Posts tagged "Technology"

Risk Strategy

5 Steps to Manage Startup Risk

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“I think that only daring speculation can lead us further and not accumulation of facts.” Albert Einstein

In the first post of this series, I added a video which stated life = risk. If we shield ourselves from all sorts of risks by staying in our small comfort zone we will not be living life fully. It is our perrogative to find a balance to ensure that we live life to its fullest. The points below relate how to find that balance when starting a business.

1. Market Risk: Our world is in a constant state of flux and with mind boggling technological advancements taking place, we have to be constantly aware of the changes taking place around us. This requires us to monitor our competitors, be in touch with our customers and suppliers, and watch for trends which could potentially make your business extinct. To read more about how to manage market risk please click here.

2. Operational Failure: All companies operate on a set of processes. These processes drive all avenues of business, ranging from Internal operations, business development, sales, marketing and execution to name a few critical functions. When these processes are not optimized or closely scrutinized a business will not be able to scale effectively and reach its target goals. To read more about how you can avoid operational failure please click here.

3. Financial Risk: Without financial controls a business loses its foundation and is on shaky grounds even when the company is making steady profits. Ensuring that you have sound and reliable financial controls in place will allow you to minimize your exposure to financial risks and allow your business to grow more effectively. To read about how you can add financial controls to your startup please click here.

4. The People Risk Factor: You hear it all the time, “Our people are our most important asset”. Its like a mantra that has been wedged into our sub conscious and is constantly repeated from board meetings to your daily staff meetings. However, I am always surprised that though this is such an important asset, very few steps and measures are taken to mitigate the risk associated with this asset. To read more about how you can add effective control measures to mitigate these risks please click here.

5. Lessons in Risk: Having been in this line of work for some time now there have been several risk factors which I have witnessed or experienced first hand. These cover the time you should start, what the risks of starting without a plan are and the kind of risks you have to deal with on a daily basis. To read more about these lessons please click here.

In life and business, if you stop taking calculated risks, or if you let doubt  paralyze you, moving forward becomes close to impossible. It is only when you make mistakes that you learn from them and eventually move forward. Along the way we have to manage the types of risk faced and ensure that we take precautionary measures to avoid risking it all if we do not know where we are headed. Once you know what you want and how you want to get it, take action , because thinking ‘what if’ is just about the worst thing you could do to yourself!

Advice Risk Strategy

Personal Experiences With Risk

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“Be brave. Take risks. Nothing can substitute experience.” Paulo Coelho

The risks mentioned in prior posts provide a framework on mitigating risk in various divisions of business. Some of the risks and counter measures mentioned in this post are general and some those I have personally encountered during my journey as an entrepreneur. 

1. Start as early as possible: The younger you are , the lower the  risk level when embarking on new startup ventures. This is a point in life when you do not have many personal responsibilities and can hence take on greater leveraged risks, for greater payoffs. There will never be a right time. If you wait around for it, you drastically reduce the level of risk you can take . 

2. Don’t start without a plan: Starting a business is a lot of fun and very exciting, however, if you do not have a solid business plan which has been well researched and developed, get working on that first. I am not a fan of shotgun startup ventures who are clueless about where they want to go and how they plan on getting there. 

3. Learn to trust your gut: There will be times when the plans looks too good to be true on paper, but your gut feeling is to be wary. On the other hand ,there are times when the pieces do not fit into place initially, yet, your gut says this is worth exploring. Learning to trust your gut allows you to hone into your inner guidance system and intuitive capabilities.

4. Don’t forget your core values: We are constantly faced with challenges where compromising on core values could lead to substantial benefits. However, going down that path poses great personal and moral risk . I have personally known someone who went down this path and ended up losing everything that mattered in his life. It was an incident which left a deep impression. Compromising on core values is one of the greatest risks you can take and one where the consequences are long lasting & long term.

Some of the concepts mentioned in this posts have many counter arguments. Such as the first one, which is to start early. Some argue that it is better to get some work experience before venturing out into the startup world. Others believe in just starting a business and hoping to eventually make some money. I would really like to hear what your thoughts about this are. Look forward to hearing from you.

