Over recent months we’ve seen some extraordinary behaviour from big institutions. Employers knowingly break the law. Airlines and holiday companies sell flights they know they can’t deliver. Energy retailers bill small business customers amounts they know are impossible to pay. Policemen murder women. Or shoot first and ask questions later. A holiday park is prepared to evict its guests to observe a bank holiday. Politicians no longer pretend to tell the truth or even talk sense. Journalists publish easily verifiable lies to create false outrage.
Thankfully, ordinary people are not like this. Ordinary people rush to help when someone collapses in the street, or asks for help on Twitter. Ordinary people go out of their way to keep a promise they’ve made. Ordinary business owners agonise over having to lose people. Ordinary business owners pay their suppliers on time and almost always over-deliver for their customers.
That’s because ordinary people operate in what you could call the ‘natural economy’. We know the world doesn’t run on money, but on the promises we make to each other. We know that even money is really just a promise.
Let’s celebrate and cherish the ordinary. That’s where a better future lies.
Most of the time we don’t buy to meet a simple need. We buy to get a job done. We don’t buy a drill, or even a hole in the wall, we buy ‘putting a picture up’, ‘fixing that broken chair’.
Even then, this isn’t what we really buy. There’s a bigger job behind the immediate job to be done, the job of becoming a better version of ourselves, in a way that others will notice.
That means that at the heart of every Promise of Value is an unspoken promise. A promise of transformation, that goes something like this:
“Working with us will enable you to become who you want to be, in a way that is congruent with your values, beliefs and style, so you can join the tribe that feels like home for you, with the status you seek.”
It’s clear from this that it is not just what you do that matters, but how you do it. And if you are to be congruent with your client’s values, beliefs and style, they must in turn be congruent with at least some of yours.
It’s well worth identifying what the minimum level of congruence must be, in order to make working together satisfying for both you and your clients. What values must your clients espouse with you? What behaviours must they share? What must they believe that you also believe?
Once you know this, you know what kind of people you are a good option for. Therefore what language you need to use to speak to them so they feel seen.
Every enterprise, even the smallest or shortest-lived, makes a Promise. It can be summed up simply as “what we do for the people we serve“.
Unfortunately it’s rarely spelt out as clearly as it could be. If you run your own business you know it’s there, because you have clients who love you, and recommend you to all their friends.
But I bet you find it difficult to articulate clearly. And I bet your team find articulating it even harder.
It’s very hard to live something that you can’t articulate. So if you’re feeling a bit frustrated by your team’s inability to deliver on your enterprise’s Promise as well you would like, here’s something you can do to help:
Get your whole team together and ask this simple question:
“What’s brilliant about this business?”
Get everyone to spend 10 minutes answering this question on a generous pile of sticky notes, then, one by one, starting with the newest or shyest, get each person to share what they’ve written and why they wrote it.
As they do this, listen out for gems.
When asked ‘what’s brilliant?‘, people often start with clichés like ‘quality’ or ‘service’.
If you encourage them to explain why they’ve written that, they often voice values, behaviours and specific examples that are far more reflective of the value you bring to clients.
Capture these on new sticky notes as you go, and share them with your own at the end of the session.
It’s an afternoon’s work, but you’ll be glad you did it, because by answering this question with your team, you’ll not only articulate your own values and preferred behaviours, you’ll also identify values and behaviours you share with at least some of your clients. You’ll know exactly who they are. They’ll be the clients you most enjoy working with, and who most appreciate what you do for them.
What’s more, you’ll have energised your team. You’ll have discovered nuances of your Promise of Value that you didn’t know about before. You’ll have started to articulate more clearly what makes your enterprise unique.
And perhaps most importantly, you’ll have reassured yourself that you’re all on the same side.
On Saturday we tried out the Elizabeth Line to Paddington. Just to see what it is like.
Brilliant!
A bus from the end of our road, 30 minutes to Paddington.
On the way home we kept thinking of new places that would now be easy to reach, and some old places that would be even easier to reach.
This new line has opened new possibilities to many.
Can your business do that?
PS the clouds in the picture are actually piles of dust on the roof of the exit. Looking beautiful from this angle against the blue sky. Once you were out, you could see it was just dust. Magical though.
If you’re interested in what makes small businesses successful, it’s well worth a read.
Ignore the points made at the end – that’s just wishful thinking on the part of management consultants. These companies don’t need outside interference, or to look more like their Anglo-Saxon counterparts. They’ve been working well this way for decades and are likely to continue.
For me, it’s an encouraging article, that shows that given the right environment it is possible to be a global business and operate humanely at home and abroad.
Why try to be a unicorn when you can be a zebra?
I’d like to think there are many such businesses hidden away here in the UK too. I’m unlikely to find out of course, because if there are, they won’t be looking at social media.
No matter how much we might wish it away, there is no escaping the fact that we are all connected. That what we do in one place and time affects others in a different place and time.
In economics and big business, we like to pretend that this isn’t true. That there are things we don’t need to worry about because they happen outside our bubble.
We call these things externalities.
As if they don’t affect us.
