Engaging Your People!

A common theme has cropped up in several of my recent engagements. A perceived (and actual) communication gap between direct reports and their supervisor.

Here are some actual quotes, “I think John is here only to draw a paycheck”; “My boss has no idea about what is going on in the business and doesn’t have a clue as to what I do. . .”; “I wonder if my company really has a game plan.”

These issues didn’t happen overnight but they can be solved in a relatively short period of time. Here are a few tips. . .

1) Manage by walking around – If you live in an office with a door, make sure you spend no more than 20% behind closed doors and the remainder (outside of meetings) with your direct reports and internal/external customers. Ask what is going on and how you can help facilitate their mission.

2) Communicate clearly what the company (and your department’s) mission statement is.

3) Have regular (agendized) formal meetings with your staff as well as brainstorming and social (lunch or outside the office) sessions. Make sure you are getting and giving feedback so people don’t think they are working in a vacuum.

4) Compliment and recognize those that are doing a great job.

5) Collect and post KPI’s for your department.

6) Use the phone or in-person approach instead of relying on email or memos.

Today, every department is running lean so it is easy to disengage from your staff. Take the time to put the “human” back into Human Capital by engaging your staff!

Steve
costavoidance.org

Solutions Business Consultants are specialists in cutting costs and expenses without sacrificing employees™. We take an enlightened look at a company’s spend and create innovative cost savings methodologies which bring money to your bottom line!

How you can make your company more profitable! [Part 1]

Everyone wants to reduce costs and expenses. Here are some self-help steps that you can do yourself (for free!) – perfect in these tough economic times.

In a recent Linked-in poll, we asked companies, “What is the best example of wasteful spending at your company?”
Two-thirds of the Linked-In respondents answered, “the wrong person in charge”.
If you think of who buys goods and services or approves expenses at your company, how can you tell if they are doing a great job?

The best way is to ask questions….
1) Are they frugal?
2) Do they bid out goods and services?
3) Do they partner with suppliers?
4) Are they on the lookout for new suppliers and new ways to accomplish processes?
5) Do they negotiate with suppliers?
6) Are they strong enough to say no to bad purchasing ideas?

If they are not taking advantage of some or all of these protocols, you have just identified several ways to help your business get on the right track.

We have interviewed department heads who are in charge of ordering. Most tell us they are “too busy” to shop around. Oftentimes, there is an administrative assistant in charge of procurement who lacks the ability to properly specify what is needed and does not posses the ability properly evaluate suppliers and their offerings.

We have also found wasteful spending occuring by employee(s) who are funneling business to a supplier that oftentimes takes them golfing, or treats them at restaurants or clubs.

This is not an exhaustive list and most businesses would be shocked to hear many of the stories that I have encountered.

Most bad purchasing methodologies can be traced to poor or no training and oftentimes, senior executives forget that spend management is a science, has to be learned and has a specific rule set that one should follow to make sure that your company is being taken care of in the best way possible.

The Second most popular item in our Linked-in survey was insufficient internal controls. Spending company money should not be easy and should have a multi-level approval process that ties in with the company budget for that particular spend. Additionally, there needs to be a responsible party who reports to the CFO, COO or CEO. This person must be accountable for the smart and efficient spend of company funds. This person should have the ability and authority to discuss and question all company spend, make sure there is adherence to budgets and oversee requests for budget overruns.

Finally, there needs to be a strong audit committee. Lack of internal controls have led to abuses that occurred not only at Enron but also at companies of all sizes – oftentimes causing catastrophic damage to the company.

I hope these “self-help” ideas have been useful. And if you have a particular situation that you would like to discuss, I would be glad to take your phone call or answer your email.

Steve
costavoidance.org
 

 

Solutions Business Consultants are specialists in cutting costs and expenses without sacrificing employees™. We take an enlightened look at a company’s spend and create innovative cost savings methodologies which bring money to your bottom line!

Is there any Passion Left? or I love my job!

A while back, I spoke about customer service and illustrated my points with a couple of concrete examples. But that didn’t solve the customer service meltdown we are experiencing in the States.  This post speaks about the underlying causes of poor customer service and poor employee performance and most importantly, offers some solutions.

Recently I was reading comments in Facebook that had been entered during working hours, it is amazing to me the number of people that are counting the hours, minutes and seconds until they can leave their job for the day. It was as if they were being tortured and at 5pm the prison gates would swing open to freedom. What truly amazes me is that we are in the middle of an employment crisis and today I still heard those magic words in a Starbucks, “my job sucks”. I asked the employee if she just said “her job sucks” and she turned a little red and dismissed her comment. I wasn’t fooled – hopefully she wasn’t either.

