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Starbucks: Howard Schultz

A case study of how passion drove Howard Schultz to grow Starbucks from eight stores in 1987 to over 13 000 stores in 2007 with revenues exceeding $9 billion.

Greg Fisher

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Howard Schultz of Starbucks

Growing a business is tough, exceptionally tough. It is one thing to control and manage a business when your operation is small and close, with a limited number of outlets, but it is completely different when you expand and feel further and further removed from the day-to-day operations. Some businesses are easier to grow than others; online and financial services businesses often have highly scalable business models whereas location based businesses or consulting services are a lot more difficult to expand and grow. This is why the story of Starbucks is such an intriguing phenomenon. In 1984, the concept of a retail coffee shop barely existed and where it did exist, retail coffee stores were seen as small owner operated enterprises with very low growth potential. Yet, Howard Schultz, the then CEO of Starbucks, revolutionised the coffee industry by laying the foundation for a 13 000 store global coffee shop empire. How did he establish a foundation for such phenomenal growth? In this feature we will take a close look at some of the specific things that Howard Schultz and his Starbucks team did to create a revolutionary growth business in a stagnant industry segment. We will also examine how and why, after such a long period of profitable growth, the company is now struggling to keep that trend going.

The roots

Starbucks began in 1971 when three academics opened a store called Starbucks Coffee, Tea, and Spice in the touristy Pikes Place Market in Seattle. The original Pikes Place store featured modest, hand-built nautical fixtures, sold whole-bean coffees and coffee products and did not offer freshly-brewed coffee by the cup. The store was an immediate success, with sales exceeding expectations. By the early 1980s, the company had four Starbucks stores in the Seattle area and could boast of having been profitable every year since opening its doors. In 1981, Howard Schultz, vice president and general manager of US operations for Hammarplast – a Swedish maker of stylish kitchen equipment and housewares – noticed that Starbucks was placing very large orders for a certain type of drip coffeemaker. Curious to learn what was going on, he decided to pay the company a visit. On his visit to Seattle from New York, the combination of aroma, taste, authenticity and vibe within the Starbucks store had him hooked.

Schultz loved the Starbucks owners’ deep knowledge of coffee and their commitment to providing quality products and educating customers about the merits of dark roasted coffees. On his trip back to New York, Schultz could not stop thinking about Starbucks and what it would be like to be a part of the Starbucks enterprise. “There was something magic about it, a passion and authenticity I had never experienced in business,” he recalled. By the time Schultz landed at Kennedy Airport, he knew he wanted to go to work for Starbucks and after a year of persuasion, he talked the owners into giving him a job as head of marketing for the company.

Key learning let passion drive you –

From the outset, Starbucks was driven by people who had a deep passion for what they were doing. Howard Schultz was so passionate about the Starbucks product, the brand and the experience that he spent a year trying to convince the original owners of Starbucks to give him a lower paying, less secure, less prestigious job in a city on the other side of the United States from where he currently resided. If you are not driven by this level of passion in your business then you will probably be superceded by someone who is. Passion is the bedrock for an effective growth effort.

The vision

Schultz spent the first few months at Starbucks learning about the intricacies of coffee – from roasting and brewing to taste and smell. In his first few months he was also overflowing with ideas but his biggest idea for the future of Starbucks came during the spring of 1983 when the company sent him to Milan to attend an international housewares show. There, he discovered the concept of an espresso bar. A small shop in which a lively, friendly barista (counter worker) served hand crafted espresso-based drinks. Schultz judged the barista’s performance as “great theatre.” What struck Schultz was how popular and vibrant the Italian coffee bars were. Energy levels were high and the bars seemed to function as a community gathering place. Schultz was particularly struck by the fact that there were 1 500 coffee bars in Milan and a total of 200 000 in all of Italy. His mind started churning.

Schultz’s first few days in Milan produced a revelation: The Starbucks stores in Seattle completely missed the point. Starbucks, he decided, needed to serve freshly brewed coffee, espresso, and cappuccino in its stores (in addition to beans and coffee equipment). Going to Starbucks should be an experience, a special treat; the stores should be a place to meet friends and visit. Recreating the Italian coffee bar culture in the United States could be Starbucks’ differentiating factor.

On returning to the US, Schultz shared his revelation with the Starbucks owners but they disapproved. They feared that serving drinks would put them in the beverage business and dilute the integrity of Starbucks’ mission as a coffee store. It took Schultz nearly a year to convince the owners to let him test the espresso bar concept. In April 1984, in Starbucks’ sixth store in downtown Seattle, Schultz set up a small espresso bar in a corner of the new store. There was no pre-opening marketing blitz and no sign announcing: Now Serving Espresso. The lack of fanfare was part of a deliberate experiment to see what would happen. By closing time on the first day, some 400 customers had been served, well above the 250 customer average of Starbucks’ best-performing stores. Within two months the store was serving 800 customers per day. The two baristas could not keep up with orders during the early morning hours, resulting in lines outside the door onto the sidewalk. Most of the business was at the espresso counter; sales at the regular retail counter were only adequate.


Key learning experiment and adapt –

Throughout the growth years of Starbucks, the people within the company engaged in deliberate experiments. One of the defining contributors to growth and innovation has been their willingness to experiment. Howard Schultz tested his initial idea of selling brewed coffee by experimenting in a store. He continued to experiment with ideas throughout his time at the helm of the company. He experimented with new products, different store formats, alternative partnership arrangements and various in-store music mixes. From each of these experiments, he learned and adapted. When an experiment seemed to work, he would roll it out to all the Starbucks stores; when it did not work he tried something else until he stumbled upon a winning solution.

Breaking away

In spite of the success of the experiment, the original owners still did not want to sell beverages inside the stores, prompting Schultz to leave Starbucks and start his own company. His plan was to open espresso bars in high traffic downtown locations that would emulate the friendly, energetic atmosphere he had encountered in Italian espresso bars. By 1986 he had opened his first Il Giornale coffee bar in downtown Seattle. By closing time on the first day, 300 customers had been served and after making some small changes to the store format, within six months, Il Giornale was serving more than 1 000 customers a day. Then Il Giornale opened a second store in another downtown building and a third store was opened in Vancouver, British Columbia, in April 1987. Vancouver was chosen to test the transferability of the company’s business concept outside Seattle. To reach his goal of opening 50 stores in five years, Schultz needed to dispel doubts about geographic expansion.

Reintegration

In March 1987 the original Starbucks owners decided to sell the whole Starbucks operation. Schultz knew immediately that he had to buy it. Within weeks he had raised the $3,8 million (around $31 million in today’s terms at a 10% annual escalation) needed to buy Starbucks. The acquisition was completed in August 1987. The new name of the combined companies was Starbucks Corporation.

