8 Small Business Hacks
Updated: Feb 22, 2020
Hacking is an overused, poorly defined term. I usually stay away from these. But I like the way this one exemplifies alternative thinking, systems analysis, and entrepreneurial spirit.
When I talk about hacking the pharma industry, or any business, I mean taking a systems thinking approach to analyzing the business. When we study a system as the combination of a number of integrated working (or non-working) pieces, we will find ways to perturb the system so that the way everything works together changes.
I call these points that may be perturbed "levers". Push or pull, the whole thing moves - through leverage.
Here are eight ideas that you might use to discover where your company has levers:
1. Cash Flow is King. Teach everyone about cash flow, rather than profit-and-loss, accounting. Business owners make decisions based on cash flow. What might change if budgeting, personnel, and timing of initiative were approached the same way by line managers?
2. Meaningful KPIs. Everyone talks about KPIs, but they're often not meaningful. Lots of times we track things because we have the numbers; we track the metrics and tell ourselves they're KPIs. What will the average time to deliver an order tell you about your customer's view of you? Not much, unless you also know the number of orders that were delivered late. Remember the hierarchy: Data -> Metrics -> Performance -> Success.
3. Annualize everything. Call this the "latte rule". If you buy a $6 latte every morning, it's a daily indulgence, until you call it a $2200 annual expense. Helps with understanding cash flow, of course. Back to KPIs, I only need the weekly or monthly sales data if it tells me where I'm on or off track for the year - and why.
4. Be Different in Everything. Of course we want to know our differentiators. How are we different sort of equates with how are we better. At least when it's a difference the customer needs. Better to think about ways in which your company can be different in all things, not just one. And BTW, every aspiration to differentiate should have at least one meaningful KPI.
5. Track Everything. Create a track everything culture. Is each employee tracking something about their work? If not, how would you expect them to have an idea of how to improve anything? This is really just bringing systems thinking to the bench level - it should be part of the foundation of company culture.
6. Avoid Disabling Employees. Disabling is an adjective here (as opposed to a verb gerund); it means your employees either enable your company or disable it. If an employee isn't buying in to innovation and change, doesn't pursue ideas, doesn't track anything (#5); that employee is a problem for the business and for the culture you're trying to develop. Make a change.
7. 10% Innovation is a Stupid Rule. Almost every company I've worked with has a "rule" that employees should spend 10% of their time on innovation or research or learning something new - whatever you call it. I've never seen anyone track their time this way. Friday afternoon is the last 10% of the work week - are your employees closing their work down before lunch so they can spend the last 4 hours on open ended thinking and experimenting? Unless it's ingrained in the culture, you have to force innovation - add it to annual goals, review every month for progress, whatever works. If you use the 10% rule, your employees will intuitively understand that innovation is only 10% as valuable as completing their task work.
8. Be grateful. A successful business requires energy and effort every day. It's hard work for you and your dedicated employees, your partners, your advisors, your family, and everyone else who has cared about the company along the way. Success also has a component of luck, although we'd love to take all the credit ourselves. There's a lot to be grateful for, and that's worth remembering - to yourself and others.