The Power of Saying No!

The Power of Saying No!

Image copyright of papernstichblog.com

This post is an attempt to try and position the usage and the reasoning for saying no to customers. The prevailing wind of client management theory has always been about saying yes to everything and then trying to figure it out afterwards. I've always gone along with the idea that if someone is trying to give you money then you should let them, but under certain conditions it would be better not to. This is my attempt to explain that ideology.

There are a number of reasons why you might want to say no to a client. These are my top ones but there are undoubtedly more:

- The client is asking you to do something that is not in your core skill-set or within the focus of your business.

- The timing is wrong, the work being offered is above your current capacity to deliver to a high standard.

- The method is unacceptable. The client is asking you to produce the work in a way that you don't agree with or can't manage effectively.

- The regime is not acceptable. The client is asking you to work in a way that is not in the best interests of your staff (night shifts, weekends, extended days)

- The money is wrong. The work or service you are providing is undervalued.

Within small businesses especially there is an overwhelming urge to accept almost any work that comes your way but this is often a false economy. Taking on a contract that will require you to spend £50k to earn £60k is bad business. Its too much financial exposure for not a lot of financial upside - particularly if you have to wait for the money. This kind of deal only really works if the time-scales are short and payment is on delivery.

For me, all of the above represent risks past a point where it makes sense. Most of them come at the risk of work delivered being less than the highest quality and therefore your reputation in the marketplace is in jeopardy. A tarnished reputation can take years to repair and cost you more work that the value of the original contract. Other issues include internal staff problems caused by clients dictating to the company. You might deliver the work OK and end up losing a valuable member of staff - at which point any profit is lost as you incur the costs of replacing the employee.

Its not a bad thing to say no to a client on the basis of what I've listed above but what about if you're the one being told no. What are your options?

In my experience most no's are not absolute. There are a number of unspoken aspects to a no and its a case of understanding what those unspoken issues might be.  I tend to start with a question:

"I understand you've said no, and I'd just like to know if its a no not now or a no not like that?"

My current experience is that the timing and the method/end result are the first two objections that will produce a no. Timing is an easier one to deal with. Just ask when the right time to come back is. Its common for companies to work in cycles and have key points in the year for certain activities - its just going to be better for you to interact with them at the right point in the cycle.

"No not like that" has a number of possible outcomes. They may just mean that they would like a red one not a blue one and it could be just something that simple. It might be that its the right design in the wrong material or the other way around - the material is great but the design isn't what they would like. The key thing is that the no has not brought the discussion to a negative conclusion and that the dialogue is continuing and you are moving towards a solution and a solution inevitably means a yes.

So in recap:

Its perfectly acceptable to say no to work that is likely to effect you negatively in some way. It's sometimes difficult to walk away from money on the table but its about creating the right business stance. Customers will not misunderstand why your saying no if you take the time to explain and will most likely respect you for the stance you've taken.

When you hear no then its not the end of the story. No not now and no not like that as questions take you down different paths but those paths are forward not backward facing. The important outcome is that the conversation and the relationship are maintained and are likely to bring you to a new point of dealing with each other.

The Perfect Customer?

The Perfect Customer?

Someone just asked me if there was such as thing as the perfect customer. I immediately said no. In the field of software development and digital in general no customer comes to you in the ideal situation where they know exactly what they want and has the funds to pay for it. It just doesn't happen. It did set me off thinking how I would categorise customers and what stance I would take with each category.  This is how I see it:

The Novice: This is the person who comes to you and in a very honest way tells you that they don't have a lot of knowledge but they do need a website or app and they want you to help them understand what they need and how to get it delivered.

The Wannabe: The old adage is that a little bit of knowledge is dangerous and this is where I see this customer. They have a "friend" who has given them some advice or they "read somewhere" how this all works. They're intent on telling you what they know whether you like it or not.

Mr Busy: This is the person who could do it themselves but they have declared themselves too busy. They did it last time or before, they have made a list of requirements (usually poor) and what ever you do it will never be as good as if they had done it.

