Tuesday, May 20, 2014

Is "Fit" Relative?

'Fit' is a crucial component to understanding human behavior because the connection people have to a purpose or mission is the primary motivator for why people do the things that they do. Because people constantly influence one another in how they think and act, understanding how individuals ‘fit’ within the context of a team, organization, or culture is key to understanding and predicting how those individuals will behave.  In the following blog, David Sorin discusses various relationships in the business world, and why ‘fit’ is essential to achieving and maintaining the benefits of those relationships.

When we think about the word “fit”  with regard to business, it could be used in several ways. The simplest could refer to actual dimension – fitting physical resources into a given space. The more complex definitions address whether a given business fits into its marketing or brand niche or even in the community in which it resides.  These and other measures in between are all important ways “fit” is critical in the business. A previous blog post discussed the need for employees to fit in their roles within a company. This is crucial to productivity and team effectiveness. And employees must align with the company as a whole on vision, values, behaviors, attitude and ethics for the relationship to work.

CUSTOMERS

Typical entrepreneurs starting a business and then gaining traction are not overly concerned with whether each customer or client they are working hard to acquire actually fits the narrow profile of “ideal customer.” The idea is to grab customers whenever and however possible and not look too closely at each one at the time. Twenty first century companies are capturing as much data as they can about each customer, which they will, at some point, examine to discover macro-trends. They may use that data over time to hone their marketing pitches but they are not normally using it to decide whether they should or should not do business with a given customer.

Let’s face it. Not all customers fit. How come? What makes them not fit? They may have:
  • different priorities
  • different ideas when it comes to the relative value of the quality, service or price the company offers
  • different expectations
  • different views of what a successful engagement between them and the company looks like.

An online retailer may not have any way of knowing if a first time shopper is a good fit.  But what about the return shopper who has a track record of buying and returning multiple items and never keeping anything? Or the one who returns items after wearing them saying they don’t fit or are poor quality? Or the one that always takes advantage of the lifetime guarantee?

A service business should know after a single engagement whether a client is one they want to do business with again. A client changing his mind all of the time, or asking for “do overs” can be costly and frustrating.

An established business may choose to jettison clients that don’t fit because they recognize that they are literally not worth their time. Younger, hungry businesses may not be able to look through that lens. Their definition of “fit” may need to mature based on experience.

VENDORS

What about vendors? Does a business need to find a fit with its vendors? To answer that, one has to consider what “fit” looks like. The best vendors meet the company’s needs – timely delivery of goods and services, good quality work, fair payment terms, flexibility when needed. Some even find ways to partner with their customers in win-win programs, some may finance inventory during holiday or other seasons and some may offer support via sales and marketing dollars or resources. 

In a start-up or early business stage, a business owner may be willing to use any vendor that provides credit or decent payment terms. This may not be enough to sustain a relationship as a business becomes more successful. If a vendor, even a valued one, is discovered to have very different values or ethics it can cause a problem. Having biased views or treating employees poorly can be another reason to end a relationship. If there is not a values fit, there is at the very least dissonance in the relationship.  Business practices, even legitimate ones, can sometimes be difficult to accept. Sudden changes in payment terms or delivery times or supply chain logistics can turn a vendor relationship sour.  A business owner needs to define what a good vendor is and then be willing to eliminate those that do not fit the definition.

COMMUNITY

A company needs to fit into its community. A strip club in a residential neighborhood will not cut it. Nor will a junkyard in the wrong location.  Business owners need to be aware of where they can fit in as good corporate citizens and fill a positive role in the community. Fit in this arena is usually based on the use of the property, the community’s regard for the activities of the business and how noticeable those activities are, the amount of tax revenue a business may bring to the locality, the number of jobs the business provides and perhaps most importantly, the image of the business and how that impacts the adjoining residents and businesses. If the activities of a business bring down the value of surrounding real estate, there is not a fit. If the activities of a business subject nearby residents to any safety or health concerns, there is not a fit.

If the community grows up around a business and its composition changes, a given business may no longer fit. The leaders have to recognize that and consider the newer needs of that community.

So, in answer to the question asked in the title of this post, “fit” can be relative. A business may find a fit when common sense is buried or desperation is close to the surface. Humans can convince themselves of anything.  Look at the number of football teams that will take a chance on a player that blew up his two previous teams. Somehow, they believe they can make him fit in with them.  If owners pause long enough to catalogue what is important to them in their relationships and then weigh every candidate against that list, they can have a relatively clear picture of whether the relationship will work. If they choose to ignore the list for other reasons, it may work for a while, but not long-term.  

Fit is important. Ignore it at your risk. If you stretch your values and beliefs to create a fit, it will often come back to bite you. If a business owner is in a mindset of abundance rather than one of scarcity, there will always be more customers, vendors, potential employees and even places to house the business. Find a fit.

This post originally appeared on 720Thinking.

ABOUT THE AUTHOR
David Sorin is an attorney of 38 years and the entrepreneur behind seven startups. He is also the co-founder of the Management Partner Development Institute, an organization aimed at educating law firms, and the co-creator of 720thinking, an organization that uses a holistic model supportive of individuals and organizations. David has been a speaker at a variety of national conferences and conventions over the last fifteen years and has been a guest lecturer at several colleges and universities, including the Wharton School at the University of Pennsylvania. David is deeply involved in the entrepreneurial community in the Philadelphia region, and his strengths and expertise include strategic planning, innovation, conflict resolution, leadership development, decision making, ethics and culture, and executive coaching.

No comments:

Post a Comment