(Authored by InnoChan Solutions and taken from an Advice piece supplied to Supply.ie)

I have come across many business owners who cite ‘fear’ as a key reason that they find their drive and impetus slowing down. When things get rough, when the pace of the money coming in slows down, it is very easy (& understandable) for fear to take over. As a business owner, you worry about the bills that have to be paid, you wonder where the money will come from to pay them. All very real fears and causes for concern.

But what if you were to look at things differently?

What other options are open to you?

To begin with, it is important to recognise that ‘fear’ is an emotion, just like joy, sadness, anger, excitement, etc. But what is an emotion and how can it help you in business?

Kurus (2002) notes that “Emotions control your thinking, behaviour and actions”, and I believe therein lies the crux of the matter. We allow our emotions to control us. What would happen if we controlled our emotions and developed the skills to use our emotions to effectively manage how we live?

I can already hear some of you saying “that’s not possible. How can I control an emotion that ‘just happens’?”

The first step lies in recognising how we are feeling at a given point in time and being able to recognise any changes that occur. Too often we get so caught up in trying to build our businesses that we forget to check in with how we are feeling, i.e. what emotions are we experiencing? It’s easy to feel good when we make a sale, or receive a compliment, the feeling of joy and excitement of having achieved something makes us feel good and very often increases our energy levels. But what about other times?

We sometimes fail to note the times when fear is creeping in, when anger levels are rising, until, that is, it is too late and these ‘negative’ emotions are keeping us awake at night or our health begins to suffer.

Here’s a radical thought; properly managed, fear and anger are very beneficial emotions in business. I believe (and have seen) how recognising and tapping into such emotions have driven clients to develop new plans, new strategies and push their businesses and lives forward with a passion and drive that surprised even them. Think about it.

Fear is a primal emotion. It brings us back into survival mode. Fear is usually triggered at times when our future or safety or security is threatened by an external event. A drop in revenue to your business hits your primal need for survival and triggers your emotion of fear. How you deal with it is the important thing.

Look at any animal in a fearful situation. What do they do? First of all, they Freeze. They stop in order to reduce exposure and to assess the situation. Next up is the urge to Flee. While assessing the situation, our animal friends will look for an escape route. If no escape route exists, the fear turns to anger and the animal will Fight its way out of the situation. It may surprise you to hear that Humans are a species of animal. When we are physically in a threatening situation, we adopt the exact same responses to our animal peers. So why don’t we do so in our businesses?

Instead of letting a fearful situation drive us into depression and ineffectiveness, why not adopt the Freeze – Flight – Fight (I call it the 3-F) approach? Here’s how:

When we encounter a worrying situation in our business (and let’s face it, there can be a lot), FREEZE. Just stop, take time out, examine the situation (the whole situation, i.e. take a holistic view) and make sure you understand the entire situation. Where is the fear coming from? What is the exact cause? etc.

Next up, look at your options for FLIGHT. This does not mean that you should find a way to skip out on your responsibilities and run away. What you are looking for is a way of getting safely away from the cause of the fear by dealing with it or buying some more time to deal with it. By being able to get yourself, even temporarily away from the situation, you will be giving yourself the potential to re-group, re-assess and formulate a new way to deal with the matter and overcome your fear.

Finally, when you find yourself in a situation where you simply have to deal with the situation that has triggered your fear, then your only option is to FIGHT. Again, this does not suggest that you find the cause and have a punch-up. What it means is that you develop the resources to deal with the cause of your fear head on. In order to fight effectively and, avoid just flailing about, we have to change our emotion; our fear must turn to anger. I believe that anger is one of the most beneficial emotions for dealing with fearful situations. Anger begets focus, drive, passion, energy.

By the time you get to adopting a fight approach, you have already assessed the full situation as a result of first freezing and assessing the cause of your fear and worry. You have checked to see if there is a way out of or around the matter. You have established that the matter has to be dealt with and by turning your fear to anger, you will develop the energy, focus and passion to get through the matter. Either way, you are no longer in fear and you will be taking action.

