Lessons From Undercover Boss

In the first episode of Undercover Boss, Waste Management's President & COO discovered that he had a lot of great employees with a lot of bad corporate policy. In the second episode, the President & CEO of Hooters discovered he had some really bad employees. In the third episode, Joe DePinto, President & CEO of 7-Eleven discovered he had a lot of great employees and great corporate leadership. What is 7-Eleven doing right?

At Waste Management, CBS featured five employees who were hard workers but complained about corporate frequently. One lady had to run to the time clock because she got docked two minutes of pay for every minute she was late. Another lady had to pee in a can because she could not take her garbage truck off route. And another was doing the work of three to four people but getting paid for one. It was impressive to see how hard each of them worked despite bad corporate policy.

At Hooters, a manager had the waitresses compete for time off by having them eat beans off a plate like a pig. It was humilating and degrading. Furthermore, the manager got the opportunity to smart off to the CEO and a slap on the wrist.

At 7-Eleven, each employee profiled were hard workers with great attitudes. Not once did any of them complained about corporate. At one store everyone knew and loved Delores and that store had the highest coffee sales for 7-Eleven. At another store, Igor was living the American dream driving a delivery truck during third shift. And James was a talented artist with a work ethic that wouldn't quit. The only negative that arose was a few lights were out at one of the stores. Since maintenance considered this low priority, it was going to take up to thirty days to fix.

Here's my takeway. Corporate does not have to be bad. In my experience of auditing and consulting for dozens of companies, corporate tends to be the bad guy. It doesn't have to be that way. Here's how:

The carrot and stick approach is ineffective. Through extensive research, science knows that rewards and punishment are the least effective means of motivating employees. People are internally motivated by intrinsic drive. The accomplishment of the task is the reward. Personal growth and progress are the reward. Once a person's basic needs of food and shelter are met by fair/competitive compensation package, motivation is driven by the higher needs of respect, confidence, achievement, creativity, and problem solving. (For further reading: Drive by Daniel Pink)

Corporate exists to serve, not police. The primary contrast between Waste Management and 7-Eleven is that WM polices its employees by spying on them and monitoring time clocks; whereas 7-Eleven empowers its employees and delegates responsibility. 7-Eleven employees appear to be self-motivating and self-policing. This may be made easier because of the franchise model in which corporate serves independent owners, but this can be achieved in any organizational structure. In 2006, "Company culture shifted to “I C.A.R.E. About People and Teamwork and Servant Leadership." (7-Eleven.com)

Focus on the little things. This is easier said than done. It takes a lot of hard work to get to the point where you can focus on the little things. The biggest problem that Joe DePinto of 7-Eleven ran into during his undercover work was that a few light bulbs were burnt out at one of the stores. When he got back to the board room he told his team that 7-Eleven needs to do a better job of serving the franchises. However, he could not have said that if he had managers who demoralizing employees like at Hooters, or a distribution network that failed to deliver product, or poorly trained employees who did not know the core values of the company. As companies get better, the focus becomes smaller.

World class training. I was so impressed with how each employee profiled at 7-Eleven repeated basic nuggets of the company culture. Delores had Joe "smile and greet customers". Another told him to make the best pastries. Igor took care of the stores. This doesn't just happen. It is the result of world class training. World class training consists of a few clear, concise expectations that are clearly communicated and easily understood.

Be best in class and worst in class. 7-Eleven is best-in-class Operational Excellence and worst-in-class Customer Intimacy. (Let me be clear, 7-Eleven has superior customer service, not customer intimacy. Think of customer intimacy as a boutique in which the product can be tailored for each customer. They server fountain drinks and shrink-wrapped sandwiches. Hold the mayo is not an option. Harvard Business further explains the difference.) The main point, however, is that successful companies focus on one of three value disciplines (operational excellence, customer intimacy, or product leadership). You cannot successfully be all things to all people. To use the cliche, jack of all trades master of none. This starts by defining what is most important to your customers and concentrating on it. This takes focus and discipline.

If you or your company is looking for strong leadership to drive your company growth, contact me. As member of a CFO roundtable, CEO roundtable, Financial Executive International, and other, I have a network of CFOs that serve companies from the small startup to the multi-million dollar small business.

The true foundation of leadership is not power, but authority.

Alec Baldwin won an Oscar for his portrayal of Blake in the movie Glengarry Glen Ross. "Early in the movie Blake is sent by Mitch and Murray (the faceless owners of the real estate office in which the main characters work), to motivate them by announcing, in a torrent of verbal abuse, that only the top two sellers will be allowed the more promising "Glengarry" leads, and everyone else will be fired." (Wikipedia) This style of leadership results in poor performance, poor productions, and even unethical behavior. A better approach is to set clear expectations, measure those expectations, and reward those expectations. Fear is debilitating, not motivating.

