How not to run a business (part 10): Undermining Your Business
There are lots of very subtle actions that can be taken where you can unknowingly undermine your business success. Let’s explore.
Don’t fire a position multiple times in a row
While this somewhat depends on the position, it’s still never a good sign when you must fire staff from the same position over and over. Even if you’re disenchanted with the people you’ve hired doing the specific work and after firing a position more than three times, this says more about your needs than the position. It’s clear, what you need in the position and the type of people you are hiring is mismatched. You need to rethink the job requirements for the position and hire the correct talent to fit that role. When you fire leaders in this way (i.e., VPs, SVPs or C-Level execs), this situation is even more detrimental to your business.
How will this undermine your business? Firing a position more than three times says several things. First, it says you don’t know what you’re looking for. Second, for all of those people whom you’ve hired and fired, the word will get around that anyone who’s a competent candidate won’t even consider the position. Once you realize that the most talented pools are relatively small and that they do talk to one another, firing a position multiple times means the word will get around to not hire on at that company. Once the word gets around about this situation, it is never a good thing for your business. The higher the profile of the position, the stronger the word gets around and this will severely undermine your ability to acquire top-end talent.
Additionally, the word will also get around in the recruiter community and they also choose not to place talent at your company.
Don’t choose an industry without researching its requirements
When you’re setting up your business plan, you need to thoroughly research the industry your business will be in. For example, selling a product or service to the medical industry is profoundly different than selling it to marketing teams, which is also profoundly different than selling your wares to the government or doctors or lawyers or farmers.
How will this undermine your business? If you fail to properly research the types of clients you are working to obtain, you won’t understand their demands and requirements. Every industry is bound by laws and regulation (some industries more than others). If you fail to realize that the industry you are targeting requires strict compliance to laws, you may also fail to understand how those laws apply to your business and that your company’s compliance may be unattainable and far too costly. If you can’t comply with the laws, you may never be able to land the deals on which your business depends. Yes, for many companies, vendors must comply with certain laws, security requirements and industry standards before a company will agree to close your deal. Failing to research these requirements may undermine your ability to remain in business. Or, it may relegate your business to smaller companies needing much smaller deals.
Don’t fail to underestimate the power of word of mouth
Sites like Glassdoor exist for a reason. Before Glassdoor, there was no transparency except by word of mouth. Now, there is.
How will this undermine your business? Before Glassdoor, recruiters would make the determination of where to place candidates. Recruiters also won’t choose to place prospective employees in toxic environments. That is, environments where firings are common, where turnover is high and where employee morale is extremely low. They won’t place anyone for a very good reason… they know the new employee won’t stay long enough to allow the recruiter to collect their commission. Recruiters only get paid their commission if the placed employee stays for the specified duration of time (3-6 months depending on the placement contract). Recruiters, therefore, will not place would-be candidates into an environment they know will be a short lived role. It also likely means that when you do find recruiters who will work with your hiring needs, they likely are unaware of the problem. Though, once they place and realize they are making no money, don’t expect to hear from them again.
Additionally, with sites like Glassdoor, employees can remain anonymous and be brutally honest about their experiences at the business. This can also undermine your ability to hire. Sites like Twitter and Facebook just compound the problem. As work gets around and your business’s reputation becomes tainted, you’ll find that it can be nearly impossible to not only attract good talent, but also retain it. Word of mouth in an industry is as good as gold to a job candidate, but can be poison for a business. You need to make sure your word of mouth is always high quality praise. Never negative backlash. If you choose to ignore the word of mouth, it will be to the detriment of your company.
Don’t skimp on employee perks
Employees spend 8 or more hours of their day working for you (not to mention commute time). Morale is a big part of that work day. If morale sinks low, your employees will exodus. Perks help keep employee morale up. Choosing the right morale boosters is critically important to employee retention.
How will this undermine your business? The Shining said it best, “All work and no play makes Jack a dull boy”. I’m not recommending that you allow your employees to play. But, offering employees a place to relax when they are having a break is important. You also need to understand what other companies in your same vicinity are offering to their employees. While I understand that every company can’t offer all of the same perks, you need to offer at least some of them. Not offering perks to your employees is tantamount to telling would-be employees and recruiters, “Don’t place people here”. Word of mouth spreads, once again, and you’ll find it hard to hire strong candidates because the perks are better somewhere else.
Secondarily, this goes back to several of the previous Don’ts. Lack of perks in combination with more problematic industry and poor morale, leading to negative word of mouth, could lead your business into a tough hiring spot. You could find that it’s nearly impossible to hire staff across the board. What you’re left with hiring are people who are not the top end of the hiring pool and instead end up the middle to low end staff. Once your business is forced to hire lesser qualified staff, your business will tank.
Perks like free food, subsidized or free daycare, subsidized or free transportation to and from work. Other perks can include tuition reimbursement, travel discounts and store discounts. When you skimp on perks when other companies are not, you will find it difficult to hire and keep any talent, especially top end talent.