Mr Price: This is the person who knows they need you to do it, they understand its difficult and they can't get it done without you but they are going to torture you over the price. Every pound is sacred and they consider it a "win" if they manage to get you down a bit.  

So what is my strategy for dealing with these people?

The Novice: This customer is looking for some free consultancy from you to work everything out without paying for it. If the contract is large then you can tolerate it but if the value is sub £15,000 I send them a load of web-links and video links for them to watch. At the very least I want them to write the use cases from which I can work everything else out, but I'm certainly not going to do all the work for them. I do quote them for the working in case they just want to pay for it but its usually not the case. If you don't start the education process with them then they are continually beholding to you and you've created a risk in their business - you might not always be around to hold their hand.

The Wannabe: This is the one I struggle with the most. I often end up not wanting to deal with this customer type. If they start telling me what "their friend said" then I just want to tell them to go get their friend to do the work. I don't say that obviously but its often in my head. I need to undo the bit they've learned and get them back to the right starting point and then work forward from there. As with the Novice if you don't start to educate them on the process and the technology they are just tied to you and the frustration is never ending. I also get them to do a small amount of work (inside the CMS usually) so they start to understand how hard/long things get. It stops them making unrealistic time based requests.

Mr Busy: This is where the difficulty goes up a notch. The person you're dealing with is often technically competent but is time poor. This means they will set tight deadlines but if you're not managing them properly they will not deliver from their side and therefore you fall behind. You might need text, or a logo, or a decision on red versus blue. They don't have time (or they would be doing this themselves) and that lack of time means lack of progress - and you can end up with projects taking far longer than they should, causing you the problems as projects overlap and payment for completion is delayed. If I have Mr Busy I use an extra document that sets out their contribution and the dates on which its due. If they don't make those deadlines I reserve the right to move on with place holders. I can then keep the overall deadline and they can see that its them that didn't deliver on the timetable not me.

Mr Price: This is the customer that can do the most damage. Giving a discount in principle is not a problem if its a discount on a price provided not one they provided. So if I quote the true cost of the work as being £15k and I offer it for £13k then I know that this is realistic. What I dont do is have the other person tell me the value of the work is £15k and can I do it for £13K. I always establish the true cost of the work and make sure the client knows what that cost is and how it was derived. I can then take a view on a discount but discounting is dangerous if done unscientifically. I prefer to give the client more than they were asking for the same money rather than discount to provide the work as described. If I was selling pipe it would be that if 1 meter of pipe was £1, I would be providing 1.5 meters for £1 rather than 1 meter for £0.80p. I try and keep the revenue up and make the scope of the work the negotiable. Its just a safer way of negotiating.

In digital you just don't get the "perfect customer". Its really just a case of having the guile to see what kind of customer your faced with and having the approach for each customer type nailed down. 

Cloudy Days Ahead

Cloudy Days Ahead

Images copyright mashable.com

Professor Ramnath Chellappa was the first to use the term "cloud computing" in 1997. At the time it didn't mean anything. Hosting was still done from specific data centres that you connected to. Without doubt it now probably the most overused (and misused) term bandied around in the tech world.

If you're not one of those currently consumed by technology then this blog post might help you make sense of this "cloud" thing. Hopefully I can get you off first base with the whole concept of the cloud and you can amaze friends and colleagues with your new-found expertise.

What is the cloud in layman's terms?

The first thing to get your head around is that the cloud isn't a physical object. Its essentially a collection of computers called servers that do slightly different things in collaboration with each other. Some servers are running software, some are storage.

If you're a user of graphics tools like Photoshop you will have noticed that you can't buy the software on a disk any more. The same is also true of Microsoft Office. Its now called Office365 and you subscribe with a monthly fee. These are all now cloud based services.

Other servers in the network are responsible for storing data.

We're all very used to taking photos on our phones. Its stored locally on the phone. When we add the pictures to Facebook to tag our friends we are adding the photo to the cloud.

What are the benefits?

If your a business then there are a couple of benefits. Firstly you don't have to buy expensive equipment any more to run your own on-line services from. Equipment became out of date very rapidly and was expensive to keep up to date.

