Are you laughing your way to the bank or the graveyard?

Jul 21, 2013 Management, Strategy, Success, Sunday Nation

Which of the following things have happened to you of late?

You want to buy a product for your home. You have spoken to a vendor and agreed a house visit so that installation can be done. You take time off from work to do this. The vendor, however, does not show up. At all. Avoids your calls the rest of that day. Then calls days later to say sorry and give a lame excuse.

You need a service for your organization. You select a provider, pay a deposit, expect a good standard, delivered on time. The provider fails to return your mails, goes incommunicado for a while, misses every original deadline, and misses fresh deadlines too.

You want to buy something. You discover, however, that in order to buy this thing you have to wait in line behind dozens of people; or hang on the phone listening to interminable messages, prompts and annoying music tones.

These things have happened to you, of course they have. In Kenya, they are daily occurrences. But how do you explain this?

Please note: YOU are trying to give vendors money. You are the customer. You are supposed to be the king and queen in this situation, not the person pleading for business. So why do they simply fail to show up to collect, or make you wait just to pay them? What madness is this?

From years of observation of businessfolk, I can offer some explanations. If the vendor is a small business, the most likely reasons centre on greed and naïveté. Entrepreneurs are greedy because they will usually take on too much work and commit to too many jobs; they are naïve because they think business volume is a good thing in itself, and that you should never turn down work.

If the business you’re trying to buy from is a large one, the greed + naïveté still applies; but is often combined with something else: big company disease. Here, the organization is out of the bosses’ control; its growth has outpaced the capacity of its leaders and systems. Those who run the company don’t even KNOW how many customers are lost every day and how many opportunities go begging. The steering wheel lost its connection with the tyres long ago.

Whatever the reasons, this is incompetence. If we are to create businesses that last, we need to learn a fundamental lesson first: growth is not good in itself; not every opportunity must be snatched. Bite off what you can chew in comfort, or you will throw up the entire meal.

Whether you are a small artisan or large bank: headlong growth is tempting, but ultimately disastrous. There is absolutely no point in having five customers instead of two, if three of the five will be served badly and will become disgruntled. It is way better to keep just two very happy with your service, and allow them to become your business’s best friends.

The holy grail in business is to create great bonds with customers, bonds that are mutually appreciative. These bonds lead to the right kind of growth: robust and at the right pace. As I have reminded you on this page many times before, Sam Walton, who died the world’s richest man owning the world’s biggest retailer, started off as a small shopkeeper. He was in no hurry; he sat in the same little corner shop for a full SEVEN years before he even thought of starting a second one.

The other way is to be impatient; to confuse volume with profit and queues with success; to run before you can walk; to tell lies to too many customers. That way may take you laughing to the bank faster, but it will take you crying to the graveyard shortly after. Long-lived success is built one brick at a time.