There is an enterprising small business newsagent near where I live! He’s come up with the ingenius idea that he can sell bread re-packaged at a premium price. He started by crumbling loaves of bread that were out of date and packing it up in a see through plastic bag and selling obviously to customers as ‘Duck Bread.’

It went down a storm….so much so he is now buying cheap bread in large quantities and immediately re-packaging it into ‘Duck Bread’ even before its gone out of date! The price of the loaf of bread to him is 34p and he is selling it at £1.50! Okay it’s not going to make him a millionaire but nice profit and as he mentions (yes I went into the shop to ask him about it) he has seen extra customers in the shop buying other produce as a direct result of the ‘Duck Bread’ being on display outside the shop.

It doesn’t cost him anymore to make the ‘Duck Bread,’ in fact it’s costing him less, for perhaps an inferior product. I guess the ducks don’t mind!! The newsagent has found customers who are willing to pay a lot more if given a reason to do so…it’s ‘Duck Bread.’

This says more about the customer buying the bread than the enterpreneurial newsagent. The customer is paying for their lack of price curiosity. Perhaps when it comes to feeding the ducks it doesn’t matter?

Re-packaging products and services could be making us all a little more profit!! Interesting thought for the weekend………

The last decade has brought staggering changes as well as a huge variety of ways of looking at new challenges. Understanding the future and our place as a small business in it is tough and we are now faced with a huge problem. Those of you who have run a small business for a number of years, will know exactly what I mean when I say we have lost touch with the very essence of what makes strategy work in small business. It’s got all to complex.

Frankly, it’s time to get back to basics and review the four essential areas of strategy, best explained by David Taylor in his book “The Naked Leader.”

He reveals his formula for guaranteed success as

Know where you want to go

Know where you are now

Know what you have to do, to get where you want to go

Do it

And there is the framework for a workable strategy…..building a flexible, forever changing, succeeding business rather than a solid, fixed, frozen business trying to build on blocks from the past.

Even in a small business communication can be difficult, getting to the bottom of things should be quite easy. Surely it’s just a matter of asking? Call me old fashioned but plain old simple human to human conversation has to be the best way of gauging how things are going.

Instead of getting your people to complete people satisfaction surveys, or have them fill in complicated bench mark stuff…..cut to the chase, get to the core of problem. Just ask your people two questions; what are the things around here that bug them, piss them off, make their life difficult? Then ask them what doesn’t. What things make their job easier? What things are going right? Sometimes an exceptional way of getting people to work in teams….

The important thing is to act on the things that are causing problems. Keep it simple just ask.

When you’re stripping your business back to the core and looking at where you are going in the future there are some fundamental questions to ask. The more challenging the better. Nobody made a difference by remaining the same. A business owners job should be to stop rigour mortis!

Three questions to get you started but only answer them honestly and truthfully!!!……

1. What business are you in? Seriously try answering it.

2. What five things would you change about the business?

3. What five things would you change about you as the manager/leader?

Then ask the people involved in the business including customers to find out whether you are right or not. Answering the questions should provide opportunities to stretch the business and move beyond where you have been before.

Leaders get distracted easily. Five of the leaders biggest timewasters are:

1. Getting the right information at the right time

2. Budgeting

3. Playing email tag

4. Sorting out stupid, senseless people problems

5. Attendance at internal meetings

In fact the above list is all management rubbish. Leaders get focused on the mundane stuff and quickly become less productive. In a small business that can result in limited growth. Five things leaders really should be concentrating on:

1. Creating loyal customers

2. Creating loyal, energised and productive people

3. Attracting new customers with little investment

4. Reducing costs as much as possible

5. Building the credibility and reputation of the business, perhaps that’s brand development

Looks a hell of a lot more exciting and stimulating to me. Which one adds more value? Which one actually makes a significant difference to business performance? Leaders need to be getting right off their backside/ass to focus their attention on the second list. Limited growth could just be a problem of the past!

