Be an Ethical Entrepreneur, Marketer, and Business Builder

Why don't lawyers realize that the world is shrinking?

March 30, 2008 By Leave a Comment

I’m not one to jump to conclusions. Honestly, whenever I heard people talk negatively about lawyers collectively, it always immediately put me off. After all, they’re all individuals so claiming they could ALL be bad is just intellectually shallow, right?

Hyatt in Albuquerque, NMOk, so I still believe they are individuals and of course there are good lawyers and bad lawyers just as there are good and bad engineers, salesman, businessmen, accountants, and brokers. In my short (and expensive) experience with lawyers, they seem to be in a league of their own, however. They seem to be held much less accountable than anyone else in the professional world for their actions. After all, when was the last time you heard of someone suing their lawyer for malpractice? Sure they get disbarred for committing some sort of felony and I really don’t have much issue with that… It’s more a lack of business professionalism that seems to permeate the law ranks. Let me give you a few examples of the most common unprofessional practices.

  1. They are not encouraged to serve the best interests of the customer. One of my recent blogs discussed encouraging the best performance by paying your team members based on achieving Key Performance Indicators (KPI’s). Well lawyers do that right? Don’t they have KPI targets for billable hours every week? In most cases, yes. Here’s the problem with that KPI. It’s not customer-focussed. If my job is to bill the customer the absolute maximum I can and spend the absolute maximum amount of time on each individual detail then how does that provide the best service for the customer? It’s the same as if you pay service technicians by the hour instead of by the job. A lot of automobile service departments, for instance, now bill by the job. They have a book of all of the possible repairs they can do on your car and they bill you a flat labor rate for each job. Now the technician may be new and take longer or a veteran and take less time, but either way you pay the flat rate. They then pay the better technicians more per hour than the neophytes. In a perfect world, just paying the technicians a percentage of the labor rate would help encourage better performance. Obviously you then wouldn’t pay them for any “call-backs” or cars that they couldn’t fix the first time. The result of that is a KPI to encourage efficiency and skill as well as serve the best interests of the customer (the job is done right the first time). Lawyers are encouraged to bill as much as they can which can lead to dragging out the process and billing you for revisions of their own mistakes (i.e. It appears that I’ve been billed for asking the lawyer to fix her own typos). How does that serve the customer?
  2. They are not paid for performance. If your lawyer loses your case or the contract she provides ends up not holding up, what do you do next? You pay her more to appeal the case or to defend the weak contract. In Pittsburgh we all know the Edgar Snyder mantra of “There’s no fee unless we get money for you!” Obviously that’s the exception and not the rule, however. The idea of billing for their own mistakes is akin to a business model where I write a completely custom software package for you and then when it’s all done and delivered, bill you to fix bugs you find. Now a lot of software contracts provide a cost for “testing and revisions”, however when that stage is done and the software is live, free updates to fix issues should be made available. We all get our regular free Windows updates, for instance, to fix all of those Microsoft bugs. Granted laws are always changing so a lawyer can’t predict that. However if they’re demanding $200, $400, or $800 an hour because they are so much more knowledgeable than you or I, then is it unreasonable for me to expect them to protect me in the current business climate? And if they miss something, shouldn’t that be on them?
  3. They have very little accountability. This manifests itself in 2 forms:
    1. They don’t have to “justify” their billing. This has definitely been quite expensive for me and for other people I know. In my instance I was billed for 24 minutes for “Talking with client” when my phone bill indicated I was on the phone for 15 minutes. I was billed 12 minutes for “reading email and forwarding to client.” An email that I had already received because the other lawyer had CCed it to me. Now here’s the worst part. It’s fully understandable that I’m not perfect and that my records could be incomplete. I freely admit that. However after pointing those discrepancies out, my lawyer accused me of personally attacking her and with 95% of the legal work done suggested we part company. What? Just tell me what you actually did or admit that a mistake was made. You’re human (I think) and most humans make mistakes at one point or another. There’s no shame in admitting that. OR just keep accurate notes on why you’re billing me 24 minutes for a 15 minute conversation.
    2. How do you learn if a lawyer you’re interested in sucks? Right now the primary method for finding a good lawyer is a recommendation from someone you know. In my case 1 lawyer recommended another lawyer who then recommended another lawyer. That should have been my first clue and at that point I probably should have asked her for references. That’s very common in most other industries so I imagine that’s warranted for lawyers, right? The benefit of references is obviously debatable since she’s not going to let me talk to someone who’s going to say she’s horrible. However, it has brightened my day to find out that there is finally a somewhat objective way to review lawyers. LawyerRatingz.com now provides a free online resource to review and rate lawyers. In the online world this is commonplace. Scam websites pop up all the time which makes sites like ResellerRatings.com invaluable and if promoted effectively I believe LawyerRatingz.com can provide the same valuable insights about shyster lawyers. :-)
  4. They have the “power”. I’m going to go out on a limb and suggest this may be the most frustrating issue when dealing with lawyers. In my personal experience, by the time I had the time to audit everything (something I really didn’t plan to do since I had no reason to not fully trust her) the billing was already approaching double the estimate and we she was 95% done with the work. It just didn’t make sense for me to drop her and try to find and educate another lawyer when closing on my business purchase was less than 2 weeks away. Admittedly, letting it get to that point was partially my fault. I just hate that I have to actually audit the records (and then get accused of “personally attacking” her because of it). I really didn’t have the 3 hours worth of time that it took me to match up all of the phone records, email records, and contract revisions. My experience is certainly not unique. Nearly everyone I’ve spoken to admits the same challenge. When you’re working with limited time and funds, and everyone else says there aren’t any better lawyers anyway, what other reasonable option do you have besides sticking with your sub-par attorney?

