Principles of Management – Controlled Burns and Firebreaks

Principles of management- As startupSQUARE closes in on it’s first friends and family release the work is piling up and I’m reminded of the need to develop firebreaks for the company. Those are the areas where a lack of vegetation, natural such as in the case of a river or man-made as in the case of a road, prevents a fire from spreading.

In work context, a firebreak is any sort of barrier which prevents a mistake from starting a domino effect and becoming a catastrophe.

A firebreak is a barrier which prevents a mistake from becoming a catastrophe. Click To Tweet

In my last company the exec team spoke frequently of running around putting out fires all day. This was almost a badge of honor.

These were brief, flare up emergencies with customers, personnel, cash flows, etc. which would threaten our business.

But our main problem wasn’t all these small fires, it was that the execs spent so much time dealing with the emergencies that there was no time left over to work on the underlying problems which were creating the fires: poor hiring practices of management, poor customer service, and a poor product not well fit to the market.

One problem in particular that I’ve seen in multiple companies is the dreaded bug collecting customer who manages to find an absurd number of flaws in the product which MIGHT occur in increasingly improbable scenarios that must be fixed NOW or lawsuits will result.

Some of these might even be reasonable (especially from the customer’s POV), but are such specialized scenarios that your product increasingly serves only 20% of the market well and takes you well outside the world of lean product development.

The small fire that execs dealt with was the customer, the big issue that they avoided? Poor product / market fit.

This type of customer occurs in every industry and is a great place to start a controlled burn/principles of management. And by controlled burn, I mean

Fire the customer. Click To Tweet

Controlled Burn

No one likes to fire staff (unless you’re a real S.o.B) but firing a customer can be liberating.

When 20% of your customers are creating 80% of the customer service costs and you’re all out of Dale Carnegie good will, then it’s just good business to get rid of them. The traditional response would be that you can’t throw away customers, cash flow is tight, those customers with badmouth you in the market and ruin your brand, etc.

Of course, all of that is true to some degree, but the reason you’re short on customers is that your product is becoming too specialized and not fitting the market so principles of management should be kept in mind.

Your cash flow is tight because you’re spending too much on customer support.

Your customer support is bad because it’s overworked and is spending all it’s time with the loudest customers, neglecting the less vocal, but still paying customers.

And will those customers badmouth you if you fire them? Yes, but they’re badmouthing you anyway.

Principles of management is better to spend your time getting good reviews from the majority of your customers by calling them before there’s a problem and fixing issues they didn’t even know they have.

The customer might even appreciate being fired if you be honest about it. “We’ve come to realize that we can’t make a product to fit your needs, so we’d like to offer you a refund.” They might even tell you that some of the issues aren’t that important and you should forget about them.

Firing the customer is only one of many controlled burns you could try. The point is, some things are going to get FUBARed.

It’s up to you to decide whether you’re going to kill your company by trying to fix every problem badly, or your going to decide to fix the serious underlying issues and let some issues burn to the ground.

(btw Sonos customer support: I’ll forgive you if you fire my mom. I told her to get some airport base stations instead anyway.)

Creating More Problems

Everyone has a limit to what they can do, and you're no exception. Click To Tweet

Especially in a startup where there’s always too much to do, you’re going to hit the wall and have to let something burn off. Better to make sure it’s something non-critical which won’t take the company down with it.

So we missed a deadline to get some new code running on the live server on Thursday. One option: we could all panic, work the weekend and get every little fire under control.

Would that help in the long run?

Probably not, because everyone would spend the next few weeks making it up to their girlfriends and wives for working through Valentine’s day. Everyone would be grumpy and we’d probably have another ten fires within a week. An unhappy spouse/girlfriend/partner is a fire with no breaker and a great reason to quit the company.

A missed R&D demo, I can deal with.

Happy Valentine’s Day, 新年快乐, and chúc mừng năm mới to all of my friends in China and Vietnam celebrating the Lunar New Year!