Business IQ vs. EQ: Part 2 – Operations, Sales and Marketing

Before a business can make a dime, it needs to have something to sell. This may be a product or a service determined by what the company charges for. Products are generally charged by adding a mark-up on the cost of production or acquisition. Services are generally charged per hour that’s gone into producing the service.

If a company sells a product that is either bought-in or needs to be partly- or fully assembled or -manufactured, the operations function generally needs to follow an IQ set of criteria. It will consider aspects such as production capacity and timing, supply of raw materials, maintenance to the production line etc. There is very little scope for EQ short of the management and motivation of Human Resources (which I’ll consider in the next blog). This is thus generally a very easy part of the business to analyse. One merely need to ensure that production matches supply (or at least doesn’t outstrip it vastly) and find bottlenecks that can potentially be alleviated to make improvements.

In the case of service companies, these processes may be a little harder because the main producing assets have a will of their own. People can only be pushed so far or motivated so much before they run into the limits of their capabilities or will to produce. To increase their production beyond that point one needs to encourage training and education and the returns on this investment of time (and money) are generally not linear (or even directly measureable). They thus require much more “gut feel”, relationship building and coaching.

The Marketing and Sales functions of a business (excluding the operational side of collecting money and delivering a product/service to the customer) are largely EQ based. Though there are “tricks of the trade” that can be learnt, generally the difference between a good salesperson and a bad one comes down to the people and how good they are at interacting with clients. Similarly, marketing campaigns need to form an emotional connection with potential clients to be effective. Thus, improving the sales and marketing functions of a business can be quite tricky. One cannot just throw money at the problem and expect a predictable and linear return on investment.

By now it should become apparent, that the EQ requirements of a business come about because of its need for people. Businesses rely on people for employees, management, investors and clients and the next blog will consider the Human Resource function


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