WEEK 2: It’s all down to common sense
You don’t need to know how things work as long as you know where to look
for the answers
Theo Paphitis started at the age of 16 as a tea boy with Lloyds of London
insurance. After gaining experience in retail and finance he set up his own
company at the age of 23 and has specialised in turning round ailing firms,
including the stationers Ryman and Partners, and the Contessa and La Senza
lingerie chains. He recently bought 61 Stationery Box stores. He appears on
TV as one of the Dragons in BBC2’s Dragons’ Den. In the second of a
five-part series he says you must allow your staff to think for themselves
It might seem like I’m stating the blindingly obvious, but 90% of business is
all about common sense. To run a hospital you don’t have to be a brain
surgeon. To run a zoo you don’t have to be a zebra. You just need to have a
healthy dollop of common sense.
Now, of course, common sense is not common. If it was common everyone would
have it and everyone would be able to do what I do. And I wouldn’t want
that! But if it’s not common — then what is it?
If you are in business one of the most important factors is to be able to make
decisions. But the biggest problem for any business is when the people in it
are not running the business — instead they’re running scared in case they
make a decision and it turns out to be the wrong one.
One of the things I tell all my staff is never to be frightened to make a
decision. Of course, they will get some wrong. But the person who never gets
one wrong is the person who never makes a decision. The only thing I ask my
executives to do is to make decisions.
If one of those decisions turns out to be wrong, then you need to identify it
quickly. Deal with it if you can. Stop the bleeding.
And if you cannot deal with it, scream as loud as you can so colleagues can
come to your rescue. There is no shame in asking others to help you. That is
what teamwork is all about. And that is a principle I adhere to throughout
all the companies I own.
The common-sense principle applies even more today than ever before. In the
past the size of your library and knowledge base was a key factor in your
status within an organisation or in life itself. In today’s business
environment, though, to be a successful boss, you don’t need to know how
something works. All you need is to know where to look for the answers. And
the technological revolution, mainly through the growth and use of the
internet, has allowed us to access information very easily.
Common sense is also vital when it comes to assessing the strength of your
competition. No matter how good your organisation feels it is doing, never
underestimate the length to which other people will go to stop you being
successful. And at some stage the competition will have the edge over you to
such an extent that your business might go into reverse or even terminal
decline.
You only have to look round the high street, where some of the biggest names —
household names at one time — are no longer with us. A prime example of this
is a firm I bought, a tiddler compared to the whale-like and dominant market
leader, which totally ignored our presence and did not consider us a threat.
This allowed us to grow and expand in just a short time with very little
hindrance, to a point where we became as influential as they were on the
high street with a turnover in excess of £100m and a product range that
bettered theirs.
I knew we were beating them at their own game when I was contacted by a
supplier who asked me if I felt insulted by this particular organisation,
whose chief executive had told him during a meeting that he had no idea who
we were. Far from being insulted I couldn’t have been happier and was able
to accelerate our expansion plans knowing we were not going to be headed off
at the pass.
I was surprised such an experienced rival had made such an elementary mistake.
Sometimes, though, the ability to apply common sense in a big organisation
is difficult due to the nature of the tiered system of management where
strategy and communication sometimes get misinterpreted and lost en route to
their rightful recipient. That is why it is even more important for managers
to question what they are doing.
For a small entrepreneurial business, which is usually operated by the owner,
it is a lot easier to apply the common-sense principle without the hindrance
of a corporate structure and all the inherent inefficiencies it brings with
it.
Next week: Taking care of your employees
