Why small businesses stay small

A power culture is crucial for startups, but you can’t scale when power is concentrated. Things break because, at scale, owner-managers can’t decide everything in real time. To scale without breaking you need a role culture with devolved expertise and power.

Letting go of that control is a huge emotional leap for entrepreneurs. It requires the maturity — and humility — to recognise that you are not always the smartest person in the room. It requires personal growth before financial growth. It requires being honest about your own limitations.

Some small business owners accept these limitations and plough a profitable niche. Some entrepreneurs level up and bring in professionals to manage phase two of growth.

And, sadly, some do neither and are stuck in the middle: overtrading while infrastructure buckles.

If you are depending on a company like this for all or part of your competitive advantage, the prudent strategy is to find alternatives. Because pride will invariably come before a fall.

Why things never get done

Have you ever been in a meeting when it becomes apparent that all anyone in the room is going to do is describe problems? People around a table will compete to describe things in increasingly obfuscatory language until others recognise in that language terms they have heard before, from sources that they hold credible. They then reassure themselves that the right language is being used around the problem.

Everyone goes away happy. Six months later, when nothing has been achieved, more language will be found. But at some point, people are going to start asking: why hasn’t anything been done about this?

It’s one of three things: time, money or risk. The first two are easy to solve and easy to explain. There isn’t time to achieve this. OK, fine. We don’t have the budget. OK, fine. No one argues with that. If people want something badly enough they will always find more time or more budget. So that is not why things don’t get done.

The real problem is aversion to risk. It generally goes unspoken because people don’t want to admit they are afraid. But the truth is, people don’t want to expose themselves to the risk of (a) failure and (depending on the neurosis level in play) (b) being seen as an imposter. Therefore they will say things instead of doing things. They will say things that sound like they are doing things.

Every time we endeavour, we run the risk of failure. So what? Literally the worst that can happen is you learn how not to do something next time. You fail and you get to play again with better information. Failing — because you acted — takes you a whole lot closer to success than sitting around finding words.

If you were ethical from the outset, GDPR is already done

I’ve been highly amused at the passive-aggressive tone of some of the GDPR related comms I’ve been receiving here at Delevine Towers.

The awful Myspace wannabe Reverb Nation flounced off an ultimatum worthy of a manipulative teenager. “It’s been too long since you logged in … In fact it’s been about two years since you used any of our powerful tools. This will be your last e-mail unless you log in.” To which I reply: “Buh-bye.”

“This is your last chance to connect,” warns an airline I have never flew with, who got my e-mail address from an online ticket broker and started spamming me. Buh-bye.

Elsewhere, whole forums of net-preneurs are pulling out their hair about the implications of GDPR-compliance.

But it’s very simple.

If you ran your permission marketing and privacy ethically from the outset, GDPR is already done. And if you’re worried — you’re why it was necessary.

Process: why rules can cause more harm than good

Workflow rules: we put them down for a good reason, to create a uniform, standardised outcome.

Sometimes, however, adhering to a rule in your workflow creates an outcome that is worse than the “non-standard” alternative.

We recognise these paradoxes and so create contingencies:

e.g. x must ALWAYS be y (except z when n will apply but ONLY if p > t AND when changing non-standard x to standard y you MUST then also change all instances of C otherwise j will not work)

When time spent managing the network of exceptions and contingencies because of a rule exceeds time spent producing outputs, we may need to revisit the rule. Did it really need to be there? Is it adding genuine value or was it based on something wholly arbitrary to begin with and simply become institutionalised? Has it now become an untouchable “sacred cow”?

You can’t sell internal process

You can only sell the result of process. The more complex the process you must perform to get you from input to output, the the farther you stray from profit.

Where are the sacred cows in your business that seem holy and untouchable but in fact are keeping you from the light?

The Coffee Subjugation

I’ve been sitting for 25 minutes at Soho Coffee Co in Bristol Airport. And here’s the thing: every single empty table is filthy.

Covered in the crumbs, unidentified liquids and waste packaging of the previous occupants.

I was surprised that the upscale-looking franchise (sandwich = £5.10) did not jump on this — after all it takes seconds to run a cloth over the table — and then I observed something.

Customers sitting down were so appalled by the mess that they were cleaning up before enjoying their own purchases.

And Soho had realised this was happening and figured out they did not need to hire someone on clean-up. The customers would do it for free as a result of horror/good citizenship.

Now …

There is a valid argument that it is not Soho Coffee’s job to clean up after lazy, messy, entitled consumers. After all, a self-service environment includes self-clean-up, right? Those who refuse to clean up after themselves are not really living in a civilisation.

But what happens when the behaviour of customers leads to a dirty food service environment? That’s when you have to weigh the moral high ground with food safety and customer experience.

So here’s the math:

Brand equity resides in the experience. Marketers call it the second moment of truth.

We can educate customers about how we’d like them to behave: McDonalds manages this. But in the long run, it doesn’t matter whether it’s the job of consumers or the job of the restaurant. If clean-up isn’t happening then you’re the filthy café. For a coffee franchise, clean-up is not an expense, it’s a marketing investment.

Extrapolate to all other under-the-bonnet jobs that add to the customer experience.