Extraordinary Business

Where do you have to go to generate millions in savings?

2008-06-18T07:24:00.003-05:00

How would you go about saving millions in costs in your business? Would you hire a consultant experienced in 6 Sigma or Lean? Who would be the best at helping you? At Stanford Hospital it turned out to be the employees.

Stanford's employees have so far helped the hospital save over $14 million in expenses. Cost reductions occurred in everything from trash collection to de-linting towels for surgery.

So how do you get so many people focused on cost reduction? It has to mean something to the staff. They need to clearly understand the vision and direction of the business. One difference is they were empowered to make a difference because management didn't have all the answers and the results have been tremendous.

Who are you willing to empower and how would it make a difference in your organization?

Blogging in some flight time

2008-04-14T12:26:00.003-05:00

In recent weeks we have heard announcements regarding the airline industry. It's been everything from charging extra for baggage, going out of business, flight delays, repair issues that led to flight delays, etc. My question to you is how has it affected your travel by flight?

Airlines are not known for their service record or reliability (at least not in a positive light.) Do you avoid air travel? What should the airline industry do to improve service?

Success Through The Generations

2008-03-30T15:55:00.002-05:00

I recently read the article in Inc. Magazine called "The Success Gene" by Adam Bluestein. The article highlighted the following businesses for having existed for over five generations: Hussey Seating Company, C.F. Martin & Company, Iwan Reis & Company, Harden Furniture Company, A. E. Schmidt Company, and NP Dodge.

First I want to congratulate each company for surviving so long through good times and bad. It's impressive to see that many generations keeping business in the family. One thing that can be said for each business is the similarity in their beliefs.

Each business lives by the belief that they are the best in their industry. Being the best separates those who want to be number one in their industry from those who are just trying to compete. Also, each company mentioned their willingness to change. Change is an important factor in business, and many businesses, family or otherwise, fail because they are unwilling to change. While there aren't a lot of secrets to how they have survived the times, it is still and interesting and inspirational read. If you have the April copy of Inc., please check it out.

A Review of Paradise Lost

2008-03-20T21:52:00.004-05:00

I recently read an article in Inc. magazine called Paradise Lost by Bo Burlingham. What caught my attention was the story was about Reell Precision Manufacturing. This company had been recognized for its culture and now was struggling for its life.

Reell was a successful company with a strong employee focus. In fact, all decisions were made in the best interests of the employees. For more than 30 years, the company had worked through good times and bad. When times got tough, the leaders took pay cuts to avoid reducing staff. The company was ran by three CEO's that made decisions based on consensus. The formula worked. The company experienced unflagging loyalty while having turnover well below the industry average. So what caused the dramatic turnaround in performance?

Reell's industry was changing. Responsible for making laptop hinges, they found their markets moving overseas. While they were able to make changes and compete for a while, they became burdened by keeping up with increasing sales. Those sales forced capital investments that forced the company to focus on generating more sales to pay for the equipment. Reell became forced to compete on price and reduced margins. In the short term, Reell's decision to globalize their laptop hinge product prevented layoffs. In the long term it nearly destroyed the company because of its failure to balance out the needs of the employees and the needs of the business.

The moral of this story is looking at all aspects of your business no matter how well you are doing. Too much emphasis in any one area can be disastrous.

Article:
Paradise Lost
By Bo Burlingham
Photographs by Mike McGregor
Magazine: Inc.
Issue: February 2008

Grow Your Business

2008-03-14T07:45:00.005-05:00

Recently I was reviewing a Businessweek article by Jack and Suzy Welch that was titled "Trim the Fat, Not the Service." The title alone brings up a good point. If you make your customers suffer through the tough times with you, they won't be there when those times are over... and you might not either.

The moment the word recession is tossed around, many companies begin preparing for the worst. They do everything to maximize their cash and eliminate services. Unfortunately the customers take the hit in many cases. The focus is on cutting costs instead of gaining market share. So, ironically, when you have your best chance to gain new customers from your competitors, you fail to take advantage of it because you are in your basement riding out the storm.