Don’t assume you can live without top end talent
Without top end talent, your business is doomed to mediocrity.
How will this undermine your business? Once you hit the mediocrity stage, your customers will, one by one, leave you. They will realize you aren’t providing the quality service that you promised. Oh, you’ll still get some new signups, until they also realize the mediocrity of your business. Competition is fierce and it’s guaranteed that your business will have competition. If your competitors are doing it better than you, then your product/service offering will end up behind all others. It’s important to understand that top end talent drives your business forward. Low to mid level talent, keeps status quo. Top end talent provides innovation, low to mid level talent doesn’t.
Once you understand this fundamental distinction between the levels of talent, you will understand why you pay top dollar to have top end talent. And note, I’m not necessarily talking about top-end talent in Director, VP, SVP or C-Level positions. While it helps to have top-end talent there, those positions do not typically get the work done day to day. It’s those doing the hands-on day-to-day work that are driving your business forward. You want motivated self-starters who are willing to own the work that they do. Low to mid-level talent won’t actually own their work. Ownership of work is critically important when looking for talented staff to hire.
Note that some industries are harder to hire for than others. If you choose, for example, to open a business that does email marketing, you’ll find it very difficult to hire into this industry no matter what the position. Most technical people understand spam and realize they don’t want their resume to contain anything to do with a ‘spam related’ business.
Don’t ignore the value of social media
Social media offers a brand new marketing approach. Social media now offers grass roots marketing team that you have at your disposal. For example, if you can get your business placed onto certain people’s Facebook or Twitter feeds, this can drive lots of people to your business.
How will this undermine your business? If you fail to understand the power of social media either by ignoring it or by assuming that it is pointless, you have deluded yourself and this immediately undermines your business. Every marketing technique is appropriate and should be exploited to its fullest. Interactive marketing is even better. If you hire people to actively scout Twitter and Facebook, they can write comments that counter any negative feedback. By hiring a team of people to manage all social media outlets, they can head off problems before they even start. By having an active team countering Twitter or Facebook posts, it shows your business is proactive and willing to counteract any negative postings by disgruntled customers.
Don’t ignore the power of mobile marketing
Smartphones are now ubiquitous. Yet, this technology as a marketing platform is still in its infancy. While in this infancy, you can latch onto this technology early and get an edge over your competition. Companies that choose to embrace mobile marketing now will have the upper hand when marketing on these devices becomes commonplace in the future (and when email is ultimately dead).
How will this undermine your business? If you fail to understand that mobile marketing is the future, you will also fail to understand how quickly you can reach out to your customers with the immediacy of a phone call. Email, for example, is a slow mechanism by nature. It can take anywhere between 5 minutes and several days for people to read your email. With push notifications, your marketing is given to the user instantaneously. They can then go find out what the hubbub is all about within seconds. Nearly every push notification is read immediately. Emails take far far longer and are prone to spam blockers, image blockers and link blockers. Mobile marketing, at least today, is under no such blocking constraints. If you take advantage early, you can add a significant advantage to marketing for your business.
To take maximum advantage, however, it must be with a solid and useful app. An app you can direct the push notification to and give critical information. If you’re a retail business, for example, offering coupon discounts for purchases can be the difference between a purchase and not, such as 20% off of a product. Discounts are always a good idea when done regularly, but infrequently.
Mobile marketing needs to be relevant, targeted and location based. You need to know exactly what this customer’s interests are and provide them with spot on marketing that gives them exactly what they need when they need it. For location based marketing, if they are close to one of your stores, you should immediately send a push notification to notify them of any special offers located with that store.
Don’t change upper management every year
Or.. even every other year. This is can be a hard one to actually accomplish depending on lots of factors and it can cause severe morale problems.
How will this undermine your business? Whether it’s through a firing, through so-called ‘voluntary’ severance (aka The Velvet Hammer), people quitting, demotions, promotions or lateral moves, frequent or regular departures in the upper management team creates more questions than answers for employees and, if a public company, stockholders. Stability in the upper management team (at least for 4-5 years at a time) says volumes about loyalty, stability and allows employees to recognize the upper management. Changing this team frequently says something is wrong internally. Not only do employees begin questioning what’s going on, these changes plant seeds that “maybe I need to seek employment elsewhere”. Operating a musical chair management team will undermine your ability to operate your business. It takes at least 6 months for any new hire to get his feet in a position. Changing critical management positions often means the person in the position never has time to get an understanding of what they need to get done. Worse, just about the time they are about to get something done, they’re being seen to the door.
You can’t operate your business with a constant stream of new people in critical management positions. If you aren’t absolutely sure the person is the right person, don’t hire them. It’s far better to leave the position vacant for just the right person than it is to fill it with a person you know won’t work out. Additionally, if you can’t ever find someone to fill the role to your satisfaction, perhaps you’re looking for answers in the wrong place. You might want to start by looking at yourself and your expectations of the role. If you can’t clearly define the expectations of that management role, don’t expect anyone you hire to magically gain this understanding and define it for you. That will never happen.