What helps the most in the future success of our business?

At platform no. 2 of Malad station, there is a book stall. The employee there is since 23 years…!

At our home, the same person delivers newspaper since last 11 years. He knows which papers we like, so whenever there is some scheme or some new paper is coming, he always informs.

The helper at the grocery shop from where my wife buys our provision, helps her remember things when she goes to place monthly order. He knows which things are regularly used by us, because he has grown up in that store and he knows buying patterns of all regular customers. My wife feels pride by the special attention that he extends.

The computer maintenance company that repairs our home PC, has one supervisor engineer since more than two decades. He knows entire history of all the various generations’ PCs that came to my home. He understands my problem quickly and sends the engineer accordingly.

The common thing in all the above examples is some employee who has been with the firm since more than a decade. Their presence makes the customer’s experience much more comfortable. Everybody prefers to deal with a known face. A customer’s comfort decides his satisfaction levels. A comfortable, happy, satisfied customer is a profitable proposition for any business. An old (experienced) employee is a very valuable asset to the company, because not only a customer but also vendors or any other party repeatedly dealing with the business finds it comfortable to deal with a known person, rather than dealing with a different person every time.

We all may have encountered the frustration of talking to different, ‘faceless’ persons every time at the call centers of Mobile, Cable, Telephone, Bank, Credit Cards etc. companies. If, for solving a single problem, we need to call that call center more than once, undoubtedly we will be faced with repeating the same thing again to different people. A customer is not happy or comfortable passing through such experiences.

The current health of our business is reflected in the financial statements listing the assets, liabilities, sales, profit, margins or growth rates. It can also be gauged by the market share and the brand equity held by the brands.

But, how can we judge the future sustainability of the growth of a business? Of course, good products, sound financial health, large customer base, good market share, reputation and positive brand equity promise a good future ahead. But, in addition to all this, one vital element plays the most significant role in the building of strong foundation of the company. And that vital element is the number of veterans or senior employees in the company, who have spent many years in the company.

If we look at the successful companies, we can’t miss the significant role played by these ‘veterans’ in consistently shaping the future. An old employee knows the business, its environment, competitors, challenges, its promises and its people. And that knowledge cannot be replaced by replacing that person. When an old employee leaves, this knowledge also leaves along with him. This is a huge loss to the company. The new person may learn and understand the processes, but the experience and knowledge of the old person will never be retrieved. Without the long term availability of good employees, a company just can’t build strong foundation, and hence can’t go much ahead.

An experienced investment banker once shared this with me. “In evaluating any company, we always try to find out how many people at various important positions are with the company since more than five, ten or fifteen years. That tells us about the depth of the experience of the management and the quality of company’s long-term relationship building practices. The newcomers, however highly qualified, can’t be expected to take the company ahead sooner. That company will have to wait longer to really take off. And that waiting may be unaffordable. Moreover, an employee is the first hand witness of what is going on in the company. Every employee has his/her own dreams. They stay with the company as long as they have hope of fulfilling their dreams by working with the company. When a person gets disillusioned, she leaves. So, the tenure of important employees is one very significant indicator of the stability of the company and its future. For us, a company with more veterans is undoubtedly on a strong footing.”

An employee-employer relationship is an important relationship from the business perspective. Maintaining any relationship is a challenging task. It requires give-and-take from both the parties. If the company respects the employee and gives opportunities to express his abilities and realize his dreams, the person will stay with the company for a long time. But, if the company has short-sighted ‘hire-and-fire’ approach, the disgruntled employees will leave, carrying bitterness and spreading bad reputation outside. Those continuing inside also live in a persistent state of fear and will fly away at the earliest opportunity. Those who remain are the sour apples, who don’t find employment elsewhere. Such excessive churn causes a chaos in the company and quality, customers, sales, productivity and profitability suffer because of the persistent instability and uncertainty.

We have to accept this fact that the strength of the foundation of a business depends mainly upon the employees who are with the business since a long time. We must try to keep such employees. We must maintain good relations with them. We must invest in them and help them to upgrade, grow and fulfill their dreams. If they stay and grow, they will help us grow and fulfill our bigger dreams. If we can’t build strong relationships with our employees, how can we expect them to build strong relationships with our customers? To increase the chances of future success, we need to increase the number of long-term employees in the company. It is very simple. We must notice and act on this simple fact.

Otherwise Aaya-ram and Gaya-ram can make our company a guest house, where people come to spend some time in between two good jobs. No wise entrepreneur would like to turn his company into a transit camp or a career parking lot.

Words of wisdom from Ramesh Shah of Zodiac

Last Sunday, I got an opportunity to attend an annual function organized by a management institute. The chief guest of the function, Mr Ramesh Shah (Furia) of Zodiac Group, in his short speech gave some very practical advice which can be useful to all business people. His words are the result of the lessons learnt from his years of ups and downs in business life and they carry very pertinent learning for all of us. Here is the essence of the wisdom he shared with the audience :

1) Pay personal attention to checking of important legal documents.

After verbally deciding and agreeing on the terms and conditions of any deal, people generally assign the task of preparing the agreement, contract, deed etc. to the specialists like lawyers, solicitors etc. And when the document is ready, they assume that whatever was told to them, is all captured properly and written accurately. They sign it hurriedly, without confirming the correctness of the document.

