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?

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."

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.

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.

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.

People and Profit: Not Even the Same Language

You say HR, I say "Processors."

You want to talk about "developing human resources" in a company?

We can't talk. We can't even begin to have a conversation. I'll tell you why: your HR isn't. It's just not about humans or resources, it's about pushing paper and filing and keeping track of benefits and numbers of people.

When you get your head wrapped around the idea that your employees' creative discretionary effort is the only thing that's going to act as a buffer between you and the grinding wheel of costs and competition in today's market, then we can talk about creating an HR department - a real one.

I suppose that you're going to have to hit the wall before you let go of your balance sheets and realize that your intangible assets are the only real assets you have. When that happens we can sit down and have a conversation about human resources and channeling them into continuous profit cycles.

Until then, don't talk to me.