Let me give you an example. A client once told me how he was having sleepless nights as a result of a fear for the future of his business. He blamed the fact that cash flow had dropped significantly and his costs were increasing. He admitted that he was terrified. By adopting the 3-F approach we were able to stop and take time out during one of our sessions to explore the exact issue. In fact it turned out that the core issue was that his bank was asking him to ‘jump through hoops’ to get a simple overdraft (not surprising in the current environment). In fact, it transpired that his fear stemmed from the fact that even  though his business has shown growth week on week throughout the year, the bank he had been dealing with from day one had changed their policies and now had significant red tape for what had been a simple request.

So at the freeze stage, he had arrived at the core of the cause of his fear. Next up was the flight stage. In business banks are a necessary evil. We need them in order to manage our finances, to receive our takings and to pay our suppliers. We cannot do without them. We cannot run away from them, but, we can take our business and move to another bank. We can take up the offers some banks are using to attract business owners to open accounts. So a possible ‘flight’ option would be to move his banking to another company and avail of free banking offers or, reduced cost overdrafts. Problem solved?…Possibly.

For the client, the appearance of options had immediately begun to alleviate the fear that had been keeping him awake at night. Next up was the fight stage. It was hard for my client to dial up any sense of anger. Hard, but not impossible.

Think of a time you experienced fear. There is a chance that once the fear passed, you experienced anger (possibly with yourself for ‘allowing’ yourself to become fearful). In business, we need to turn that emotion into action. In the case of my client, once he realised what had been causing his sleepless nights, he did become annoyed. Using this emotion, he developed the key steps to take action. He went to his accountant to get the accounts for the last number of years. Then he approached his current (and other) banks to get the best deal. He also began looking at every operation within his business to see what actions could be taken to manage strategically. In effect, his initial fear had become the key to a proactive and energetic approach to his business rather than a debilitating factor.

In business, particularly in the current economic environment, we all face uncertainty, slow growth, reduced cash flow and other factors that feed and drive our emotion of fear. However, instead of ‘drowning’ in fear, we already have it in us to deal with threatening events. Just tap into the animal instinct within you.

Try the 3-Fs for yourself…It works.

Until next time…..

Introduction:

One of the common issues that I come across when dealing with Business Owners is concerned with the crossover between the desire to deliver a superior level of quality & service and the need to own a successful business. Often, this leads to errors, stress and mis-judgements on how to operate.

From my experience in dealing with many such business owners, I have decided to produce a series of blogs that will address a number of the issues I come across while dealing with business owners. These blogs will focus on a single topic each and will hopefully provide some insights for others. At the very least, I hope business owners will take a little time to stop and think about their business practices.

Topic: Price versus Service:

Entrepreneurs want to deliver a service that is above that of competitors, which many link with a need to provide ‘free stuff’ in order to attract or retain customers. ‘Free Stuff’ can mean extra product, additional service, etc. at no extra cost to the customer. This can lead to a major problem; giving away your value.

One of the lasting lessons I learned many years ago on a training course is the answer to a basic business question;

Why do Businesses Exist?

The answer is simple; the sole reason for a business to exist is to MAKE A PROFIT. That does not mean that they don’t want to be known as organisations that offer premier services, quality, or the other good stuff, but the key to existence is profit.

This, I believe is where many entrepreneurs fall down.

I have dealt with numerous business owners who, as soon as a prospective client shows an interest in their product/service something is triggered in them that makes them ‘do whatever it takes’ to get the business. In general, this means that if the client challenges a price, the business owner will start dropping their prices in order to ‘get the contract’. This is a major mistake.

Here’s why:

A prospective client approaches your company seeking to purchase your product or service. You give them a price and they say “Ooh, that’s more expensive than I thought”. So, in order to ensure you get the sale, you reduce the price.

• What message is this sending to your client? 
• How much does this action demonstrate how much YOU value your own product or service? 

As an experienced professional buyer I know that purchasing professionals are tasked with buying products and services for the best overall combination of price and service. I also know that buying from a company who is willing to drop their prices when challenged does not inspire confidence. Your individual customers/consumers can have the same opinions.

