Chris Ronzio (01:54):
Welcome everyone to Organized Chaos for another roundtable discussion. And today joining me is Greg Gunther. Greg, welcome.
Greg Gunther (02:03):
Thank you, Chris. Thanks for having me along.
Chris Ronzio (02:05):
Thanks for coming from across the world in Brisbane, over in Australia. Now this episode's one of our roundtable discussions, like I mentioned, where, like you, we feature members of Trainual's Process People Community, and we talk about just whatever topic that we want to really dig into. And so the topic that you brought up that I think is a great one, is how we can transform the challenges we're going through today and turn them into future business opportunities, so kind of making light to the silver lining of what feels like some dark challenges sometimes. Does that sound right?
Greg Gunther (02:39):
Oh, perfect. Yeah, no, I think that's exactly right. I think every challenge, we've just got to look for that opportunity that sits hidden within that.
Chris Ronzio (02:49):
So depending on someone's mindset, they might look at the global business climate right now and think, wow, there are so many challenges. There are supply chain issues. There are people resigning and switching jobs everywhere. There is the ongoing need to figure out how to work remotely or hybrid and what that solution is. There are wars. There's currency issues. There's market fluctuations. If you've got that perspective, there's a lot of challenges. So is there a particular one that came to mind for you when we started talking about this?
The Controllable VS. The Uncontrollable
Greg Gunther (03:24):
Oh, look, Chris, I think it's so easy to get overwhelmed with the stuff. It's just so easy to get sort of caught up in the whirlpool. And for a business owner it's, where do I go, where do I start? That's fundamentally really where people are at in terms of mindset that you mentioned. Look, I feel like it's this controllables and uncontrollables, and I feel like for business owners, it's trying to understand, well, what can I control? Because the uncontrollables if we're spending a lot of energy and headspace on those, that's wasted headspace. There is a lot that we can control and that obviously sits within the realms of our own businesses, and start to really bring our focus back into there would be my first thought on that.
Chris Ronzio (04:16):
Yeah. Yeah. Controllable versus uncontrollable. A lot of small businesses when I used to work with them very directly and they would confide in me that they felt stressed and there was all this chaos and there were all these problems in their lives. I think the first silver lining there to remember is that if there feels like chaos and there feels like there's a lot of opportunities or issues to sift through, it means that you have a lot of options. You have a lot of decisions to make and you get to decide how to react to those things. Right?
Greg Gunther (04:53):
Well, and that's always in our control, isn't it? But I think the other part that I see, Chris, because I agree with you, there's a lot of stress. We've seen a lot of people bordering on the wellness and mental becomes an issue. But I think too, what happens when we get in this overwhelm, we start to chase the unicorn, and unicorns just don't exist. So again, there is no silver bullet to this. It's really sort of bringing it right back in. Opportunity is closer than we think. It's really sitting back inside our business and say, okay, let's look at. The old SWAT analysis is an old tool, but it still works really well because you can identify sort of those top three or four strengths, weaknesses, opportunities, and threats. And then within that framework, understand, well, what are my opportunities sitting within that framework? But that's looking at it from our perspective. It's very strong.
Chris Ronzio (05:51):
Yeah. So there's a book I read that talked about how the silver lining of the darkest clouds is where the innovation is or something like that. And so what I wanted us to talk through today is just some of these big macro issues that are going on in the world and how while they may seem negative at the surface, there are some real opportunities to uncover. Right?
Supply Chain Issues
Greg Gunther (06:14):
Totally, right. I think you mentioned supply chains earlier, the issues around the struggles with supply chains. I don't know, certainly over here, one of the things that we've witnessed as a consequence of that is there's a bit of shopping local. So there's a lot of support now for local businesses. Now if we are a small business in our local area, how can we identify or look at some of those closer opportunities to deal more locally with some of our communities? Because there's a sort of an emotional shift if you like to want to support local business, so there's opportunity in that. And we've seen manufacture, like people actually starting to manufacture a little bit more locally, so it's getting a bit more small scale. We're seeing local markets become very popular, so local produce and that sort of thing where people are now sort of going in large numbers to local markets, so we're seeing a pop up of those. So there's always opportunity.