Schultz told the Starbucks employees that his vision was for Starbucks to become a national company with values and guiding principles that employees could be proud of. The new Starbucks had a total of nine stores. The business plan Schultz had presented to investors called for the new company to open 125 stores in the next five years – 15 in the first year, 20 in the second, 25 in the third, 30 in the fourth and 35 in the fifth. Revenues were projected to reach $60 million in 1992.

In the following several months, a number of changes were instituted. To symbolise the merging of the two companies and their cultures, a new logo was created that melded the Starbucks and Il Giornale logos. The Starbucks stores were equipped with espresso machines and remodeled to look more Italian than Old World nautical. The traditional Starbucks brown was replaced by Il Giornale green. The result was a new type of store – a cross between a retail coffee bean store and an espresso bar/café – that became the signature format of Starbucks in the 1990s.

 

New markets

The arrival of Starbucks in Chicago proved far more troublesome than management had anticipated. The first Chicago store opened on 27 October 1987, the day the stock market crashed. Three more stores were opened in Chicago over the next six months, but customer counts were substantially below expectations – Chicagoans didn’t take to dark roasted coffee as fast as Schultz had anticipated. Store margins were squeezed for a number of reasons: It was expensive to supply fresh coffee to the Chicago stores out of the Seattle warehouse, and both rents and wage rates were higher in Chicago than in Seattle. Gradually, customer counts improved, but Starbucks lost money on its Chicago stores until 1990, when prices were raised to reflect higher rents and labour costs. More experienced store managers were hired and a critical mass of customers caught on to the taste of Starbucks products.

Portland, Oregon, was the next market entered, and Portland coffee drinkers took to Starbucks products quickly. By 1991, the Chicago stores had become profitable and the company was ready for its next big market entry. Management decided on California because of its host of neighbourhood centres and the receptiveness of Californians to innovative, good quality food. Los Angeles was chosen as the first Californian market to enter, principally because of its status as a trendsetter and its cultural ties to the rest of the country. LA consumers embraced Starbucks quickly.When store expansion targets proved easier to meet than Schultz had originally anticipated, he upped the numbers to keep challenging the organisation. Starting from a base of 11 stores, Starbucks opened 15 new stores in fiscal 1988, 20 in 1989, 30 in 1990, 32 in 1991, and 53 in 1992 – producing a total of 161 stores. The opening of 150 new stores in five years significantly exceeded the 1987 business plan objective of 125.

Financing growth

From the outset, the strategy was to open only company-owned stores; franchising was avoided to retain full control of the quality of Starbucks’ products and the character and location of its stores. But company ownership of all stores required Starbucks to raise new venture capital, principally by selling shares to new or existing investors, to cover the cost of expansion. Starbucks was able to raise the needed funds despite posting losses of $330 000 in 1987, $764 000 in 1988, and $1,2 million in 1989. While the losses troubled Starbucks directors and investors, Schultz’s business plan had forecast losses during the early years of expansion. At a particularly tense board meeting where directors sharply questioned him about the lack of profitability, Schultz said: “Look, we’re going to keep losing money until we can do three things. We have to attract a management team well beyond our expansion needs. We have to build a world class roasting facility. And we need a computer information system sophisticated enough to keep track of sales in hundreds and hundreds of stores.” Schultz argued for patience as the company invested in the infrastructure to support continued growth well into the 1990s. He contended that hiring experienced executives ahead of the growth curve, building facilities far beyond current needs, and installing support systems laid a strong foundation for rapid, profitable future growth. His arguments carried the day with the board and with investors, especially since revenues were growing approximately 80% annually and customer traffic at the stores was meeting or exceeding expectations. Starbucks became profitable in 1990 and profits increased every year thereafter until 2007.


Employee relations

Howard Schultz strongly believed that the success of Starbucks was heavily dependent on customers having a very positive experience in its stores. This meant having store employees who were knowledgeable about the company’s products and paid attention to detail, who eagerly communicated the company’s passion for coffee and had the skills and personality to deliver consistently pleasing customer service. Many of the baristas were in their 20s and worked part-time, going to college or pursuing other career activities on the side. The challenge to Starbucks, in Schultz’s view, was how to attract, motivate, and reward store employees in a manner that would make Starbucks a company that people would want to work for and that would result in higher levels of performance. Moreover, Schultz wanted to cement the trust that had been building between management and the company’s workforce. As part of this strategy, he invested heavily in staff training programmes, making the training fun and innovative. He also began providing part-timers working 20 or more hours per week with the same health coverage as full-time employees. This laid the foundation for a strong bond between the company and all its employees. This relationship was strengthened in 1991, when a plan, dubbed Bean Stock, granted each employee stock options in the company, effectively giving them an ownership share in the company in which they worked. At this time, Starbucks dropped the term employee and began referring to its entire workforce as partners. Starbucks was able to attract motivated people with above average skills and good work habits not only because of its fringe benefit programme but also because of its pay scale. Store employees were paid $6 to $8 per hour, well above the minimum wage.

Accommodating fast growth also meant putting in systems to recruit, hire, and train baristas and store managers. Every partner/barista hired for a retail job in a Starbucks store received at least 24 hours of training in the first two to four weeks. The training included classes on coffee history, drink preparation, coffee knowledge, customer service, and retail skills, plus a workshop called “Brewing the Perfect Cup.” Management trainees attended classes for 8 to 12 weeks. Their training went much deeper, covering not only the information imparted to baristas but also the details of store operations, practices and procedures as set forth in the company’s operating manual, information systems, and the basics of managing people. Starbucks’ trainers were all store managers and district managers with on-site experience. One of their major objectives was to ingrain the company’s values, principles, and culture and to impart their knowledge about coffee and their passion for Starbucks.

Key Learning  Export the Culture –

One of the primary challenges in growing a business is trying to keep a culture and a company ideology alive as operations become more and more dispersed. Culture tends to develop naturally within a small business when most people work closely with the leader. As a company grows, the leader needs to be more deliberate and purposeful in ensuring that people buy into and live out a core set of values and principles that represent the culture of the organisation. Schultz ensured that the Starbucks culture was instilled in new employees in stores across a wide geographic region by investing heavily in training, giving people a reason to feel connected and loyal to the company and establishing regional management teams that would be accountable for the culture in stores in a particular area.

Going public

Starbucks’ initial public offering (IPO) of common stock in June 1992 turned into one of the most successful IPOs of the year. With the capital afforded it by being a public company, Starbucks accelerated the expansion of its store network. But, its success spurred the development of other specialty coffee products across the US and competitors – some imitating the Starbucks model – began to spring up in many locations.

