Thursday, May 29, 2008

Ric Campo Talks About People, Profitability, and Corporate Culture

I just left a very interesting forum, sponsored by executive recruiting firm, Austin Allen at the River Oaks Country Club in Houston.

Ric Campo, a founding partner of Camden Living, gave a powerful and informative presentation. His comments were filled with the very precepts Camden followed to become a Fortune 100 Best Companies to Work For award winner in 2008, and, one of the finest multi-family real estate development and operation companies in America.

I took copious notes. Ric was singing my song.

Ric's management principles are not the common practice in today's world. Read and see why they should be.

Just to highlight a few of his salient points:

  • Camden has well defined, well communicated missions and values. These do not change with market conditions.
  • Camden believes that their front line employees are the most significant contributors to the company's success.
  • The Company's value isn't derived from a focus on their material assets. Ric said, "It's not about assets, it's about people. Our people are our assets."
  • Camden strives to hire the best and the brightest. Then, the company strives to give them responsibility and authority to deliver Camden's mission.
  • Camden recognizes success based on the creation of an increasing number of high-quality, long-lasting jobs. This is representative of their belief that people are their greatest asset.
  • Camden is very concerned and intentional in maintaining and developing their outstanding corporate culture.
  • In the Fortune Employee surveys, Camden had 92% of their workforce saying that Camden was truly a great place to work. The average among the Fortune top 100 was 89%.
  • Camden is a stickler for "best practices" in handling people. (This is why more companies really need to engage the services of a PEO.)

That might work for some companies, but not when things are tight, or tough.

Some might argue that this is all well and good for some high margin, fluff company. Don't kid yourself. Camden's business, in today's market, is anything but that. They must thrive in a tough, highly competitive, asset intense business. Camden's profitability challenges are as big as they come.

Employee Practices Turn-Around an Acquisition

I particularly enjoyed the story Ric told about one of his mergers. Camden had acquired a fairly large company with an east coast presence. The acquisition had everything it needed on paper to be functioning well, yet, at the point of the acquisition, was not doing so. They even verbally ascribed to the same management and cultural philosophies that worked so well with Camden.

However, on closer look, their talk didn't match their walk. The reason for poor performance could be tied to this divergence, a response to some very difficult, but temporary market conditions. It turns out that the company had frozen salaries, cut bonuses, and increased the employee contributions to their medical plan. Meanwhile, they hadn't cut the executive compensation.

Ric said that these actions upset the affected folks, which, in turn, affected their ability to perform. Needless to say, Camden corrected the situation, in accordance with their mission, and the situation righted itself quickly.

Happy People: Successful Enterprise

Camden demonstrates the true, but rarely followed axiom: The happier the people, the more engaged they will be, the more profitable the enterprise.

This validates the well researched message of Richard Hadden and Bill Catlette who wrote Contented Cows Give Better Milk, and the sequel, Contented Cows Moove Faster. Companies with well placed, well rewarded, well aligned, happy employees, are able to do more, make more money and have fewer problems.

It's kind of funny that most managers still can't see it.

They will, though. They'll need to to survive.

Thursday, May 15, 2008

You Can't Stop the World, And You Can't Just Get Off, Either

Everything is changing. Not a new phenomenon, but an accelerating one.

The rate of change is so great, that more than 50% of US business execs are finally confessing that they are struggling with its pace. And, let's face it, even the rate of change is increasing. I call it Hyper-Dynamics.

It effects everything in our lives, and our companies, much of which management tries to ignore.

Consider some changes we business owners tend to try to ignore.

  • Employee Ability and Aspiration: What an employee once wanted to do for you, he no longer wants to do. He may have matured in his current role, and desires a new challenge. She may now have young children at home, and no longer wants to travel. Children may have "left the nest" and she now wants to travel. The individuals which hold the IP in our enterprises are changing just as quickly as is everything else, but we have no systematic way to deal with these factors, and are inept at adjusting our roles and processes to take advantage of the opportunities these changes afford. Instead, we underutilize the people we have, and we just let then go when are mechanical models no longer require their service in the box we have externally defined.

  • Markets: The entire market has the potential of the international corporation. What was once a regionally valued offering may now be available from a remote producer in China. Outsourcing and off-shoring can render our offerings obsolete. When faced with these challenges, we make the false assumption that we just need to work harder at what has always worked before. We push our sales people to make more calls. We push our service people to work harder. We push our management to work longer.

  • Costs: Energy, healthcare, taxation, insurance, natural resources, and people costs are rising at unprecedented rates. The forces that are pushing them are not even within our control. But we believe that we must make their containment a significant part of our strategic management initiatives. We spend a dollar to save a dime. We focus on financial statements, correcting them, as if they were the business itself.

  • Product value: Whatever I can produce today will be more efficiently produced in the future. Shelf life of ideas is shorter than ever. Windows of profitable opportunity are smaller than ever. But we still function as if we can develop something, sell it profitably, and rest, as though we have arrived at something that will last. We resent the copy-cat, or the competitor that says he does exactly what we do, but at a better price. We gripe about the imitator from the 3rd world who unjustly sells to our customers.

There are many, many more, but these few provide enough to exhaust many the mechanically minded manager.

Our refusal to accept hyper-dynamics will, simply, lead us into disaster. Short term solutions will merely exacerbate our problems. Self delusion just guarantee the inevitable.

My solution? REALLY embrace change. I know it sounds trite, but the mere statement of the words does not prove the reality behind them. I mean embrace, welcome, anticipate, expect, and adapt.

With this, you'll need to grasp the concept of absolutum obsoletum. Whatever we think works today is becoming absolutely obsolete . . . and sooner than I might think.

The solution comes with the change from a mechanical, change resistant organization into an organic, change adapting one. Change from the organization that orchestrates change to one that is able to flow with the change. These are entirely different approaches.

  • Instead of telling your customers what you do, and expecting them to buy, learn to discover what they want and need that you can offer.

  • Instead of determining what your company should be doing in antiseptic board rooms, let the front line employees tell you what their encounters with the real world are telling them.

  • Instead of defining jobs for your employees, telling them what you want them to do, discover what they would do for you and your customers, if they could.

  • Instead of losing sleep and fighting against rising costs, use your people's creative and innovative energies to identify your own company innefficiencies and redundancies.

  • Instead of thinking you have the totality of responsibility or all the answers, free your people to create entirely new, high value offerings for your current customers, and for customers not yet reached.

