I’m back from a whirlwind trip to Las Vegas, where we hosted 50+ TC Boot Camp attendees, three private coaching clients, a quarterly planning meeting for two of my companies and a scouting trip for a few long-shot investments. In two of the three private coaching meetings, a common theme we discussed was systems management. I reviewed business systems through three lenses: communication, oversight and recalibration.
Everyone seems to enjoy talking about systems, creating systems, perhaps even training their employees on new or existing systems. Since the first mention of “business systems” in 1980 by McKinsey and Company and through the creation and adoption of Six Sigma, business leaders throughout the world have been obsessed with automation and systems, to help eliminate defects in any process.
Sounds great, right? Just like “running a marathon” sounds great, the problem arises in the distance between idea and implementation. We all want to be in great shape. Getting off the couch and running every day is another story. We all want our businesses to run smoothly with maximum profit and happy stakeholders and shareholders. Systems oversight and management is another story.
Who Moved My Cheese? is a simple yet effective business fable about adapting to change and overcoming fears. The book has sold more than 26 million copies and remained on the New York Times business best-sellers list for nearly 5 years. It offers very little in the area of systems development, but it diagnoses precisely why systems fall apart and why we need them in the first place: change.
Your top competitors in business today will not be your top competitors five years from now. The problems you solve for your customers, clients, patients or donors today will not be the same problems you will solve a decade from now. Your employees, shareholders, stakeholders and strategic plans will change. Everything, in fact, will change; and that’s precisely why clients consistently travel to me with challenges and frustrations in dealing with change; anticipating change and overcoming their fears in adapting to, circumventing and even enjoying the change in their lives.
This morning on your way to work, your car keys were probably right where you left them last night. In business, however, nothing is where you left it. Change is continuous and often compounding or confusing for you and your employees. For example, if you left your employee training systems where you last touched them, perhaps when you started the business, they are not where you left them. Your training systems have, for good or for ill, been changed, improved, strengthened, weakened, diluted or condensed, etc.
Your systems have either adapted to or been run over by change. When’s the last time you took a look at them? How consistently and effectively do you oversee the systems in your business?
Things are not where you left them.
Five years ago, Nir Eyal wrote a book called Hooked: How to Build Habit-Forming Products, which helped startup tech firms understand user psychology. He discussed the research on slot machines, which use variable rewards and pleasures that come at unpredictable intervals. If you haven’t read, Addiction by Design, it is both amazing and alarming.
In response to pressure from psychologists and child development specialists, tech industry insiders have blown the whistle at Google, Facebook and WhatsApp, becoming critics of the very tools and addictive apps they spent years developing. In his latest book, Eyal admits that there will be a movement to be “post-digital” in 2020. He says, “We will start to realize that being chained to your mobile phone is a low-status behavior, similar to smoking.” But, he does not think technology is the problem. We are.
Throughout the book, Mr. Eyal challenges the idea that technology is doing all of this to us. “These are things we can do something about,” he argues, “It’s disrespectful for people who have the pathology of addiction to say we all have this disease. No, we don’t.” Eyal says technology is something people overuse, which suggests we need to do something about it ourselves, but Tristan Harris, the former Google ethicist, argues the opposite. Harris speaks around the world, leading the movement to regulate big tech firms and require that they change how they develop tools and apps, putting the onus on them to make their devices and apps less addictive.
Although I don’t expect these two narratives nor their arguments on technology and behavior to be settled anytime soon, I do think there are some valuable takeaways for your business, when faced with any challenge or opportunity:
First, never forget, regardless of the narrative in your mind, there is always a counter-narrative. Make it your job to get better at seeking out the counter-narratives in your life and in your business. Work to understand them, whether you ultimately accept them or not.
Second, ask two important questions when you face any challenge or opportunity: “Am I sloughing off personal responsibility or reclaiming it?” and “What does my understanding about this issue, opportunity or challenge tell me about me?”
Eyal equates his stance on technology and personal responsibility to a time in his life when he was obese. The myriad digital detox crash courses he attempted were just like the 30-day fad diets he tried but were unsuccessful. He finally lost weight for good when he asked himself why he was eating.
The solution he advocates and the narrative he’s accepted on technology overuse is a slow process. “People often look at their phones because they are anxious or bad at being alone,” he says, “The phone-hooked need to figure out why they are so uncomfortable waiting in line without their screen and what they fear around them.”
This mental contrasting ability to hold two narratives in your mind is extremely productive and serves as a great tool in running your business.