Growth strategy

In 1992 and 1993 Starbucks developed a three-year geographic expansion strategy that targeted areas which not only had favourable demographic profiles but could also be serviced and supported by the company’s operations infrastructure. For each targeted region, Starbucks selected a large city to serve as a “hub”; teams of professionals were located in hub cities to support the goal of opening 20 or more stores in the hub in the first two years. Once stores blanketed the hub, additional stores were opened in smaller, surrounding “spoke” areas in the region. To oversee the expansion process, Starbucks created zone vice presidents to direct the development of each region and implant the Starbucks culture in the newly opened stores. The Starbucks store launches grew steadily more successful and in 1995, new stores generated an average of $700 000 in revenue in their first year, far more than the average of $427 000 in 1990. This was partly due to the growing reputation of the Starbucks brand but it was also attributable to the company’s ability to select excellent sites. Starbucks had the best real estate team in the coffee bar industry and a sophisticated system that enabled it to identify not only the most attractive individual city blocks but also the exact store location that was best. The company’s site location track record was so good that by 1997 it had closed only two of the 1 500 sites it had opened.

Key learning  location, location, location –

Location is a critical part of the growth recipe for certain businesses. For any store-based retail business and a myriad of different services businesses, location can be critical. Getting the location right for a single store can be tough but finding quality locations on an ongoing basis as you try growing an enterprise to multiple locations is a whole new challenge. It has been shown time and time again that location can have a major impact on the success or failure of a new store; therefore it is essential that if your business is location dependent, you should develop a strategy and system for finding quality locations before you embark on a massive growth effort.

The Starbucks Experience
 
Starbucks management regarded each store as a billboard for the company and a contributor to building the company’s brand and image. Each detail was scrutinised to enhance the mood and ambience of the store, to make sure everything signalled “best of class” and reflected the personality of the community and the neighbourhood. The thesis was “Everything matters.” The company went to great lengths to make sure the store fixtures, the merchandise displays, the colours, the artwork, the banners, the music and the aromas all blended to create a consistent, inviting, stimulating environment that evoked the romance of coffee, signalled the company’s passion for coffee, and rewarded customers with ceremony, stories and surprise. To keep the coffee aromas in the stores pure, Starbucks banned smoking and asked employees to refrain from wearing perfumes or colognes. Prepared foods were kept covered so customers would smell only coffee. Colourful banners and posters were used to keep the look of Starbucks stores fresh and in keeping with seasons and holidays. To make sure that Starbucks stores measured up to standards, the company used “mystery shoppers” who posed as customers and rated each location on a number of criteria.


Key learning  details matter –

When you are trying to grow a business, details count. Growth equals new customers and new customers often engage with a business on a test basis. Because new customers have no loyalty to the company, if a small detail is not taken care of, they are likely to go elsewhere. When one is trying to grow a business it is easy to let the details slide or assume that someone else, further down the chain of command, will take care of the details. But they won’t. Schultz and his team were sticklers for detail and this created a consistent image and quality experience for customers as they rolled out more and more stores.

Management team

Schultz continued to strengthen the top management team of Starbucks, hiring people with extensive experience in managing and expanding retail chains. Orin Smith, who had an MBA from Harvard and 13 years of experience at Deloitte, was brought in as chief financial officer in 1990 and then promoted to president and chief operating officer in 1994. The three key executives during the company’s growth years – Howard Schultz, Howard Behar and Orin Smith – contributed the most to defining and shaping its values, principles, and culture. As the company grew, additional executives were added in marketing, store supervision, specialty sales, human resources, finance, and information systems. Schultz also took care to add people to the Starbucks board of directors who had experience growing a retail chain and could add valuable perspectives.

Key Learning  Build a Balanced Management Team – People enable business growth and managers, in particular, make the difference between a successful and an unsuccessful growth effort. One of the critical things that Howard Schulz did that enabled him to grow Starbucks so quickly and effectively was to put a balanced management team in place. Each of the three key executives played a very particular role in the business – Schultz was the visionary and the innovator, primarily concerned with strategy; Behar focused intensely on the people in the business, making sure that the human side of the business was nurtured and Smith was the detailed operator, he oversaw the company’s finances and operations. These three, working synergistically together had the right combination of trust, diverse skills and alternate viewpoints to be a catalyst and enabler of massive growth. If you don’t have the right management team in place you won’t grow effectively.

International expansion

In markets outside the continental United States, the strategy of Starbucks was to license a reputable and capable local company with retailing know-how in the target host country to develop and operate new Starbucks stores. In some cases, Starbucks was a joint venture partner in the stores outside the continental Untied States. Starbucks created a new subsidiary, Starbucks Coffee International (SCI), to orchestrate overseas expansion and begin to build the Starbucks brand name globally via licensees.

Success Leads to Struggles

Starbucks’ performance record since its 1992 IPO made it, for many years, a darling of the investment community. Between 1995 and 2005, the company’s stock rose from about $2 to more than $30. The company’s revenues had grown to over $9 billion and it had 13 000 stores across the globe. But in late 2006, Starbucks’ stock began a seemingly relentless descent, losing more than half its value in 15 months. From a value near $39 in November, 2006, it dropped to less than $19 in early 2008. In February 2007, Schultz, then the company chairman, sent a memo to senior management suggesting that recent decisions at the firm had led to the “watering down of the Starbucks experience” and “commoditisation of the [Starbucks] brand”. Later that year, Starbucks reported a first ever decline in same-store sales. In January 2008, Schultz decided to replace CEO Jim Donald and return as the company’s chief executive, a position he had last held in 2000.

By 2007, Starbucks Coffee Company had become the largest specialty coffee retailer in the world, with more than 13 000 stores globally and revenues in excess of $9 billion. To reach this store count, the company had opened units at a remarkably rapid rate. “Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1 000 stores to 13 000 stores and beyond, we have had to make a series of decisions that, in retrospect, have led to the watering down of the Starbucks experience, and, what some might call the commoditisation of our brand… We desperately need to look into the mirror and realise it’s time to get back to the core and make the changes necessary to evoke the heritage, the tradition, and the passion that we all have for the true Starbucks experience… We have built the most trusted brand in coffee in the world, and we have an enormous responsibility to both the people who have come before us and the 150 000 partners and their families who are relying on our stewardship.

Key Learning  Growth is Not Never-Ending –

The reality is that a recipe for growth will never last for ever. Some companies may be able to grow effectively for a few months, others such as Starbucks may manufacture years of profitable growth. But any growth strategy that is pushed too far will lead to decline. The challenge for business owners is to foresee how long a growth phase will last and then to revise, reinvent and reinvigorate the company before the initial strategy stagnates.