This blog is getting a bit long, however I always like to offer solutions and not just problems so I’ll address a few of my ideas of possible solutions this week. Moreover, any experience where you learn something is not a failure. And as expensive as this has been I sure hope I’ve learned quite a lot that I can share.

Let me run one last thought by you, though. Do lawyers not realize that the world is shrinking? In 1985 if you had an issue with a lawyer and you felt compelled to let others know they were a shyster, then you were basically limited to the number of people you speak with. However this is 2008. We have this thing called the internet where, with a bit of savvy search engine optimization, you could write up a blog about a lawyer you were unhappy with for the entire world to see and easily find. Obviously this is true of every other business in the world. This powerful disclosure is forcing businesses in all industries to straighten up and it forces the businesses to, not only act ethically, but provide top level customer service. This open transfer of information is only going to continue and lawyers have to realize that acting unprofessionally is not a healthy method for sustained business success. This is true of every business. Attorneys are no different.

So what do you think? Am I being too harsh?

To your success, Bryan

Filed Under: General Business Tagged With: , , , , , ,

How to increase your conversion rate by 10% in the next 30 days…

March 23, 2008 By Leave a Comment

No matter what business you’re in, if people have to buy something from you, there is a sales process. If that process involves them walking past your store or entering, that’s a step in the process. If it involves them browsing through stock or trying things on, those are steps. The following material was used as a bit of an educational marketing piece for a company I worked for but it applies to every business everywhere. :-)

 

No matter what you’re selling there is a step-by-step process that takes place from initial contact to completed install. Each step in the process presents an area where you can be losing prospects who are ready and willing to pay you, but unfortunately you haven’t done the best job of helping them learn that!

 

Here’s the idea. There are 3 main areas to improve in your sales process:

  1. The script

  2. The person

  3. The system (i.e. are we following up? are our materials effective?)

 

And each of those areas can potentially be improved for each step in your sales process… So if you’re sales process has 6 steps, then there are possibly 18 different areas you can improve. If that doesn’t make sense, don’t stop reading yet!

 

Unfortunately,

the ONLY way to determine your weak areas AND make an educated decision on how to improve them is through detailed tracking for at least 2-4 weeks.

 

Ultimately you should be tracking every lead with this level of detail FOREVER to make sure no weak-links pop-up down the road.

 

So here’s my 8 step process for plugging those holes and increasing your closing ratios to the best they’ve ever been in the next 30 days.

  1. Write out the steps in your sales process. From the initial phone call, email, or trade show contact to the post-install request for referrals write down every single step. Your steps may look something like this:

    1. Initial Contact: Telemarketing, Call-in, incoming email, fair/trade show sign-up

    2. Call-back: Phone call to set appointment, Email response to inquiry

    3. Confirm: Call to confirm.

    4. Appointment: In-home presentation

    5. Follow-up:

    6. Schedule Install

    7. Install:

  2. Write down the possible results for each step. “Cancel” is NOT a specific enough result. It’s better than nothing, but the goal is to determine “Why did they Cancel?” and address that issue. For instance:

    1. Initial Contact: We’ll call you back, Too expensive, Just gathering information, Appointment Set

    2. Call-back: Call me back later, I’ll call you once I check with my spouse/mom/dog, Too expensive, Appointment Set

    3. Confirm: X was here yesterday and we’re going to go with them, Too expensive, An emergency came up, We’ll be home and waiting!

