ccsboardroom blog

I overheard someone say that if you are a business owner or manager younger than 42 years of age then it’s highly likely you’ve never managed through a real economic slow down!

Leading and managing business critical challenges should be ‘a priority’ to most. The reality is very different. The business growth and excesses we have enjoyed over recent years manifests in many ways to a lesser or greater extent in some cases; lazy balance sheet positions, excessive risk taking, little attention to cost containment, inaccurate financial reporting and paying little attention to customer trends and dissatisfaction.

Working with several organisations recently, it has been interesting to see how few people outside of financial responsible roles had any real practical understanding of the economics of business. ‘Income should exceed expenditure!!’ In tougher economic times, this is an essential ‘common sense’ basic. Unfortunately it seems that so often ‘common sense’ is not that common!

It appears that Senior Management take for granted that their people understand, for example, the concept of ‘gross margin’ and how the change in this figure affects ultimate profitability.
In this example, due to the AUD exchange rate changes, one of my clients, a distributor of imported goods, has had the inevitable price rises that they could not avoid passing onto their customers. Having a fantastic service ethic, ‘the customer is always right culture’, which has been a cornerstone of their success, has now however created a false reality. Because of their commitment to their customers, the customer service team were uncomfortable in fielding calls about the price increases. This intuitive reaction of the service team, resulted in management frustration, loss of profits and increase in the risk of customers ‘walking out the door’. So how did we overcome this challenge?

Bringing the Sales and Customer Service teams together, we explored the basic concepts of Profit and Loss Statement, carefully and simply explaining the terms Gross Profit and Net Profit and how these are affected as cost of goods and expenses change. The positive impact on the team was instantaneous. The team were now able to ‘go into bat’ with the company interests clearly understood, using agreed common language, using their terrific sales and customer service skills to negotiate more effectively with customers. A terrific outcome!

A recent survey in the USA (Weber Shandwick) indicated that employers were treating their people like mushrooms, ‘keeping them in the dark’ about the impact of the financial crisis. 71% of workers say that bosses should be communicating more and 54% have not heard from their company leaders at all regarding the impact of the current financial crises. Here is the clincher …. 74 % indicated that they have heard their colleagues talking about the issue.

Different leadership and management habits need to be developed when times are tougher. The key question then is: … What are you doing differently?

Often adversity has a way of uncovering experiences that are unique and happen ‘once in a lifetime’.

CCS has several clients in the travel segment. We measure service levels and run workshops for front-line and management professionals. As part of a recent research program (someone has to do this) I was travelling overseas on a cruise liner in the Baltic. Having some previous experience, I was keen to observe comparisons with current overseas service cultures and management styles.

Little did I know that this would really be a ‘different trip of a life time!!’.

I came away with a remarkable story of professional service that many Australian organisations could learn from. A clear respect by employees for ‘professional authority’! A commitment to excellence in performance delivery that demonstrated both passion and accountability!

The story unfolded when I unfortunately got ill in Amsterdam and had to ask the Hotel (Park Hotel near Leidseplein) to call the doctor. Without going into the painful details I was able to get some strong analgesics to help cope with my kidney stone issue. The hotel staff were excellent in helping with an emergency, as was the doctor.

The very next day we boarded the ship bound for the first port in Germany. I thought I was over this traumatic episode, only to discover the first day of the cruise that things were going from bad to worse.

‘Cutting to the chase’, I needed urgent medical attention. The medical team on the ship were terrific. They were confident, empathetic and proactive in helping me arrange scans at a University Hospital in Rostok, Germany. The urologist was very professional. (He was excited to treat an Australian and really keen to discuss Aussie landmarks.) All I wanted was treatment.
It was recommended that I next have a CT scan. So off to a public hospital in Stockholm, Sweden. Again, good medical facilities but no opportunity to get the treatment I really needed. The boat was leaving in a couple of hours.
The doctors had recommended that in my condition, it was not a good idea to fly …. Especially 24 hours back to Sydney. Eventually and on good recommendation from the ship’s medical team, I was persuaded to check into a private clinic in St Petersburg, Russia.

