mind your business: Trial by Fire
Any entrepreneur knows that when it comes to running a business your work is never done. From the moment you wake up in the morning until you go to sleep at night, you're worrying, planning for the future, and more often than not, putting out fires. In fact, like a fireman, you're always on call. You're always prepared to rush in and extinguish a customer's complaint, a lost order, a disagreement between employees or whatever the day's blaze seems to be.
The best way to keep these flames from permanently harming your business is to "leave a fire extinguisher behind" after putting out each fire. Do so and you'll turn every fire into an opportunity to improve.
I learned this lesson from Dave Lindsey, a successful entrepreneur and founder of Defender Direct in Indianapolis. When you fight a "business fire," your job is much more than to solve the problem. It is to leave behind processes—or as Lindsey put it, to "leave behind fire extinguishers"—to prevent the problem from happening again, or to make it easier to fix the problem if it does occur.
Lindsey is just one of 54 successful entrepreneurs who participated in my study of high-growth entrepreneurial businesses. The study was designed to illuminate the common challenges entrepreneurs face as they pursue growth after surviving the start-up phase. The results of the study are the subject of my book, "Grow to Greatness."
Much of "Grow to Greatness" discusses processes, because they are the "how-to's" of your business and are essential to its growth. When you're starting up your business, institutionalized processes aren't as important because you'll do much of the work yourself. But as your business grows, there will simply be too much for you to do on your own. You'll hire employees, and, being human, they'll make mistakes or come across situations they aren't equipped to handle. Without the proper processes in place, they'll guess what to do, and that often means you'll have to come sprinting in with your fire hose.
Read on for advice on how to keep your business blazes to a minimum and how to make the most of them when they do flare up:
Determine the cause of the fire. As a small business owner, you can spend your entire day running around, fire extinguisher in hand, putting out fires.
You can't afford to put out the same fire over and over again. A customer might give you a second chance, but disappoint them again and it will be very difficult to win them back. It's also bad for your high-performing employees' morale. They don't like being slowed down by these fires either, and when they feel that solutions are never put in place, it exhausts them as much as it exhausts you. When you take the time to really examine why a fire started, it's much easier to fix. Furthermore, it allows you to put the right fire extinguisher in place to make sure the fire can be quickly put out if it reoccurs.
Once a fire is out, put a process in its place. As previously mentioned, after you've put out a fire—say, acting on a customer complaint or dealing with an employee who repeatedly breaks a rule—and have determined its cause, you must leave a process behind to prevent the problem from arising in the future, or, if it does, to provide employees with a fire extinguisher so they can put out the fire themselves.
Every time you correct a mistake, write a short process statement that says: "If Problem X happens again, follow the instructions on Checklist X." Then, make sure every employee understands this new process. New problems always will pop up—that is the nature of business. However, by writing a process, you will save yourself time in the future because you won't have to constantly correct this same problem.
Start with the hard stuff. Begin by focusing on those actions and problems that, if handled incorrectly, can do the most harm to your business. That usually means product or service quality issues, customer interactions, brand reputation issues, and purchase or cash problems. You may have 20 fires that need putting out, but you can prioritize by initially focusing on the ones that could have the biggest impact on your business.
Create checklists for important tasks. You should not only have how-to processes written down to handle problems that have occurred in the past; you should have checklists critical to the operation of your business. For example: how to open for business; how to close the business; what to do in an emergency; what to do if an employee does not show up for work, etc. For some situations, you may need a checklist or how-to process that also explains what not to do. For instance, what not to do when approached by an unhappy customer or what not to do as an employee if your register comes up short.
Eliminate single points of failure. Processes are important to a growing business for another reason: You never want a single point of failure. Make sure you always have backup. Every employee's job must be taught to at least one other employee. When every employee is trained to do two jobs, the business does not have a single point of failure. It helps keep the business running smoothly, and it reduces your stress and the stress of your employees.
Update processes as needed. Creating processes is not a one-time job. In other words, you can't spend a day in your office writing up processes only to never revisit the process. First, it is impossible to write up a process that covers every eventuality. Second, as your business grows, you will need different and more sophisticated processes to handle more volume and more people.
"Huddle up" to keep key processes in the front of employees' minds. Use short morning meetings to set priorities for the day. I learned about these morning meetings from Horst Schulze, who led the creation of the service award-winning Ritz-Carlton Hotel chain. He called them "huddles." During his tenure, every day, before every shift, in every Ritz-Carlton Hotel in the world, a short "huddle" was held to highlight one key operating principle or process. All of the chain's core principles were discussed at least once every month. You can use "huddles" at your business to highlight how a process was successfully used the day before or to remind employees of a process's importance.
Schedule "firehouse" time. Thinking strategically or on a macro level about how to grow a business is different from thinking tactically and reactively to more immediate business needs. Several entrepreneurs in my study emphasized the need to allocate time to get away from the business to think clearly about their long-term business needs.
One of my colleagues calls this specified time for strategic business thinking "firehouse time." It is hard to think strategically when you are "putting out fires" and leaving behind "fire extinguishers" daily. Thus, "firehouse time" means giving yourself time away from fighting fires to think about your business and plan for its future.
Successful entrepreneurs are constantly fighting fires, and that isn't necessarily a bad thing as long as the fires are different each time and fire extinguishers are left behind. When this is the case, progress is being made. You are creating a well-managed business with high standards and quality performance. That usually translates to happy customers and great success.
By Edward D. Hess
Edward D. Hess is the author of "Grow to Greatness: Smart Growth for Entrepreneurial Businesses" (Stanford University Press) and is a professor of business administration and Batten Executive-in-Residence at the Darden Graduate School of Business, University of Virginia. He also is the author of 10 books, more than 60 cases and more than 60 articles. For more information, please visit www.EDHLTD.com.
- People:
- Dave Lindsey
- Edward D. Hess
- Places:
- Indianapolis