Secondly you can access your information from any location on any device. Before the cloud you could only retrieve information in the office or copy it to a dedicated device. The cloud allows ubiquitous access on the go.

What's this "scaling" thingy?

Working in the cloud allows your company to have more resources when you need it and for it not to be there when you don't. If your company quickly needs access to more resources, it can scale quickly and automatically in the cloud. You will pay a little more when you scale up and pay a little less when you scale down. Because of this scalability, the cloud's "elasticity" is often compared to that of a rubber band.

How big is the cloud exactly?

We're not going to fill it up any time soon. There is a great infographic that shows the overall storage capacity of the cloud here. The cloud never stops growing so in theory its impossible to really know what the overall capacity is. Lets just agree its big!

Can my stuff be lost or be stolen?

The cloud is based on replication, your information is mirrored in several places so if one machine did fail or the building where its stored burned down then your information isn't lost, it can be brought back from one of the mirrors.

Security from theft is a different problem all together. Big cloud based services like Amazon, Google and Microsoft are well defended from cyber attacks. Smaller cloud providers are another matter. I would always recommend going with one of the big guys to get that extra protection.

So how do I get started?

Its most likely you already have several cloud based products that you use. Gmail, E-bay, Amazon, Dropbox, Office365, Skype - these are all cloud based. If your a little more technical and want to delve a little deeper then check out Amazon's cloud hosting for businesses - AWS.  The beginners guide to using AWS can be found here.

Want to see more?

Here are a few cloud-based services that are small business orientated and might give you a few ideas about how your business might be enhanced by using the cloud:

For small business HR and employee tracking check out Bamboo HR

For cloud based invoicing take a look at FletchFlow.

For employee / client collaboration give Multiwall a try.

For task and project management try Trello.

What About.Me for Business?

What About.Me for Business?

In the plethora of social media sites that you can use for business about.me is not an obvious one.

About.me (Usually styled as about.me) is a personal web hosting service co-founded by Ryan Freitas, Tony Conrad and Tim Young in October 2009. The site offers registered users a simple platform from which to link multiple on-line identities, relevant external sites, and popular social networking websites such as Facebook, Flickr, Google+, LinkedIn, Twitter, Tumblr, and YouTube. It is characterized by its one-page user profiles, each with a large, often-artistic background image and abbreviated biography.

Having signed up personally for a site I decided to try an experiment on how effective the site might be for a small business or entrepreneur for recruitment, generating new business or networking.

The rest of this blog post is are my findings on this experiment.

Recruitment

I spent some time looking through the profiles of about.me members who described themselves as technical in some way or had a technical image as their page backdrop.  The search function in the site is limited so there is no deep search available. I could however find people in my general location who I recognised has having some of the technical skills I am looking for. Its not the same as looking at LinkedIn for example, but because the site incorporates a direct link from the about.me profile to their LinkedIn profile it was an easy task to follow that person through to the more professionally orientated LinkedIn site.

Generating New Business

In a nutshell, probably not. The site really doesn't have this kind of focus. It's like looking at selfies, the user shares an impression of themselves that they would like to give. Vanity would dictate a lot of peoples choices on the image and text they use on here and that is not the starting point of trying to determine if someone is a potential new business partner. The other aspect is just that, this is a site for people not companies.  

Networking

I think this is a more realistic use of the site. If you're heading somewhere out of your normal patch and want to meet some interesting or like-minded people then this site might work - taking into account the safety side of meeting with strangers. I spotted several profiles that I saved into a collection of people who I just though were fascinating. If I'm heading in their direction I'll be definitely dropping them a note to tell them I'm in town.

Positives

There are a couple of other aspects of this site that I liked and would see as positives.  There is not much by way of messaging between users other than a small note. I like this, I'm not going to be receiving any long winded unsolicited diatribes.  The other thing I liked was the ease of connecting my other social media accounts for Facebook, Twitter, LinkedIn etc. People can then follow their interest up in me in a number of different ways depending on their preference.