    4. Appointment: Too expensive, Have to ask my spouse/mom/dog, Think we’re just going to go with X instead, I don’t think we need that right now, Sounds great sign me up.

    5. Follow-up: Credit was turned down, Sign us up!, Check Bounced, Credit Card denied, We changed our mind.

    6. Schedule Install: If you are losing leads at this step, look at the time from the previous step to the install date. You may need to look at working non-standard hours to get installs taken care of right away.

    7. Install: Looks and works great!, Emergency came up and we can’t be home, We changed our mind

  3. Make a flowchart of the steps. The flowchart is very helpful for showing everyone each step and to help you to setup your software for tracking. Notice that all of the items above in italics are reasons a step becomes a dead lead. All of the other results from above are what leads to the next step. Reference the Sales Flowchart example below:

    1. They sign up and you have to get “Credit Approval”

    2. They sign up and pay with cash, a check, or credit card so you “Schedule the Install”

    3. You have to “Follow-up” with them

    4. They’re not interested and it becomes a “Dead Lead”

    4. Example Sales Flowchart

    Notice how it can get a bit tricky. If you look at the “Appointment” step you have 4 options:

  4. Make a list of all of your lead sources. If you’re going to put all this effort into tracking your leads you might as well track the lead source to answer 3 questions:

    1. Did that lead source pay for itself with after sale profits?

    2. What is the acquisition cost of that lead/customer? (maybe it paid for itself but other sources have a lower acquisition cost and therefore generate better profits)

    3. Are there any steps in our sales process where we’re losing a lot of people from this source?

  5. Track every lead. If you have to, funnel every lead through a specific “Sales Coordinator” in your office or be sure to train everyone. Just make sure your tracking everything – Including those referrals that are going directly to your sales representatives. At a minimum, you NEED to track the following information for each lead:

    1. Name

    2. Phone or email (you need to be able to contact them somehow)

    3. Person in your office who spoke with the prospect (this is the only way to determine if your weak link is a person)

    4. How they heard about you (i.e. lead source)

    5. If they’re no longer interested, WHY NOT? If you believe you have a great product that you KNOW will help them you should be shocked that they’re no longer interested and ask.

  6. Make sure EVERY lead gets input into a spreadsheet or database so you can get quick/accurate results on each lead. This is where simple to use database can make huge improvements in your business! Let’s face it, the first 4 steps are relatively easy. You’re a responsible and effective owner or sales manager and you can put the steps, results, and flow chart together. However the people in your office who are tracking lead information may not be quite as dedicated as you… Therefore the process MUST be simple to track and input. Moreover, since you’re already wearing 10 hats, its very important that managing this process is simple for you. :-)

  7. Analyze the data. Determine the weak step (i.e. from step #1). You determine the weak step by looking at the step prior to it becoming a “Dead Lead.” For instance, if after the initial “Call-back” they say they’re not interested, your weak step was the “Initial Contact” and/or the “Call back”. Now to determine the weak link (script, person, system) you have to look at the REASON they became a dead lead. Not Interested will never tell you the weak link! Too expensive, husband says our water is fine, we already bought from X competitor, are reasons that allow you to start addressing the weak link. Obviously, you also need to record which person handled the “Initial Contact” and which person handled the “Call-back” to determine if it’s a people-problem.

  8. Plug the hole. Improve the weak link. How do you do that? Simple. You make a change, test it for the next few weeks and measure the results. Be careful to only make ONE CHANGE AT A TIME PER STEP or else you won’t know which change made the difference. Your change may be additional training for the person, improvements to the script, or a better method for tracking follow-up within your sales process.

    9.  

    Rinse and Repeat. Once you stop tracking each lead your closing ratio starts to go down immediately.

To your success, Bryan

Filed Under: General Business Tagged With: , , , ,

The 4 things that DRAMATICALLY improve teamwork…

March 17, 2008 By 3 Comments

[digg=http://digg.com/business_finance/The_4_things_that_DRAMATICALLY_improve_teamwork]

This evening my sister was working on a speech for a college class where she wanted to teach people how to improve teamwork in a business. Wow, a summary of how to improve teamwork in any business in only 5 minutes??? We’re going to have to narrow that down. So we decided on improving the productivity of a team that already exists. In other words, we’re not hiring new people, expanding a business, or firing unproductive people. So we talked it through for a few minutes and here are 5-minute’s worth of suggestions to having the best team around. ;-)

