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Showing posts with label Employees. Show all posts
Showing posts with label Employees. Show all posts

Friday, July 15, 2022

The Slow Slide into Shittiness

By now in your career you've probably been employed by, hired, partnered with, or competed against a company that was bought out by another company.

Think about what they were like. Roll it around on your tongue.

If you had any experience with that acquired company prior to its acquisition, no matter what your role was at the time and no matter whether that company employed you or was one of your vendors, partners, etc., chances are that you either worked for or with or against them because they were a pretty well-run company, with something that, if pressed, you might even say you really liked about them.

Until...

They were bought up or out by another (usually larger, often older, certainly more bottom-line-focused) company and run right into the ground.

It might have taken awhile, but the first signs appeared early - layoffs, management changes, mass defections, and release dates for new products and/or services either pushed back (often more than once) or shelved, with the PR folks spinning an endless cloud of vague language to try and downplay the fact that the company you liked better was now circling the drain.

The reason for this is because almost all acquisitions take place in order to grow the buyer's market share. They completely ignore what made the target company attractive enough to become a target in the first place: Customers. Loyal Customers.

When you buy a company, unless it's carved out in the legalese as a sop to the original owner(s), you get the whole thing: IP, products, employees, property, documentation, goodwill, history, and on and on. But if you only walk away with their Customer list (perhaps chopping up the rest to sell down-market) and somehow believe that those Customers are now yours, you haven't been paying attention to corporate acquisitions over the past century or so.

Something about the acquired company appealed to those Customers. It might have been their products, or how great their rep was, or their lower cost, ease of use, simple terms, terrific service, culture, inclusiveness, processes, or a hundred other things. Or (most often) a mash-up of all of those things.

The company doing the buying typically has a culture that is focused on acquisition. That's how they got so big in the first place. But as they acquire Customer lists and discard the rest, those Customers jump ship to the next company to come along that offers all of the things that were jettisoned in a race to instant gratification and the bottom line.

During due diligence, as you're looking over the books of the company that you want to acquire and figuring out how to make them part of you by forcing them to be you, with your people and methods and rules, why not do this:

  • Have each of your department managers spend time with the managers and crews of the company that you are buying. Not an afternoon. A solid two weeks at least. Not to explain your company's way of doing things, but to specifically look for things that they do better than you do.
  • Record everything you see and hear.
  • Take all of that knowledge - that you are paying for, by the way, and now own - back to your own company. Map it against how you do things. Figure out how to adopt the things that they do better. Even if it means - horrors! - changing things in your company.
  • Start doing things the new way, before the acquisition is complete, or it will never happen.
  • Don't let everyone who isn't in sales leave. People are more often than not what made that company great - their knowledge, experience, ideas, attitudes, excitement. I understand that you can't and don't necessarily want to hire everyone. There are always redundancies. But what if their HR Manager or one of their line workers or IT people is better than one of yours? Trade up!
Most acquisitive companies tend to take a Darwinian view: We must be the better company, this line of thinking goes, because we're acquiring them. But this completely ignores the fact that acquisitions aren't why most companies exist. When you're a hammer, everything looks like a nail.

When you've paid all that money for another company, why leave so much of value on the table? Or, worse yet, there for the taking by a competitor with a wider view and a long-term vision?

Hey, it's your money; do what you want. I just (used to) work here.

Sunday, February 16, 2020

Setting Up an Auto Service Business Development Center

Staffing
Our Service BDC does all inbound/outbound service calls. We also have a Sales BDC that handles all inbound/outbound sales calls.

In addition to the calls that they are paid for (see below), our Service BDC reps also follow up on reservation no shows. Our current no-show rate is about 6%, down from a high of 15% that occurred before we changed our reminder emails/texts (which now go out at the time the Customer makes the reservation, the night before their reservation, and the morning of).

Conversica has also proven useful as a data mining/contact tool. Our results have declined, but the volume of reservations that it generates is still very reasonable for the cost. We just wish that it was able to text Customers, as we find that far more effective than emails or calls.

Metrics
  • Answer speed: 94% on the first ring. 100% by 3rd ring.
  • Abandon rate: Less than 4%.
  • Outbound calls/texts per day: Minimum of 120. Texts are better than calls – they get many more responses.
  • Reservations per day: Minimum of 20/rep, goal of 30.

Breakdown of reservations
  • 50% as the result of outbound calls
  • 20% online
  • 20% Service Advisors
  • 10% combination of email and snail mail

Necessary Resources
  • I highly recommend having a call recording system to playback calls and for training– at least 90 days of storage, ability to track calls by extension, ability to forward calls as .wav files, and ability to generate reports that show call length, successful/unsuccessful outgoing calls, and wait time
  • Booking system – The same system has to be used by the BDC and by the Service Advisors; BDC reps must be able to leave notes that the Service Advisors can see, and the BDC reps must be able to see recommended services, including quoted prices; the booking system must be able to report on volume by date, rep, show/no show, service(s) performed
  • ACD Reports – answer speed, abandon rate, call volume by day of week, date, time of day (to help figure out staffing), wait time (to corroborate with recording system)

Training
We give each of our BDC reps a training manual. It contains our scripts, a phone operation manual, breakdowns of our processes, a reference guide, maintenance service guide and prices, contact list of Motorcars employees, our department’s priorities and philosophy, and a set of flashcards. We use the flashcards as a fun way to train new reps on questions that they won’t likely get very often but should still know the answers to (see below, after Scripts).

We also have up-to-the-minute versions of all of this – plus the schedules of all employees – in the cloud (Google Drive).

A typical new hire shadows the entire team and begins to make outbound calls within 2 weeks, and inbound calls within 4 weeks. Because there is so much to know, we would rather they learn things well, rather than quickly.