The success of Starbucks has attracted many competitors into most markets in which they operate. Almost every town or region has a local chain of coffee shops modelled along the lines of Starbucks, and large multinational chains such as MacDonald’s and Dunkin Doughnuts were lured into the coffee market, competing on price for Starbucks customers. These competitors all had the potential to erode the Starbucks customer base and cause a decline in revenues and profits. In addition to that, the more a business grows, the more challenging it becomes to find good quality retail locations. There is only a finite number of really good retail locations in any one area and, to keep growth going, companies are often tempted to settle for second-rate locations. A second-rate location can be the difference between profit and loss in a store and the lower the quality of locations that a company is tempted to accept (to fuel growth) the greater the losses can become.

Conclusion

Real life stories create an excellent context to learn about the complexity and realities of business. The story of Starbucks, as described here, provides insight into what it really takes to grow a business, how one can increase success when growing a business and how business growth cannot be expected to continue into perpetuity.

Whether you want to expand your current operation from R100 000 in annual revenue to R1 million or whether you are looking to go from R50 million to R500 million, the lessons from Starbucks over many years of profitable growth provide definitive actions that you can implement to increase your chances of success.

Every business’s growth path will be different, with different obstacles to overcome and different breakthroughs along the way, but for everyone choosing to embrace the challenge of growing a business, the following items should serve as an effective guide.

The (Starbucks) Recipe for Growth

1. Let passion drive you

2. Experiment and adapt

3. Export the culture

4. Location, location, location

5. Build a balanced management team

6. BUT BEWARE: Growth is not never-ending

Greg Fisher, PhD, is an Assistant Professor in the Management & Entrepreneurship Department at the Kelley School of Business, Indiana University. He teaches courses on Strategy, Entrepreneurship, and Turnaround Management. He has a PhD in Strategy and Entrepreneurship from the Foster School of Business at the University of Washington in Seattle and an MBA from the Gordon Institute of Business Science (GIBS). He is also a visiting lecturer at GIBS.

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Entrepreneur Profiles

Expert Advice From Property Point On Taking Your Start-Up To The Next Level

Through Property Point, Shawn Theunissen and Desigan Chetty have worked with more than 170 businesses to help them scale. Here’s what your start-up should be focusing on, based on what they’ve learnt.

Nadine Todd

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Vital Stats

  • Players: Shawn Theunissen and Desigan Chetty
  • Company: Property Point
  • What they do: Property Point is an enterprise development initiative created by Growthpoint Properties, and is dedicated to unlocking opportunities for SMEs operating in South Africa’s property sector.
  • Launched: 2008
  • Visit: propertypoint.org.za

Through Property Point, Shawn Theunissen and his team have spent ten years learning what makes entrepreneurs tick and what small business owners need to implement to become medium and large business owners. In that time, over 170 businesses have moved through the programme.

While Property Point is an enterprise development (ED) initiative, the lessons are universal. If you want to take your start-up to the next level, this is a good place to start.

Risk, reputation and relationships

“We believe that everything in business comes down to the 3Rs: Risk, Reputation and Relationships. If you understand these three factors and how they influence your business and its growth, your chances of success will increase exponentially,” says Shawn Theunissen, Executive Corporate Social Responsibility at Growthpoint Properties and founder of Property Point.

So, how do the 3Rs work, and what should business owners be doing based on them?

Risk: We can all agree that there will always be risks in business. It’s how you approach and mitigate those risks that counts, which means you first need to recognise and accept them.

“We always straddle the line between hardcore business fundamentals and the relational elements and people components of doing business,” says Shawn. “For example, one of the risks that everyone faces in South Africa is that we all make decisions based on unconscious biases. As a business owner, we need to recognise how this affects potential customers, employees, stakeholders and even ourselves as entrepreneurs.”

Reputation: Because Property Point is an ED initiative, its 170 alumni are black business owners, and so this is an area of bias that they focus on, but the rule holds true for all biases. “In the context of South Africa, small black businesses are seen as higher risk. To overcome this, black-owned businesses should focus on the reputational component of their companies. What’s the track record of the business?”

A business owner who approaches deals in this way can focus on building the value proposition of the business, outlining the capacity and capabilities of the business and its core team to deliver how the business is run, and specific service offerings.

“From a business development perspective, if you can provide a good track record, it diminishes the customer’s unconscious bias,” says Shawn. “Now the entrepreneur isn’t just being judged through one lens, but rather based on what they have done and delivered.”

Related: Property Point Creates R1bn In Procurement Opportunities For Small Businesses

Relationship: “We believe that fundamentally people do business with people,” says Shawn. “There needs to be culture match and fluency in terms of relations to make the job easier. As a general rule, the ease of doing business increases if there is a culture match.”

This relates to understanding what your client needs, how they want to do business, their user experience and customer experience. “We like to call it sharpening the pencil,” says Desigan Chetty, Property Point’s Head of Operations.

“In terms of value proposition, does your service offering focus on solving the client’s needs? Is there a culture match between you and your client? And if you realise there isn’t, can you walk away, or do you continue to focus time and energy on the wrong type of service offering to the wrong client? This isn’t learnt over- night. It takes time and small but constant adjustments to the direction you’re taking.”

In fact, Desigan advises walking away from the wrong business so that you can focus on your core competencies. “If you reach a space where you work well with a client and you’ve stuck to your core competencies, business is just going to be easier. It becomes easier for you to deliver. Sometimes entrepreneurs stretch themselves to try to provide a service to a client that’s not serving either of their needs. This strategy will never lead to growth — at least not sustainable growth.”

Instead, Desigan recommends choosing an entry point through a specific offering based on an explicit need. “Too often we see entrepreneurs whose offerings are so broad that they don’t focus,” he says. “Instead, understand what your client’s need is and address that need, even if it means that it’s only one out of your five offerings. Your likelihood of success if you go where the need is, is much higher.

“Once you get in, prove yourself through service delivery. It’s a lot easier to on-sell and cross sell once you have a foot in the door. You’re now building a relationship, learning the internal culture, how things work, what processes are followed and so on — the client’s landscape is easier to navigate. The challenge is to get in. Once you’re in, you can entrench yourself.”

Desigan and Shawn agree that this is one of the reasons why suppliers to large corporates become so entrenched. “Once you’re in, you can capitalise from other needs that may have emanated from your entry point and unlock opportunities,” says Shawn.

Building a sustainable start-up

While all start-ups are different, there are challenges most entrepreneurs share and key areas they should focus on.

Shawn and Desigan share the top five areas you should focus on.

1. Align and partner with the right people

This includes your staff, stakeholders, partners, suppliers and clients. Partnerships are the best thing to take you forward. The key is to collaborate and partner with the right people based on an alignment of objectives and culture. It’s when you don’t tick all the boxes that things don’t work out.

2. Make sure you get the basics right

Never neglect business fundamentals. Do you have the processes and systems in place to scale the business?

3. Understand your value proposition

Are you on a journey with your clients? Is your value proposition aligned to the need you’re trying to solve for your clients? Are you looking ahead of the curve — what’s the problem, what are your clients saying and are you being proactive in leveraging that relationship?

