Don't Prioritise "Value" Over "Value Added"
I was observing a contract negotiation between two parties. The other party’s (let’s call them the “buyer") negotiator was playing the usual game of beating down price and focussing on that alone.
What the negotiator seemed unaware of was that they were not getting the difference between “value” and “value added”. In this case, the negotiator thought that their objective was to get the lowest (“best”) price, without thinking about the best deal.
The risk the negotiator was taking was that, in their focus on getting the lowest price, they were actually doing two things, neither of which were good:
- They were alienating the supplier with their “nickel and dime game”;
- They were losing out on other intangible benefits that would actually make the contract work more smoothly.
When I explain that this negotiation was actually a renegotiation of a contract coming to an end, in which the supplier had done a lot of work outside the scope of the original agreement, the negotiator’s stance was clearly not going to help. The supplier was clearly feeling unappreciated and not respected. The buyer’s representative could see what was going on, but was “under orders” not to interfere.
The conclusion was that:
- The supplier left feeling aggrieved and determined to stick to their guns;
- The negotiator thought they’d done their job well;
- The buyer clearly was going to get the “bare minimum” for their buck.
This is where the concept of value added comes in. In every contract, one usually finds instances where the “supplier” of the service may throw in little “extras” that aren’t part of the contract, but help things run smoothly for their buyer. These may be, for example, services that aren’t covered in the terms or scope laid out in the contract, but add value and/or save money for the buyer.
Occasionally, it’s better to preserve the goodwill of the other party, as well as leave room for the “value added” from that goodwill by knowing when to stop (as long as you’re comfortable with the price). In the long term, everyone’s in business to do well, but by frustrating this, there’s a risk of losing valuable “hidden benefits” as well as supplier goodwill.
This extends to other aspects of business, such as how one treats staff, equipment, premises and any number of other aspects. Skimp on these, and customers and staff will notice. It'll show in staff attitude and (worse) reduced customer service.
In the end, the motto "You get what you pay for" is one to remember.
I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management. I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services. For strategic questions that you should be asking yourself, follow me at @wkm610.
Labels: Customer Care, Productivity, Selling, Strategy
Multitasking – Solutions for the Office
My last post looked at the dangers of multitasking. In this post I’ll look at what we could do in our office environment in addition to the suggestions I made in the previous post.
Life in the office demands that we complete a multitude of tasks within tight time constraints. The fact is, we can expect numerous interruptions, meetings, phone calls, colleagues stopping by for a chat, “urgent requests” and any number of other distractions.
Where open plan offices were seen as “the way” in the past, some are now beginning to realise that they actually have a negative impact on productivity. They have certain advantages if one wants to hear what’s going on in one’s team, or because they allow us to fit more people into a given space than if we had walled offices. However, they still mean reduced productivity in many cases.
Getting rid of or re-designing open-plan offices to be less open-plan is going to take time, so what can we do in the meantime to reduce the problems inherent in multitasking?
Meetings:
- Schedule these for 45 minutes: the average person can focus for this long at a single stretch and it gives them time to think about what happened before the next task.
- Start and finish meetings on time (scheduling them 45 minutes before the lunch break or closing time gets people focussed).
- Avoid scheduling meetings right after lunch breaks or on Friday afternoons.
- Insist that participants switch off all smartphones and tablets or other digital devices not required for the meeting (easier said than done).
Go “Offline”:
- Stop expecting (or demanding) instant responses. Just because someone can receive an email or text instantaneously doesn’t mean you need (or deserve) an instantaneous response.
- If it’s that important, go and talk to them or call them.
- Let people turn off email at certain times (some businesses now have a policy that requires employees not to engage in office emailing between certain out of office hours).
Recharge:
- Allow people to relax at a particular time of the day.
- Have “recharge” or “rest” rooms
On an individual basis:
Prioritise:
- Do the most important things when you’re fully charged (for me, this is from 7:30am - 10:30 am).
Work without interruptions:
- Set time limits for tasks or milestones so you can have a break.
- Focus.
- One of my managers was happy for us to work from home, provided that we agreed it beforehand, it was in the diary and we could be contacted by phone. This meant we could concentrate on that all-important report/presentation, strategic plan in peace and quiet.
Have “Thinking Time”:
- Use this for long-term, strategic planning in another area away from your workspace.
Take Holidays:
- Disconnect entirely from the office. You have a right to relax and it’s necessary for your health.
- Your colleagues between them should be able to manage most things if you’ve briefed them properly.
- Turn off the phone.
For every multitasking issue there’s usually a solution – all it takes is a willingness on all sides to understand it and make it work. In the end, no manager should want an unproductive team.
I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management. I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services. For strategic questions that you should be asking yourself, follow me at @wkm610.
Labels: Leadership, Productivity, Teamwork
The Dangers of Multitasking
How often have we seen the words “must be used to/good at multitasking/have well-developed multitasking abilities”?
Multitasking, or the process of handling many tasks at the same time, is seen by many as a sign of a truly competent person. Business life is full of interruptions, firefighting, meetings, emails, water-cooler chats and being interrupted by friendly colleagues or phone calls.
Observation, however, suggests that multitasking makes one not only less productive, but also increases the likelihood of errors.
Studies have shown, for example, that multitasking is likely to see:
- Up to a 25% increase in the time taken to complete a task;
- Up to a 40% increase in time lost switching between tasks;
- Impaired performance when performing tasks involving selection or action;
- Impaired ability to focus;
- Increased difficulty in retaining new information;
- A drop in IQ of 10-15 points (equivalent to one night without sleep)!
- Switch from one job to another
- Driving/calling (potentially dangerous)
- Asking how much time I need to finish a task beforeallowing interruptions;
- Asking whether it’s more productive to keep working or to allow an interruption (e.g. the boss)?
- Practising focussingon a task (not easy in a noisy, open plan office, which is why some wear headphones);
- Eliminating distractions where possible;
- Setting aside “focus times” for important tasks when I know I can work in peace (why else do people come in early or stay after the customers have left?)
- Establishing “stopping points” during a long task to allow me to take a break (c. every 45-50 minutes);
Multitaskers typically think they’re more effective than is actually the case. Every time they’re distracted from a task, it takes an average of 16 minutes to return fully to that task, and they often forget what they were working on! Generally, heavy multitaskers find it more difficult to:
… compared to those who complete one task at a time. In 2014, the University of Sussex found that they also have less brain density in the region of the brain responsible for empathy, cognitive and emotional control. They may also have difficulty in organising thoughts and in filtering out irrelevant information.
The human brain can only focus on one thing at a time. This allows higher levels of concentration, resulting in a task being completed faster and to a higher standard.
What makes for “fertile” multitasking environments? Generally, a crowded or hectic environment (like many offices). Typically, we find people in these environments will multitask activities such as:
What can we do to regain control? I’ve tried (with success):
Anything that doesn’t require concentration can be multitasked in the right environment. Catching up on emails during a client meeting doesn’t come under this heading.
In my next post I’ll look at more multitasking solutions for the office in general.
I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management. I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services. For strategic questions that you should be asking yourself, follow me at @wkm610.
Labels: Career, Productivity
