Author: richardclose

When leaders get it wrong: Three steps for coping with mistakes in business

Mistakes are a part of life and of running a business.  Despite processes and strategies, it is important to remember that there will always be a risk of human error. When the inevitable happens, what really counts is not the mistake itself but the way in which the subsequent fall out is dealt with.

Good leaders resist the urge to assign blame when things go wrong, as it’s very rare that a mistake can be attributed wholly to the slip-up of an individual. The vast majority of errors can come as a result of a series of small mistakes, or the breakdown of procedures and communication.

See below for our three-step guide on how to deal with mistakes:

  •   Own your mistakes

It’s not the mistake that matters it’s the covering up of it that will cost you dearly. Politicians often learn this the hard way – think Chris Huhne and speeding points fiasco. Whether it is a mistake that you have made personally or a wider mistake within your organisation it is important to admit the error as fast as possible. Many leaders waste time and energy by either trying to brush the mistake under the carpet or in attempting to lay the blame at someone else’s door. Dealing with errors promptly helps to reassure both customers and the internal team that the management are fully engaged in the running of the business. It also works to demonstrate that the senior team are empowered to put things right.

  • Analyse the cause of the error

Looking back at what happened and why often starts out as practical exercise however, this can quickly turn into a witch-hunt as people become defensive about being made responsible for the blunder. Making a conscious effort to take a truly constructive look back at what happened and building a clear understanding of what went wrong, can help to reassure staff that they work in a fair and open environment with a focus on progression as opposed to recrimination.

  • Follow through with changes

Once you have got to the heart of the problem and ascertained the series of events that caused it – take immediate steps to prevent a repeat performance. If there were specific individuals involved who failed to uphold their responsibilities, administer training or coaching to help equip them with both the skills and confidence to move on in a positive way. Find a way to share what you’ve learned with the wider team. Naturally, avoid specific details and finger-pointing but take the opportunity to communicate a positive message to the rest of your organisation.

 

When working with NACCO, I released a product to market without fully understanding the implications on the distribution department. It was a decision I questioned and had to hold my hands up and admit I was wrong. Having a network of people around you whose opinion you respect – whether they are employees, customers or even competitors – is crucial, as is listening to the opinions of that network.

Taking down the walls can be the key to growth

One of the barriers to company progression and growth can be directors who are inaccessible to the staff and sometimes, even each other. Directors hiding away in their separate offices, rarely coming out to interact and find out what’s occurring on the ground is one of the behaviour traits I’ve seen time and time again and can greatly hinder the business.

When I talk about taking down the walls I speak in a very literal sense; one of the first things I did when joining Briggs Equipment as CEO was to have the walls removed on the director’s floor to remove the physical barriers, open up the space, get everyone working together and most importantly, communicating. It’s incredible how much being alone in an office can halt making decisions, or at the very least, delay the process.

It forced people to talk to each other – something I find people do too little of these days with the proliferation of email and mobile device communication developments. Discussions took place with more ease and decisions were made with more speed.

It’s also the perfect way to ‘out’ the obstructors. With nowhere to hide, their actions are forced into the open and if they are not favourable towards the company or are resistant to change for the better, it will be much more easily identifiable.

In today’s world where there can be many barriers to growth; changing market forces, the economic climate, cash flow, skills shortages – adding barriers from within is an extra headache many businesses could do without. When it comes to taking down the walls, I wouldn’t hesitate to do it again in any organisation where I felt that forces weren’t working together as they should be.

Empowerment is crucial in the quest to motivate, engage and retain employees

In my experience, empowerment has been the single key element in affecting culture change within an organisation. Once people feel empowered to make decisions, take responsibility for them and have the hierarchy removed which can dent their confidence and courage to come forward with new ideas, they can be a real asset to the business.

Employees that feel valued and feel that their actions can positively impact the business become incredibly motivated, gathering pace and flourishing into great ambassadors for the business, both internally and externally. This positivity can far outweigh negativity being emitted by others and can become infectious.

I have found that quite often, providing a nurturing environment where employees can see a clear progression route and are allowed to fulfil their potential, that this can be far more effective at employee motivation and engagement than financial remuneration. Financial incentives have their place, for sure, but must not be the sole or primary route to getting employees on side.

Moreover, there are additional benefits to be reaped from employee empowerment; not only do they need less management thus saving on management costs, but a more engaged employee will have less absences from work, be more productive, increase the pace of the business and help customer retention.

