Why Your Business Needs A Third Eye

A few years ago, three friends resigned from their lucrative jobs and went into business, with all of them setting up their own company.

The first guy, James, went into an information technology-based business and marketed an Enterprise Resource Planning - ERP solution to consumers across the board.

The second guy, Peter, went into agriculture and grew vegetables on a twenty-acre farm some thirty kilometres from Nairobi.

Finally, Morris went into general commodities trading. He purchased anything that moved and sold it at a profit. It never mattered what it was really, but he made a decent income.

Six years down the road, the outfits had become massive operations. James had captured a sizeable market and expanded his operations to Mombasa, Kisumu, Nakuru and Eldoret, and all these branches made money.

Peter had established a steady market for his produce. From the farm gate, he sold to willing buyers who took truckloads twice a week.

Morris had a team of suave business executives that scanned the market for opportunities and then moved in to conclude the deals.

Two years ago, James noticed that his growth had plateaued and was not able to point a finger at what caused it because everything looked normal. Everyone reported to work as always and went about their daily tasks hustle free.

Three months after James reported the flat growth, Peter noticed that demand for his fresh produce had gone up and he enjoyed good margins.

Morris, just like James, in the same timeframe, also noticed the plateauing trend in revenue growth. So how comes that in the same country, one business grew while the other two went flat?

The three friends decided to combine forces to analyse one another's business, subject to signing Nondisclosure Agreements that protected their trade secrets. And their findings astounded them as much as they equally excited them for getting to that much-desired Eureka moment.

Let us start with James. The biggest contributor to the stunted business growth was from within. The business had internal competitors who rode on company tools to make money at its expense. The staff were running parallel operations and acquiring clients for themselves. For every 10 new users, they took 6 for themselves and brought in 4 to the company's books. This explained why these techies came in funky cars and often had evening drinks soon after work, without significant pay rises.

A follow-up thank-you phone call done from an outsourced call centre gave the dishonest employees away. Many of those telephoned, confessed to being the clients of different companies though they were serviced by Jame's company staff from a common database. So corrective action was taken.

The next business audit was at Morris's company. They sought to solve the problem behind the dwindling numbers despite maintaining high operational activity. Again, it was the same problem as at James's company. The staff were stealing. Since it was difficult to know what was being sold on the day, the three business friends sat in for two weeks and closely monitored all the Business executives.

Within the period, a quarter of the team members tendered their resignations and moved out. And with fewer executives, there was a sharp rise in business results. Investigations revealed more about what was going on and Morris was forced to place a cautionary message on the papers alerting the public that those who had left his business were not representing the company any more.

Their focus now shifted to Peter's farm. And as much as it was profitable, they discovered that the farmhands were stealing and selling produce to an alternative retail market from the opposite end of the farm. About 30 percent of all harvested lots were being lost.

Peter was forced to accept the retail market that comprised of small traders who were not served buy his bulk buyers. He made one guy in charge of these sales.

All three friends took remedial steps to overcome the weaknesses within their operations and went on with their businesses with keener eyes. This was not for too long though because the Covid-19 pandemic reared its ugly head.

The negative trend caught up with all three businesses and the drop in activity reflected across the board. So the three friends met once again and asked themselves the simple question: "How do we overcome this pandemic?" They went around every business as they did before but only this time around with a different approach.

At James's outfit, they narrowed down to the 20 percent of the clients that give him 80 percent of the business. He learned from Peter that this was known as the Pareto principle. Having mapped out the crucial 20 percent, they reorganised the team to focus on keeping those clients happy.

Further, they were able to profile these clients attributes and also developed a new sales approach for new clients in order to attract this desired kind of prospects. It did not take long before the sales went up during this pandemic. James reduced his headcount because he did not need that many people in the team.

Peter's farm was their next stop. Because many city dwellers had lost their jobs and left for upcountry, demand for fresh produce dropped significantly, so they had thought. The trucks coming by had reduced and the crop was going to waste.

They had to find a new route-to-market for the fresh produce. On closer analysis, they discovered that the bulk buyers supplied institutions and hotels with vegetables. But now most had closed down and hence the supply shock. So they devised a plan. They found out that all the small grocery stalls in the estates and the small shopping centres were in dire need of fresh supplies. They also found that several pick-up trucks and canters in the same places were idle. So they connected the market and the transporters to the farm and within a week, Peter was in business.

Finally, they went to Morris's business and established that most of the commodities that Morris handled could not move at the moment. So they put their heads together and came up with a plan.

The anything-and-everything approach was tedious to manage. It was a hotbed for deceitful business dealings by staff. They re-examined the records and came up with three leading items that brought in the most revenues.

These items could be sourced easily and had a ready market. Everything else was just a good way of confusing management. And since the business executives were on a retainer and a sales commission-based structure, the three friends beefed up the commission payable on the three hot items and correspondingly reduced commissions on all other items. It worked magic. The three commodities moved fast and before long, the business was out of the woods.

So next time you have a problem, find yourself a trusted third eye to see things differently. This is not panacean and I do not recommend it for all situation because not everyone in business is trustworthy, many will betray you.