What if your business was prepared for this. What if instead of cutting costs, you had already managed your business to work efficiently while still exceeding your customer's expectations. What if all the people in your organization understood your strategy and were passionately living it each day. What would that look like? How would it change your business when you are growing while everybody else is cutting back?

Right now you are at the crossroads. Either baton down the hatches or take market share from your competitor. If you can't afford to grow your business, how much can you afford to lose?

How Important is Employee Retention to You?

2008-01-20T16:46:00.000-06:00

We need a few good people. Or at least that is what I hear my clients say. Gone are the days of the company man. Now many people see jobs as merely stepping stones to get where they want to be. This is quite a turn around from our parent's culture that hailed the person working 20+ years at one job.

What has caused this change. The greatest factor might have been big business itself. Everyone has heard the story of the dedicated employee ousted from his position due to cutbacks and sending jobs overseas. Other factors may be benefits. As benefits change in relation to the needs of the employees, we see even less loyalty.

This takes us to our current generation. Most employees nowadays consider 2-4 years a long-term commitment to a job. Unlike their parents, they are also more concerned about balancing their personal life with their work. Many are no longer willing to work for just the almighty dollar.

So what is your company doing to find and retain good people? When businesses fail to keep good employees, they should first look at themselves before blaming the employee for leaving. What are you doing to develop your culture to attract people? How do you keep your staff engaged in their work? What are you learning about your employees needs that will let them know you value them and wish to keep them around?

If an employer treats their staff as an expense, they will often find it difficult to retain and hire good people. Given there are fewer people entering our workforce right now, you want to make sure you are a place people talk about working and not about leaving.

Set Goals and Ditch Resolutions

2008-01-18T09:28:00.000-06:00

This thought is from an article by Dan and Chip Heath in the February 2008 issue of Fast Company. Their article "Make Goals Not Resolutions" highlights a good point that plagues most companies and people. We fail to clarify what we want to accomplish.

Things like increasing profits, better teamwork, improved communication are all great ideas. Unfortunately they cannot be measured and there is no time line to follow. The result is usually failure to realize that goal to its full potential.

The Heaths point out visualization as a key factor in achieving what you want. By visualizing where and when you will do something you have a much greater chance of actually achieving that goal.

So what were your resolutions for the new year? If you could visualize what you were doing, where you would be and when you complete it, would it help you reach your goal?

The need for coaching is on the rise.

2008-01-17T08:24:00.000-06:00

Business coaching is continuing to gain credibility throughout the world as a legitimate resource to help professionals achieve results. A recent article in the Cincinnati Enquirer (Dec 18,2007) states that "9 out of 10 human resources professionals and clients see the value of coaching as 'very high' or 'somewhat high.'" :

Coaching was originally used to boost the performance of poor performers. My recent experience shows that successful executives are more likely to seek out a coach for themselves. People who strive to be the best and seek to get the most out of themselves while staying balanced.

What is your perception of coaching and if you were to seek a coach, what would you look for?

Do you dislike your boss?

2008-01-16T21:50:00.000-06:00

Recently Yahoo Hotjobs! surveyed people on job satisfaction and found that 43% of workers were unhappy with their boss' performance and that 7 out of 10 workers are looking at landing a new job in 2008.

I believe their are two sides to every story and I believe there are a lot of good people that are in leadership roles. There are also people who don't understand their manager's responsibility. I think this represents how important communication is in an organization. It also shows what happens when companies fail to give their leaders the skills to be successful.

What are the costs to business when they experience high turnover?

The Hidden Costs in Your Business

2008-01-13T14:03:00.000-06:00

Ever wonder what your business is costing you? Many of you can look to your P & L's to find a number. While that might be accurate to represent the total dollars you are spending, I am more interested in what lies beneath those numbers.

A company with a good strategy, strong leadership, and effective staff can be far more profitable than a business with a good strategy, weak leadership, and a staff unclear of their direction. I have seen companies with comparable sales in similar industries that have differences of hundreds of thousands of dollars (or more) in profitability. That difference could be the measure of what your business is costing you. But how can you be sure?