In his book, The Servant, James Hunter outlines the timeless principles of servant leadership. The book is the tale of a struggling John Daily, a husband, father, and plant manager. He comes "to a realization that is simple yet profound: The true foundation of leadership is not power, but authority, which is built upon relationships, love, service, and sacrifice." (Amazon) 

 

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New Rules for Small Businesses Using Twitter

AccountsWorld.com sends me a daily email with top news headlines. I usually find at least one article interesting. Earlier this week I  

clicked through to read Client Portals: A Secure Alternative to E-Mail. 

As a professional services firm*, our product is a report, similar to CPA firms. We deliver our report electronic through a client portal. We developed this portal in house and spent big dollars for it a couple years ago. It was well worth it, but now I read about companies like LeapFILE.com that offer similar portals.

Although we are currently satisfied with our client portal, we may outgrow it or decide to go another direction. We may find that it is more cost-beneficial to outsource the client portal instead of paying a programmer everytime we want an update plus a monthly hosting fee. We are not ready to switch, but I wanted to keep LeapFILE on the back burner.

I noticed on LeapFILE home page that they are on Twitter. What a great way to keep them in my mind but on the back burner. So I followed@LeapFILE. Shortly thereafter, I received the following @reply:

@MikeCampbellCFO Thanks for the follow Mike. We work closely with CPAs & would love to know how we can help your firm if there're questions!

This tweet communicate several things: First, they used my name. Who doesn't like hearing their name? Names are very important. When someone takes the time to learn and use your name, they are communicating they care. Second, they must have read my Twitter profile because they acknowldged that I am a CPA. Third, they reminded me of their product without being pushy. Finally, they offered help and had a call to action. This was a great first tweet. It's amazing how much you can squeeze in 140 characters.

We then exchanged the next two tweets:

@LeapFILE Thanks. I learned about LeapFILE from an accounting periodical. JofA or Accountant's World (can't remember which one).

@MikeCampbellCFO Great! Feel free to sign up for a trial http://bit.ly/5ZL3UJ or let us know if you have any questions =) We're here to help.

I thought the next call to action was brilliant and effective. Sign up for our free trial. In fact, I took them up on the offer and started the free trial.

Here are the takeaways:

Send personalized @replies, not auto DMs. I hate auto DMs and it's a great way to get unfollowed. Personalized @replies, on the other hand, initiate engagement. @Replies are also put your name in the Twitter public timeline which is crawled by Bing and Google. It also appears in the Twitter stream of mutual followers.

Twitter is just one tool in your company's marketing plan. Notice in my little anecdote that I found LeapFILE through an email blast, a trade publication, and social media. Social Media fills in a missing gap and is NOT an end-all, be-all. Companies should use social media in concert with blogging, web sites, trade shows, target-industry conferences, sales professionals, and so on.

* The opinions expressed in this blog are my personal opinions and do not represent my employer's view. We offer forensic engineering and fire investigation services. If you have any questions regarding those services, please 

contact me. 

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Price is not based on cost! Professionals are knowlede workers, not machines.

I read this article from Runner's World about the cancer risk of plastic water bottles. It states that the safest water bottle is stainless steel. Prior to reading this article, I purchased plastic water bottles and consume about one per day. They are kind of a hassle. As case of 24 is heavy and take up a lot of room in the refrigerator. They fill the recycle bin. And it just feels wasteful to throw away so many. The stainless steel water solves each of these pains at less cost. The only trade off is that I have to wash them.

This week, I bought four H2Go stainless steel water bottles from Target. They were located in two different departments: sports and automotive. The bottles in the sports department range from $15-25, whereas the bottles in the automotive department ranged from $10-15. Furthermore, the four bottles I bought were on clearance for $5 each.

Here's the takeaway: Price is not based on cost! Does it really cost more to make a stainless steel sports bottle as opposed to a stainless steel travel bottle. Maybe, but I'm sure it's not 30% more. Ronald Baker, founder of VeraSage Institute, is on the leading edge of value-pricing for professional services firms. His mission is "to, once and for all, bury the billable hour and timesheet in the professions." Two important points he makes are that professionals sell knowledge and expertise, not hours; and that value is subjective, value drives price, and price drives costs.

For further reading, Ronald Baker is the author of The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services.

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My Running Philosophy (and leadership philosophy).

When I started running about this time last year, I anticipated that I would be healthier, have more energy, and feel better overall. And that has happened. What I did not anticipate is how my running philosophy would provide a framework for my leadership philosophy.