In order to provide your product or service, you have to spend money. This may be to purchase raw materials or equipment that will enable you to provide your product or service. These purchases are expenses to your business which MUST be recouped if you are to remain in business. I have dealt with clients who forget this when ‘dropping’ their prices in order to attract the client. So, if you end up charging a client less than it costs to prepare the product who makes up the shortfall? By dropping your price to the extent that you are not even covering your costs, you are effectively paying your client to do business with you. While the client gets a great price, your business model is not sustainable and at some point your money will run out. What will happen to your business then?

So what should Business Owners do?

First of all, identify how much it costs to produce your product/service. This is the price you cannot go below. No matter what a prospective customer demands in relation to pricing, always remember, if you drop your price below the cost to produce the product, you are effectively paying them to buy your product!

How many of your suppliers pay you to buy their products?

One way to overcome this issue is to right down all of the costs associated with supplying your product/service and have the list to hand whenever you receive a price query. Once you see it in print, it can have a seriously sobering effect when dealing with quotations.

Okay so you know how much YOU have to pay to produce the product that you want to supply to your clients. Next you have to work out how much you want to make from the transaction. The whole area of mark-up is fraught with danger. The temptation might be to charge no mark-up in order to make a sale. In this case, ask yourself, “Do I like working for nothing?” because without it you are only covering your costs, that is exactly what you are doing.

I have found from working with clients, that a better way of playing with the price that a client pays is to divide your product/service into a series of options, similar to when you want to buy a car. If you were to look for a Mercedes E-Class you can expect to pay between €42,000 to €121,000 for the saloon model. The car is the same, but the more the customer wants to pay, the more options are included in the price.

I used this example with a client recently to great effect. This client had a habit of promising the world in order to get the contract. However, instead of being conscious of how much it cost to provide the service, the client would cut prices in order to attract their customer, i.e. paying their customer to do business with them. They had persuaded themselves that ‘dropping the price = improving service’.

So what did they do? Using the Mercedes example, they identified every element of their service and the costs associated with it. They made a spreadsheet with the costs (including the mark-up). Now when a customer comes, they quote the price based on the customer’s requirements. If the customer subsequently suggests that the price is too high, they offer to revise the service to suit the customer’s budget, while maintaining their costs and mark-up.

The result?

The customer gets a very personalised service which is tailored to their requirements AND budget. For the business owner, the result is that they are now in business for profit. They are covering their costs and earning money to cover their salaries, etc.

Stephen Covey (author of The Seven Habits of Highly Effective People) wrote that in business, it should not be about having a ‘Win-Lose’ relationship between the parties in a transaction, instead the focus should be on a ‘Win-Win’ relationship where the client/customer gets the product or service they require and the supplier gets the revenue to help them survive and make more. Covey, in fact, goes one better when he suggests that in business one should be willing to ‘Win-Win or Walk Away’, i.e. if you can’t reach a mutually beneficial result, both parties should walk away from the deal.

That’s a difficult concept to apply in business today. Most business owners (as mentioned earlier) will do anything to make a sale, even sell at a loss. This is not a long term solution and can be very damaging to a company’s reputation.

The client mentioned above, had difficulty adopting this concept. Two things changes their opinion:

• Listing all of the costs associated with their various services really served to hit home just how much things cost and eliminated the risk of selling at a loss. It also gave them the potential to adopt their service to suit their customer rather than cut prices.

• They actually had a customer who came to them for their service and tried to get the price cut to what would effectively have been a loss for them. The client took a decision to offer to amend the service rather than cut the price and after consideration, the customer bought their services.

Conclusion:

In the current environment, ALL business owners (B2B and B2C) are under pressure to attract and retain customers. In these circumstances, the temptation to offer products or services at reduced rates can be too great to be ignored. However, before you go down this road remember:

Cutting prices to cost = You are working for Nothing!!

Cutting prices below cost = Paying your customer to buy from you!!