Here is a little test to start reading between the lines. Please keep in mind that if we are talking about averages it may not mean you do not have room for improvement. Remember, an average is little better than a C grade.

Advertising: How are your advertising expenses compared to the averages for your industry? What do the best companies spend? Some companies spend over four times the amount on advertising compared to the leaders in their industry. Unfortunately in most cases more advertising does not lead to greater results.
Turnover: How long do you retain people compared to your peers? Higher turnover can increase human resources costs exponentially through training, benefits, wages, unemployment, advertising (want ads), and recruiter bills.
Strategy: Great, you have a strategy. So who knows about it? How effectively is it executed? Over 90% of businesses fail to realize their strategy to its fullest potential and over 95% of employees in most organizations do not know what their company's strategy is. This can lead to even the right people doing the wrong things. In addition there can be multiple agendas, wasted time on projects not congruent with strategy, not to mention frustration, anxiety, loss of motivation, and ultimately lost sales.
Quality: So your quality is good, but can it be better? Each year, millions of dollars are lost to quality issues. These losses go beyond equipment failure into people related issues. Poor leadership can lead to poor morale and the "I don't care" attitude.
Sales: So your sales are down. It's the economy, the political climate, increased competition, the web, we lost our lucky rabbit's foot, etc. Remember, in the face of any bad economy, there are always companies that are growing and profitable. If you are not one of those companies that is growing and profitable, then you could be dying a slow death. Are sales fluctuations a blip on the screen or have steady decreases taken a bite in your profitability? There could be many reasons including the economy, but do you want your business to be influenced by the economy or do you want to be the best in your industry?

So what's your business costing you? What if you could increase your bottom line anywhere from 10-50% just by changing some of the things you already do without adding new technology? Many businesses seem to let these hidden costs go. My guess is because they cannot be seen. They remain hidden in the numbers. I would also guess that even if some companies knew the problems, they might feel powerless because they don't know what to do. What are your thoughts?

How's your memory?

2008-01-06T15:05:00.000-06:00

An article in the January 6, 2008 edition of Parade states it is natural to start forgetting things as we get older. While we are no less competent, it does take us longer to retain information. So as you get older and find those "minor memory lapses", what do you do to retain information. I find that working your brain is a lot like working your muscles. If you fail to work out, your muscles atrophy. In some ways not giving your brain a workout can do the same. What do you do?

What's your goals for the new year?

2008-01-06T14:06:00.000-06:00

It's hard to believe we are into our first full week in 2008 already. Often this is a time of year when we are excited about the targets we have set for ourselves in the coming months. What are some things that you are striving for? What's one thing you need to do on a daily basis so you will reach those goals? What is one thing you need to stop doing in order to accomplish your

Clock Management

2008-01-04T10:01:00.000-06:00

I recently heard a radio personality comment on a football game he was watching. The comment was related to how the coach managed the clock and how difficult it must be to keep track of the time outs while managing the plays and accounting for the obvious obstacles created by the opposing team.

What's interesting is as a leader you experience similar change every day. The Leader's team is their people and strategy is their playbook. Instead of one team, leaders are often competing against many teams at the same time. The clock you manage is through your annual goals and your fiscal year. As with any team, you have your standout players, your team players and those who fail to deliver their best.

As you look at 2008, what are some of the biggest challenges you see with meeting your goals?

Live with a purpose. Ward off Alzheimer's

2007-10-09T07:53:00.000-05:00

Carla Johnson of the Associated Press recently wrote about a recent study that found people "who see themselves as self-disciplined, organized achievers have a lower risk for developing Alzheimer's".

It appears this personality helps protect the brain. Some of the "dutiful people" were examined after death and found to have physical symptoms in their brains that would be consistent with the criteria for Alzheimer's, yet these people had shown no signs of the disease.

Robert Wilson of Chicago's Rush University of Medicine who co-authored the study said, "This adds to our knowledge that lifestyle, personality, how we think, feel, and behave are very importantly tied up with risk for this terrible illness."

