Sustainable Business Learning Community Conversations, March 2014 - April 2014

Sustainable Business, April 10, 2014 Topic: How Do You Measure Success In a Service Based Sustainable Business?

Comments from last week's conversation on Creative Service-Based Businesses:

There is a lot of creativity inherent in sustainably based service businesses. When you don’t have the standard model of what that looks like, how do you frame it in a way that can help the client to understand?

• Work in phases, removing uncertainty layer by layer, enabling the client to get to the next milestone, the next level. This is a discovery process; part of the service you provide is getting them through this discovery process.
• Ask your customer what they expect from your service before you even begin. Make sure that their expectations fit with your service.
• Clearly assess what the client doesn’t know about your service and the process that you will be taking him through.
• Always have respect for your client - whatever work you do you are doing for them.
• Fan the vision: Show your client that they can have a bigger picture, bigger expectations right from the beginning.
• There will always be constraints - time, budget - they can both help and hinder design. Without constraints, it’s hard to narrow down design, but then time and budget when too constraining can get in the way of good design. Find the right balance between enough latitude to move forward and the inevitable constraints.
• Incorporate an element of fun or play into the creative process. You need to get out of that academic mode - it’s hard to create “on the spot.” Try to create the conditions that nurture creativity.

Genealogy Service: Karen’s business is to lead people through the process of genealogical research. Her goal is to teach them the joy and adventure of discovery and to lead them to some truth. By leading them through a few simple steps at the beginning, it allows people to see further into their family history than they thought they could. She’s opening them up to a wider vision than they ever imagined they could have. It’s about the hunt - the adventure of discovery - the telling of stories.

The other piece of the creative process - getting to the root of it: If you can get to the seed, the underlying root, of a business, it’s a great place to empower people. This deep discovery is an very much part of the creative process, and when you are delivering a service to a client, you really are trying to get to that thing below the surface. De-tread, for example, is all about empowering others. The tires are merely a symbol of the purpose of Audra’s work, which is empowerment. Being able to identify the seed is the difference between being a business owner and being a leader.

Relationship building happens during the discovery process. Even if your client isn’t ready to move forward, stay in contact with them and maintain the relationship. They may be ready to move ahead at a later date.

Topic today: How do we know when we achieved success with our sustainable service? How do we see service in a 3 dimensional view? Do we satisfy the client if we are damaging the environment? The community? Do we design our processes around building relationships? Are we looking at waste? energy? Water? Habitat?

• Part of your responsibility as a 3D business is to educate your client about the triple bottom line.

• Educate softly: Don’t preach, but explain, as you do your work, why your business focuses on the triple bottom line. Let your actions inform the process and broaden your customers’ horizon.

• Many customers today aren’t familiar with the concept of a sustainable business and don’t know to ask for that kind of service. You have to balance finding customers who just want a job done at a reasonable price and doing the work in a way that reflects your values.

• Other customers might value the intrinsic quality of the work you do for them (like being green and community oriented). They may be willing to pay more for your service because they understand and share your values.

• Part of education is asking questions as both a business owner and a customer. Example: You’re having work done on your home and ask prospective construction companies if they do deconstruction or demolition. The more customers or clients ask these kinds of questions, the more a company will consider their requests - a construction company may turn to recycling and re-use rather than sending everything to a landfill. We can actually change the way companies do business by asking questions and showing that we care about how they do their work.

Thoughts from some of our business people in residence:

• Kimberly, who is in the process of remodeling a house for resale, will stage the house with visual cues that will encourage more environmental responsibility and healthy living: Compost bin on counter, recycle bins, bike racks.

• Karen has had to put a lot of thought into how she would create a business around her deep interest in genealogy and her willingness to help others in their own research. Her genealogy service creates more of an on-going experience rather than an end product as genealogical research is really never ending (if you catch the bug, that is) . Recognizing that community is a foundation of a sustainable business, she wants to create a community of interested people who can come together to share experiences and support one another.

• Kimberly’s healthy community is both a product and an on-going service because all the amenities that will come along with living in one of these communities.

The creative struggle has always been commodifying our creative output - how do we put a price on it?

Are we becoming a culture more accepting of divergent processes? Are we moving from a culture of linear processes?

