Front Line Employees Hold the Key to Long Term Growth

The strong correlation between Long Term Growth and Employee Satisfaction

I’d like to start this post by asking three quick questions. They all relate to important issues that affect your business.

  1. When was the last time you were delighted when you did business with a service company?
  2. What role did an employee of that company play in the delightful experience?
  3. Do you think you could make a guess about that employee’s attitudes toward his or her job based on what happened?

Even though great service is a rarity these days, we’ve all had at least one experience with a company that really knows how to take care of its customers. In fact, I distinctly remember a small dry cleaner in an area where I used to work. I was so happy with the service, I’d drive halfway across town to give them my business, passing other dry cleaner’s shops in the process.

Why did I go out of my way to deal with them? The employees went out of their way for me. Once, they even made a special, after hours delivery to my house when I needed something in a hurry. They also welcomed me and called me by name whenever I stopped by. That made me feel like they really appreciated my business.

If you place people first, then good customer service and profitability will follow. 

“Employee behaviors and attitudes , even more than leadership principles and ideals, communicate most directly to customers just what the company stands for.”  Fred Reichheld, Loyalty Rules!

When you get right down to it, employees have the power to start a chain reaction that leads to success. Here’s how it goes in reverse. Customer Loyalty drives long-term growth. Customer delight drives loyalty. Appreciation and interest drive customer delight. And guess who’s in the best position to show your customers that you really care about them? That’s right. Front line employees.

Not everyone understands the connection

Despite the obvious importance of employee satisfaction, the great recession has resulted in many companies not placing nearly enough emphasis on developing and retaining employees. Consider these survey results:

  • 84% of employees feel that their workplace is headed in the wrong direction according to a November 2011 survey by Right Management
  • According to a June 2011 study from Mercer, one in two US employees are either actively looking for work or have mentally ‘checked out’

“Diminished loyalty and widespread apathy can undermine business performance, particularly as companies increasingly look to their workforces to drive productivity gains and spur innovation,” said Mindy Fox, a senior partner at Mercer.

Of course, great leaders have always known that taking care of their employees is important. The companies that have continued to make employee satisfaction a priority will come out of the current economic environment stronger and will ultimately put a lot of  distance between themselves and the competition.

If your employees are happy, customers see that, and they respond by giving you more of their business.

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Those Pesky Customers by Emily R. Coleman, Ph.D

We all know them:

  • Those unreasonable people who don’t understand business efficiencies and want to talk to a live representative.  And worse, a live representative who actually can speak their language.
  • Those people who don’t grasp the concept of “try, try again,” and immediately call for technical support or complain about the product.
  • Those delusional types who think executives have nothing better to do with their day than solve customer problems.

Doing business would be so much easier if we didn’t have to deal with customers.

Okay, okay.  This is obviously an exaggeration.  Unfortunately, however, not by that much.  Even today, with a down economy, with a rapacious competitive environment, and with buyers who can go elsewhere, customers are seen as a group to be measured and managed.

I recently read a fun article on the subject by Greg Harris.

http://www.jameco.com/Jameco/email/corner/listenandlearnall.html

His position is that “the customer’s voice can serve as a company’s guiding light and everyone on [our] management team makes talking to customers a high priority.”

I’m all for “customer engagement” and matrices to measure it.  I’m all for customer satisfaction studies so you can see where problems lie.  I’m all for “this call may be monitored” to see how employees handle customers.

But mostly I’m for the fact that marketing is about communicating with customers, users, and prospects.  And the best way to do that is to talk to them – and with them – and get to know what actually makes them tick (as opposed to what we think makes them tick).

Therefore, allow me to propose something revolutionary:

Let’s put aside our assigned roles, our job-defined turfs, and our egos.  Let’s agree that no one can claim to be a marketing professional without spending a portion of our day – or our week, or our month – without actually talking to real customers, users, and prospects.  Let’s go out on real-world sales calls.  Let’s spend some time taking the calls customer support reps routinely handle.

Let’s get beyond the numbers.

Keep the matrices.  Keep the market research.  Keep the technologies that, hopefully, make us more efficient.  But as we create our strategies, our tactics, our messages, wouldn’t it be useful to have some personal, gut-level, insight into the people we are trying to reach?

