Elie Kochman on Business and Networking

When I first started working at a large corporation, I was fresh out of school, where my life ran on minimal scheduling. I went to class, studied, and worked on my projects. Work was completed in time for when it was due, and I showed up to my classes (most of the time). I followed whatever few rules there were, because there weren’t very many.

Process by Ivan Walsh on Flickr.com

At my company, however, there were rules for everything. Want to make a small change to some text in an error message? Make sure the change was properly requested, documented, signed-off by the appropriate person, and only then can you check it into a test region. Want to put it into Production? Be prepared for a few days of paperwork and waiting for approval. Want to make it simpler to make small, routine changes? There’s a process for making changes to the process too.

I don’t question the need for process in any business – in fact, without any process at all, a business is doomed. Did you get a new client? Make sure you’ve documented that in your financial statements. Did you buy a new computer? Make sure you list it in your expenses, as well as in your company’s assets. Trying a new marketing strategy? Prepare some metrics to assist in determining how successful the strategy is.

On the other hand, as a company grows, it becomes increasingly difficult to remain both flexible and in control. That is, you as the owner are ultimately responsible for the success or failure of the business. You’re responsible for the image your business has. If someone in your company makes a blunder that costs you a customer, you have to absorb that.

At the same time, you want to trust your employees, and to give them the flexibility to get the job done, to take initiative for the benefit of the company. You don’t have the time to micro-manage (a topic of its own that I won’t get into here).

The end result is that your risk increases, because you can’t know everything that’s happening in your business, much as you would like to. As a result, your processes must adapt to changes in how your business operates, but at the same time, not become bloated to the point that your employees are either gaming the process, or ignoring it.

To do so, what I would recommend is that you take a look at the processes you have, and make sure that it is proportionate to the task to which it applies. For example, the same standards should not apply to which brand of coffee is used as applies to making a decision to hire someone.

Look at any process you have in place. The purpose of process is to reduce the risk associated with having multiple decision-makers. If a given process does not reduce that risk, then it should either be replaced, or eliminated. If the decision to be made does not expose your business to a risk, then the process should be dropped.

Time spent on dealing with process is wasteful, and yet, many companies find that they spend more time with the process than they do with actual work. Make sure you’re not one of those companies!

That’s right, we consumers are a fickle bunch. Today we buy from company A because we heard some great things about them, and tomorrow we run for the hills and look for the local products, because local is in. We like to follow fads, and we’re actually pretty good at doing that.

Companies are well aware of the consumer attitude and loyalty (or lack thereof). As a result, some companies will go to great lengths to earn the loyalty of their customers, while others assume that the loyalty cannot be acquired. Which attitude is correct? Both and neither.

A few weeks ago, I wrote about one company, with what essentially amounts to a monopoly, and how they handled, or didn’t handle, a major image fiasco. In that case, the attitude was that customer loyalty is not relevant, since the customer has little choice but to use their service.

This article will be looking at another company with an image problem, but a completely different attitude – Toyota.

On account of a faulty design in a component of a car, Toyota was forced to issue a recall of hundreds of thousands of vehicles to address safety issues. The explanation for how such an oversight might have occurred in a company that was formerly known for its quality is quite simple. As the company grew, it exceeded its ability to maintain the same standards that brought it former success.

However, when it came time to deal with the product recall, the company did not look to excuses. The recall began with an apology for having let everyone down. The incident was not downplayed, but was addressed in full. What might have been a valid excuse was not discussed.

At the end of the day, Toyota may have lost some potential clients for the next few years. However, several people I’ve spoken to stated that they would continue to drive Toyota cars, because the company was open about the issue, and took appropriate steps to remedy the problem. I drive a Toyota (not affected by the recall), and would buy another.

What this shows is that the consumer isn’t always fickle. Sure, we change our minds arbitrarily, sometimes without any good reason. But sometimes, we do have loyalty to a particular brand, and so, when that brand makes a mistake, we look at how the mistake was handled before deciding whether or not to jump off the wagon.

I was reading a post by Jeremy Lichtman about Website Development where he raised an interesting point – he mentions the concept stage of development, where the initial idea is evaluated, and says:

It isn’t easy to tell a potential customer that their ideas are terrible, or to try and make them modify their concepts in order to allow them to work better online.
Part of that is that developers and designers are by nature creative people, and we don’t like raining on somebody’s parade.
Part of it is also the risk of losing a possible customer.

