Creativity in Business – Do We really Need It?

Creativity in business - it' makes for good business

I was asked the other day whether there was room for creativity in the business world.

My answer was a resounding, “Yes!”  Creativity is in strong demand in the business world.  There’s a continuous need for it on so many levels:

Think of products and concepts: Steve Jobs (Apple) and Elon Musk (Tesla) are two top-of-mind examples.

Think about creativity in the ability to make a deal (making an acquisition, hiring a star employee, negotiating good terms with a vendor,….).   Creative business people  make the best deals.  

Think finance: accountants who can get creative can save their clients money. Not everything is black and white – the value and savings are often in the grey.

Businesses are inherently full of problems just begging for solutions.

The key is being able to develop practical solutions.

If you’re a creative marketer, sales professional, coach of any kind, lawyer, accountant, doctor, shoemaker, plumber, name any other industry – you can go far.

From an employer’s perspective – ask yourself, “Who is more valuable?”:

Employee #1: Is steady, consistent, and does a good job or,

Employee #2: Is steady, consistent, does a good job, & can solve a problem when one arises?

If you can be a solution provider rather than a problem reporter – you will go far.

Remember, you can handle any given business extremely well.  Likewise, the same issue can be handled very poorly (we’ve all seen countless examples of this).

A business person who is creative (and strategic) will always consider multiple options and then carefully choose the best way of playing the cards they have been dealt.

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Graham Acreman
President, Stellacon Business Coaching
graham.acreman@stellacon.com

How Do I Know If I’ve Got the Right People on My Team?

Successful businesses are always evolving. Sometimes the evolutions are in their core offering. Sometimes it’s in the technology they use, or in the way they sell or even deliver their service. Just like companies, roles within companies evolve too. It’s essential for a business leader to be regularly assessing the skill sets and core competencies required in each role for employees to be successful. This is essential if you want to build a strong team.
One firm I worked with saw a dramatic shift in the skill sets required of their customer service team. The shift occurred when they implemented a new computer system. Whereas the primary requirement for the customer service role used to be someone who had great customer service skills, the primary requirement evolved to them needing to have great technical skills first and customer service skills second. They still needed to be good at customer service but first and foremost they needed to have a technical mindset. Some employees were able to make a seamless transition while others required extensive training. Though most were able to learn the new skills ultimately, some just did not have the technical aptitude. Keep in mind, these were employees who were great in the “Old” role but could not adapt to the “New” role. It didn’t make them a bad employee but it did make them unsuitable for the existing role.
The guidance I would give clients that I work with is that they need to assess the skill sets and competencies that are required in each role for the employees to be successful. They should review these annually and then evaluate their employees against this criteria. Where there are short-falls there should be a formal training plan established in order to help bridge the gaps. If an employee is successfully able to bridge the gap then you have a wonderful success. If not, then you need to consider whether they might be better suited in another role within your company or explore separation.
The reality is, if an employee is not well matched for their job, you’re likely not happy with their performance and they’re not likely happy either because they know they are struggling. As a business leader it’s your responsibility to help each member of your team to be successful and to make changes when necessary.

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Graham Acreman, President | Stellacon Business Solutions

(613) 263-1010

Email: info@stellaconsolutions.com

Web: stellaconsolutions.com

Understanding the Fuss About Tim Hortons

Ontario’s minimum wage increased 21% January 1, 2018.  Prudent businesses have already developed plans for how to mitigate the impact of the increase. Some solutions have been more popular than others.

Already there have been public call-outs of owners who are thought by some to be offside in how they are dealing with the impact of the change.  Some are weathering the storm, others are quickly backtracking, and others are still trying to figure out their next move. Read How to Mitigate the Effects Of Ontario’s Minimum Wage Increase. 

 

 

The reality is, businesses exist to provide value and make money.    In the process, they provide jobs and opportunities for employees. If an employer is not earning a reasonable return on their investment for any reason they will not remain in business long.

Salary costs are often the single largest cost to a business.  The impact of the minimum wage increase will vary by industry.  To get a better understanding of the impact let’s take a look at a case study using a company that has a 60% labour cost and predominantly employs minimum wage workers. This means for every $1 sold, 60% of the revenue is labour related.

This is our case study showing a snapshot of their financials before the minimum wage increase:

In the above, the business has $1,000,000 in annual sales.  Their labour cost is $600,000 (60%), other costs are $300,000 and their remaining profit is $100,000.

Now we take a look at the numbers after the effects of the minimum wage increase:

 

 

 

 

The only change above is that the labour cost has increased 21% (now represents 73% of the total sales).  This single change has taken a business that was profitable and now brought it into a loss position.    Obviously this isn’t good so what is a business owner to do?

Options  can include:

  • increase prices
  • reduce hours
  • reduce number of employees
  • reduce benefits
  • reduce other costs
  • automate processes

Most employers will likely use a combination of these options.

Returning to our case study, if our business owner chose to increase prices in order return to the same level of profitability then our numbers would now look like this:

Keep in mind, our business is not selling any more volume they have simply increased their prices by the amount necessary (12.6%) to maintain the same level of profitability.

In the case of Tim Hortons, price increases of 12.6% would look like this:

 

 

 

Of course a business owner choosing this route would have to consider whether their customers would be accepting of a 12.6% increase.  And in the case of Tim Hortons, this is not a decision that that franchise owners have – their pricing is mandated from their head office.

Ultimately  they had to do something  as has been widely reported in the media.  I suspect in time we’ll see some pricing increases and increased automation.

In the meantime, as business owners consider their next move, they need to be mindful of the potential impact and ramifications of their decisions.   You must carefully strategize how you are going to educate your employees.   That is, how are you going to sell it to them?  An effective strategy can significantly improve your likelihood of success.

 

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Graham Acreman, President | Stellacon Business Solutions

(613) 263-1010

Email: info@stellaconsolutions.com

Web: stellaconsolutions.com