Sustainable Business, April 3, 2014 Topic: Designing Creative Based Services for a Sustainable Business

The root of a sustainable business is relationships.

• Could a sustainable business be the sum of all its relationships? Could that be its income statement? Its balance sheet? Relationships are not really represented on financial documents, but remember, one day before its collapse, Lehman Brothers had a good balance sheet. But when the market/people could no longer have any faith in them, when trust was lost, the balance sheet collapsed.
• Service design should be relationship-based.
• Good relationships will lead to a good balance sheet.
• Good relationships will also allow you to fumble from time to time, work through glitches and learn together. Transparency in relationships is vital.

• Loans on a balance sheet depict a relationship with a bank, but it doesn’t really tell you about the health of that relationship. It might be helpful to include an assessment of your relationships with various clients/vendors, banks, etc. as an addendum to your financial reports.

• There is a tangible output to a service as well. Perhaps you start with a roadmap or outline at the beginning, basically a strategy of how you are going to proceed. You go through a discovery process with the client. In the end you might end up with a formula or case study that can be applicable to other customers.

• The product/service continuum: Every business provides both product and service (to varying extents). Be aware of this and nurture both aspects of your business. You want to work with people who understand this as well.

• Understand who your target clients are - what your ethos is. This comes through developing good relationships and learning what customers need and want.

• All design is experiential design - whatever you are designing, you are designing an experience for a human being.

Kim: When people think of flipping a house, they think in terms of fast and cheap. Doesn’t work for Kim - she feels that working in that way would reflect poorly on her. She wants to hold a high standard - high integrity. The experience of the people buying the house matters as much to her as making a profit.

• Innovation is based on the belief that you learn through your mistakes.

Creative-Based services: Tom’s working with a number of people developing service-related businesses. When asked to define their services, many struggle to describe them or define them. If we don’t address the reality of the service, the design work won’t be relevant.

The Learning/Doing Continuum:

• Business owners and customers learn from one another. At the start you might be heavy in the learning process - a period of discovery. You learn from your customer what their needs/wants really are, and they learn what you can do for them, what your service or product is all about, how it works and what value there is in it.

• You move along the continuum as your business evolves - at the beginning, lots of learning, less doing, and as you learn more and gain expertise, then you move into more doing with a little less learning. Learning never stops, however, as businesses are in constant evolution.

• For Bethany (consulting to support the launch of art and design projects), the product is the discovery process itself. Value is identified through the discovery process. She can approximate how much time she will be engaged in a project but doesn’t really know until she gets started. It becomes clearer as the process unfolds. Helping a client recognize that he needs a certain level of service is sometimes hard to do. She likes to work through the discovery process with the client.

• The rattlesnake: In our businesses we often come along a client who is facing a big problem (the rattlesnake) and needs something done right away. Creative-based services don't always lend themselves to this kind of immediacy. Can you help the client see past the problem and put it into context? Recognize the bigger picture and move them past the snake? Are you good at dealing with rattlesnakes? Should you involve your business at this point?

• The 30K Foot View: It is the business person’s responsibility to draw the larger context for the customer. Bethany feels her business is at the 30K ft view, while her clients are often on the ground. They don’t see the context, the big picture. Bethany’s job is to reveal the context for them. Perspective is worth 80 IQ points (Alan Kay).

• Stay open to learning: It’s important to find a balance between pushing forward and taking the time for those learning opportunities. You don’t want to rush things and be short-sighted. Your business can have long-range plans and still be flexible at the same time.

Get time frames out on the table with a client. It’s important to have conversations about time frames recognizing that, while the creative process takes as long as it takes, there are sometimes real time constraints involved. You can create checkpoints in these open processes.

Have a prospective client talk with others who have gone through the process with you - they can connect with others in their own way and gain a better understanding of the creative process.

The big challenge for many artists is for them to recognize that there is value in their work, value and fulfillment in the creative process, and they have to stop undermining their own work.

Sustainable Business, March 27, 2014 Topic: Designing Services for a Sustainable Business

Comments from last week’s workshop on Competency:

• Idea of photosynthesis - parallel to plant life: If you use this idea as a stepping off point, it helps others to really understand what we are talking about when we talk about competencies. Energy input, through competencies, is converted into a functioning business and value for your customers.