  1. The most important factor in determining an employee’s satisfaction is his relationship with his direct manager. That’s more important than salary, benefits, flex time, over time, company picnics and the like. We’re talking about his direct superior and not the CEO, CFO, or departmental VP. If his manager does not have solid rapport with him, he will not be happy. This is extremely important because almost every other tip, suggestion, or improvement MUST take this first factor into account. Don’t forget it!
  2. One of the most common complaints you’ll hear from employees, if you bother to ask them, is, “I don’t know what I’m supposed to do.” Sure, she knows her title is “receptionist” or “salesperson” or “plumber”, but what does that mean she has to do every hour of every day. As her direct manager you need to define that. The best way to figure this out is to provide enough detail, goals, benchmarks, and Key Performance Indicators so that every single day your team member can easily answer whether they had a good and productive day. They should then be able to list exactly what they accomplished that made it successful and productive.
  3. Tie compensation to the Key Performance Indicators (KPI’s). The number of businesses that do this HAS to be less than 1 in 10,000. Out of several hundred businesses I’ve worked with in some capacity only 1 comes to mind that does this extremely well with a few others doing this moderately well. Most don’t do this at all. If you determine someone needs to get 8 “jobs”, “services”, “deliveries”, or “sales” done every day but you pay them by the hour, what’s his incentive to do more than 4 or more than 8 once they get those target 8 done? As a general rule, salespeople are the only ones who have jobs strictly based on commissions. Why? If an engineer designs a brake system that doesn’t work, why should he get paid the same as an engineer who designs one that is flawless? A friend who is an engineer for Penn DOT told me he was welcomed to his engineering job with “Congratulations! You have a job for life. No matter how bad you screw up you basically can’t get fired.” You think that government agency is attracting “go-getters”? Even if it did, as I respect my friend’s engineering skill, how long do you think it will be before those employees are taught to accept less than the best in their own work? Figure out a way to provide an incentive for EVERY single person on your team even if its just tied to the overall company revenue targets. Software companies often do this by providing stock to employees. Public companies do it by offering 401k plans with discounts on the company stock. Depending on the size of the company, it can be very difficult for someone to gauge the effectiveness of his work when his only non-salaried incentive is the stock price.
  4. Provide quarterly reviews with every team member. So you’ve defined for everyone on the team what makes up a productive day and you even related incentives to that productivity, now you need to review those with them at least every 90 days. Many sales managers and sales teams do this on a weekly basis. Again, why are salespeople given such strong incentives to produce and few others are? My recommendation is to get your hands on “First, Break All The Rules” by Marcus Buckingham IMMEDIATELY and use the 12 questions he’s developed from information gathered from over 80,000 managers over 20 years for your reviews. These reviews need to achieve a few key objectives:
    1. Determine the team member’s progress on meeting the goals from last session
    2. Determine whether you as a manager can do more to help them achieve those goals
    3. Set new goals for the next 90 days

    This is not a complaint session where you attack the individual and highlight all that they’ve done wrong. Numerous tests and studies have proven that mice and men both respond much better to positive affirmation than to critical attacks. Don’t say things like “Look, Bob, you did this wrong. It’s spelled out in detail in the manual so you don’t have any excuses.” You’ve immediately put Bob on the defensive, probably upset him, and didn’t score too many rapport-building points with him. Instead try, “Hey Bob I have a few copies of your TPS reports here. How can we work together to make these even better this time? Was the manual clear or should we improve it?” Now, if that team member thinks you’re a chump, then the second wording may only get you slightly farther which is why having a strong relationship and solid rapport with your team members (reference #1) is so important.

So there’s the 5 minute performance review for your team. The next step is reviewing your company Vision, Mission, and Culture to help fill in all the blanks that are not spelled out in the company manual or in the KPI’s.

To your success, Bryan

Filed Under: Team Building Tagged With: , , , , ,

Your company has a culture. Did you choose it?

March 12, 2008 By 5 Comments

Yosemite National ParkIn my last blog I mentioned that if you’re an Ethical Business Builder, but none of your employees are aware of that, who cares? It’s important that you make your whole team aware of the importance of ethics in business.

Obviously your actions are the most important part of being an ethical leader. If you have an “open-door policy” but you’re never around – or you claim that its important that you treat all people with respect, but your team members can hear you flipping out on your vendors on a regular basis as a means of “getting the best deal”, then it doesn’t matter what you write in your ethical policies. The only things important to your team members are the things that you do – not what you say. I’ve read in numerous articles and books that most businesses take on the traits of their founders. Microsoft is like Bill, Apple like Steve, Facebook like Mark, and Google is like its 2 founders…

ALL businesses have a culture. Some are high-energy and highly-competitive like Nordstrom’s and some are more laid-back like your typical start-work-at-noon-and-sit-on-your-bean-bag silicon valley software company. In both of those instances the companies “culture” was deliberately structured to be a certain way. The founders of those companies apparently determined (or it just happened by accident) that the most productive way to deal with their employees was to develop a culture to cater to the type of employee they wanted. This is important because not every person can excel in every environment and company culture. It’s well-known that Nordstrom’s employees either love it there or hate it. The ones who hate it rarely last more than 6 months. That’s the way management likes it. If you’re not going to thrive in the culture they’ve created, then they don’t want you. Does the culture that you’ve developed in your company attract the employees who will excel in your business?

