It is a well-understood axiom of the business world that there are two ways to improve the bottom line of the business. Stated simply, those two ways are to make money or to cut costs. Now no business can cost cut their way to profitability. But by the same token, waste and excessive internal costs for any business can eat away any profits that business is enjoying. So to get ahead in a competitive business environment, both methods must be employed.
When a business turns its eye to cost cutting, there is a stated or unstated business objective that the business owners will discover significant bleeding of revenues that are going on within the systems of doing business. So if those systems can be improved to eliminate that waste, the business would literally make money from the inside out because the overhead of the business would drop so dramatically.
The usual progress of such a cost saving campaign by a business is to find “the low hanging fruit” first. By that we mean that in order to satisfy the demands of management, middle management will identify superficial savings in hopes of satisfying the requirement. Hence switching from disposable cups to mugs or cutting back on break room amenities often go on the chopping block first.
Sadly, while there may be some superficial savings to be found in such places, the significant introduction of efficiencies for any business lie at a deeper level and take a more in-depth process of locating problems with how things get done internally. The methodology of finding these “money pits” within a business is often called “Process Improvement.” The concept of process improvement is to diagram a particular business process from inception to completion and document the stages it goes through, the handing over of authority for the process and to pin point places where inefficient methods are causing excessive cost in executing that process en route to the final stage of process completion.
Routinely, the areas of business structure that most often identified as being candidates for a process improvement examination are
* Excessive overhead between departments. Departments within a business are notorious for taking on the atmosphere of a fiefdom and becoming resistant if not suspicious of other departments in the same company. When that happens, department managers will introduce paperwork and unnecessary processing to cause “work” to move to his or her department from another or for completed jobs to continue along their path. This excessive overhead can be costly at the department level and bog down the business as a unit enough to actually reduce the profitability of the organization.
* Communication problems. A business process moves through the organization as each department or entity adds value to the process through to the completion of the job. However if communications between departments or people along the process chain are flawed, a process can grind to a halt and wait for hours if not days before the missed communication is discovered and the work is put into the cycle to be completed. This slow down or break down in communications can be a tremendous drain on the company. To correct the problem, modern tools of communication should be reviewed so each significant person along the chain is quickly made aware of work that needs to be done and can signal to the next agent that their step is complete and that the process is moving to the next stage.
* An inefficient IT infrastructure. Out of date computer programs that are not integrated with each other cause needless work to be done to take data from one system and moving it into the next computer program only to be entered again at the next stop along the chain. Standardization and integration of data and systems will introduce huge efficiencies to the process.
By streamlining the process of moving a business requirement from inception to conclusion, we can remove much of the inefficiency and waste that has become inherent to that process. We can introduce up to date integration designs both at the IT and process level to quickly move the process from one department to the next upon completion. The outcome is a streamlined organization that is no longer “bleeding money” due to inefficiencies and as such is making money “from the inside out”.
It is a well known axiom of doing business in any industry that those who do not stay in step with the times will be those companies that eventually die out. There is no place where that truism is more evident than in the way that companies in virtually every business sector are finding to integrate an internet marketing strategy with their traditional communications and to provide the public with an internet “presence” to supplement their public profiles in other venues.
Of course, the value of the internet for sales and promotions has been well known in the industries that service the youth markets and for the companies dealing with entertainment and the arts. Because the internet is in virtually every home and even now on hand held devices of every description, the access it gives to reach a target market are phenomenal.
This explosion of an entirely new marketing model has introduced the world of business to entirely new paradigms of marketing and new ways to achieve greater market penetration and sales. And so any business who has had to get out on cyberspace to keep up with the competition has already had to learn a whole new vocabulary that has grown up around the internet marketing phenomenon. Now terms like “Search Engine Optimization”, “Auto responders” and “Viral Marketing” become important and powerful tools to any business that wants to tap the power of the internet to increase sales.
The second wave of businesses that, perhaps reluctantly, ventured out into cyberspace were traditional retail business that you would not associate with cyberspace at all. This includes sport teams, restaurants and even retail giants such as Wal-Mart and Border’s Book Stores. In fact, the wave of change in how products and services are sold has been so rapid that entire market niches have been virtually revolutionalized by internet sales techniques. Book and music outlets have been virtually hard hit as a large percentage of their customers have abandoned the “brick and mortar” sales outlets entirely to use the more convenient tools of internet shopping.
This has made it tough on some retailers to keep up. For the “mom and pop” business, the change has been particularly devastating. Already small, home grown businesses were struggling to compete with the giant mega-stores like Wal-Mart to keep their loyal clientele coming back. Add to that the migration of customers to the internet and the need for change just to stay in business became even more urgent.
But even businesses who do not depend on marketing at all have seen the need to build and maintain a well functioning business web site so they will have a “face” in cyberspace. In the modern marketplace, the consumer will go to the internet first to find out about a company and it’s goods and services. This has turned traditional ways of connecting with existing and new customers upside down entirely.
The good news is that these rapid changes in how modern markets work have made the business world more diverse, more able to adjust to changing business dynamics and more open to the creative and innovative minds that have always been the real life blood of the business world. And, ironically, it is often the small business that is most capable of making rapid changes to its online presence and ways to doing things.