- When an employee is consistently late to work, is the narrative in your mind that he’s a bad employee or can you accept that your policies and procedures have been unclear and perhaps you’ve been a bad manager of time in the past, setting an example for others to follow?
- When a referral source goes dry, have you blindly accepted in your mind that the referrals are going somewhere cheaper and more convenient or can you challenge that narrative and ask how you might reclaim personal responsibility and put more wheels in motion to regain the trust of that referral source?
- If a new competitor opens up across the street and starts poaching your employees, do you cry foul and play the victim or do you double down on making your office not only the best place for patients but also for employees?
In every corner of life and business, you’ll find those who cling to one narrative and those who can mentally contrast, play devil’s advocate, hold strong opinions loosely and let the best idea win. One road leads to success, fulfillment and happiness. The other leads to stagnation, frustration and peril. Here’s to taking the path less-traveled. Here’s to understanding all narratives and the power they have, for good or for ill, to help you or cause you to fail.
Three months after its public debut, Uber posted a $5.2 billion loss that’s “impressively vast” even for a company whose business model is based on outspending the competition, said The Economist. Since its inception, Uber has lost a total of $14 billion. A few weeks ago it laid off 400 people from its marketing department, representing a third of the entire division, and has placed a hiring feeze on new engineers.
Uber’s stock is down 20 percent since their IPO in May. It’s expensive to recruit drivers, there’s more competition and consumers are very price-sensitive. Even the most-promising startups, with billions of dollars in venture capital, must answer to the laws of gravity.
Last Wednesday was a private coaching call day. I started early in the morning and took call after call, in 45 minute increments, until late afternoon. In many of the calls, there was a common theme of growth via attempt to ignore gravity. Doubling the size of your business is not as simple as doing twice as much of what you’re doing right now. Growth creates complexity and complexity kills growth. New employees, hours, locations, additional doctors and strategic partners – all of this is complex and it can strangle the very thing you want to achieve.
As a recovering stubborn-headed know-it-all who used to do all of this the wrong way, please learn from my mistakes and understand what I get to see working all over the world and also what doesn’t work.
Understand the laws of gravity in your business. Attempt to defy them and you will eventually be pulled back down to earth.
First, decide how big you want to get and why. Aimless growth is like a mapless journey. It might turn out great, but the odds are not in your favor. If you can’t write down a revenue goal, you’re highly unlikely to achieve it by accident.
Second, determine how much profit you must derive from each unit of time, service or product. Do not violate it. Cut costs at every turn.
Third, know your “enough is enough” number and have people in your life that can hold you accountable to not only achieve it, but also to enjoy the life you’ve created around you before you’re dead and gone.
Fourth, realize every successful business is really a marketing and sales business. If you don’t know the money math inside these core competencies, you will never achieve significant growth.*
Take total collections and divide it by the number of new patients, clients or total products sold last year. Do the same with total collections and number of full time employees. Know your most-productive hours in the business and your least-productive hours. Set the minimum required revenue per hour or per product line and task managers to maintain or exceed those metrics.
Failing to acknowledge the gravity in your business is like ignoring a bad joint sprain and attempting to run a marathon. Most of your peers operate blindly and big dumb companies behave badly all the time, but this is no reason for you to follow in their path.
* You and 39 other clients can join me in 2020, where I will show you best-of-class statistics for each of the metrics (i.e., gravity) in your industry and help you perform in the top 1-5% of your market and field. You can request details for an upcoming discovery call where you will see details of the program. Make your interest known by going to MyCoachingApplication.
Most small business owners are used to giving answers, not asking questions. If you followed around some of the world’s top CEOs and leaders, you would find the exact opposite is true. The best leaders are great at asking questions, so that the best ideas win and the best answers quickly become evident, even if they arise from the least-expected team members.
Management expert Peter Drucker was well-known for asking smart questions like, “What changes have recently happened that don’t fit what everyone knows?” Read that question again and let it sink in for a minute.
Most leaders start their meetings with assumptions, biases and beliefs about their market. They see any change in the market as something to be dealt with based on their existing talents and tools. They almost never assume the solution is entirely out of their wheelhouse. They simply go about fitting every “nail” to their hammer. Drucker’s question, however, forces you to stop and ask what you don’t know.
