Get your Start-up Employee mix right! Here’s how.

When I began my business in 1984, I was just fresh out of college, naïve by today’s standards, and all of 24 years old.

Back then I use to sit in a small office of my photo-finishing studio which on the third floor of a quaint building on the bustling Laxmi Road in the heart of Pune’s famous peth areas.

Within a year of starting my business, I began to take pride in the fact that I had managed to build a very young team full of enthusiasm.  Despite the energy they brought into my venture, I was very well aware of the fact that they had no exposure, did not understand systems and processes, and had little understanding of planning and managing finance. So to say, they were excellent soldiers but what I needed were also Brigadiers and Generals who would carry out orders well, plan and execute well in advance.

My team was somewhat akin to a Cricket team that had no balance. On a day we would do well beyond our expectations and another day we would be miserable failures. I was so caught up in our day-to-day operations and managing an inexperienced team that all of us had no clue which direction the business is headed. I had no mentor who could guide me or any senior, experienced employee on whose judgment I could rely.

So, one fine day I sat down began reflecting on why I had no senior employee working with me. However hard I tried to reject it, I then had to painfully come around to accepting that as a 25-year-old owner and employer I was afraid of having someone who was senior, more experienced and perhaps more competent than me on my team.

I was more concerned about the perception such a scenario would generate than the fact that my business was directionless. I was mortally afraid that the person would appear as the leader and me a minnow in front of him. After much soul-searching and taming my insecurities, I then reached a conclusion that if I did not live up to their competency levels, in that case I did not deserve being called a leader at all.

It was a choice between safe keeping my ego and growing my business. A choice faced by every entrepreneur, be it a fresh-faced college student-cum-entrepreneur or an experienced entrepreneur hiring talent much younger and competent than him.

I therefore decided to hire two senior professionals in my organization: one a Marketing professional and the other a Production Manager. The Marketing professional I chose was an extremely hard-working, competent and a go-getter of a woman. Not very impressive to talk to, but she knew how to get the job done! She was extremely aggressive as an employee and a tough negotiator when it came to getting her salary. I felt truly intimidated by her at times.

The Production manager was ex-Indian Air Force personnel with a background in the maintenance department of the Air force. He was a very dedicated man, who believed in hierarchy and was meticulous to a fault.

Days passed into months and the two managers had taken their jobs seriously and were doing well. The Marketing manager was able to expand her territory, come up with unique schemes, and persuade customers to give us work; while the Production Manager worked hard at getting the job done in time.

Things were looking good as I got a lot of time to think ahead and plan my business. However, I had gotten so engrossed in my planning and had become complacent about managing my employees. I was under the impression that the two senior managers would take care of that too. Little did I know that I was soon heading into a major organizational crisis!  At first, it began as sporadic instances where a few differences of opinions would come up and I would let it pass and not take a stand or give clarifications. However, as the work began to gain momentum, the fight for organizational power between the two senior managers had grown much more than I had imagined. Petty office politics had taken precedence over the work which was at hand.   Meetings soon turned into a boxing ring with me as a meek referee in between two stalwarts

A full-blown crisis was just waiting to happen and it chooses to take place on a day when I was not in the office for a couple of days. I had just returned from an out-station work trip and headed straight to my office. As I entered my office, I could sense the heavy atmosphere hanging over our heads. Something had happened and I was completely clueless! I looked around and all the staff had grim faces and they were avoiding eye contact with me. I then noticed that the two key managers were sitting in their cages like lions waiting to go at each other!

I headed straight for my cabin and called for my cousin who was also one of my employees. Upon questioning him, he meekly told me that the two managers had an argument which had spiraled out of control and literally ended in a physical fight! Taken aback at this piece of news, I didn’t know what to say! Dumbfounded, I was tempted to ask who won, but refrained from asking on second thoughts. I mumbled my customary “ hmm”, and dismissed him and spent the next two hours thinking  how to solve this crisis! I couldn’t avoid it and neither could I address it without having a proper strategy at hand.

So I called each manager one at a time. The production manager felt that he was the boss on the floor while the marketing manager refused to accept him as the boss. It reached a point where they both put the ball in my court and asked me to choose: it’s either me or the other person.