But sooner or later they do.
Because the bubble is imaginary.
We live in a series of systems, and ultimately a closed system – planet Earth, and sooner or later the all the consequences of our actions will come back to bite us. Even those we choose not to see.
Time then to take responsibility, and dissolve our bubbles.
Price is about ensuring both participants profit from their time together, finding the the right balance between what you need and what represents value to the people you serve.
Questions to ask:
How much does it cost you to deliver? – Work this out on a per package basis, and remember to attribute a share of everything your accountant would normally dump in ‘overhead’. That way you can be sure of making a profit each time you Keep your Promise. Keeping your Promise enough times per year to make the living you want is a different problem.
How much do you want to earn? – Here’s a quick calculation:
Work out how much a year you want to earn before tax.
Divide it by 100 (=((365-(weekends, time off and bank holidays))/2) – because you need to spend half your working time running the business).
That’s your target ‘daily earnings’
Set yourself 2 levels – the least you want to earn, and your ideal.
How are the alternatives priced? – Price is part of the story people tell themselves when they choose, and is often used as an indication of quality. You don’t need to be cheaper than the alternatives. You don’t need to be more expensive either, unless your costs are higher or you want to earn more.
Remember:
Being in a category of one puts you in complete control of your price.
Pricing is part of the story.
Payment is part of the format.
As long as you’re charging more than it costs you to Keep your Promise you have the potential to be profitable. Keeping your Promise enough times per year to make the living you want is a different problem.
Price can be a flow control mechanism too. If you’re inundated with clients, putting your price up will slow demand. Lowering it may increase flow – but only if enough people already know what great value you offer.
If you’re not enrolling enough clients, you’re more likely to be underexplaining the value than overpricing it.
A low price can help to enrol early adopters, but make sure they know it’s a special deal for them. And make sure they will rave about it afterwards.
If you get it wrong the first time, you can always put your price up for the next new client.
You only really need enough. And enough is up to you.
If you’ve read Geoffrey Moore’s “Crossing the chasm” (and I recommend it), you’ll be familiar with this diagram:
But what does it practically mean for you?
If you are a business offering something new and different from what has gone before, something that could potentially disrupt the status quo, you need to understand this curve.
As an example, here’s what it means for me.
In the UK, there are around 1,018,220 businesses that employ between 3 and 10 people, including the owner. These are my overall ‘market’, the people I want to serve.
I offer a service that’s new and potentially disruptive to the status quo, so however I niche down into that market, by industry say, or geography, or business life stage, this curve comes into play. It adds another dimension to the psychographic of the people I can help most, that I have to consider when designing, marketing and delivering my service.
Here’s how it splits:
25,455 of them are Innovators. They love trying new things, what matters to them is that things are new and better than the current best option. They’ll want to know how it works (and they’ll take it apart to find out). They’re not worried about support, or infrastructure, they’re just happy to have the latest cool thing to play with. These are great people to test really new ideas on. Until they get bored and move on to the next cool new thing.
137,460 of them are Visionaries. They are interested in getting ahead, and if they can see how a thing will get them ahead of their competitors faster, they’ll go for it. They don’t mind if it’s not all there, or if there is no support. They will happily support themselves. They will ask for your thing to be redesigned to suit them though, so be prepared to maintain several versions of your thing.
346,195 of them are Pragmatists, and much more demanding. They want to know whether a thing solves their problem better than the current market leader, for less than the cost of the problem. They want to know that you are a safe company to work with; that there is support, and maintenance and spare parts. As long as these things are in place they don’t care who does it, which means you can still be a small business, collaborating with other small businesses to provide a complete service. Pragmatists will only use a new thing if they believe that there are enough people like them already using it. They don’t trust Visionaries (‘flying by the seat of their pants’) and they trust Innovators even less. That gap between Pragmatists and Visionaries is The Chasm.
The same number of businesses (346,195 of them) are Conservatives. I think of these people as the ones who say ‘nobody ever got fired for hiring IBM‘. For them what matter is whether a thing solves their problem better than the current market leader, for less money. They want everyone else to be using your thing before they do. They want you to be not just safe, but respected in the marketplace. They also expect you to provide everything yourself – support, maintenance, spare parts. In other words, you have to be a big company like them. Or at least look like it.
Finally, there the 152,733 who are Skeptics. As you might imagine from their position on the distribution curve, they are the last to adopt new things, sticking stubbornly to whatever has served them well up to now, even if the new thing would serve them better.
I’m an Innovator looking to serve Visionaries.
What side of the Chasm are you on? More importantly, where are the people you seek to serve?
At this morning’s Like-hearted Leaders, listening to Gareth Dauncey’s story of how he thought up, designed and developed his Mood app, I was struck by two things.
First how radically simple he’s managed to keep it. “2 clicks to log your mood is OK, 3 is too many”
Second, how ruthlessly focused it is on helping the customer, and nobody but the customer. “100% private – you log your mood for you and nobody else.”
Radical minimalism.
Something we can all aspire to.
I found it on Google playstore by searching for ‘moodapp’, then scrolling down to see #mood