About Emily R. Coleman

Dr. Emily R. Coleman is President of Competitive Advantage Marketing Inc, a marketing firm that specializes in taking small, medium, and large companies to the next level by helping them develop and deepen their competitive edge in the marketplace. Dr. Coleman has more than 30 years of hands-on executive management experience working with companies, from Fortune 100 firms to entrepreneurial enterprises. Dr. Coleman’s expertise extends from the integration of corporate-wide marketing communications to the development and implementation of strategy into product development and branding. Dr. Coleman can be reached at ecoleman@colemanmgt.com.    At LinkedIn:  http://www.linkedin.com/pub/emily-r-coleman/0/5a/714  On Facebook:  http://www.facebook.com/pages/Competitive-Advantage-Marketing-Inc-CAM/223500261070884  At Twitter:  http://www.twitter.com/e_r_coleman

How to Achieve your Strategic Plan: Part 2 of 2

In my last post I summarized the top 4 reasons why Strategic Plans fail. But you don’t get rewarded for predicting rain, you get rewarded for building an ark.  So how do you ensure that you achieve your strategic plans? How do you keep everyone moving in the same direction? How do you get the most out of everyone’s efforts? How do you make sure that every day you take another significant step toward your most important enterprise goals?

Evaluating the winds and currents

When setting direction, you have to examine all of the issues that will have an impact on your journey. You look at the voice of your customers, employees and shareholders to analyze your strengths, weaknesses, opportunities, and threats. This in-depth analysis of information from inside and outside your company is essential for charting the right course in a fast changing world. When conducting this analysis, it is critical to give top priority to customer feedback since every companies future ultimately depends on its ability to serve customers better than the competitors.

As an example, your overarching goals for each of your major constituents could be:

  1. Customer: the “provider of choice” as measured by customer delight
  2. Employee: the “employer of choice” as measured by employee satisfaction levels
  3. Shareholder: #1 in Shareholder return
  4. Community: “highly valued member of community” as measured by philanthropic contributions

Measuring your progress

Once you’ve established your overarching goals, you need to make sure that you develop strategies that really drive the business forward. I like to use the “rule of 3” – no more than 3 major strategies for each identified goal. You will also need to develop concrete metrics with breakthrough objectives for each strategy that can be monitored on an ongoing basis, like a speedometer or mileage gauge.

As an example, one of the strategies that you establish to become the “employer of choice” could be:

  1. Retain the best employees. We will retain outstanding performers at every level of the region by developing a spirited, team oriented culture and work environment that combines exciting professional challenges with opportunities for professional growth.
    • Performance Metric: Employee Retention
    • Current Performance: 82%
    • Benchmark: 95%

Turning long-term strategies into short-term tactics

OK. You’re making progress because you’ve defined clear-cut goals, strategies and metrics for the entire company. Now it’s time to analyze the gaps between current performance and the benchmark by utilizing tried and true quality tools and six sigma to develop improvement initiatives to close the gap.

  1. Retain the best: Using my “rule of 3” again, identify the top 3 tactics to close the gap in the coming 12-18 months. NOTE: Just as with strategies, choosing more than 3 tactics greatly diminishes your chances of making any progress due to resource constraints, lack of focus, etc.
    • Recognize and reward outstanding performance at every opportunity.
    • Create an inspiring and competitive team environment by establishing bold objectives and enabling employees to achieve them.
    • Sharpen focus on results by sharing and publicizing them throughout the region.

Getting everyone on board

Once you have identified the tactical plan for the upcoming year, you need to deploy the objectives throughout the organization using a concept called the “time span of control”. For example:

As the leader, you are focused on delivering the year.

→ Your management team has to deliver 4 good quarters to achieve the annual objectives.

→ Their team has to deliver 3 good months every quarter.

→ The front line leaders have to deliver 4 good weeks every month.

→ And each employee has to deliver 5 good days each week.

Approaching deployment of your objectives in this manner ensures that everyone in the company knows how they connect to the strategic goals. It also identifies the budget required to achieve each tactic and it identifies where your incentives are mis-aligned.

Going back to our “employer of choice” example, one of the tactics to “Retain the best” was to recognize and reward outstanding performance. Formalizing this tactic could be as simple as an agenda item in every front line leader’s weekly meeting or an employee of the month program. Establishing a budget for the reward program is also important.

Developing a simple document to serve as your compass

When you complete this integrated planning process, you publish a simple straightforward, three-page document that lists your vision, goals, strategies, and top priority tactics. It also includes a scorecard for tracking progress to the goals.

This document becomes the official company-wide strategic plan that sets the direction each year. Another thing, everyone gets a copy. It’s short, crisp, and it’s meant to be that way. After all, the goal isn’t to list every activity at your company. The purpose is to help everyone focus on the top priorities for the upcoming year as you journey to your five-year goals.