Outbound Calls/Lists
  • No shows
  • Declined services
  • Collect updated email addresses, textable phone numbers
  • Purchased recall lists
  • Sold not serviced
  • ToyotaCare (each cycle, plus late, ToyotaCare Plus, and Toyota ServiceCare)

Compensation
We have a daily spiff to drive the next day’s reservations. The spiff is paid out to every member of the team, and starts at a combined total of 70 reservations for the following day:
  • Less than 70 reservations = $0.00
  • 70 reservations = $12.50
  • 80 reservations = $15.00
  • 90 reservations = $18.75
  • 100 reservations or more = $25.00

The team can see where they are constantly throughout the day by checking the Workbook in Xtime, and I tell them how much money they have in their ‘bank’ every time it goes up. This has proven to be a winning strategy – everyone makes extra calls to get over the next hump.

Outbound Campaigns

Conquests
  • $7.50 for Customers 9 to 16 months without service
  • $10.00 for Customers more than 16 months without service
  • Recalls – Payout per ‘show’ for proactive outbound contact - $5.00
  • ToyotaCare - $0.75 for each ‘show’
  • ToyotaCare Plus - $20 for each credit card number collected
  • Toyota Service Care - $10 for each credit card number collected

Detail Center
  • Complete Detail - $12.00
  • Interior Detail - $6.00
  • Exterior Detail - $6.00
  • Pet Hair Removal - $2.00
  • Floor Shampoo - $2.00
  • Seat Shampoo - $2.00
  • Exterior High-Speed Buffing - $3.00
  • Engine Clean & Degrease - $2.00
  • Rubbing Compound - $5.00
  • Steam Clean Dashboard - $2.00
  • Ionizer - $3.00
  • Add Fresh Air Scents - $2.00

Recommended Services
  • Alignment - $5.00
  • Battery - $5.00
  • Brakes - $5.00
  • Tires - $10

Marketing Plan

We have found that our most successful campaigns have several traits in common:
  • They are a combination of email, postcards, and outbound calls.
  • They are narrowly targeted – not ‘shotgun’ ads. For example, there are 5 different ToyotaCare email templates – one for each of the 5 services – plus one to transition Customers to ToyotaCare Plus and another to get all Customers, regardless of brand or model year, onto Toyota ServiceCare.
  • As a rule, our eBlasts and postcards rarely feature pictures of cars. Instead, we use humor, children, single panel comics, puppies, kittens, and images of the folks who work at our stores. ‘Dad’ humor seems to work best.

Scripts

Incoming Call
  • Thank you for choosing Motorcars. This is ___________ speaking and I can help you!
  • My pleasure, I’ll be happy to assist you with this.
  • Please allow me to gather some personal information from you. May I have your home telephone number?
  • (If Customer does not appear under the phone number given, let them know, and ask if they have brought vehicle in for service before.)
  • (If yes, thank them for being a loyal Customer and try to find them by last name.)
  • (If no, thank them for the opportunity to earn their business and create a Customer profile for them in XTime.)
  • Which vehicle is your call regarding? (Year/Make/Model)
  • (If Honda) What service codes appear on your Maintenance Minder?
  • (If Toyota) Your next recommended maintenance service is XXX. Is this the service that you wish to schedule?
  • (Check Dealer Daily for Toyota recalls. If there are open recalls, let the Customer know, and ask if they wish to have them taken care of during their visit.)
  • Anything else that you’d like us to check out, since it’s coming in anyway? We also offer complete Detail services, if you would like to schedule that at the same time.
  • Will you be arranging your own transportation or taking advantage of our shuttle service? (Unless oil change or other Waiter. If the concern is an electrical concern of any kind, it must be a drop off. The Customer’s SA will be able to give the Customer a good idea of how long it will take once the technician has an opportunity to see the vehicle.)
  • What day works best for you?
  • Let me check our service calendar for a convenient drop off time… We have an opening on ______ (day) at ______ (time) - will that work for you?
  • What email address/textable phone number may we send your confirmation to?
  • We have you scheduled to meet with your Service Advisor at ____AM/PM on _____ (day). You will be meeting with _______________. Our goal is to complete your visit in roughly XX hours, but your Service Advisor will be able to give you an exact time when they check in your vehicle.
  • (If new Customer, explain service drive and shuttle process.)
  • Again, my name is ____________and if for any reason you need to reschedule, will you please give us a call?
  • Have I answered all of your questions and provided you with excellent service today?
  • Thank you for calling and have a great day!

Declined Service(s)
If You Get Voicemail
Hello, __________, this is __________ calling from Motorcars. Please call me at XXX-XXX-XXXX. Thank you! Have a great day.

If a Human Being Answers
Hello, this is __________ calling from Motorcars. Is __________ available?

Hello, __________, this is __________ calling from Motorcars. Your Service Advisor recommended some work during your most recent visit, and I’m calling today to schedule your reservation.

We have an opening today at __________. Will this work for you, or would another day be better?

If They Push Back
I understand. Do you mind letting me know what obstacle we might be able to help with?

If It’s About the Cost
I realize that this might be an unexpected expense. If it will help, we have a special coming up next week on (depending upon which service was declined):
Alignment - $95.96 (normally $119.95)
Brakes - Save $50

We also offer a deferred interest credit card that allows you to take up to 6 months to pay for any work that you have done. It can also be applied to needed parts, such as tires and so on. Would this be helpful to you?

IF IT’S ABOUT BEING WITHOUT A CAR (only applies to brake jobs)
If it will help, I can offer a 1-day rental at no cost to you while you have this work done.

IF YES
Great! What I’m going to do is to schedule your reservation and I’ll add a note to your Service Advisor, so they’ll know about this.

(Make sure you schedule them with the same Advisor who made the original quote.)

IF NO
That’s fine. When you are ready to schedule this service, please let me know. My name is __________ and you can reach me at XXX-XXX-XXXX ext XXX. Is there anything else that we can help you with today? (Pause) Thank you! Have a great day.

No Show Follow Up

Hello, this is _____ calling from Motorcars. The reason I’m calling is that it looks like you may have missed your recent service visit. We understand – life happens.

