Which of these management mistakes will you make in 2023?
ILLUSTRATION BY RUTH MACAPAGAL
One of the many advantages of having clients around the world and advising so many entrepreneurs, CEOs and family business owners from many different countries is that I get to see the patterns that are universal and also the ones that are particular to a certain region or country.
One pattern that I see again and again, across countries and territories, is the mistake of not thinking things through until their logical conclusion. What do I mean by this?
Entrepreneurs and executives fall so in love with their ideas, products or services that they neglect to do the most important thing: nobody cares if you love the product, only if your clients and customers do. What you think about your product or service literally does not matter.
Why it pays to make Jeff Bezos’ obsession your own
How often do most executives, CEOs or business owners adopt this mindset? Rarely. But the best of the best do. As a “global management guru” (Bloomberg), I have worked with top Fortune 500 CEOs and countless business owners from around the planet, including world-famous billionaires. One of the fundamental things that differentiates the winners from the losers is their attitude, along with diligence when it comes to the customer experience. Period.
Jeff Bezos did not make it to the top by accident. As he puts it, “We’re not competitor-obsessed, we’re customer-obsessed. We start with what the customer needs and we work backward.” Yet most companies work forwards because the people at the top think they have a clever idea. But they do not have their ears close to the ground. They operate in a vacuum, detached from what the customers want. I have said this before and I will repeat it often: most business owners and CEOs live in a bubble. They have no idea what the reality of their businesses and the reality of their customer’s experiences are like.
In this context, so many examples from my decades of experience come to mind. Take the wealthy billionaire business owner of a family conglomerate that is worth several billion dollars. Their brick-and-mortar business was doing so well that they completely neglected online and e-commerce. Then COVID-19 hit. When they contacted us to fix their online presence, it was clear that no one had ever taken the customer journey seriously. When my team did their mystery shopping online, and conducted an extensive audit of their online presence, it had several dead ends. No wonder that sales were low; in a lot of cases, you could not even check out and pay!
You would think that a billion-dollar business would have this covered. Not so. Nobody had bothered to put themselves in the shoes of the clients, and of course, neither had the owners. While creating an excellent online presence is a precise science for which you have to get real experts on board, experiencing your customer’s journey is not rocket science. Just try out your own products or services or listen closely to actual customer feedback.
Conrad Hilton and 1000s of customer feedback
Almost all of the great entrepreneurs and CEOs, especially the ones who have achieved massive success for their businesses, do that.
Conrad Hilton, the American businessman who founded the Hilton Hotels chain, made sure that his staff sent him the customer feedback from all his hotels to his office. Remember that at the time, all those came in paper; there were no emails yet. He regularly went through hundreds of these feedback papers from customers, and they were covering his office floor. He was obsessed with eliminating all the pain points in the customers’ journey and experience. That was how he created what would eventually become the world’s first international hotel chain and laid the foundation for a multibillion-dollar fortune.
One of the top 10 richest families in Asia, whom I have had the pleasure to interact and do business with, is also no exception to this rule. I could observe firsthand how the matriarch of the multibillion-dollar fortune still has an obsessive attention to detail to make sure the customer journey is just right.
Part of the family’s fortune is in retail. The family head would often call her top managers on a Sunday to take a walk with her through the stores to make sure they did not miss a thing. She always keeps her ears close to the ground and never loses touch with her customers, despite her multi-billion dollar fortune, because she knows who pays the bills.
How many billionaires do that? A lot of them. How many unsuccessful business owners do that? Very few. That is one of the key differences.
To pivot or not to pivot? That is the question
Another example from our clients: The matriarch of a European family business conglomerate called on me and my team to professionalize the business, and make sure that her children would not only get along with each other but have what it takes to lead after her death. We had to make sure that the right organization was set up and that the business would become more and more profitable. Among many things, we also did short, medium and long-term strategic planning for the group.
As part of our strategic planning that we did together with the owners and the top management, the owners were dead set on pivoting one of their oldest companies into a completely new direction. At first glance, this all seemed to make sense. They had found that two major trends would be in favor of the new business direction. So far, so good. However, they made the crucial mistake of not thinking things through 100 percent and not planning things out in detail from start to finish.
Any good plan has to be like a movie script unfolding with none of the scenes missing. Yet most companies plan as if the movie only had a beginning and an end, and maybe a few scenes in between. But you need a clear cohesive strategy from beginning to end that shows how to reach your targets and all the steps in between. That was what they were missing. They were so blindsided by their love of the new direction in which they wanted to take their business, that they lost touch with reality.
When love can blind you
When my team and I did a deep and detailed planning with their teams, it became very clear that the numbers and the strategy did not add up. The owners would have lost money and not made a successful turnaround. Consequently, we advised against it and it saved them not only a lot of money, time and energy but also resources that they could apply elsewhere to boost profitability.
The root cause is that owners and CEOs easily get tangled up in the admiration of their own products or services and become blind to how the customer experiences them.
Take Nokia, a famous failure. The CEO who was in charge at the time when Nokia was at its peak but missed out completely on the new smartphone trend, is said to have been so much in love with their phones that he ignored data that clearly showed him that a new trend was coming. Let me close with a German saying: ignorance precedes failure!
Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email [email protected].