Related: Want To Start A Property Business That Buys Property And Rents It Out?

4. Unpack your value chain

If you want to diversify, understand your value chain. What is it, where are the opportunities both horizontally and vertically within your client base, and what other solutions can you offer based on your areas of expertise?

8. Don’t ignore technology

Be aware of what’s happening in the tech space and where you can use it to enable your business. Tech impacts everything, even more traditional industries. Businesses that embrace technology work smarter, faster and often at a lower cost base.

Ultimately, Desigan and Shawn believe that success often just comes down to attitude. “We have one entrepreneur in our programme who applied twice,” says Shawn. “When he was rejected, he listened to the feedback we gave him and instead of thinking we were wrong, went away, made changes and came back. He was willing to learn and open himself up to different ways of approaching things. That business has grown from R300 000 per annum to R20 million since joining us.

“Too many business owners aren’t willing to evaluate and adjust how they do things. It’s those who want to learn and embrace change and growth that excel.”

Networking, collaborating and mentoring

Property Point holds regular networking sessions called Entrepreneurship To The Point. They are open to the public and have two core aims. First, to provide entrepreneurs access to top speakers and entrepreneurs, and second, to give like-minded business owners an opportunity to network and possibly even collaborate.

“We believe in the power of collaboration and networking,” says Desigan.

“Most of our alumni become mentors themselves to new entrants to the programme. They want to share what they have learnt with other entrepreneurs, but they also know that they can learn from newer and younger entrepreneurs. The business landscape is always changing. Insights can come from anywhere and everywhere.”

The To The Point sessions are designed to help business owners widen their network, whether they are Property Point entrepreneurs or not.

To find out more, visit www.ettp.co.za

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Entrepreneur Profiles

Bain & Company Give You The Data On How To Become 40% More Productive

Top performing organisations get more done by 10am on a Thursday than most companies achieve in a full week. They don’t have more talented employees than everyone else though — they’re working with the same people and tools as you. Michael Mankins unpacks what separates these businesses from everyone else, and how you can learn to be more like them.

Nadine Todd

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Vital Stats

“Engaged employees are 45% more productive than satisfied employees. An inspired employee is 55% more productive than an engaged employee and 125% more productive than a satisfied employee.”

When Bain & Company partner, Michael Mankins evaluates businesses, he clearly distinguishes between efficiency and productivity. Efficiency is producing the same amount with less — in other words, finding and eliminating wastages. Productivity, on the other hand, is producing more with the same, which requires an increased output per unit of input and removing obstacles to productivity.

Interestingly, when businesses face challenges or tough operating conditions, the first response is always to become more efficient, instead of more productive. Restructuring and ‘rightsizing’ are the result. The problem, says Michael, is that when companies take people out, they don’t take the work out, and so the people end up coming back, along with the costs.

A better response, he says, is to identify the work that could be removed to free up time, which could then be invested in producing higher levels of output.

While businesses have become very good at tracking the productivity levels of blue-collar and manufacturing workers, tracking the productivity of knowledge workers is entirely different.

“There’s no data around white-collar productivity,” says Michael. “The problem is that the world is shifting towards knowledge work, and so, if we can’t measure productivity, output and obstacles in that space, businesses will never get the great levels of performance they’re looking for.”

Because of a complete lack of statistics in this area, when Michael and his colleague, Eric Garton, were approached by Harvard Business Review Press to write a book dealing with this issue, they had to devise a way of looking at the relative productivity of organisations comprised of white-collar workers.

The results were unexpected. “We were asked to research the difference between top performing organisations (the top quartile) compared to average organisations. I honestly thought the answers would be obvious, even if we didn’t yet have the tools to track them. I thought the best companies would have the best people. That’s 90% of the answer. Simple as that.”

As it turned out, it wasn’t that simple at all. Of the 308 organisations in the study, drawn from a global pool, the average star performer or A-player was one in seven employees. This statistic held true whether the company was in the top 25% of performers or an average performer. The difference was that the top performing businesses were 40% more productive than their counterparts — and yet their mix of talent, on average, was the same.

“There were some exceptions, but on the whole, the best in our research accomplishes as much by 10am on a Thursday as the rest do the whole week. And they continue to innovate, serve customers and execute on great ideas — all with the same percentage of A-players as other, more mediocre businesses.”

Related: (Slideshow) Top Advice From Local Entrepreneurs That Will Change Your Business In 2019

So, what were the differentiating factors?

What’s dragging your organisation down?

First, we need to understand how Michael and Eric approached their research before we can understand — and implement — their conclusions.

“We began with the notion that every company starts with the ability to produce 100 if they have a workforce that’s comprised of average talent, that’s reasonably satisfied with their job and can dedicate 100% of their time to productivity — bearing in mind that no-one can dedicate 100% of their time to productive tasks.

“The question we were focusing on was around bureaucratic procedures, complex processes and anything else that wastes time and gets in the way of people getting things done, but doesn’t lead to higher quality output or better service to customers. That’s what we call organisational drag. You start at 100 and then the organisation drags you down. The good news is that you can make up for organisational drag in three ways: First, you can make better use of everyone’s time. Second, you can manage your talent better by deploying it in smarter ways, which includes placing it in the right roles, teaming it more effectively and leading it more effectively. Third, you can unleash the discretionary energy of your workforce by engaging them more effectively.”

This trifecta — time, talent and energy — became the basis for Michael and Eric’s book, Time, Talent, Energy: Overcome Organizational Drag & Unleash Your Team’s Productive Power. “The way you manage the scarce resource of talent can make up for some, potentially even all, of what you lose to organisational drag,” says Michael.

What the research revealed: Time

time-management-productivity

“Wasted time is not an individual problem,” says Michael. “It’s an organisational problem. The symptoms include excess emails and meetings and far more reports being generated than the business needs to operate.”

These are all manifestations of an underlying pathology of organisational complexity, which is managed by senior leadership. “The best companies lose about 13% of their productive activity to organisational drag. The rest lose 25%. The most important thing is to reduce the number of unnecessary interactions that workers are having. That means meetings and ecommunications need to be relooked.”

The easiest manifestation for Michael and Eric to observe were hours committed to meetings and how much time workers spend dealing with ecommunications. What’s left-over is the time people can actually get some work done.

What they found is that the average mid-level manager works 46 hours a week. 23 hours are dedicated to meetings and another ten hours to ecommunication. That leaves 13 hours to get some work done — except that it doesn’t.

“It’s difficult to do deep work in periods of time less than 20 minutes. When we subtracted all the other distractions that happen daily, we were left with just six and a half hours each week to do work.” What’s even scarier about this statistic is the fact that meeting work and ecommunication time is increasing by 7% to 8% each year and doubles every nine years. If left unchecked, no-one will have the time to get any work done. “This is why everyone plays catch-up after hours and on weekends,” says Michael.

