Awful Business Strategies
They say the definition of maturity is being able to entertain an idea without accepting it.
e.g. thinking through alternative viewpoints without reacting emotionally.
The reverse is certainly true, immaturity is when people broadly dismiss any viewpoints they don’t like, even if they don’t understand them.
Or Ray Dalio says “Wisdom is the ability to see both sides, and weigh them appropriately”
If you’re going to read a broad range of business books, you’ll no doubt encounter ideas that strike you as inappropriate.
The trick is being able to analyse and understand these points, then reach your own conclusions.
This article is based on the ideas that I’ve processed, understood and still dislike.
Each of these work – they technically achieve their intended goal.
My concern is that they come at the expense of your staff or customers, or that they violate the golden rule – do unto others as you would have them do unto you.
Mandatory Hotdesking
When I was at ANZ, the company brought in mandatory hotdesking across our division.
They argued that it allowed them to fit 115 people into 100 desks, thanks to holidays, illness and remote work.
This is all true, but misses one crucial factor – it sucks.
Hotdesking for full time employees is uncomfortable and inconvenient.
Combined with an open plan office, it creates a sense of unease – not ideal for developing a culture of trust and accountability.
Yes, you will save money at first.
But if in the long run it decreases morale (and therefore output), is it worthwhile?
These approaches work for startups, small teams and cultures where people like and trust each other.
Unfortunately it doesn’t translate into large businesses, and only serves to magnify existing problems.
Tethered Social Enterprises
Right now, Australia is full of dinosaurs – old, slow institutions who haven’t responded to the evolving market.
They tend to have conservative boards and bureaucratic systems for making decisions.
They’ll also decide that the solution is to start a social enterprise – build a business that will change lives and also generate lots of cash to fund the rest of the institution.
There are two problems with this approach:
1. Starting a social enterprise that makes a profit is enormously challenging, and will require a lot of risk taking, experimentation and creativity.
2. These institutions is designed to prevent risk taking, experimentation and creativity.
If you want these businesses to work, they need some funding, breathing room, and permission to fail.
Without those vital factors, you’ll end up creating something safe and underwhelming, which you’ll then try and saddle with all of your overheads and existing staff.
By all means, run a startup but let it act like a startup.
Going halfway ensures that nobody is happy.
Repeated Sales Calls
One of my LinkedIn contacts shared this image:
I’m not going to dispute its validity, it’s probably true.
It’s also awful.
This says that salespeople should not take no for an answer, and should pester customers into sales.
Imaging being on the receiving end of this treatment – you can’t get rid of someone who’s convinced that they can “wear you down”.
Yes, this approach might boost short term sales, but it also damages your reputation and annoys a lot of people.
High Pressure Sales Tactics
There are a lot of books out there on closing sales, and some of them are pretty good.
There are also a lot that are creepy, whose message comes down to “Create an environment where the customer can’t say no”.
I hate this.
I hate people trying this on me, and I especially hate seeing it done to my friends.
It generally leads to customers walking away with something they didn’t want, didn’t need or will regret.
It puts your sales targets ahead of happy customers, which is a great way of temporarily cashing in, while your long term business suffers.
This just isn’t a game I want to play.
Sales skills can help you grow a genuinely great product, but as soon as you start prioritising your personal agenda ahead of your customer, you become a sleaze.
Commission Only Sales Roles
While we’re at it, commission is an often misunderstood mechanism.
Commission for sales staff is a great idea – it incentivises them to take risks and go the extra mile.
However, positions that are commission only are dangerous.
This makes staff constantly anxious and desperate, which is not conducive for growing a business.
What do desperate sales people do?
They target easy sales, generally people who won’t say no.
This is how we end up with salespeople selling inappropriate educational courses to pensioners and people with severe disabilities – over-promising and then running once payment has been made.
If you value your staff, pay them fairly.
Commissions are like the icing on the cake – a great sweetener, but sickening if that’s all you have to eat.
Layoffs During Successes
I understand the economic argument behind layoffs.
I’ve also seen plenty of cases where layoffs keep a company afloat during hard times.
It’s the decision to fire large numbers of people during the good times that makes me uneasy.
We had this at ANZ; in the same time that profits were at an all-time high, the company cut 1,000 employees in a day, then another 1,000 a few months later.
Losing a job is a horrendous experience, and is not a decision to be taken lightly.
These moves save money, whilst damaging trust, morale and culture.
It makes the mood transactional, each employee does the bare minimum whilst spending a lot of their energy on not being fired.
That means you have thousands of talented professionals focused on looking valuable, rather than channelling their attentions towards benefiting the business.
Sneaky Mailing List Signups
Another one in the category of “Technically Effective And I Hate It”.
You’ll have one interaction with a person – maybe a random LinkedIn request, maybe they take your business card, maybe you sent them an email.
Suddenly you’re getting weekly emails as part of their mailing list.
This boosts vanity metrics like total subscribers, but it also annoys a lot of people.
You’re essentially forcing them into seeing way too much information about your company.
Here’s the test; if you had asked, would they have voluntarily signed up?
If the answer is no, then sneakily adding them to your distribution list solves nothing.
Wilful Ignorance Over Supply Chains
Some businesses pride themselves on their supply chains; these are great companies who pay fair wages and treat their suppliers (and the environment) well.
Some businesses are not as passionate, and openly choose suppliers who cut costs.
I don’t like this approach, but I get why it happens.
At least you can go to these companies with a proposed alternative, and have a good discussion.
The one I can’t stand is the deliberate ignorance – where the company doesn’t look into where their goods come from, generally because they suspect it’s not good.
This technically keeps their hands clean, but in my view it makes them more dishonest than the greedy companies.
If you’re ashamed of where you’re sourcing from, it’s time to make a change.
Turning a blind eye helps nobody, in fact it condones and hides unfair practices.
Websites That Reject Adblock
There’s a recent trend in sites putting up a wall to anyone with an adblocker in their browser.
The idea is that you turn off your blocker, so that they can bombard you with ads.
How ignorant can a company be?
We put the adblockers on for a reason.
Holding us to ransom generates ill will, and increases the chances of the reader going elsewhere.
It is delaying the inevitable – the old model is dead, but pretending that it can still work will backfire over the long term.
Idolising Shareholder Value
I fundamentally do not believe that the purpose of a business is to maximise the rewards for their shareholders.
I understand that is the legal requirement for some companies, who end up with the Ben & Jerry’s problem (where you’re obliged to accept a takeover bid from an evil giant who offers more money).
Businesses can be used to solve social problems, encourage healthy behaviour, lift families out of extreme poverty, as well as being great places to work.
The notion that dividends and profits are the measurement of success – and are the goal of every employee – seems ridiculous in the 21st century.
The businesses we build are not widget factories, but extensions of an entrepreneur.
If the entrepreneurs vision is to fix a social problem, shareholder returns should not derail their success.
