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Founder of Beauty Chain Sorbet Questions the ‘Lean and Mean’ Business Philosophy

In order to build the solid and happy home detailed in the previous chapter [of the book], you need every pillar to be secure and in place. Each pillar is as important as the other and all four are critical to the success of your business.

The conventional business paradigm is as such: In order to run a successful business you need to focus on the bottom line. There is no other way. Without a focus on the numbers, your business will surely fail. It’s the way things are, the way things have been and the way things will always be. When you challenge this and suggest that people should be prioritised over profits, the knee-jerk reaction from most business owners or managers is: Forget about the soft and fuzzy stuff; it sounds like a nice idea but it can never work.

I do not, for one moment, believe that profits are unimportant. Profits are critical to the sustainability and growth of any business and they provide a return on shareholder investment.

I’m suggesting that we understand the sequence of our priorities. In other words, what comes first and what follows naturally. It’s like the age-old question: ‘What came first? The chicken or the egg?’ Similarly, in business we have to ask: ‘What comes first? The purpose or the reward?’ I believe that the purpose is paramount and the reward is the natural result.

If you focus on your people and create a working environment where they feel nurtured, cared for, content and inspired, they will be motivated to serve their guests to the best of their ability and with a positive attitude and to touch the lives of those guests in a powerful way. This creates loyal guests who will feel good about themselves and enjoy visiting your business on a regular basis and spending money on products and/or services.

Through word of mouth and social media, these loyal guests encourage others to do the same which, in turn, generates the necessary income over a sustained period of time to allow the business to create wealth and grow exponentially. The simple and logical flow of the above statement is seen in the diagram below.

As a consultant to a number of large companies in the 1990s, I witnessed examples of business acquisitions where an entrepreneurial family business with a particular culture was purchased by a large group. In the aftermath of the acquisition, there was blood on the floor. The business was consolidated to limit expenses so large-scale restructuring and retrenchments took place and soon positive quarterly earnings were delivered to the shareholders. Expenses continued to be cut and people were forced to work harder with the constant fear of losing their jobs.

Just as the company was on the verge of becoming a walking skeleton, another company was bought to bring some ‘fat’ to the skeleton and so the cycle repeated itself. Too often, profitability is seen to depend on how much you can take out of a business, rather than what you can put into it. The quest is then to become ‘lean and mean’.

This is an interesting description if we have a look at the literal meanings of these words according to Webster:

  • lean is ‘lacking or deficient in flesh; containing little or no fat’
  • mean is characterised by ‘petty selfishness or malice’.

Is that what business is really striving for? A skinny, scrawny and bony business that has a nasty, uncaring, and malicious culture? Surely not. ‘Lean and mean’ businesses might well produce short-term profits for the shareholders but sooner or later the culture will impact negatively on productivity. There will be nothing to inspire exceptional performance and the culture of fear will begin to debilitate the business.

Negativity will spread like a cancer. Demotivation will set in and customer service will no longer take centre stage. Despite the fact that they might be earning a good salary, when people are discontented and disillusioned in their working environment and unhappy about the way they are being treated, their anger and frustration become directed towards their managers. The internal conversations become nothing more than moaning and bitching sessions and the biggest casualty, by far, is always the customer who is now just an interference in the ongoing battle between management and staff.

A short-term profit obsession can sometimes lead to fundamental blunders, particularly when restructuring is overdone and the staff complement becomes so thin that the business can no longer effectively serve its customers.

We should rather be aiming to create a ‘caring and sharing’ culture:

  • caring is ‘showing concern or kindness to others’
  • sharing is ‘to partake of, use, experience, occupy or enjoy with others’.

In a ‘caring and sharing’ culture, people will view their managers as leaders rather than dictators; they will feel a sense of belonging and share a common purpose; they will strive to improve their customer service by growing their skills and knowledge; they will feel inspired to motivate themselves; they will develop positive attitudes towards their work; they will contribute meaningfully to the creation of wealth and will share in the fruits of their efforts. Most importantly, they will be sharply focused on their customers instead of their managers.

There will always be a limit to how much you can draw from a business. Notably, after the thirteen years of the Sorbet journey, we view things very differently today than when we first started but we are constantly looking for more ways to give.

People are our lifeline. Since inception, we have employed nearly 3,000 people and can count the number of retrenchments on one hand. While other companies see ‘letting go’ of employees as a cost-saving measure we see it as the exact opposite.

Sorbet is Africa’s largest beauty franchise business. In just twelve years the business has gone from being mistaken for an ice-cream shop to being a household name across South Africa. In 2018 Sorbet surpassed 200 salons.

Sorbet’s founder and CEO, Ian Fuhr, is a serial entrepreneur. Over a 40-year period he has launched five successful companies. Over the years he cultivated a unique business philosophy that culminated in the launch of the Sorbet brand in 2005. Get that feeling, the story of Ian Fuhr’s background, his history and how Sorbet was born, is now also available as a paperback edition published by Pan Macmillan.

Since 2002 Johanna Stamps Egbe has worked with a series of organisations and initiatives. In her roles as lobbyist, corporate social investments manager, marketing coordinator and fundraiser her focus has been to help people to build a high-performance, purpose-driven culture.

 

This article is an extract from founder and CEO of Sorbet, Ian Fuhr’s, new book (co-written by Johanna Stamps Egbe), The Soul of Sorbet: Building People, Culture and Community (published by Pan MacMillan South Africa, July 2018). It is also available on amazon.com.

 

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