Unintended Consequences Matter

Optimal decisions for significant matters take into account all angles, even arguing from other points of view.

Adding to this process of making good decisions, Entrepreneurs should also weigh unintended consequences of their decisions. Did you evaluate, at least for significant issues, potential unintended consequences?

Take an example of developing an incentive program. If you have developed a program that correlates high performance with high reward, it is of course your intended consequence. But, what about unintended consequences of employees cheating or manipulating the system to obtain higher compensation? How have you protected the company against such unintended consequences?

When making crucial decisions consider potential unintended consequences and implement appropriate internal controls. Unintended, and un-thought of, consequences do matter!

Ravi Patel

 

Empower Your Employees to “Think Outside the Box”

Entrepreneurs start ventures because they have new, innovative ideas as a result of “thinking outside the box.” They often identify under-served niches in the marketplace and seek unique ways to fulfill unmet or unrecognized needs.

Once they start and grow the business, do Entrepreneurs foster the culture of “Thinking Outside the Box” in their employees?

The Entrepreneur’s original initiative due to creative thinking is also applicable to his/her organization. If the culture of the company is one of innovation and finding unique ways of doing things better and faster, it will promote not only continued success for the company but also tremendous job satisfaction for the employees.

Entrepreneurs should be careful not to create a control-oriented impression that “Thinking Outside the Box” is only meant for them. It gives a feeling of “Do what I say, not what I do.”

Empower your employees and let them come up with creative ways to perform their jobs better and improve processes in the company. Entrepreneurs too, for this employee performance management philosophy, should think outside the box!

Ravi Patel

Who Should You Hire?

Entrepreneurs must hire people to grow their companies. What kind of management team do they hire? Who should they hire?

In order to keep costs down, there might be a tendency to recruit lower-cost managers who might require a lot of supervision. Is this keeping costs down in the long run? Is the Entrepreneur’s time well spent in managing such leaders?

Entrepreneurs should not be afraid to hire people smarter than they are. Hiring smarter people might be tough on the ego and wallet, but in the long run the company will be much better for it. In fact, hiring smarter people will provide the opportunity to not only learn from them, but also allow Entrepreneurs to focus more time and energy on their areas of strength.

Do the Right Things!

Ravi Patel

Published in: on June 16, 2020 at 7:08 am  Leave a Comment  
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Strive for Excellence, But Judiciously

Striving for excellence in everything is a noble goal.

However, if one becomes too focused on perfection on trivial things or items, the benefits may outweigh the time and resources devoted to achieving excellence.

Entrepreneurs need to be aware that they cannot ask themselves and their organizations to strive for excellence in everything. Focus on a few goals and aim for excellence on those, but de-prioritize lower-level projects and just accomplish them well. The resources of your organization should be allocated judiciously on higher priority goals requiring excellence.

It is okay to be excellent on major items, but good on minor ones.

Ravi Patel

Published in: on June 9, 2020 at 7:17 am  Leave a Comment  
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Argue Other Points of View

Do you try and understand and articulate a view that is different than yours?

One often hears the phrase “put yourself in the other person’s shoes.” It is used when you are being encouraged to understand a situation from the perspective of someone else.

This can be useful advice for making important decisions. Generally one argues their own viewpoint well when a certain decision has to be made. However, in order to make the best decision, Entrepreneurs should consider arguing the viewpoint other than their own.

Making the arguments for a case different from their own allows the Entrepreneur to clearly see all sides of an important decision. Arriving at a decision after considering all viewpoints is best when one makes all the arguments as if they are their own.

Ravi Patel

 

Published in: on June 2, 2020 at 7:05 am  Leave a Comment  
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Stakeholder Relationships

During this stay at home downtime for most businesses, it is essential for Entrepreneurs to identify their key stakeholders. Once identified, develop a plan to build and maintain relationships with them.

There are many stakeholders for each company – such as shareholders, customers/clients, suppliers, employees, bankers, accountants, consultants and advisors, local community leaders, industry colleagues, lobbyists, and so on.

Identifying your key stakeholders and having a comprehensive plan of maintaining strong relationships with them is critical for your long term success.

Do the Right Things!

Ravi Patel

Published in: on May 26, 2020 at 7:01 am  Leave a Comment  
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Look at the Bigger Picture

Given the current shutdown of businesses, Entrepreneurs must be stressed out regarding all that they have to do when everything opens.

The well-known Pareto Principle of 80/20 could be helpful.

A lesson from that principle is for Entrepreneurs to focus on the big things they need to do and not worry about all the small details. Delegate the small stuff to others. If one dwells on small things, there is little time to work on the larger, more important things in business.

Similarly, if you are dedicated to bringing back revenues, focus on the 20% of strategies and tactics that would generate 80% of the returns. The same philosophy should be applied to keeping employees,  customers and suppliers safe.

Do the Right Things!

Productivity Measurement

Given that most employees are working from home during the current pandemic, how do you know if your employees are productive? Or productive enough? Should you? Claiming to have good employees that you trust is one thing, but backing it up with data is essential.

Have you established metrics to measure productivity directly based on your annual company goals?  Are the metrics simple and easily understandable? Do you communicate them effectively to your employees? How often do you post or discuss measured results? Are there periodic meetings (even with video-conferencing) to analyze performance and develop methods to improve productivity?

Working productively from home is required now or might be the way of the future, but gauging its effectiveness with productivity measurement data makes it more meaningful.

Once you do measure productivity of your employees and obtain successful results, align your reward systems to be in line with productivity improvements.

Improving productivity of your employees is a sure way to deliver more to the bottom line. Are you doing that? If not, why not?

Ravi Patel

Re-creating Team Cohesiveness

With stay-at-home in effect, many Entrepreneurs, their management teams, and employees are working from home.

While mentoring and coaching the members of the management team is possible via video conferencing, Entrepreneurs need to build cohesiveness in their teams. Members of the management group must work well together and function as a well-oiled machine. Doing so remotely becomes very difficult.

The Entrepreneur should plan, after businesses reopen, team building events, preferably off-site, to re-create a feeling of camaraderie among the management team and facilitate effective working relationships between the members.

Ravi Patel

Differentiating Cash Outflows

Entrepreneurs watch, as they should, their cash outflows very carefully. But, do they realize if they are spending or investing their money?

Spending money involves payments for costs of goods and services (such as inventory, supplies, labor, travel), compliance requirements (taxes, fees, licenses), or overhead (rent, utilities, office expenses). These provide short-term benefits.

Other forms of payments or outflows have returns over a period. These are usually for marketing, hiring, training, improvements, real estate, machinery and equipment, and such.

Differentiating between spending and investing is useful for decision-making. Controlling spending and investing wisely offers the optimum path for Entrepreneurs.

Ravi Patel

Published in: on April 28, 2020 at 6:51 am  Leave a Comment  
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