Two years ago, I walked into a coffee shop in a suburb of NYC and grabbed a table in the sun to write for a few hours.
Then, I noticed something odd happening.
Every 30 minutes or so, one of the counter people had to leave the counter to go unlock the door on the men's restroom. So I asked her "what gives?"
"The handle has a twist lock on the inside," she said, "and it needs to be untwisted before the door is closed again or else it stays locked and then nobody else can get in until we come and unlock it with a key."
Hmmm. That was a really bad call on the part of whoever bought the door handle, I thought.
Fast forward about a year. I amble into the same coffee shop and settle in to write. Twenty minutes later, I notice the same counter-person-pissed-off-customer-dual-frustration-two-people-hands-in-the-air restroom dance. Every time someone comes to the counter to complain about the door being eternally locked, the counter person throws up his hands and says he knows he knows, it's been a problem for years and huffs again as he walks over to unlock the door.
I do a bit of quick math in my head.
If the shop is open about 16 hours a day, 365 days a year and every hour a customer is forced to come ask the counter person to unlock the door, that's 5,840 disruptions to both employees and customers a year. Let's take it a step further. At 5,840 minutes (or 97.33 hours) of productivity lost by an employee at $10/hour, that's about $973 in lost productivity a year. And that doesn't even include the value of the drop in overall productivity, mood and loyalty caused by the constant interruption and frustration over never having the problem solved.
It's also 5,840 moments of frustration and annoyance for both employees and customers a year. So if 1 in every 100 customers never came back because of this, that's a loss of 58 customers in a year. If each of those 58 lost people would have bought three lattes a week at $3 a latte, that's $1,248 a year in lost revenue.
Add $973 to $1,248 and you end up with an annual loss over $2,000. And if the real attrition number was closer to 1 in 10, rather than 1 in 100, the loss would be closer to $20,000 a year. So the refusal to change the door lock was losing this business between $2,000 and $20,000 a year in productivity declines and customer attrition.
So, I asked the employee why the manager never just swapped the door handle out for one that automatically unlocked as soon as the door handle was opened and his answer was that, despite the fact that he told the owner many times to do just that, he was told it would cost about $300, so it was too expensive.
Oy.
I've seen this problem unfold in so many variations in small business.
It's not actually a cheap-ass owner problem. It's an apples and oranges problem.
For a small business owner, every time you spend a dollar, you need to be able to do at least a down and dirty calculation of how that dollar is either going to come back to you as two dollars or save you two dollars. If it's easy to quantify both how much you'll need to spend and how much that spend will either generate in revenue or save in costs, you can make an apples for apples comparison and the decision is easy.
But owners and managers have a tough time taking action and spending money when the comparison isn't a straight up apples for apples, dollar for dollar equation. In this case, the owner would've had to estimate not only the cost of the lock, but the cost of loss in productivity, frustration and customer satisfaction.
Even the small amount of work I did in my head to come up some very rough numbers is enough to derail the process. Rather than doing the work to estimate the information they need to make an intelligent decision to either fix a problem or invest in an opportunity, a lot of people just punt.
They walk away and decide not to decide.
Don't do that. If you own or manage a business or lead in any way, don't punt. Ever.
Do the work.
Act.
Even if it's hard.
Jonathan Fields is an attorney turned serial-entrepreneur, business strategist, speaker and author. He writes about the creativity, innovation, embracing uncertainty, leadership, entrepreneurship, mindfulness and lifestyles at JonathanFields.com. Jonathan's latest book, Uncertainty: Turning Fear and Doubt Into Fuel For Brilliance, is due out in September 2011 from Penguin/Portfolio. When not deep into the process of creation, you can usually find him dancing around his living room with his wife and daughter.