Here the “exceptional customer service” story begins; An escorted ambulance service ( I had no Russian visa) to a private medical clinic. On arrival at the clinic, which from the outside looked more like a mausoleum, we were greeted by an ‘administration translator’ (Pauline) who helped guide us through the myriad documents that needed authorization prior to check in. Within an hour of arrival we were seen by a urologist (Dr Oleg), a smiling genial young specialist who immediately diagnosed the problem and indicated that a 2 day stay as their guest would solve the problem. I could simply fly the on to meet the boat at the next destination. With no visas and time not on our side we indicated that the boat was to sail the very next day by 5:00pm … I needed to be treated and back on board by then.

The look of desperation on both mine and my partners face probably influenced this wonderful man to demonstrate how the wheels of a bureaucratic and hierarchical organisation can really function.
After one phone call, of which we could understand not a single word, super efficiency and superlative service followed. Bloods taken, x-rays organized, accommodation in a ‘hotel room’ ward found, anesthetist put on notice and the operating teams advised of a late night procedure.

We could tell that no one questioned the authority of the Doctor. Orders were followed, instructions obeyed, procedures invoked with attention to medical detail at minutia level. Bear in mind that this was all happening in a surreal way because of language barriers and unfamiliarity of environments. A visit, again via ambulance, to an army hospital to undergo an IV x-ray added to the crazy experience. Superb technology and service, with clear military precision of rank control and command.

By 8:30 pm that night I was out of the OR and back in my private ward. An immediate visit by the surgeon who reassured me that everything had gone according to plan. “We make you nice” Dr Oleg said in broken English. Dopy but relieved I spent a sleepless night watching Russian TV watching Cadel Evans come close to cycling glory. By midday the following day, after an early morning visit by the specialist, I was back on board the cruise liner.

I had had massive misgivings about undergoing medical treatment in Russia. I was wonderfully surprised.

I am the first to acknowledge the unique aspects of my experience. A foreigner, with a medical emergency, in a private clinic, with pre-arranged contacts from the ship’s medical team!

Getting home to Sydney was a tremendous feeling. To keep the story going, I’ll report next week on the service and support I now get from the travel insurance company.

So far, the requested insurance claim form has not arrived. Thank goodness it wasn’t a ‘paperwork emergency’!

A few years ago I was sailing in the beautiful Whitsundays during race week. As a crew member, I was asked to identify the colour of the 2 minute warning flag, which indicated the race course. I passed this information to a person in the cockpit, who translated the flag colour from a naval chart. This information was then used to identify and plot the appropriate course. As the events unfolded we noticed 40 boats heading in one direction and only 3 sailing with us on our new course. A few moments later we discovered that I had in error reversed the flag colours … bottom line .. mucked up. Because I’d been allocated the job, no-one had thought to check a vital piece of strategic information. We did make up lost ground and came in 19th, but we may have ended in the top 3. Embarrassing .. oh’ yes, … did I learn something … absolutely! (For the next race I was given galley duties.)

Most people, because they are so busy, don’t take time out to consider where they are headed or validate their direction. When this happens, often it is too late or incredibly difficult to recover ground resulting in lost customers, people and profits.
Many leaders operate in a ‘make believe’ world, thinking that if they keep ‘grinding at the wheel’ without lifting their heads to check the ‘wind’, that their products will remain relevant and that customers and their people will still be there tomorrow. Unfortunately the exact opposite happens!

At the rate of change being experienced by industry and the revolution in innovation through technology, ‘while you were sleeping’ the course you set last year already needs adjustment.

So how do you ensure this adjustment or confirmation to strategy happens regularly and effectively?

The responsibility of driving strategy lies squarely with the company leadership. However, left to the CEO or Senior Management team alone, without the engagement and input from other stakeholders creates a recipe for failure. There is a real need and significant benefits from bringing together key stakeholders, in a well tailored process, to develop, reconfirm and flesh out the plan to deliver the strategy.

