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UPDATES&INSIGHTS: Advisory – 7 Things Your Business Should Not Tolerate in 2019

By Robert Wagner, CPA, HoganTaylor Partner and Advisory Practice Lead

This is the year! This is the year to finally say, “There are some things I will no longer tolerate in my business!”

As soon as you read those words, you know what those things are. They are the processes and procedures that were originally put into place for good reason, but are now not being followed. They are customers who are abusing your people and limiting your profitability. Perhaps they are even people in your business who drag everyone else down.

Let’s make 2019 the year that you tackle these issues, making your business better and improving quality of life for everyone.

7 Things Your Business Should Not Tolerate in 2019

1. Failing to Use Customer Relationship Management System to Track Sales Activity

You have spent tens of thousands of dollars for a Customer Relationship Management (CRM) system and have spent weeks implementing the system and training your employees, all to professionalize and coordinate your sales process. But your sales team refuses to “take the time” to use it. As a result, you have no visibility into your sales funnel. Everyone still has his own spreadsheet to track prospects, and the sales team is making multiple calls to the same sales targets because team members cannot see what other team members are doing.

This must stop. Starting in 2019, if that sales call, email, or meeting is not recorded in the CRM, it didn’t happen.

2. Accepting Sales Orders from Customers with Unrealistic Dates for Deliverables

Years ago, your company outgrew the need to accept sales orders from customers who demand to make their lack of planning your emergency. These are the customers who wait until their business is in crisis before they decide to purchase your products or services and then demand expedited results. They “needed it yesterday” and expect you to stop what you are doing and bail them out.  Accepting sales orders from these customers sets you up for failure, disrupts workflow for your best customers, and destroys team morale. Make 2019 the year this behavior stops. Honor your operations and services teams by allowing them to be successful every day.

Do you occasionally need to put forth heroic effort to help one of your best customers? Of course! But if they routinely call you at the last minute and demand a fire drill, disrupting your business and your people’s lives, then they are not one of your best customers.

3. Accepting Incomplete Sales Orders from the Sales Team

Bad habits are hard to break. But 2019 should be the year that your company finally breaks the bad habit of accepting incomplete sales orders from your sales team.

Many companies are so accustomed to working around problems generated from incomplete sales orders, that they assume it is just part of doing business. The company tolerates ordering the wrong parts and then returning them, making multiple trips to the customer’s location to fix errors because the scope of work was unclear, and finally, chasing payments from customers because the billing address was inaccurate or incomplete. These issues can be eliminated if a clear scope of work and complete order information is provided up front.

Make the decision to break this bad habit; then watch your costs go down and employee morale and customer satisfaction go up.

4. Customers Who Fight Every Invoice, Do Not Value Your Services, and/or Abuse Your People

“D customers”.

Every business knows they have customers who should be fired. These customers want the lowest price, nitpick your invoices, are fine if the relationship is win/lose, and make your employees miserable. In fact, they sometimes flat out abuse your people.

Studies have repeatedly proven that weeding out your worst 5% to 20% of customers will improve your bottom line and allow you to provide more attention and value to your best customers. Try it in 2019!

Of course, the exiting of any relationship should be handled professionally. Both sides should leave the relationship with assurance there is a bridge to come back if circumstances change (such as changes in personnel).

5. Poor Invoicing Practices that Result in Additional Borrowings and Other Costly Headaches

Assuming your business is not a bank, 2019 should be the year you stop acting like one.

Many businesses are lazy when it comes to billing their customers. They ship products, deliver services, achieve milestones, and incur enormous costs to serve their customers and then wait weeks or even months to send a bill.

As a result of this laziness, many businesses operate like banks for their customers. These practices require the use of your cash or your line of credit, both of which impact your profitability. Furthermore, when you wait to invoice your customer, you are inviting them to pay late. The message is clear, you do not care when you are paid and are not hurting for the cash because it took you two or three months to send an invoice.

I hear business owners say their project managers or their sales representatives, or even their accounting people are “too busy to invoice their customers!” How can this be? Are you ever “too busy” to process sales orders or payroll? Of course not. Invoicing customers should be a key part of someone’s job responsibilities and, like other important responsibilities, completing these tasks on time should not be optional.

6. Continuing to Fix Problems that Could be Solved with Better Employee Training

The ancient proverb goes, “Give a man a fish, and you feed him for a day.  Teach a man to fish, and you feed him for a lifetime.”  The modern, business version of the proverb goes, “Tell a person which computer button to push, and you answer his question for the moment.  Teach him why to push the button and what happens before and after he pushes it, and you help him learn to solve problems on his own.”

In 2019, train your people to correctly use the tools you have provided and to avoid repetitive errors.

Amazingly, company supervisors and managers have resigned themselves to correcting the same errors every week or month from employees processing transactions, producing products, or delivering services. Often these errors could be avoided with just a few minutes or maybe a half a day of training, but we fail to take the time to help them learn to avoid these mistakes. Frankly, laziness is disrespectful to your employees, as avoiding the conversation denies them the opportunity to become a high performer.

Often these problems could be fixed if employees just knew how, why or what they were doing within your systems. So, beginning in 2019, commit to a combination of formal training from vendors and consultants; micro-learning sessions from “power users” at your company; and finally, to using “stand over your shoulder” sessions where supervisors or “power users” watch team members maneuver in your systems, and then point out mistakes, short-cuts, and hacks to reduce errors and make employees more comfortable and more productive within your systems.

7. Underperforming Employees Who Drag Down the Morale of the Whole Team

Underperforming employees kill morale and erode your leadership. When a team member routinely fails to execute their role effectively and efficiently, your best employees must take up the slack, fix the mistakes, and smooth over shortcomings with the customer—all in addition to getting their own jobs done. Eventually, your stars will resent you for not dealing with the problem.

Make 2019 the year that you step up to the challenge of helping team members who need to improve their performance, and if that effort fails, to compassionately and professionally exit them from the business.

The choice in 2019 is yours.  You can continue on the path of least resistance and tolerate poor habits, or you can make this the year these habits die and free your company to become more efficient and more profitable.