally display when faced with the prospect of loosing their job. When faced with the cold, hard facts they are more likely to see your side of things and are more likely to come up with possible solutions to help, while of course at the same time saving their job in whole or in part.

On the legal side, the Employment Relations Act specifically states that where an employer proposes to take an action that affects the employment of the employee, or intends to make an employee redundant, it must act in good faith towards that employee. This means the parties to an employment relationship have to be active and constructive in establishing and maintaining a productive employment relationship in which the parties are among other things responsive and communicative.

What the Act does not have are practical, step-by-step procedures to follow with suggested wordings for letters and meetings. This is where I can help and if you think that a restructure may be necessary to keep your company competitive, or perhaps even alive, I suggest you make contact with me at andyburrows@iconbusinesssolutions.com or visit my website at www.iconbusinesssolutions.co.nz

Andy Burrows - Business Advisor

No Competitors is Good. Right?

Imagine you are new to business ownership and you are considering buying a new venture. Which one of these two businesses would you buy? The first is selling a new concept totally new to the market and where no competitors exist. The second is selling a version of a product that has been around for years and where dozens of competitors are in the market.

Your first reaction is likely to be to buy the new concept business, because you have been told by people (including me to a degree) that being unique is good and it will be easier to sell and keep a high price if no competitors are around to bug you. But you would be wrong.

The problem with the new concept business is, at least for someone new to business ownership, you need to spend a long time and a lot of money EDUCATING the market about your new concept before they are ready to buy. This is fine if you have deep pockets and can take a longer term view of ROI, but for most small business owners newer to the game, you need a quick payback and that will more likely come from a tried-and-try product or service. The key is to look for or develop a COMPARATIVE advantage from your competitors so that you can carve out a niche in the already developed pool of demand that exists. Better, faster, cheaper, more colours, less waste or whatever feature that will set you apart.

So don’t fear competitors. Embrace them. Hang out with them and learn their weaknesses and how you can be better. It is likely that if they have been around for a while they will have become fat and lazy. You will be able to take a proven idea and do it better than many of them, therefore building your business quicker than they can react to and building a successful enterprise for your future.

Andy Burrows

Business Builder