Allocating time discussion time focused on business strategy rather than operational issues is essential. This process provides people at all levels with an understanding of their role in making the strategy live. It also ensures that managers allow enough time to reprioritize tasks that deliver strategy direction, rather than continuing along an incorrect habitual path.
Our experience indicates that translating strategy from the ‘flip chart’ to implementable actions (making the strategy come alive) is as vital to success on every front. All it takes is some skilled facilitation to help adjust the sails, harness the wind which gives the lift needed to ride the wave of opportunity.

Everyone in a company should be a salesperson! Certainly a bold statement!

The experience many of us have as consumers, when dealing with companies, can sometimes be exhaustive, frustrating and incredibly tiresome. Often it seems to me that we, the ‘potential customer’, are made to feel we are interrupting the person from doing their job.

A case in point ….. Recently I needed to fill the car. It seems that Shell Service stations are currently out of their premium fuel. When I asked the cashier if he knew ‘why their was a shortage of fuel?’, his response was rude and dismissive. “Call this number .. ask them.” Peter, the name on his badge, was obviously having a very bad day.

Without going on about the lack of service, the point is ‘Do our all our people see themselves as sales people for the company?
The sad reality, is no! …. In most businesses, the selling is left to the ’sales professionals’. Our people in accounts, marketing, reception, production and distribution are seldom encouraged to become the ‘extended sales team’.

For those companies that do develop the ‘interpersonal communication skills’ of every person that may ‘touch the customer’ the benefits are significant. Just knowing ‘what the company does?’ or how to ’show a customer that you value them’, exponentially increases the positive sales opportunities.

Imagine if your delivery people were incentivised to provide leads for the ’sales team’. Imagine if the receptionist was included in the sales bonus structure … by listening to customer feedback and identifying new sales opportunities.
The concept is endless … exciting and totally under utilised!

Once again, I ask you to consider if in your company or business, every person has been the challenged to act and behave as a potential sales person. If you think you want to explore further … give me a call. Better still, ask me to call your company … and I’ll give you my view of how your people are ’selling your company’.

Having the appropriate employee survey ensures you engage your teams and that you leverage their collective brain power. Using this approach to help you reduce costs and improve productivity as margins erode is one of the safest ways to protect profitability.

There is significant evidence that validates the exciting concept labeled “The Wisdom of crowds”. In his book James Surowiecki, explains the notion of solving problems or identifying opportunities using ‘the wisdom of crowds’. He argues and demonstrates through various examples that “the collective input of a group of people” is much more powerful than the view of one or two specialists.

In the business environment, often CEO’s and a Managers’ management style (and habit) ignores the valuable input of their teams especially and importantly ‘at the front’ line. Combine this with the management fear “As the boss, I’m supposed to know everything” often ensures that the collective opinion is ignored.

Many companies use the information collected from their people to help steer and drive business objectives, but as importantly, identify challenges and opportunities overlooked by senior management. As the economy tightens and shareholders look to protect their investments, business leaders are under increased pressure to deliver reduced costs and improved productivity.

Two key management questions and opportunities arise when business is under increased pressure to perform!;
1) Do you really understand how people feel about working for you? Their perceptions, views and opinions of the company, the brand and management in general.
2) What are your strategies to fully engage your people in the current business challenge? Have you used the principle of “The wisdom of Crowds”?

Significant success with the above two points is experienced by those companies who regularly measure and act on employee feedback. In addition, many Australian companies are using other principles of Harvard’s Service Profit Chain (Heskett etal) to create a culture that ensures their people are engaged in the vision, goals and business challenges of the day.

My clients and network of CEO’s who we have helped with practical approaches to implement these sound business processes are reaping significant business benefits. Most people think employee surveys are focused on the ‘warm and fuzzies’ … think again! It could be the single best investment you make this year in driving business performance.