Besides, you and I already know that the greatest opportunities for excitement, value and profitability exist, not in the middle of the pack, but around the edges, where risk is sometimes the greatest. The rate of change means that yesterday's performance is not the end. Everyday comes with new, high value opportunity. It's up to you to find them, but you need to be looking, hoping and expecting.

And, best of all, you don't need to go it alone. Get your people in the act. Teach them that you value their looking, hoping and expecting. Then, don't ignore what they'll show you.

You might as well make a lot of money, too.

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It's Still True Today: HR People are from Venus, and Business People are from Mars

Keith Hammonds posted an article on Fast Company titled, "Why I Hate HR." It describes conditions which are typical of the attitudes and experience of companies when considering the involvement of their HR processes as profitability drivers. It is an old article, but well worth re-reading as the problems he communicates aren't really any better handled since he wrote it nearly 3 years ago.

One of the best means of immediately impacting the performance of employees (and with it, the increasing the profitability for the employer) is the performance review. As I have illustrated in a post comparing the sports world with the corporate world, effective performance review processes are tremendously beneficial to employees and companies alike. Yet they continue to be mishandled and misunderstood, therefore, ineffective.

Hammonds asks the question that is typical of management's attitude about them:

"Why are annual performance appraisals so time-consuming -- and so routinely useless?"

The answer is simple. Management doesn't really know what they are, or, consequently, how to use them.

Management doesn't understand what the sporting world does.

  • Management isn't clear in communicating objectives.

  • Employees don't know how their work impacts the company.

  • As a result, nobody knows how to tell exactly how performance aligns with either.

  • It naturally follows that there would be no resource to improve performance, because no one knows exactly what to improve.

I know how to fix it. So do many others. But management doesn't seem to care.

Why not?

It's the age old, nagging problem. The HR teams don't know how to connect with the business teams. The business teams don't know how to connect with the HR teams. And, this connection is critical to the success of both. HR is irrelevant without the ability to connect to business.

For 20 years, I have researched this problem. In that research I have discovered that most of the thinking about these issues comes primarily from the ivory towers of think tanks and universities. Their revelations may be true, and their conclusions accurate, but the information is too generalized and difficult to apply. To be of much use to most companies, someone needs to connect these discoveries to the streets, where the rubber meets the road.

I will do that with my new book, The Squaredime Letters, to be released this summer. Squaredime will provide real guidance for business and HR groups alike. It is a must read for both HR professionals and management alike.

The good news is that when the HR/Business connection is finally made, productivity and profitability will be substantially improved for everyone involved.

You know what that means? More earnings for all.

Monday, May 12, 2008

A Strengths Based Approach Makes the Job Search Easy, and A Lot More Fun

I’ve been counseling college students to forget what they think they know about “getting a job” to pursue a “strengths based” effort to become involved with an employer where they can maximize their entry value in whatever enterprise that may be fortunate enough to hire them.

It’s a simple and effective process.

Let's say you want a job.

Begin with a change in perspective. You are really not simply looking for a job, as if you were taking something from someone, but, instead, you are looking for an opportunity to serve someone, as if you are actually giving something valuable.

To do this confidently, you must absolutely know how you naturally work best. This knowledge is what Marcus Buckingham calls a talent, which is the foundation for a strength. Once you can identify your real and natural strengths, you can approach employment in a new way. What you'll learn isn’t what job you should do, as is customary for career counseling services, but how you should uniquely approach anything you might choose to do.

It’s a five step process:

  • Understand these strengths as areas of near perfect performance. Learn what results they can almost automatically offer, simply because of who they know they are.

  • Research companies to discover ones with visions and missions that are aligned with the kinds of things they can be passionate about.

  • Take a different approach. When talking with a prospective employer, don’t ask things like, “What positions are you currently looking to fill?” and then try to make the resume look like a fit. Instead, using their knowledge of their strengths, engage a business on the basis of the expected outcomes that their employment will produce for the company. This helps the prospective employer frame the hiring decision. It changes from, “Do I have a position for your?” to “Do I want the outcome you offer?” Managers and business owners are hungry for outcomes, and the average applicant rarely offers any.

  • If the first company declines, ask what other companies in the space are in need of the outcome you deliver.

Experience tells me that this approach leaves a better impression than the typical employment interview. Rather than the employee-centered approach, this one shows a business owner that the primary interest of the applicant is producing a beneficial outcome for the business. The applicant is there to help him. If the offer of a great outcome is declined, consider that it may lack clarity. Revise it.

No business person worth his salt forgets the approach. And, if the outcomes are well presented, few can resist the strong temptation to take advantage of the opportunity you present. After all, should they pass on a great outcome, their competitor might get it. This is a risk too great for many managers to take.

Besides, you don't really just want a job, or do you?

Off-Shoring and Outsourcing: Problems for Mechanical Model Enterprises

I responded to a wonderful article by David Williamson Shaffer on Epistemic Games. The article was titled, The End of the American Century, and is a good description of America's misunderstanding of the changes that have, and are, taking place in the world economy.

My comments, reprinted here, clarify the difference in perspective between "mechanical" and "organic" business models, and how this difference highlights our cultural dislike for outsourcing and off-shoring.

David, this is a well written piece. Thanks for your thoughtfulness, and insight.

Yes, the reality is certain, and it is different from that which most Americans assume to be true. There is a larger economic world out there, and most of it is not American.

I was reading Thomas Freedman’s The World is Flat a while back, and, somewhere in the middle, I became frightfully aware of this fact, and of the reality that most of my associates in business believed otherwise. The world’s business models have already changed, and many of us are ignorant of that reality. It became eminently clear that, as Americans, we are erroneously convinced that our long established, mechanical business models, remain the right and true way, and that we should continue to force our businesses to fit those models. This is our form of insanity.

If we are to survive, we must get with the program.

I appreciate your inclusion of the account of the Dallas attorney, Mark Richardson, who said that, out of ethical obligation, he must do what’s best for his clients, and “that includes saving them money.”

His assessment reflects what I believe to be a misapplication of the economic reality he describes. His ethical responsibility is not to “save his clients money,” rather it is to allocate their resources to produce the greatest value for their investment paid to him. His description of off-shoring to a lawyer in India at $60 per hr instead of using his in-house attorneys at a rate of $395 per hr, or his $225 rate for a junior associate, suggests that his rates are, somehow, too high.

I think this perception is common, and a misunderstanding of the real value proposition to be considered. There is a world of difference, and understanding that difference will illustrate the problem many Americans have with concepts such as outsourcing, or off-shoring.