The examples above, however, don’t talk at all about the ethical underpinnings of those cultures. Just like other aspects of culture, if you don’t express your culture, including the ethics that you expect, in writing and then demonstrate through your own actions that you believe in them 100%, then the culture will create itself. Generally that “self-created” culture will come partially from the founder and partially from whatever the other employees think is appropriate. My first encounter with a defined set of “Culture Statements” came from Brad Sugars in his book Instant Team Building and from his entrepreneur masters class. Actually, I can’t think of one other business book or article that has emphasized the importance of defined culture statements.

Culture statements are a series of statements that simply tell your employees and company stakeholders what values and culture your company employs. It’ll probably make more sense if you just read the 12 Points of Culture that I developed for a business I co-founded, cribME!.

12 Points of Culture

  • We treat our customers, colleagues, partners, vendors, and shareholders with respect. In unsettling situations we do our best to empathize with the other side and view the situation from their perspective.

  • We maintain integrity in all interactions. The end never justifies the means. Deliberate lying is never an option. If ever we make a mistake and accidentally make an inaccurate statement we will correct that statement as soon as reasonable.

  • We work diligently to make effective and open communication a high priority by avoiding gossip, harmful sarcasm, and verbal attacks. If we have a question or concern about someone, we strive to ask them directly instead of listening solely to those around them.

  • We are never satisfied with “good enough” and continually strive to improve ourselves, facilities, products, and services to best serve the company stakeholders.

  • The team leaders do their best to provide a healthy and productive environment for their team members to excel at their jobs every day.

  • We are positive toward each other, focusing on exceptional work and constructively critiquing when warranted. We are open to others positive suggestions for improvement.

  • We understand that everyperson we encounter has something to teach us and so will learn from everyone around us.

  • We appreciate that profit is the life-blood of every business and a profitable business benefits everyone in the organization as well as in the communities we serve. We work together to minimize unnecessary expenses and waste to ensure a lasting, profitable business.

  • We strive to be on time and meet deadlines. If we say we are going to do something by a certain time, we do it. If for some reason that is impossible, we communicate another solution as soon as we are aware that we will be late.

  • We recognize that the customer is not always right, however, whether he is or not, its our responsibility to make him feel that way.

  • We hold ourselves accountable for our own actions and responsibilities. We admit to making mistakes and continually learn from them. When we learn from mistakes, they are not failures.

  • We take calculated risks to improve our areas of responsibility. We try new and innovative solutions to daily problems. We quickly discard the solutions that do not work and continually improve those that do.

One of the benefits of developing culture statements for one business is how easily they can be amended to apply to almost any business. Statements I wrote for another business included a point of culture emphasizing the importance of safety. There aren’t a whole lot of dangerous situations in the software business so I didn’t feel that was necessary to emphasize for cribME!.

It’s important to make use of and review all of the points of culture, along with your vision and mission, BEFORE you hire someone. The potential hire needs to be aware of what makes your company unique and it gives you an opportunity to measure her reaction to your emphasis on ethics.

This blog is just barely touching the surface of the importance of dictating your culture to shaping your business. One of the primary findings in, Built to Last: Successful Habits of Visionary Companies, that contradicted the teachings of almost every MBA program on the planet, is that the businesses that survived and excelled over time were often the ones that were centered around a core business concept, not a great product.

We’ll get more in depth into the Vision and Mission in another blog, however, for now, start reviewing your business’ current culture and compare that with the culture you’d like it to have. In the next few months I’ll be working to define the culture of a few startups, as well as potentially revamp the culture of a business that’s been around for over 10 years. I look forward to recording the lessons learned from both of those processes.

To your success, Bryan

Filed Under: Leadership, Team Building Tagged With: , , , , ,

The difference between good and bad is in how it's communicated

March 7, 2008 By Leave a Comment

As I’m thinking of lessons that are extremely important for all of the members of our teams to understand, communication jumps to mind. Behind ethics and more specifically “being honest with all people”, effective communication is probably the most important part of the culture of any organization.