Instead, you should:

1. Identify, list and apply a cost to ALL the elements of your product or service (including mark-up).
2. Use the list as an ‘Á La Carte’ menu for your business.
3. When a customer challenges a price for the product or service they have specified, offer to adjust the specification as a means of reducing the price.

Try it…And Good Luck!!

Until next time….

Over the last few months I have been working with a client who owns a Fast Food outlet. He was complaining that his weekly sales figures were down and he was trying to battle the negativity he was feeling. In fact he was beginning to hate his business.

One day, between our meetings, I happened to be walking past and noticed that all the seats in the shop were being used by customers so I was expecting good things when we next met. To my surprise, he told me that he had had a relatively poor week. I mentioned the full store but he still said he hadn’t performed as well as he would have liked.

I stopped and looked around and then asked how often customers use the upstairs part of his restaurant. His answer, was “very little”. I noticed that his restaurant contained no signs that even indicated there was seating available upstairs. With this in mind I re-ran my scenario of passing and seeing all the seats in the store being used and asked how many potential customers are walking away because they don’t know about upstairs.

My experience with this client got me thinking. How many business owners are bemoaning the drop in business as a result of the recession while not tapping into the full potential of their resources?

Not tapping into your resources is rather like buying an expensive car and only driving in first gear; you might get to your destination, but you will get there much slower and the car will burn out much quicker, leaving you kicking the wheels and blaming the road for causing you to become stranded.

Recognising and utilising your resources to their full capacity is the key to getting through the current economic climate. Companies boast about implementing ‘Lean’ processes and while that includes an element of eliminating waste practices, it is more important to ensure that ALL resources are being fully utilised ALL the time. Aircraft don’t earn money sitting in airports, ships don’t earn money tied up in a harbour. Both only earn money when they are moving people and freight around the world.

So my questions to you:

1. Can you identify EVERY one of the resources available in your business?
2. Are you FULLY utilising each one to the benefit of your company?

If my client can fail to spot the potential in an entire upper floor of his business, what are you failing to notice?

Getting back to that client. After our meeting, he put “More seating available upstairs” signs in the windows and behind the counter of the restaurant. He also rearranged things to draw the customer’s eye to the stairs.

The result? Instantly, more customers. Those people who believed the restaurant to be full, were now coming in and taking their orders upstairs.

My challenge to you (should you choose to accept it):

• Take a look around at your business.
• Write down EVERY SINGLE Resource you can identify (including staff)
• Then leave your business and come at it from a customer’s perspective. Do they see things as you do? Do they know about your ‘upstairs seating’?
• What additional resources does this highlight?
• Now work through each resource and ask yourself “is this adding value to my business?” If ‘Yes’, then keep it. If ‘No’, then it is either a resource you are not tapping into correctly or is a waste. If it’s not being used properly, why not? If it is a non-value add resource, look at ways of removing it.

I was attending a business workshop recently and the facilitator posed a simple question to all the attendees; “What makes your business different?” For everyone who tried to answer that question, the facilitator was able to counter with statements such as “there are may other companies in your sector who can argue that THEY provide the best service / most unique service”. It is an interesting question and one that is very hard to answer from a commercial point of view. So does this mean that as business owners, we are deluding ourselves with our beliefs on the position and perception of our business in the wider business world? If so, are we then disappointed when things don’t work out as we expected.

Our businesses are like our children. We don’t like people telling us when ‘our child [business]’ has a less than perfect perception in the wider business world. This can be demoralising for us. We put a lot of effort into our business. In our minds, we have the best product/service since sliced bread. But, unless we are Steve Jobs coming up with radical new products, in general, we are merely taking existing products/services and packaging them in a different way to other companies. So again, the question that needs to be asked is “What makes your business different?” Why should individuals or companies buy from you instead of their current suppliers? Why should an individual or company decide to buy from you rather than an alternative supplier?

As a business owner, I find these very difficult questions, so when I got back from the workshop, I started to conduct a little exercise in an effort to help me answer the question “what makes InnoChan Solutions different?”

There are many Training & Development, Mentoring, Coaching and Consultancy companies out there and, in the current climate that number is growing daily as more and more people (who cannot get work) set themselves up as Trainers, Coaches and/or Consultants. The industry sector is quite crowded.