We have a natural distaste for both. It appears that available talent off-shore will take jobs away from Americans. We can’t possibly remain profitable if we are forced to reduce our fees to compete with these off-shore providers, so we think. And, so we fear. However, we miss the basic economics of the opportunity.

America’s infrastructure is considerably well-developed and expensive to maintain. We are also well-entrenched in it. We can’t, and shouldn’t expect to eliminate it, which would be necessary if we are to attempt to compete in this world economy taking the fear-based approach inherent in our “save money” models. Instead, we need to embrace it, to recognize its value, and then use it to our real advantage in the development and delivery of the products and services it can produce. That infrastructure affords us opportunity unavailable and undeliverable by our “competition” in places, which like India, are as of yet under-developed.

The basic tenant of our capitalist economy is the free exchange of resources to gain other, more valuable resources for the betterment of our lives and our companies. At the core of every financial transaction is the idea that all participants gain value in the transaction. A consumer receives greater value from the transaction than what he spends. The seller receives greater value than what he spends to provide the product or service. Done right, both sides profit.

Take the case of the attorney. The law firm's client chooses to buy legal services that provide a greater value than their associated expense. It is the ethical responsibility of the attorney to do just that. Here is where the decision to off-shore aspects of the transaction comes in. The basic research task described in Shaffer's article is an example of a non-strategic offering. Grunt work in simple terms. Such work may provide some value to the client, but the value of that work should not be understood in the framework of the cost to produce it, but in the value of the impact of the work done. The two are really not related. If attorneys in India can provide the entirety of the value to be received for 25% of the cost of attorneys in America, so be it. The value realized is not diminished at all. If attorneys in India are happy and fulfilled only requiring $60 per hr, an efficiency is created, making it possible for the American attorney to deliver the same value to his client at a reduced cost, first to his firm, and secondly, if he should choose to reduce his fee to deliver that value, to his client.

So, off-shoring actually enables the attorney to increase his value to his client, but that value does not lie in his ability to “save his client money.” Such a limited view diminishes his value to his clients, and violates his ethical responsibilities toward his own firm. Both parties have the ethical responsibility to maximize each other’s value, and earnings. Saving money may occur, but cannot be the foundation for value description. Since there is an opportunity to off-shore, the greatest value can now be realized from better utilization of the American attorneys. They can now apply their creativity to strategic activities with the opportunity to add vastly greater value to their clients, tasks well worth the $300+ per hr that they need to maintain the operation and necessity of the firm.

The distinction between the two perspectives lies in the way we tend to view a pricing model. We tend to choose something from our mechanical, manufacturing business models. We consider cost, add some “fair markup,” and assume the rate to be some sort of value. In reality, there is no cost + fair markup anywhere in the value equation. The value exists only in the mind of the customer, and it is not a cost plus proposition. The cost has no significance to him, only that, all things considered, the purchase costs less than the economic value received. Should the law firm be ethically able to charge $300+ per hr for services it provides? Absolutely. However, and this is the critical distinction, it can only support the fee if the value provided is worth multiples of the fee to the customer.

Only when American companies end their love affair with cost plus pricing and adopt value based fees, will we be able to fully embrace every opportunity to send our less-strategic work overseas, and then become what our well-developed infrastructure requires, that is high value/ high margin enterprises.

Friday, May 9, 2008

Become "Well-content" with Weakness - Maximize Your Strengths

The Bible has some valuable business content, particularly content about maximizing individual and team performance. One particularly useful insight comes the New Testament, from the Book called II Corinthians, Chapter 12 verse 10. Permit me a little leeway in how I interpret Paul's words and apply them to business.

Paul says, in essence, "I am well content with weakness, for when I am weak, I am strong."

Dumb idea? Sounds a little ridiculous, where business is concerned.

O, contraire.

Paul's admission is, in actuality, one of the most important yet neglected truths in our world. Paul has discovered something that most people refuse to acknowledge: People are, for the most part, weak. That is, most people are not qualified by strength, talent or unique ability to do a whole lot of things. I dare say, most things. Paul realized that, if he were accurate in self assessment, he had but a few areas of great strength, of unique talent and powerful ability. In everything else, he was somehow deficient. This is also true for you, and for your employees.

In our world of "universal education," where intelligence is measured purely by academics, we become convinced that "well roundedness" is value, and that the way to achieve the greatest of human potential involves becoming as proficient as possible at all things. And, in light of human pride, the acceptance of weakness without significant effort to eliminate it, is foolish.

The truth rests in an entirely different model.

Marcus Buckingham's work, Now Discover Your Strengths, reveals something about a small group of people who achieve incredible levels of success. Synthesizing millions of interviews with all kinds of individuals, Buckingham determined that the most significant and common feature of each of these "super successful" people was their ability to accept, and embrace their individual strengths and weaknesses, and to live and work without the need, ir interest, to do much to improve their areas of weakness, making every effort to function only in the limitations of their strengths.

I would say that these "super successful" people were "well contented in their weaknesses," knowing that when they are weak, (that is fully informed of where they were weak, and avoiding the pull to work to eliminate the weakness) they are strong.

Ignoring this creates reverse leverage in our efforts to be as productive as we can. Buckingham points out that an effort to improve an area of weakness requires more energy than the resultant gain. A whole lot of effort produces a small improvement. So, working on weakness is a bad investment. I call it "negative leverage."

On the other hand, with regard to a strength, it takes but a small amount of energy to achieve great improvements. This is "positive leverage."

Two Contrasting Perspectives on Growth

One school of thought holds that people can be taught to do most anything, and that the area of greatest potential growth is in an area of weakness.

Another school says that there are but a very few tings that any individual is talented has a strength to do well, and that the area of greatest potential growth is in the area of greatest strength.

Buckingham's research supports the latter position.

What does this mean to the potential productivity of our company and the people who we employ? How could this insight help us to deal with the growing number of distractions and activities which are beginning to paralyze many of our operations?

Simple. It offers a solution. It offers the potential of leverage for every employee in every area of our company. It offers the chance for people to "do less and accomplish more."

Taking a Different Approach

Instead of managing activity and time with the same, mechanical processes you have used for decades, consider another approach. Instead of the linear and sequential organization of tasks, which just grow in number by the day, consider an approach which is not so activity focused, as much as outcome focused. Consider that the activities with the greatest leverage potential shouldn't even be on the same list with those that, done by those without the strength to leverage them, are but negative leverage. (They take more energy to get done than the value they bring.)