Even though the lawyers and solicitors are experts in this work, they may miss some vital point which may prove to be very critical sometimes. Such lapses may cause some irreversible and significant damages in future. We must read the document ourselves. Even if we may not understand every word of that legal parlance, if we try, we can easily get the context of the content and find out its appropriateness. Ensure that the roles and responsibilities of various parties are in line with what is verbally agreed upon. Pay particular attention to the clear and specific treatment of exceptional situations like exit clause, termination clause, defaults, disputes, penalties for delays, failure of fulfilling some commitments etc.

2) Thoroughly study the intricacies of the business you get into.

As per the current trends, recently there is an increase in the number of people joining real estate development and share market related business activities. There is nothing wrong in both the businesses, but jumping into something without knowing the undercurrents may prove dangerous in the ensuing journey. It is like jumping into the sea without gauging the depth of water and the presence of other creatures inside. We may have the ability to handle and swim out of any depth, but we may have grossly underestimated the impact of the other elements. Before getting into a new business, we must find out : What are our internal strengths and weaknesses? What are the external threats and opportunities? What are the laws, rules and regulations applicable to this business? What are the legal requirements? What is the competition structure? How is the market condition? What affects it? What is the future scope? These are some of the questions. There are many other questions which one must find answers of. A detailed, careful study and understanding of the rules of the game is advised, before entering the playground.

3) In important decisions, don’t take the things at their face value. Always cross check.

In important deals, we often develop a tendency of going with the herd. In real estate, if one person is investing in some project, others will join him without cross checking whether that person has overlooked something very critical. In stock exchange also, people follow ‘tips’ without personally trying to evaluate the company and having some idea about the company and its business. In medicine, the practice of taking second opinion from another doctor is a very common and accepted practice. The same must be applied while evaluating an important project, company or other major decision. Always take the second review from somebody else whose opinion you respect. It may turn out to be contradictory to what you have heard so far. It may also give you an altogether different perspective. But, it may even throw light on something very important which you never considered earlier. This additional perspective may prove to be very precious at times.

4) Don’t resent bureaucrats or politicians. Work with them.

In today’s times, politicians and bureaucrats (Government officers) are considered notorious. Everybody intends to keep away from them. They are treated as untouchables. But both, politicians as well as bureaucrats, are there for serving us, the people. They are an important part of the system. Instead of resenting them, we should develop healthy relationship and rapport with them. With their knowledge and experience, they can help and guide us in charting our path through the intricate web of government documentation and procedures. If we have good terms with them, we can approach them in case of a need or a trouble. If we don’t have a recourse to them, we have to fend for ourselves and that path can be a longer and tiresome one.

Good lessons, indeed… and that, too, straight from the horse’s mouth…!

Thank you, Rameshbhai….!

Customer ko unnis-bees ka fark bhi padta hai…!!!

I came across a recent and real example of how a new business loses its credibility in important customer’s mind and how customers feel taken for granted. We all can learn from it.

Pradeep runs a very reputed coaching class in Mumbai. It has more than 5,000 students on its roll. To all these students, they give some stationery like bags, note books, file folders, pens etc. with the coaching class branding. Pradeep ensured that this stationery was always of the best quality. He never compromised on the quality of things on which his brand’s name was printed.

Shrikant, a cousin of Pradeep, started a new wholesale business of PVC file folders. They supplied to bulk users and coaching classes were one of the target customer segments. He approached Pradeep and requested for an order of file folders. Pradeep showed him his regular folders, which were sourced from the best manufacturer with the best brand and quality reputation in the corporate market. Pradeep required 20,000 folders every year. He told Shrikant to provide him the same quality at better rates. Shrikant readily agreed and promised that he will certainly match the quality and will give better price. He took a specimen sample from Pradeep and went to work. Shrikant was very happy that he got a big order right in the beginning of his venture. That was a very good start to build upon, he thought.

The folders were delivered in due course. To Pradeep’s surprise, the quality of folders was not as per the specimen given to Shrikant. It was distinctly inferior. He called up Shrikant and asked for the reason for the difference in quality. He made it clear to Shrikant that he was not happy as the quality obviously did not match that of his earlier supplier. To that Shrikant replied, “I agree the quality is not same. That company gets its material from foreign markets on exclusive basis. It is not available in India to anybody else. What I have given you is the next best to it. And the rate is also 15% less. Sirf  unnis bees ka fark hai. Nobody notices in so much detail. Tere students ko kya fark padta hai….?

But it made a difference to Pradeep, to whom quality was of supreme importance. He realized that he had made a mistake of experimenting with Shrikant without checking his credibility. He felt that Shrikant should have communicated to him when he found out that the same quality was not possible. Pradeep felt being taken for granted and he disliked it.

He never repeated the order to Shrikant. Shrikant’s inability to understand that customers may forget the price, but they always remember the quality of products cost him a very big customer in the early stage of his business.

Really, customers never forget the bad quality or bad service. And they do not forgive being taken for granted. In the matter of quality, unnis-bees ka fark is a big difference. It can kill the credibility of a business. Forever.

