The best business advice, opinion, news and expertise in Greater Manchester and further afield.

Monday, 21 March 2011

Business Psychology

Hazel Carter-Showell, Managing Director, CarterCorson

How SME’s can benefit from using business psychology tools to increase revenue and retain clients.

Business psychology is a relatively new discipline, blending a deeper understanding of people and human behaviour with an understanding of business and how it all works in practice. 10 years ago, when I started my business, it was seen as an unholy alliance of management consultancy and therapy! Luckily, that attitude is changing, and it isn’t just the major plcs who are using psychology to improve business performance. SMEs already know how vitally important it is for every asset to be used to the max – there is not enough time or energy for limping along carrying underperformers, failing to get decisions out of a dysfunctional board, or trying to whip some enthusiasm from a disengaged workforce who will do the bare minimum.

Few businesses fail because of their business model – they fail because something went wrong for the people in it. Every now and again we have to remind ourselves that businesses are people, making or selling stuff for people – without people there is no business. People are not commodities, they won’t perform just because you pay them – even if you pay them until their eyes water (even footballers).

Psychology gives business owners the edge to understand what I call the ‘Human Balance Sheet’©. By understanding your people – where they are assets and where liabilities (and accepting the same person can be both!), SMEs can ensure they have motivated people doing the right job, in the right way; and getting more from them than it says on the job description. Additionally, no business operates in a vacuum, you can improve your external relationships with suppliers, clients and key stakeholders; with less time spent dealing with misunderstandings or the emotional fall out of unmet expectations.

Tools such as psychometrics (often misunderstood and occasionally misused) can help you to understand the potential of your team, how they behave under pressure, what motivates them. This can then be used to get them re-engaged, aligning what they want with the company’s objectives – a genuine win-win. Other psychology tools include cognitive behavioural coaching – sort of coaching on steroids, helping otherwise talented individuals who are not performing because of something in their past. This isn’t a ‘whip out the couch’ moment – I believe that talking about the past doesn’t change it, but you can change how you respond to it today.

Imagine team development that gives your people the emotional intelligence to handle even the most challenging clients, and the skills to connect and communicate on a whole new level: no more silos, better client relationships, more effective sales processes with everyone pulling in the same direction, creating increased profits. When you see it like that, perhaps business psychology doesn’t seem like such a soft subject. Actually, the soft stuff is always the hardest, and to repeat a phrase I heard recently that I love – when you have to be financially stingy, it is time to be emotionally generous. So, maybe it is time to put ‘analyse human balance sheet’ at the top of your next board agenda. The day you come to sell your business, to investors looking for a quality management team – you’ll be glad you did.

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