The paradox of great small businesses is that they soon cease to be small. Winning and satisfying customers rapidly takes them into a bigger league. But there's a way to resolve the paradox: 'Getting big by staying small.'
That's among the innumerable slogans of a business called De Mar: another is 'Not the biggest but the best.' You aim to preserve the virtues of smallness while growing large - and this company is living proof that professional management pays handsomely anywhere: even plumbing.
The boss, Larry Harmon, used the familiar weaknesses of that trade as his springboard. By focusing on customer complaints (high and erratic prices, delays, bad work, mess, etc.), Harmon devised a formula that earned De Mar a leading role in the Video Arts film, 'Service with Soul', starring American guru Tom Peters.
Once a mega-company consultant, Peters now seeks heroes among small firms (which makes commercial sense for him - there are so many more of them). Any big business might emulate De Mar's basic offering: standard by-the-book prices; round-the-clock, seven-day, same-day service; one-year guarantee. Prices apart, too, many British plumbers would claim to offer all, or most, of the recipe.
But few exploit small virtues company so vigorously. It isn't just that Harmon knows all his people personally. That's true of any modest-sized business. His attitude to the staff makes the vital difference. They're not plumbers, not even technicians, but smartly uniformed 'customer service advisers'.
Their pay depends in part, moreover, on points earned from customer satisfaction. Any management guru would applaud this practice. Fitting rewards to business objectives is the surest way of achieving the latter. Separating the two, by the same token, is an excellent way of missing targets - paying salesmen commission on turnover, say, when the object is profits.
Harmon argues that it's his own job to 'get the phone to ring'. He has a full-scale marketing programme, which means spending real money on TV commercials and tele-marketing (3,000 calls a week). It's the role of the 'advisers', acting as what he calls businessmen with 'a rolling franchise', to satisfy and thus retain the ringing customers.
The 'rolling franchise' refers to vans, loudly painted and covered with promotional messages, that are mobile ads on the Californian highways. Here, as elsewhere, Harmon doesn't miss a single professional trick. The combination of pro management and small company virtues has taken De Mar from a mere $4,000 a week in 1985 to $70,000 - and rising.
The business exemplifies several of the policies recommended in this column, including heavy emphasis on training (2% of turnover) and sustained effort to create a Unique Selling Proposition. Look at the 20-odd pages of indistinguishable ads for plumbers in the Yellow Pages, and you'll see why uniqueness must pay.
The Yellow Pages are a very different world from California, true. Are there elements of Harmon's formula that wouldn't translate into British practice? The evangelistic aspects, with 6 am assemblies yelling 'Amen' to Harmon's invocations, might go down badly, but everything else would work the same way: elevating a business out of the rut and into riches.
The most important ingredient is treating both staff and customers with respect. You can't have one without the other. What people are called may seem insignificant. But Harmon's use of 'advisers' serves the same purpose as the late Sam Walton's insistence on calling WalMart's shop assistants (and everybody else in the stores) 'associates'.
What's important is the attitude which the dignified name implies. Walton, in the discount chain he built into the world's biggest retailers, would fly himself from store to store on personal visits. He would talk mostly, not to the managers, but to the people who staffed the departments
Like De Mar's plumber-advisers with their vans, Walton's associates were encouraged to regard their departments like franchises, as businesses which they ran themselves. Harmon gets his team to study examples of the best in customer service from operations like Disneyland - and that, too, boosts people's morale and their performance.
The Peters video should stimulate big ideas in any smaller business. The biggest single cause of failure is thinking small - and it's the easiest fault to cure.
Source:thinkmanagers