Results-oriented management process

While winning strategies and tactics are important, you can never forget that the best plan in the world is only ink on a page. The real challenge comes in putting the plan to work – and making it work. You need to implement a disciplined way to convert this good work into breakthrough results. This is where the “time span of control” comes in handy again.

Each management level described above has to develop a management process around their “time span of control” to ensure that you have chosen the right tactics and they are delivering the predicted results.

Just as before, the objective is to deliver the annual objectives as part of the 5 year plan.

→ Every Quarter the Board and the investment community requires the leader to provide a status to ensure progress to the annual objectives.

→ To ensure those quarterly calls go well, you need to conduct Monthly Operational Reviews with your Management team to make sure they deliver 3 good months.

→ Your Management team establishes, for example, weekly Sales meetings to ensure that they deliver 4 good weeks.

→ And each employee knows what they have to do each day to ensure they deliver 5 good days.

Summary

The reason this approach works so well is that it addresses the four reasons why strategic plans typically fail as I outlined in the first post. The simple communication document ensures every employee knows the plan. The results oriented management process keeps the management team focused on performance against the goals. And lastly, the “time span of control” formally deploys the goals, identifies budget needs, and establishes the right employee incentives.

Following the “rule of 3” keeps the plans focused, short, and crisp. This limit on strategies and tactics will also force your organization to focus on the few things that will move the needle the most.

How to Achieve your Strategic Plan: Part 1 of 2

Strategic Plans are everywhere. The development of a Strategic Plan is even considered an annual ritual in some companies. So with all of this effort and practice, why do 9 out of every 10 strategic plans fail? In the first entry of a two-part post, I’ll address the four most common reasons why Strategic Plans fail. In the second part I’ll discuss some practical methods to help companies achieve their Strategic Plans.

Why 9 of 10 Strategic Plans Fail

We have all seen the output of Corporate Strategic Planning sessions: 3 ring binders, charts, actions, metrics, etc. One company actually delivered it in a hard bound, book format. Unfortunately, the output of these sessions actually contribute to the high failure rate. In summary, Strategic Plans typically fail because:

  1. Employees don’t understand the strategy
  2. The Executive team spends less than an hour a month discussing the strategy
  3. The budget is not aligned to the Strategic Plan
  4. Employee Incentives are not aligned to the Strategic plan

Employees don’t understand the strategy

Here is a test – go ask a random group of employees what the strategic direction is of your company and see how consistent the answers are. The sheer size of many Strategic Plans is intimidating to most employees resulting in a lack of understanding.  Most plans are not communicated well and I have even worked for some companies that refused to tell employees what was in the plan because it was confidential! The result is employees not knowing how they contribute on a daily basis to the plans achievement. Even when plans are communicated, it is usually in the form of some type of kick-off meeting. Worst of all, after the kick-off it’s never discussed again.

The Executive team spends less than an hour a month discussing the strategic plan

The plan is completed, 200+ tactics have been identified, it is delivered in 3 ring binders, and it’s placed in the bookshelf. There the binders sit,  collecting dust until next year’s plan displaces them. Every executive team tracks financial results on an ongoing basis and they may even chart overall progress against their 5 year strategic plan. Unfortunately, the 200+ tactics (which, by the way, are excessive) identified as enablers to achieving the strategic plan are rarely discussed. Without ongoing discussions, the company has no idea if the tactics selected were the right ones, if they are delivering the intended results, and if executed flawlessly result in achievement of the plan.

The budget is not aligned to the Strategic Plan

The annual budget process is rarely aligned with the 5 year strategic plan. The reason is fundamental – the budget and the strategy are typically developed by different departments, have different timelines, and are rarely integrated. In addition, the annual budget is geared up to feed the existing machine and are based on prior year run rates. We have all seen how this turns out – departments take on a “use or lose it” spending attitude at the end of the year and their new budget looks a lot like the old budget. Hardly leading to breakthrough results.

Employee Incentives are not aligned to the Strategic plan

As I just mentioned, Strategic Plans are put in place to dramatically improve performance. Once the plan is issued, employees go back to work and are incented to do the work that they have always done. I once worked at a company that put delighting the customer at the core of the strategic plan. Unfortunately, the retail network incentives never changed. The field was still rewarded almost exclusively for current year P&L performance. Even worse – the old customer satisfaction measure was still in place and only weighted at a 20% contribution.

How do you achieve your Strategic Plan?

When you look at these four reasons, it is no surprise that only 10% of companies come close to hitting their strategic goals. In my next post, I’ll share an approach to achieving a strategic plan that I have personally used in many industries. It works so well that the process was even awarded a Global Benchmarking Award.