Now, when you’re a young entrepreneur who has senior employees working for you, more often than not one tends to get arm twisted into taking decisions their way. However, I was not going to let that pass and I sat down with both and had a conversation that I should have had the first time they had a fight.

I shared my dream about my enterprise: the dream of becoming the biggest and the best photo-finishing lab in the state. I told them the goals that I had set for the business and then explained to them their role in making that dream come true. I held up a mirror to them and asked them to reflect if their behavior all this while was in any way productive and whether that was helping all of us working towards their goals.

I went one step further and informed them that their behavior was not befitting people their age and experience and that both of them were responsible for lowering the morale of the other employees and lowering productivity of the entire floor! I asked them to go home and reflect on this incident and come back to me four days later. I also let them know that it is they who have to make a choice of continuing here since I had hired both of them for their competency and that if it came to making choices between the two, they would both lose their jobs!

A week later, I had both my managers focusing on the company goals! My talk had made them realize their pettiness and they mutually agreed that if there was a difference of opinion, it would never be personal and that they would resolve it amicably. It was easier set than done, but then this time I kept a keen eye on what was happening in my office.

I realized that one can never become complacent when it comes to anything related to your start-up. Of course, there were many differences and disagreements that came my way after this instance, but then this time I was much more proactive and made my stance clear every time.

Here are my some of my tips on the simple rules for managing employees in a start-up:

1. Get your team balance right. Don’t hesitate to take older people. And don’t hesitate to take on talented people even if they are older than you!
2. Most Indians are programmed to think that the eldest is the boss. In a professional organization, you are the boss not by virtue of your age but by virtue of your position! So shake off that value system that the older person is automatically the decision makers!
3. Indian men find it hard to work under a female boss. That’s their cultural issue and we need to bring their focus on deliverable and results and not their gender.
4. Most  professional women on the other hand are loud and pushy because they have to survive in a man’s world. They therefore have to be aggressive and sometimes loud to be heard and make their opinions count. This leads to unnecessary stress So, if you want to come across as a professional and gender neutral organization, give female workers equal opportunities to prove their talent.
5. Sell your employees your dream. Tell them how they can participate in realizing the dream.
6. Surround yourself with people more competent than you. This is the biggest mind block most Entrepreneurs have. They’re scared of employing people more competent than themselves. But an Entrepreneur has the biggest edge over the most competent employee. An employee is not a risk taker and he respects you enormously for being able to take risks. And don’t be ashamed to learn from them. They will be your willing teachers. I have seen many organizations stoop to mediocrity because the owner is afraid of enrolling people more competent than him. In fact, he should constantly ask himself if his employees are continuing to be more competent than him. If they are not, he is clearly out pacing them and that he needs to continuously rejuvenate the team.
7. Finally, look for efficiency and not loyalty. The Indian value system values loyalty more than it values efficiency. Keep away from that trap. This is particularly true in first generation entrepreneurial ventures. The source of most conflicts between 1st generation and 2^nd generation employees is often this issue.

 

More tips and insights in my next blog!

 

Parag Shah

October 2012,

 

Give your customer a comprehensive solution and not just a product Part II

This is the second part of my earlier blog post on Customer Satisfaction. You can read the first blog post here.

It was 1999 and I had just ventured in to the Real Estate business then. Although I have come across many incidents and have learnt many lessons during my entrepreneurial journey, I can never forget my experience with my first real estate customer! I met my first customer, one Mr. Manhar Bhansali, through word of mouth. He was a big diamond trader and had come to Pune on a business trip from Mumbai and had heard about our project through his sources. On arriving in Pune he called me to request for a project site visit.

I still remember that feeling of excitement and thrill on having a potential client call you up and ask to see a property! Delighted, I agreed to take him on a tour of the sample house the same day.  I have always believed in the product speaking for itself, and hence had gone out-of-the-way to show the sample bungalow not just as a view of bricks and mortar but to make it an experience of luxurious living for our potential clients to consider.