I never listen to music when I run. So I do a lot of thinking when I run. Like most people, I "flit around four major thought bubbles: organizing, problem-solving, wandering, and pondering. ... Running gives you the freedom to access those inner processes that the busy outer world often robs you of." (Runner's World) During my pondering, I identified seven core concepts that frame both my running philosophy and my leadership philosopy:

• You can do it.
• Define your vision and goals.
• Find your passion. 
• Do the right thing. 
• Never give up.  
• Pace yourself.
• Reward yourself.

A fellow runner posted his 2010 goals on Facebook. It inspired me to write down my goals and got me thinking about goal-setting and vision. I've posted these on DailyMile.com and thought I'd share them here, too: 

Run over 400 miles in 2010. 
Race 4 PRs: 
< 6:45 1-mile 
< 22:00 5k (7:00 pace) 
< 50:00 10k (8:00 pace) 
< 1:30:00 10-miler (9:00 pace)

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Snuggie: A cheap knock off that undermines the integrity of the Slanket.

I do not own a snuggie and I've been, for the most part, oblivious to the cultural phenomenon until the Weezer Snuggie. I'm a big fan of the band. Someone posted a link to a YouTube infomercial that the band sells their own branded Snuggie with a "free" CD. At first I thought it was a spoof until about a minute into the video the band members starting appearing decked in their Snuggie. Hilarious.

Shortly after Christmas, someone else posted on Twitter that they were enjoying a movie in their new Slanket. Curiosity got the best of me and I Googled Slanket. As it turns out, the Spanket claims to be the original 'sleeved blanket'.

Now I'm curious from a small business standpoint how the Snuggie has been able kick the ass of the Slanket. Why have I been hearing about the Snuggie for two years and just now learned of the Slanket?

I then read the Wikipedia article on the sleeved blanket and learned that there is yet another, the Freedom Blanket, which predated both the Snuggie and the Slanket.

Okay, I should really let this go, but I went further and read a New York Times article that was footnoted on Wikipedia.

I had to chuckle when the founder of the slanket called the Snuggie "a cheap knock off that undermines the integrity of his Slanket".

After reading all of this, I was fascinated by the marketing of the Snuggie and came away with a couple of important takeaways for small businesses.

The Snuggie might be considerably thinner and smaller than the Slanket, but that enables the Snuggie to enter the market at a much more attractive price point. The Snuggie competes with $10 fleece blankets. The sleeves are a novelty that people are willing to pay an extra five bucks for.

The Snuggie markets to a broader cross section of America. Most Americans do not live in the extreme cold of the north and don't need the thicker, more expensive Slanket.

Viral marketing doesn't just happen, but when it does hold on. I'd love to have been a fly on the wall in the meetings that mapped out the marketing plan.

There's nothing wrong with being a first follower. Many first followers far exceeded the original.

One of my favorite companies that I audited was a retail hair salon. It always fascinated me how a guy could make a lot of money from $10 haircuts. I learned a lot from the owner. He bought a salon, then another, then the franchise rights, and so on. He simply figured out how to do it better than the next guy. His systematic opening of new salons was second to none. It reminded me of the book, The Millionaire Next Door.

Don't be seduced by the next big thing. Maybe you are already sitting on it. Maybe the next big thing isn't a new, grand, creative idea. Maybe it's the mundane product or service that's been neglected.

The Problem With Personality Profile Tests

Throughout my career, I have taken a half dozen different personality profiles: Meyers Briggs, Four Temperaments, PI Index, DISC, Hire Success, and most recently Trimetrix. These tests help employers and employees understand one another and communicate better. However, it is the process of self-reflection, delving deeper into personality traits, and listening to others' self-assessments that provides more value than the tests themselves. The tests have several problems and can be misused if not understood.

Problem No. 1 -- They are not personality tests. They are temperament tests. Temperament is just a small component of a person's personality. Personality consists of one natural tendencies (i.e. temperament) and social factors.

Problem No. 2 -- There is some question as to the scientific basis for personality. "In the 60s and 70s some psychologists dismissed the whole idea of personality, considering much behaviour to be content specific. This idea was supported by the fact that personality often does not predict behaviour in specific contexts. However, more extensive research has showed than when behaviour is aggregated across contexts, that personality can be a modest to good predictor of behaviour. Almost all psychologists now acknowledge that both social and individual difference factors (i.e., personality) influence behaviour. The debate is currently more around the relative importance of each of these factors and how these factors interact." (Wikipedia)

Problem No. 3 -- Most personality tests ignore values, faith, and virtue. There is a universal ethic of right and wrong that transcends different faith traditions. Regardless of personality, everyone can, and should, develop these universal virtues. For example, Steven Covey's 7 Habits, Christianity's seven virtues, and aspects of Servant Leadership apply to all personalities.

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