50 Business Challenges: No. 26 Resilience

In this instance we are talking of business resilience rather than the personal kind. Assess the risks your business faces, and the consequences of each risk. Some risks are quite likely, yet have a minor effect. Others are unlikely to happen, but the consequences can be devastating. Take action to reduce both kinds of risk, and plan how to deal with the aftermath. For example, if the office burns down, where will you relocate, how will you contact staff and clients?

A short post is not the right place to go into detail, but bear in mind that we are potentially talking about business life and death.

For an example of how one company keeps going through crises, see here for the Waffle House approach.

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50 Business Challenges: No. 25 – Check Your HR Policies

During the course managing firms and as a business coach, I have come across several problems caused by defective HR policies and records. With changes already in place on PAYE and compulsory pensions being introduced getting things right becomes even more important.

It is, of course, difficult for small businesses who cannot afford (and do not require) a specialist HR department. Yet the cost of defending a tribunal claim, even successfully, or consequent reputational damage can be significant.

Apart from legal implications, there is an additional issue of management information. So often I have been told that “X” always takes time off – but there is no clear record of time taken. Equally, it is useful to know if absence across the firm is changing. If so, what is the reason, and what does it imply? Do you need to take steps to improve morale?

The challenge for this week is to set up a review of your HR policies and procedures. This may need the help of a consultant – it is not my area of expertise, but I do know one or two people who could cover it. Even if you just identify the gaps and come up with a plan to fill them, it is a good start.

50 Business Challenges: No. 24 Balls on the Line

Sometime you have to put your balls on the line” said Warren Gatland, coach of the successful British and Irish Lions team in Australia. It follows the vitriolic reaction to his dropping Brian O’Driscoll, one of the world’s great players. Gatland was accused of giving the final game away, of being biased towards his own national team, and even of destroying the ethos of having a joint Lions team.

Gatland will be very relieved that his team selection delivered an emphatic series winning victory. He has been, however, honest enough to acknowledge that “if we had selected Brian we probably still would have won the game given the way we played”.

The moral? Leaders have to be prepared to take tough decisions, whether about people, products, or even the continued existence of the firm. They have to avoid the easy choices in favour of the right ones – even when it may never be clear which choice was right. And they have to be able to withstand pressure and criticism, which can derail an entire career if things go badly.

50 Business Challenges: No. 23 The To Do List

Many of us try to organise ourselves day by means of a to do list. Yet all too often we cram it with things to do, most of which will still be on the list at the end of the day. By the time these items have appeared for a few days, enthusiasm wanes, and we become used to their not being completed.

Making a list is a good idea: for one thing, it requires a review of what needs to be done, and putting items in order of priority. As always, remember the important, not just the urgent.

How you make the list (as I have learned from bitter experience, and training) makes a difference.

Recognise how little time is actually at your discretion. Meetings, colleague and customer demands need to be factored in. Do not try to do too much – it is better to complete one thing than part do many.

Introduce a Power Hour for those important long term projects, so that you devote 20 minutes or so to each, preferably at a regular time.

Group all those short items, such a chasing phone, calls together into half an hour or so (at least those that you cannot delegate to someone else).

Limit the rest of your list to 3 or 4 items where you can actually make progress. Add new items tomorrow as appropriate.

By ensuring that your list is not overloaded, you will become much more effective.

50 Business Challenges: No. 22 Variance Analysis

As a business coach, I am often surprised that small companies do not use variance analysis as a means of managing the firm. What is it? In effect it compares actual to projected figures in order, seeks an explanation for any differences, and considers the consequences.

Variance analysis can (and should) be applied to both income and expenditure, preferably monthly. It can be used at whatever level your figures are produced to.

Income

Are you above or below budget? If above, is this merely business expected later in the year which has been brought forward? If so will you  have a gap in income in the future? A particular product or service (or a person) may not be delivering the expected income. The reason may be seasonal, a change in the market or several others. The response may in some circumstances be additional promotion, or a sale to liquidate unwanted stock.

Expenditure

Similar principles apply. Differences may be explained by timing, market factors or even the weather. What are the knock on effects on your business, do you need to do something as a result, and if so what and when?

 

Of course, this analysis is not relevant only month by month, but cumulatively over the course of the year. This takes account of the timing differences outlined above. Thus it is worth doing a variance analysis on the basis both of the current month and for the year to date.

 

How would it feel to have a better handle on what is going on in your business? You challenge is to start using variance analysis from the end of this current month.

50 Business Challenges: No. 21 Off the Wall Marketing

Sometimes business gets to be very sensible and staid. Sometimes it pays to break out and do something a bit different, particularly in the field of marketing where the whole aim is to be noticed.

This is not to say that “anything goes” – you still represent your brand, and need to get the right message across. Turning up dressed as Elvis to an undertakers’ convention will sell the wrong message. For a coffin maker to display not only a range of traditional oak and pine, but also one in the shape of a chilli (as seen in Ghana), would attract large numbers of people to the stand.

Whatever your normal marketing channels and methods, consider making a small experiment in the full knowledge that it might fail. (Do not, of course, bet the firm). Over the next few weeks a commercial firm might invite clients and contacts to view the Lions Tests over brunch (Sky subscription). A High Street firm might hold a coffee morning for a charity, handing out free pens. A twist on something popular might work, such as a fashion and grooming event for men, or a women only session with the local car dealer. Whatever the choice, make sure you get some publicity from it.

If it works, you make more money. If it does not, at least you have tried something creating.

50 Business Challenges: No. 20 Velocipede Mount!

Or in more common parlance: get on your bike!

Accounting ratios (see Challenges 17, 18 and 19) are brain work, so some healthy exercise in the open air is called for. Mens sana in corpore sano, and all that. (The longer Wikipedia quote sums up the life of the business owner quite well).

Why cycling? Most people know how to do it, it can be done in company or alone, and it requires limited equipment, to whit one bike. For many it removes the barrier of undressing in public at the gym or pool, or of displaying flesh while exercising. And it does not carry the same risk of wear and tear to the joints that running can. It can however damage a gentleman’s, er, equipment.

You do not have to cover vast distances, reach high speed, or ride over wild terrain. All these are possible, but equally John Major’s spinsters cycling to Evensong are cyclists too. Make cycling what suits you.

Exercise keeps weight off, reduces stress and leads to a healthy heart and lungs. So get that bike out, pump the tyres and find a traffic free place to ride.