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31 JANUARY 2016
2 simple diagrams that will save your business

by Mike Stopforth: Entrepreneur and investor. Sometimes writer and speaker. Exploring how we lead, and how we should lead, in an increasingly complex world.

Never settle. Businesses – and agencies in particular – mess up when they settle.

The biggest enemy of innovation in any company is past success. When you think you have it made – when you think you’ve gotten it right, you’re already in trouble.

Winning customers is tough. Keeping customers is tougher. Shaping the future of customer relationships is almost impossible.

Finding talented people is tough. Inspiring talented people to do great work is tougher. Shaping the future of employee dynamics is almost impossible.

Anticipating the likely trajectory of a customer relationship or employee dynamic is critical to long term business success. American athlete Billy Sunday said: More men fail through lack of purpose than lack of talent.

Talent will cover finding great clients and good staff, but purposeful application will inform your proactive intent for both over time.

It is fundamentally against the instincts of any business owner to fire a customer. We were told the customer is always right, right? That is, statistically, a crock of pooh. The customer IS king (or queen), but being the king (or queen) does not mean you’re right.

The role of any business – and particularly agencies – is to get into that (much-maligned in Game of Thrones lore) Hand of the King position. The trusted advisor. The seat next to the throne.

Very often we spend so much time trying to repair fundamentally broken customer relationships, or to motivate naturally unmotivated staff, that we miss focusing on the relationships that matter most – the relationships that build our future and earn us the seat next to the throne.

The best advice I was ever given in this regard is the following tool, imparted to me by local legend Matt Jankelow. While I know there are various versions of this matrix floating around, and I’m not sure of the origin of the logic, his version (I call it the Happy Customer matrix) has been indispensably powerful for us.

In any business there are customers you love, and customers you hate. Hate is a strong word, but dislike sounds naff, so hate it is. In any business, there are suppliers you love, and suppliers you hate. To make smart decisions about the trajectory of customer relationships you need to focus your time and energy on getting as many customers into Q1 – Customers you LOVE and Customers that LOVE you. Sounds like common sense, right? Well, common sense isn’t always that common.

This exercise requires honest introspection and objectivity. It also requires regular, unbiased customer feedback. When you do this exercise and realise select customers are in Q2, spend the appropriate amount of time in Q2. If relationships and delivery cannot be impacted in a realistic time frame, the customer(s) in question go to Q4.

Customers in Q3 should be subjected to a price increase. Make it worth your while, or move them to Q4.

It seems extreme, and for some it will be, but this exercise has a dramatic and immediate impact on your bottom line and cash flow. Remember, revenue is vanity, profit is sanity and cash is the only thing that will empower you to battle the ‘settle’ through constant innovation and improvement.

That said, you can have all the cash in the world and no talent to deliver on it. In which case you need to spend time with my Happy Staff matrix…

In any business you have staff who are nice, and staff who are a bit s#%!. You also have staff who are competent and other who, well, aren’t.

Staff who are nice and competent should get 70% of your time. As Simon Sinek so eloquently puts it:

  • Great companies don’t hire skilled people and motivate them, they hire already motivated people and inspire them. People are either motivated or they are not. Unless you give motivated people something to believe in, something bigger than their job to work toward, they will motivate themselves to find a new job and you’ll be stuck with whoever’s left.

Staff in Q2 are highly productive and effective, but horrible to be around. That’s all fine and well but one bad apple can rot the whole barrel. So take them out of the barrel. And if they’re still an issue, I’d rather have a good person that needs to be taught and mentored than a skilled as#*ole.

Q3s are pretty common. Q3s look spectacular in interviews, but often crumble under pressure. Q3s are friendly and personable but when it comes to the actual work, consistently below average. The good news is Q3s can be fixed, and when they can’t, they can be managed out of the business. Most Q3s want to please, so when you have a frank and honest discussion about how they’re not delivering, they opt out anyways.

Q4s… Need I say more?

I’m convinced that if you spend intentional time on these two diagrams with your leadership team every month it will have a marked impact on you and your organisation.

One last proviso though....

You might be the incompetent one.


Cerebra is an integrated strategic communication agency that builds, engages and activates communities around brands. Visit our InfoCentre or website.

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