Our sample house was a fully furnished bungalow complete with the latest gadgets and technology available in India in 1999. Apart from tastefully furnishing the house, I made sure there was Air-conditioning, washing machines, TV, crockery and cutlery, servants, cooks and even a doctor on call! I had made it a habit of posing myself as a customer to critique my product and services and set a benchmark. This habit had time and again proved its merit as it allowed me to arrive at insights which helped me to give my product an edge.

Due to this practice, I knew that a customer arriving from Mumbai would hate to open the house himself and then get it cleaned; or figure out if there was running water and that his fridge was stocked or whether the cook is available to prepare a fresh food for him or his family. I didn’t position these bungalows as a holiday home, instead I focused on making it feel like a second home where the customer could walk in anytime of the day or night and live there like he did in his normal circumstances. I wanted the transition from his first home to his second home to be smooth and perhaps even a better experience, something that he could even flaunt to his friends.

Our housekeeping team back then was headed by one of the most efficient couples I have met-a retired Colonel from the Indian Army and his wife who had worked with the Marriott Chain as the head of their housekeeping. She worked hard at training the local help and transformed them into proud, honest and hardworking helpers.

We even had an instance where a customer had left his watch worth Rs. 1 million, and it was found and returned to him by the staff. When the delighted customer tried to give him a gift for his honesty, he was suitably enraged. He said “Honesty cannot be bought, Sir. You can keep your money!” I have always believed that organizations are only as good as their lowest common denominator. If your helper has values and has been trained and takes pride in his job, you can rest assured that half your job is complete.

Getting back to Mr. Bhansali, he liked what he saw and he immediately asked me to get the papers ready and meet him at his office in Bombay. Since I had those papers ready in advance, I left for Bombay the next morning and met his lawyer and handed over the No Objection Certificate (NOC). And as promptly I had responded, Mr. Bhansali too was quick in closing the deal and handed over my first cheque of Rs 50 Lakhs, as an advance for purchase of the land, in the same afternoon.

Ecstatic and on cloud nine on making my first and a quick sale, I spent the next 48 hours in the happy high of my success. Two days later, I got a worried call from Mr. Bhansali in the late hours of the night. He was anxious and worried about his investment as he had burnt his fingers in the past with rogue builders who had swindled him out of his money.

As he narrated the above experience, I could see the money slipping out of my hands! I made a quick decision, and an emotional one at that, and decided to return his money. I told him I didn’t want my customer losing sleep over a deal and that I’d rather have his friendship and trust. Even though my voice was calm and confident while I said this, to be honest I was scared to death! Just the thought of giving that money back gave me heart palpitations and I could hear a little voice inside my head calling me foolish! But my big risk had paid off. On sensing my honesty and commitment, Mr. Bhansali immediately refused to take the money back. My risk had won me a client and a friend!

Mr. Bhansali had booked the deal in November of 1999 and he wanted the delivery of his 6,000 sq. ft. villa with all comforts and the décor he saw in our sample bungalow in 5 months! Even though I was committed in winning over his trust, I was still a realist and informed him that there was no way we could build it that fast! I didn’t want to make a promise that I couldn’t keep. After a lot of persuasion he reluctantly agreed to postpone delivery date for 9 months. The same day I met my engineering team and persuaded them that we had to do our best to get his house ready in 5 months!

Four months into the construction, he paid us a surprise site visit and informed me that his daughter was arriving from the US in a month’s time. She would not be returning to India for another two years, so he was very keen to get the house-warming ceremony while she was in India. He wanted to have just one room readied for ceremony. Pressed as I was with the existing delivery schedule, I told him that it was not possible. Instead, I could build him a temporary shed and that he could conduct the ceremony there. Sad but resigned to the fact that I was putting in more than my hundred percent he left feeling satisfied.

Mr Bhansali had scheduled the house-warming ceremony a month later at seven in the evening. I promised that I would take care of all the arrangements for the ceremony from my end, thus saving him the trouble. I had instructed my staff to switch off the lights in the house as soon as they see his car entering the project’s gate. I was standing at the entrance waiting to give him his surprise. As he stepped out of his car, all the lights were switched on all at once, inside and outside. I can still picture the look on his face when he saw his house decked and lit up. I had made sure everything was in place, right from his living room to his bedroom! I had the crockery and the cutlery laid out on the dining table, had made sure there were flowers in each bedroom and toiletries in each bathroom.

