Archives for category: Profitability

Conscious Business – A Strategy

By Pete Burden
April 5, 2011 //
1

I have lost count now of the number of times I have been asked what Conscious Business is.

And I have also lost count of the numerous ways I have explained it.

I suppose it is a bit like trying to describe a mountain. It all depends which face you climb. Or whether you are interested in geology and what’s underneath it.

But here’s one more go. An attempt to boil it down to something people can take away and use.

Conscious business is a strategy – for personal, business, and ‘planet-wide’ use.

As with all strategies we tend to be interested in the outcomes it produces. Are they good, bad or indifferent?

I think it’s a good strategy for personal use because it produces good outcomes:

  • it is more enjoyable – being based on authenticity and congruence;
  • it is more fulfilling – leading to better, more stimulating, and richer relationships;
  • it feels better – moment by moment, it leads away from disquiet towards more energy and peace.

It’s a good strategy for business because it produces good outcomes:

  • better short-term profits – through differentiation, reduced costs, more creativity and innovation;
  • better medium-term profits – through increased customer loyalty and lower staff turnover;
  • better long-term profits – through more resilience and flexibility in the face of market upheaval and change.

And it is a good strategy for the planet because it produces good outcomes:

  • it naturally leads to the creation of products and services that are less harmful and more beneficial;
  • it is more aligned with our deeper collective needs as humans – to collaborate, to support each other, and evolve in a positive direction;
  • it builds value for everybody, including future generations.

That’s it.

Categories Benefits, Business, Congruence, Emotion, Motivation, Profit, Profitability

How to become the home of smartphones (or anything else)

By Pete Burden
August 20, 2010 //
2

Someone from a large mobile phone company asked the following question the other day: “What would make Vodafone the home of smartphones?” It’s a question I hear pretty often – I heard it as: “how do we become leaders in such-and-such new technology”?

I posted this reply. I thought you might enjoy it:

Hi Tom, here’s an answer:

Step 1 – Radically redefine the purpose of your company. Maximising stake-holder value is never going to work – because it will never inspire the company’s employees. And to become a leader a company has to have inspired employees. Replace that purpose with another one – to serve your customers and increase the well-being of the employees.

[I used the words stakeholder-value and then half-regretted it. I really meant shareholder-value, because "stakeholders" often will already include customers and staff. I only half-regret it though because I also think that stakeholder-value is often really code for shareholder-value. What is needed is a real re-think of purpose and a change of emphasis - not just fancy word-smithing.]

Step 2 – Change the way the company is structured. Employees will never be happy or inspired in a workplace where a few people at the top wield all the power and earn 20 times more than the customer-facing employees.

In the old days power was concentrated in the hands of the unions and the “bosses”. Nowadays it’s usually just the “bosses”.

Employees, like all of us, need fairness, transparency and a sense of being able to make a difference through what they do. They need to feel they have a fair share of the power.

Step 3 – Change the focus of the company so that it is focussed on what customers want, not what shareholders, or even just the employees, want.

You’re looking for a win-win – a solution where customers get what they want, and employees get what they want – but more as a by-product of pleasing customers.

To find this everyone in the company needs to learn new skills – to learn how to talk to customers in new ways, to really listen and understand them.

Then, having understood what customers want, change the company so that it gives customers what they want.

Customers, for example, don’t want to be shuffled around from department to department. They want to speak to someone who is knowledgeable and can help them with all the problems they may have: billing, contracts, hardware, software, network issues and so on.

This may require reorganising into different groups that stick with clients for a long-time. Customers want personal and meaningful relationships – not call-centre queues.

Giving clients what they want isn’t rocket-science. Once you realise that what they want isn’t rocket-science either. Customers want what all human beings want: respect, honesty, trusting relationships and so on.

This approach will, I believe, lead to leadership and success for your company – in smart phones and anything else you turn your hands to. Customers will become happier and more loyal, revenues and profitability will rise, the company will be able to pay everyone better, and train and support everyone better.

Is this vision hopelessly naïve? Well, there are companies out there doing this already if you look, which suggests that even if I am assuming things can get better, I am not the only one; there are others out there who believe it and are proving it every day.

The biggest problem that these successful progressive companies seem to have is being killed off by their success. They get good at all of the above, and other bigger companies buy them and destroy them and their culture.

So if you embark on this journey a fourth step (or maybe it should be step zero) is to choose a set of managers who really buy into all this and won’t sell you down the river later on. I’d recommend exploring employee share ownership as a way of ensuring you can hang on to your rights.

And, finally, what do you do if you are the single employee in a corporation of a hundred thousand who reads this and believes it? How on earth can you start to make this happen, alone?

The answer is simple actually: start with you.

Firstly, think or feel your way into this stuff – is it better than what you have right now?

Secondly, if so, decide to make it happen. Commit to not giving up at the first hurdle.

Thirdly, seek allies – in your company or else where. Use social networks – that’s what they’re for.