No one likes hearing negative things about themselves. Not even me or you! The truth is …. we are perfect. Our service is good enough. Our products mostly deliver. Our front-line people are always courteous. In effect, we are on track. That’s what we all like to think.

The reality I’m sure you’ll all agree, is quite different. Mistakes happen. Deliveries are late. Orders are wrong and people are rude and indifferent if they have a bad day.

The challenge for many managers and business owners is that dissatisfied customers may, and I stress ‘may’ let you know of their dissatisfaction. More likely behaviour …. they have low expectations of you and wait for something better or in fact they simply don’t come back. Even worse … research indicates they spread the ‘negative word’. More importantly people tend to embellish the story to make the problem more believable to others.

Measuring what our customers think, feel and perceive about our products and services provides, amongst other things, an early warning system before things really go wrong. In fact a priceless strategy. So why are some companies hesitant to take the initiative and embrace the opportunity to connect with their client’s opinion, and in so doing improve the relationship?

Many Managers I work with, who have initially been sceptical, have said;
- “Before we measured, we don’t know how to measure or where to start!”
- “Initially we are afraid of what we might hear but chose to overcome our fears and face the truth to cement the customer relationships!”
- “We didn’t know what do we do with the results?”
- “Never even thought about putting resources into the process of customer measurement.”
- “Never thought we could make the time to do measurement.”
- “We never imagined we would receive the value, especially when we had no budget!”
- “We were concerned we would not follow thru on expectations!”

The central theme is fear and inexperience on not knowing how to leveraging the many benefits. Just holding onto one important customer, who was about to ‘walk’, who didn’t think you cared, because of your initiative to get some feedback, will in fact have a positive ‘halo’ affect on both your people and profits.

Lets make this personal …. think about how many relationships break-up because of poor communication and unrealised expectations? How well did I perform? Please let me know … and show me, teach me and train me how I can do better?

Before we continue to lose more valuable customers, those that we have spent loads of energy winning (time and money), how about getting some input on how they feel about doing business with you. Cement your relationships with your customers to ensure you don’t lose them.

It takes courageous management to risk launching a new product or developing a new market segment. Non of which happen without some research.

Similarly, before developing your next strategic plan, consider getting input from those customers that have helped you achieve the success you are enjoying today.

You may be very surprised how quick and rewarding the payback can be!

Often we think one dose of motivation will do the trick in keeping people’s spirits up! Wrong …. for most people we need constant motivation to perform. Take for example a professional sports team. Constant pep talks, regular feedback on performance and never ending focus on goals. All on these small, but effective tactics assist in driving motivation.

After a break during the festive season, many people struggle to get back in the saddle of work. It’s understandable that the freedom of holidays creates a feeling of relaxation and minimum stress. Easing people back into work mode is very much about effective leadership and management. Acknowledging that it takes a few days for people to settle in.

Here are some easy ideas to help lift the spirits and motivate people as they get back into work mode;
- Take the time to ‘walk around’ and ask your people about their holiday experience
- At the start of meetings, ask people to share with others ‘their magic holiday moment’
- Establish ’short term’ goals for the next 3 months
- Have a ‘welcome back’ get together
- Demonstrate excitement and enthusiasm when you see people for the first time in the new year
- Make it fun to be back at ‘the grind stone’

What about the people who have worked through the festive season? They will be feeling tired and perhaps frustrated that they never had ‘time out’. Motivating these hard working people is just as important. Remember to say ‘Thank you’ to your crew for holding the fort and keeping the wheels turning. Even better if you do this with everyone present.

One last thought about motivating your people …. everyone is different, so getting to understand their drivers and ‘what motivates an individual’ is probably going to give you the best results.

Remember … moods are contagious.
As a Manager and Leader, the more positive you are, the more positive your people will be!

Have fun in 2008, stay upbeat and enjoy the moment.

I asked a few Executives recently why they hold end of year Christmas functions?

They said, amongst other things .. ‘An opportunity for people to get together’, to ’say ‘Thanks’, ‘to celebrate’, ‘to have some fun’!

