Identify the core of your business.

While I was attending the annual African Banking Congress in Johannesburg, I had the good fortune of being able to participate in a master class on aspects of management. The master class consisted of a lecture and interactive simulations in which we were asked to make business decisions which were then checked against a best practice code. There were plenty of surprises, even astonishment at times when what we thought were brilliant solutions were shown up to be the sort of errors that amateurs can be expected to make.

The best practice check list showed that in fact we had not made the best decisions in achieving the objective. Our decisions had been coloured by prejudices that we were not even aware of, assumptions not backed by facts and a whole range of non-sequiturs.

After this sobering splash of cold water, the presenter perked us up by saying that, despite our errors, in fact we had performed better than the average managers he advised.

Then he posed this question: Why do most small companies remain small? "99.999% of big companies start small," he added. "99.998% remain small. What factors enable the 0.001% of companies that start small and grow big to remain big?"

The answer, he said, was starring us in the face: "People, people, people! Get the right people doing the right jobs in the right way and success is assured." He pointed out the example of soccer clubs. "What is the difference between a Manchester United or a Real Madrid and my neighbourhood team? The ball is the same, the game is the same, the objective is the same, the playing field is the same, the skills required are the same.

"Why then is Manchester United not only the most famous but also the richest team in the world while no one except the players and their friends and families has heard of my neighbourhood team?

"The quality of players is the only difference," we agreed. "There you are," he said. "Get players of this quality and put them under the direction of a man like Sir Alec Ferguson and you get Manchester United. People are the most important resource for any business."

Yet, he told us, research carried out all over the world came up with this startling fact--most companies treat their workers as if they were the least important factor of their activities. "That is why small companies remain small." To compound the issue, even when companies succeed in recruiting good people, a staggering 60% do not provide them with adequate resources with which to do their work. "Incredible but true," he added.

"Many companies try to force people into systems or resources; the really successful companies--Microsoft, Google, De Beers and others have always fitted resources and systems around people. It makes sense. You do not pay millions of dollars for a Ronaldo and then insist that he wears football boots that are too small or too big for him because you bought a job-lot! That sounds absurd. But go around and see how many companies cripple their workforce with resources that don't fit. Then they wonder why they are not growing or are always on the brink of going under."

Snow blindness 

He told us he had been called in as a consultant when a very famous butchery business in Johannesburg had started to go down the pan after the founder had died. His sons, clutching business degrees, had revamped the shop, smartened up the uniforms of serving staff, advertised consistently and offered discounts.

But customers kept going to the competition. Exasperated, they had called in the presenter's management consultancy. "The first thing I did was to go to the actual butchery area--where the meat was cut. Here I found a disgruntled, unhappy staff. They showed me their blunt knives and other tools. The sons had bought a lot of cheap equipment without consulting the cutting staff and most of it was either useless or had broken down.

"These guys hated the jobs they once loved. The meat was badly hacked and throughput was very slow. No wonder the customers stayed away. I took the head butcher and we went out and bought the best knives and other cutting implements we could find. It cost around R15,000 in those days.

"Then I went back to the sons and told them that I had fixed the problems and that the customers who had deserted them would start to return soon. Our company billed the butchery over R60,000. A couple of month's later, they sent me a crate of champagne with a note that said 'With thanks to the miracle worker. We don't know how you did it, but you did!" Their business was back on track.

"They had missed the most obvious solution--one which was staring them in the face. We call that 'snow blindness'. They had neglected the core centre of their business"

His closed his master class with this admonition: "Every morning, ask yourself this: What is my business? How will what I am doing help my core business?" Then answer honestly and act according to it. If you do, you will not need my services."