Understand that I am not one of those people who lives to work but I have to ask, “Where is the sense of obligation of today’s employees, the passion to do something great, the joy of solving a difficult problem or innovating a new process. Why would you drive 5 or 6 days a week to something you hated?

Incredible yes? But this issue is completely reverseable with a paradigm change from two departments….HR and Senior Management. Before your hairs raise up on your arms you have to understand that I am not here to slam Human Resources or Senior Management (they are usually the folks that hire me) but for today I am saying that things must change  if you are wanting to maximize productivity, create a culture of innovation and retain good employees. The solution is relatively simple and involves an old management concept aptly named, managing by walking around. In many companies, HR and Senior Management types typically hole up in their silos and await an triggerin action by an employee. “I need an insurance form”; How do I apply for FMLA” or “I appeal this write up by my no-good supervisor” or “I have this idea I would like to share with the President”.  If Human Resources and Senior Management would  come in early and talk to folks getting their morning coffee or while they are settling in their cubes or if they would stop by at the end of the day and ask questions – both personal and business – the results would be amazing.

Examples of questions:

1) How is the family?
2) What project are you working on?
3) What roadblocks are you running in to?
4) What could the company do to help your team operate more efficiently?
5) Would you mind if we spoke more in detail at a later time.

Now you wouldn’t ask all of these questions to each person nor would you get perfectly honest answers initially but you get the picture – over a period of time you will meet your most important asset – your employees. And you would give them a gift far greater than money – you will bestow them with a sense of belonging, supply them with someone to connect with, and show they that the folks upstairs really care about them and their work product.  And as a free bonus, you will find out quickly what can be done to better your company.

It is important to remember that everyone who works at your company begins with passion.  After all, they send a motivational resumé and cover letter, beam during their interview and promise that they can fulfill the companies goals and objectives.  Their passion is fueled during  the orientation week as they are introduced to the company, staffers, leadership, their department and their new desk and duties. Sometime between that magic hire date and six months to a year later, things can start to turn sour. The pox may be unclear goals or multiple unachievable targets; it could be an already vexxed employee who actually poisons our new recruit; many times it is a supervisor who knows the technical skills of the job but lacks the people skills (nurturing, training, listening, advising, mentoring). Companies that fail to manage by walking around are condemned to never know what is happening around them as they sit around and wonder why they are the last to know when a staff member decides to terminate their employment or why their latest IT project is six months and $40 million dollars behind

Some of the most critical solutions in running a successful company are the simple ones and they involve key players investing precious time in their staff. Starting is easy and can begin tomorrow.

Steve
costavoidance.org

Solutions Business Consultants are specialists in cutting costs and expenses without sacrificing employees™. We take an enlightened look at a company’s spend and create innovative cost savings methodologies which bring money to your bottom line! Many of our services can be enjoyed on a contingency basis – based on our success!

Where to spend your marketing budget?

With the new economy, you should have automatically received more bang for your buck from your traditional outbound marketing vendors. If not, then you should call them into the office and begin renegotiation of your current contract/future business. Often times, you may not reduce the total dollar amount but you should receive additional frequency, improved position and have a free promotion or two thrown in as well. (Here is a shameless plug: if you haven’t lowered your cost of goods and overhead, give me a call) That being said, this post is not a tactic to squeeze your existing vendor pool, rather, it is a request for you to look at your marketing spend based on the new economy,  current consumer behavior and the channels available to you.  You may find that it is time to shift part of your spend into newer channels that will garner more return on investment or you might want to just dip your toes into the social internet soup.

Background: From a consumer point of view, marketing is either pushed at them (traditional outbound marketing) or pulled toward them (referred to as permission marketing, Web 2.0 or inbound marketing). Traditional outbound marketing guarantees that every day we are bombarded by emails, popup ads, billboards, radio commercials, television spots, telephone calls, newspaper and magazine ads.

Does this traditional outbound marketing still work?  Not like it used to – consumers are shellshocked by the shear volume of push to buy this product messages – emails are deleted without being read and direct mail pieces hit the trash. Many consumers have abandoned traditional commercial-ridden radio and switched to XM. And who reads a physical newspaper anymore?  Finally, I believe that most consumers give little or no credence to the celebrity spokesperson or radio personality or printed brochure when it comes to chosing a product or service for their family. I could be wrong but at the least the effectiveness of these modalities have weakened considerably.