There’s a three-step programme that should be followed to ensure employees are kept happy:

Engage

Get them to believe in you (and what the top team and company stands for):

  • Sort the top team – it goes without saying that the right ethos has to come from the top
  • Remove obstructors and middle management concrete
  • Be open and honest – always!

Retain

Staff must feel valued:

  • Help encourage the development of positive relationships with team/line managers
  • Create a nurturing and challenging environment
  • Ensure financial remuneration, where appropriate

Motivate

The key question: do staff enjoy coming to work?

  • Is it fun?
  • Are they fulfilled?
  • Can they see a fulfilling future with the company?

Real bottom line business benefits will result from employee empowerment – it isn’t just an idealistic notion or a fluffy phrase, but a real business growth tactic yielding real financial benefit.

Why the value of customer service in business growth and success can’t be underestimated

Customer service in business growth

Good customer service is fundamental for business growth and imperative in gaining that all-important competitive advantage. You only need to look to the high street to see household brands such as Apple, John Lewis and Marks & Spencer at the top of their game for this very reason. Good customer service should form the solid foundation of any business ethos. After all, what is a business without its customers?

I have, on occasion, been surprised by the customer service approach of some businesses. Even some of the larger organisations I have come across haven’t demonstrated the level of customer service I would expect from a firm of that size and stature. When I walked into Briggs with a vision to turn the business into a profit generator, customer service was one of my key concerns. So, did I pore through customer feedback forms or talk to the staff regarding the customer service charter? No. Instead, I made my way straight out the front door to speak to the customers directly. Hearing it from the horse’s mouth and listening to what they thought of Briggs whilst gaining insightful information on their experiences was a top priority for me.

Not all of the customers I spoke to were complimentary about Briggs and I remember one such meeting with the top brass at a well-known supermarket chain. Whilst there, I was given quite possibly the worst ‘hairdryer’ treatment I have had in my 30-year career, (to say he let me have it is an understatement)! However, it’s what I took from that feedback and how I implemented changes that counted, allowing us to go from strength to strength. Incidentally, that particular customer stayed with us, through which time we carried out regular and reliable communication – a vital factor in turning the relationship around.

So, drawing on 30 years’ experience and turning four loss-making businesses into multi-million pound profit generators, what are the top customer service tips I can offer? As outlined above, listening to customers is the first most important activity. Though it may sound obvious, I never fail to be amazed by how many companies don’t do this. Customer service is more than just box-ticking, having a charter for show, or saying ‘have a nice day’.

For me, another element of good customer service is flexibility, such as showing customers you can adapt to their needs, even if it isn’t strictly what you would normally do. Making your customers’ lives easier can make the world of difference when going head to head with your competitors and it’s the extra mile that people remember. One such change we implemented at Briggs when transforming the business model from sales to leasing, was to provide contracts that not only worked for Briggs, but for the customers too. Flexibility was what they needed to have in their business, not least because the economy was pretty turbulent at the time and committing to lengthy lease contracts wasn’t a viable option for many businesses.

Most importantly, remember to be brave and admit when you’ve got it wrong. Customers will remember the way you handled mistakes, not the mistakes themselves. A company can be redeemed by its approach in putting things right.

Customer experience is also an important aspect for businesses to consider. For example, sectors that seem to get this element right are car dealerships and new-home developers. Both are highly competitive selling market places with huge competition for high-value items. They place great emphasis on the customer journey by creating sound consumer relationships from the outset – a key role in the basics of any customer service strategy.

Loyalty is now also a big part of customer service. Originating in supermarkets, with brands like Tesco and its Clubcard, loyalty marketing has grown exponentially and is used by all types of businesses great and small. Social media channels have offered another way for us to engage with our customers and retain their loyalty. However, this can be a double-edged sword as it is often the medium through which dissatisfaction is aired, with many turning to social media to broadcast the ‘customer service sins’ of a business.

Exceeding the expectations of customers should be the mainstay of the customer service charter, and this needs to be achieved consistently. Investment in good customer service will reap dividends, resulting in positive feedback and word-of-mouth recommendations that will be instrumental in business growth. Put it at the bottom of your priority list and the consequences can be catastrophic.

Knowing your bankers from your obstructors

Know your banks from your obstructors

Through the business turnarounds I have instigated and been involved in, there have been some key concerns that crop up time and time again. Although every business is different in terms of the problems it faces, there are certain issues which are constant and my approach to turnaround in the first few days is quite formulaic.

