GrubHubMike

The Entrepreneur's Boss: The Employee

The entrepreneur doesn't have a boss, but they are responsible to others.  I just finished 5 parts on "The Customer" as the entrepreneur's Boss: (1,2,3,4,5).  The entrepreneur is also beholden to their employees.  Good executives know the importance of surrounding themselves with smart, talented and dedicated people.  They also know that great people deserve and expect great treatment. 

Startups are by their nature risky environments.  An executive has the responsibility of providing as much stability and longevity as possible given the risky nature of the business.  Identifying and avoiding unnecessary risks is essential.  Given the relative inexperience of most entrepreneurs, this means surrounding oneself with knowledgeable advisers.  Gathering data about your industry and identifying trends are essential.  This advice allows an entrepreneur to intentionally balance growth and risk instead of being blindsided by emergencies.

Doing right by employees starts at the hiring process.  Entrepreneurs at startups have a duty to be clear about startup culture and potential risks to the business.  Within reason, be up front about financial outlook and possible major finance changes.  Be frank about long hours and intense activity.  Acting with integrity means ensuring that each candidate has eyes wide open when accepting their position.

Entrepreneur's Boss Series: The Customer (part 5)

Everybody's got a boss.  Taking care of the customer is the first duty of every entrepreneur.  That can be tough enough!  But the real challenge is consistency and longevity.

Consistency is a hallmark of great service.  Think of your favorite restaurant... Are half of the wait staff polite, while the other half are just so/so?  Probably not. A company's message needs to be the same across every department and individual.  Everyone understands the vision and methods that combine to create a great experience for your customers.  Consistency gets more difficult when a business adds customers.  Products and services need to be customized to a customer's individual needs.  Policies need to be flexible enough to meet those needs while remaining consistent enough to be fair.

Longevity is also essential.  Again, think of your favorite restaurant... The first time you went they provided a great meal with professionalism and pride.  Then they did it again.  And again. It isn't so hard to excel for a day or a week, but to do it consistently for months or years is incredibly challenging.  It needs to be written into the DNA of the business.  That kind of fundamental shared vision for service comes across to customers.  Longevity begets loyalty.

Entrepreneur's Boss Series: The Customer (part 4)

Generous service is essential.

Everybody's got a boss.  The entrepreneur's first boss is his customer.  Eventually, everybody screws up.  Most customers are pretty forgiving if you can fix the problem.  Being forgiven for mistakes isn't good enough... Blunders are opportunities to create strong loyalty.  How?

"Make the resolution more memorable than the problem" One of our customers gave us that advice when we were putting together our customer service team.  You can blow somebody away with generous and awesome service. They'll become your biggest advocates.  The business case for generous service is hard to prove; mostly because it is hard to measure the value of goodwill from your customers.

Commit to rooting out the cause  Wronged customers don't want to be bought off.  They want to be fairly compensated for their trouble.  But, what they really want is to know that the root cause will be addressed.  If you've got good feedback mechanisms in place, you can fix these problems.  The final step is to reach back to the customer after the solution has been applied and thank them for their help in the process.

Let your customers take advantage of you.  Ok, not *all* your customers. But some of them.  I've been in a lot of conversations that go something like... "Well, we can't do such and such, because somebody with a lot of time and expertise could take advantage of us.  Think of that times a thousand!"  Sure, if your company has generous service policies some number of people will take advantage of that.   Don't let single instances of potential fraud be extrapolated into doomsday scenarios.  Build controls and measures.  Watch for problems and respond.

Don't try to please everybody.  Every once in a while, you'll get a customer that complains about every offering and every solution.  No matter what you do, they don't like it.  The solution is simple: go separate ways.  Focus on the 90% of your customers that like your service.

The Customer: Staying Relevant -- Entrepreneur's Boss Series

Continuing on the theme of the entrepreneur's boss, its important to stay relevant to the customer.

Staying relevant is a fine balance between innovation and focus.  If you've got your feedback mechanism working efficiently, then you'll have discovered plenty of opportunities for innovation.  And sure, you can do them all... but not well. 

Product Innovation.  There are always more opportunities to make additional revenue with a new product.  A lot modern thinking points to the importance of staying very focused. Make sure your product is the best at what it does.  On the flip side, there always seems to be obvious opportunities that seem to be just a bit outside the current product.  How do you balance?  Each additional product offering or improvement should reinforce the existing product.  It should provide additional value to your current customers, instead of exclusively focusing on attracting new ones.

Focus in Segmentation. All of your customers can be further engaged.  But should you engage them all?  At some point you need to figure out which segment of customers you want to help.  Maybe you release new products and features to 80% of your customer base to increase satisfaction or revenue, or retention or some other important aspect.  Maybe you just cater to the top 20% by revenue.  Keep in mind that as you offer customized products to segmented customer bases, the cost of ongoing support and operations goes up very quickly. 

So what about when you screw things up completely?  The next post will be on resolving problems memorably.

The Customer: Gathering Feedback -- Entrepreneur's Boss Series

I'm continuing my series on The Entrepreneur's Boss.  Today's entry is about effectively using customer feedback. The way a company handles feedback can be categorized into three ways: organic, passive, and proactive.   Effectively incorporating feedback involves all three

Proactive feedback is incredibly important, and also pretty easy to check off of a todo list.  Unfortunately, this usually gets bogged down in tactics.  What focus group are we going to create? What surveys will we send out? How can we profile our customer demographic?  Actually, the tactics are pretty well understood, and not very difficult to research.  The real keys here are:  what questions need answering? How am I going to use this information?   There is no point in doing a survey unless you are asking clear, actionable questions.