This triggered a brief discussion in the comments about how to learn the skills required for dealing with [potential] clients. It’s not something covered as part of a standard degree in Computer Science or the like. It’s not part of a certification in web development for most colleges. As a result, many would-be web developers working for themselves fall into one of the following two categories:

Customer Management Chart

1. They treat the client’s opinions and ideas like gold, and implement them regardless of whether or not it’s a good idea. While this is good for getting work, it’s not good for developing a business, as you end up spending too much time dealing with the whims of ill-informed clients. This prevents you from developing your business of building quality websites that fill real needs. In the end, your clients are not happy because the site doesn’t live up to their expectations (regardless of whether those expectations were reasonable) and you end up losing the client.
2. You build what you like building, or what you think is a good idea, and if the client likes it, that’s great, and if not, they can go bother someone else. I don’t think this method needs much explanation as to why it’s a bad idea.

What’s needed here is to find a good balance between the two extremes, a sprinkle of tact, and some of your business experience.

Evaluate what your [potential] client is proposing, and try to figure out what the client is trying to achieve. Then confirm your guess with the client. For example, the client talks about creating a blog where every web developer in the world will spend all their time (not going to happen). But what the client really wants is a way to market their new product for web developers.

Now, rather than putting down the idea completely, gather some facts about what the client is trying to do, and what they’re trying to achieve. For example, you might collect some articles about how many web developers have A.D.D. or the fact that there are thousands of sites out there for developers, and the largest such site only has 200K members. Get some examples of how similar products are marketed (e.g. show Eclipse vs. Rational Application Developer for a Java IDE) and what their numbers look like. Try to gather as many quantifiable facts as you are able.

Next, present an alternative to the client, from the perspective of someone who understands what they are trying to achieve. “In order to market your software using various social media platforms, how about we run through some options, and what some companies which are similar to yours are doing.”

There, you’ve said it – what you’re trying to do (market software), there will be choices (some options), and where they came from (other companies). Now, outline the ideas clearly, and demonstrate the breadth and depth of your knowledge by having answers ready for common questions to each option. Don’t show off, just be knowledgeable, and if you don’t know, ask: “Can I get back to you on that?”

Knowledge is Precious

Not every client is reasonable, but then again, not every client is yours. The key here is not to attack their ideas, but to understand where they are coming from. Why did they choose you for the project? It’s because you know more than they do about how to do it. Share your expertise, use your special knowledge. Make sure your opinions are clearly delineated from the facts.

At the end of the day, you may be able to reason with your [potential] client and land a project that is a good idea, that’s well structured, and balanced.

Some [potential] clients will still insist on a bad idea, despite your feedback. However, you’ve already told them it’s a bad idea, just not in those words. You’ve outlined what they’re trying to do, and you got that right. You’ve outlined some real options that would reach that goal, and they’ve been turned down. What now?

Now you need to look at your business, and the impact accepting this client, and their bad idea, will have on the rest of your business. Will it help improve cash flow because it’s a short project (i.e. high profit margin for minimal resources)? Will this client refer you future business, thus making this a strategic move? Is this a client who has other projects with you, thereby putting pressure of losing other contracts?

Or will this project keep you busy, stressed out, and prevent you from pursuing better clients who will help your business reach its goals?

The answer to these questions will help you determine if you should be accepting or rejecting the bad idea. (Note that while you may refuse the project, treat the client with respect, and you may end up with a valuable connection as a result.)

Recently on LinkedIn I asked a question about business cards and etiquette – do you always reciprocate handing out a card? That is, if someone gives you their card, should you give that person one of yours? If you hand someone your card, should you request one in exchange?

Before going any further, one thing needs to be clarified. I was asking the original question for a particular reason, and it was not so that I could write this article. I’m planning on attending a speed networking event next week, in which participants are seated at tables with five other people and get two minutes to make an introduction. The last time I attended, before anyone spoke, I had 5 cards in front of me, one from each person. After the introductions, however, I only really saw value in 2 or 3 of the connections.

The second half of the issue is that I did, at that event, reciprocate the handing out of my card. I ended up on 3 distribution lists as a result, and it took a while to get taken off one of those. All three people who put me on their mailing lists had something in common – they were all mutual fund salesmen. The question I was trying to get answered was whether I could [politely] refuse to give my card to the mutual fund salesmen at the next event.

