Christian Nelleman: What I wish I’d known
Article Date: Mar 08 2007Serial entrepreneur and high-flyer Christian Nelleman founded XLN Telecom in 2002 to offer an alternative telecoms service for small businesses. The company’s growth was phenomenal, advancing 800 per cent in the first year and has continued in the same vein.
Plan early how you’ll get customers
I really enjoy the challenge of making impossible things fly. Ours is a small company with strong management, but we still have to fine-tune it every day. At the start everything moved very fast and we had to set up the infrastructure that would allow us to grow. There was finance, billing, online development, marketing, lots of things to consider, but most important of all was trying to figure out how to get customers in the first place. That’s something that, if I had the chance, I would have done a lot earlier. It’s all very well having technology that can cope with 200,000 customers, but if you’ve only got four, what’s the point?
Outsource behind the scenes
I’m not a big fan of outsourcing because it can be costly, but we had no choice. We had to outsource a lot of back end processes, mainly non-customer-facing parts of the business and some aspects with direct customer contact. There are benefits to outsourcing, of course. Rather than having a lot of idle personnel sitting twiddling their thumbs for part of the day, you can make a provision for peak call periods. But you have to balance the upside with the down. We grew from zero to 20,000 customers very quickly and, basically, our outsourcing organisation wasn’t prepared for such rapid growth. It had to more or less double in size, which meant investment and risk-taking on its part.
Offshore outsourcing can be particularly risky – these people are the face of your company, your representatives, yet they are far removed. Eventually, we brought everything in-house and these days I’m of the opinion that you should never outsource anything customer-facing. If you use a call centre in India, for example, callers can easily identify that the calls are outsourced – there might be reduced quality on the line or misunderstanding due to limited English – and this creates a perception of a service that just isn’t as good. What we want is to show customers that they are valued and, with potentially underpaid, under-educated, under-trained staff, the operatives are considerably disempowered. Cultural differences can play a huge part here. If a call-handler is being paid say £120 per month and they are being asked to issue a £10 credit to one of our customers, it’s understandably very difficult to equate those two things!
Watch out for ‘sunflower’ sales guys
Shared values are very important to me, not only among the people with whom I collaborate but also with my own employees. My philosophy is that culture starts at the top on day one. You see, there are different types of employees and often you have to weigh up the values they have against their performance. Let me give you an example. You could have someone who is a top sales guy, brings in 40 per cent of the group sales, but just doesn’t share the company’s values. I call them ‘sunflowers’ – they look good from where you sit, looking down, but they’ve got a big head and cast a lot of shade so nothing grows beneath them. My advice: don’t be afraid to cut them down early!
This time it’s personnel
I now know that you’re deluding yourself as a manager if you think you can change values that have been established during someone’s formative years. The only way to get to the root of the problem is to interview everyone personally, something that I haven’t always done, but certainly do now. Personal interviews can be time-consuming, but if you end up tolerating underperformance or lack of values, yours is not going to be a great company. That’s why we now implement a constant recruitment process, always looking for good people. And if you use a recruitment agency, get a fixed rate and settle for nothing less. If I could go back in time, that’s how I would have started, with great people, great technology and great systems – that’s how you make a great company.
