Creative use of idle resources

Visiting the operations of student-entrepreneurs is part of the mentoring process of AIM’s Master in Entrepreneurship program. This allows a guru to get a better understanding of the enterprise and to validate the improvements implemented by the student in his/her enterprise.

Let me share some findings on two such visits and the ensuing dialogue conducted between guru and student-entrepreneur.

The first visit was to a mall-based retail store that had a service facility. It was noon time on a week day. Our student-entrepreneur owned a network of retail stores and this outlet was just one of them. The guru was accompanied by a drillmaster, usually a young MBA graduate who assists in the mentoring process, given his own training in classic and current business techniques and skills. Initially, they observed the retail store from the outside. The guru noticed there were three salespersons who were standing by, just waiting for customers to enter the store since none had come in yet.

Guru: Is it normal not to have customers at this time?

Student-entrepreneur: Yes. That is why we open at 11 a.m., which is the time the mall opens. This place gets full only after office hours on a weekday and for the entire day on weekends.

G: What do your sales people do while there are no customers?

SE: They fix the items, clean the display area, and generally attend to housekeeping.

G: That’s a good way to utilize their idle time. But what if the place is already clean and the displays are already fixed?

SE: I guess they would be idle until someone comes in.

G: Is there a way for them to make people come in?

SE: I’d love to do that but that is impossible because the mall is virtually empty. And to have my people pull people in from the common areas is not consistent with my store’s image. I certainly do not want them behaving like the sellers in the public market who persuade and cajole for patronage. My store has more class than that.

G: Agree. Your store is too classy for such tactics. But is there a way to use the idle time of your sales people to make customers come in during your non-peak period? Think about it. Do you have a record of customers who bought something from your store last week?

SE: We have that in our invoice file.

G: Does it have names, addresses, telephone numbers?

SE: Yes, but the more complete customer identification file is found in the warranty card file.

G: That is even better. What can you do with this information? How can you use it to make customers come in during your off-peak period?

SE: Actually, when the sales people are not doing anything, they can call those customers to follow-up on the product’s performance. We can show customers that we still care even after getting their payment and the product has left our store.

G: What about the warranty file? What else can you use it for, outside of checking if the unit being bought for service is still under warranty?

SE: We can call customers whose warranty coverage is close to expiration date and ask them to bring in the product for a free service check-up during our low period when the service people are idly waiting for customers.

G: What if they want to have the free warranty check during your peak hours?

SE: We can still accept them but they will have to come back for it. During our non-peak period, it can be done on a "while you wait" basis.

G: What’s the effect?

SE: Customers will know that we are after their satisfaction and this will result to customer retention.

Quite pleased that this student-entrepreneur had learned to convert idle resources into a customer retention strategy, the guru and drillmaster team proceeded to another student-entrepreneur’s factory. They observed that its vicinity was untidy, with wild grass, abandoned buildings, dried-up trees, open pits with construction debris, and other idle assets all around. They were quite concerned about the visibly underutilized assets and engaged the student-entrepreneur in the following discussion.

Drillmaster: Is there anyone in charge of keeping the grounds clean?

Student-entrepreneur: Yes, but they are now deployed elsewhere in the compound.

DM: Why not get more people to keep the grounds tidy?

SE: Hiring more people means more cost. If we deploy them to clean, it does not contribute to increased production. I do not hesitate to increase manpower count for direct production people. But to hire people who will directly increase production is another story.

Guru: But can you not motivate your production people to stay after work hours to clean parts of the compound?

SE: But I will have to pay overtime.

G: Not if they decide to stay at will. What can you do so that there is something in it for them, though not necessarily overtime pay, which would be beneficial to them? Take a look at the open pits with stale water and construction debris. What can you see in there?

SE: I can see small fish swimming. In fact, I can assign these pits to a group of employees and convert them into ponds to grow tilapia or catfish which can tend to after work and eventually bring home for their families’ consumption. These can also be shared with other employees who could help them take care of the pond.

G: Good idea. Although you have to set clear criteria on who can qualify for this non-wage benefit. What else can be done?

SE: Some of the other areas can be planted to vegetables and be the object of employee stewardship. Just like the pond people, some others can be assigned there, or to an area where several fruit bearing trees also need attention.

Once more, the guru and drillmaster team saw how the student-entrepreneur transformed a non-performing asset into a useful and rewarding endeavor.

(Alejandrino Ferreria is the dean of the Asian Center for Entrepreneurship of the Asian Institute of Management. For further comments and inquiries, you may contact him at: [email protected]. Published "Entrepreneur’s Helpline" columns can be viewed on the AIM website at http//: www.aim.edu.ph).