Example: Let me digress and add a personal example of consumer spend. While not scientifically accurate my experience has to represents a chunk of consumers:

My heat and air unit went out last year. We have no home phone so I couldn’t look in the yellow pages. So, I asked a couple of my neighbors, my dad, the head of facility maintenance at my old employer, and a realtor who they thought the best heat and air company was in our area. I then contacted these companies along with four others selected at random to submit bids for replacing my current unit. Not surprisingly the bids had a $2000 spread (some vendors were more hungry then others) and I ended up buying my unit from the company recommended by the facility maintenance manager ($600 off the low mark)  The key decision factors were that the winning bid was not out of line with competitive bid for units of similar specifications and that I had a recommendation from someone I trust. That means that all of that traditional advertising was wasted on me – Not only did radio, television, cable and newspaper ads failed to sway me and the slick literature and even the brand name had little influence. Sadly enough, I never even checked any of the companies fancy internet sites.

No, I relied on independent research and a referral from someone who used the product and the company and was happy with the service. Statistically, I should of included more companies to bid but just like you my time to spend on heat and air units is constrained. Most importantly (for this post and my decision) I seeked out and found someone whom I trusted to give me a referral.

The future: Now the new “pull” marketing certainly interests me as a consumer. It is more polite, I like the fact these applications ask my permission to join a group – linkedin, facebook, tweeter, etc.  and some of them provide me great content. It allows me to build a relationship in Facebook with people and companies that interest me and makes me feel like I am in the decision-marking driver’s seat. But and this key, there is noone in this social media pool whom I trust to help me make the heat and air decision. Don’t get me wrong, I have made some serious contacts via social media but the newness and remoteness of the relationship makes it near impossible to influence this buying decision (as of today).

Wouldn’t it be great: It would be great to do a search on (my city) heating and air companies and be presented with the local installer blog complete with pricing and  local references near my address. That would give me more of a comfort level. I would also like to see integrated complaints and compliments from third party consumer sites. Yes, sites such as Bizrate exists but isn’t comprehensive and doesn’t provide phone numbers and addresses for me to follow up on.

My point is that social media may be worth spending a little money on – after all, how much is a facebook page or tweet or blog cost to produce. But I would not expect huge results overnight. Why, because the same computer that displays my facebook and linkedin page is constantly trying to sell me into being an instant millionnaire or provide me cheap drugs I don’t need. Scams I don’t need, Relationships I do. But, relationships take time and they must develop along a logical course which means actual human interaction over time to produce a trusting relationship.

How to determine whom to trust is going to be difficult without more face to face (video) interactions and physical interactions among social media participants. The social evolution is going to have to clean up the spamming and profiteering it it expects to seriously influence  consumer and business spend.

Thanks for listening. I welcome your comments.

Steve Gordon is a former Apple Employee and Procurement & Logistics Professional who is now Chief Operating Officer of costavoidance.org. Costavoidance is dedicated to

• Develop strategy and implement goals
• Supply Chain and Cost Efficiency
• Project Management
• Interim Executives
• Process Improvement
• Marketing and Sales

Steve
costavoidance.org

Solutions Business Consultants are specialists in cutting costs and expenses without sacrificing employees™. We take an enlightened look at a company’s spend and create innovative cost savings methodologies which bring money to your bottom line! Many of our services can be enjoyed on a contingency basis – based on our success!

Customer Service – Your Secret Weapon

One of my hobbies is home remodeling which brings me in contact with a myriad of building supply stores. Recently, I had some floor tiling questions – not only did the salesperson take me into a room and actually demonstrate what I needed to do, he called me a few days later to make sure I had no other problems. A few days later, I went into another location of the same chain and bought an expensive decorative tile and a couple of hand tools. The cashier bagged them all together. I asked her to wrap the tile up separately to prevent damage – she told me that there was no way the tile could be scratched or broken and handed me the bag. I, of course, took the decorative tile out, triple wrapped it and told the clerk that tile is as breakable and scratchable as glass.

My point is, in most businesses, it is your front line clerks, salespeople, customer service reps, accounting and billing personnel, the receptionist, the delivery guy, etc. who can make or break your business. Common sense is not doled out evenly among your employee population and you should have training, policy and procedures in place to ensure your customers are happy and ready to do business with you again. Your strategy should also include monitoring, secret shoppers and active feedback.

Solutions can help put the emphasis on service back into your organization thus reducing customer migration, improving retention, gaining referrals and loyalty. In today’s tough market with limited customers and funds, there is no better bang for the buck than focusing your staff’s effort on customer service excellence.