I find it extraordinary that business Leaders seem to want to wait once a year to do this. Why?
Most workers I meet, want acknowledgment more regularly that once a year. As humans we thrive on recognition and acknowledgment. Complicate this with the “instant society” where people expect things immediately, and the expectations of the “now generation”, and the impact of an ‘annual’ celebration seems totally meaningless. The truth however, is that it will have limited impact, especially if you think it will enhance relationships within the business, drive up morale or increase productivity.

People don’t want to wait to be thanked! We want immediate recognition and appreciation.!! Try it and you are likely to experience a remarkable change in performance in your business.

Here’s what I recommend, and its been tried and tested by many of my clients … take the budget you have for your end of year function (add 20%) and divide by four. Then do something small every quarter.

Yes, bring all your people together at least quarterly to thank them, share successes and challenges, an update on where the business is headed and the progress you are making. Also take the opportunity to celebrate achievements, anniversaries and especially welcome and introduce new people to the company.

If you are a Team Leader, a Divisional Manager or CEO, the same principles apply.

I hope that during this festive period you take time to recognize everyone in your business. All those who have helped you achieve success.

Celebrate with them, have fun and bring back some personal touch, in a world where ‘emotional connections’ are so badly needed.

Enjoy the festive season! : )

Just as in politics, where leaders of parties need strategies and tactics to sell their message, a CEO faces exactly the same challenge …. ‘How do I get my people to buy-in?’ Generally people fall into 3 main categories when ‘change’ is announced: The ‘Supporters’, the ‘Neutrals’ and the ‘Cynics’ or detractors.

Selling the message is a critical step. It needs to be well thought out, carefully planned and artfully implemented. Too many Senior Executives are so focused on the process aspects of managing change that they forget or underestimate the importance of communication and the emotional impact. These arguments can and should be extended to all levels of management! Any Manager, worth their salt, should quickly be able to identify who among his or her team is ‘on-board’ with the coming change.

Ghandi is quoted as saying .. “We must become the change we want!” As always the changed behaviour starts with us!

Part of the process is to use various tactics, including leveraging the ’supporters’, engaging the ‘neutrals’ and turning around the ‘cynics’. Many Managers would not even contemplate these tactics because they are so busy ‘doing’!

Selling the message to each interest group within the company needs to be based on their WIIFM! (What’s In It For Me!)
Consider the ‘medium’ used to sell the message, the ‘forum’ for the communication, and critical … consider the timing.

Perhaps at another time, I’ll share more about the strategies of ‘timing’ announcements of change. In the mean time, find the time to consider ‘Have you even thought about a change strategy’? Who’s with you? … Who’s against your change? … and Who simply doesn’t care?

The Harvard ‘Service profit chain’ (SPC) outlines the connection between ‘employee capability’, satisfaction, loyalty & productivity to ‘business and profit growth’. This connection through ‘customer satisfaction and loyalty’!
The question arises … Can the model be used in ‘not for profit’ or government organisations, where ’sustainability’ replaces ‘profits’?

In a recent workshop conducted in Canberra, attended by several people in the non business sector, skepticism was high regarding the SPC principles. In my opinion, the drivers to success are no different in this sector. The outcomes may be different. All organisations, to function effectively, require good leadership and management. Committed and loyal personnel are the core to any operation that delivers services. Therefore similar to a commercial profit focused business, not for profits and government should follow similar best practice management principles.

Why does the doubt exist? Reasons may vary from historical, practical to emotional; Ingrained culture. The nature and style of management that not for profit & government agencies attract. Changes in the mission. Lack of experience to drive ‘effective’ change.

The key finding from working in many sectors seems always to come back to two things; Leadership and Management! Any organisation, from any sector, that provides its people with the tools & resources on both a physical and emotional levels will be effective. Providing people with an understanding of ‘why we do what we do?’ and ‘teaching them better ways of doing things’ ensures the people are happier, provide better service which in turn achieves desired outcomes! … in what ever form you choose to describe it.