Innovation and “Stealing Shamelessly”

Creating an innovative culture starts with creating an open culture. An open culture is accepting of ideas regardless of their source – other companies, industries, people – and is willing to implement what they have learned to improve their own performance. A great illustration of this concept from the greatest innovator of our time, Steve Jobs . . . . he obviously had no issue with learning from the best of the best:

“Picasso had a saying – ‘good artists copy, great artists steal’ – and we have always been shameless about stealing great ideas”. Steve Jobs

What do Copiers and Dog Food have in Common?

Once, when I was involved in a manufacturing operation for office equipment, I took my entire leadership team on a benchmarking trip to Ralston Purina. At the time, a lot of people questioned whether dog food had anything to do with components for copiers. But what we learned from Ralston Purina helped us to dramatically improve our whole approach to inventory management.

The idea came while walking through our local Wegmans grocery store. I was amazed to see from the “produced on” date that Purina could produce “Dog Chow“, ship it, and have it on a shelf in less than five days.  My factory was also producing a consumable for copiers, yet we had over 50 days of finished goods in our supply chain. I just had to see how they did it and try it in our shop. We brought many ideas back to our operation that ultimately helped us to become more responsive to changes in customer demand. And those improvements helped us to decrease our finished goods inventory by nearly 40%!

Other Benchmarking Examples

Whether you call it benchmarking or stealing shamelessly, the basic idea is to encourage your organization to learn from the best. Here are few more examples:

  • Henry Ford studied slaughterhouses in Chicago to get ideas that would help him develop the most efficient assembly line operations in the automotive industry.
  • A large retail bank learned how to make customer service a delightful experience by benchmarking Walt Disney Co.
  • Some historians say that Julius Caesar benchmarked the military strategies and tactics of other armies.
  • Steve Jobs’ passion for nicely designed products for the mass market was instilled in him by the builder of his childhood home – “His houses were smart and cheap and good. They brought clean design and simple taste to lower-income people”.

No such thing as a perfect match

The literature on benchmarking is full of similar success stories. But to get the most out of your efforts, you have to stop looking for the perfect match to your industry. The goal is to find ideas and practices that you can use right away to improve your performance. And it doesn’t matter where you find them.

Once a company starts rewarding people for “stealing shamelessly” (and I like to add – with proper credit), they have taken the first step in creating an innovative culture.

12 Observations on Leading

I had a mentor that strongly encouraged all of his front line managers to consciously develop and formulate a personal philosophy of leadership. He saw it as his mission to teach and develop; and he would provide book excerpts, quotes, and lessons learned that he used to develop his own philosophy. One of the lists that I ultimately adopted as my own was from Gordon Sullivan & Michael Harper.  What I love most about the list is the focus on the difficult task of leading individuals and forming a strong team.

  1. There are no universal truths. Each person you work with is unique. Each organization is unique. The leader, today and tomorrow, must be aware of that and must continually tailor his or her behavior to the situation at hand within a consistent framework of values.
  2. Leading means understanding that “we” are “they”. This is the beginning of accepting responsibility for your own actions and for the team.
  3. Be yourself! The best leaders act out of their own set of values and their own intellectual construct, and with their own style.
  4. Leaders respect people. The hardest decisions involve people – people who have family and friends affected by the things that happen to them. Treating people with dignity and respect is the only acceptable framework in which to make the hard decisions.
  5. Good leaders have a sense of humor, a healthy respect for the lighter side of life. The best leaders are unambiguous about what they are serious about, but they do not try to be serious about everything.
  6. Good leaders make time for themselves, family, and other interests. You need to sustain broad focus, keep the personal needs of your team members in perspective, and sustain your own personal renewal. Read more of this post

Innovation, Benchmarking & the 5 Stages of Grieving

92% of executives surveyed as part of the “GE Global Innovation Barometer 2012” agreed that innovation is the main lever to create a more competitive economy.

Steven Johnson identifies 7 key principles that are a catalyst for innovation in his book “Where Good Ideas Come From“, 2 of which I’ve noted below:

  • seizing existing components or ideas and repurposing them for a completely different use
  • adapting many layers of existing knowledge, components, delivery mechanisms that in themselves may not be unique; but which can be recombined or leveraged into something new that is unique or novel.

So clearly, open-minded companies  have a need and can benefit from great practices developed by organizations of any size . . . in any industry. So why don’t they?

First of all, most people believe their organization is so unique that it can’t be compared to any other. Also, with the inevitable benchmark comparisons, “the successes and failures of an organization are there for all to see” as noted by Peter Drucker. And who wants to embrace something that could cast your organization in a bad light?