Fourthly, learn those new skills of communication and start doing the customer service bit with your existing customers. This will prove to the cynics and skeptics that this can work. That customer happiness and loyalty rise.

By the way, this probably won’t lead immediately to better profitability because your company structure may still be wrong – remember all those powerful, top-level high-earning employees for example?

Fifthly, keep going, just for the hell of it. Keep flexible, adapt when you need to.

At the very least, you can trust that this approach will:

  • make you happier
  • earn you allies
  • build your reputation

It may attract better offers and opportunities.

And remember that this is an unstoppable trend anyway. Wherever you look you’ll see these kinds of changes taking place as our economies mature. As this trend rolls out, you’ll be caught up in it anyway.

So why not take the first step yourself?

Categories Collaboration, Community, Corporations, Giving, Profitability, Strategy

What goes up must come down

By Pete Burden
July 7, 2009 //
1

Stimulated by reading something in a discarded newspaper by Jonathon Porritt, standing down this month as chairman of the government’s Sustainable Development Commission, I dug out their report “Prosperity without Growth“.

It’s long, over a 100 pages, and could do with a bit of editing. I think it was Greg Dyke who when faced with a difficult decision would ask “What would it mean for my mother?” My view is that if a bit of technical writing can’t be presented clearly and simply, then they may be a waste of all that brain heat.

I only managed the summary (pages 6-13). But the frustration and confusion leaps off the page. The author (Tim Jackson of Surrey University) seemingly can’t understand why others simply don’t get it, and he isn’t happy about it.

His point is that economic growth, in the way we commonly understand it now, is completely at odds with living on our planet in a way that gives all 6 billion or more of us a decent life.

The current macro-economic model doesn’t work socially (letting us all be happy people), environmentally (keeping our ecosystems alive), and economically. Economically it fails when it peaks and troughs, leading to the kind of financial “meltdown” we have experienced recently; but then neither does reversed growth, leading as it does to increased unemployment and so on.

I don’t pretend to understand the complexity of all this – I am no economist. But I do think it’s sad when minds are closed, as Porritt suggests they are, at some of our leading institutions.

Porritt claims that, in the Treasury, for example, there is “no readiness to interrogate the macro-economic model”.

I sometimes come across businesses who aren’t ready to interrogate their own local economic models. But after a bit of to-ing and fro-ing, the realisation comes that without a sustainable economic model, the business won’t be around long. There simply has to be some kind of effective balance between what goes in and what goes out.

Anybody can see that, especially my mother. And I don’t want to live in a world with a broken economic model.

Maybe Porritt’s plan is to embarrass the Treasury into change. Whatever it is, I’d rather hear the news that all the intelligent people out there are working together, facing the facts, doing a bit of brainstorming, and coming up with some new, practical ideas about creating a new model that really does work.

I know it takes courage to challenge the status quo. But people are full of courage. So come on.

Categories Change, Failure, Growth, Profitability

Navigating through difficult times

By Pete Burden
February 9, 2009 //
2

In difficult times, as in good times, I think it’s important to focus on the basics. Perhaps more so.

What are the essentials for a sustainable business? I can feel a list coming on.

Firstly, be agreed on what you are trying to achieve. Knowing this can get you through the toughest times.

Secondly, believe in profit. I know this is a little controversial. Some will say it is obvious. Others will not like the idea of profit as essential.

Profit is such a emotional topic, although mostly we don’t admit that. For many it has a bad name. And on the other extreme, even those who seek it above all else might be feeling a little guilty about it now.

But for a business to be sustained, whether it has a social or a purely economic goal, profit is needed. Profit builds reserves. When reinvested it creates strength – primarily through skills and knowledge. Excess profit can be harmful. But reasonable profit, reinvested, is essential.

Beliefs about profit are often so deeply held they’re hard to shift. But unless everyone in your company shares a positive view of reasonable profit, then you really do have difficulties if you want your business to survive and meet its mission.

Thirdly, everyone involved has to have a can do/will do attitude. It’s easier to believe that if things get hard we can give up. But to succeed we have to believe there is a way to get through – even in the hardest times. And we have to believe that we, and we alone, control our progress.

This is somewhat related to understanding that fear is normal. Fear of meeting people. Fear of doing new things. Fear of failure. And most of all fear of change. Know that fear is normal, and you are part way to overcoming it. If you know it and admit it, then you can ask for help, as just one example.

Being open to learning more generally – not being afraid to look a fool, and being unafraid to duck difficult things – is part of the same skill.

I believe even the strongest among us are afraid of change. We all fear the new and unfamiliar. Some like to change the world; but few are brave enough to change themselves.

But in an ever-changing world, what could be a more essential attribute for a sustainable company or an individual?

Fourthly, do the right thing. This doesn’t mean moralising. It’s more of a felt sense. For me, it mainly means overcoming fear so you can move towards a bigger goal. It’s about knowing what that bigger goal is. And sometimes taking the time to check the goal, so that it doesn’t get too big for its boots.