If revenue and profit are up this quarter, why? Start with what you might not know. Maybe there’s a new employer in your area offering excellent audiology coverage. Might that be the unknown source of your good fortune? Perhaps the referral campaign you did 60 days ago is finally catching up with busy schedules and spouses who want to get their loved ones into the hearing health care provider before their vacation. Maybe consumer confidence has a lot to do with your growth, etc.
The list should be long of possible reasons why something different is happening in your business, but you’ll never articulate the actual reason if leadership insists on giving answers instead of asking smart questions. If things aren’t growing as quickly as you would like, here are five of Drucker’s questions to ask of your team at your next meeting:
- What is our mission?
- Who is our customer?
- What does our customer value?
- What are our results?
- What is our plan?
Too many small business owners can’t articulate a powerful and meaningful reason why they exist in the marketplace other than the fact that they want to earn a living and they like what they do. I’m sorry, but the market doesn’t care that you like to boost clarity or perform surgery or help clients with legal problems. The market only cares how much value you can deliver in solving problems for consumers.
Too many small business owners are unclear about exactly whom they serve. We were crystal clear years ago when we stopped treating children and cochlear implant candidates. We’ve never looked back and have continued to grow, even by dismissing 25% of our previous new patient flow. We know exactly whom we serve and we know precisely what they value.
Finally, what is your plan and how will everyone in your organization know if you’re making progress? Drucker says, “Progress and achievement can be appraised in qualitative and quantitative terms. These two types of measures are interwoven – they shed light on one another – and both are necessary to illuminate in what ways and to what extent lives are being changed.”
Know what your results are and how to measure them.
If you need some inspiration in making your next quarter one of your best ever, stop coming to the table with all the answers and instead start asking better questions. Set the framework and keep asking, “What more can we do to delight our patients?” Your team will have answers. Give them the freedom and motivation to pursue them in service of your mission.
I returned from a great meeting with clients recently and met my assistant to go over our plans for the coming week. If I’m in one of our offices, I like to go walking around and say hello, let people know I’m still alive and, occasionally, like I observed today, I get to see a new employee or two in training.
At our departure desk today, there was a new smiling face in training and a handful of patients checking out, all under the careful guidance of two administrative employees and their supervisor. If this new employee was paying attention, and it appears she was, then she learned a powerful lesson today about what patients and spouses want when it comes to hearing appointments.
Every single spouse at the checkout area nicely asked for the same thing.
Most of these patients were coming back in 1-2 weeks for prescription changes and two were coming back in three months for a cleaning or observation appointment, I’m not sure, I was only in the area for 20 or 30 seconds. 100% of these patients said some variation of the same thing. When asked which day of the week works best for them, they all said, “The day and time that is least likely to make me wait.”
Steve Jobs has a famous quote about the customer not knowing what they want until you show it to them. This advice is cute and different. It flies in the face of consumer surveys and focus groups, but it assumes you face the same daunting task of inventing the next great technological revolution, like the iPhone.
You need not reinvent the mobile phone. Your job is not that complicated. You simply need to listen to what patients want and give it to them.
Pouring over 20,000 new patient appointment requests from last year alone for our clients and our privately-held practices; reading the transcripts from over 1,000 secret shopper tapes, the data are crystal clear: your patients and their spouses want appointment times that are convenient to them, and don’t make them wait on you.
If you ignore this and fail to provide your new patients with convenient appointment times (think 5pm, 6pm, 7pm or later) within 7-10 days, they will go somewhere else and/or, if you can get them to show up, they are 400% less-likely to start treatment. * Don’t shoot the messenger.
In a new study from researchers at MIT, the journal Marketing Science reports that consumers make much simpler decisions than most marketers assume. Our brains are really good at deploying an “index strategy” or a straightforward ranking of our options. The advantage of making only slightly better decisions wouldn’t be worth it, in most product and service categories, so we quickly rank the options we believe are available to us based on simple factors like price and quality, finalizing our decision when there is a clear winner. However, when consumers are not able to clearly index their options, they get stuck and delay the decision until there is a clear winner, if ever one appears.
As the only practice owner on the planet paying attention to this research, and as someone who fully understands its power and importance in the consumer markets of hearing aids and treatment, I acutely implore you to pay attention as well.
Stop pretending like patients and spouses care about the technology you use or the level of training you received as a specialist. They don’t. That might bother you but it doesn’t make it untrue. Start recording your new patient phone calls and checkout desk. You’ll hear the same thing all day long. “What’s your appointment time that won’t make me wait on your?”
Pay attention and give consumers what they want, or go work for someone who will.