So what makes InnoChan Solutions different?

To begin with, let’s look at the Coaching/Consulting/Mentoring business.

There are many many ‘experts’ out there calling themselves Coaches, Consultants and/or Mentors and indeed some of them have considerable commercial experience. However, in some cases the commercial experience relates to a single (or limited) range of business functions, e.g. Accountancy, HR, Sales, etc. InnoChan Solutions is unique in that my experience in the commercial field is spread across multiple business functions. Over the years I have actually worked in most business functions (many at management level). In short, I have physically worked the Supply Chain from Sales, Stores, Warehouse Management, all the way up the Supply Chain to Data Management/Data Capture. Having worked at all levels and in most functions gives me a unique understanding and perspective of function operations and how they do (or should) interact with other functions.

In developing my business model, I recognised that experience would not be enough. I needed the academic detail to back up the experience. Enter Masters #1 (a MSc in Supply Chain Management). This, I believe, gives me the requirements needed to provide a thorough (and unique) service to clients.

Now let’s look at Coaching. In a previous blog, I noted the “fear” many have in relation to Coaching. This is due to a lack of understanding and, I believe, the number of untrained (cowboy) coaches operating in the world today. It is incredible to think that one can think s/he can become a coach as a result of a correspondence course without ever having met a client or having practiced the tools and techniques involved.

While there are many good and well organised coaching courses available, what makes the InnoChan Solutions courses any different? To begin with, over the last three years I have undergone a wide and intensive array of globally recognised Coaching, NLP, Psychometric and Emotional Intelligence training leading to recognised and academic qualifications up to a MA degree in Coaching & NLP and academic special awards in Emotional Intelligence.

These qualifications have provided me with the best possible tools that can be used in a Coaching, Mentoring and Consultancy situation. For example, under the brand of iWAM Ireland, I can offer a test that is three times more in depth than the current MBTI test (MBTI measures 16 cognitive patterns while the iWAM test measures 48 cognitive patterns).

Now let’s look at training. Currently I lecture on behalf of the Irish Institute of Purchasing and Materials Management (IIPMM) and I have begun organising Coaching, iWAM and Extended DISC Courses. InnoChan Solutions hopes to change the way training is conducted for Coaching by combining the good I have experienced in my own training journey with my academic interests in order to provide would be participants with a series of solid (intensive) programmes which are designed in such a way that they can be taken as stand alone qualifications or as part of an academic qualification ranging from Post-Grad Certificates all the way to a full University Masters degree (the MA in Applied Coaching). I believe that these courses will be as attractive to individuals looking for a new career as they will be to organisations looking to improve the Coaching and Mentoring skills of HR, Managers and Supervisors within their organisations.

So what does all this mean with regard to the initial question asked; “What makes InnoChan Solutions different?”

I believe I offer a unique set of skills (that couples commercial experience with both academic qualifications and the added qualifications and experience in Coaching and Mentoring). My approach to training is designed to provide courses that will ensure fully qualified people who will be able to operate as Coaches & Mentors and, who will be compliant with forthcoming regulations in relation to coach qualifications (regulation will be effective from September 2012).

So what else makes InnoChan Solutions unique?

I have started to merge the two distinct sets of skills I have; the commercial with the “softer” skills of Coaching and Mentoring. InnoChan Solutions, using EQ and psychometric testing can profile the skills needed to perform specific roles within organisations. These tests tap into the motivational patterns of people within individual functions which will assist with effectiveness, staff retention and efficiency. This knowledge can also be used by companies when it comes to improving efficiency in recruitment thereby reducing recruitment costs while improving the success rate of recruitment.

InnoChan Solutions offers a different way of managing within an organisation and this can be backed up with in-house or external training that will “Deliver Innovation & Change through People”.

A couple of years ago, when I first set up a Coaching Business, I conducted an on line survey across all of the business contacts I had amassed over 20+ years working in various roles in the corporate world. I was amazed at how many senior managers viewed Coaching as ‘wishy washy’, ‘a waste of time’, ‘touchy feely’ or ‘American hype’. Almost all thought Coaching was a concept that related more to Life (Life Coaching) than to the business environment. But is this the correct view?