Chris Ronzio (07:20):
Yeah. So with the supply chain one if a business for years and years and years had the same supplier, and now they're in a country that is shut down or can't get things delivered or they're stuck at the ports or whatever it is, those businesses are looking for new suppliers in a way that they never have.
Greg Gunther (07:40):
Chris Ronzio (07:40):
Whereas companies may have had a difficult time selling those businesses on why they should use their materials, now people are, are more open to changing suppliers. And I think that's a shift
Greg Gunther (07:53):
A total shift. I agree with you. And I don't think that's a shift that's going to change quickly in the future. I think there's going to be a lot of these things that we're witnessing right now that'll stick. And it's again, as a business owner, I'm starting to think strategically about, well, where might some of my sort of skill sets, my offerings, value propositions fit within, and maybe it's slightly broader market too, Chris. Maybe we're looking a little bit outside of our traditional markets and we've seen a lot of that happen too.
Chris Ronzio (08:24):
Do do you think there's a change in how people treat inventory? Because since inventory is in some cases been so scarce to be able to get, they're placing larger orders and now wanting to store those orders rather than the on demand ways of the last few years.
Greg Gunther (08:39):
Well, there's a risk in that, isn't there, because obviously that's a bigger overhead investment that we're making in working capital. But again, I think this talks to how I can build relationships. I'm seeing collaboration becoming a thing now, like true collaboration. A lot of us talk about collaboration, but I feel like there's closer relationships. We've got some people that we're working with that have very close relationships with their supplier. So they've formed a closer bond with that supplier. So they're not having to necessarily have you carry the bigger inventory. They're, more inclined to have this close relationship so that they can give their forward supplier probably a little bit more forward forecasting in terms of what they're expecting, so the supplier can sort of make sure that they've got the product they're available for them to do that. So I think the importance of relationships is becoming more important as well. And not just with our clients, it's with our suppliers, so that we're building this sort of total collaboration, what I like call it.
Chris Ronzio (09:50):
Another supply related example that I've seen is, it's very difficult, I'm not sure in Australia if it's the case, but in the US, it's very difficult to get new cars because the supply of new cars, the lots don't have any cars, and so it skyrocketed the demand for used vehicles. And all of a sudden the businesses that had used inventory or focused on used vehicles were in a position of strength, where their businesses were booming. And so again, every challenge has a kind of the yin and yang of the opportunity.
Greg Gunther (10:27):
Yeah, exactly right. And we're obviously closely following you because it's exactly the same experience here with vehicles. But I think what we need to think about as business owners, Chris, I feel is not just the first order consequence. I think sometimes we think about, oh, I can't get my supply from my supplier, but what's the second and third and fourth order consequence of that? So what are the things strategically thinking that might uncover an opportunity for us in all of that?So when we start to dig deeper, so what does that mean? So if I can't get supply, what does that mean? And that might mean, well, okay, we've going to have big delays, or what would that mean from a client perspective? Are they going to shift their focus onto something else? So they're going to look for alternatives and can we maybe fit in that alternative market? Are there things that we could be providing in that alternative? So thinking a little further through, Chris, is probably where I tend to think now.
Chris Ronzio (11:28):
Yeah. I think the same, especially if customer's expectations are set that I can't get this product that I want for six months because of the supply issues. Another opportunity is to say, well, how do we work with that customer to give them a temporary solution knowing that we've placed the order for the longer term solution? When you've got the customer and they're wanting to place an order, you don't want to lose them to the alternative. So how do you ... Yeah.
Greg Gunther (12:01):
Well, no, Chris, I think the other thing that popped into my mind as you're talking there, is how do we keep that relationship with that client as well? So what are the things that we need to be doing probably a little bit outside of our normal capabilities? But how do we continue to maintain a relationship with somebody where we are having difficulties in supplying them what they need? So there's other challenges there that we need to think about as to how we do that. But I love your idea of the temporary solutions. Yeah.
Chris Ronzio (12:28):
Yeah. So I'm trying to brainstorm if I was running the the car lot, maybe renting out a fleet of vehicles while someone is waiting for their order. Then I could have however many orders I'm taking a month, I've got a turnover of rental vehicles until they get into their new vehicle.
