Any entrepreneur knows that when it comes to running a business, your work is never done. From the moment you wake up in the morning until you go to sleep at night, you’re worrying, planning for the future, and more often than not, putting out fires. In fact, like a fire fighter, you feel like you’re always on call—prepared to rush in and extinguish a customer’s complaint, a lost order, a disagreement between employees, or whatever the day’s blaze seems to be.
The best way to keep these flames from permanently harming your business is to “leave a fire extinguisher behind” after putting out each fire. Do so and you’ll turn each problem into an opportunity to improve.
I learned this lesson from Dave Lindsey, a successful entrepreneur and founder of Defender Direct in Indianapolis. When you fight a business “fire,” your job is much more than solving the problem. It is to leave behind processes to prevent the problem from happening again or to make it much easier to fix the problem if it does recur.
Dave Lindsey is just one of 54 successful entrepreneurs who participated in my study of highgrowth entrepreneurial businesses. The study was designed to illuminate the common challenges entrepreneurs faced as they pursued growth after surviving the start-up phase. The results of the study are the subject of my book, Grow to Greatness.
Much of Grow to Greatness discusses processes, because they are the “how-tos” of your business and are essential to its growth. When you’re starting up your business, institutionalized processes aren’t too important because you’ll do much of the work yourself. But as your business grows, there will simply be too much for you to do on your own. You’ll hire employees, and, being human, they’ll make mistakes or come across situations they aren’t sure how to handle. Without the proper processes in place, they’ll guess what to do, and that often means you’ll have to come sprinting in with your fire hose.
Read on for advice on how to keep your business blazes to a minimum and how to make the most of them when they do pop up:
Determine the Cause of the Fire. As a small business owner, you can spend your entire day running around, fire extinguisher in hand, putting out fires. Unfortunately, when you’re the resident fire marshal, you have just enough time to keep the business standing and not much time for anything else. Plans for advertising to new customers, new service or product initiatives, the hiring of needed staff, etc., all fall by the wayside. That’s why it’s so critical to determine the cause of a fire once it happens.
You certainly don’t have the time to be putting out the same fire over and over again. For one, a customer might give you a second chance, but disappoint her again and it will be difficult to win her back. It’s also bad for your high-performing employees’ morale. They don’t like being slowed down by these fires either, and when they feel no solutions are ever put in place, it exhausts them just as much as it exhausts you. When you take the time to really examine why a fire started, it’s much easier to fix.
Once a Fire Is Out, Put a Process in Its Place. After you’ve put out a fire and determined its cause, you must leave a process behind to prevent the problem from arising in the future, or, if it does, to provide employees with a fire extinguisher so they can put out the fire themselves. Of course, it’s not as simple as it sounds. Why? Creating and writing processes takes time, and, next to cash, time is probably one of your scarcest resources.
Every time you correct a mistake, write a short process statement saying if Problem X happens again, follow the instructions on Checklist X. Then, make sure every employee understands this new process. Every day, new problems will pop up, but by taking the time to write a process, you will save yourself time in the future because you won’t have to be constantly correcting this same problem. Instead, you’ll have time to handle new ones. What results is a constant state of improvement, which is foundational to success.
Start with the Hard Stuff. By now you are probably thinking to yourself, Well, everything needs a process. Where do I start? Start by focusing on those actions and problems that, if handled incorrectly, can do the most harm to your business. That usually means product or service quality issues, customer interactions, brand reputation issues, and purchase or cash problems. You may have 20 fires that need putting out, but you can prioritize by focusing on the ones that could have the biggest impact on your business first.
Create Checklists for Important Tasks. Even airline pilots with decades of experience go through a safety checklist before taking off. No matter how much entrepreneurial experience you have, your business shouldn’t be any different. You should not only have how-to processes written down to handle problems that have occurred in the past, you should also have checklists critical to the operation of your business, for example, how to open for business; how to close the business; what to do in an emergency; what to do if an employee does not show up for work. For some situations, you may need a checklist or how-to process that also explains what NOT to do in a situation. For example, what NOT to do when approached by an unhappy customer or what NOT to do if your register comes up short.
Eliminate Single Points of Failure. Processes are important in a growing business for another reason: You never want a single point of failure. Make sure you always have back-up. Every employee’s job must be taught to at least one other employee so that he or she can step in immediately if someone does not come to work because of illness, family issues, or unforeseen circumstances. When every employee is trained to do two jobs, the business does not have a “single point of failure.” It helps keep the business running smoothly, and it reduces your stress and the stress of your employees.
Update Processes as Needed. Putting in processes is not a one-time job. First, it is impossible to write up a process that covers every eventuality. To remain effective, processes have to be updated and improved as one uses them. Second, as your business grows, you will need different and more sophisticated processes to handle more volume and more people. That may require software to keep better records and to create information faster so that you know about and can quickly and efficiently manage mistakes.
“Huddle up” to Keep Key Processes in the Front of Employees’ Minds. Use short morning meetings to set priorities for the day. I learned about these morning meetings from Horst Schulze, who led the creation of the service award-winning Ritz-Carlton Hotel chain. He called them “huddles.” During his tenure, every day, before every shift, in every RitzCarlton Hotel in the world, a short “huddle” was held to highlight one key operating principle or process. Each of the chain’s core principles was discussed at least once every month. You can use “huddles” at your business to highlight how a process was successfully used the day before or to remind employees of a process’s importance.
Schedule “Firehouse” Time. Thinking strategically or on a macro level about how to grow a business is different from thinking tactically and reactively to more immediate business needs. Several entrepreneurs in my study emphasized the need to allocate time to get away from the business to think clearly about their long-term business needs. One entrepreneur emphasized, “Give yourself an afternoon a week to think about five critical things going on in the business and to make sure you are focused on big opportunities or problems.” One of my colleagues calls this specified time for strategic thinking “firehouse time”—time away from fighting fires to think about the business and plan for its future.
Processes are important in a growing business for another reason: You never want a single point of failure.
Think of the processes you create as the structural foundation of your business. A building’s foundation must be strong to support the edifice. And your processes must be strong and effective in order to support your business.
Successful entrepreneurs are constantly fighting fires, and that isn’t necessarily a bad thing as long as the fires are different each time and fire extinguishers—processes—are left behind. When this is the case, progress is being made. You are creating a well-managed business with high standards and quality performance. That usually translates to happy customers and great success.
Edward D. Hess is author of Grow to Greatness: Smart Growth for Entrepreneurial Businesses (Stanford University Press, 2012). He is professor of business administration and Batten Executive-in-Residence at the Darden Graduate School of Business, University of Virginia. Ed is the author of 10 books and many cases and articles. His work has appeared in over 200 media outlets around the world including CNBC, Fox Business News, Dow Jones Radio, WSJ Radio, MSNBC Radio, NPR, Forbes, Bloomberg, BusinessWeek, CFO magazine, Washington Post, and Financial Times. His book Smart Growth: Building an Enduring Business by Managing the Risks of Growth (Columbia Business School Publishing, 2010) was named a 2010 Top 25 Business Book for Business Owners by Inc. magazine. www. EDHLTD.com