Tag: business

The Jamaican proverb “Every Mikkle Mek a Mukkle” summarizes a powerful idea that Caribbean executives would do well to contemplate.

The proverb simply means that small things count, because small things aggregate into big, important things. In other words, it’s similar to the more well-known proverbs “A Journey of a Thousand Miles Begins with a Single Step” and “Every Bit Counts.”

I have observed that we have many companies in the region founded on great ideas, and possessing wonderful goals. However, when it comes to the minute details of execution, our grasp far exceeds our reach.

For example, I have stayed in many hotel-rooms across the region, but very few are able to provide the kind of details in their infrastructure that are the signatures of an excellent company. It might be the cracks along the ceiling, the uneven floor, the cement left along the grouting or the broken chair in the room.

In restaurants, it’s the filthy restrooms, the scuffed walls or the beaten up menus that have twice as many items as the restaurant actually has available.

In many companies, you call to do business with them and the phone just rings and rings without an answer.

When they occur, none of these cases is a “deal-breaker” that could cause one to leave and seek lodging or a meal elsewhere.

Instead, we get used to the low standard, as our companies continue to “train” their customers to expect no better. In a prior issue of FirstCuts, I spoke about the way in which employees of companies in our region give each other “blighs” (allowances) that allow poor standards to continue, because it’s simply easier to overlook seemingly small issues rather than to confront them.

I also wrote about how Caribbean managers could improve their time management skills, and how executives could work to restore promises that have been broken in the past.

While these may all seem to be small issues by themselves, the cumulative effective is tremendous.

Companies struggle for reasons that they cannot pinpoint, and are incorrect in thinking that a single bullet fired at the right spot will cure all their problems and move them to higher performance.

They are wrong.

Instead, they must learn to inspire their workers to devote themselves to individual, private, invisible excellence that may never be publicly rewarded.

An old-fashioned mechanical clock is a useful metaphor. There is no way for a clock to keep proper time if a single cog is out of alignment with the others. It might add or take away a small fraction of a second each day, but the overall effect is that it renders the clock ineffective, as reflected on its face.

The success of what shows up on the face depends on what happens with the moving parts inside, and this is what managers seem not to grasp. They allow seemingly “small things” to accumulate into big problems, and by the time the big problem is fully experienced, many simply give up.

It’s up to them to lead the way, by example, and demonstrate that being professional means to tend to every task with a kind of dedication and excellence that is often missing.

Here in the Caribbean, there are a number of business anomalies that I have detected that I can only attribute to our rather unique history. They have to do with practices that I see managers repeat, even when it’s clear that they don’t produce results.

Hiring for the Body-Count

Managers across the region make the mistake of hiring too many of the wrong employees, focusing on appearances over results and putting pride before profits.

It seems to me that too many of our companies refuse to act on the notion that a handful of skilled employees are able to outperform a much larger number of those who are unskilled. There seem to be at least two reasons why this situation persists.

The first is historical — the economies of old were built for the most part on unskilled, unmotivated labour. A handful of mostly skilled managers from Europe had experience in agriculture, business and trade, but workforces comprising Africans, Indians and Chinese were brought in large numbers regardless of their skills, and in most cases forced to work at the point of a gun. The solution then, and now, was to throw more people
at jobs until they could be completed.

The second reason the situation persists is that companies don’t understand that there is a vast difference between hiring 10 people for 100 days each, and hiring 100 people for 1 day.

The difference has to do with what is called “The Mythical Man-Month” which is a fact of knowledge work. Work that requires communication and coordination becomes more difficult when an additional person is
added because that person’s relationship with every other person must now be managed. In other words, the 10th person added to a team bring with him/her 10 x 10 new communication links that must be managed, while the hundredth person added requires 100 x 100 new
links.

The increase in communication complexity grows exponentially with each person added.

A manager who decides to hire more people, rather than to obtain more skilled workers is only making things more difficult for himself.

In other words, it makes better economic sense to hire a small group of high performers to replace a larger group of low performers, even if the output of both groups is the same and the total wage bill is equal. From the manager’s perspective, it’s easier to manage a small group than a large one.

This fact seems to be lost on our regional companies.
Focusing on Effort vs. Deliverables

Flexi-time has been long in coming to the region, and as far as I can tell it has something to do with not being able to manage for results.

A manager who places an ad in the paper in order to fill a vacancy will only fill it with a full-time employee, and won’t consider an employee who is willing to work for 4 days at 10 hours each, or even a part-time arrangement with someone who is highly skilled.

The reasons could be varied, but I imagine that the overriding cause has something to do with a fear of doing something unconventional, and perhaps “getting in trouble” with her own boss. Although it might make economic sense, company politics sometimes turn common-sense upside down.

The most unfortunate consequence of these decisions is that employees quickly learn that management is more interested in appearances than actual results. “Looking good,” and the avoidance of “looking bad”
seem to be the most powerful motivators of all.

Pride vs. Profits

It’s an interesting phenomena — retailers across the region never seem to have sales the way their counterparts in the US and other developed countries do.