• You don’t have to be competent in all areas - where do you want your energy to go?

• Entrepreneurs want to do so many things but can only wear “one hat at a time”. Know what your limits are, energy and otherwise.

• Think of assembling a community to advise you - people with different competencies who bring with them a wider breadth of knowledge and experience.

Today’s topic: Designing Services for a Sustainable Business

If talking about product, we all understand what we mean by the word “design.” But when we talk about designing a service, we are confused about what that actually means. What’s the purpose of design for a service? How do we go about it? If we want to design sustainably based services, what does that mean?

When you think about the economic part of the triple bottom line, it is interesting how services and economics intersect differently than products and economics do.

Comments:

• Maybe the inherent difficulty in designing a service explains why the lack of service in our economy is so prevalent. There are a lot of poor service providers.

• How do you go about designing a service? There is no class that teaches you how to do it. There is no “service CAD” software…

• Services are infinite and on-going, ever adapting to changing needs and conditions.

• Every business is a service business - some know it and some don’t. There’s marketing, branding, relationship building, etc.

• Service is often an adjunct offering to another product. We buy something from a company with a service department so we can contact them if there are questions or problems.

• Healthcare is an example of a service. In this industry, wait times can be a problem. Some health care providers advertise short wait times in order to attract business. Perception is hugely important in many service businesses, especially this one. Figuring out how to establish a maximum wait time is an example of design work for a service.

• How do you adapt your service to leave the impression that the customer is getting a good service result?

• Recognize that people are often looking for empathy and understanding.

• Critical Control Points: You need well designed metrics to measure service. Figure out what metrics you should use, what areas you need to measure in order to get meaningful information about the effectiveness of your service.

• Surveys? Many businesses use surveys to measure how interactions with customers go, but participation rates in these surveys is usually very low, and those who respond are frequently people who have had a bad experience and want to complain. Those who had a good experience generally don’t respond because they got what they wanted out of the transaction.

• Observation: Observe the reaction of a person using a service. This won’t give you a quantitative measure, but it can help you to understand how the customer perceives the quality and effectiveness of your service.

• Will people pay for service? What will they pay for it? Many people want certain services but don’t want to pay for it. Can you convince them of the value of the service? If not, can the business be sustainable?

• Some industries talk about their service as if it were a product (insurance). It’s possible that doing this makes it easier for people to be willing to pay for it.

• All design is systems design: Enzio Manzini We can see many things in life moving that way. When you buy an iPhone, you buy a system, not a product. The physical device is nothing compared to all the other ways we use the phone and what it means to us. All design is systems related.

• Assess customer needs and your capacity - understand what people need and want from your services as well as what you can deliver.

• Design a service around your area of expertise; what do you know more about than your customer? You can charge them for the service because of the knowledge you have that they do not.

• Write a story/scenario as if you were the customer - try to put yourself in their shoes. Try to identify what experience the customer wants. Look at people who give great service, study them and try to replicate what works.

• Providing a service can be a discovery process. Ex: Bob Weins in Platform 21 that does cloud accounting. He has learned that most of their customers had no idea what they wanted from this service. They didn’t understand what Bob meant by “give us all your receipts” Understanding how and where they incur expenses was a discovery process for these business owners and they were unaccustomed to keeping track of receipts. Another example; the people doing the construction at the El Moore are in the process of learning what construction means on an 1890’s building.

• The amorphousness that is a service business requires the discipline of project management.

• It’s all about building relationships - the humanness of a service business that gives the business so much value.

Sustainable Business, March 6, 2014 Topic: How to Assess Competencies in People You Work or Partner With

2 kinds of competencies: Core and Business

Some competencies, both core and business, you will need within your business, others can be outside the business. But you have to have a basic understanding of competencies required in order to find the right person/company to work with.

How do you know when someone has the competencies you are looking for in your business? How do you make that assessment?