An immediate requirement for me is to ascertain obstructors and bankers. In any organisation, there are people who embrace change and are willing to do what they can to aid the turnaround process – otherwise known as your bankers. Alternatively, there are your obstructors – those who are resistant to change which is vital to the turnaround and will hinder the process greatly. This task needs tackling in the first few days of a business turnaround plan; in other words, finding out who is with you and who is against you. By doing this, you can quickly establish the top team who will be sitting around the boardroom table.

With the right company at your side, priorities become clearer and the implementation of solutions are often more effective. Whether it’s the business running out of cash, customers fleeing, bad management or low staff morale, all of these issues are easier to handle when a trusted team is on board.

The identification of obstructors needs to extend beyond the board room and top team, as they also come in the form of ‘middle management concrete’. This group typically consists of managers who have been established in post for a while and may be resistant to change. It is important to identify these and filter them out; culture change can also assist in this process. If you take time to meet all the staff and source allies, in whatever role they may be doing, they will be invaluable should you need to crack the ‘middle management concrete’. ‘Attacking’ from the bottom is also as important as managing from the top. Getting shop floor staff on your side by encouraging and empowering them will really make the managers work.

This process can take a few months but is an essential step in ensuring the right staff base is formed to take the business forward.
Further practical tips on tackling middle management concrete head on are included on this blog.

Presenting an alternative management structure to aid business turnaround

Alternative management structures

During my career I have experienced many different types of businesses and management structures and find it interesting how these can differ quite significantly from one business to another. I have been fortunate enough, in my role as CEO at Briggs Equipment, to have been in this role with full support from the chairman where needed, but the freedom to make decisions and work freely and independently to bring the business back into the black.

All of this experience and knowledge has led to me to think about an alternative to the traditional set-up in many businesses; which comprises a chairman or non-executive director, overseeing a CEO and his board. I think there is an alternative model which can work really well in some circumstances.

The CEO of a business will be close to it and have management responsibilities whereas a non-exec chairman provides an objective view of the business from an ‘outside’ perspective. However, I believe there is an alternative structure to apply when there is a need to marry these areas, closing the gap between the two – such as in business turnaround.

So whilst the role of the non-executive director/chairman is usually hands-off, in this alternative combination model, the role is redefined advocate a healthy mix of hands-on and hands-off approach.

In this scenario, the non-exec can:

  • Provide a sounding board/support mechanism for the CEO
  • Be visible to the CEO, but back off when appropriate
  • Manage the board, overseeing the bigger picture
  • Help develop strategy & direction
  • Ensure that the business has a great team
  • Ensure that the team has the resources needed to get the job done
  • Take responsibility for investor relations

Combining the ‘grey hairs’ experience of the CEO and non-exec in business turnaround can help steady the ship, identify the business blind spot as well as opportunities from the outset, understand what needs fixing and the best solutions, and provide the necessary diplomacy skills to bind the disparate elements of the business together to make it successful once more.

Identifying the business blind spot

Identify your business blind spot

In my experience of business turnaround, I have discovered that every struggling business has a blind spot of some sort. Spotting the mistakes that have been made and identifying why the business is failing is a task that needs fast action. An independent, unbiased approach is needed.

The blind spot may have been missed or ignored, particularly if the management team has a vested interest in the decisions that have been made.

There are many blind spot hotspots and below I outline my ultimate checklist:

  • The wrong culture? This may play a significant factor in the blind spot
  • The wrong market? Sounds ridiculous but not uncommon for a business trying to succeed and failing due to being in the wrong market
  • The wrong leader? Aside from the obvious assumptions about a good or bad leader, some leaders might be more entrepreneurial than others or have different approaches to management that may just jar with the business they are trying to take forward. They may be more suited to a different type of business or sector
  • The wrong model? A tweak in business model can make it successful once more. When I came to Briggs Equipment, I identified very quickly that the sales model is what was holding the company back and that a leasing and servicing model could be much more profitable
  • The wrong decisions being missed or ignored if the management team has a vested interest in the decisions that have been made. No one will want to admit that a route they have established or advocated is wrong (egos can certainly get in the way!). It can also be the case that those on a management team will not want to ‘out’ a fellow leader and openly state when something they have initiated isn’t working.

A blind spot will greatly limit the success of a company, at best, and at worst will cause its demise – so when it comes to identification of it, one should be sure to make it a priority.