Consider these possibilities:
  • Discover the strengths of your people. Everyone needs to know what they, and their co-workers do naturally, with the greatest ease and with the greatest result. Then, you need to help them, whatever they do, to work in accordance with those strengths.
  • Get to know which activities have the greatest impact to bring you the most significant return on the effort invested. Any low impact activity needs to be eliminated, of outsourced to a company where the activity can be leveraged for your organization.
  • Re-align your work so that you and your employees know how their contributions actually impact your profitability, and that of your customers. Then, by properly aligning your compensation and reward strategies, your employees will, naturally, do the things that bring the greatest reward for everyone.
  • Become flexible enough that you don't institutionalize practices and activities in a non-institutional, hyper-dynamic marketplace in which you work. Everything, especially your customer, is in constant change. Adaptability to the world outside is very difficult with institutionalized internal practices.

You don't have to wait until you're overrun and your people are over-worked with low value, low-impact activities before you make any changes. Learn to embrace your strengths, and your weaknesses, letting others do the same.

If your employees could work half as hard, with double the results, you'd reduce the stress of your workplace, reduce your turnover, reduce your management involvement, increase your innovation, and gain the profits that would result.

Today might be a great time to start.

Thursday, May 8, 2008

Performance Expectations - Clear in Sports, Blurred in Business

Performance expectations are clear and mutually understood in the sporting world, but blurred for employees in most businesses.

In the sporting world, each and every player knows his position, his roles, and responsibilities. And, maybe more importantly, each knows how his contributions impact the outcomes of the team.

Every wide receiver knows that he is a wide receiver. The very position is aligned with his athletic strengths. He knows where to line up for a particular play, and where he is to run his route. He knows blocking assignments and decoys. He knows whether he is primary on a given play in a given situation. When a pass comes his way, he knows what he is to do. Once he catches it, he applies different skills to evade would be tacklers on his way toward a goal known by all the other players on the field. A good player is able to improvise in accordance where necessary, in accordance with the common goal.

In the business world, only a few employees actually know their position, their roles, or their responsibilities. More importantly, only a very few actually each know how their contributions impact the outcomes of the company.

In the business world, employees often know little more about their job than their job title, and some generally related activities. That may be it. And, sadly, that job may not utilize the best strengths and attributes of the employee at all. Unbelievable as it sounds, this data is supported by employee surveys again and again.

Employee surveys indicate that only 40% know the primary goals and missions of the company. Only 20% know how their job contributes to those goals. Only 20% even care. Only 20% know how their regular activities impact profitability. They come to work to do their job. When it comes to improvising, or innovating, since they don't really know what matters most, they choose not to. And, in a crunch, employees don't know how to choose the most productive activity in unique situations.

Businesses Lack Strong Employee Alignment - Expectation Need Clarity

Imagine not knowing the real end game. Imagine not knowing which end zone, or which basket is yours. Imagine not knowing what is a win, or what is a loss. It would spell failure in sports. In business, however, it only spells mediocrity, lack of engagement and contribution, resulting in less-than-optimal performance. Management must continually step in, micro-manage, sometimes applying pressure, most of which is misunderstood by the employees involved.

Poor alignment is like having a team where many of the players, somehow, without knowing it, undermine your ability to achieve. They are effectively working to benefit the opposition.

Businesses Struggle to Get the Best From Their Players

Ever wonder why some employees seem to lose interest over time? It's the same reason that they aren't continually increasing their contributions over time. People love to work for great outcomes. Gen X and Gen Y employees aren' t terribly interested in trading their time for a paycheck. They want to be working with other engaged people to accomplish great things. They want to win. If an enterprise has no greater goal than "maximizing shareholder value" or "making money," you can be sure your best people will just bide their time until something better comes along.

Do You Have a Vision, a Purpose and a Mission?

This is the most undervalued, and misunderstood essential when it comes to recruiting the best, and aligning them achieve great goals for your enterprise. It provides the answer to an often unasked question: Why should the very best people want to be a part of our company?

I am amazed how few executives I work with have clearly determined why their company exists in the first place. I mean, why, really. Why this industry? Why now? Why here? What about our customers? What impact does our company have on them? Are we here to make any difference? If so, what difference is that?

If your company should go out of business, will it be missed? If you don't know how you'll be missed, or who will really miss you, I recommend getting alone with some of your key stakeholders, or your employees and getting the answer. If you don't know, I guarantee your people don't know. Even if you do, it's probably a good bet that most of your people don't. If they don't, they don't know why they work for you, making them easy prey for your competitor. (You do realize that over 60% of employees are just biding their time working with you, waiting for a better opportunity to come along before they jump ship.)

What Should you do? Get clear about some things:

- Know what it means to win.

- Know your purpose. Develop a clear vision and mission for your enterprise.

- Communicate. Inspire your people. Engage them in the common call.

You'll begin to attract more winners, people who will know why they want to work with you. They'll know what it means to win, and how their involvement affects the outcome. Then, they'll make greater and greater contributions, ones that move you closer to the goal. Hindrances will decrease. Your customer and competition will take notice of you. You'll make a mark.

You'll start to stack up more wins. And that means, in the end, you'll make a lot more money.

Wednesday, May 7, 2008

Business Lessons From Sports: Performance Management is Key to Winning

Businesses and athletic programs are similar in that successful programs win.

Winning, however you define it, is the result of proper execution - players doing what they're supposed to do, when they're supposed to do it. Proper execution is dependent on player performance – in the game.

So, teams and companies that best manage player or employee performance win. They have the right people, in the right jobs, executing the right way.

In sports, results are reported in the standings. In business, results are reported as profits.

It just makes sense.

I must make a worthy observation. Business performance management practices in business are deficient and under-developed compared to those common to sports . . . and it is costing us millions in potential profits.

Business should take a lesson. It will revolutionize results.

I want to address just four glaring differences between the two models. Seeing these will help us, as executives, make some simple but important adjustments in our own practices which will really improve our results. The deficiencies in our business practices should then become clear
  • Goals and performance expectations need clear definition. These are exact and mutually understood in the sporting world, but blurred for employees in most businesses. In sports, everyone knows what winning means, and every player knows how their job contributes to that goal. That is not characteristic of the teams involved in our businesses.

  • Monitoring, encouragement and correction must be immediate, relevant, and continuous. Player performance is monitored and corrected regularly, even immediately, in sports, but is handled only intermittently, monthly, quarterly or even annually for employees in business. Athletes receive immediate feedback and coaching. Good habits are reinforced, and bad habits are broken as soon as possible. Employees may not even know how they are doing.

