When we kick off a Foundation Consultation, clients often wonder why we go into so much detail about their personal life, your goals, Vision, and Mission statements. They usually want to clarify, aren't you a business consultant? Shouldn't we be talking about hard numbers such as top-line revenues, margins, and sales strategies to raise our conversation rate?
Well, yes, and we do. However, you don't just start putting walls up before you find out what you want the structure to look like.
Especially as a small business owner, it is tempting to worry only about what will make a hard impact on your business today. If I spend money here, I expect X return by Y date. It is much harder to consider investing in something like your company vision which arguably has no measurable effect on your business. So why do it? Let's make sure we have a clear understanding of Hard and Soft edges before we go any further.
Hard edges are actions you take within your company that you can back by data. These are typically direct correlations. If you pay an accountant for a job, you see a report on your desk. Or you purchase new equipment for your manufacturing process and begin to see immediate improvement in your product quality, a decrease in expenditures, or faster production rate. You have put your money, or time, to work and received a direct product for it. These are the majority of every task you put time or effort into.
Business owners, like hard edges. It makes them feel like they are being productive and improving their business. They want the best bang for their buck, and they want it today. Let's face it, as a small business owner your 'budget' is really cash out of your pocket.
The soft edge activities in your organization are the ones that are more difficult to measure directly. Instead of putting your money directly into a revenue-generating activity, you are investing in the humanity of your company. It's much like comparing land development to supporting the arts. One will lead to a direct economic benefit, while the other, may lead to economic impact, but increases social capital. If you are like most business owners, I am probably losing you about now, but stick with me.
Soft edge is what you see the big corporation do to varying levels. These companies have so many employees that small changes in company culture can make a huge return. Consider, if you have 100 employees, and you are able to implement a more effective Mission statement that results in a 10% increase in productivity for your employees, you would essentially have hired ten more employees (100 employees x 110% productivity = 110). This is why you see companies spend thousands of dollars on something that seems so simple as a few words up on the wall.
However, it is more than 'putting some words on the wall.' It is actually investing time, energy, and passion towards building a culture of passion within your organization. As human beings, we all want to feel validated, appreciated and know that our work matters. We have all been in a role or worked for a company where we didn't feel valued and appreciated, and in return, we didn't truly value the work we did. We punched the clock to get the hours in, not really caring if you delivered a quality product. You only cared about not providing such a bad service or product that you got into trouble, had to do re-work to fix it or get fired.
Contrast that with a time in your life you felt passion for what you were doing? For some, that may have never been in a job, but in service to the community. Consider a time where you enjoyed what you were doing, felt appreciated by the person you were helping and genuinely wanted to do everything you could to help them. Developing this type of outlook and passion in your employees, that is the soft edge.
Let's look at two different career paths, payment processing, and nursing.
How do you get your employees jazzed up about payment processing? It may not have the same direct, life saving or improving rewards of nursing. After all, it's just numbers and transactions, who cares? If your company doesn't take time to make sure it's employees understand what it is your company really does, the backstory that explains your purpose in the world, then no one really will care. They will see their job as processing transactions and unimportant compared to saving lives. But now, take some time to invest in your soft edge, and paint a picture for your employees. Through payment processing, you are enabling a family to purchase their meals, helping them pay for medical care to save lives. Whatever it is people do with your service, make sure your people understand why that is so important. In doing so, they will realize why they are important and take more satisfaction in their work.
Nursing may have apparent value in improving lives, but if your hospital or clinic doesn't take the time to show their employees that they care about them, then the employees won't care if they are saving lives. To them, even with a great purpose, they will lose interest. You see this all the time, overworked hospital staff quits caring, and loses focus. As a result, many deaths in hospitals every year stem from staff mistakes and errors that could have been easy to prevent.
So why do we focus on getting to know the owner's personal life? To better understand their passions, goals, and desires. With this knowledge, we can find out what it is you are really after, besides a profit, and share that with your organization. If we can tease out your true passion in this business, then we can use it as the basis of your companies Mission. When you have a mission in life or through your organization that is powerful, and your employees can relate to you, then you will get their best.
But it doesn't just end with a compelling mission statement. Companies that only invest as much energy as necessary to come up with the words miss the point of the exercise. Finding your passion helps you define your values. For some, they value constant improvement, fun, profitability or any other buzzword. The key is to determine what they are for you as the business leader, and then attract a team that shares these values. This may require replacing people within your organization, but it ultimately will put on you a better path to success.
It is one thing to state fun is a core value, but it is another to actually have it. Do you encourage fun events such as bring a pet to work day or ice cream days? If your core value is education - do you allow employees to invest time on the job to learning something new? If it is innovation, do you embody this value by allowing your team to spend time being creative and coming up with new ideas? Remember too, as a business leader your employees will always be watching you. If you state honesty is a core value, but you withhold information or mislead your team, then they will know that that is a hallow value, and see everything as a lie. Despite being 'soft edge', you will undoubtedly see a drop in return on sales when your employees no longer trust their leader.
Soft edge investments are just like any other. The best strategy has you continuously investing more capital over time. While day to day or year to year you may not see a massive gains, over the long term you will see an exponential return. If your business is more than a hobby, and you genuinely want to grow it in such a way that it will last, then you must invest in determining and exercising your values. Building a team around you that also embodies these principals and showing them that you not only care about profitability but in the employees themselves. When you invest in both Hard Edges and Soft Edges, your business will see #BetterResults .