What’s in it for me?

I have had numerous requests asking “What can Solutions Business Consultants do for my business” In response, I have prepared a brief summary of what we do. If you learn anything from this post, it should be that we offer a complimentary initial consultation – let’s talk and discuss your issues… I have been known to successfully solve a problem or two on the phone call and if our conversation leads to an engagement or referral then we have a win-win situation we both can be proud of.

Businesses exist in a state of flux depending on 1) market conditions, 2) goals/objectives  of the company and the 3) internal and external processes the company employs to operate.

Business inefficiencies occur when #1, 2 and 3 are out of sync. My job is to help businesses redefine and understand the current market, modify goals and objectives to meet the challenges of the current market and then align the company’s processes making them more relevant and efficient.

To better understand the aforementioned explanation, I am listing recent categories of consulting business that I have completed. This should not be viewed as a list of services because every business is different and I will tailor my approach and execution dependent on your needs.

Business Development/Customer Intelligence: I assist businesses in understanding who their ideal customer is. Not all customers are born equal and profitability is key – minimum volume generation, product mix, sales/service support and infrastructure requirements all have to examined and possibly modified. Once the ideal customer is defined, it makes it much easier to focus efforts on new customer recruitment and proper servicing of existing customers. I show companies how to leverage this information to then go out into the field and develop new customers.

Cost Reduction/Expenditure Management: I assist companies in tackling and bringing their expenditures under proper management.  Expense control, vendor selection and negotiation, bid processes, travel policies and an intensive look at purchasing always results in a stronger organization and bottom line savings. Lenders and investor/shareholders alike are impressed with the results.

Website Analysis/Logic/Design and Search Engine Optimization: I assist companies in taking a customer-point-of-view analysis of their existing or proposed web-site focusing on simplicity of navigation, ease-of-use, goal maximization and sales effectiveness. Additionally, I focus on low-cost, no-cost methods of promoting your web site using social media, podcasts, key word/phrase selection, promotion and research tools.

Business Processes: I assist companies in tweaking their infrastructure processes to maximize staff utilization, customer experience, defining goals and objectives, creating business policies, correcting bad or faulty operations and more. . .

The best part about what I do is the diversity of the challenges- I have helped small companies, large companies, small projects, multi-departmental software implementation – the variety is endless, fun and productive. As always I look forward to our initial complementary consultation. Call me at 865-356-3575 or email me at steve@costavoidance.org

Accountability can save you a fortune

In a recent analysis of a 1500 person company, I found that lack of accountability in project execution attributed to the following:

1) Millions of dollars wasted via failed projects.

2) Creating a culture where there were no consequences (corrective or otherwise) for failure. Employees leading failed projects actually received undeserved promotions and other accolades because senior management did not closely monitor project successes and failures. Employees assigned new projects were aware of this lack of follow-up and had no external forces motivating them to complete projects in a timely or successful manner

3) Best practices were not codified which resulted in departments repeating failed steps and not taking advantage of process improvement.

4) Several company departments became known company-wide as a roadblock for getting things done. Their failures have put the company at risk for continued business operations and have crippled crm and inventory systems.

5) This company is a private stock company so lack of accountability places the board of directors at risk for shareholder suits.

It should be noted that repeated issues of failed accountability is not unique to this company. Many companies face this internal cancer. However, by implementing a few positive steps, accountability and oversight can be brought back into the mainstream of company operations. Below are a few thoughts on implementing a system of accountability.

1) Whether it is internal development of software, the modification of off-the-shelf software or mods to existing software, basic purchasing methodology has to be brought into the decision-making process. Here are a few questions that should be asked:  a) What is the return on investment?; b) Is there an easier way to achieve the goal of the project that could employ low-tech, or no-tech solutions? c) Can a third party solution be used rather than hiring contractors or using internal employees? d) Does the project conform to corporate goals?  Of more importance is the involvement of purchasing to perform due diligence, competition and ultimately make the purchasing decision. Absolutely, the last thing you should ever allow is the ability of corporate department to make independent purchasing decisions. I could reel off numerous horror stories if you don’t believe me – the short story is that the key to any good purchasing decision is independent oversight. A corporate department such as IT is incapable of providing their own oversight – blame it on the fact that we are all subject ot human failings. For larger projects, not only should purchasing be brought in but I would involve the CFO and, more importantly, the board of directors. Accountability starts at the top and placing emphasis on doing a good job sets the tone for the successful company.