 

Risk Strategy Teams

The People Risk Factor

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Our mission statement about treating people with respect and dignity is not just words but a creed we live by every day. You can’t expect your employees to exceed the expectations of your customers if you don’t exceed the employees’ expectations of management.” Howard Scultz

You hear it all the time, “Our people are our most important asset”. Its like a mantra that has been wedged into our sub conscious and is constantly repeated from board meetings to your daily staff meetings. However, I am always surprised that though this such an important asset, very few steps and measures are taken to mitigate the risk associated with this asset. As a startup this is one of the most dangerous sort of risk we are exposed to, due primarily to our size. When a critical team member or employee leaves, the entire business can be brought to its knees. Listed below are a couple of risk control measures you can use to protect this asset .

1. Strict selection policies: At early stages, startups are usually 2-3 individuals who know each other and are comfortable spending days on end locked up in an office, working on the next big idea. Adding new partners or employees represents a large undertaking, and requires serious looking into . If you make the mistake of adding the wrong individual, productivity in the office takes a nose dive and the cost of replacing the employee is high. So use this list along with your own requirements to ensure that you select carefully.

2. Ironclad contracts for new employees: A lot of private data is shared regarding costing, pricing and internal processes with new employees. Many startup companies fail to get employees to sign non compete and confidentiality clauses. The risk of losing an employee to a competitor with your trade secrets represents a phenomenally large risk against which you should take counter measures .

3. Quarterly one of one reviews: I usually have quarterly reviews with most of the individuals whom I work closely with . This is an open and candid session where I learn about their level of satisfaction, frustrations and other problem which may be hindering them from performing up to mark. These sessions provide critical feedback and allow you to take precautionary measures to ensure you do whatever is necessary to retain your most talented performers.

4. Provide training and development: Most startups run on strict financial budgets, however if they have used strict budgeting controls as stated in my previous post, a budget for training and development should be in place to provide your team with training ,which will help improve their productivity and skills. This helps in creating stronger bonds between management and employees. It also increases the overall morale and productivity levels of the organization.

5 Fair rewards & recognition: If your team is generating high levels of growth for your organization they need to be compensated fairly. In some startup companies, which are not heavily venture backed this can be a challenge as funds are usually very tight. However, management needs to ensure that performance and rewards are tightly linked. If they are not, you stand a high level of risk to lose your rainmakers. To read more about rewards and recognition please click here.

We have to do whatever is necessary to ensure that we cater to our team wherever possible. It is a difficult juggling act to manage expectations and requirement, at the same time maintaining an environment where productivity and morale is high. If not correctly maintained there can be nasty repercussions which can bring your organization to a standstill and expose it to extremely high levels of risk. However if it is correctly managed, this asset becomes your organization’s competitive advantage, and paves the way for greater achievements.

 

 

Finance Risk Strategy

Financial Risk

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“Before you can really start setting financial goals, you need to determine where you stand financially.” David Bach

In most businesses I have been part of todate I have been lucky to have partners who excelled in the field of financial control. Over the years I have come to realize that without these controls a business loses its foundation and is on shaky grounds even when the company is making steady profit. Once you have a financial accounting system in place and have reliable data regarding the forecasts, budgets and the companiy,s cash flow, your teams gains a morale boost knowing that the business is supported by strong numbers and an understanding of the numbers that have to be hit to keep everyone afloat. Listed below are a couple of a pointers which formulate the basis of this foundational core to reduce the risk of your business going under, due to lack of financial control.

1. Using an accounting system: One of the first things you need to do if your business has a sizable inflow and outflow of finances is to buy an accounting system. For those without financial background this provides a professional framework to operate in and to record in detail the financial health of your business. I have used Quickbooks  and it has proved to be a relatively simple and robust accounting system.

2. Forecasting: This provides the business with goals and direction and an outlook for goals that need to be realistically achieved. Doing yearly and quarterly forecasts provides the team with numbers that need to be hit to ensure steady and profitable growth. Without them, you are aimlessly wandering from quarter to quarter and never really hit any targets. Most importantly your goals must be SMART, setting unrealistic expectations will only result in decreased morale.

3. Budgeting: If you have set forecasts and goals for the company, they must be adequately supported by funds to ensure they are met. This is difficult for early stage startups and one of the primary reasons so many venture backed companies burn through their initial funding. There need to be strict controls to ensure that you use your budget as a control measure thereby avoiding hemorrhaging cash through miscellaneous expenses which are fund consuming .