Would you prefer to reschedule in the daytime, evening, or on a Saturday?

I have 3 times open on __________ … one at __________, one at __________, and one at __________. Which is best?

Great! I have you scheduled on AT

If a Human Being Answers
“Hello, this is __________ calling from Motorcars Toyota. Is __________ available?

Hello, __________, this is __________ calling from Motorcars Toyota to schedule your ToyotaCare service. This is a free maintenance service that we provide that includes everything but air filters and wiper inserts for the first 2 years that you own your vehicle. We have an opening at __________ on __________. Will this work for you, or would a little later be better?”

If You Get Voicemail
“Hello, __________, this is __________ calling from Motorcars Toyota to schedule your FREE ToyotaCare service. Please call me at __________ ext. __________ to schedule this service. I’ll be happy to help. Thank you!”

ToyotaCare Plus

If a Human Being Answers
“Hello, this is __________ calling from Motorcars Toyota. Is __________ available?

Hello, __________, this is __________ calling from Motorcars Toyota to schedule your next maintenance service. I see that your ToyotaCare service plan is about to expire/has expired. Would you like to extend your ToyotaCare coverage?

Extending your ToyotaCare will extend your coverage for maintenance for an additional 2 years. This will cover your first major service, which is normally $160. It will also cover 3 additional services after that. Extending your plan will also extend your roadside coverage for an additional 2 years. This covers flat tires, no starts, running out of gas, and they will get you to the nearest Toyota dealership anywhere in the United States.

There are 2 ways that you can extend your ToyotaCare. One is to pay the total amount of $329 plus tax.”

If They Say No
“That’s fine. Let’s go ahead and schedule your next maintenance reservation.” (Continue with service scheduling process.)

When They Say Yes
“Excellent! Let’s go ahead and schedule your service, and then I’ll take your credit card information so that we can extend your ToyotaCare coverage.”

Sunday, January 26, 2020

F*ck President's Club

Look, we get it: Salespeople are like puppies - they like to be praised. But they already make more money than almost anyone else in the company. Do they really need another paid vacation, too? And one that's better than anything the folks in the rest of the company will ever be able to afford?

If you're going to tell the non-sales folks that they're equally important, don't make it so obvious that you don't really believe that.

What's that? You include a token few non-salespeople among the celebrants, nominated by their manager or a consensus of managers? Bully for you. Now you're just rubbing everyone's face in the fact that you play favorites, too.

Either pick one person per department or - more sensibly - eliminate this ridiculous expense. Of course salespeople beat their goal. That's their job! Their reward is a fat paycheck!

President's Club is nothing more than a participation trophy for the folks that Management likes. Everyone knows that. They talk about it the entire time you're gone. Instead of working. And they hate you for it, and they hate Sales for it, even though it's not Sales' fault.

It's yours.

Thursday, April 25, 2019

Eating as Behavior Encouragement

Have a team member who is absent more than you’d like? Buy lunch for everyone on the day they don’t show up, and only that day.

Repeat if necessary (it probably won’t be).

Machiavelli May Have Had a Point

Want someone to improve at a particular KPI? Walk up and thank them for it. Not when they get better - now. Don’t mention the number or whether it’s good or bad - just thank them for it.

The first thing they’ll do is run back to their desk to see what you’re talking about. If the number isn’t terrible, they’ll be sure to improve it, because everyone wants to be a hero - especially in their own eyes.

If the number IS terrible, they’ll assume you were being sarcastic, and that you are watching them like a hawk. Either way, performance will improve. If it doesn’t, they are almost certainly planning to jump ship.

Plan accordingly.

Friday, June 22, 2018

"When I Was at X, We Used to Y..."

Suppose you throw a party, and a friend of one of your guests starts off a conversation like this:

"The last party I went to, they had little Beef Wellingtons on tapas plates. Do you have little Beef Wellingtons on tapas plates? You should really look into that, because they're delicious. They also had this really cool game that we all played; it was a riot! What activities do you have planned?"

How likely are you to invite this schmuck to your next party - or the friend that brought them?

Believe it or not, many folks* who move from one company to another do this exact same thing, oblivious to how rude and condescending they sound. Sure, you want to share your expertise, experience, and problem-solving skills, but you're missing 2 key words from the end of that sentence:

...when appropriate.

It's fine to suggest new ideas. It's even fine to suggest old ideas, if you think you know enough about the issue to understand it from your new co-workers' perspective. Usually, though, we don't. We talk when we should be listening and absorbing. As a newbie, that's your main job. If someone asks for your opinion, fine - but don't mention what you did at your old employer or who they were. At best, it comes off as grandstanding. At worst... well, if you don't know, this article is definitely for you.

Even when you do voice an opinion - when appropriate - it's always best to couch it in a way that leaves room for a conversation. Maybe this:

"I'm guessing that you probably already tried Y. How did that work?"

First, you're giving the other person credit for probably thinking of and trying the obvious solution(s). Second, you're acknowledging their expertise by asking for their observations regarding the result. Third, you're establishing that you don't have all the answers, but you're willing to roll up your sleeves and work on it together.

Popping back to our party guest metaphor, the new employee who does this is the one who runs out for beer/wine when you're low, offers to drive the really drunk guest home, and helps clean up afterward.

Those are the folks who get invited to every party.

*Guilty as charged - but I'm much better now.

Saturday, June 18, 2016

Manager or Supervisor?

Give some thought to this:

  • Do you ever suggest-but-not-really-because-it's-more-like-you-insist that one of your direct reports hire someone?
  • Do you ever tell them that you don't want them to hire someone?

If you have ever done either of these, no matter what your direct report's title is, you have turned them into a supervisor.

A supervisor supervises daily work that is defined by someone else. A manager decides what the work is. They also have the power to hire and fire. Take that away, and they're not a manager any more. And the moment their direct reports know that - whether you want to or not - you take on being that team's manager, because they won't bother to go to the supervisor for anything any more. Why should they? You've taken all of that former manager's power away.

