The risks of relying on low hanging fruit

lowhanging“Go after the low-hanging fruit.” Phrases that get overused as business metaphors as much as this one are worth a closer look, because they contain some essential truths.

Among the several definitions I found, Yahoo’s was the most helpful. In essence, it describes fruit that is easy to reach but might be of lower quality than the hard-to-reach fruit higher up the tree.

Plucking low-hanging fruit means taking advantage of quick wins for short-term gains that might not be sustainable (pretty soon you’ve grabbed it all) or have much long-term value, because you’re not taking the best fruit.

There are three areas – sales, hiring, choosing business partners – where you need to be careful of the unintended consequences that can arise when you focus too much chasing low-hanging fruit.

1. Sales
Obviously, you should take advantage of easy opportunities to sell your services or products. Especially when resources are scarce and cash is low, that’s a necessary use of your time.

Here’s the rub: customers at that level are often beset with problems of their own that surface only after the relationship has started.

They might be slow to pay invoices, or they might not pay at all. That becomes a drain on your company’s resources, which will reduce profitability. They might just be flat out pains in the neck, and who needs that?

As a business owner, don’t be surprised if this kind of customer is less grateful to do business with you than you might expect.

You might think you’re doing your sales team a favor when you send them after low-hanging fruit.

But consider that making easy sales does nothing to sharpen the skill set of those doing the selling, and even dulls those skills.

Salespeople can quickly become lazy when earning easy commissions. No one I know wants their salespeople to become too comfortable; that leads to complacency. When the easy pickings are gone, and prospects become more challenging, it becomes that much harder for sales to deliver, individually and collectively.

2. Hiring
The second situation relates to hiring people. I’ve seen companies starting out hiring the low-hanging fruit, by which I mean family members, friends, and neighbors. It’s the path of least resistance, and word travels fast when you take that path.

For a time, it works pretty well. Then, as the company grows, things change. Rarely to those early quick hires mature and develop the abilities needed to manage a more complicated business.

The owner becomes frustrated as loyal employees fail to rise to new challenges. Employees are puzzled by this new attitude from the boss. After all, they’re doing what they’ve always done, which has worked well enough up to now.

One of the most difficult responsibilities owners face is having a face-to-face meeting with a long-term employee who is simply not doing the job necessary to stay on the payroll. It is so painful that some owners simply avoid having such conversations. It isn’t fair or right for anyone involved. That’s a consequence of hiring low-hanging fruit.

3. Selecting business partners
Some organizations provide what I call scaffolding to businesses and their owners and the company. This comes in the form of support services like banking, insurance, legal counsel, information technology, book keeping, payroll, taxes and human resources assistance.

The needs of a one-person business change dramatically when the payroll jumps to three. Beyond that, various state and federal rules, regulations, and laws kick in. More sophisticated support and advice becomes necessary.

H&R Block may be fine when you are filing your personal income taxes, but corporate filings require different knowledge and sophistication. The insurance agent who handles your personal lines might also sell business policies, but likely lacks the expertise on the Affordable Care Act and state health regulations that your 125-person business requires.

The problem with many of these relationships is that they have a certain amount of stickiness, in the sense that they’re easy to get into than to untangle from. This works fine for the service provider, for whom those relationships are part of the business model.

But when you need to move your account to a more suitable firm, it can be problematic to unwind the relationship.

So when it comes to selling, hiring, and selecting business partners, you can avoid problems down the road by choosing carefully up front.

But if in your case that train has left the station, I recommend taking the advice of one of my clients. He told his Strategic Advisory Board peers, “If I want to be a bigger, better company tomorrow, I need to think and act like one today. It may be painful but the results will be worth it.”