It also means a sense of proportion in other ways. For most of us in the developed world, it means remembering how lucky we are even when things look bad. Most of our lives contain many good things. Remembering to be grateful for them helps keep everything in balance.

Fifthly, do what you say you will, most of the time. Avoid promising to others; but if you make promises to yourself, then keep them. It’s all too easy in times of uncertainty to let a fog settle over us. And that fog provides the perfect shield to hide away, to let things slip, to quietly drop promises – even the most important ones.

Holding on to and reinvigorating your vision is one way to dispel that fog. Another is simply not to let yourself or others off the hook.

One way we let ourselves off the hook is by failing to “bottom-out” things. To me, this means starting a conversation, but when it gets a little hard, giving up. It means failing to push through the mental pain barrier to get at the roots of a problem.

The antidote might be stopping and declaring a time-out, and admitting one is lost. With no idea which way to go.

Being right, knowledgeable and on the ball is so important to most of us that sometimes we’d rather let confusion reign than admit we are lost.

But if you are wandering around in a mist, you are unlikely to get out of it by just wandering around. You need to get a grip. Work out what you know and what you don’t. Assess your resources. Form a plan. And then move steadily forward.

Another way of saying this? Tell the truth. Not just any old truth. But THE truth. The truth that is true for you right now.

However hard that may be.

Categories Commitment, Congruence, Conscious, Future, Honest, Motivation, Opportunity, Profitability, Purpose, Strategy, Thinking, Truth

Little things count

By Pete Burden
November 9, 2008 //
3

My son has recently learnt to read. What a wonder and a joy. A whole new world of ideas magically available to him – the wisdom of the ages, and access to dreams of the future.

I went into Habitat to buy him a reading light. I saw a nice little light. I noticed it had a small, low energy bulb. I took a boxed one to the counter. Bought it and took it home.

How frustrating – when I opened the box there was no bulb.

For the first next couple of days I ranted and railed at anyone who would listen about the salesman’s failure to up-sell me. As I have said before anything to do with selling seems to have a bad name but it’s poor selling I don’t like, not selling itself.

Why is up-selling important?

Increasing the size of a transaction is directly related to the company’s profitability. Here was an opportunity for the salesman to increase the sale value by 10%. At very low additional cost to the company. They offer low-energy bulbs. All he had to do was ask if I wanted one.

More importantly, imagine how angry I was when I got home and discovered there was no bulb in the box.  What use is a light without a lightbulb? That salesman and his company upset my feelings and those of my disappointed child. Upset my feelings and I will not only be angry next time I go near the store, but I will tell as many people as I can what a bad experience I had. Not great for the company’s profitability.

Is profit king? For me, yes. Profitability is a direct measure of the value the company gives to its customers. Profit is used to develop and grow the company, invest in people, training and capabilities – and ultimately in giving a better service to customers. People complain about profit but what they are usually complaining about is what is done with profit (excessive executive pay, greedy shareholders etc) not profit itself.

Lack of proft is not good from the employee’s and the economy’s point of view either.

And what about the environmental angle? Maybe I shouldn’t have bought this light at all. My view is less extreme – we all need to live, and while I will do my best to reduce my carbon footprint and help others do the same where I can, life without some of its basic joys seems grim indeed.

If I am going to buy the light, then I am the kind of consumer who’ll pay extra for a low-energy bulb not an old-fashioned one. I’ll happily pay extra for anything that assuages my conscience in this area. I hope Habitat’s record on sweat shops and human rights is OK. I hope they have a “Plan A”.

So what happened from an environmental point of view? The failure to up-sell caused a wasted trip to replace the bulb, with all it’s environmental consequences. Of course I can time it so that I am in town anyway, but you get the point. Failure to up-sell can be environmentally inefficient too.

When I went back to the store a few days later, I was still fuming a little.  Maybe that’s why I wasn’t thinking well. I told the guy I needed a bulb for the light. I nearly started talking to him about up-selling but bit my lip. As I said, I was still a little angry. He sold me a bulb. I popped it in my bag and took it home.

The end? Not quite. When I opened the box, I discovered an old-fashioned bulb not a low-energy one. The display lamp had a low-energy bulb. I’d assumed that’s what I’d get. The new sales guy got me something else.

If I had any hair, I’d tear it out. Good selling to me is about understanding needs. I had a need. A need for a light bulb, yes. But also a need to feel good about myself. To do something better for the environment. To confirm my self-image as a good citizen.

This poor sales guy failed. He mis-sold me. He’s damaged the reputation of the company. He’s reduced its turnover. He’s reduced its margin (I swear there’s more profit on a low-energy bulb than an old-fashioned one). He’s made me very unhappy.

And maybe he’s contributed to damage to the environment – maybe I’ll use the old-fashioned bulb? Or should I make a third trip?

OK, I wasn’t clear enough about my needs. That’s clearly my responsibility. But the company also contributed to the problem, because the salesman didn’t ask me what I needed.  Because the company didn’t teach him how to sell well. Such a little thing.

Categories Business, Consumption, Profitability, Selling
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