If you don't trust a manager to hire or fire people, you have the wrong manager. Fire them. If you don't trust anyone else to hire and fire, you've created a hierarchy with just 2 levels: you, and everyone else. There are some profound ramifications to that:

  • Your managers won't own the success or failure of their team members. Why should they? They didn't even get to decide who those team members are.
  • Your managers' direct reports will come to you whenever they get a 'no' from their manager. Congratulations! Mom said no, so now they go to dad. You've turned your organization into a dysfunctional family, just like you always dreamed about.
  • Turnover: If your managers' direct reports aren't owned by their manager, they won't get what they need. People who don't get what they need leave. And guess what? Managers who find out that they're not really managers leave, too, to go work for organizations where they can be managers. Which is most of them.

The solution: Let go! You hired managers to do what you are either bad at or don't have the bandwidth to do. Let them be managers, for Pete's sake. And if they fail, give them some encouragement and talk it through with them. If they don't improve, replace them. If they do, congratulations - you have an hierarchy that works.

Sunday, March 20, 2016

Pin the Tail on the Donkey

"Hey, Dave, do me a favor - tell your team not to tell Customers that they can X if they have a Y."

"Who told a Customer that?"

"I don't want to say; I don't want to get anyone in trouble."

"Okay. Can you give me the Customer's name? I can work backwards from that."

"Can't you just send around an email or something?"

No. No, no, no.

First, because if that actually worked, they would have gotten it right to start with. Second, it's clear that only one person is getting it wrong. Why waste the time of team members who already get it right? Are we deliberately trying to kill their morale?

There are a lot of things wrong with our current Avoidance Culture, and one of the worst is not trying to correct a problem at its source. If anything less than the entire team is getting something wrong, it's an abdication of your responsibility as their manager if you don't sit them down, face to face, and say: "This is something that you need to correct."

"But it's hard!" you cry. "I don't want to hurt their feelings!"

How will they feel when their bad habits accumulate to the point that you have to let them go, when you've given them no indication that they were doing anything wrong? Is that fair? Is it right? And how will your HR staff feel when that dismissed employee turns around and litigates? As far as they knew, everything was peachy.

If there is an issue, it's your job to coach your employee regarding how to correct it. Yes, they still have to do the heavy lifting, but you're not doing your job if you don't even tell them where the log jam is.

Saturday, August 22, 2015

'My' Customers

One of the biggest and most destructive mistakes that any manager can make is to let an employee think of any Customer as 'theirs'. They can certainly take ownership of a Customer's needs and issues, but not the Customer, ever. The Customer belongs to the business, not to the employee, no matter how terrific they are.

The only thing that stops you from putting this into practice is fear. But is that really how you want to run your business, doing anything to keep employees and Customers? Because if you do, it's not your business any more, no matter who signs the checks.

"Nonsense!" you say. "What harm can allowing an employee to bond with a Customer cause? So what if they do things outside of our established process - they bring in results!"

What you're missing is that it's just another version of the 'special situation'. If you allow one employee to work outside of what is normally allowed, it creates extra work for everyone involved down the chain, and breeds resentment among the employees that are not so privileged. It's likely that your star player is only a star because they're allowed to circumvent the rules. But if that's true, why not do away with the rules entirely and let everyone do what they want with 'their' Customers?

Because you fought long and hard to get away from that chaos - remember? - and now you're backsliding.

"But it builds employee loyalty!"

Nonsense. What it breeds are bullies who make life hell for everyone else when they don't get their way, setting impossible Customer expectations that cost your organization time, money, and yes, Customers. And if Customers know that they can get whatever they want by going to your bully, why would any of them go to anyone else?

And then, of course, your bully leaves, and takes all of 'their' Customers with them, while you curse them for being exactly what you made them.

Stop being co-dependent! If there are rules, they apply to everyone, and anyone who can't succeed by following them doesn't belong. Stop allowing employees to run your business - that's your job. If you don't do it, nature abhors a vacuum, and is more than willing to put someone else in your chair, whether you realize it or not.

Thursday, July 17, 2014

PTO

There are some employers in the United States today that don't offer employees paid time off (PTO), even if they're sick or there's a public holiday. Others restrict PTO to employees who have been with their organizations for 1 year or more.

I understand the reasoning: "If an employee isn't producing, why pay them?" Followed closely by: "They'll only take advantage of it."

There's just 1 problem with this line of reasoning: It's wrong.

If you don't allow paid personal time, sick time, etc., you are essentially saying that there is no defined limit to how many days an employee can be absent (with notice, of course), provided that they are willing to forgo pay for that many days. That being the case, what actually happens is not multiple days taken off in one go - it's a day or two taken off each month, every month.

That's right - you've unintentionally consented to allow employees unpaid time off that totals 12 to 24 days a year - and to resent you for making them show up for work sick (getting everyone else sick in the process).

But give even a new employee 5 personal days up front, and here's what happens (provided you hired the right person): They hoard them.

That's right - limited to just 5 days that they can have off per year, the end of the year rolls around and people still have days left that they could take off, but haven't. Why? Because they never know when their child might be ill, or their hot water heater might spring a leak, or one of their parents might die. Against the unknown, they take those 5 days and bank them. Especially since so many of them are working 2 jobs just to make ends meet.

But really, do you really want employees that haven't taken their 5 days? Think about it: 52 weeks in a row of 40 or more hours per week, without a break. How productive do you really think this employee is going to be, even if they don't get sick?

If you really want someone fresh and sharp, why not offer 5 days of personal/sick time, and 5 days for mental health (what we used to call a 'vacation').

So, for the cost of 10 days' pay, you get:

  • Employees who are less likely to leave
  • Higher production because no one is spreading the plague
  • Sharp, fresh employees
  • Few employees who actually use all 10 days
  • An employee who has to work harder to pay for an even better vacation next year
In other words, if you're going to bean count, do it here only if you prefer employees that are mentally and physically unfit.