In my experience visiting businesses I’ve seen plenty of examples of why great communication is so important to an organization. However, 3 great business leaders who I’ve had the pleasure of meeting and learning from taught me a few simple lessons that drive home the point a bit easier.

Behind my father, Steve Dickerson and Bob Reiss are probably the most influential businessmen I have met. Mr. Dickerson has an amazing knack for story-telling and an even more uncanny ability to solve problems. He was one of the people I interviewed and referenced in my very first blog and he’s the one who taught me that the difference between a positive and a negative action almost always lies in the way its communicated.

So lets consider this for a moment. You’re in charge of a manufacturing facility that employs a few thousand people (over 2,000). You’re notified 2 years ahead of time that the facility is going to be closed. When do you let your employees know? If you give them 1-2 months then they may just leave in spite. If you give them 4-6 months you’ll probably have most people leaving before you even shutdown and then you’ll have to start hiring people for just a few months. If you give them any more notice then for sure people will leave which makes your job a whole lot tougher. It’s not like you can prevent the plant closure, so its not your fault. Take a few minutes and think through what you could do in this situation to best help all of the company stakeholders. Obviously the way you handle this situation can certainly dictate what will happen to you after the end of those 2 years.

Mr. Dickerson looks at the world a whole lot differently than most people. I have never personally met someone so confident that he could overcome any obstacle and solve any problem. He elected to tell all of his team members right away. Now read this carefully because the way he communicated the plant closing is what turned this situation into a “positive.” Before he told the entire team, he called in upper management and let them know and informed them that they have 2 years to find jobs for everyone in the plant. That’s right, his management team including himself took the personal responsibility to find employment for everyone who was going to be laid off. So they did some research and found a new manufacturing plant was being built not too far away and some other businesses were expanding. The day the plant closed 2 years later, every single one of the “laid-off” employees were now employed somewhere else or had made appropriate plans for retirement.

So the first question that comes to mind is, why isn’t that story taught in every business ethics class in every school and MBA program in the country? Doing the right thing and COMMUNICATING effectively can turn even the most negative situations positive.

Now many of us may not be responsible for the livelihoods of thousands of people so that story may seem to be a bit beyond our capabilities. So let’s take a look at a lesson that Jamie Hresko taught me.

Mr. Hresko was the plant manager for the Pontiac G6 plant in MI. To get an idea of his capabilities, when he took over responsibility for that plant there were over 3,000 grievances outstanding from the union. Amazingly, as I understand it, that’s only slightly higher than the average for a GM facility. However, within 3 years, Mr. Hresko had managed to drop that number to around 30. The lowest of any union facility under GM’s ownership. One of his 5 keys to doing that was Communication and he told this story to illustrate.

He said one day the union rep came to him and said we need another water fountain out on the floor. Jaime considered for a split second that they cut the workers’ hours, the labor force, and their wages (if I recall correctly) and the grievances were still unrealistically low so the least he could do is give them a water fountain. He said “no problem we’ll get it ordered right away” and then asked someone on his staff to make sure they had their water fountain. Two weeks go by and still no water fountain so the rep comes back to Mr. Hresko and asks where the fountain is. Mr. Hresko tells him the truth, “you know what, I’m not sure. I asked someone to take care of that for me and we’re definitely getting it for you so can you give me a chance to find out what’s going on?” So he went and found out the fountain had been ordered, everything had been taken care of, and it would be installed the next day. Low and behold the fountain shows up the next day and all the union members thank Mr. Hresko and start saying “man that guy is good. We don’t have a water fountain for 2 weeks and soon as we mention it to him he takes care of us. If you want anything done around here you have to go to Mr. Hresko.” The reality of the situation was he did absolutely nothing. The person he had asked to take care of the fountain did exactly that. Except one thing. He failed to communicate with the union what was going on and how long it would take. That simple act of communication would have instilled more faith from the union in the rest of management, would have saved Mr. Hresko the time of researching what was going on, and would have prevented the union from getting upset because no one took care of the water fountain for 2 weeks.

Now in the interest of full disclosure, it has been over 3 years since I’ve heard either of these stories so they are paraphrased, however I’m certain my numbers are very close. Even if they were off a bit and Mr. Dickerson helped 3,000 or 1,800 people find new jobs – or if Mr. Hresko only reduced the grievances to 50 or 60 would the stories be any less compelling?