The interview/hiring process can be complex, so:

• Ask for input from a lot of other people to get a better perspective of the interviewee.
• Listen to your intuition. If you see red flags or feel that something isn’t right, that perhaps the person isn’t quite what they are representing themselves to be, look into it further. Don’t rush. Pay attention to how you feel over and above the formalized process. Give some weight to your gut..
• Make a list: Before you think about hiring someone, make a list of the skill set you’re looking for, and also the type of person you are looking for. You want to be sure to work with someone you like. If you things down before you start looking, you will recognize a good match when you see it.
• Sleep on any decision you make about people!! You will wake up smarter.
• Talk as little as possible - let the interviewee talk. They will reveal more of themselves and their work experience that way. You have to dig, make them tell you what they did, how they did it. Let them tell you about themselves and the work they are capable of doing.
• Check references: Talk to not just their supervisors, but their subordinates as well - to see how they treat others. Take them to lunch; how do they treat the wait staff?
• Think about the personality types you are looking for, aggressive, good with people, intuitive, etc., and look for that in prospective employees. Do you need a creative type? someone who is analytical? a facilitator? You might think about using personality assessment tests as part of the interview process.
• Don’t be afraid to ask naive questions
• Once you’ve hired someone, check up on them frequently.
• You may feel that you need to fill a slot urgently, but don’t hurry it. Important to take time in hiring.
• If a new hire isn’t working out, we often don’t let them go early enough in the process, either due to our reluctance to admit that we hired the wrong person, or simply that we don’t want the hassle. Therefore, keep your prospects open with other possible candidates, just in case you discover your first choice wasn’t the right one.
• If a new hire does’t work out, ask yourself if you gave them the tools to do their job?
• Perhaps a new hire doesn’t quite fit in the job they were hired for, but might their skill set fit in well in another role within your company?
• Peter Drucker took a scientific view of business. He said that if you were right in assessing competency and subsequent performance 30% of the time, you would be in the management hall of fame. The biggest issue is our inability or unwillingness to recognize the likelihood that we will be incorrect in hiring a fairly large percentage of the time so our pride keeps us from taking any corrective action. The key is to develop a process of determining competency so that it can accommodate your errors. Get clear about process, and about what you are actually looking for. Hiring is a very high error area. Small businesses especially need some kind of “shock absorber” built into their hiring process.

Multidisciplinary teams: Many businesses need to develop teams of people with a variety of competencies because the work that will need to be done will change and evolve more often than you will be changing people. Your employees will have to have the capacity to learn and grow. Recognize people who are problem solvers, who can learn new skills and adapt.

Businesses today do a lot of outsourcing - they build a networks of people with whom they can work. It’s important to get these working relationships right from the beginning.

Manufacturing model vs. organic model - throwing the Org chart out the window: Instead of finding people to fill specific positions in your business, think about the possibility of allowing people, recognizing the unique competencies and interests of each person, to define their own role in the company. Identify the work that needs to be done and let each person decide which tasks they would like to do. In the end, everyone defines their own role in the business. You have to deal with the whole person, not a body in a slot, and the person will ultimately find the role that suits them. We need to get out of the manufacturing model and move to a more organic model. If you try to force a person into a role, there will be a percentage of the work that he doesn’t really want to do and you will forever be fighting over those tasks that never get done, or are never done well.

Clearly this won’t work for all jobs. There will be specific tasks or certain kinds of jobs (engineering work, for example) for which you’re going to have to find a person with a very specific skill set who can fill a very specific role.

Try to incorporate this more organic view into the interview process: Give a interviewee a list of tasks that need doing in your business and have them show you what they love to do. This opens the possibility that your business might move in that direction in the future. It’s a great way of having humans fighting against the mechanisms of a company . When a company gets intrenched in the way it does its work, it can’t move forward and adapt.

The large company: As a company grows, however, at some point there has to be some kind of structure (departments, etc). Studies have shown that employees are motivated when they feel they are a part of an organization and that when a company grows too large, they begin to lose that feeling. 200 people is about the max before the the social fabric of a community begins to break down.

When a company exceeds that maximum, you ask, what is the whole employees could be a part of? It doesn’t have to be the whole of the whole, but maybe just a sub-group within the whole. People don’t like a feeling of disconnect. Even in large companies, like Google, the company culture finds ways to keep the people connected to each other and the whole company.

With many technical people who own a business, it’s a question of control. As their company grows, their role becomes more of meta-competence. They are managing people who are actually doing the technical work. For some people, that’s fine, but others don’t want to more into a management role and don’t like the idea of having to relinquish control and pass technical work onto an employee(s).