  • Resources for improvement must be readily available. Player performance correction and coaching for improvement is immediately available for the athlete, but may not even exist for employees. In the sporting world, coaches, trainers and specialists abound. Specific enhancements are developed. In business, correction comes without specific help to develop performance.

  • Regular training and skill development must be central to operations. Ongoing, regular training is commonplace and essential for any and all highly skilled athletes, while businesses falsely assume that well recruited employees don’t need ongoing training. They should already know what to do, and how to do it. Practice is expected for athletes. Employees rarely practice.
Recognizing and correcting these differences and correcting your processes will mean an increase in your employee's performance, and with it, your company's profitability.

Modeling company performance management practices after those of a sports franchise will improve you revenues, reduce your costs, and create competitive advantages. It will take pressure off your management, as your staff adapts and innovates in ways that will create value for your company and your customers.

Don't know where to start? You're not alone. Consider calling a professional, like a PEO. A good PEO should have a full coaching staff, a veritable well-equipped gym, in fact, everything you need so you won't have to hire a bunch of people to make sure you cover your bases. I work a lot with one particular PEO, Administaff. I know, firsthand, they can help you pull this off very easily.

In the words of FedEx’s Fred Smith: You’ll make more money, and have fewer problems.

I think that’s worth a lot.

You'll Need a Whole new Mind to Survive: The Backbone of the Innovative Company - People

In case you ever wonder how you can help your company be more profitable, or innovative . . .

In case you fear that you may not have a long term competitive advantage in your industry . . .

In case you wonder if you'll ever really fit in to today's workforce . . .

Here is a groundbreaking book which well describes the powerful, changing forces at work in our world, changes that, when fully accepted and embraced, will increase business profitability exponentially. The Book is titled, A Whole New Mind: Why Right-Brainers Will Rule the Future by Daniel Pink.

Pink writes in his introduction:

"The last few decades have belonged to a certain kind of person with a certain kind of mind – computer programmers who could crank code, lawyers who could craft contracts, MBAs who could crunch numbers. But the keys to the kingdom are changing hands. The future belongs to a very different kind of person with a very different kind of mind – creators and empathizers, pattern recognizers and meaning makers. These people – artists, inventors, designers, storytellers, caregivers, consoler, big-picture thinkers – will now reap society’s richest rewards and share its greatest joys.

This book describes a seismic – though as yet undetected – shift now underway in much of the advanced world. We are moving from an economy and a society built on the logical, linear, computer-like capabilities of the Information Age to an economy and a society built on the inventive, empathetic, big-picture capabilities of what’s rising in its place – the Conceptual Age.”

Value, Innovation, Creativity, Employability and Profitability

Anyone looking for the clearest picture into value creation in the coming century should read this. Understanding this great shift will bridge the generation gaps with Gen X, Gen Y and Boomer employees, making your company organically innovative, giving you sustained competitive advantage in your marketplace.

If you are a potentially disillusioned member of GenX or GenY and you wonder how you fit in, you will love what Pink says. You also should be familiar with Ryan Dorsey, and his bestseller, My Reality Check Bounced.

Did I mention that this is a key to sustained higher profitability?

My practical study into the People-Profit relationship parallels much of what Pink and Dorsey describe sociologically. There is a huge deficit of profitability missed by most every company, simply because current mechanical management practices prevent them from realizing the tremendous creativity and innovation contained in their own, current workforce. [Read again: Current practices actually prevent companies from making as much as they can.]

Don't wait until you get much further behind before you begin to convert from the mechanical to the organic business. You might lose your best resources while you wait.

As always, early adopters will reap the greatest benefit.

Did I mention profit?

Monday, May 5, 2008

When Numbers Don't Tell the Truth - But You Pretend They Do

I wonder at the logic of some executive decisions.

  • Q: Why would otherwise intelligent executives spend a dollar to save a dime?

  • A: Because they don't realize that they are.

They've been doing it ever since they learned to manage by financials.

If you consider what happens when business people start to think like financial people, it will make sense why. Financial people manage by manipulating line items on financial statements.

Here's the logic. Decrease an entry = reduce a cost.

All is proper. All is true. All is right. Manage by the numbers, and numbers don't lie - that is, unless you won't honestly look at all the numbers.

It's the age old, mythical discussion of "hard" costs vs. "soft" costs. And, this thinking is costing you money.

  • Lie: Hard costs are real costs. Soft costs aren't.

  • Truth: If money goes out, it is real.

There are no such thing as "soft" costs, only costs that cannot be connected to invoices, with corresponding line items on financial statements. As I said, if money goes out, there is a real, "hard" cost, even if you have trouble accounting for it.

The Health Insurance "Shop and Change" Model

Here's the real case of a 35 person company I worked with recently. It's the same strategy followed by countless companies, every day, all across the fruited plain.

The owner/operator is a prosperous fellow in his mid 40s. He manages by financials. He didn't like the 12% increase in his health insurance premium he was given upon renewal. It would increase a line item on his P & L. It would reduce his profits.

So, in accordance with his "mechanical" model, he had already fixed things. He had already followed the very same tried and true method he always used to handle any cost increases he faced. He shopped. He needed and got a better number for his financials.

Good strategy? Appropriate accounting? Not really.

My friend needed a lesson in real math, a lesson in real expenses, a lesson in accurately assessing the cost of anything. You see, his methodology makes financial sense unless the change causes the company to "spend more money" making the change than the change nets.

In his case, as in many others, it did. He just hadn't really looked.

Where Else do Costs Exist?

Here is the typical dynamic at work for most companies in their effort to manage the cost for employee health benefits. You'll recognize it. It is part of a cycle that goes something like this:

  • Set expectations based on rumors, news reports, comments by insurance people calling, wanting to “give you a quote”.
  • Become anxious about an approaching renewal date.
  • Get your renewal. It is usually "too high."
  • Listen to explanations, justifications, and excuses from your agent.
  • Go out for other quotes.
  • Shop plans, and plans, and more plans.
  • Set up spreadsheets.
  • Compare apples to apples. (Which cannot be done.)
  • Make the difficult decision to change.
  • Hold employee transition meetings.
  • Answer many questions. What? Why? Oh my?
  • Adjust, breath a sigh of relief if nobody quits, and pretend that you’ve done something good, something right, something necessary.
  • Begin the entire process all over again in 9 months.

You know the drill. So did my friend. He'd done it countless times before.