“One of my clients told me that his most productive meeting is at 6.30am on a Saturday, because it doesn’t involve one minute that isn’t required or one individual that doesn’t absolutely need to be there. If the same meeting was held at 2pm on a Tuesday, there’d be twice as many people, it would be twice as long and there’d probably be biscuits.”

The point is clear: We don’t treat time as the precious resource that it is, and if we did, we would radically shift our behaviour.

Start by asking what work needs to be done and then figure out the best structure to do that work. “Don’t confuse having a lean structure that does the wrong work with being effective,” says Michael. “One of the biggest problems we see is that companies are not particularly good at stopping things. Things get added incrementally, but nothing ever gets taken away. For example, we found that 62% of the reports generated by one of our clients had a producer — but no consumer. Time, attention and energy was invested in reports that no one needed and no one read.

“Ask yourself: How many initiatives have you shut down? If you made the decision that you could only do ten initiatives effectively, and each time you added an initiative, one had to be eliminated, what would your organisation look like?

“Unless you routinely clean your house, it gets cluttered. The same is true of companies. Initiatives spawn meetings, ecommunications and reports, which all lead to organisational drag.”

What the research revealed: Talent

According to Michael, the biggest element in their research that explained the 40% differential in productivity is the way that top performing organisations manage talent.

“We conducted research in 2017 that revealed the productivity difference between the best workers and average employees. Everyone knows that A-level talent can make a big difference to an organisation’s performance, but not everyone knows just how big that difference is.”

To put it in context, the top developer at Apple writes nine times more usable code than the average software developer in Silicon Valley. The best blackjack dealer at Caesars Palace in Las Vegas keeps his table playing at least five times as long as the average dealer on the Strip. The best sales associate at Nordstrom sells at least eight times as much as the average sales associate walking the floor at other department stores. The best transplant surgeon at Cleveland Clinic has a patient survival rate at least six times longer than that of the average transplant surgeon. And the best fish butcher at Le Bernadin restaurant in New York can portion as much fish in an hour as the average prep cook can manage in three hours.

It doesn’t matter what industry you investigate, A-level talent is exponentially more productive than everyone else.

This is why Michael thought that the obvious answer to why some organisations perform better than others is the mix of talented employees they’ve attracted.

“When we asked senior leaders to estimate the percentage of their workforce that they would classify as top performers or A-level talent, the average response was slightly less than 15%. And that’s despite the fact that most companies have spent vast sums of money in the so-called war for talent.”

The big difference, as Michael and Eric discovered, is how that talent is deployed. “It’s what they do with that one in seven employees that makes the biggest difference,” says Michael. “Most companies use a model called unintentional egalitarianism, which basically means that they spread star talent across all roles. The best on the other hand, are more likely to deploy intentional non-egalitarianism. They ensure that business-critical roles are held by A-level talent.”

The challenge is that approximately 5% of the roles in most companies explain 95% of a company’s ability to execute its strategy, and very few organisations articulate which roles those are — but the ones that do tend to be top performers.

“There’s an excellent historical example of this at work,” says Michael. “Between 1988 and 1994, Gap was a high-flyer in the retail sector. They performed globally on all levels — they grew faster than anyone else, were more profitable, had higher shareholder returns, and were the most admired company.

“During that time period, the organisation was led by Mickey Drexler, and his strategy was to focus on what he believed was Gap’s critical role, which was merchandising. He wanted every merchandiser to be a star. ‘No one will tell us what the colour is this year — we’re going to tell the world. We’re going to determine which styles are in and what everyone will be wearing.’

“And they did. If you want proof that Gap’s merchandisers were in fact stars during that period, you can look at today’s CEOs and COOs of the world’s largest retailers. Most of them were merchandisers at Gap during those years.”

The challenge of course is that everyone is always trying to hire stars, and yet only 15% of employees can be described as A-level talent. What can organisations do to utilise their stars wisely?

“First, move a star into a different position if they’re not in a business-critical role. To achieve this, how you define a star might have to change. Some companies hire for positions, and others hire for skills across positions. Stars, in my view, are more the latter. They can learn different skills and fill different roles.

“Second, start defining your business-critical roles. If you ask executives what percentage of their roles are business critical, most say 54%. They’re not discerning. It’s unintentional, because they don’t want to signal to their workers who aren’t in a business-critical role that they’re not as valuable to the organisation, but the reality is that people figure it out anyway, and you just end up with business-critical roles that aren’t filled by the right people, and stars in positions that anyone else could fill.”

Related: Entrepreneur Erik Kruger On The Importance Of Clarity And Embracing Failure

Teams perform better than individuals

To understand how important teams are when deploying talent, Michael uses an example from the world of racing — Nascar in the US to be precise.

“Between 2008 and 2011, there was one pit crew that outperformed everyone else on the track,” he says. “A standard pit stop is 77 manoeuvres, and this crew could complete them in 12,12 seconds, which was faster than any other team. However, if you took one team member out and substituted them with an average team member, that time jumped to 23 seconds. Substitute a second team member, and it was now 45 seconds. The lesson is simple: As the percentage of star players on a team goes up, the productivity of that team goes up — and it’s not linear.”

Michael and Eric also discovered that the role leadership plays on team productivity is both measurable and exponential.

“In 2011, the National Bureau of Economic Research wanted to quantify the impact of a great boss on team productivity. They found that a great boss can increase the productivity of an average team by 11%, which is the same as adding another member to a nine-member team.

“If you take that same boss and put them in charge of an all-star team, productivity is increased by 18%, and this is with a team whose productivity was exponentially higher to begin with. Great bosses act as a force multiplier on the force multiplier of all-star teams.”

According to Michael and Eric’s research however, what most organisations tend to do is place a great boss with an under-performing team in the hopes of improving them, when what they should be doing is pairing great bosses with great teams.

“We did a survey that asked a simple question: When your company has a mission-critical initiative, how do you assemble the team? A: Based on whomever is available. B: Based on perceived subject matter expertise. C: We attempt to create balanced teams of A, B and C players to foster the development of the team. D: We create all-star teams and we put our best leaders in charge of them.

“We thought everyone would answer D. We were wrong. 30% of our bottom three quartiles answered B, closely followed by C, and then A. Only 8% of them answered D.

“The results were very different in our top-performing quartile though. There, 81% of respondents answered D. In other words, the 25% most productive companies in our study set were ten times more likely to assemble all-star teams with their best players than the remaining 75% of the organisations in our research.”

How talent is deployed makes a difference. “I recently had this highlighted for me through another sporting analogy. The world record for the 400-metre relay is faster than the 100-metre dash multiplied four times. How is that possible? When your role is clear and your position is clear, the handoff is seamless. Under these conditions, the best teams outperform a collection of the best individuals.” Michael does offer a word of advice though.