From the moment you start in a new job you begin a process of learning and developing. Management call it ‘Training and Development’. While many shudder at the word ‘Coaching’ because they associate it with what they consider to be a ‘New Agey’ concept of Life Coaching, Executive Coaching can be a vital function within any organisation.

Staff management tends to be viewed as a directive process where staff are told what to do and how to do it. Staff reviews tend to focus on Key Performance Indicators (KPIs) and how the staff member has measured up to them rather than tapping into (or linking with) the member’s own internal KPIs.

Every member of staff is motivated to work. They have a desire (á la Mazlow’s Hirearchy of needs) for shelter, sustenance and security. This need motivates them to work for the money they need to satisfy their most basic requirements. Once these have been satisfied, each staff member changes their motivation focus to other needs such as a new car, a holiday, etc. From an internal KPI, each staff member will measure his/her performance against how they are achieving and meeting their most basic needs in their lives i.e. what’s important to them.

As a manager, you might say “so what? I need a staff who can meet the needs of the organisation and achieve their targets (KPIs) which will benefit the organisation as a whole”, and you would be correct. However there is a way to manage the core motivation of staff while ensuring they achieve their KPIs and benefit the organisation. It involves two concepts (traditionally ignored by many managers); Emotional Intelligence and Coaching.

Employee behaviour is always motivated by something. Management has long associated the behaviour of staff with their performance in their jobs. However, without an understanding of the motivation behind the behaviour, managers everywhere are left with fire-fighting the behaviour they see in their staff. Imagine, if a manager could identify the motive, they would understand the behaviour and if they could satisfy the motive, they could manage the behaviour. This concept seems radical, but it makes sense and has the potential to achieve so much.

Understanding what motivates your staff goes beyond the traditional day to day management style of many managers. In essence this theory appreciates the fact that each staff member is different. They are motivated by different things. They are not clones or robots. Management is definitely not a case of ‘one size fits all’.

Using Emotional Intelligence tests such as the iWAM (inventory of Work Attitudes and Motivators) highlights the key motivators of staff members in the work environment. On its own, this is a vital tool for management who want to understand what motivates the people who work for them. Remember, ‘if you understand the motive, you will understand the behaviour’. Understanding the motivators of individual staff members, enables management to manage the individual based on his/her unique patterns. The result is simple; if you engage with staff based on their individual motivation patterns, they will become more engaged, more motivated and achieve their KPIs more consistently. Staff reviews become more effective and the KPIs more relevant for the individual rather than the current short cut of ‘one size fits all’.

Now let’s look at the second concept; Coaching. Coaching is not a ‘wishy washy’ concept. In essence, coaching is a future focused process that seeks to achieve specific agreed goals within a given time line. That sounds very like most business plans, doesn’t it? So why are managers afraid of the concept.

I believe, one of the main reasons behind the ‘fear’ lies in the fact that the concept of coaching requires a one to one relationship with an employee or team as well as enabling the individual to set their goals. Most managers already meet with staff on a one to one basis during annual reviews in order to plan and set targets for the coming time period. The difference is, in the review meetings, it is the manager who sets the targets, not the staff member (the person who is actually doing the job every day).

What would happen if a manager was to combine a knowledge of staff motivation with a coaching approach (where the employee who, as already noted, knows their job inside out and can positively contribute to how it can achieve more). Such an approach is not something that managers can just ‘turn on’. Adopting a coaching (or developmental) approach requires training in order to be effective. Coach training is not only for people who want to set up a business in Life Coaching, it is vital for those within organisations who find themselves working with staff in a management or developmental role.

The benefits of adopting the management approach that has been discussed here include:

• Improved staff motivation and engagement
• Improved staff retention
• Improved performance
• Reduced costs in recruitment (if you understand what motivates your existing staff in a specific role, you can focus your search for new recruits using the same motivational patterns, thus attracting more suitable candidates)