The problem was that he wasn't accounting for all his real costs. He never accounted for:

  • Cost of the distraction, the loss of his executive focus.
  • Cost of meetings with brokers and subordinates. (He held 6 over the course of 2 months. that is at least $1500 for a leader making $150k/year.)
  • Cost of non strategic use of his mental bandwidth. (Profitable projects needed his brain.)
  • Cost of subordinates time building projection models. (At 6 hours, at least $300, not counting other things that weren't done.)
  • Cost of the 120 minutes each member of the staff spent in direct transition meetings. (That single expense was $5500 for 35 employees averaging $45k/year.)
  • Cost for the breakdown and rebuilding of employee confidence that accompanies any change to benefits. (Employees talk among themselves and spend countless hours doing their own comparisons while at work. Let's be conservative and give each employee only 1/2 hour of wasted time. Cost: $1500.)

So, this corporate leader cost his company a minimum of $8800 to make the transition.

What Did it Get Him?

For all of his efforts, he was able to moderate the 12% increase ($15k) to 6% ($7.5k). He reduced a line item on his financial statements. He could report this "success" to the board.

However, the real bottom line reflected something completely different.

When you spend $8800 to save $7500, no matter how you do the math, you lose $1300. And that's only counting the actual labor dollars he could actually identify. Guaranteed, the losses are far greater if he were to account or any loss of attention, or loyalty, or goodwill, or whatever else he had the guts to consider.

Upon closer discovery, with the courage to be honest, my friend discovered that his real costs surpassed the financial savings he anticipated, and reported, in the change. – This means he, and his company, lost money making the change. He spent a dollar to save a dime.

Numbers really don't lie. They just don't have a chance to be accurate when the real variables aren't included in the equation.

Get smart. Count the real cost of your "cost saving" measures. Otherwise, you won't really be saving any money at all.

You might even save your way right into bankruptcy.

Companies Must Discover Corporate Culture as the Foundation to Effective Marketing: Marketing and Culture are Inseparable

Marketing: Communication of your ever increasing value and impact to your clients, prospects and your marketplace over time.

Corporate Culture: In a nutshell, a company’s culture is identified by all communications that take place inside and outside the company. They include communications between the management, the employees and all their friends and family, spreading to customers, suppliers and associates of both. Any and all communication is duplicated and repeated many times by the people involved. The sum total of all communications defines corporate culture.

Unintentional Corporate Culture Diminishes the Value of Marketing

Culture as described, is often in conflict with the expensive, carefully crafted and communicated marketing messages. Because of this, the marketing message loses much of its power and credibility. This is why many of your perfect prospects don’t buy from you.

Communication is Usually Inconsistent

In the typical scenario, employees say certain kinds things to their bosses. They say different kinds of things to peers, still different things to subordinates, and different, things to clients. They say still other, different, things to family members and friends. This inconsistent communication creates a veritable cacophony of mixed and varied messages producing confusion in the marketplace, no matter how carefully the “formal” marketing messages are created. The “informal” messages are continuously and naturally transmitted through “portals” of interaction, so many, in fact, that they actually overtake the intentional, “canned” corporate message.

As a result, it doesn’t matter what your brochure says. The culture is already communicating some louder and clearer message within the marketplace. The marketing messages are then in conflict with the “cultural messages” already in play.

An Intentionally Crafted Culture is More Important than Good PR.

Culture "happens" whether you're intentional about it or not. Most companies just "let it happen."

You'd never handle your marketing unintentionally. In fact, you’ll invest a lot of money designing perfect marketing strategies. You might even have no problem paying professionals to assist. But you’d never even consider making even a small investment crafting your culture.

“Soft,” you say. “Not too smart,” I say.

This one single practice will absolutely prohibit your company or your ideas from expanding virally. Too many communications are in virtual conflict. The marketplace’s thinking about your company isn’t consistent and clear enough for natural customers to flow to you.

You can only imagine how well the cultural messages must be honed so that something distributed on YouTube, produced by some randomly involved “man-on-the-street” will present exactly the same message that in an ad costing the company thousands.

Get Better Results, Year After Year, Without Always Working Harder and Harder
Your company’s communication via culture must become clearer, tighter, and more intentionally directed, all the time. This one thing will grow a your revenues, customer loyalty and equity far faster than hiring more salespeople, offering more training, doing more marketing, or firing the CEO and hiring a new one.

It even makes sense to bring in expert help, a PEO, or a total service enterprise like Insperity, or a "Best Places to Work" consultant to get to work on your communications, that is, your corporate culture.

The good news is that if you make the investment to intentionally craft your internal communications, that is your corporate culture, you’ll begin to realize ever increasing benefits automatically . . . organically.

The Most Neglected Secret of Cost Reduction: Duh, It's Your People

Companies always ask me to help them reduce their costs. And I am almost always successful.

The common roadblocks to success may surprise you.

They are really asking the wrong question.

What management thinks it is asking is a different question than the one that will bring the outcome they want. They ask the question from the limited perspective of a financial person, rather than that of a business person. From that limited perspective, they are asking me to reduce a line item on their financial statements, and that is almost always either impossible, or of much less significance than what is really possible.

Limits of a "Financial" Perspective

The financial perspective asks something like, "Can you reduce my health insurance cost?" Or, "Can you cut my Workers Comp cost?" They are thinking that they can get the best outcome by simply "beating a vendor down," as they have historically done in the "mechanical" business model they work with.

However, check the costs associated with health insurance, other insurances, energy, taxation and people (line items on financial statements). These business costs are all rising faster than at any time in our history. The cost reduction gains available, if at all, are tiny, especially when compared to the gains available by making changes in systems and performance, as characterize an "organic" business model.

The right question involves going "Organic."

Here is a great example.

I recently worked with a fairly substantial ISP. They had an industry standard turnover rate a little shy of 50%. They used industry standard protocols for supervision and hiring. They felt that their healthcare costs could be reduced. That reduction saved them 15% in that one area, and they thought that was good. With their 150 employees, they could book $70,000 of savings.

They would have missed the greater opportunity.

With $5.5MM in annual payroll, the health insurance savings only amounted to a reduction of 1.17% off their labor costs. It's a mere tweak.

However, I ask a different question related to cost savings. Asked about the "organic" and intangible things at work in the company, I looked for systems inefficiencies and redundancies. I looked for things that might be done differently to achieve substantially better results. I looked at people practices. In this case, I looked at their recruiting and hiring and supervisory practices.