In a way it might be said that hiring a coach could assist you with protecting yourself against Alzheimer's. While there is no study to back up how coaching can help, this study does suggest it could make a difference. A good coach should help you define your purpose and live a dutiful life by teaching self-discipline. So if you are considering hiring a coach to better yourself professionally, you may also reap greater benefits personally.

Your car now powered by... H2O

2007-09-11T18:19:00.000-05:00

Often I talk with businesses about what is possible. The biggest challenge is getting the leaders to see possibilities that stretch beyond their comprehension. Often this failure to stretch their minds can limit their options. Today I read a story that stretches our comprehension of what many of us would believe to be possible. Water burns.

An article posted by David Templeton in the Pittsburgh Post -Gazette states that scientists have discovered a way to burn salt water using radio waves. They still need to figure out if it can produce enough to power a car or machinery, but the potential could be huge given that salt water is the largest resource on our planet.

Next time you consider limiting your possibilities keep in mind that if they can figure out how to get water to burn then there are greater possibilities for your business than you can imagine.

"I Don't Know" Outlawed

2007-09-09T21:44:00.000-05:00

The mayor of Megion, a Siberian oil town has ordered his bureaucrats to stop using "I don't know" and "I can't". His reasoning is using those phrases is admitting your helplessness. What would happen in your organization if you outlawed these phrases?

Wanna Buy a House?

2007-08-27T08:39:00.000-05:00

There is a lot these days about credit and the sub-prime market. The values of homes have risen dramatically over the past ten years. Now in many areas that growth has slowed and even stopped.

So how has this impacted you? Those who have purchased homes above their means are feeling the pinch and many lenders have suffered now that the bubble has burst. In the end, the impact of this will be felt by everyone.

To my friends in banking I ask this. What opportunities exist now that could possibly strengthen your business? Are there any advantages to the outcome of the sub-prime lending?

As a home buyer, if you were looking to invest in real estate, I would say that the next year or two are going to provide some great opportunities provided you have the capital to spend. I am guessing there will be homes that are going to be at bargain prices and you will be able to get more than what you paid for three years ago.

Are We Lazy?

2007-08-26T21:43:00.001-05:00

Well, after a long summer I am finally getting back into the swing of things. Though it has been a while since my last post, I can honestly say it's not related to the subject.

I recently read an article in Fortune Magazine called Couch-Potato Nation (September 3, 2007). It appears that Americans have become lazy compared to some of their international counterparts. We are have approximately 117 hours of leisure per week compared to 110 in 1965. The article argues that in a world labor market, we are driving our compensation downward when other countries such as China and India's are going up. Based on the article it seems the only solution is to get off our butts and work more.

While I agree with some points of the article, I believe there is more to it than that. I also believe that we can still remain effective in the global labor market, but it is going to require us to change ourselves. We need to re-invent who we are as a nation and in many cases what we offer the rest of the world. I remember a time not so long ago when an IT or engineering job meant security. Those times have changed. Our responsibility is to keep up with the changes.

What do you think?

The Millionaire Inside You

2007-04-25T16:35:00.000-05:00

So many people seek wealth without realizing they already possess it. Every one of us is already a millionaire. The only difference between those who have $1 million and those who are working for it is the skills they mastered. So something to ask yourself is if you are already a millionaire, why don't you have $1 million? Those obstacles in the way are what is cleaning out your "bank account." It's the counterproductive habits that have removed the funds to this point. What you really need to do is look at what has made you successful so far, and how can you use it to eliminate the bad habits. Apply more of what you do well and focus yourself on your goal. No matter what it is, you can achieve it if you are committed to taking action.

Thoughts on Virginia Tech

2007-04-17T08:32:00.000-05:00

My thoughts go out to all the families and students impacted by April 16th's tragedy at Virginia Tech. It is troubling to see so many lives lost and few answers provided at this time. It is also sad to see after all our advancements in society that we still resort to hurting innocent people to get our point across. I am making an assumption that the shooter was not suffering from a mental illness. That does not appear to be the case in this picture. In the end we are only left with the questions of why did this happen and how can we prevent it from happening again?