Negatives

The privacy options in the site are a little under-developed. I would have liked to be able to opt out of certain search criteria and to be able to narrow the demographic of the kind of users I would like my page to be shown to.

Conclusion

Overall I'm happy to have the about.me page. Does it meet my business needs? ... not really. People can still discover me and if they are interested enough they can find out more about me and my work, but I don't see this forming part of my business strategy going forward.

Need Help? How About Outsourcing?

Need Help?  How About Outsourcing?

There comes the moment in every entrepreneurs life where the amount of time you have available and the amount of work you need to do just doesn't add up. There are a couple of ways of looking at this:

[1] is all the work in front of you really necessary. Is it? Really?

[2] you can ignore it and see what happens.

[3] you can hire people to do specific parts of the workload.

[4] you can use outsourcers to bring it all back under control again.

Outsourcing in its simplest form can be just about arranging certain parts of your workload to be handled by a specialist (accounts done by book keeper for example). Its an honest way to deal with a time based problem - as accounts can be extremely time consuming.

Upping the ante in the outsourcing stakes is to take part of your delivery and pass that onto an outsourcing partner. This could be the physical delivery of the product or the fulfilment of the order (combining the product and the packaging). This is where entrepreneurs can get nervous because if the outsourcer isn't focused and professional then they will let your customers down, either not delivering on time or with the incorrect products.

There are some misconceptions about what outsourcing is about.

The biggest is that it saves you money.  It rarely does.  The operational and management expenses of moderating an outsourced project will get rid of any financial benefit.

The best ways to look at are this:

[a] It increases your capacity without increasing your fixed costs.  You can get more done with roughly the same amount of money is one way of looking at it.

[b] It allows you to bring in unique or specialist skills you don't have internally just for the part of the project you need them for rather than hiring and having to feed an employee full time when there is not a lot of requirement for them.

[c] You can use outsourcing to bring a localised version of your product to market. Something made in the US for a US audience may not suit a Chinese audience exactly, so Chinese outsourcers can use their local expertise to modify the product to be more suited to the market.

[d] Short term surges can be dealt with using outsourcers. If you find yourself unexpectedly busy at short/no notice then outsourcers can plug that requirement and make sure you don't let customers down.

There are some things that you shouldn't outsource - specifically sales. No one will every understand the products the way a creator or entrepreneur will or will have the passion and enthusiasm which is quite often the difference between a sale and no sale. I've never seen outsourcing the sales process as likely to work out.

The issue is always one of project management and quality control. You will need extremely well defined processes internally for the outsourcer to replicate to ensure delivery is on time / on scope / on budget and meets the required quality controls. Every internal issue you have will be amplified by the outsourcer who has the same issue without the same level of understanding.

If a company is going to outsource for the first time then they need to bring in expertise or a consultant to completely work out their outsourcing strategy, work out the processes completely and to moderate the outsource partner - at least through the first project. Otherwise I would suspect that neither the company or the outsourcer are in for a pleasant experience.

What's Your Dunbar Number?

What's Your Dunbar Number?

Dunbar's number is a suggested cognitive limit to the number of people with whom one can maintain stable social relationships. These are relationships in which an individual knows who each person is and how each person relates to every other person. This number was first proposed by British anthropologist Robin Dunbar in 1992.

The main principle is that the average person can rationally manage 150 people and relationships under the Dunbar number principle. With this in mind I thought I would put myself to the test.

Why am I bringing this up?

Well I was sat here looking at the ever increasing number of people I have on Facebook, LinkedIn, Google+, Skype etc. putting myself to the Dunbar test and seeing how many of these people I can remember where and when I met them and how they relate to the rest of my contacts.

Facebook helps me understand how people are connected by constantly telling me / showing me who is connected to who. In my head I can picture people as part of groups - clients, friends, friends of friends etc.  The question then becomes am I just purely remembering or am I in any way managing these groups?

Where LinkedIn really excels is that there is a clear focus on why people are on the site. Its a serious tool that I understand and recognise as being for my work/business career.  

Facebook is less clear. There are people just trying to be friends, people doing business, raising awareness, raising money, campaigning on social issues and distributing the real reason we have the internet - cat videos. The reasons and motivations for being there are less distinct and therefore less manageable.