4. Cash flow: The inflow of funds in your business must exceed the outflow . Even though the concept of cash flow is simple to understand, it is a  primary reason why many small business fail. By not correctly managing the flow of funds you will be placed in awkward situations where you will not be able to meet expenses. Review your policies on customer credit and negotiate favorable terms with your suppliers. Keep checking that your expenses are being matched by your revenue and if possible, develop a cash cushion to weather you through the difficult times.

If you have not implemented these basic controls at your startup, I strongly suggest that you take steps to integrate them into your daily operations. This will help provide everyone in the team with a transparent picture of the health of the company. Initially it will take  time to set up all the controls and will take some getting used to. However it will be well worth the effort. Take control of your finances today because lack of financial control should not be the reason you go out of business!

 

Risk Strategy

Operational Failure

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“In the end, all business operations can be reduced to three words; people, product and profits.” Lee Iacocca

All companies operate on a set of processes. These processes drive all avenues of a business ranging from Internal operations, business development, sales, marketing and execution to name a few critical functions. When these processes are missing or loosely defined a business faces several long term disadvantages which arise in areas such as productivity, efficiency, price and overall morale of the team. If these factors are not paid close attention to from the start you will substantially increase the risk to your business, keeping it from reaching future growth. This is a set of measures that can be put into place at your startup to help reduce this level of risk.

1. Product/Service development is a critical stage in a company’s development. This process should be clearly defined from  time of inception, selection, development and execution. Using such a process allows you to push viable product/services faster through the levels aided with input from all divisions or team members. At the same time it allows you to kill product/service ideas at earlier stages to maximize efficiency.

2. Break down the product/service you are providing into components. This helps identify a supply chain and is critical when you want to know the level of business risk exposure. This is something I am still in the process of learning. This has brought about a greater amount of transparency and increased efficiency in the companies I have been involved in implementing this strategy.

3. Delivery and execution mechanisms are vital to ensure that your product/service gets to your customer at the right time and place and matches their expectation. This operations component must be tweaked constantly to ensure that customer satisfaction levels remain high and retention levels are maintained. If this part of operations is neglected you may find yourself at a severe disadvantage against a competitor who has concentrated in making their delivery mechanisms optimal.

4. Internal processes such as finance, communication and CRM should be automated with the help of technology to achieve a faster flow of communication from one department to the other. When organizations begin to scale is when a disconnect takes place internally. I have experienced this many a time and now rely on technologies to keep everyone connected and keep the flow of information and communication clear and fast. 

Listed above are some of the steps I have taken in businesses  I am involved with to increase operational efficiency and decrease risk of process breakdown . Operational management is actually a very complex topic, The above is a very simplistic approach that startup or younger companies can adopt to establish processes which will help them to scale faster in the future .

If anyone reading this post has domain knowledge regarding operations management at a startup or SME’s I would appreciate your comments and feedback on this post.

 

 

 

Communication Customer Service Sales

Exceeding Expectations

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“There are no traffic jams along the extra mile.” Roger Staubach

My first company had the tag line “Exceeding your every expectation”. It was printed on everyone of our name cards and it pushed us to go the extra mile many a time. It is only after some years that I have realized, it does not take much to exceed customer expectation. They do not need elaborate gestures to make them feel special, all they need is to be treated honestly and fairly, to be provided with significant value for their purchase and to have all this done in a convenient and efficient manner.

From personal experience I know that there are many service providers I go to even though they may not be the cheapest, biggest or more convenient in the market. For example, all my computer needs and requirements are dealt with at a small shop I have been visiting for years. You may well ask why anyone would do this, in this day and  age of online ordering and convenience ? It comes down to the relationship I have with the owners of the store. It is good to walk into a store where everyone knows you by name and where you know you will always get that extra attention and exemplary customer service, whenever you walk in and need it.

As part of a startup , you need to identify areas where you can add greater value to your clients. You need to show them that you care about their success as much as they do. These are some of the ways I have used to go that extra mile :

1. Remember your customer’s birthdays and make sure you send out either an ecard or an actual card to show that they matter to your business.

2. Gather as much personal data regarding the customer as possible, such as hobbies, interests, family and  other information that may help you with future conversations as well as personalizing services.

3. Remember to thank the customer at the point of purchase and to follow it up with a note via email or mail, thanking them for their business.