Steve

Don’t wait and miss your opportunity

Lately there has been a pleathora of knee jerk reaction to the “poor economy” resulting in companies such as IBM, Sprint, Jewelry Television, and others  to commit mass layoffs of their workforce. But, the need to cut payroll by 500 or 5000 employees does not occur overnight. And the “economy” cannot be blamed entirely for the panic dance that is taking place.

Nothing makes me sicker than to see a company try to fix things by misusing employing termination. Why? Because bulk terminations are lazy:  they offer only a temporary cost savings measure, severely damage morale, cause negative publicity,  erode public confidence and most of all, they fail to fix the underlying corporate issues.

The positive benefit about our current economic situation are that companies are being forced to look to improve themselves from within. These progressive firms realize that a wait and see attitude will most likely lead them into serious financial difficulties in the future. Many companies are now taking a serious look at bringing in business consultants to take an independent look at the status quo. Oftentimes, outsiders can easily identify low hanging fruit such as high supplier costs, departments working at cross purposes, outdated sales techniques and poorly defined job duties. Rarely, do we find tens or hundreds or thousands of employees who are the root cause of a companies woes; most often we find it is bad communication and poor processes that have been allowed to infect a company for months creating the perfect storm for failure.

Don’t wait and miss your opportunity to spend a few dollars in correcting today’s business problems. Start small and focus on documenting and fixing specific problems. Six months from now, you can be the hero and your employees can benefit from growth and stability instead of being victimized by needless mass layoffs.

Steve

Responsible Travel Policy

If you review or approve travel for your company, chances are you have seen it all. Many of our clients have had similar issues with wasteful trips and requests for reimbursement that are abusive. One would think that most employees who travel would have the good common sense not to bite the hand that feeds them. However, in all fairness, sometimes you just have to spell it out in black or white. That’s why a comprehensive travel policy is a must to set proper expectations for your traveling employees.

Here are some points that should be covered. 

1) Set up an approval process that requires a superior’s approval for any travel and a VP approval at $1000

2) All expenditures should conform to IRS requirements for documentation.

3) Where possible, the company should negotiate a blanket contract with airlines, hotel chains and rental car companies.

4) Meals should be limited to a specific dollar amount, disallow liquor and limit tip to 15% and any reimbursement should require the detailed receipt showing exactly what was purchased.

5) Require lowest fare adoption and 14 or 21 day advance notice of travel – exceptions should go to a Senior VP to dissuade poor planning.

6) Larger companies should use a dedicated person to make all travel arrangements or use a web-based system that allows for your policies to be programmed in to the system.

7) Hotel room nights should have a maximum $ per night limit depending on the market.

Rental cars should be disallowed unless it can be demonstrated that the cost plus hotel parking and gas would be less than airport shuttles and taxis.

9) Family members/friends should not be allowed to travel with the employee on business trips – this just encourages company paid vacations and distracts from the business purpose of the trip.

10) Phone on planes should never be used and hotel phones should not be used if the employee has a cell phone.

11) There should be a list of things that are not going to be reimbursed such as dry cleaning for stays less than 5 days, valet parking, personal and sundry items, etc.

For a comprehensive travel analysis, policy creation, approval systems or other expense policy needs, contact Steve at Solutions Business Consultants steve@costavoidance.org

Use the current economy to your advantage

The current business downturn can be used to your advantage in analyzing your vendor pool and encouraging greater competition.
Take a look at your procurement processes. To begin, generate a quick flow chart on how goods and services are being ordered.
1) Do you have a procurement card system – how is it structured, monitored and audited?
2) Is 85% of purchases competed and approved in a hierarchial manner and does the procurement department have veto power? Are all big ticket items, $5,000 or more competed on a regular basis among seven or more suppliers and approved by the procurement department.
3) Is there an ROI generated on all capital purchases.
4) What percentage of purchases are turned down.
5) Is expense reimbursement conducted according to a defined company policy and IRS rules.
6)Do executives utilize their credit cards in a responsible manner (see #5 above)

If you no on any of the above questions, you have (or will have) problems in the future. There are additional questions which can also be asked and independent oversight needed -  I recommend both an independent committee (audit committee) as well as an outside consultant.

The independent committee allows financially minded people to vaidate the company is not only focusing on their stated strategic direction but also is being fiscally responsible doing it. The consultant allows an independent perspective unbound by internal business politics or the “boss” pressure.

Take advantage of the current economy by validating spend and resources. In the long-term it will be the wisest investment you can make.

Solutions Business Consultant specializes in maximizing the efficiency of your company. Fees are reasonable and are based on your specific goals. Send us an email today at steve@costavoidance.org.