Tuesday, February 25, 2014

Work Parties

There are 3 things that you absolutely must get right when it comes to work parties. Do them wrong and an event that you intend as a benefit and sign of goodwill will be universally loathed and demeaned for months before it rolls around again, distracting everyone from their work and giving them one more reason to hate you.

1. Attendance. Is your party a social function or a work function? If it's a social function, why does everyone have to come? Why can't they bring their significant other(s)? If it's a work function, abandon all pretense and pay everyone for their time. Better yet, don't have a party. They already have to put up with you all day. Aren't they allowed to have some time to themselves to berate you in private? And if you say 'Then let's have it during work hours', you are conveniently forgetting that doing so means that all of your employees' deadlines must move up an entire day to make room for a party that no one wants to go to. In other words, you suck.

2. Oversight. Here's the best idea yet: Throw a work party, but don't go. Let an employee committee plan it - venue, theme, etc. - just give them a reasonable budget and a few guidelines to keep you from getting sued. You know - like your first college mixer (are those still a thing?). They'll plan an event that they think is fun (bacon grease limbo night is my personal favorite), as opposed to the cornhole tournament at the VFW hall that you planned. Best of all, if the event is a bust, you're off the hook - everyone will blame the party committee (who are usually troublemakers, anyway, am I right?). You can't lose!

3. Booze. Okay, here we go: I know that you're scared to death of the 'L Words' (Liability and Litigation), and there is wisdom in your fear; some people just can't handle their liquor, and will do things under its influence that will likely get them a) fired, b) one hell of a reputation, or c) killed. But if you're going to go ahead and throw the party, not buying drinks for those who want them is just going to look cheap. So how do you do it right? Simple: Drink tokens. Allow 2 per person, and anything else they drink is out of their own pocket (and out of your control - there go the two L's). Lots of companies do this, and it works a treat. Employees get enough free hooch to loosen up and appreciate your generosity, but not so much that they dance naked on the bar (if you think I'm joking, you're wrong).

But better yet... If you have a budget for this, don't throw a party. Your employees don't need it. You know what they'll appreciate more? Money. Give them the money you budgeted for this, and let them decide whether to do something fun without you around (employees need to vent about the boss; it's normal and healthy - as long as it doesn't happen at work) or pocket the dough. Again, either way, you win. And what's better than that?

Friday, January 10, 2014

Generational Businesses

You've got to love entrepreneurs. They're responsible for much of our Gross National Product, most of what makes America great (ie, new ideas) and almost all of the best jobs. They work ridiculous hours, often starve themselves to pay their employees in the early days, take crazy risks, fight fear with enthusiasm, and learn what they don't know by doing. Entrepreneurs are what makes the rest of the world wish they were us (that is, Americans). They may be eccentric (Steve Jobs used to soak his feet in the toilet), they may eventually become self-entitled (two words: Larry Ellison), they might be arrogant (pick your favorites here), but a certain amount of all of these ingredients are required to be the man or woman who says, "I have an idea and I'm going to make it real!"

But piss on their kids.

This isn't sour grapes. Most of us will never be founders, and that's okay. Many of us actually like being the folks who help make the vision happen; we just want someone slightly less mad than Captain Ahab to follow. It can be satisfying to be the person that figures out the 'how' without the pressure of having to come up with the 'what' or the sleepless nights spent pondering the 'why'. An entrepreneur's work is never done, but we get to go home and have lives.

But why do so many seem to mess it all up by leaving the business to their kids?

It's not that they walk into wealth (okay, maybe it is, a little). But if you work as hard as founders do and take the big risks, you should absolutely be comped for that, and making sure your kids have the best of everything that you can afford is the American Way. Send them to the best schools, buy them the best clothes, take them skiing in Whistler and snorkeling in Belize. Do it all. But never, ever leave them your business.

Let's start with the obvious: You understand your business because you had to know everything; there wasn't anybody else. You know how to handle employees, what makes an effective marketing campaign, how to negotiate with vendors, and how to keep Customers coming back.

Now let's look at your son/daughter: Their first job was probably working for you doing some kind of menial job. But they didn't technically report to you - thy reported to the head of whatever department handles shipping, cleanup, moving merchandise around or whatever. But they're your kid. How likely do you think that manager was to rip them a new one when they did something stupid that cost the company money? They probably didn't even tell you. And who else gets to set their own hours?

From day one, they are raised in an environment of resentment.

Now your kid gets older. You send them to college, they take a few classes, but nothing too stressful because they have a job waiting for them at home; their degree is window dressing. And they come back and you give them some kind of management job, their very first, and set them loose. And they suck, because they have no experience actually doing anything, because all of their lives you were the doer.

Trouble is, you don't notice, because everyone still comes to you, just like they always have. You don't know it, but your son or daughter is a joke, and nobody tells you, and they get used to making money - probably more money than anyone but you - for doing nothing very much. Until the day that they do something so monumentally dumb that it can't be brushed under the carpet.

And you fire them, right? Just like you would any manager that did that incredibly dumb thing. You fire them, because you realize that you should have put someone in that job with some experience under their belt, someone who'd worked for several other companies and could actually do what needed to be done. Right? Right?

"Of course not," you say. "This is my child, here. They are beautiful and perfect, even if they are a little dumb sometimes. They just made a mistake. I'll have a talk with them. It will be okay."

So you have a long talk, and they're really embarrassed, just like that time they cut their little sister's hair or put that baseball through the window, but you give them a couple of pointers, pat them on the back and, just so they know that you love them, you give them a promotion. (Tell me that you have not seen this happen.)

Time goes by. Things seem to be going okay. You're working just as hard as always, still making all the big decisions, but you're the president and that's what president means. Meanwhile, your kid has learned that the secret to keeping everyone happy is to let them do pretty much whatever they want, and to spend most of their day chatting with employees about things that have nothing to do with the business, or having meetings where there is a lot of conversation but no decisions.

