Keeping the Numbers

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Marcus flipped the report across the desk so I could see it. Turnover had crept up significantly over last year and HR was on the rampage. “I think we have to raise our base pay, though we are already over market, we just can’t seem to keep people.”

“Tell, me, why do they leave?”

“Oh, they don’t leave, we usually fire them.”

“Are you keeping track of this? How many of these turnovers were voluntary and how many were terminations?” I asked.

Marcus thought for a minute, “I’m not sure. We haven’t been keeping the numbers that way.”

Turnover can be deceiving. Tracking turnover statistics needs a breakdown, at least to voluntary vs. terminations. Voluntary departures are likely a retention issue. Terminations are likely a recruiting issue. Solving retention issues are completely different than solving recruiting issues. As your team sits down to review your turnover statistics, you might consider more detail in your breakdown. -TF

Why Things Went Right

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“Let me see the projects that you put in for review,” I said, as Sean handed over the list. I scanned down the page, “I see you selected six, tell me, how did you decide which ones for the group to do a post mortem on?”

Each quarter, Sean’s team spent four hours going over significant projects for the quarter, looking for lessons learned. “Oh, that was easy,” Sean replied, “these were the eight biggest money losers.”

It is always tempting to debrief a project where things have gone wrong. Once you have corrected all those problems, where are you? My guess is, you are back to even steven. No loss, no gain, no harm, no foul.

If you really want to make progress, you also have to analyze where things went right. Pick two or three winning projects to debrief. Find out why you were able to make significant margins. Where was the advantage in those projects? Where can you find more projects like those? -TF

One Small Word

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I was sitting in the back of the room, listening to Brian.

“I know you guys have been working hard to meet our quota this quarter, but we still need to do more. That means we work this Saturday.”

I cringed. Brian’s team was launching an impossible product in an impossible market and they were winning. With one word, Brian took their energy and reversed it. He used the word, “but.” With that one word, he told his team that all their hard work was for nothing and because of that, they were going to have to work Saturday.

Change that one word to “and.”

“I know you guys have been working hard to meet our quota this quarter, and we still need to do more. That means we work this Saturday.”

We are still working Saturday, and we acknowledged the effort. Does this make a difference? With my team it does. -TF

Scaling Mount Everest

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“Look,” I said, “if you want to fire this guy, or just cut him off at the knees, you don’t need this. Do this, only if you want to see him correct the misbehavior. Otherwise, just fire him and get it over with. You don’t need me for that.”

Alice was having a “behavioral issue” with Barry.

“Look, if the solution seems difficult, what is the likelihood that Barry is going to jump in and make everything right?”

“Not much,” Alice replied.

“If you want to raise the probability that Barry will actually change his behavior, he has to truly believe that the solution will be easy for him. You have to break it down to its simplest terms so he can understand that we are not asking him to scale Mount Everest.”

If you want someone to fix a mistake, you have to make it easy. If it appears difficult, they will not fix it. -TF

Thinking Outside-In

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“No, you cannot have it your way, this is not Burger King,” read the sign on the door outside the phone bank in customer service. No customer would ever see this sign, but you can be sure it was heard in every voice on every call.

Many companies create a wonderful technical product or service, stick out a shingle and no one bites. They structure their services like a menu in a restaurant, so they can deliver consistent, reliable and predictable quality, but their customers remain few. So what’s the problem?

The problem is the direction of thinking. Sure it would be nice if customers would buy things exactly the way we wanted to sell them, but they don’t. This thinking is inside-out.

Think about your product or service from the outside-in. Examine every point of contact with your customer to see if it was designed for your convenience or for the customer’s benefit. Your underlying product or service may not change, but your customer might see a whole new you, from their perspective, outside-in. And take down that stupid sign. -TF

Psychological Loss

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Why is your bank so adamant about pushing online banking?

Converted customers like it because it saves time, automatically keeps its own transaction record and at the end of the month, makes bank reconciliation a breeze.

On the surface, for the bank, it creates a lower incremental transaction cost.

  • The customer replaces the data entry clerk at the bank.
  • It moves the transaction from a historical posting to a real-time capture.
  • With real time capture, it eliminates manual reconciliation procedures associated with manual (historical) posting.
  • Scalability (growth) is no longer dependent on employee head count, it is now dependent only on computer and system capacity.

But, here is the real payback, and it has nothing to do with lowering transaction costs.

  • It creates a tighter tangible bond between they customer and the bank.
  • The technical setup of the account (the hassle of passwords & security) makes it more difficult to switch to another bank.
  • If a customer defects, they have to start over and will lose their online history (of course they can print it to paper), but online users quickly adapt to a paperless identity. Online history will be gone.
  • To break this tangible tie will require abandonment, and will create a strong sense of psychological loss.

What is your company doing to create strong emotional ties with your customer? -TF

Free Beer

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I was in conversation with a manager about questionable ethics.

I was quiet for a minute and then told this story, “A friend of mine owned a bar and occasionally, late at night, he would walk around to the customer’s side and order a beer. As the glass was poured, he would reach in his pocket and pull out some money to pay for the beer. I asked him once, that since it was his bar, why wasn’t his beer free? He told me that every moment, he was teaching his team about the right way to run a business.”

Every moment, as a manager, you model behavior, for better or worse. Your actions are so loud, your team cannot hear what you are saying. -TF

Showing Up

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Curtis shook his head as he paced around his office. He wasn’t angry, just awestruck. “Five contracts,” he said, “We lost five contracts to those bozos, in the past two months.”

“What do they do, that you don’t do?” I asked.

“Nothing, that’s what gets me. We run circles around them with what we can do. We spent a $100,000 on a machine last year that does all kinds of stuff they can’t do.”

“What did the last client say?”

“I don’t understand it, the last client said that it was nothing special, that they just deliver a plain vanilla product. When they need it, it’s there.”

“And what’s the backlog on your delivery?” I prompted.

“Well, we are a few days out on our delivery, but look at our quality, it’s so much better,” replied Curtis.

Execution trumps a promise every time. Execution of a plain vanilla product on-time trumps late-delivery of a special product, every time.

Often, you don’t have to be special; you just have to show up. Didn’t Woody Allen say that? -TF

Job Profiles

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Question:
Is there one biggest hiring mistake that we all seem to make?

Response:
Actually, there’s more than one, but let’s start with the creation of a job profile. It is not so much that companies make a mistake with the job profile, they just never put one together.

Think about the last time you were in a meeting when someone leaned across and said, “Oh, by the way, we have two candidates coming in to talk to us about the opening down in manufacturing. Can you squeeze some time to talk to them?”

And you want to be helpful, so you say, “yes,” when you should say, “I would love to help. First let me see the job profile so I can get a clear idea of the person we are looking for.”

My guess, you would get a blank stare or an evasive glance, because most companies don’t stop long enough to prepare the profile.

Hiring without a job profile is not the biggest mistake, just the first one. -TF

What to Tell the Team

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We had just spent two days hashing out the strategic plan. Everyone was picking up their notes, collecting their stuff and packing for a quick exit.

“Whoa, Nellie,” I said. “I know it seems like we have done a lot of work, but there is one more important task. How are we going to tell the troops?”

Most planning meetings lay out the strategy and action calendar, but often, there is no communication plan to tell the rest of the company.

Add one last item on your agenda. Figure out who is going to tell the team, what to tell them, when to tell them and how to tell them.

It’s relatively difficult for team members to execute your brilliant strategic plan when they don’t know the details. -TF