Sweet Success.

My first customer entered his house to the music of Bhimsen Joshi singing Raag Basanti in the drawing room and with eyes wide with wonder! Till this date I relish the sight of wonder, delight and appreciation on Mr. Bhansali and his family member’s faces! As soon as they had finished exploring their house, I called the Panditji and left them to perform their house-warming Pooja.

Even though I had said no, I had pushed my limit to provide my customer with a solution to his problem and not just a product! I had of course under promised and over delivered but let me warn you, friends that it’s a very fine balance to maintain! The toughest word to say is NO to a customer, but sometimes it’s the right word to say! In order to satisfy my customer I had pushed myself and my entire team to the brink. I never repeated this exercise again and reserved it only for my first customer!

Parag Shah

September 2012.

My First Customer Service Strategy

Under Promise, over Deliver. Easy to say, hard to implement.

 I don’t come from a family of entrepreneurs or businessmen. My father was a renowned and a successful doctor in a small town near Pune called Daund. He was someone I idolized as well as respected. His lessons on how being a good human being have always remained with me till date. He would always say, “Parag our traditions and customs tell us “Matru Devo Bhavo”,  to treat your mother as your first God, “Pitru Devo Bhava” , your father as the second, “Guru Devo Bhavo” , your teacher as your third and of course “Atithi Devo Bhavo”,  your Guests as your last God.” He would then say “For me, I say “Patient Devo Bhava!”

His simple explanation was that his patients are his God because they are his best teacher. He firmly believed and valued the practical knowledge he got from his patients than the bookish one that gathered dust after medical school. I think somewhere there was an internalization of this in my psyche from those days. I am however still working on whether one should really treat his customer his God or not. I feel that, that would be stretching it too far. I guess one can call customer’s your best experiential teacher.

I believe that businesses cannot be as noble as the medical profession. I would trivialize the matter by comparing them.

Trained with these noble thoughts, I started my small photo finishing lab on the third floor of nondescript building. My starry-eyed glass dreams were soon shattered as I sat in my ac office waiting for customers to just walk and hand me over their business! I had no customers for the first few months! Getting customers those days was hard as people were not experimental and fickle as they are now! Luring them with attractive offers or promotions was not an option for sustaining a loyal customer base.

I had to work very hard those days and taught myself every single aspect of my business right from how to raise an invoice, to a maintaining a sales register, a production and consumption report and even a wastage report. I also poached an expert in my industry from whom I learned the technical aspects. How I poached an expert makes an interesting story to which I shall do justice in a different blog!

After months of near bankruptcy and uncountable amount of hard, back braking work my business finally began to show signs of growth. Those days I had vowed that I would eat sweets only on the days on which I would get 100 films for processing. Back then the delivery of a processed film used to be 6 hours and it was a long laborious process. Armed with my first 100 films, on the day after the “Ganesh Chaturthi”, I decided to celebrate my victory with an ice cream party on the house for the staff.

Like most startups today, I too had popped the Champagne when the things were just about to go bad! Remember when things are going good always be on your guard! After the party, when we all got back to work we suddenly realized that we did not have the efficiency to deliver all the 100 rolls in 6 hours! I had not accounted for this as I had not done my ground work properly!

We were up the whole night processing those films. Even my front staff stayed behind the entire night to help finish the orders. At around 7 am, having worked all night, we had still not finished half our order! I and my staff simply didn’t have the physical stamina to continue. At 8 am which was our opening time, we had customers streaming in to collect their films only to be met by bleary eyed owner and staff and told that their order was not yet ready! That day we were like lambs in the slaughterhouse!

My customers looked something like this to me at the time!

