What is the key element of business success?
Now there’s a question that could lead to a multitude of different answers: A great product; a positive cash flow; a solid business plan; financial backing; an inspiring and hardworking owner; location, location, location … all of these are important and many businesses have failed because one or more aspects were not in place. I submit, however, that the key to your business’s future lies with people.
A business may be a separate legal entity but it is created by, built by, supplied by and supported by... people. Your business began as an idea that you had. As a would-be entrepreneur, you had to sell your idea to potential investors, suppliers and potential customers. While your business plan was important, the people to whom you were selling the idea were effectively buying you and your dream. This was the beginning of a relationship.
Regardless of whether you are a sole proprietor or a fast growing chain, the business is literally in the hands of the people who supply it, run it and buy from it. It follows then, that it makes good business sense to build positive, long-lasting relationships with all your stakeholders. A logical starting point for evaluating a relationship value chain, is with your suppliers. Too often, business owners fall into the trap of increasing their profit margin at the expense of their suppliers. If we squeeze providers into a situation where the terms and payment schedule are detrimentally one-sided, we risk an antagonistic relationship. In the event that we need their cooperation in a quick turnaround for a customer or their understanding should cash flow become a challenge, this is going to be unlikely. Suppliers are an integral part of any business and a supplier who feels valued is a potential ally.
Employees are the next main link in the chain. A happy, healthy and stimulated workforce is a productive one. Employees who feel included in the business and its success are more likely to work harder and to be creative in tackling problems. The culture of any organisation is largely a reflection of the managerial style of its leaders. Do your employees feel valued, listened to and respected? Or, is the environment one of mistrust and frustration, keeping people apart? One of the advantages of having a smaller workforce is the relative ease of developing and nourishing positive relationships and flatter reporting structures. People work for money, but loyalty and willingness are built through relationships.
Similarly, customers are increasingly looking for the relationship touch when it counts. This may be as simple as wanting a smile and a greeting at the checkout, or being able to speak to a real, live person when the gods of technology mess with their online shopping experience. We can spend a fortune on advertising and brand building, but if we don’t deliver the kind of service the customer is looking for, they can and will shop elsewhere. The growth in social media engagement between businesses and customers is indicative of the need for responsiveness. In a 24/7 world, this is perhaps one of the big challenges for small business - how to be available to communicate with your customer, when they don’t keep “normal office hours”.
Feeding into the relationship chain, are the family, friends and colleagues who directly or indirectly support the business. The “old school tie” network may be a dying breed, but we cannot underestimate the power of strong business networks when it comes to finding investors, mentors, or in gaining access to potential buyers. Networks are only as good as the effort we put into them. It is vital, therefore, that small business owners develop their relationship building skills and truly practice an open door policy with all stakeholders.
“Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.”
― James C. Collins, Good to Great: Why Some Companies Make the Leap... and Others Don't
Author: Janet Askew