Greg Gunther (12:48):
Well, you're seeing the rise of go-get and some of these other Conex store style things. They're proliferating in this environment. So you're right, I think your idea is a good one. Car lots have cars sitting there, right, so could I be playing in that market while I'm trying to deliver my promise?
Skills & Labor Shortages
Chris Ronzio (13:11):
Interesting. Okay. Let's move on to another challenge, so skills shortages, or people burning out, switching jobs, not being adequately prepared maybe for the new jobs that they have to do. What are you seeing here?
Greg Gunther (13:25):
So skill, I don't know how you're feeling it over there, but there is a dramatic shortage of skills. So people are really finding it difficult to attract people, but also retain them at the same time. I think what we've seen in terms of shifting is a lot of people have not shifted much in terms of their jobs. There's been a lot of uncertainty, so people are sort of sitting tight and maybe sucking it up to some extent because they might not necessarily be happy where they are, but they've sort of withheld their way through that. We are starting to see people now thinking now about more, what is it that they want to do? So I think mindsets of a lot of people is shifting to what's more important for them. So they've really been able to sort of more deeply inside themselves understand what's more important.
Greg Gunther (14:22):
So there's things like flexibility in my workplace coming up. There's obviously more family time coming up. A lot of those sorts of more, they're not necessarily strictly work things, but they're now very important to them. And so from a workplace point of view, from an employer point of view, we need to start to think about how can we make ourselves look attractive in that environment. In the past, it was all about making sure that we're competitive with our packages, like our remuneration packages. That's still important, but it's now as important to be starting to think about what are some of the other things that will attract and keep people.
Greg Gunther (15:04):
We've got one client that we've worked with over a bit of time, and we had employees actually say to us that one of the reasons that they are staying is because of the wellness program that this particular employer introduced. And they saw that as being a really important piece to them having a good lifestyle, if you like, or a good mental state while they're working. So I think we need to think a bit more creatively about what does make our business a good place to be at and what does that culture need to incorporate within it as part of our overall offering to our employees.
Chris Ronzio (15:45):
Yeah. So we saw something similar in the us where during the beginning of the pandemic, people stayed in their jobs because there were so many layoffs happening that people were not sure they could get another job and they were thankful to have the existing job that they had. And then in 2021, as our economy was really booming, that's when people started looking for new jobs and getting competitive offers and switching jobs. And so has Australia been on the same timeline or slightly behind?
Greg Gunther (16:12):
Look, I think to be fair, we find when you sneeze in America, we catch a cold probably about 12 months later, so we tend to follow. A lot of people watch what happens in America because they think, okay, is that a leading indicator for something that's going to happen here? But to answer your question, yes, we are seeing exactly that same thing here. It's just a little bit behind where you are. We absolutely have people now who are shifting, but it's positioning our firms, our businesses in such a way that we want to stand up above the crowd and that's particularly a lot of people having.
Chris Ronzio (16:56):
So to some extent, you're able to time travel and watch what happens over here and then put it to good use. So you mentioned really being intentional, improving the culture and being attractive as a place to work. And there are things like wellness packages, but it's also flexibility, and how accommodating you are to families, and how flexible you are with the hours that they work, and the locations that they work. I think that's a lot of what people are looking for these days. And so everything we've been through in the last few years is this forcing function to make us look at ourselves in the mirror and say, is this a desirable place to work, or compared to the alternatives in the market, which is now a worldwide market, are there better options for people? And so I think it can seem like a difficult, daunting thing for businesses that don't consider themselves innovative or progressive when it comes to these types of policies.
Greg Gunther (17:55):
I agree. And the other thing that we're seeing, Chris, is people are more looking for a place where there's a strong purpose, a reason for being, and also understanding the contribution that I can make to that, they want to make a difference. So people are looking for that. And if we don't understand why we exist, then again, it's a hard thing to attract people into because they want to be able to align with our purpose, if you like, and they want to make a contribution towards that.
Chris Ronzio (18:30):
So what are some other macro challenges that you see clients that you're working with dealing with right now?