Guilty and ashamed, we somehow managed to finished deliveries over the next 24 hours but we had lost our reputation in the market! The cost of over confidence can sometimes be much more than one estimates! All the hard work that I had put into building my brand in the last one year had simply been washed away in those two days! Not ready to give up and fold shop easily I wiped my slate clean and started all over again. It took us almost 6 months to win back their confidence and their business.

True that!

I had learnt my lesson by burning all my fingers following which I set proper systems in my startup. Here’s how we did it at Snap back then. I made a production chart given to the staff at my collection counter on a daily basis. The minute a film came in, the counter staff would estimate the delivery time based on the production chart and hand over receipt with the estimated delivery time to the customer.

The delivery time always had an additional hour added to it as a buffer in case of unexpected challenges like power failures etc. Whenever there was a power failure, the counter staff would then call the customer in advance, and inform the delay and apologize, and sometimes offer an extra discount or a photo frame.

Even though this added slightly to my costs, it is always better to tell your customer in advance about a failed delivery. No one likes surprises, least of all your customers, who expect nothing less than the highest standards from you even if they pay you peanuts for it.

But always remember, a happy customer is your best advocate! Customer Delight can give you more satisfaction from your business and can even bring in more business than any marketing gimmick or sales promotion. 

How to build bad-weather friends for your business!

Treat your supplier as you would treat your customer.

Sometimes, it’s amazing to see how small little uncalculated gestures towards people who you work with can actually become your business’s lifeline somewhere in the future!

One of the best lessons that I learnt very early on during my snap photos days was to always, always treat your suppliers with respect. I had learnt that if you treated your suppliers with respect, they will go out of their way to help you, when times are bad for you. In business only they can be your best bad weather friends! Let me narrate an anecdote to drive my point.

I don’t understand why most purchase department managers think that their suppliers have to wait long hours, be treated shabbily and should always be put to a fight with another supplier to get the better of them. Having been at the receiving end of such treatment when I was running around for my loan, one thing I was dead certain of was to never treat another human being like that ever again!

I was once travelling by car to Mumbai, in my second-hand  Maruti 800 that I had bought from someone who had worked with me for a several years.  It was a family trip for a relative’s marriage. Back then the old Bombay-Poona highway was a nightmare to drive upon and would take anything from 5 to 8 hours to commute between two cities that were barely  159 km from each other.

We had our customary halt at Khandala for the famous Sangam Batata wadas and as we were coming out, I saw a gentleman standing near the parking. Upon closer look I recognized him as I had met him a couple of times. He used to work with Agfa Germany India Ltd in their sales department. He looked pretty stressed out so I went up to him and asked him what was wrong? He pointed towards his bus which had a breakdown.

Although he didn’t tell me why he was stressed, I felt sorry for him and decided to ferry him to Bombay and informed my wife and children that he was joining us. Now, it was one of those trips where the family was going together after many days, and hence the children and my wife took this as an intrusion, but had no courage to argue with me. Judging the intrusion by their crestfallen faces, Jayant offered that he would manage on his own. In any case there wasn’t enough space to accommodate passenger number 5. But as usual I would have none of it and convinced him to join us.

The trip to Mumbai thereon was obviously a long stone cold silent one.  Just as Jayant was getting down from the car, he said “Thanks Parag. I will be ever grateful to you for this help.” He mentioned that this meant a lot to him since his son was unwell and that it was crucial that he reach home as soon as possible. We dropped him near his house and proceeded for our wedding. And for a long time I had forgotten about this episode until many years later.

Jayant would often visit Pune and we did go on to do business together for many years. He said he loved “Puneri” food and I would often take him out for a customary meal of “Puneri” food on Laxmi Road. He always appreciated the fact that I treated him with respect. I would never ask him questions about how my competitors were doing, what price they got their raw material, who was doing what expansion. Most suppliers are privy to very sensitive competitor information. But I realised that I would be putting him in an ethical dilemma if I did ask him. But whatever, information he would give during the course of a casual conversation, I would listen to intently but not respond to it. Besides, as a matter of principle I never ever criticised competition.

About 3 years later after the incident, the Indian economy went into a major financial crisis. Photographic paper for which India dependent on imports was not available anymore and you could only get to import the photographic paper if you deposited 250% of the value of the goods and that to 3 months in advance! There was no way anyone of us in the business at the time could raise that kind of capital overnight. Moreover that would be 750% more than the usual requirement.