At the same time, I’ve seen how people do learn to use benchmarking to find “Good Ideas”, make big improvements, and set new standards for performance after they go through a five-stage process of adjustment that’s virtually identical to the steps in the grieving process. (My wife, who’s a social worker, pointed out that intriguing comparison to me.)

How doubters become “do-ers”

  1. The first stage is Denial. You just found out that another company does something better than you do. So the natural inclination is to deny the basis for the comparison. “The findings don’t apply to us, because we’re a very different organization.”
  2. Stage two is Anger. “This ridiculous and completely unwarranted comparison doesn’t make any sense because the other guys are” (choose one): Bigger, Younger, Serving very different customers, Smaller, older, fill in the blank _______”
  3. After the anger wears off, it’s time for the Bargaining Stage. This is when people point out all the reasons why it’s impossible for their organization to live up to the benchmark. “Sure they do it in two days. But because we’re bigger it’s only reasonable to expect us to handle the same task in five days.” In other words, inflation hits the benchmark during this lowering-the-bar stage.
  4. What happens next? Depression. This is the time for hand-wringing, head shaking and highly visible chair-slumping. “Boy, they really are that good. And we’re not! We might as well run up the white flag and surrender, because we’ll never measure up.”
  5. Now for the good news: There’s a light at the end of the tunnel. After all of these understandable human reactions have run their course, people are finally ready to move to the Final Stage: Acceptance. “OK. There’s a Grand Canyon-sized gap between our organization and the benchmark. So let’s start building a bridge!”

This is the time when people get fired up to tackle the problem and beat the benchmark. And that’s when innovations occur that, in retrospect, are brilliant in their obviousness and simplicity.

I’ve seen people go through these five stages time after time. But I’ve also learned something else: If you understand the stages and recognize where you stand in the process, you can move through the whole thing much faster. And that will accelerate the innovation cycle and improve the performance of the entire organization.

When you create a culture that is open to new ideas, from anywhere, and shares them freely, you can add a really important stage after Stage Five – let’s call it “Stage 6: Getting Results.”

Top 10 “Must-Do’s” for a Front Line Leader

This is a checklist that has served me well as the front line leader of many organizational turnarounds .

  1. Must be the Leader and set the example for the organization
  2. Must re-shape the work environment and the organizational culture
  3. Must formulate concrete strategy and long-term objectives
  4. Must develop and execute annual operating plans
  5. Must establish and enforce standards of performance
  6. Must make tough decisions and address the real issues faced by the organization
  7. Must allocate resources to achieve your strategy
  8. Must teach and develop direct reports
  9. Must build an organizational identity
  10. Must take responsibility to execute the agenda

Whether or not your turnaround succeeds ultimately depends on employees embracing new strategies and tactics. And that won’t happen without a non-stop employee engagement campaign that requires your complete commitment and involvement. So, starting on Day 1 you have to communicate how you are going to operate and what it will be like to work in this new organization. Constant communication is really inseparable from the act of leadership itself.

You must also remember that while you are establishing a strong foundation for the future,  you have to deliver some early wins to ensure that you are able to stick around for the long-term. Once you show a commitment to the organization and start breaking them from a habit of losing, your turnaround is well on its way to success.

How to keep clients from heading for the exits.

Developing a high performance culture that motivates all employees and sets a new standard for client satisfaction, operational excellence and profitable account management should be an objective for every organization. Even if you are currently experiencing double digit revenue growth, this focus could help you identify and solve issues lurking in the background that threaten to undermine the future of the business.

The attached case study features a dynamic employee engagement campaign that kicked a $2B services organization into overdrive.

Even though the global recession has shifted the focus of most organizations to cost reduction, I believe that effective approaches to employee engagement will separate the winners from the losers when the economy recovers.

To read more about how to keep clients from heading for the exit, click on the following link to read the full case study “The Power of Employee Engagement”: http://wp.me/P28Mqi-1m

Top 8 Distinctions between Manager and Leader

Warren Bennis once created a whole list of distinctions between manager and leader, some of the following may be helpful.

  1. The manager administers, the leader innovates
  2. The manager is a copy, the leader is an original
  3. The manager maintains, the leader develops
  4. The manager focuses on systems and structure, the leader focuses on people
  5. The manager relies on control, the leader inspires trust
  6. The manager has a short term view, the leader has a long term view
  7. The manager asks why and how, the leader asks what and why
  8. The manager has her eye on the bottom line, the leader has her eye on the horizon

Leaders focus on employee engagement – inspiring trust, developing people, and creating an organization that is innovative and looking at the horizon. Another way to summarize the list is that managers “do things right” and leaders do the “right thing”.

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