In that the internet is a phenomenally dynamic place, new ways of reaching our customers change almost annually. Where one year a simple web page may have been sufficient, soon we had to have chat rooms, MySpace pages and YouTube compatibility. Any business that sees these changes as chances to do something new and exciting with their business will be the companies that thrive in this modern world. And, as always, those who do not thrive with change will be destined to be made obsolete by it.
The idea of being customer service and customer satisfaction oriented is not a new paradigm in the business world. Even in businesses that are not directly working with the public, the idea of structuring the company to satisfy the needs of the people that make it possible for the company to stay in business – it’s customers – is a core value for a large percentage of businesses, especially those that are successful.
But there are segments of every business that have no contact with customers so it is difficult for them to develop a customer service mentality. And if the business itself is not structured to deal with the public or have conventional “customers”, that approach to the business world can be lacking in the workplace. That is why a big business trend in all type of business settings is to change the work ethic internally so that workers view those who use their work as customers.
When properly implemented, each employee actually begins to view each other, their bosses and especially people who rely on their work in other departments as customers or clients. In theory, this approach has as its objective to build that customer service mentality even in workers for whom the outcome of their work is only for internal
departments or other workers in the company.
Its an innovate approach to changing the corporate culture of any business. By altering the mindset especially of an office worker to that of someone who comes to work with that entrepreneurial or retail oriented outlook, the employee is freed to become more creative, more aggressive about completing quality work for their “customers” and get a greater feeling of satisfaction from satisfying their internal customers.
It’s a noble effort to try to alter the traditional culture of an office based business setting. The traditional culture of a “cubicle farm” type of office setting often resembles the comic strip Dilbert. That strip can be painful to read if you are a manager trying to keep a creative and proactive team moving forward in a business setting. But Dilbert does point out some of the communication problems that are common in an office setting. The distrust of management, the tendency by employees to drift toward unproductive attitudes and behavior and the low morale of many office settings is lampooned by the strip.
The client coworker business concept attempts to empower the employee to strive to perform to his or her best even when only performing duties for the department or another department internal to the company. The client customer model calls for viewing that other department as a customer and providing customer service to that internal relationship with the same “eager to please” attitude that is necessary when serving external customers whose revenue drives the company.
There are some real values to be had by introducing a customer service attitude even to internal support functions within the company. When combined with other empowering techniques such as process improvement and open communications with all levels of management, it can unify an office and put some real life into your staff.
However, the negatives of the client customer model have to be avoided. This approach can create animosity between coworkers and hard feelings when one employee feels that he or she is not being treated like a customer by another. The client customer model can create distance between peer employees and reduce comradery which has a great deal of value in a team oriented corporate culture. But a wise manager can implement the client customer model to a business setting and harvest from it the productivity gains while skillfully avoiding the pitfalls.
Much has been said and written about the globalization of the marketplace in the new century. More and more, business no longer sees their markets as limited to their community, state or even this country. To be successful in the new world economies, we have to see our markets as international if for no other reason than that our competition and our customers are seeing these markets.
The press likes to make a fuss about the effect of international trade on the national workforce. While that is a concern, the old axiom that every problem represents an opportunity applies well to this business paradigm. If we as business people begin to see the international business community as our opportunity to tap into markets and revenue streams otherwise unimaginable in another market environment, we can capture a new profitability that can come with success in those markets.
However, doing business in foreign markets demands some changes to how we go about structuring our contracts and sales and distribution networks. One of the most explosive markets that is just beginning to become available to western businesses are the wealthy cultures of the Middle East. With the explosion of the Dubai projects and the westernization of many of the Middle East cultures, it is becoming possible to “go retail in Riyadh” if we are willing to learn the culture and how to approach those markets. To do so, the following constraints should be taking into consideration.
§ Middle East markets are self protecting. Many Middle East countries restrict commerce to occur only between business entities within the country. This can be worked around utilizing partnerships with local businesses who can bring in your product and create a local franchise. The business is still yours, as are the profits, but the localization of your presence in a Middle East economy is set up to honor these restrictions.
§ Middle East markets work under Islamic Law. There will be interruptions for daily prayer and for Islamic holidays that you will be expected to honor. So be prepared to be respectful of these customs. Also be sensitive that nothing in your product offerings makes reference to other religious viewpoints. This is not being timid about our own culture. It is just being savvy about how to work profitably in an Islamic culture.
§ Distribution and management must be internationalized. You probably will not be able to set up a warehouse in the middle of Saudi Arabia with your company name on it. Because of the local bias of the states where you want to do business, take advantage of any existing distribution channels that go through Europe or other surrounding countries to route your product to the Middle East and turn over ownership, management and distribution of the product within the Middle East to your Arabic partners before the product enters the country. This careful set up of your network will pay off in the long run.
§ There are friends and enemies in the Middle East. Many fear doing business in the Middle East because of dangers due to recent conflicts. Just be aware that the west has many allies in these countries and there is a desire to partner with us within the more sophisticated economies in the Middle East. By taking care as you forge your relationships and using local wisdom to craft your business dealings, you can do business in the Middle East safely and profitably.
These are significant issues when considering whether it is time for your company to start offering your products and services to the wealthy nations of the Middle East. But if the time has come that your business is ready to start building those international commerce channels, the results can be tremendously profitable for your bottom line. The investment is worth the effort if the business structures are developed wisely.