Circumstance vs. Character

In coaching, consulting and reviewing the reports from our on-site trainers, human capital challenges are at the top of the list of items we’re hired to fix. As I’ve done with most systems, challenges and opportunities in business, I help my clients and trainers develop and deploy “litmus tests,” or quick “yes/no” tools to help guide next steps.

Here’s one you might put to good use when your next employee challenge or frustration arrives. Ask if this is an issue of character or circumstance. 

Our data indicate: underperforming employees are rarely an issue of character. These situations are almost always an issue of circumstance.

For example, we failed to place the employee in the proper role. The training program was inadequate. Oversight and motivational systems were not being deployed consistently. Communication was unclear. We did not support the employee’s desire to learn new things, master his own environment and contribute to a higher sense of purpose.

And yet, I see employees in our clients offices being disciplined or terminated because of circumstance. This is a horrible mistake. Do not let good people go if you haven’t done your job in placing them in the best-fit position, training, managing and motivating them and then getting out of their way so they can help you achieve your vision and mission.

In the rare situations where an employee has demonstrated a problem with character, in a twist of irony, many practice owners drag their feet in firing the employee.

Listen. There are no quick fixes for issues of character. There is only one solution for an employee who is dishonest, has a poor work ethic, refuses to be a team player and sabotages new projects in the office: swift termination.

And yet, too many business owners fail to address this problem because the employee has been with the team for a long time, performs their job, at least from time to time, sufficiently, etc.

Isn’t that interesting? The fact that most small business owners will tolerate a crisis of character but not one of circumstance? Why?

For starters, it’s easier to blame the other person for poor performance than it is to look in the mirror and admit that your systems for hiring, training, management, motivation and culture all stink like yesterday’s garbage.

Our egos don’t get damaged when we point our fingers at someone else. But, like my mother used to say, “when you point your finger at someone else, there are three more pointed back at you.”

This advice and litmus test, if you take a moment to unpack and consider them, make perfect sense in the larger picture of running a successful business. Because if you get this right, you’ll behave in the opposite fashion of every other competitor in your industry.

Go Where the Deep Water Is

As of November, Nike no longer sells directly on Amazon. Nike is not alone. Birkenstock, Louis Vuitton, North Face, Patagonia, Asics, Ralph Lauren, Rolex and Vans do not sell directly on Amazon either. Nestlé Nespresso dominates a huge direct-to-consumer channel and paid Starbucks $7 billion to take over the sale of coffee and capsules for Nespresso machines. The new Disney+ streaming service cut out the middleman and kicked Netflix in the shins on the way out the door.

These smart firms want to own the data and chart their own course into higher lifetime customer value, margin and sustainability in a world where 85-90% of retail purchases are still done in physical stores. Sure, Amazon dominates the online retail world, capturing more than 50% of all online sales, but don’t forget that 85-90% of all retail purchases are still completed in physical stores.

These firms know, in order to survive the Amazon apocalypse, they must shed inefficiencies and middlemen, deliver more value than the competition and delight their customers, so that everyone else is forced to follow in their wake. In business, you’re either making waves or getting splashed in the face, by the way. The deeper the water, the bigger the waves. This has been true for a long time.

Conrad Hilton, founder of the famous hotel chain, made waves when a family friend told him in 1920, “if you want to launch big ships, you have to go where the water is deep.” A serious student of success stories of Rothschild, Carnegie, Girard, Cooper and many artists, scientists and philosophers, Hilton saw a bigger vision of what might be possible with his first hotel and he started chasing his “blue ocean” strategy before anyone else thought like this.

Two important questions leap to mind as they apply to your practice: (1) Are you sailing in deep or shallow waters? (2) What must you shed and what must you control and leverage in order to reach deeper waters?

What five things must everyone in your market know about you? Do they know them, or are you hiding your unique selling proposition under a bushel? Can patients and spouses pass along these “talking triggers” to friends and family, making it easy and a pleasure to refer to your practice?

What five things need to be continued in the business and what five things must you stop doing in order to get to the next level? What five things are you not doing that you must start doing? Who or what seems to keep pushing you back into shallow water? What vendors are tying you down and need to be removed, have their contracts renegotiated or brought in-house?

These are difficult questions. They require time and patience to implement. They force you to zoom out and see a much longer runway. They push the horizon further out and they give you the time and space to attract the proper talent and strategy, in the right market at the right time.

The good news and opportunity, like Hilton realized, is that hardly anyone thinks like this.

Most new clients I meet with want to grow the practice rapidly. Like yesterday. Few possess the ability to take their dreams and vision into much deeper water and then painstakingly pursue the hard work, investment and frustrations that are required in order to implement a “blue ocean” strategy. The most-successful think like Hilton and these other smart firms sailing to deeper water

Innovation vs. Improvement

When Brian Carroll was laid off unexpectedly from his sales position at a car dealership in Michigan, he received a call from a past customer wanting a car.

Carroll told the buyer he no longer worked at the dealership, but the customer didn’t care. “He hired me to find the exact car he wanted and to negotiate with different dealers to get the best price.” Carroll then drives the new car to wherever the customer wants it delivered.

The car concierge. Brilliant.

This is not new, even though most sales people on the showroom floor have never considered it as an option to break free from working for someone else.

I created this option for myself by working with the same salesman for many years in a large network that sells nearly every brand under the sun. I haven’t gone through the normal motions of buying a car for over a decade.

Carroll says he now sells 30-35 cars a month, doing better than he did at his old job. And, I’d wager, he has more freedom and flexibility in being his own boss. If he’s smart and enterprising, he’ll recruit another handful of sales professionals to expand the business in other markets, franchise out his tools and systems or both.

This isn’t as innovative as Tesla ditching the entire inventory channel and car lot model used by every other car brand, but it is a very smart improvement.

In business, there is an ever-present temptation to innovate. We want to create something new, exciting and sexy. And yet, there really isn’t anything new under the sun. Jobs and Apple didn’t invent the telephone, but they did improve it significantly and sky-rocketed to become the world’s first trillion-dollar firm as a result.

In audiology, my specialty, we’re all racing to deliver in-office earmolds through 3D scanning and printing. Yes, it’s cool, but if I pick up the phone at lunchtime today, call your office and your team doesn’t answer, should you really spend more time, energy and money innovating, or should you simply improve your existing processes?

I know the answer but it’s not the sexy, exciting, shiny-new-object answer that most business owners want to hear.

Sigh. It’s very easy to make business owners rich but very difficult to get them actually to do the simple, boring things required to quickly double or triple revenue.

Write this down: given the choice between innovating and improving, take improvement ten times over.