Being just good enough isn't enough

2007-04-16T18:19:00.000-05:00

Do you know people or businesses that seem to operate on the status quo? A vast majority of what we experience is managed through complacency. People do just enough to get through the day. Many businesses do just enough with service to prevent customer complaints. We have been lulled into accepting mediocre performance. I would love to hear from people about when they experience someone going above and beyond. Let's recognize those who step up.

Coaching improves performance

2007-04-15T20:53:00.000-05:00

I recently read an article by Margarita Bauza from the Detroit Free Press on the benefits of Coaching. In the past, many people thought coaching was only for poor performers. The reality today is most people using coaches are high performers that want to become world-class achievers. As I look at my list of clients, I would agree with her findings. Most if not all of the people I work with are tops in their field. What they look for is how they can work smarter and excel in performance.

Are you seeking a coach? Here are some things to look for:

Find the right fit. Make sure you are comfortable with the coach you choose.
If you need help in a specific area, seek someone who specializes.
Seek a coach who will help you develop your skills. Some coaches are more consultants. They tell you what you should do. Developmental coaching helps you find the right answer for your situation.
Ask a lot of questions. Understand the coach's process or style and make sure it matches what you wish to accomplish.
Make sure the coach is focused on you.
Ask for references.

Coaching can be an excellent way to get you from where you are to where you want to be. The top performers in entertainment and sports have a coach. Why shouldn't you?

The Need to Relax

2007-02-07T11:22:00.000-06:00

I recently returned from a trip to the Caribbean. After a busy 2006, it was a welcome respite from the work I had been doing. My wife and I took the opportunity to take a 7 day cruise. If you have never done a cruise before, I highly recommend it for a number of different reasons. Besides the great service, you meet many different people from many different cultures. I was fortunate to meet people from Bermuda, Canada, Denmark, Scotland, England, as well as other parts of Europe, Asia, and Central America.

One of the things I noticed about the different cultures was how many people from the US struggled to relax. Now these people may have thought they were relaxing, but I would wonder how relaxed they felt when they returned.

It started with our charter to the cruise ship. We were running a little late and one person became visibly angry and complained to the director responsible for making sure we had all our passengers. We weren't running unreasonably late, nor were we in danger of missing the ship.

Another time involved waiting to exit the ship at one of our ports of call. A couple complained about waiting, the service, the gathering points and a number of other trivial things that were little more than inconvenient to them. Later, someone was complaining to the bartender that she should know how to make a particular drink he received earlier even though he couldn't remember the name of the drink himself.

What I observed from our foreign counterparts was the opposite. They were there to relax, and minor inconveniences didn't seem to bother them compared to the high strung behavior I witnessed from the others. It's no wonder we struggle with increased stress and health issues, burnout from jobs, and our inability to see the positive in many cases. If we need to be taught anything its how to value our free time and separate from work when necessary. I think all too often we are not at our job and we still act like we are. The hurry up and relax approach doesn't seem to be effective since some people appear more stressed after vacation than before. What have you observed on vacation?

The links in the chain

2006-12-12T21:43:00.000-06:00

On December 1, I attended "A Christmas Carol" at the Overture Center for the Arts in Madison thanks to the generosity of Ron Phelps, my financial advisor. Not only did I get to see a great play (one of my favorites) but I noticed something that plagues many leaders and businesses alike.

If you are familiar with the story, you know the first ghost to visit Scrooge was his old partner Marley. Jacob came to warn Scrooge to change his ways or face the consequences of his actions and wear the heavy chains like Marley had to carry on him for eternity.

What's the comparison you ask? We as leaders and business people walk a fine balance. We do what we need to do to grow our business and strengthen our leadership. Yet we often take shortcuts that add up over time. For example, have you ever dealt with an employee who did something that was not to your level of satisfaction, and your way to correct the problem was to do it yourself? OR, you choose to do it yourself because nobody else can do it as good as you?