I got many answers to my question, some of which addressed my concerns, others which seemed to ignore that aspect of the question. However, I did learn a few things about such events, and the ramifications of sharing a card.

1. Speed networking events are of limited value, because, while they allow you to meet many people in rapid succession, they often do not allow you to establish a solid connection with any one person.
2. Given then I will be attending this event (although this may be my last such event), sharing my card is considered to be a necessity. That is, I cannot politely decline to share my card with any one person or group of people.
3. I can control when to share my card – I can wait until it’s my turn to introduce, thus linking my card to my introduction.
4. I can make mention that I do not wish to be placed on any distribution lists – while I welcome networking opportunities, please keep my e-mail off any type of mailing list you may have.
5. When receiving cards, make notes on the back regarding the person who gave me the card, and any other information that may be relevant.
6. You never know where your next successful connection will come from, so don’t try to guess. Instead, hand your care to anyone who will take it, but always include a brief summary of what it is you do, and what it is you’re looking for.

What do you think about sharing your card? What value can you find is such events?

This post is a little different from my normal posts. All I’m going to do is ask a question, and I’m genuinely interested in your opinions on this.

Where and how do you network? Why do you network that way, and how could your existing networking be improved? What changes might you make to your networking activities, if you were able to?

To start, I will provide my answer:

I network primarily on a variety of websites, such as Facebook, Linked In, and Twitter. I try to participate in those communities, and interact with the people I’m connected with. I also have a regular networking meeting about once every 5 weeks with several people working in similar fields to my own. On occasion I will attend a business card exchange event. Ideally, I would like to spend more time in face-to-face networking, were time and distance not factors.

If you haven’t seen the site yet, check out http://knirl.com and let me know what you think. Hey, you can sign up for the newsletter and I’ll send you updates as they become available (and no, I won’t send you spam, and will let you remove yourself from the mailing list, and no, I won’t give away your e-mail address to anyone).

I’ve spoken about elevator pitches several times before. I came across an article today on putting together a 500 character pitch, and it included a tool for writing one. The article, courtesy of Susan Ireland, can be found on her blog, and there is a link to the wizard for creating the pitch on the 15 Second Pitch.

Read through the pitch before posting it, and tweak it if necessary. You can then use this pitch verbally, as a signature to all of your e-mails, or on your website.

I’d be interested in seeing what you come up with – post your pitch as a comment to this post!

Sometimes the best solution to morale problems is just to fire all of the unhappy people.

Once again, I have been reading questions on Linked In, and came across an interesting corporate culture. The end result of such a culture is well-reflected in the poster shown (courtesy of Despair Inc.).

The question asked how to motivate employees to pursue courses on their own time for use at the workplace when there was no money for training (but the courses were free) and no obvious means of encouraging employees to pursue the training. The author of the question wanted to know of alternatives to giving negative performance reviews at the end of each year.

To me, the fact that the author even considered using negative performance reviews as a means of encouraging behaviour shows a major problem with the corporate culture. First, this is essentially blackmailing your employees to do something. Rather than encourage them to do what is right, you are discouraging them from doing something which they may or may not want to do. The likely outcome from such a means of “encouragement” is either mass rebellion, with all employees refusing to take the training (and now on principle of defying management), or a mass exodus as employees leave to find greener pastures.

Second, performance reviews are held annually, which is not frequent enough to cause anyone to modify their behaviour. Some employees will attend a course the day before their review to avoid the negative repercussions of not attending, and then stop.

To motivate employees to do something, you need to use positive reinforcement (much like trying to encourage children to behave well). Additionally, you need to work as a team, with everyone on the team working toward a common goal (working for the paycheck does not count). Explain to the team why these courses are important. Get them to offer suggestions on how to integrate the content of the courses into the workplace. You need to make the employees WANT to take the courses.

I came across a question on Linked In today which raised an interesting question about managing schedules, and what happens when the schedule starts to slip. Anyone offering a service will encounter this situation at some point in time, and those who will succeed know in advance how they will handle this situation.

At the start of a project, the timelines look good, the schedules may be aggressive, and optimism is high. People enjoy a fresh start, and the work begins. However, as time goes on, the Project Manager realizes that the schedule was unrealistic, or perhaps something unexpected came up, and now the project is a month behind. Suddenly, the client is clamoring for status updates, and wants to know why the project is late.

As a Project Manager, what do you do?

In order to answer this question, the first step is to understand the various reasons why a schedule might slip, since that can affect how to resolve the issue.

