When I get asked what are the some of the most common issues that affect the performance of a small and medium business (SME) in New Zealand, the two of the most common challenges I respond are:
- Lack of Clarity
- Culture of apathy (amongst others)
Luckily there are actions a business can take to minimise the impact these issues can cause. Most of the solutions don’t take any implementation of any complicated software or equipment, the investment is based around time.
Let’s start with the first issue - clarity, or the lack of it. This can be seen in two different contexts. The first is the lack of transparency SME owners have when it comes to the overall direction and strategy / objectives they have for the business. This lack of clarity is a huge cause of mistrust and even resentment. When the managers of the business are seemingly wandering around with no apparent purpose, off having coffees and any other activity that is actually crucial, the rest of the team are left at guessing what they are up to. Eventually this guessing becomes negative and potentially toxic. That is the focus on the big picture, the second issue with poor clarity is the setting of expectations within the job on a daily or even weekly basis. All too often I have come into a work environment only to hear comments from staff about the consistent frustration about not knowing what is happening or the ‘goal posts’ keep moving. Not knowing what is going on until the last minute. I’m sure this scenario is not a foreign story.
Despite the issues the lack of communication and clarity can cause, I am still amazed how many SMEs still haven’t set a clear vision or direction for the company. If they have, they have done a poor effort in documenting and communicating this vision and just expect by some small miracle that team members can weave it into their business as usual (BAU). Considering the lack of clarity and strategic vision are cited as the key cause of frustration and relating to a poor culture, why do business leaders still struggle with this? Without this level of transparency, the actions of leadership are often misinterpreted. It becomes a ‘them and us’ split in behaviour and teamwork. Not the ideal outcome, despite everyone working hard for the benefit of the business.
One significant contributing factor is the lack of skills and capability of leaders and owners to know where or how to start this process. Reflecting on the message within the book The E-Myth, an understanding of the reasons why becomes clearer. This leads to the second challenge - a poor culture, one which is full of apathy and the apparent lack of caring of staff. Combined, all of this begins the downward spiral of a work environment that does not support effective teamwork, let alone the desire to achieve some sort of excellence. Without transparency, communication and the ability to set expectations on a daily basis, staff stop caring and begin to turn up to work and just go through the motions.
New Zealand is a country of SMEs (small and medium businesses). By and large these are led by technicians who were good and enjoyed their trade, so they do the natural thing and start a business. Of course you can start your own business and do it better! To be able to start a business in NZ, there is little need to learn about how to run a business, so the large majority are set up how they have seen it done before them. This leads to a situation where there is a generational trend of business structured, led and run by owners who are poorly equipped to take on the challenges. There is no requirement for basic business capability skills to be established to run a business.
A small number of operators who have been able to identify this shortfall and take the initiative to seek out the knowledge and skills. Fortunately there are a myriad of options available in New Zealand ranging from consultants (yes like me), advisors and training organisations e.g. University (MBAs) or business incubators such as the Icehouse. But I will go out on a limb and be generous in my estimation and say about 10% of SME leaders take these steps. The rest power on and learn the same challenges only to benchmark against their personal experience. But they don’t know what they don’t know right??
The only role modelling that they have experienced is all about turning up and getting on with the work. Any general plans or direction is reactive to the work coming in. Teams keep trucking along doing the best that they can, thinking they are doing the right things, but realistically not really sure if they are positively contributing to the success of the business or not. After all, if the cashflow is there and the clients are happy, why do we need all this fancy stuff around strategic planning or vision setting? Really great question!!
Having a clear idea of what type of business you want to be and the general direction you want to go has a powerful effect on the team and business. This doesn’t have to be a well crafted statement that is represented by fancy sign writing across the office wall. This is a good summary of where you want to be, encapsulating your dreams and goals - beyond those short term goals that tend to be specific and measurable.
The benefits of going through a process, defining your vision are:
- Common goal for everyone
- Engages teams and individuals
- Guides decision making and strategic planning
Get this right and the issue of “culture” will begin to take care of itself. Culture is simply the accepted behaviours of a business or environment. So if it is acceptable to watch colleagues struggle and not go in to help each other, then there is a culture of poor team work. If it is ok to just expect people to work with only part of the information, then you are contributing to a culture of mis-information and mis-trust. See where this is going?
As a business owner, if you want a positive culture where people give a s#@t about quality, customer experience, cost management - it starts with leadership. In most cases all of this boils down to communication, keeping everyone informed and providing feedback. This does not mean a ‘soft, entitled’ team. It does mean that strong, consistent and clear communication can often make a huge difference around team engagement. This is where short daily stand up meetings can make a huge impact. Small bits of information shared daily. Having the ability to reset and engage team members each day can help with clarity, motivation and morale. It also takes actions. As much as it can sound like a cliche - role modelling the behaviours you want from your team can result in massive changes.
This all takes time and effort. Don’t see it as ‘extra’ work for you but as an investment into the future business you want. By going out into the Gemba, you can show through your actions at the same time as finding out what is really happening in the workplace and the chance to communicate directly with your staff. It isn’t easy and the skills to do this don’t always come naturally, that is why there is help and support available. It isn’t a sign of weakness to ask for help to set a plan to change the culture in your workplace for the positive.