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Big Wins, Small Loses – Big Mistake!

Big Wins, Small Loses – Big Mistake!

The day that Liverpool beat Manchester United was a great day for me and all Liverpool fans across the globe. After four consecutive losses by Liverpool in the premier league, we were all embarrassed to discuss football matters in any social setting that we were party to. We avoided the topic like a plague but then the win against Man U came and finally we could wear our Liverpool paraphernalia in public again. There is a reason that Ferguson cherishes Man U wins over Liverpool more than any other; it is for that very reason that every Liverpool win over Man U will see us celebrating like we just won the world cup. For me, that one win was worth the four consecutive losses we’d had prior to that match. I could live with those.

But here is the thing, not many situations especially in business can allow you to get away with the major wins to cover up the small losses. Sure, a big win is great and we all celebrate them in ways that defy logic and strain biology; but are they sustainable? If you are receiving frequent body punches with these small losses, will you have the strength to stand up to that heavy financial adversity uppercut when it eventually comes? We have become obsessed with bagging the biggest trophy, winning the most coveted award, getting the biggest clients, and running the biggest companies as if they are an end in themselves. In all this, we seem to be overlooking the small and medium in much the same way that Kenyan Banks threw out their small clients in favour of high net worth individuals and companies (Back in the 90’s).

In a given premier league season, Liverpool gets to play Man U only twice. If beating Man U counted for more than these 3 measly points; the emotional gratification followed by distasteful intoxication in the name of celebrations might be justified. If we had won the four games against the less glamorous teams, we would have amassed 12 points and consequently be better placed in the league table. The same goes for businesses; even though it may boost egos and butter resumes to have the big companies in your clientele list, what will have the greatest impact on your bottom line are the many less glamorous yet fundamentally important companies that give you the business in between the occasional big clients.

One of the most important characteristics of a good business is its ability to generate positive cash flows. Big profits are great but cash-flow generating ability is what enables you to pay employees, pay suppliers, and ensure that all operating costs are met in time. This cash flow generation is not a reserve of the big clients but all the clients in your company. It is therefore critical to be the same reliable partner with all your clients; both big and small. While the big ones will fatten your pockets occasionally, the smaller one will keep the operations of the company going for the remainder of the financial years.

Barclays Kenya is a more apt example of this. Back then, most civil servants received their pay checks through Barclays. But Barclays had enough of these poor folks and the then management decided to chase away the low net-worth individuals and opted to deal with only the high net-worth individuals and companies. But things got turned on their head because soon enough microfinance was the new cutting edge. Equity was making a killing from the very small people that Barclays had literally chased away and suddenly Barclays Kenya wanted get a share of this pie. They are trying to reel people back in, including my mum and she tells them is “hey! You chased me away and now I have a new home.” I have met many a frustrated Barclays agent and I guess that is the response they get everywhere especially with civil servants and teachers.

Look within your organization and see whether there is a marked difference or any difference at all to how you deal with your big and small clients. Are both groups comfortable with the way they are received, the quality of work that you for them, the speed to which you respond to their issues etc? If not, you may lose that small client to a company that treats them right and then you will start having trouble meeting some of your monthly financial obligations. Guess why?

What are your thoughts…?