Greatest Hits: You Can't Save the Company on Weekends (posted 6/16/2010 by Joseph M. Sherlock)
In the early days of our manufacturing company, my business partner and I used to save our little firm every weekend.
We'd forget to get a job done during the week, so we'd come in on Saturday and Sunday to complete it. We might have to re-do a job that we had messed up, or to quote some job that we didn't have time to deal with during the week. If we didn't do these things, we were sure our customers would get angry and desert us, and the company would die.
It was a never-ending race against the clock.
Of course, we'd have to save the company the next weekend, too, because we'd be so exhausted from working hard the week before we'd make more mistakes the following week and have to rectify them the following weekend. We felt that there was never enough time to do get everything done. We were always under the clock pressure.
I don't remember what defining event made us stop this cycle of failure. Maybe we just got so sick and tired of not having any personal lives outside the business that we simply said, "If the company can't make it during the week, it deserves to die."
In any case, we stopped working so hard in the business. That gave us more time to work on the business. We now had the spare time to set up cost control systems, to evaluate employees, to fire the ones who made most of the mistakes (except, of course, ourselves), and to praise and reward the good ones. We had time to make a business plan, to set goals, and take actions. We not only wrote a business plan, we stuck to it, too. We now had a period to pull our business plan out of the file and act on it.
This gave us a chance to re-evaluate our customers, too. We learned to work hard to keep the good ones and get rid of the bad ones - those who made unreasonable demands and expected us to drop everything and move them to the top of the list.
We learned to stand up to such bullies. We counter-demanded that they pay more for extra services. Some went elsewhere. Some sheepishly complied. Others stopped making demands once they learned about the increased cost consequences. In any case, our misery ceased.
Once upon a time, we custom manufactured colorful Plexiglas domes for an amusement ride manufacturer. The firm was very demanding. After many frustrating months, we finally started pushing back.
After looking at our costs, we raised prices 46% and stopped offering prepaid delivery. We also stated that manufacturing lead times would double unless they were willing to pay for the special color plastic in advance, so that we could pre-order and stock it without financial risk to us.
After much noise, fury and threats to dump us, the company realized that we were far better than its previous supplier and agreed to our new terms.
We had created a profitable account from a former monster.
There was now enough leisure that we could ask our good customers questions about how we could do a better job for them. We learned from their comments and made appropriate changes to better serve them.
We stopped over-promising on jobs; if customers set unreasonable deadlines, we either told them we couldn't meet their schedule or made them pay a premium for overtime. We gave our customers realistic completion dates and we set up schedule boards to keep jobs on track in order to meet our commitments. We felt better about our business and less frustrated. We rediscovered a life outside the firm and our families got to know us again.
More people were hired to take care of the things we still didn't have time to do ourselves. We expected that this would increase our overhead and, therefore, lower our profits. But we were willing to pay that price to keep the business from driving us nuts. Surprisingly, it didn't work out that way. The profits actually increased, because our employees were doing a better job than we ever did. They weren't tired and brought fresh ideas and new viewpoints to our business. The increased efficiencies more than covered the increased costs.
Profits also increased because we found that good customers appreciate one's efforts and will pay more for improved service.
So, we hired even more employees and made even more money. This gave us even more time to work on our business and allowed us to try some new marketing strategies. They worked. These ideas made us more money that we reinvested in talented people, who made us more money, and so on.
When we sold our company eleven years later, it was 36 times bigger than when we bought it. The firm who purchased our business may have thought they were just buying our corporate stock, our inventory, and our customer list. They weren't.
They were buying access to the pool of talent whom we had hired and the systems we had established to motivate those talented people. Most of the people and the systems remained in place after the sale, helping the new owners double the size of the company in less than 5 years.
What about your company? Are you still trying to save it every weekend? If so, you're doomed to running in place. You won't grow but your problems will until they overwhelm you, or they make you so frustrated and tired you throw in the towel. Don't let this happen.
Start working on your business so you can make it a success. Take this weekend off and think about what you want your business to become. Then, next week, start steering it in that direction. Begin by hiring good people to help you make your business grow and succeed. You'll never regret it.
More of my business advice can be found here.