What spoils the fun of Gujarati Thali of our customers?

Gujarati Thali conjures up an image of a wide range of Gujarati and other Indian delicacies served in the traditional way. The main feature of this Thali is that it is unlimited. Being allowed to eat anything without any limits excites many a diners who feel challenged to test the limits of this unlimitedness…! But, over all, it is a very delicious traditional symbol of Gujarati hospitality and culture. A typical Gujarati Thali served at the Thali restaurants of Ahmedabad, Vadodara, Surat and other smaller cities and towns of Gujarat really lives up to the exotic image of this offering. Customers go to these Thali restaurants expecting an array of dishes drawn from all parts of the country, being served to them, (unlimited of course…!)  with the traditional Gujarati hospitality. Generosity is the hallmark of this hospitality. The food is served with a lot of love, encouraging the guests to consume more. All, from waiters, cooks and supervisors to the owner really go out of their way to ensure that you go back with a full stomach and a deliciously satisfactory gastronomic experience.

Now, what happens when this traditional offering is greedily commercialized with the sheer motive of earning some easy money by cashing in on this image? You see not-so-delicious examples of Thali restaurants, started by purely commercially minded people, mushrooming in cities to make a quick buck riding on the immense popularity of traditional Gujarati Thali, leavning a bitter aftertaste on the tongues of customers.

One such chain of Thali restaurants is very famous in Mumbai. The popularity seems partly due to the reason that there is no other authentic Gujarati Thali restaurants known to people in Mumbai. It has opened its branches in many of the swanky malls in Mumbai. Gujarati Thali enthusiasts go to this place looking forward to a traditional, colorful, delicious, hospitable Thali experience. But, all these expectations are shattered once you settle around their tables. The experience has no authenticity or original character of a true Gujarati Thali served in authentic Gujarati dining halls. Here, at this chain of dining halls trying to position itself as authentic Gujarati Thali place, you, as a customer, may unmistakably go through the following unsavory experience :

a) As soon as you sit down, a barrage of waiters fill up your enormous plate with little amounts of everything there is on the menu that day. They keep repeating the serving too fast for you to cope up with. Your attractiveness as a customer ends as soon as you enter their premises and settle on their chairs. Soon, you will realize that with a long list of people waiting outside for their turn to enter the restaurant, you are a burden on their system and they want to get rid of you as soon as possible, . The staff makes all the efforts to ensure that you ‘finish’ as soon as possible. They try to get you out in less than half an hour ! Here goes your plan to relish the outing of a rich, Gujarati meal in a relaxed way….!

b) Few minutes later in the meal, a wheeled serving counter approaches your table. The attendant says “Masala Chhas” (Butter Milk). Now, you ask him there is Chhas on the menu, which is already served, what is this for? He informs “This is with Extra Charge…Rs.15 for a glass.”. So, you get the first jolt on your unrestricted, unlimited journey.

c) As you approach finishing your meal, another attendant comes with a basket of Paan. He has some readymade Paans, a traditional, disgestive mouth freshener eaten after the meal. As you happily welcome him with a delightful surprise, he informs “Paan is with extra charged.  10 Rupees each. ” You gulp this second speed breaker on your unlimited journey and go ahead with the Paan. Once you pick up Paan, the fellow asks for money. If you tell him, “Please add to the bill”, he replies “No, for Paan, you have to pay separately. It cannot be added to the bill. Please pay now.” So, before you formally complete your meal, you have to reach for your wallet and make the payment, till then the attendant will not move away from your table.

You may wonder, what prevented them to add the price of a glass of Masala Chhas and a Paan to the total price they charge from customers? How many customers would mind a nominal increase in total rate for such inclusion? That will make the Thali truly unlimited and letter as well as in spirit…! But, this wisdom does not go into the heads of those who want to make few more rupees at the cost of a satisfactory customer experience, which will bring the customer again and again and which will also encourage the customer to recommend the place to many other friends. How many such disgruntled customers would wish to visit the place again? What recommendations would they pass on to their friends?

Just like this rapacious Thali restaurant, in similar cases, if we try to cut corners in our business, by shortchanging the unsuspecting customers, the customers will avoid coming to our business. They will not come back to us and also advise many others not to come and buy from us, because of our obvious greed.

How many times we try to charge extra for nominal things which are generally assumed to be part of the total package? Like, how does a customer feel when he buys a gift worth Rs. 5,000 from a shop and the salesperson asks for Rs.10 extra for gift wrapping?

How would a customer (after buying goods worth few thousands) feel when a shop keeper gets annoyed when asked for an extra carry bag?

Which customer will be happy when he returns next day, due to some genuine reason, to exchange some item purchased only to be told that “Exchange time is between 1 to 3 pm only and we will not exchange the product purchased by you. We can only repair it, if there is a defect.”

Such short sighted and greedy practices many bring some money to our cash counter, but it leaves the customers utterly unhappy and dissatisfied. They will not come back and prevent many from coming to us.

So, let us not make the aftertaste of a Rs.250 Thali bitter by insisting on charging Rs.10 for a Paan then and there itself…!!!!