1. The initial schedule was never accurate. It was overly aggressive, and did not allow for unforeseen problems. As a general rule-of-thumb, there should be about a 20% allowance for unforeseen difficulties. Additionally, the people doing the work should be involved in creating the schedule, since they will be the ones expected to adhere to that schedule.
2. The schedule was sufficiently conservative, but a delay from a third party held up progress. Once the third party delivers, the schedule will be back on track, although pushed out by the length of the delay. The third party could be a resource for either the vendor or the client.
3. The schedule was sufficiently conservative, but changes to scope caused the schedule to break.
4. The scope did not change, but the amount of work required for some portion of the project was not estimated correctly and this was only determined once the work began.

The first step in resolving a problem with the schedule is communication. The client should be informed:

1. There has been a delay in the project, and what the new schedule is
2. What caused the delay, and whether or not another delay for a similar reason can be expected during the remainder of the project

Once the client has been informed of the new schedule, the relationship with the client must be repaired. Depending on the nature of the delay and the ultimate cost to the client, how the relationship is repaired will vary.

If the cost to the client can be measured with a dollar value, then that cost should be, to some extent, reimbursed to the client if the vendor was the source of the delay. However, this situation is not that common as making such a measurement is fairly difficult, and may not be determinable until after the project is complete.

In most cases, offer the client some form of compensation for the delay, with the amount depending on the nature and severity of the delay. Clearly, a single day delay is not as severe as a month delay. However, if that single day means that the client misses an industry deadline, the severity is greatly increased.

One form of compensation that allows for an opportunity to repair the relationship fully is to offer a discount on future work. For example, if the vendor was supplying a website, they can offer a discount on future maintenance, for example, a 10% reduction in the hourly rate for the first 50 hours of maintenance.

What is clear, regardless of the nature of the delay, is that the relationship between the client and the vendor will need repair. What should not be done is to attempt to hide or deny the delay – the client will eventually find out, and then trust will be lost. By being honest about the schedule, and keeping open lines of communication, you can work with the client to bring the project to a successful close. Your practices in dealing with delays will assist in future goodwill, as clients tend to appreciate when vendors are honest about schedules, and take appropriate action to adhere to them.

Karma, according to Wikipedia, is “…the concept of action or deed… which causes the entire cycle of cause and effect”. A closely linked topic is that of the Golden Rule, one variation of which states:“avoid doing what you would blame others for doing” Thales and is commonly quoted as “Do to others as you would have done to yourself”.

In recent months, we have watched as dozens of people and companies have been charged with unethical behaviour in their business practices. This is a clear demonstration of bad karma -  a company steals money from its shareholders will eventually pay the price (although the shareholders themselves will likely not get their full investments back). On the other hand, companies which have maintained good business practices, along with providing clear information to the public, find themselves able to weather the economic storm, and many of these will survive.

Good karma in a business is not just how you treat your employees, or your shareholders, or your clients and customers. You must treat all of your associates with respect, with consideration. In hard times, you will need to rely on all of these people to help you, even at a cost to themselves.

As an example, I read this morning in the National Post that 800 British Airways employees will be working without pay for up to a month, and thousands of others have agreed to  pay cuts. While it can be argued that this behavior is self-serving in that it ensures that these employees will retain their jobs, the fact that the cuts were voluntary speaks loudly of the good karma British Airways has with its employees.

As an example of the reverse behaviour, here in Toronto there is a strike of the unionized municipal workers, including garbage collectors and daycare workers. Part of the issue which demonstrates the bad karma is the fact that city councillors have the option of a pay freeze (but it is not mandatory), while trying to enforce a freeze or cut on other city workers. While I personally don’t agree with the requests of the striking unions, their argument of unfair discrimination is valid. (It should be noted that several councillors did take the voluntary pay freeze.)

When dealing with employees, clients, and shareholders, it is necessary to look to the future. While at the moment it may be costly to ensure a postive relationship, when the times are tough, it can become necessary to ask them to make sacrifices on your behalf. At this point, they will examine your past behaviour in great detail. If you, as a business owner or manager, were ethical and upfront with all interested parties in the past, you will find people willing to work with you in the hard times. On the other hand, if you were unethical in any manner in the past, you may be looking at spending some time in substandard federal housing.

The past can come back to bless you, or haunt you. Without a crystal ball to predict when the past will return, you’re better off erring on the side of caution and always being ethical and upfront with your actions.