The point is, in every situation, be it a conversation with your sister, husband, colleague, boss, or team member, you should ALWAYS be looking for the most positive way to communicate. Often times being positive simply means calling people back when you say you will, or keeping people up-to-date on the progress of a project. Dale Carnegie in his classic, How to Win Friends & Influence People, suggests in instances where you must critique someone you start out with a positive statement about the person first, so as not to put them on the defensive.

Bob Reiss made a point of assuring his employees that ethics were a high priority. For example, he always kept a copy of the 10 commandments on his desk to reference when a situation with an employee warranted it. From several sources familiar with his companies I was told it was nearly impossible to get a job there. No one ever left. Once you had a job there you stayed for life because you loved working there so much. In one instance, an employee of Mr. Reiss’ approached him with a difficult situation that she was very concerned about sharing with him. Her boss had apparently done something inappropriate or unethical (I was never told what he did) and from experiences she’s had at previous jobs, going above the head of your boss was never a good idea. Mr. Reiss thanked her for bringing the situation to his attention and took care of the problem (I believe by getting rid of that manager). Had Mr. Reiss not been known as an owner with high ethical standards and who strongly valued honesty, there’s a good chance that lady would have never felt comfortable enough to approach him. So if you’re going to be an ethical business builder, make sure you communicate that with your team members. After all, if your team doesn’t know that, are you really an ethical business builder or leader?

The best way to communicate those ethics is through actions and a good way to hold yourself and your team accountable is by setting very specific guidelines for the “culture” you expect at your business. We’ll get more into the importance of defining your business’ culture in another blog.

To your success, Bryan

Filed Under: Business Ethics, Leadership, Team Building Tagged With: , , , ,

The art of the win-win situation. Why you need to be your vendors' best customer.

March 3, 2008 By Leave a Comment

As I get involved with more businesses and, in particular, with individuals who are working on my teams it has occurred to me that their are several business axioms that are very important to me and should be to all of my team members. One of those axioms is always finding a win-win situation.

In basic terms this means that everyone who is involved with a transaction should “win” when that transaction is complete. For instance, if I’m selling my house, at closing we should have a win-win-win-win situation. My house should be sold at a price I was willing to accept, the buyer should have a house that was accurately represented, and that they’re happy with, the realtor should be reasonably paid for her services, and the mortgage broker should be paid for his. Everyone got what they wanted so everyone wins.

In business you occasionally have an unscrupulous salesman who will tell a prospect anything to get the sale. You may even have instances where a boss will go to his grave spouting “The customer is always right!” when in reality the customer was wrong and the employee deserved the boss’ support. However in my experience, the number 1 area people forget this win-win philosophy is when dealing with vendors.

It first became very clear to me that you always treat your vendors well when I was a paperboy. As a paperboy with 50+ papers to deliver, almost any time it rained you inevitably end up with a few wet papers. So you have some choices. You can wait for hours as you request the newspaper company to come replace your wet papers which would make the papers late – or you deliver them as is. Generally, as long as it was only a few papers and they weren’t destroyed, I chose the latter. Now out of 50 people, who do you give those few wet papers to? Certainly not the people who are nice to you, invite you inside when its cold, and give you a big tip. Why would you take the risk of upsetting them? No, you choose the people who are mean and cheap. For me personally, mean always trumped cheap.

In one instance, I recall a customer blatantly accusing me of lying and trying to cheat them by me asking them to pay more weeks than they owed. To this day, I’m 100% certain that wasn’t the case and even if I had made a mistake, accusing me of lying was something I took VERY personally. At that point, I would have preferred to just erase their debt and lose them as a customer. However, that wasn’t an option so, from then on, they became my only customer who mailed their checks to the newspaper directly. In their minds, the problem was solved. In reality, they now received every wet and late paper I ever delivered. Since I never had to confront them again to collect money, it made it very easy for me. After all, someone had to get the late and/or wet paper, why not them?

In the “real world” of business this has rung true for me more times than I can possibly remember. As a business consultant I travel a lot and have personally worked with nearly 100 business owners. Without a doubt, a few jump out in my mind as people who have treated me exceedingly well. One client in New Mexico made a point of always taking me out to the most fancy restaurants and putting me in nice hotels. He probably spent a few hundred dollars extra per trip that he didn’t “need to.” He was also one of the only customers who always paid me with a check in full before I walked out the door to fly home – a check that he guaranteed was as solid as oak. With those 2 actions, he endeared himself to me and my boss. In return, everyone on his staff had my cell phone number and felt very comfortable using it because I made sure to always help them as soon as I possibly could. He treated me better than any other customer and so, without giving it much thought, I did my best to provide the absolute best service for him.