“Don’t fall into the trap of believing that if you do have the best talent, you don’t need to worry about anything else. I don’t believe that’s true. There are always higher levels of performance that can be achieved because there are always areas you can improve on.”

What the research reveals: Energy

According to Michael, employee engagement and inspiration is a hierarchy. “There are a set of qualifiers that have to be met just to feel satisfied in your job: You need to feel safe, have the resources you need, feel that you’re relatively unencumbered in getting your job done every day and that you’re rewarded fairly.

“To be engaged, these all need to meet, and more. Now you also need to feel part of a team, that you’re learning on the job, that you’re having an impact and that you have a level of autonomy.”

Inspiration takes this a step further. “Inspired employees either have a personal mission that is so aligned with the company’s mission that they’re inspired to come to work every day, or the leadership of their immediate supervisors is incredibly inspiring, or both.”

Why does this matter? Because how satisfied, engaged or inspired your employees are has a real, tangible impact on productivity. “Engaged employees are 45% more productive than satisfied employees. An inspired employee is 55% more productive than an engaged employee and 125% more productive than a satisfied employee.”

The really scary statistic is that 66% of all employees are only satisfied or even dissatisfied with their jobs, 21% are engaged, and only 13% are inspired. “These statistics are pretty constant, although top organisations can improve their engaged and inspired ratios,” says Michael. “What we found amongst those companies that did have more engaged and inspired workers was that they all tended to believe that inspiration can be taught. It’s not innate. You can become an inspirational leader with the right attitude and training.

“For example, one organisation surveys its employees every six months and specifically asks workers to rate how inspirational their leaders are. If you’re rated uninspiring by your team for the first time, you’re given training. If, six months later, you’re still rated uninspiring, you’re given access to a coach to evaluate why the tools aren’t working for you.

“By the third, two questions are asked: Should you be a leader, and should you be at the company? Many productive employees can be effective individual contributors but aren’t necessarily leaders, or aren’t happy as leaders, and would best serve the organisation in a different role. The second question is tougher, but even more important. If an inspired employee is 55% more productive than an engaged employee and 125% more than a satisfied employee, an uninspiring leader is a tax on the performance of the company, and there has to be a consequence to that. We have to constantly enrich our workforce and leaders need to be included in that.”

The problem is that very few organisations are asking how inspiring their leaders are. “If you don’t know if your employees are engaged or if your leadership is inspiring, you can’t address it,” he says. “You can take a satisfied employee and make them engaged, but you can’t inspire someone if they aren’t first engaged — that’s the hierarchy. Employee engagement is largely achieved through the way you manage teams. You have to give people the sense that they are having an impact, working within a team and learning. Get that right, and you’ll unlock a powerful level of discretionary energy that will drive productivity in your organisation.”

Related: How Yoco Successfully Secured Capital And The Importance Of A Pitch

Time, Talent, Energy: Overcome Organizational Drag and Unleash Your Team’s Productive Power, by Michael Mankins and Eric Garton, focuses on the scarcest resource companies possess — talent — and how it can be utilised to drive productivity.

Visit www.timetalentenergy.com to find out more.

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Entrepreneur Profiles

7 Foundational Values Of Brand Cartel And How They Grew an Iconic Business From The Ground Up

Marco Ferreira, Renate Albrecht and Dillon Warren built Brand Cartel, a through-the-line agency, that delivers exactly what they wanted — and has grown exponentially as a result.

Nadine Todd

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brand-cartel

Vital Stats

  • Players: Marco Ferreira, Renate Albrecht and Dillon Warren
  • Company: Brand Cartel
  • Launched: 2013
  • Visit: brandcartel.co.za

“We’d never worked at agencies, which meant we had no idea how much you need to run an agency. We grew into it. It’s made us really good at what we do.”

When Dillon Warren, Renate Albrecht and Marco Ferreira launched Brand Cartel in 2013 they were in their early 20s with zero agency experience between them. The idea had started when Marco recognised that social media was taking off, but no agencies were playing in that space yet. It was a clear opportunity.

Printing flyers that said ‘Your social media is so last season’, Marco and Renate went from store to store in Sandton City, pitching their services. When Dillon joined them a few months later because they needed someone to handle the company’s finances, they had two laptops between them, R6 000, which Dillon had earned from a Ricoffy advert, and sheer will and tenacity.

“We shared a house to save on rent and split everything three ways,” says Renate. “At one point we hadn’t eaten in two days. My mom lent me R500 so I could buy Futurelife and a bag of apples for the three of us.”

The trio hired their first employee soon after launching Brand Cartel, and after prioritising salaries and bills, there wasn’t much leftover. “Dillon actually paid us R67 each one month,” laughs Marco. “That’s what was left — although I still can’t believe he actually sent it to us.” It was at this point that the young business owners realised they needed credit cards if they were going to make it through their start-up phase — not an easy feat when your bank balance is under R100.

Related: What Comfort Zones? Get Comfortable With Being Uncomfortable Says Co-Founder Of Curlec: Zac Liew

“Looking back, those days really taught us the value of money,” says Dillon

We spent a lot of time with very little, and we’re still careful with money today.” Through it all though, the partners kept their focus on building their business. “It almost didn’t work for a long time. We were young and naïve, but in a way, that was our strength. We didn’t have any responsibilities, and we’d never worked at agencies, which meant we had no idea how much you need to run an agency. We grew into it. It’s made us really good at what we do. All of our business has been referral business. It takes time, but we focused on being the best we could be and giving everything we had to our clients. Our differentiator was that we really cared, and were willing to offer any solutions as long as they aligned with our values.”

This is how Brand Cartel has grown from a social media agency into PR and Media Buying, SEO and PPC Strategy, Digital and Print Design, Web Development, Campaign Strategy and now an Influencer division. “It’s an incredibly competitive space with low barriers to entry, which meant it was easy to launch, but tougher to build a client base,” says Renate. “I’d sometimes cry in my car between sales pitches, and then walk in smiling. We had no idea if we’d make it.”

The perseverance has paid off though. Strong foundations have laid the groundwork for exponential growth over the past year, with turnover growing almost ten-fold in 2017 thanks to relationship-building, strong referrals and fostering an internal culture and set of values that has driven the business to new heights as a team.

Like many start-ups, Renate, Dillon and Marco have made their fair share of hiring mistakes, but as the business grew and matured, the young entrepreneurs began to realise that the success of their business lay in the quality of their team and the values they stood for.

This meant two things: Those values needed to be formalised so that they could permeate everything Brand Cartel does, and they needed a team that lived, breathed and believed in them.

“We’ve had some nasty experiences,” admits Dillon. “You should always hire slowly and fire fast, and for five years we did the opposite. We’ve hired incredible people, but we’ve also ended up with individuals who didn’t align with our values at all, and that can destroy your culture.

