One of the best pieces of business advice I ever got came from an adviser of mine: “The secret to creating a valuable company is to find something you can build once and sell many times.”
The advice sounded simple but it was devilishly hard to implement. At the time, I had one of those nasty businesses that require a custom proposal for every job. Each client wanted something unique, and the variety and complexity of their requests meant I would personally have to review pitches. It seemed like we spent more time writing proposals than actually doing the work.
After a while, we finally decided to focus on one consistent subscription to our research and conferences. We created one brochure and stopped writing custom proposals. At the time, I thought the biggest hurdle would be convincing my customers to stop asking for modifications and special exceptions.
As I rolled out our new focus, I found our customers the least of my worries. Most clients embraced our focus and willingness to commit to an area of specialization. What I didn’t expect, and what actually became the biggest hurdle in making the switch to a scalable business, was the resistance coming from my employees.
Because I subscribe to the old school of management that says the boss gets to decide what the employees do, I explained our new focus to my team and simply expected them to fall in line.
Most did, but some chose to obey my instructions only selectively at best and, at worst, ignore them outright. I wrote recently that part of the problem was the way I had structured my general manager’s compensation, but the other issue was that some employees wanted to focus on what was intellectually challenging to them, which usually meant customization.
I hired one sales rep right out of MBA school — we’ll call her Sabrina — who was a problem from day one. I’d send Sabrina out to sell our subscription service, and she would come back and insist we meet one-on-one because the prospect represented a unique opportunity. Not wanting to quash her enthusiasm, I would agree to sit down with her, and each time Sabrina would lay out a problem with a prospective client that in her mind required a truly custom approach.
Each time I would patiently explain to Sabrina that we no longer offered custom consulting and special tailoring for each client. I would point out how her prospect’s issues were actually not all that unique and could be satisfied within the confines of our standard offer. With each explanation, I would get increasingly firm with Sabrina. Finally, after six months of wasted effort, Sabrina and I agreed it wasn’t working, and she left.
I ran into the same problem with one of my senior consultants, whom I’ll call Riley. Riley had come to our company from another consulting outfit and he was always determined to prove himself, which is why he would go way beyond our standard offering when serving our clients. If our contract with a customer promised two workshops, Riley would do four. If a client wanted some extra analysis done that fell outside the scope of our agreement, Riley would offer to do it. This made for great client relationships but it also meant we couldn’t give Riley as many clients to manage as we gave other consultants.
I don’t think Riley or Sabrina were bad people or unintelligent. In fact, they were among the most educated — and expensive — employees we had. I actually think they were overqualified to work in a company that wanted to scale up. We needed people to follow systems, not to reinvent them.
Next time I’m going to save myself money and hassle and hire fewer people who want to think and more people who want to do.
Special to The Globe and Mail
John Warrillow is the author of Built To Sell: Turn Your Business Into One You Can Sell . Throughout his career as an entrepreneur, Mr. Warrillow has started and exited four companies. Most recently he transformed Warrillow & Co. from a boutique consultancy into a recurring revenue model subscription business, which he sold to The Corporate Executive Board in 2008. He is the author of Drilling for Gold and in 2008 was recognized by BtoB Magazine’s “Who’s Who” list as one of America’s most influential business-to-business marketers.