Inflation & Margin Squeeze
Greg Gunther (18:37):
I think for a lot of our clients that we're working with at the moment, one of the biggest issues is we've got a lot of sort of cost increase. We had our inflation figures announced yesterday here in Australia, and I know we're a little bit behind you, but we are sitting at 5.1, so that's the inflation. So that's a scary number coming off a very low base for us. So that's got to leave a few people frightened. But what that's creating is cost. People in business have known inflation's been that high for a while because they've seen their costs just rise so much. But of course, they're not being able to recover that at the consumer level or the client level, so you've got this margin squeeze.
Greg Gunther (19:18):
So there's a lot of clients now, pretty much teetering, I'd say because they're not getting the revenue coming in on the top line and their expenses are actually coming up on the bottom line and that's causing a big squeeze. And of course, one of the biggest costs we have is usually in salaries and wages and rent and things like that. So there's an element here where there's a nervousness and uncertainty because how do we deal with that? I feel like we've got to get our businesses in such a state that we can do more with less. This is where you and I are on the same page in terms of importance of systems and processes and having them documented and followed.
Greg Gunther (20:05):
We know from some of the work that the book, I forget what it's called, but it was basically a multiplier effect. The research that they did identified that we can actually get nearly two times the productivity out of people than we do generally. The bulk of people are not performing to their level. And the way we get that sort of nearly two times factor is by having some really good systems and processes in place so that they can be the best that they can be with their skills. So we're doing the basics. We're systemizing as much as we possibly can so that they can show their human skills and their flare in what they're good at, so that makes jobs better and easier for them.
Businesses Are Filled With Inefficiencies
Chris Ronzio (20:56):
Yeah. You ever get a bag of potato chips and it's this much full in the bag?
Greg Gunther (21:03):
It's a lot of air.
Chris Ronzio (21:06):
A little bit like that for a business. There's a lot of capacity in the bag and the businesses don't always fill it. Yeah. I thought it was funny when I was doing the efficiency process consulting before Trainual, I would go into a company and talk to people. One of the questions that I would ask is what processes would break if we had twice the number of customers? And it starts to highlight the inefficiencies, the things that take way too much time. And then you can start to dig into those processes and say, can we find a tool to make this go faster, is there equipment, is there software, is there a different person that needs to be doing this? I think businesses are filled with inefficiencies, things that really slow them down.
Chris Ronzio (21:55):
So it's a great point because when you are top line is not increasing and your costs are increasing and your margin's getting squeezed, you need to be more efficient or find a way to be more efficient just to get by. But I also think there's opportunity for businesses to raise pricing when they have a fear of raising price. Some people just are afraid. They are afraid some customers will be upset. But no one does this better, I think, than the gas or fuel or petroleum stations. They raise prices every day. They change prices every day. And the fuel that's in the ground didn't cost them anything different. They're raising prices based on the future expected increase of those costs, right?
Greg Gunther (22:48):
Chris Ronzio (22:48):
And businesses, especially small businesses are very, very slow to react to cost changes. Do you see that a lot?
Greg Gunther (22:58):
It's the low hanging fruit, isn't it? You're right, there's this fear because I'm going to lose a customer or they're not going to like me. Well, I don't know. Because a lot of small business owners have relationships with their clients too. So they feed off that relationship. So me putting a price up, they don't want to have anything there that might potentially put that at risk, but it's the low hanging fruit. You touch on a really important point because I would say nearly 90% of the businesses that we go into are not charging the right amount. I loved your little ... You just put up a post earlier about stop charging hourly rates. I actually did put a comment in there. Price is just a measure of value. So the better we understand from a client's perspective, the value that they're perceiving from what we're delivering, the more able we are to charge the right price.
Greg Gunther (23:53):
And I would argue that most times we are charging so, so far less and it's usually because we're not valuing ourselves enough. You talked about mindset earlier, this is a bit of a mindset shift that people need to know is that I'm providing value and that needs to be recovered.
Are You Afraid to Raise Prices?
