Our intuitions can sometimes lead us astray when it comes to decision making. Sometimes what seems to be the obvious step can benefit your business in the short term but have devastating effects in the long run, causing your business irreparable damage.
- Buying decisions, Fresh vs Cheap.
- The buying choices of a food business is one of the most telling examples of how devastating short term decision making can be for a business. A business can choose cheaper ingredients for their products that can allow them to save money, but it can easily come at a sacrifice on freshness of the ingredient. A food business that lacks fresh food can drive sales down, which lowers the food turn over rate and can cause even more reason for the food product to spoil. It is a vicious cycle that goes on and on until the business fails unless they recognize the error, but by that time it can be an uphill battle to win back the trust of your customers.
- Treatment of employees
- Often times, short term thinking of staff consist of a concept that employees are an expense (You pay them for their work, that’s the definition of expense right?) When a business owner sees the people working for them as an expense, it is hard to establish good morale which directly reflects in the business. Instead, try seeing them as an asset to your business; building blocks that help grow your business every day. For example, if a waiter is performing poorly, the short term decision is to let them go. However, that does not guarantee the new employee taking his place will be any better. Perhaps the employee was perform poorly because they were underpaid, they did not feel a sense of belonging in the restaurant, they did not feel valued, or they were simply poorly trained. Long term decision comes after thorough investigation of the core of the problem to the staff’s performance and creating systemic changes that eliminates this problem can benefit businesses that are long lasting. Operating as a business that values its employees will also give the business a good reputation and naturally attract better candidates for employment.
- Over at Huff Post a great article by Ryan Johnson provides several examples of how well established companies can pay fair wages and do better than their competitors.
- Customer Service
- Some restaurants don’t see much value in customer service, but in this age of online reviews (Yelp, Tripadvisor, Google, etc.) it can be detrimental to a business. A business that is looking to maximize marginal profit at the expense of customer experience will lose more money in the long run when return visit goes into oblivion. Above all, all businesses should be comprised of human interactions. If you take away the wish for customers to have an enjoyable experience, you are taking away the humanity within that transaction.
- Here’s an interview by Forbes with Eric Ripert, a celebrity chef on his understanding of customer service.
- Shop/ restaurant front maintenance
- This goes hand in hand with customer service. If you have a restaurant or grocery business, the way your business looks in a customer’s eyes are the crucial first impression you make. It may be a hassle to clean between the tiles or dust regularly, but these little things can help a business give customers a clean image. Signage and utilization of natural light from windows are also crucial in achieving a comfortable customer experience. If signage is dirty and unwelcoming, you are losing a great opportunity to utilize creativity and make people remember you. If windows are blocked by products (snack stands, news stands, drinks fridge, etc.) people will be less likely to want to step into the business and no amount of extra products can make up for that potential profit.
In conclusion, all of these points go back to the basics of empathy. When you are thinking in the benefit of others in every interaction and decision, rest assured that it will be reciprocated. Don’t be blinded by immediate return, long term thinking is the key to a successful business.