The way this company worked, with the high, although acceptable turnover, their supervisors were capable of supervising 12 people. They spent an inordinate amount of time on recruiting and training their people. By outsourcing this single piece, they could change the capacity of the staff they could supervise. We moved it from 12 to 16. (a mere 33% increase in supervisory efficiency.) And, the improvement in hiring practices decreased their turnover by more than 1/3 within 6 months, which improved employee production and customer service.

The resultant cost savings exceeded 9% on total their labor cost. That was nearly $520K. Without even accounting for the "soft" benefits associated with enhanced performance, or improved customer retention, this "organic' approach netted them a whole lot more profit than they could have ever gained following their "mechanical" and financial approach.

Why don't more companies look past the limitations of their cost reduction models? The answer is simple. Most companies are looking at pure "financial" solutions. These fit their "mechanical" models, and seem appropriate as they are acceptable to the "boards" to which they report. The "organic" approach means that they focus on "non-financial" areas, (people, leadership, systems, culture) areas that are seen as "soft" and therefore, less valuable.

The truth is different; the proof is in the pudding. The areas of greatest impact lie in the "soft" stuff, the "intangible" stuff.

In the inimitable, simple language of James Carville, "It's your people, stupid."

Sunday, May 4, 2008

End the Deception: You CAN Get A Lot More Out of Your People

One of the biggest lies I hear from business operators is also the most common. They say, "I already get everything I can out of my people."

I hear it all the time. Then, I expose the error. Then, I can fix the problem.

What they miss is simple. They don't understand how leverage works in the employee business.

It's simple. First, the basic tool of leverage is the lever. What is a lever? A lever is a simple tool that makes it possible to lift 100 pounds with 10 pounds of effort. Simply stated, the lever makes it possible to get more from less. It is the essence of profit.

There are 2 kinds of leverage where people are concerned, Individual Leverage, and Group Leverage. Both are easy to understand.

Individual Leverage is at work:

  • One sales person consistently produces great results, with effortlessness, while others, working hard, produce only average results.
  • One financial person can find an error in a complicated spreadsheet, while others may study it for a long time, and still not find it.
  • One person can, in a short time, create a powerful presentation while others, even teams, can produce only an adequate presentation, with greater effort and a lot more time.

The levers at work are strengths, talents, aspirations, experience, etc.

In my experience, I have seen that I can produce spot-on, high impact presentations in a few hours, while it takes a team of marketers many more man hours to give me things I must improve anyway. I am experienced and uniquely gifted. It is a high-value ,"leverageable" activity for me.

Group leverage is at work:

  • One particular sales team consistently out-produces every other team in the same market, with the same product at the same time.
  • One shift out produces other shifts where all the conditions are, seemingly, the same.
  • One particular project team consistently delivers on time, and under budget, in industries or areas notorious for the opposite.

The levers at work are leadership, communication, culture, alignment, etc.

The Boston Red Sox won 8 straight games from the more talented Yankees and the Cardinals to win the World Series in 2004 based on aspiration, leadership, and culture. These provided the leverage.

There are tools available to discover and develop Individual and Group leverage for business, but since most business leaders aren't aware of the opportunity, these are misunderstood and misapplied. And, since they manage primarily by their financials and "hard numbers," any resources directed at these tools is considered a waste.

If management will realize that they are wasting resources and effort by not developing their people leverage, then these "soft" investments will become indispensible, and companies will start to reap greater rewards than they ever thought imaginable.

Consider the Fortune 500 best Places to Work companies. These company's, year in and year out, way out-produce their competitors, in profit and, more importantly equity growth.

It isn't even arguable.

Friday, May 2, 2008

Make More Money - Align Business Models with HR/People Models

People are responsible to carry out every business initiative.
People are the real profit creators in business.
Nothing happens that is not done by some person.
It follows that better people and better people systems produce better results.

This is usually the work of a company's HR department.

There’s a disconnect: Executives never think of HR to impact profit; they can't see past the old administrative personnel departments of the 1950s. Why? Business schools don’t teach the clear connection between people and profits.

Today’s typical HR people aren’t business people. This is a problem.

The very people chosen to handle HR responsibilities are usually ill-prepared or without appropriate authority to accomplish any development task. In fact, management often relegates “HR” to secretaries, clerks or other lower-level persons. Management doesn't think of HR personnel as strategic or profit centric.

In my work with Insperity today, I’ll walk into an organization and be introduced to the “HR” person. Interestingly enough, she/he is also the accounts payable person, or the receptionist, or the bookkeeper. This, also, is not hard to understand, because the very title “HR” that is "Human Resources," has nothing really to do with developing any resource at all. It is a euphemism for the real work being done in these operations, that is, the work of a personnel department.

Connect the HR models with the business model, and voila, profit abounds.

Everything a company does is impacted by some human's performance. Everything. Doesn't it make sense that Human Resource activities have something to do with those outcomes?

Alignment, placement, training, highly developed interest . . . the right people, doing the right job, in the right way, with the right focus.

These are the foundations for discretionary effort, the stuff from which high profit is made. You could have more happy customers, paying higher fees, if you had the best employees. Of course you would.

With a non-business view of HR, and an under-developed and unspecialized people focus, how can companies honestly expect any better productivity from their employees?

My experience says they can't, and they don't.

Such a waste.

Thursday, May 1, 2008

The All-Too-Common Mis-Practices of Handling Employees

I am no longer surprised when I see overt management inconsistencies. I am not surprised when I see how typical management mis-handles employees. So I guess I shouldn't be surprised when I see that they can't see it themselves.

Jeffrey Pfeffer makes a comment in his brilliant book, The Human Equation, a book about building profits by putting people first. Pfeffer writes:

". . . what the available data do portray is [the typical company's] unplanned, haphazard management of the employment relationship. This ad hoc character of managing people must certainly negate much prospect of achieving profits through people."

It is in this very reality and the inconsistency it produces which serves as the unfounded excuse for the typical and untrue belief held by most of our American business owners. - "Our company can't make more money through better people practices."

It makes simple and stupid sense. We don't know what to do to improve our worker conditions or alignment for productivity, so we safely assume we are doing the best that can be done. Whatever our results, we assume that it is the best our people can do. Since we manage our businesses through the lagging indicators of our financial statements, we also assume that any financial improvements must come as the result of some financial or structural change engineered from our expert management.

I saw this very clearly in Business Week surveys in 2006. Business leaders reported that their greatest concerns involved finding and keeping enough quality people to carry out their important business objectives. This makes sense. However, when asked which systems they felt were developed and in place to carry out those critical objectives, people systems were the least developed, well behind financial systems, or marketing systems.