Google+ I now see very much the same as Facebook, a mish-mash of serious, trivial and banal.

For business, managing your network is essential. If done properly it should feed you a level of activity that provides a baseline of commercial activity on which you can build to increase turnover. If you can't rely on the Dunbar theory to help you remember who people are and what your relationship is with them then what's the best solution?

CRM

Customer Relationship Management or CRM is both a philosophy and a software solution. CRM systems allow you to create traceable histories of clients and relationships over long periods. Small business as well as large corporations that use CRM systems often generate massive financial rewards by being able to interact with contacts with specifically timed interactions driven by the CRM telling them that its product renewable time or the anniversary of a contract or purchase.

Microsoft Dynamics CRM

If your a Microsoft user or fan then stick with Dynamics CRM. It directly integrates into all the other Microsoft software family, allowing you to feed your CRM system from Outlook, Word and One Note. Its not the cheapest system but its pretty powerful.

SugarCRM

I've use this system a lot and its my favourite. Its a flexible system that has lots of interchangeable modules that can customise the system to suit your specific needs. It also has a access point that a programmer can come in and create bespoke modules for your business if you require them.  Low level SugarCRM is free and you only need to pay if your using some of the extended features.

There a lot of tools you can choose from for your CRM system but the key fact that is that you need to manage contacts, connections and acquaintances to maximise the benefit for your business. The theory of the Dunbar number whilst interesting isn't a strategy so don't overlook this very necessary aspect of being in business. 

Give the Dunbar number a go yourself (don't cheat) and see how you fair against the principle of 150 being the average.

What Is An Idea Really Worth?

What Is An Idea Really Worth?

Quora is a website that allows anyone to ask any question for their peers to answer. It swings from the silly to the serious as you can imagine. One of the most common questions I'm asked to answer is the value of an idea. Just the idea. Not a product or service based on an idea, a blank sheet of paper with words on it that represent a thought.

Value of an idea?

The question is a good one. We all feel that we have the capacity to be creative and clever and develop something that is the route to fame and fortune. But there are issues with this train of thought:

[a] If we can imagine something that we don't have the skills to develop ourselves, how does that effect the potential value of the idea?

[b] If we tell someone the idea in the attempt to get someone with the skills we need to help, do we dilute the value of the idea - and if we continue to add people to create the solution, do we continue to dilute the value?

[c] If we have multiple ideas that connect, does that multiply the value?

As with a lot of the things I write about, there is a punch coming, so here it is:

Your idea is worth absolutely nothing ... regardless

Ideas are worthless without a way to execute them. There is no value at all in an idea that isn't made. There are number of well quoted entrepreneurs on this subject who all feel the same way on this, most notably Seth Godin who put 999 of his own ideas on line.  You can see that list of ideas here.

Execution of an idea 

The counter side to theory of ideas being worthless is that execution of ideas is priceless. Anyone skilled enough to take a concept through to completion and deliver it to the market is worth their weight in gold. These people are few in number, harder to find and even harder to hang on to, yet, we all need them.

The whole dichotomy is expressed beautifully in this diagram by Derek Sivers:

The most brilliant idea, with no execution, is worth $20.
The most brilliant idea takes great execution to be worth $20,000,000.
That's why I don't want to hear people's ideas.
I'm not interested until I see their execution.

Generating new ideas

I'm not suggesting with all this that you don't try and come up with new business ideas and innovation - its the life blood of not only business but of humanity. What I am suggesting is that there is a package of things that dictate if an idea is of any value.  A phrase I use a lot when I'm lecturing or mentoring students is:

"There is a fundamental difference between a good idea and a commercial one and you need to learn the difference."

Its vital for the purposes of not spending time and money on something that can not be delivered or profitable. Its unlikely that most people can have an idea and deliver it themselves - although increasingly as tools get better, digital products are getting closer in that respect. 

When you next think you've struck on an idea you should be sharing and mobilising all the people you know to help deliver it, not putting your efforts into keeping it a secret.