Dillon, Marco and Renate realised they needed to put their values on paper. “We did an exercise and actually plotted people based on a score grading them against our values, so we knew where our issues were. We knew what we wanted to stand for, and who was aligned with those values. We were right; within a few weeks resignations came in and we mutually parted ways.”

The team that stayed was different. They embraced Brand Cartel’s values, and more importantly, it gave the partners a hiring blueprint going forward.

“Values are intangibles that you somehow need to make real, so it’s important to think about the language you use, and how they can be used in a real-world work context,” says Marco.

The team has done this in a number of ways. First, they chose ‘value phrases’ that can be used in conversation, for example, ‘check it, don’t wreck it’, and ‘are you wagging your tail?’ Team members can gently remind each other of the value system and focus everyone on a task at hand simply by referring to the company’s values. “In addition, when someone is not behaving according to those values, you can call them out on the value, which is an external thing, rather than calling them out personally,” explains Dillon.

Related: How Matthew Piper And Karidas Tshintsholo Launched Their First Business From Their UCT Dorm Rooms

Second, all performance reviews are based on the values first. This means everyone in the organisation begins any interaction from a place of trust, knowing they are operating according to the same value system.

“When you’re in a production environment with jobs moving through a pipeline, there can be problems and delays,” explains Marco. “Instead of pointing fingers when something is over deadline or a mistake is made, our team can give each other the benefit of the doubt and work together. They trust each other, which creates cohesion. We all work as a team, which impacts the quality of our work and the service we offer our clients.”

The system is simple. Coaches will step in first if there is an issue before it escalates to the Head of Team Experience, Nicole Lambrou. If Nicole is called in, she will address the problem head on. “Inevitably it’s something fixable,” says Marco. “By addressing it immediately and in the context of our values it can be sorted out quickly. Ultimately, the overall quality of our team improves, and we are a more cohesive unit.”

The founders have seen this in action. “I recently arrived at a client event and three different people came up to me and complimented my team on the same things — all of which aligned with our values. Everyone at Brand Cartel lives them, internally and externally,” says Renate.

The value system has also shaped how the team hires new employees. “We used to meet people and hire for the position if they could do the job,” says Renate. “But then we started realising that anyone can hold up for an hour or two in an interview. You only learn who they really are three months and one day later.

“We need people who walk the talk, and we really only had a proper measurement of that once we articulated our values. Our interview style has changed, but so has what we look for.”

brand-cartel-south-african-agency

Here are the seven values that Dillon, Marco and Renate developed based on what they want their business to look like, how they want it to operate, and what they want to achieve, both internally, and in the market place.

1. Play with your work

Our goal is for everyone on our team to become so good at what they do that it’s no longer work. Once that happens you love your job because you’re killing it. It’s why sportsmen are called players, not workers, and it starts with the right mindset.

2. Wag your tail

The idea behind this value stems from Dale Carnegie, who said ‘have you ever met a Labrador you don’t like?’ In other words, we all respond well to people who are friendly. It needs to be genuine though, so again, it’s a mindset that you need to embrace.

We live these values whether we’re at the office or meeting clients. If you go into each and every situation with joy and excitement, from meeting someone new to a new brief coming in, you’ll be motivated and excited — and so will everyone around you.

3. Check it, don’t wreck it

The little things can make big differences. Previously it was too easy to pass the buck, which meant mistakes could — and did — happen. Once you instil a sense of ownership and create a space where people are comfortable admitting to a mistake however, two things happen. First, things get checked and caught before there’s a problem. Second, people will own up if something goes wrong. This can help avoid disasters, but it also leads to learnings, and the same thing not happening again.

4. What’s Plan B (aka make it happen)

We don’t want to hear about the problem; come to us with solutions, or better yet, already have solved the problem and made it happen. We reached a point where we had too many people coming to us with every small problem they encountered, or telling us that something wasn’t working so they just didn’t do it.

That wasn’t the way we operated, and it definitely wasn’t the way we wanted our company to operate. We also didn’t want to be spoon feeding our team. It’s normal for things to go wrong and problems to creep in — success lies in how those problems are handled.

Ignoring problems doesn’t make them go away, so we embrace them instead, encouraging everyone on our team to continuously look for solutions. For example, the PR department holds a ‘keep the paw-paw at Fruit & Veg City’ meeting every morning, where we deliberately look for where problems might arise so that we can handle them before they do. We start with what’s going wrong and then move to what’s going right. You need to give your team a safe and transparent space to air problems though. We don’t escalate. We need to know issues so that we can collectively fix them, not to find fault.

Related: The 5-Hour Rule Used By Bill Gates, Jack Ma And Elon Musk

5. Put your name to it

It’s about pride in work and making it your own. When someone has pride in what they’re doing, they’ll not only put in extra time and effort, but they’ll pull out all the stops to make their creative pop, or go the extra mile for a client.

We need to find the balance between great quality work and fast output though. One way we’ve achieved this is by everyone reviewing the client brief and then committing to how long their portion will take.

When someone gives an upfront commitment, they immediately take ownership of the job. It took time for us to find our groove with this, but today we can really see the difference. Our creative coaches also keep a close eye on time sheets and where everyone is in relation to the job as a whole to keep the entire brief on track. If someone is heading towards overtime we can immediately ask if something is wrong and if they need assistance.

We also celebrate everything that leaves our studio. Every morning we have a mandatory 15-minute catch up session where we check in on four core things: How am I feeling (which allows us to pick up on the mood in the room and the pressure levels of our teams); What’s the most important thing I did yesterday; What’s the most important thing I’m going to do today (both of which give intention and accountability); and ‘stucks’, issues that team members need help with. We then end off with our achievements so that we can celebrate them together.

6. Keep it real (aka check your ego at the door)

We believe in transparency. At the end of the day we’re all people trying to achieve the same thing, but it’s easy for ego to creep in — especially when things go wrong. You can’t be ego-driven and solutions-orientated. If clients or team members are having a bad day, you need to be able to focus on the solution. Take ego away and you can do just that. It’s how we deal with stucks as well. We can call each other out and say, ‘I’m waiting for you and can’t do my job until I receive what you owe me,’ and instead of getting a negative, ego-driven reaction, a colleague will say, ‘sorry, I’m on it.’

7. Walk the talk

For us, ‘walk the talk’ really pulls all our other values together. It’s about being realistic and communicating with each other. If you’ve made a mistake or run into a problem, tell your client. Don’t go silent while you try and fix it. Let them know what’s happening and fill them in on your plan of action.

Walk the talk also deals with the industry you’re in. For example, if you’re a publicist, you need to dress like a publicist, talk like a publicist, and live your craft. In everything we do, we keep this top of mind.

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