I asked a lot of executives, business owners, and entrepreneurs how it could be that the most critical success factor for all the surveyed companies had the least developed systems.

I got few credible, thoughtful answers. I began to suggest that the comment about needing quality people might just be nice sounding rhetoric. That is way too shallow and simplistic.

Out of the few answers I did get, I was able to form my own, credible, thoughtful answer. Business owners actually don't know what they need to know, or do, to strengthen their workforce, and they don't want to admit it. So, instead of acknowledging the weakness, and pursuing a new-model solution, they simply ride the gravy-train of their common ignorance, and go on as if it really doesn't matter. "Nobody else I know is doing anything much different than what we are doing." Sounds like a plan.

It's the comfortable curse of common practice. It's the curse of common ignorance. It's the fuel of comfortable mediocrity. And, sadly, based on the survey results, and on my experience, I'd say it's an almost universal phenomenon.

So, as long as most everybody else doesn't get it, you can feel safe. There is safety, at least a little, in numbers.

You won't feel so safe, however, when your competitors break from the pack. Then those upstarts will steal your best people, then your best customers, then they'll come after your business. Then, you'll need to look out, and you probably will. You'll start to look for help to develop your people systems. But, by then it might just be too late.

Think about it.

Human Capital: It'll Make or Break You

You read about it in the current business magazines. "Develop Human Capital as a Top Priority." It is the only real way that yours, or any company, has any hope of gaining the increasing profitability necessary to survive in today's hyper-dynamic business environment. You want to get on board.

So, you implement HR practices which you hope will help. You focus on recruiting. You find the people you want. You provide good offers, and good benefits. You orient them, then train them. You indoctrinate them. You school them in your corporate processes and procedures. 90% of their training time is focused on your industry, your product, and your company. 10% or less talks about your customers.

The honest result: Your employees are trained to care more about your company than your customers. And you feel good about it.

You prefer employees to be more interested in your company, in your processes and in your procedures than in those of your customers. That way, they'll watch out for your interests. Overly "customer-focused" employees would give away the store, and with it, your profits.

The very practice is backwards, and actually costs you money.

Can your employees be too customer focused? Probably not. Not if you're reading this and asking the question. You probably do train them to understand and preserve your internally focused processes and activities already. Their primary focus isn't about "What I can do to make my customer's experience better today," leading to increasing profitability, it is more like "What can I do to increase my sales?" or "How can I handle all these emails?" or "How can I increase the number of customer service calls I handle?"

Notice: "What do we need and want?" vs. "What does my customer need and want?"

My Security Company Almost Lost a Good Customer: Me.

I have worked with a specific alarm company for almost a decade, paying them $35 or so each month for monitoring an alarm at my residence. It has been an uneventful, neutral relationship. Then, I needed something, and all that changed.

The company had installed an equipment "upgrade" just a week or so ago. At 9:30 on Sunday evening, the alarm went off. No reason that I could tell. I cancelled it, and assumed it was fixed.

At 10:00, the warning blast sounded. Again, I cancelled it. 10:15, 10:25, 10:30. By now, even I knew that there was a problem I could not correct.

Customer Problem or Company Problem?

I called the 800 number for help. A professional sounding security person answered. It only took 30 seconds to learn that she cared more about her internal protocol than she did about my problem.

"I'm sorry you are having this problem, Mr. Coolidge. When was the last time you tested your unit?"

"I don't know how to do this."

"Well, your instruction manual says that you are supposed to run a test once a month. You say you've never run this test? Well, that's your problem. Lets run the test. . . "

I dutifully pushed the buttons and listened for the sounds as instructed. After all, this service person has made it clear that "user error" was at fault. She know a lot about her company's service protocol, but she didn't know a thing about customer solution profit.

Let me cut to the chase. 20 minutes after that call, the alarm sounded again. It was now almost midnight. I couldn't survive an entire night of this!

I called the 800 number again, and another security person answered. I explained the problem, and, once again, she began the same diagnostic process that had been unsuccessful before.

"There's nothing we can do, Mr. Coolidge. If you would like to schedule a service call, we could do that. It will only cost $. . . " Sounds like this employee was watching out for the company, right?

"Wait a minute," I was concerned. "This alarm is going to sound every 30 minutes or so all night. I can't have that. I'll pull the thing off the wall."

"That would be a violation of your contract," she said, still serving the company.

"Can you send someone out now?"

"That's not part of your service. I'm sorry, Mr. Coolidge. I can schedule a service tech . . . " The alarm company was seeing this as my problem, even my fault. The tech had been well trained.

A customer lost is profit lost.

I hung up, ready to violate my contract, which would be cancelled at the same time. I was a customer, I needed a solution, and, since my alarm company didn't want me to have one, they were on the verge of losing profit.

Imagine this same thing, happening over and over again, in industry after industry, day in and day out. Customer service people with a chance to improve a customer's experience, and with it, loyalty, and with that, extension of service, and on what are they focused? On themselves, and their own company policy, protocol, process, or needs. This focus put my alarm company minutes away from the loss of monthly recurring revenue, the loss of profit.

I made one final call. One more desperate attempt to fix the problem.
The phone was answered by a different security customer service person. And, this time, for whatever reason, she had a different focus. She had my interests in mind. She was also interested in increased profitability for her enterprise.

"This is unacceptable, Mr. Coolidge. We need to get someone out there right away. You have a service component in your contract, so this in-home call won't cost you a thing. I know that it is late, but would it be OK if we had someone there in 30 minutes?"

Excuse me. Where was this person on my first call? She seemed to be concerned for my deteriorating state.

The tech arrived, pulled the unit off the wall, and discovered that the upgrade installer had done a sloppy wiring job. The short circuit was causing the alarm to sound. It wasn't user error after all. It was installer error.

What causes a customer to leave, or to stay?

The first 2 service people I had called ought to be fired. They had pushed me to leave their company, and to discourage anyone from ever doing business with them, forever.

I doubt this company even knows how many customers leave for reasons like mine. I know they have no clue that I was as good as gone - the fault of one of their company-centric employees. I know they have no clue that I am still their client - through the effort of only one customer-centric employee.

In fact, the unmistakable and only difference between declining and increasing profitability is the difference between the "company-focused" and the "customer-focused" employee.

Which Costs More?

It doesn't cost a company any more to have employees who care more about customers, more about customer's needs and preferences than employees who care more about the company's policies and processes.

But my alarm company believes it does.

In a way, I suppose they're right. It costs them customers.