Those days were equivalent to the Wall street collapse. As the months progressed most of my competitors had to shut shop. I too was on my wit’s end and that’s when I one day called up Jayant and said, “I am running out of stock. Can you help?” “Parag, there isn’t anything anyone can do for you. The whole Economy is in shambles and not much hope left.” He ended the conversation by saying he will try to do something for me.

Seven days later, I got a call from Jayant saying that their principals from Germany are here, and he has arranged a meeting for me with the Director of Bayer Germany. He suggested that I could request them to trust me and ask for credit for the purchase of photographic paper. And so I left for Mumbai the same day.

Before my meeting with Director, Jayant had done the groundwork and had pitched me as one of the most loyal and honest customers of Agfa Germany. He knew that the German’s appreciate honesty and loyalty as against volumes. I was a small player at that time and did not contribute much to their total sales. Agfa was a large conglomerate, but Jayant made sure that I got 15 minutes with the Director. I used all my persuasive powers and persuaded him to give me credit for the imports. He said, he would give me 180 day credit. The man liked me! So here was this little guy in Pune who was the only one who had access to imported paper. I was expecting, that business would double owing to the fact that many labs would close down. I placed my order for the 1^st month and had my stock and my lab was up and running!

Jayant the supplier, who was not treated well by other competitors, went out of his way to make sure that my business survived. Why?Probably because I helped him when he needed it and I have always respected him even as a supplier.

The lesson for me was to know that all human beings are equal, and they all deserve our help and respect. Don’t ever do it with an expectation of anything in return. And treat all your suppliers with warmth and respect. My wife would go to market yard every week to buy her vegetables from the largest vendor. I would fret over the fact that she was trying to save a few bucks! I soon realized that she looked at it as a great social event!

She would go to this particular vendor who is the largest wholesale supplier of vegetables in the market.  That man ignored her for months. But she persisted. She slowly got him on her side. She seized the opportunity when he said he wasn’t  getting an appointment with a leading heart specialist in Pune. She drove him to the heart specialist in her car. Got all is investigations done. Helped him with his surgery and made sure the family was at comfort. The old man today sends us his best vegetables every morning, at a real low cost, and picks and chooses the vegetables my family will have .

The next time I am going to talk on trust your employees.

Back them , when they need it most!

Related articles

• Dr Jayant Patel spends first free night (bigpondnews.com)

How did I end up becoming an Entrepreneur?

I grew up in a small town near Pune called Daund. My father was the only Doctor of the town and had become a larger than life figure in the town because of his philanthropy. As a child I was extremely shy with low self-worth and had great fear of authority. I was a loner and hardly had any friends I could connect with.

I had one hobby that occupied all my waking hours as a child-reading fairy tales. I loved those vividly coloured books and would get lost in the world of justly Kings and beautiful Princesses and the poor boy who would in the end win the hand of a beautiful princess. It was always the victory of good over evil.

I had a world of my own, which I could create and change and modify, and make it colorful, make it smell beautifully, and imagine the princess as the most ethereal creature on earth. This is where my journey in entrepreneurship began-as a dreamer. To dream is so beautiful and limitless.

I do think all entrepreneurs have the power to dream and have vivid pictures of what they dream about. How many of you out there who have started their own ventures have started out like me? Or was it the opportunity that propelled you?

Do share.

Welcome to my blog!

 

Welcome to my blog and thank you for spending time here.

If you don’t know me or what I do and haven’t yet read my about me page then here is a brief on where I come from and what I do.

I’m a serial entrepreneur turned teacher/coach/mentor. Over my career spanning 3 decades, I have started three successful ventures and one not-for-profit Educational Institute-FLAME.

While at FLAME I taught Entrepreneurship and actively mentored the start-ups and students there.

This blog is an extension of the classroom learning and a platform for meaningful interaction and  exchange of knowledge and wisdom.

Hope you enjoy my coming posts and do contribute so that we both can benefit from this opportunity.