Small Business: Innovate or Attenuate

So you're a small business owner?

Go ahead.  Keep doing the same thing.

Keep using the same business processes, the same hardware and software, the same approaches to your business game that you've been using for the last decade. Heck, maybe even before then.

Keep hiring the same kinds of people, execute the same strategy, depend on the same marketing techniques, and say the same thing about your product or service.

Keep doing the same thing because ... ? It's safe? It's what you've always done? You're afraid of alternatives? Consequences? Real and perceived risk? Losses? Embarrassment?

Keep doing the same thing because ... ? You believe the world is static - technology isn't reinventing your industry, consumer preferences aren't changing, and that the perceived value of your product or service doesn't continually wane in the eyes of your consumer?

Keep doing the same thing because ... ? You like consistency. You dislike change. You want to keep the cheese right where it is, thank you, and that makes you feel comfortable. Comfortable is preferable to disruption.

Keep doing the same thing and - in comparison to your competitors - your costs will increase, your margins will erode,  your perceived value will diminish, your market share will shrink, and you will be slow: you shall be the master of the wrong product, at the wrong place, at the wrong time. 

But maybe, in the end, you'll still feel good about it? If not, upswings in the economy are times to innovate. Do something different. Spend a little money to R&D - try new things, in new ways, to question your assumptions and think differently.  And a great place to start is with your business processes and systems automation. 

R

Friction

Replacing labor is only part of the problem. Think about how technology improves customer service and satisfaction.

This is an image of a woman enjoying one of 7,000 McDonalds kiosks in their European stores.

McDonalds installed the kiosks to reduce friction.

Friction are human touch-points in your business process.

It's any time that labor must intervene to get something done.

Labor:

• Is inherently unreliable. They may or may not show up for work; may require sick or family leave; may require more training to do the work with higher quality.
   
• Is inherently error-prone. Humans make mistakes. Especially in repetition. 
   
• Is inherently slow. People can only work so fast. They are limited by their limbs, mind, focus, and attention. 
   
• Is inherently costly. Add up the opportunity cost of slow, error-prone, and unreliable to determine a basis for their expense, and, a for a return on technology investment.

Thus, technology investment is used by businesses to reduce friction, reduce human interaction, and either contain the cost of growth, or, lower costs to an organization. 

If your company isn't investing in technology to reduce friction, your competitors are, every day building themselves the capability to work faster, smarter, and less expensively than you.  

US Corporations have experienced the most profitable years on record recently because of their fervor in attacking friction. They're driven by the profit motive. Businesses will never stop investing in technology to lower labor's influence in their processes.

So you must ask yourself two questions:

1. In what ways are you investing in technology today to reduce friction and remain competitive?

2. In what ways am I redundant as labor - do I create friction - and thus at risk at losing my job?

R

5 New Economy IT Strategies

Hey, how're you doin'?

Nice to meet you.

Say, if you're a small business owner and if you and I were to connect for the first time on the street, here are the kinds of problems I'd guess you're having.

Just bear with me for a minute.

• Rising energy costs. You're watching the events happening in the middle east and may feel a bit uncomfortable about oil and gas prices. And as the economy heats up, there's going to be even greater demand on scarce fuels, further driving the price up. Experts are talking about $5-gallon-gas next year. You're concerned and you want to be prepared for it.
• Mobile. Your workforce (if not your customer base) is mobile and wants greater access to information systems using phones, tablets, and from home. You want to accommodate but you're not sure where to start. You're not even sure if your stuff can be used or seen on mobile devices.
• Mixed Messages. Your team's probably tired of juggling cell and company voicemail, email, and instant messaging across many mediums and platforms. Diversity in communication might be up but effectiveness might be down - the right message ain't reaching the right people at the right time.
• Social. You've caught up with social media fad but you're not certain what it's doing for you, or, how it's extending value to your customer relationship. How is this Social-stuff translating into favorable behavior or more work anyway?
• Acquisition costs. Obtaining more capability is expensive. There's an inherent barrier-to-entry with a lot of this new IT stuff. It' not like this economy has made you flush with cash to spend frivolously. You need proven solutions without guesswork.

Wow. That's hitting the proverbial nail on the head.

Now, we'd chit-chat about these issues and I'd eventually come around to showing you 5 new economy IT strategies to address each of these concerns.

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1.  Cloud Computing. If you still own a server the server forces your team to be sitting next to it to access information. You're absorbing and paying for the risk in managing that asset. Own nothing. Own a server? Ditch it! Own a phone system? Why? Buy software? Seriously? Lease capability from vendors and shift your risks to them. Replace your expensive hardware with inexpensive appliances that access web-based resources. Instead of paying for tech services you have to manage and pay for yourself, you'd be using a utility - it's time to think of your technology like water, electricity, or plumbing: it's a service you use and not an asset you maintain. Cloud licensing is subscription-based so you only pay for what you use - lowering that barrier-to-entry for immediate capability.

2. Telecommuting. It's time to sit down and honestly talk with your team about this. The bandwidth's there, the infrastructure's there, the Cloud is there, now it's just a management decision.  Why pay anybody to drive 30+ miles for the privilege to type in your building? Can't offer your team raises or other benefits? Give them the benefit of self-direction and time management, and, the ability to lower their own energy costs by driving less often.

3.  Integrated Communications with Relationship Management. Your land-line, toll, cell, voicemail, email, instant messaging, copies, fax, and social interactions can come under one software, one view, one channel. The capability's there - you just need to implement. What that creates is a single inbox for your players where there's no distinction of medium. Further, all of this content can be married with CRM (Customer Relationship Management) systems built in to that inbox. Why have your team running around with their heads cut off wondering where something is? Give them the gift of a single virtual inbox.

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4. Shrinkwrap. This is a term I like to use for corporate downsizing in a cool, necessary, and strategic way. You see, with more efficiency, more Cloud, more Telecommuting, you can stop paying those outrageous property taxes you've been complaining about; you don't need to renew that lease; you can rent office rooms when you actually need them; you can shrink the corporate presence to a smaller - and more economical - footprint. Why pay for a facility that's mostly empty? Here's your chance to make structured, strategic changes to your fixed expenses: get smaller.  Become more agile. Think faster than you're competitor who're stuck with buildings, skyscrapers, and other structured/expensive costs they can't get out of.

5. Extend Value. Social media gives you a way to connect with your customers in amazing ways. Now's the time to see how technology can not just automate your workforce but empower your customer to do business with you - how are you making it easier to contact, work-with, and use your product/service? How're you using Social to listen and respond to your customer? Hey - heads up: you're a media company now! "Hi, Channel 5: what's up?" How're you building and cultivating your audience.  How can you use social to attract attention?

Now's the time to get curious as a business owner: what's possible under the budget constraints you have? Can you implement two or maybe three of these strategies to prepare for the new economy? Maybe all five? Whatever. Now's the time to start asking questions. What you don't want to be is just like everybody else, scrambling for options when there's no more time to implement.

That's right: money for nothing and chics for free.

Thanks for reading.

R