Eventually, you get old. You spend a little less time at work because your son or daughter is now in a VP role of some kind, and they have to stretch their wings sometime. Everyone in the business seems happy, so things must be going well, right? Your business has become a Name, it's not as hard to fight for Customers as it used to be, and you stopped having to worry about making payroll years ago. And someday, probably much later than you promised your spouse, you retire, move to Costa Rica for part of the year, and your business is in the capable hands of the 2nd Generation, one or two or more of them, but of course they never fight like they did when they were kids, and things are exactly the way you dreamed they would be, with grandkids coming to visit you and afternoons spent fishing or antiquing or traveling with friends.

Until a new competitor with a better idea, better staff, or both moves in and eats your empire alive. Not right away, usually. There's time for your kids to hire expensive consultants to tell them what to do and to endlessly debate whether or not they should do it, and getting second opinions from still more consultants, trying to do what you always did because it always used to work, but the new guy does new stuff and, before you know it, Customers stop coming in the door. Then the layoffs begin, until finally there's no one left. Your kids have money, of course, and they made more on the sale of the business or the land, but you still remember the look on the faces of all of the employees on the day that you or your son or daughter told them when they would receive their last paychecks.

Not all 2nd Generation businesses die this way. Some last long enough to be passed along to the 3rd Generation - kids who want to do something other than work for their folks, who in fact work for someone else and build up some experience, and eventually realize that their parents are running a money machine into the ground. If they come into the business, they're all about numbers, and hire experienced managers to do most of the work. They're more like a ringmaster than a founder, with a keen eye on the books, and they make sure any children that they bring into the business work somewhere else first, just like they did, and walk in the door with ideas of their own.

So if you're an entrepreneur, rather than go through all of this, ask yourself a couple of questions (plus probably a few more), and act accordingly:

1. Did your kid(s) ever ask for your business, or is that your idea?
2. Did you ever ask them what they wanted to be when they grew up?
3. Can you get someone better for less money?

Monday, January 21, 2013

Quid Pro Quo

Here's a rule that managers and employees must learn, regardless which department they belong to:

The amount of a manager's time (and the company's money) that any employee is entitled to is directly proportional to the amount of revenue that that employee creates or the amount of spend that that employee saves.

Simple, clear, appropriate. Notice that I do not use the word 'fair'. Fair is a fuzzy term; its definition depends upon who is speaking, and never the twain shall meet. But 'appropriate' is something that we can agree on, even if neither side particularly likes it.

Take a look at how your Customer Service and Business Development teams are comped. If your organization is like most, the first is too low and the second is much too high. And I know that the next words out of your mouth are these: "How can we compete for BD reps if we pay below the going rate?"

First, half the reason that you need BD reps is that you lose Customers because they don't receive Customer for Life service. Fix that - maybe by increasing retention among your CS reps and comping them for hitting Customer retention goals - and half of your BD needs go away.

Second, you are not looking for BD divas; you want BD reps who consistently hit 100% of goal (not above or below that) and who take the long view that taking care of Customers up front leads to more and better referrals which leads to higher revenue which leads to more money.

When you comp by value, there is less jealousy and distraction from doing work, because the math is there for all to see: Produce more or save more = get more.

You can't fulfill the American dream any simpler than that.

Thursday, May 3, 2012

Expensive Reports

Does your organization issue corporate credit cards to execs and Salespeople, then pay their bills for them? How's that working out for you? Getting those expense reports on a timely basis, are you? With all of the receipts included, and with your form filled out correctly? No?

Of course you're not. Know why? Because you're doing it wrong! Do this, instead:

  • Issue corporate credit cards, just like before, only have the bills go to the employee's home address.
  • Set the account up in such a way that the employee has to pay each bill themselves, out of their own pocket.
  • Ensure that - once you have received a properly filled out expense report with all necessary receipts attached - you reimburse the employee no later than the end of that week.

Here's what this does for you:

  • Because they are personally liable for all charges, you don't have to chase employees for reports or receipts any more. If they don't provide them, you don't reimburse, and they still have to pay the credit card company.
  • Any interest charges they incur are theirs to pay - not yours or the company's. As long as you reimburse promptly, it's not your fault if they pay their bill late. It's their bill, after all, not yours.
  • If they don't have a receipt, you don't reimburse for that item. No slipping in slush money, no losing receipts. Everything must be documented and included, or the money lost is theirs.
  • Because the grace period for many credit cards is now 20 days or even less, after a month or two, the first thing a Salesperson will do after returning from the road is to complete and turn in their expense report. As long as they do that, they will never have to actually pay for anything out of their own pocket - they will pay each bill almost as soon as the expenses are incurred (providing they don't wait to make payment once they receive their reimbursement - again, not your problem).
  • That fellow who used to lose all of his receipts? He quit. Good riddance!

Ass Kisser of the Month

You know what's wrong with Employee of the Month awards? Their existence. In nearly every organization on the planet, it's an excuse for management to perk someone they like. The problem with this sort of popularity contest is that it does nothing but cause resentment among employees, who see it for exactly what it is: Another way for management to reward their buddies for being their buddies. Bear in mind, this comes from a guy who's won these types of awards many time before, and who's been in management for a long time.

If you have any illusions that your organization is a business and not a club, don't ever utter the words "employee of the month".

Okay, having said that, I'm going to say exactly the opposite, and you're going to agree with me that both answers can coexist in the same space-time continuum without causing the annihilation of this universe, okay? Here's how it works if you really want to do Employee of the Month properly:
  • Management has no say in who is nominated or who wins. Let's face it, management gets to choose winners and losers in everything else; they have no business here. Every nomination must come from someone who is not a manager, and only non-managers get to vote. 
  • As part of the process, each person who nominates a colleague must explain in their nomination why they believe the other employee is a lifesaver. None of this, "So-and-so is always so nice" or "Treats Customers well". They should be doing that all the time. Never reward someone for fulfilling their job description; it sends the wrong message. The nomination must be for something that was above and beyond the call of duty. 
  • If no one nominates anyone in a given month, there is no Employee of the Month. Period. The moment you jigger this, you're back to belonging to a club, and not running a business. 
  • Make the prize something of value to the recipient. And by value I don't mean something that costs the company a bundle. You know what most non-managers want? More time off. So award the winner an additional paid day off of their choice. Screw what HR says; the winner will truly appreciate it - it feels just like playing hooky - and their friends will want it, too, which generates more above and beyond behavior. 
  • Record it in some lasting way. A plaque that you add names to, if you're old school, or a permanent page on your blog, intranet, and / or FaceBook page. Something that the recipient can look at when they're having a bad day. Something that others can see is part of your organization's commitment to recognizing and rewarding extra effort (not popularity). 