Chris Ronzio (24:10):
And it's another one of those holding the mirror up moments where if you think most of your customers will leave because you raise your prices 10% then is what you're producing really that valuable? And so when you think about the pricing conversation, it forces us to think about, is this something that is really providing value for my customers? Can I afford to charge a little or to whom can I charge a little bit more? Who is getting the most value, let me optimize for that. It's a conversation that we go through I think every few months over here, is trying to figure out and make sure that we're charging appropriately. And I think back to my service business days, I didn't do it nearly enough. It's something that I hesitated to change pricing on people. But it's definitely an opportunity in today's market.
Greg Gunther (25:06):
Well, I think the other thing that comes up for me as you're talking there, Chris, is we probably largely try to be more generalist. In small business, we've got to get as many people as we possibly can as clients, and that tends to be a bit of a mentality, but we don't. I think what you just raised is important. There's probably a lot of those people where maybe they're not valuing what we're doing as much, but there's probably a core of them. The old 80/20 rule, the Pareto principle, who are those 20% of our sort of client base that are supplying us with 80% of our, in this case, maybe revenue, and what is it about that 20% that they're seeing that deep value in? So the closer we get to that, we can probably shed a lot of clients, to be honest, and make more money, and that's going to take a lot of pressure off capacity.
Chris Ronzio (25:59):
That's another way to get efficient is just to make more money from fewer clients, and I think that's something people should consider. That's actually a great bridge because I know that you have gotten pretty involved in the podiatry industry and you have a book with a client of yours, so can you talk about that a little bit?
Greg Gunther (26:18):
Yeah, a blatant plug, Feet First. We wrote this book together because we wanted to travel a journey, and so when we first started working with Troy in his podiatry practice, we started at a point where he was at quite a low. And I'd argue and he talks about it, but he's probably bordering on depression when we first sort of met and started to do some work together. And he would work very long hours, off and on weekends. He shared with me in those early days, he often used to really get fearful around, can I make wages this week, which is not an uncommon thing. It's probably one of those things that many people face. Again, this wasn't rocket science, but what we do in the book is we talk about where we started, what are some of the things that came up for us as we went along, and what are some of the things that we did to sort of address those things. And then at the other side of that, what's been the result of that.
Greg Gunther (27:22):
I feel like there almost needs to be a sequel to this because there's already been a lot more happen in this environment than when we published this. Troy and I share our own individual journeys, because I have a journey as well and my journey started back with a business failure. I talk a little bit about that in this book, what that business failure meant and created for me, apart from the fact of really feeling like a failure in those early days. I can reflect on that experience now and think about what did that teach me, so it really helped me break through.
Chris Ronzio (28:01):
Well, there's definitely a mindset, and it sounds like you've been through this from your first business failure to turning into a very successful career. And it sounds like your client went through that as well. And I think it's something all business owners deal with. At some point, we all have challenges. But the important thing I guess is I would summarize this conversation, the important thing to remember is if someone puts in their notice and quits your business, there's an opportunity to hire someone that's maybe even a better fit or to reorganize the structure of your organization. If your biggest client leaves you, there's an opportunity to look at were you providing enough value or who are the clients that you have that you provide the most value to so you can specialize.
Chris Ronzio (28:42):
If you've got costs increasing, you have an opportunity to reconsider your pricing and packaging. If you've got vendors that are unavailable, you have the opportunity to go shop for other vendors or support local businesses. And so summarizing all of this, it's really about reframing those challenges as surprise opportunities, right, where you had a surprise today and now you've got an opportunity to improve as a result.
Greg Gunther (29:12):
I agree. The word you used, reframing, is the perfect word for this. Everything that comes up like this, it's about reframing it and there's always opportunity.
Chris Ronzio (29:23):
So, Greg, once again, I appreciate you being a part of our Process People group. And if people want to reach out to you and find more about you, where can they go?
Greg Gunther (29:32):
So thank you. The website is www.yourbusinessmomentum.com.au. Otherwise, search me on LinkedIn. I've got a LinkedIn profile there and that'll give you all of the information and background.
Chris Ronzio (29:50):
Perfect. And Greg's very active on LinkedIn. Thank you for participating in all of my discussions. And it was great to spend your Sunday morning with me here. Thank you so much for tuning in. Thank you everybody for joining Organized Chaos.