4. Leave extra room for you to exceed their expectations. If you promised 5 days delivery time and deliver in three days, that goes a long way. Remember to leave yourself some wiggle room.

5. Put yourself in the customers shoes and ask yourself what you can do, to make the entire process more personable and enjoyable? Treat your customers the way you would like to be treated.

Going the extra mile is a defining and differentiating factor between good and great companies. Building such a culture from the start will provide you with clear competitive advantages. 

Do you have a special story of how you were wowed by a particular vendor?

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Sales and Relationships

 

Communication Customer Service Strategy

Learning from Experience

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“Your most unhappy customers are your greatest source of learning.” Bill Gates

We have all been exposed to bad customer experiences. For those of us in the business or corporate world, we have also been on the receiving end when things didn’t work out as expected. That is part of life. Trying to please every customer to their complete satisfaction is a gargantuan and uphill task. However, it is essential to learn deeply from every complaint and put into place systems, which will take care of such incidents in the future. Listed below are a few pointers which should help expedite the learning process:

1. Refrain from pushing the blame onto external circumstances. Sometimes your supply chain gets delayed, it could be a mix up which your delivery system made or bad weather which resulted in your receiving a mouthful from your client. Accept the blame rather than pushing it onto someone else in the organization because that is the last thing an angry customer wants to hear. Once you have accepted the mistake you can go about resolving the issue in a more efficient and effective manner.

2. Extensively document the mistake. This will force you to think and put into a process the actual course of events and why they occurred. I have found the discovery process extremely interesting because you are forced to map out where the entire process started, who was responsible for what, at which stage and most importantly where we need to focus to ensure that the problem doesn’t happen again. It creates ownership in a business and a team constantly striving to deliver their best.

3. Finding the most efficient and effective solution. Once the mistake has been clearly identified the team should reach a collective decision regarding how to avoid a similar issue in the future. Control measures must be put into place and ensuring responsibility for its proper execution is essential. This is a critical step which should be documented and circulated to all team members to show that a decision has been taken.

Such experiences provide a great learning opportunity for the entire team. Once a mistake has been committed there is nothing we can to do to undo it, however , we can set into motion a series of actions which will alter the way we respond to them in the future. With a fanatical focus on ensuring that you cater to your customers every need and make the experience of doing business with you as seamless and comfortable as possible, will garner massive long term benefits.

What was your last customer experience horror story and did your organization do anything about it?

 

Communication Customer Service Technology

Integrate Technology

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“The purpose of a business is to create a mutually beneficial relationship between itself and those that it serves. When it does that well, it will be around tomorrow to do it some more.” John Woods

With escalating costs and the need to constantly maintain bottom line numbers, many companies are switching over to handling customer support services via technology platforms. Interactive Voice Response (IVR), Self Service Kiosks and online knowledge banks have greatly reduced costs for organizations, but, has an over reliance on these technologies resulted in a decrease in overall customer satisfaction?

Like most things in life, balance needs to be kept, so it is with integration of technology into your customer service function. The telco I was dealing with has an IVR service which you need to dial out from your mobile, since my phone was not able to make any outgoing calls the system directed me to another number which did not work either. At this point, I switched to the next logical source for information which was the website. The website did not have any knowledge banks relating to the issue at hand and did not even list the call center number I could call from a land line. In this day and age of web technologies this was disturbing. I ended up having to google several keywords to finally find the number.

The lesson to be learnt is, that focusing all your energy on just one touch point, such as a contact center is not the best of strategies, specially when deploying other web based and self service options are not as expensive. It is true that return on investment is marginal for these strategies, however, they lay the foundation for a much more holistic and comprehensive customer service solution for the future. Leveraging on tools for Customer Relationship Management (CRM) such as Salesforce, ZohoCRM, HighriseHQ can also be effective ways to keep track and even develop metrics around your customer service function.

Either way, as a startup organization you need to develop strategic roadmaps to help you handle customer service requests as you begin to scale. These will involve a number of technology solutions, what needs to be remembered when integrating is:

1. Keep a balance between technology and the human element.

2. Leverage on your website to provide detailed knowledge banks on prior complaints & questions.

3. Develop strategies to store and easily refer to archived customer interactions and data.

4. The ability to escalate complaints which have a higher level of priority.

5. Doing all of this while keeping it simple for the customer.