Great video of a twenty minute seminar by Seth Godin delivered in 2003. It may be five years old but it’s still relevant…. click on the hyperlink below to go straight to the video

http://www.ted.com/index.php/talks/seth_godin_on_sliced_bread.html

I ride my cycle a lot. I’m used to numpty car drivers pulling out on me (if you’re a cyclist you know what I mean.) I don’t hang around, I cycle quite fast. This weekend due to a lack of patience a car overtook in the most incredible place and hit the vehicle coming the other way. Wing mirrors went spinning across the road. Cost, £300 all because one car driver just couldn’t wait a few seconds.

In the rush to get the job done, to get to our destination, or to get the business to grow, we knock things off. We knock people about…. whether they are customers, our people or suppliers and like the car drivers it costs money. People leave our business because they are not treated the right way. We become consumed by doing busy work rather than real work. We run round in circles, become less efficient and take our eye off the real ‘REAL’ ball.

It’s the equivalent of driving head down along the road without enjoying the ride, appreciating the view and taking the moment in. Business is a lot like that. We spend so much time trying to achieve but not understanding how to achieve.

The definition of patience is tolerance of delay. It implies self control, considering the options and sometimes just waiting. How many times have you jumped at a decision only to recognise later that delaying or self control would have put you in a better position or you would have made a better decision?

Just slow it down a little, think carefully, be patient, don’t rush it. Better to get there than never at all!

Leadership not management is now the key to driving out more production, outstanding creative work and new ideas. So why are we small businesses having so many problems? Well we’re selling more intellect and less material. The emphasis today is on managing the human imagination not production lines. Our peoples expectations have changed but ours haven’t and our customer’s expectations have changed but perhaps ours have not! Trust, respect and loyalty are missing and we only have ourselves to blame.

There are some key concerns….many small businesses have done just the opposite of what they should have done – order and conformity rather than free thinking and risk taking. Many small businesses could not have frustrated their people any more if they had tried to and as small business owners/managers we are so reluctant to let go. It all leads to limited growth and mediocre performance in many cases.

So, small businesses will need to be able to manage change better in the future. They will have to be less organised and less controlled by a single brain. Founders, managing directors beware! Growth will be limited not by production or developing the latest product but by your ability to recruit and retain the best people in the business.

The widespread trend towards interconnectedness will accelerate continuously leading us towards being more nimble, innovative and continuously self modifying. Small, autonomous, flexible businesses will be the ideal structure in the future and your people will have a share equity in those same businesses.

We’re going to have to share responsibility, demand accountability and drive towards common goals. Our jobs as Directors will be less about control and more about disrupting the status quo.

We are exposed to an average of 3500 brands a day. Brand orientated businesses are twice as likely to succeed. 80% of businesses with a strong brand focus have operating profits almost twice as high as the sector average. We’re shifting from profit generation to value creation for all stakeholders and we’re now operating in a world that’s no longer based on the manufacture and trading of tangible products but the creation and delivery of intangible services.

Some of the worlds strongest brands today were not even a twinkle in their creators eyes twelve years ago; ipod, eBay, Google, Innocent Drinks, Big Brother, Harry Potter. We are entering a new culture of mobile usage, organic, downloadable entertainment, male grooming and social networks.

It means instead of messaging people how good we are, we need to involve them. Instead of promising we need to deliver, interactive replaces passive, look and feel is history, it’s actually about experience. And finally, instead of having an audience as customers you have a community of customers!

What on earth is going on? Your most significant question at the moment; is your business strategy designed for a static world or for a changing one? And is it changing in a fundamental way?

Somehow we need to get a grip and work out how to make the intangibles tangible!

If you don’t want to do yesterday’s exercise try this one……in the next 10 days (okay it may take little more time to organise,) round up some of your colleagues and visit two ‘real’ businesses you admire. Hold an open minded discussion with them on what they do well, what they want to improve on, what their challenges are. How do they deal with some of the particular problems you have? What are their aspirations for the future?

Believe me you’ll learn a hell of a lot……