Passive feedback is what you'll get through your customer service department.  Don't have one?  Well, you probably do, and its you.  Customers will tell you what's wrong.  In fact, some customers delight in nothing more than delivering a litany of faults.  But, they are in the minority.  Usually,  this is where you'll get most of your positive feedback. 

Organic feedback is how every person in your organization responds to conversational situations.  They have more impact than most of us realize at the time.  One should ALWAYS respond with respect, interest and gratitude.  "I used your site last night, it sucked" said one of my closest friends.  "Thanks for giving it a try.  What could be improved?"  is much more helpful than "Screw you buddy! I'm taking my hookah and going home."  The key to effectively using this kind of feedback is a clear philosophy on how to turn negativity into conversations. Then take those gems of knowledge and communicate them to the right people.

So, it turns out you've got data coming at your from a lot of different places, and being gathered by a diverse group of people.  How do you use feedback?  Lets go with a top 5 list.

1. Gather the whole picture.  Each event is a single data point. Weigh each comment within its context.

2. Incorporate positive feedback.  When considering change based on negative feedback, consider what you are doing correctly first.

3. Don't have knee jerk reactions.  Deliberate and composed is the order of the day.

4. Somebody in charge. Have a single person in charge of aggregating all the feedback data.  Otherwise folks make changes on incomplete information.

5. Don't try to please everybody.  If you've got a million customers, at least one of them is 1-in-a-million-crazy.

The Customer: Providing Value -- Entrepreneur's Boss Series

This is the first entry of The Entrepreneur's Boss Series.  You don't work for yourself! You work for The Customer

The first boss is the customer, not the shareholders.  If you make your customers happy (and have a solid monetization plan) the shareholders will probably be happy.  That doesn't mean give away your product for free to please a customer.  In fact, that would be a diservice, because you wouldn't have longevity.  You couldn't continue to provide value.

What problem do you solve for your customer?  When you have conversations about products you should be asking yourself two questions:  Does this line up with our business goals?  Does this help our customer?  Certainly, you should find yourself asking about profitability and "What's in it for me"  But the question can't be answered in a vacuum.  "What's in it for our customer?" is just as critical in the long term.

Drive customer loyalty, not customer imprisonment.  The language and nature of the contracts you have with your customer are a good indicator of the value you provide.  In the best case, retention is achieved by providing continuing value to your customer.  In the worst case, retention is achieved by long contractual obligations. Imagine a cell phone company with has a "cancel at anytime" policy on the basis that they are going to make their service so good that nobody will want to cancel.  Would that drive loyalty? I'd wager it would! (of course, I don't have a billion dollars to make that wager, so that's easy for me to say)

The Entrepreneur's Boss (Defunct)

**This series got a little muddled** I scratched it and restarted it here:

One of the best things about starting your own business is not having a boss.  It is also a horribly inaccurate lie.  The reality is, one gets much more freedom, but a disproportionately more amount of responsibility.   While its true I don't have a boss, I do have responsibilities to different groups of people. 

The obvious one is the shareholders of the company.  In fact, I have a fiduciary and legally binding responsibility to them.  But, there are three other groups that I am responsible to as well: employees, customers, and the public (in the form of the brand)

I'm going to start a new series on these four groups as "The Boss" of the entrepreneur.  What are my responsibilities to each group? How do I serve there interests?  How do I judge between them when priorities conflict?  Here's an outline of the series:

The Customer

• Providing value
• Actively Seeking feedback
• Staying relevant
• Resolving problems memorably
• Consistency and Longevity   

The Employee

• Ensuring stability
• Compensating fairly
• Challenging to growth
• Listening and problem resolution

The Brand

• Responsible transparency
• Intentional communication
• Consistency in communication
• Bold direction

The Shareholder

• Increasing enterprise value
• Minimizing risks
• Aligning interests
• Transparency

Being Referee - When Interests Conflict

• Customer vs The Public
• Employee vs Employee
• Customer vs Customer
• Shareholder vs Employee

Cadence

Some things can be controlled, others can't. One of the keys to effective management is to work on the causes, rather than trying to dictate effects.  "Work Harder!" is not a good instruction. "Focus on such and such" is.  That's because the productivity is tied to strategic direction and sufficient resources, not frantic activity.

The last few weeks I've noticed that I spend a lot of time trying to control the cadence of initiatives. Its happened before, sure, but its never been such a consistently frequent issue.  Its been interesting to see. 

It happens as a result of fast paced hiring.  The evolution goes like this:

1. Identify work that needs to be done.
2. Hire somebody to fit in to the company and get it done.
3. Identify more work to be done.
4. Hire additional folks to get it done.
5. Rinse and repeat

At some point, there isn't valuable work being identified.  So, the process stops for a time. But, everybody in the team gets used to this ever increasing amount of total work to be accomplished. There needs to be a conscious effort directed towards controlling the cadence of the work.  Otherwise the hiring goes on ad infinitum. 

So I say... "Whoa there big fella! Take it easy!"