Personally, I work hard and enjoy “living well.” My living style is anything but “cheap.” My father recognized this and so pointed out “that the quickest way to increase profits is to cut expenses.” If you think about it, it makes perfect sense. However, there’s a limit.

One out-of-state client I worked with happened to be located very close to a handful of friends and the university I attended. Because of that, I got to know them exceedingly well and routinely stopped by their office to make sure everything was going alright. I never charged for any of these services and in exchange received some free water (total value of the water was about $200 and at that point 2 hours of my time was worth that so they were WAY ahead on the deal). They had my cell phone number and used it when they needed and I helped as I could. Quite literally I spent more time with them than any other customer, including my father’s business, for several years. In one instance, I was visiting their office and emailed the General Manager ahead of time indicating that on this trip I’d stay with friends so all he had to worry about as far as travel expenses was my mileage for me to get there. When we spoke on the phone he agreed. When the owner of the business got the bill and learned that while visiting that customer I also took time while I was in the area to sell my house, he refused to pay. The house was sold 3 days before I even showed up in the office and because of that it allowed me to be in their office bright and early at 8am instead closer to noon if I would have driven directly to their office that morning. We’re talking about probably less than $200 (I can’t even remember the exact amount). Easily less than I had saved them by staying with friends for a few nights. So I spoke with the owner who happened to, at one time, be the CEO for a large international organization and apparently a staunch believer in “cutting expenses is the fastest way to increase profits.” I emailed the owner a copy of the emails that the GM had received and clarified that I told him ahead of time about the expenses and the GM had agreed. The GM lied and said that was not the case and the owner refused to pay saying that my emails didn’t matter since he had to backup his GM. Before this event, I would have considered this owner to be one whom I respected nearly the most out of all of the owner’s I had dealt with. In the end, my boss allowed them to not pay (though my boss did still pay me) and I felt cheated and taken advantage of. Over 3 years later and I still will not take a phone call from them and refuse to work onsite in their office again. I have no time to deal with unprincipled behavior and the money I could make by continuing to work with them would never be worth it.

I have dozens of stories to further illustrate this point – from the gentleman in Massachusetts who sends me cheese every year for Christmas, to the owner in Texas who forgave me when I billed him too much for gasoline. The people who have treated me the best, have received priority service. That is how it should be. Always treat your best customers the best. This also means that, your vendors should consider you one of their best customers for you to receive the best service.
This is NOT true for most businesses. In most businesses, the customer who screams the loudest receives the most attention. The employee who causes the most trouble receives the most attention. This irritates me to no end because it honestly makes no sense. If you want to bring ethics into the picture you could even argue that its unethical to treat superior customers as anything less than superior. In essence, it’s not “fair” to treat them as anything less. Criminals are treated as criminals. War heroes are treated as war heroes. Superior customers deserve to be treated as superior customers.
When you treat your vendors poorly, you will always lose. I know of businesses where particularly difficult customers will literally get billed EXTRA for being a pain in the butt! I’ve seen it happen time and time again.

So the lessons I’ve learned from all of these and many more experiences that every one of my team members should understand are:

  1. When dealing with vendors, paying the least amount of money is NOT always getting the best deal.
  2. In every situation, every party involved should have a “win” and be very excited about doing business with you again. If not, rework the deal.
  3. You give your best team members (employees) and best customers your absolute best service.

As for #3, most business people have probably learned the 80/20 rule where the top 20% of your customers generate 80% of your profits and the bottom 20% of your customers generate 80% of your problems. After going through the situation with the client who refused to pay my mileage, I told my boss I could care less if we lost them as a customer and I sincerely meant it.

I’m not the only one who thinks this way as Brad Sugars talks about “grading your customers” and getting rid of those customers with a D or lower and possibly even those graded with a C. Literally sending them a letter indicating you will no longer serve them and offering some suggestions for who may. He has personally owned over 50 businesses and claims this is true for every business in every industry.

A few years back Sprint sent notices to thousands of their customers that they had 30 days to find a new cell phone company because Sprint would no longer service them.

Marcus Buckingham talks about how one of the “rules” that should be broken is always spend the most time with the people who need the most help. Instead, he says that you will always reap a greater reward by spending the most time with your best people.

Admittedly, when I was 16 years old running my paper route, I hadn’t read any business books or had anyone teach me that you treat your best customers the best. It just seemed to be common sense. If that’s the case, then why do so many businesses I visit spend so much time taking care of their worst customers and employees instead of finding new ways to serve their best customers and employees?

If you’re ever lucky enough to work with me, make sure you remember these lessons. ;-)

To your success, Bryan

Filed Under: Leadership, Team Building Tagged With: , , , , ,