Several months ago, an article I wrote called “What is the Heart of Business?” was published in a local Business Journal. You can find the article on my website, but I thought it would be helpful to reintroduce the basic premise, here, because it continues to be relevant.
Businesses must make money in order to grow, even to survive. It seems reasonable to create a plan by which the business will make money. Should profits, then, be the focus of the business? Are profits the heart of a business?
We have all seen restaurants that are doing really well; they have regular customers, they serve great food, the atmosphere is warm and inviting, even romantic. They become so popular that parties must wait for tables on Friday and Saturday nights, but it is worth it. Everything seems to be going well for the restaurant. Then, for some reason, the quality of the food takes a dip. The decor gets a bit tired. The staff is not quite as enthusiastic. You ask the manager or server what is going on and they either say, “Nothing,” or something about how costs are rising and they are trying their best to maintain prices because they are afraid they will lose customers if they increase menu item prices.
They seem to be focusing on controlling costs, which has to be a good thing in order to maintain profits. Yes, all but for one thing. By concentrating on costs, they are no longer concentrating on what created their success in the first place. The quality of the food decreases because they are trying to reduce costs and are no longer spending the money for the highest quality ingredients. The snowball begins to roll. They are a perfect example of what happens when concentrating on what you don’t want. By concentrating on the increasing costs and on their fear of losing customers, that get exactly that: increasing costs and fewer customers.
I know this seems obvious, but I see it time and time again. A study published in the Harvard Business Review revealed some telling statistics. A 5% increase in customer loyalty resulted in an increase in profitability by from 25% to 85%! And there is a direct correlation between customer loyalty and the spirit of the employees who touch the customer. It is the food, the ambiance, and the restaurant staff that make a restaurant great.
The heart of a business is its people and their energy, the culture of service to the customer. The heart of a business is its heart.
Well, get on with it!