Each time we take the easy way out, we add another link to the chain. True, the first few times there is little burden. In fact, its actually faster just to take care of it yourself sometimes. However over time that changes. Each time you fail to act as a leader adds another link to the chain. What was a simple quick fix, now becomes a burden that prevents you from doing your primary goals. Soon after the burden leads to being overwhelmed. Then when you need others to do the job, they still aren't trained properly. The cycle continues.

Here is a good exercise for you to do. Write down the 5 most important tasks or responsibilities you have. These should be the very reasons why you are employed. Next, write down the 5 tasks or responsibilities you are doing. Match the two lists. If list 1 is significantly different from list 2, you may wish to review your priorities. Either you haven't clearly defined your job, or you are doing things that should be delegated to others.

Like Scrooge, you too can change your path. The best part is you can do it while avoiding visits from four ghosts on Christmas Eve. If you are feeling the burden, please contact me. I'm a lot less scary.

When does price outweigh service?

2006-10-29T12:44:00.000-06:00

Here is a question I would like to pose to you. When does price outweigh service?

What peaked my curiosity in this are some recent experiences where I shopped almost only on price. One experience I would like to share is my recent purchase of new tires for my truck.

Last Sunday I went out to get a new set of tires for the vehicle my wife drives. A good set of tires can be expensive and I wanted to find the best value. I have purchased tires from a number of places in my lifetime, and to be honest to this day I have not been able to distinguish much of a difference in service. This is true for my most recent experience.

I opted to buy my tires at a retail outlet in Madison because Sunday was my only day to shop, and none of the local stores were open. I quickly found the tires I wanted and set up the installation.

My experience with the personnel was mixed. The woman who was helping me was courteous. As I was paying for the tires, one of the service men told me I'd better get used to waiting. It appears that everyone tried to take advantage of fewer people shopping due to the Packer game. For those of you unfamiliar with Packer football, you can usually throw a rock across a store during a Packer game and not even come close to anyone. That was not the case this Sunday. When I asked him to clarify how long the wait was going to be, I was told there were 8 cars ahead of me. Seeing three people working, I came to my own conclusion that it would be approximately 2 hours (3 people at approximately 40 minutes per car to install and balance a set of tires.) I determined that would be a reasonable wait and equivalent with what I would expect anywhere else on a Sunday afternoon.

Since I was stranded without a vehicle I chose to use the time to shop for other things I needed from the store. I had plenty of time to wander and check out the new gadgets and deals that were present.

Time passed. I stopped back after about an hour and a half to see my tires still stacked neatly by the door. When I asked about the wait, I was told they would get to it as soon as they could. More time passed, and after about 4 hours, I finally saw my truck roll into the service bay. I watched the technician go to work on the wheels, but after about 15 minutes, I was curious why the rims were still on the vehicle. I would soon find out. The technician came in and said he could not remove the rims. When I asked why, he explained he tried to remove the lug nuts but some were on too tight and he could not work them loose. He brought me out to show me the problem bolts. His concern was he did not want to break the studs because he would have no way to replace them.

Now you can imagine after waiting for 4 hours on a Sunday how you might feel. After all that waiting I left very angry with the back filled with new tires while I still drove on the ones I hoped to replace. Despite being very upset I was hoping my dealership would work to make it right since they have been the only ones to rotate the tires.

After contacting the dealer the next morning, we were able to bring the truck in immediately. They agreed to look at the problem and see what happened. Later that day they contacted me and said that there was no problem with the lug nuts and charged me for the installation and the disposal.

Here is the moral of the story. In order to save approximately $80 on a set of tires I invested over 5 hours of my time and at least an hour of my wife's. The end result is actually a loss.

The problem: When it comes to products and services, we look at price when we can find no other way to distinguish a difference. Though I teach others how to define that difference and take their focus off price, I find that we ALL still fall into the trap.

We are only allotted so many hours in a day. When they are gone, there is no way to get them back. Many of us have failed to place a value on our time, and sometimes we loose sight of the overall cost.

So a word of warning. Be careful when you are shopping for the best deal. Make sure it really is one.