I throw these pearls out there so you can add them to your strands and shine. But it's up to you to pick them up, and to share what you've found on that beach with us, too. Got anything shiny?

Wednesday, May 2, 2012

U Shore Do Talk Fun-E

Every industry and organization have their own terms and even their own language that are completely inscrutable to anyone from outside. It can take years for newbies to learn the lingo. Meanwhile, a lot of knowledge is flying over their heads at the speed of sound simply because they don't grok.

Solution: Create a company dictionary of industry and organization-specific terms, including their usage and which departments they tend to be associated with. Post this dictionary in your new hire folio, on your company intranet, your FaceBook page, your wiki, your cloud - anywhere that newbies are likely to look.

A major component of new hire on-boarding is figuring out who to go to for what. How about an internal contact directory that shows not only name, phone number and title, but also what each person actually does, so that you don't have to ask everyone else in the building.

You see? It's the seemingly minor and easily corrected things that waste a large percentage of your man-hours and productivity.

Here's another one: Once you've created these two animals, turn them loose and let employees update them. Heck, if it's a wiki, you might even just start with the title and let them take everything from there. After all, they know everything that should go on both far better than you do. Plus it frees you up to actually get some work done between all those meetings.

Hmmm.. empowerment, buy-in, plus less work for you. What the hell are you sitting there for? Go make this happen right now!

Friday, April 27, 2012

Hiring, Part 2

When you hire someone, make sure that they're smarter than you are. If they're not, why not just do it all yourself? If you want your company to be the best, you have to hire the best. At the very least, even if they're not smarter than you are, at least make sure they know more about their chosen field than you do. And if you worry that one of those shiny pennies might replace you one day, maybe you'd better get busy polishing your skills.

When you lose an employee - especially for disciplinary or performance reasons - replace them with someone better. If not, your organization will stagnate.

I simply can't say enough about cross-training at every level of your organization. Every company that I have been with that had a cross-training program for new hires had far fewer communication issues than companies that didn't - not least because it puts you on a first name basis with the people in each department, plus their pet peeves and the issues associated with doing their jobs, and the impact that you will have on them on a firsthand basis. It's a lot easier to create a good process if you already know firsthand what bad ones look like from every level of the organization.

When you hire someone, there's typically sag (stagnation & lag) time between their training period and the time that they actually begin to do real work. Why pay someone to sit around and forget everything you've just spent time and money teaching them? The moment training is over, have them sit with everyone who already does the job that they're going to do.

Notice that I said 'everyone' and not 'someone'. This is key. Every person is going to know something different about the job and each performs the job their own way. By having your new hire sit with each person, they can learn all that's good about each team member's process and knowledge, and leave out the poor processes that veteran employees no longer even see.

After your new hire has shadowed every member of their team and taken notes (this shouldn't take long - perhaps 1 to 4 hours per person they sit with, depending upon the complexity of the job), it's time for them to be mentored by each member of the team as they perform the job themselves. Again, the idea is that each member of the team will spot different things that your new hire needs to improve. It's also a terrific way to help employees bond and to create buy-in for the new hire with the other members of the team. (This phase takes longer - likely at least a day with each existing member of the team.)

By the time this training period is over, your employee has the benefit of knowing everything that the other members of the team know, plus a fair bit of practice under their watchful eyes. This also increases buy-in and retention on the part of new hires, who now feel not only part of the team, but also that the company values them enough to put a considerable investment into their on-boarding and success.

The Power of Chocolate

Go to Pier 1 or a suitable facsimile thereof and purchase ye a basket or a bowl, deep, and about 10 to 14 inches across. Make it something that fits your office decor. Then go to Godiva or some other confection supplier and purchase a stock of small, individually packaged chocolates. Good stuff - none of that cheap crap you pass out at Halloween. Put it on the corner of your desk closest to the door.

The first colleague who notices it will ask what the chocolate is for. Tell them that it's free to anyone who wants some. They will likely laugh and leave. The second person who looks at your chocolate collection will ask if your kids are selling it for school. Tell them no, it's free to anyone who wants some. When they ask if that's really true, tell them yes and suggest a particular piece. Smile.

The third person to arrive will say that they heard that you 'have free candy or something'. Tell them yes, and that you believe chocolate is good for the soul. They'll take a piece, maybe two, and go tell everyone in the building.

When a woman (it will always be a woman) says it looks good but she can't take one because because because... What she really wants is not only your permission, but your coercion, so that she can tell herself later that you made her take it. Remind her that chocolate has healthful antioxidants, plus the pieces are so small, plus she's earned it.

Refill the bowl on the day it is empty.

The reasons why you will do this:

  • Everyone will come see you - even people who don't like you. As a result, you have an opportunity to ask anyone anything about what's going on in the company.
  • If someone is angry at you, they will show up at your desk angry, but the chocolate will mitigate their ire. They're still mad, but they also want a piece of chocolate, and they can't in good conscience chew you out too much if they expect to get one.
  • It really does make everyone happier. If they're having a bad day, it gives them hope. If they're tired, it's a bit of energy at 2:30pm. If they just accomplished something, it's a way to reward themselves and mark the occasion. And on and on.