The problem seems to be one of pride.

The thinking goes like this: “I paid $X for this item and there is no way I am going to sell it for less than $Y.” This thinking prevails even then the item has been gathering dust on the shelf for months.

It’s a simple mistake in business economics — it’s better to have $2.00 in pocket now than it is to pay to carry an item on the shelf for several months that may not sell.

The mistake is an easy one to correct in practice.

However, the feeling of failure that comes from discounting the item is often too much to bear, along with any embarrassment and loss of face that might come from admitting that a mistake was made. Instead, it seems that many retailers just keep the item on the shelf, act as if everything is OK, and their employees comply by
keeping their mouths shut.

After all, for most of us, it’s easier to lose money than it is to lose respect. Unfortunately, retailers usually don’t have someone in their face telling them that their pride is costing the company too much money!

I have a new theory when it comes to Caribbean companies that are fighting hard against local or regional competition.

The winners will be the ones who are able to answer their phones.

What I mean is simply the following: Caribbean companies that get the basics right have an advantage over all the others.

Let’s pick an example that we can all perhaps relate to — the banking sector. From my observation, there is not a single regional bank that currently stands out from the others in terms of properly executing what I consider to be basic banking functions.

The advertisements and promotions claim otherwise, of course.

However, the reality is that doing simple deposits, withdrawals, payments of credit cards, customer service agents that offer basic courtesies, wiring, computing interest and fees, … these are what I consider to be some of the essentials of basic banking. Our banks have a hard time executing them consistently.

Get someone good, or someone that you know, to help you on the inside and you might “get through” quickly.
Get someone who is untrained and unprofessional, and you are in for a difficult time.

But this is not a situation that only our banks find themselves in.

Industries all across the region have the same problem of being unable to execute the basic functions of business.

What are some of the things that our companies are struggling to do?

– update their website. 16 year old bloggers are able to do this, so why can’t a 2000 person company?
– answer the phones. All the time. Offer voicemail outside of business hours
– return calls and emails
– show up at meetings
– take action on promises
– when plans change, communicate with those involved
– train everyone who might answer the phone on behalf of the company to pretend that they care, even a little bit
– keep their places of business clean. Soap, water and paint are not that hard to get
– ask “Is there anything else I can help you with?”
– let me know about new products and services when they become available
– act as if they are interested in doing business when a willing customer calls

I believe that a company that does ALL of these basics has a good chance of dominating their industry. In Jamaica, I am convinced that Digicel has come to dominate the mobile phone industry simply because their competition failed to do the basics for many years. It leads me to think that many companies in the region are
vulnerable, but just don’t realize it.

I think that what amazes me most is that there are regional CEO’s and other executives who are just as inept at the basics of business as entry-level employees.

What they do in common (and what saves them in a jam) is their ability to talk themselves out of a jam when they need to. They over-use their ability to think quickly on their feet, to make jokes and to sound intelligent to cover up their miscues. Too often, we give the a bligh, and accept the “sweet talk” as an acceptable
substitute for results.

Sadly, it results in a mediocrity that only persists.

I can finally say that I have made it through a critical process — that of opening up, and registering a business in Jamaica.

The entire process was a daunting one, and I can understand why they say that we have one of the most inefficient tax systems in the world. I have been putting off this post, because I needed to recover a bit from the whole thing so that I could write with some perspective.

The first step is to register the company, and that took several months due to a variety of glitches, some caused by me and the way in which I was trying to set things up. I eventually settled on creating a company that is entirely owned by a U.S. company that I own.

The paperwork was fairly straight-forward, and I used a local company called Profits and Dividends to get this step done. The end-result of this activity (which cost some US$700 or so) was to receive the Registration papers for the company and a company stamp.

In essence this was the simplest step.

The next steps were all necessary in order to have even a single employee. They need to be done with some precision, due to the fact that they all involve travel around Kingston from one office to another, and it’s quite easy to get turned back from the office in order to retrieve a single paper that was forgotten. As my wife said, just bring everything that you think might be needed with you in a briefcase .

1. The first stop was the National Insurance Scheme (NIS) office in New Kingston, at 18 Ripon Road, off Oxford Road.

   You need to bring all your company registration documents plus a full copy. Also have a personal Taxpayer Registration Number (TRN) and driver’s licence handy for each of the steps. Fill out the NIS form for the business, and for all the employees in the business if they have never been registered.

   Get the slip, and the letter that indicate that you are registered.

2. Visit the Tax Office some time between the 3rd and 25th of the month to avoid the end of month rush. Sign up for a Business TRN. Bring a copy of the registration. The wait for this to be completed is about 5 minutes.
3. Once completed, stay at the Tax Office to register for General Consumption Tax (GCT) payments.
4. If a Tax Compliance Certificate (TCC) is needed, then a visit to National Housing Trust (NHT) and the Tax Office are needed. These are used to clear items from customs and are good for six months.

What makes the process difficult is the movement back and forth during working hours from one office to another. I haven’t actually paid payroll taxes yet, so that will be another bit of excitement, to be sure.