You will have a much happier company, and for a fraction of the cost of increasing employee benefits. A chocolate coating take the edge off most things - stress levels decrease and people seem much more tolerant of each other. Plus it's hard to dislike the guy who gave you a Key Lime Truffle right after your presentation bombed.

When you refill, change up what's in your basket / bowl. The key to this strategy is variety. If you have the same thing every day, the people who don't actually like your selections have one more reason to stay away. But if what you have changes every week, they'll stop by just in case you happen to have added some chocolate covered pretzels with cinnamon.

It's not a cost of doing business. It's an investment in a happier, more cohesive office.

Wednesday, April 25, 2012

Plugging the Damned Dam

How many times have you seen or been a part of organizations that spend all of their time plugging holes in the dam instead of taking the hammer away from the kid who keeps making the holes?

One of the biggest holes for B2C (that is, businesses that sell directly to consumers) is this: Employees who forget who the Customer is. (Hint: It's NOT THEM!)

You're seen it. You go to a restaurant and no one greets you. You show up at a doctor's office and there is no one to take your information. You want to ask a question about a bathroom faucet or a dress, but the sales floor is a ghost town. You call a local business in an effort to support your community, but no one picks up.

These are business killers.

If you own or manage a small business, do this: Have one of your relatives go in to your business on your day off, and have them film or make notes of the whole experience (it's certainly cheaper than hiring a Secret Shopper). If you're at home, call your business using your spouse's phone, or your kid's. You may not like what you hear... or don't hear.

You must build your corporate culture in such a way that employees act like you want them to even when you're not there. If you don't, you'll never be able to take a day off, and your spouse will kill you. The best way to get employees to do what you want even when you're not there is to hire the best employees you can afford, even if it takes a long time to find them. Never, ever hire someone just to have a warm body in the position; you'll only have to fire them later, or live with your mistake for years.

Second, make sure that you have communicated your corporate culture - mostly by making sure that you and all of your managers are living examples of it. If you always treat Customers like who they are - the people who buy your groceries - and impress on your employees that perfection is the only behavior that is acceptable, and why, things will begin to move in the right direction.

Bear in mind, when I say Customers buy your groceries, I mean Internal Customers as well as External Customers. If you don't treat your employees perfectly, nothing else you do will encourage them to treat External Customers well. In fact, they are much more likely to do the opposite. Wouldn't you, if your boss was a jerk?

Tuesday, April 24, 2012

Kick Your Company Out of the Nest

I've talked about hiring friends & family, pocketing & knowledge retention, deciding whether your organization is a club or a business, generational businesses, and chain of command, all of which are difficult changes for the established, non-business-school-graduate. But the difficulty factor doubles if you're an entrepreneur, because of an added element: The business is your baby.

You started your business in your garage, spare room , or attic, but it really began as a dream. Your spouse and kids probably helped you, at first, and then maybe a friend or a neighbor, because you couldn't afford anyone else. As time went on, your growing infant organization ate up more and more of your time. Eventually, things got to the point that you slept only when you fell over, sweated the books (you're still sweating the books), never took a day off or a vacation, and made every sale yourself because there wasn't anyone else. And finally, after all of that work, you join the ranks of the less than 1 in 10: A start-up business that lasts for more than a year.

Year two, you maybe hire a high school kid or two to work part time. You miss your kids' school plays, concerts, and games because you have to work. You always have to work; you no longer even seriously think about doing anything else. But you start to see a little success, so you reinvest that and go to a trade show or a networking event where word of mouth grows. You eventually have enough money for your very first ad, which does nothing, but that's okay because you learned from it, and your next ad gets some attention and pretty soon, you can actually hire a couple of real employees and learn to sweat over payroll.

Another year or 2 or 3 go by, and you have a full-time work force. Each person wears 10 hats because there are no hat stands. Everyone works late (but never quite as late as you); no one claims overtime. You have shared your dream and these people believe it, fearless because they don't know any better, and clueless enough to do everything wrong over and over again until they eventually find a method that works.

And now, 5 or 6 years in, you can finally afford to hire someone who can actually tell you what you're doing wrong: Your very first consultant. It's almost like a first kiss, what we used to call 1st base, in that it promises bigger and better things to come. And then, day of days, you hire your very first employee who has actually done this before, and maybe even many times before, which is the entrepreneur's equivalent to 2nd base, and then another and another pro join up, 3rd base and now the bases are loaded with people who know what they're doing, and...

... you jump out of the back seat and say, "Take me home!"

I understand. Like any new, extremely emotional experience, letting your company go is like sending your son or daughter off to prom or spring break. You had control, and now a bunch of pencil pushers are trying to tell you how to run your own company. Things used to be so much easier, back when you didn't have to get approval or document or assess readiness. And the thing that sends you over the edge is this: The very first dip in revenue.

Panic! Someone is groping your child! All of these people are going to kill your kid!

Stop. STOP! Take a deep breath. You hired these people because they know what they're doing, right? And they've managed not to destroy previous employers. And you agreed that, to make this whole thing work, you have to get the hell out of the way and let them do their jobs. And you know that - you know it - but you don't feel it.

This is the glass ceiling where the 10% who made it through year 1 fail: They can't let go. And while their business doesn't die right away, they begin to lose people by the truckload, because they see it even if you can't: The company has stopped growing because you are standing in the way. That's right: You have become an obstacle for your company to overcome, and there are only 2 ways that things can go from here: You can fight to regain control over your teenage company and lose its respect, loyalty, and love, or you can do what all good parents do:

Trust that you brought it up right, and finally take that vacation you promised your spouse so long ago that you can't even recall doing it. Tell no one where you go. Take no phone. Watch no news. Stay gone at least a week, but preferably a month. If your business really can't live without you that long, you've already failed. But when it does, it will thrive and blossom into a strong, functional adult, stepping right out of its diapers and into its first acquisition, merger, or IPO.

And isn't that what every corporate parent really dreams of?

When Slippage is Bad

Slippage is the practice of offering something - a discount coupon, a voucher for future service, a cup of coffee, etc. - knowing that a lar...