Leadership

Seth Godin wrote a very interesting book titled “Purple Cow.” The name came from an experience he had while driving his family on a vacation in rural France. Being from a large city the family was impressed to see the picturesque pastures full of cows. At first this was an attention getter but after about 20 minutes, he noticed that the view became commonplace and no longer commanded their awareness. What he realized is that no cow stood out, they all were about the same drawing no interest. He thought that if suddenly there would be a purple cow in a pasture, it would draw everyone’s attention since it would be unique. His point in the book is that in today’s business world we all look very much alike to customers. (This is especially true for contractors.)

Because we are so similar, customers become numb to our messages of doing quality work, on-time, etc. He suggests that the business that can be a purple cow will standout and draw the customers focus and possibly business. With the challenges of today’s economic downturn, how are you leading your company to stand out from the rest? What is your Purple Cow strategy?

Customer Focused

As the new year is starting resolutions, goals and objectives are being created. While most resolutions often do not come to completion, I have one goal to suggest for this new year. Determine what it takes to gain and keep loyal customers.

This may sound pie-in-the-sky or so obvious as to not warrant a second thought, but wait and hear (read) me out.



First of all, I am assuming that everyone knows the difference between satisfied customers and loyal ones and it is the latter that we want, right? Satisfied customers are OK with what we do, but may just as likely go with another contractor for the next project. Loyal customers will give us the next job without even a debate. Which do you have?



We measure loyal customers by repeat business.

We measure satisfied customers by the ones we lost.



Look at 2008, how much work came from the same customers? What percent of that customers’ total work in your market did you get? If not 100% - why not?



How many projects did you bid on and not get? Unless the job was delayed or cancelled, a possibility in today’s economy, why didn’t you get it? Those are not loyal customers. No matter the reason for the lost job - not lowest bid, it went to a family member instead, or a project manager had a grudge with you - these are not loyal customers. How many customers do you have that are not loyal? How many do you want?



If all your customers are 100% loyal to you, skip this section and read about engaging employees, if not, consider these basic principles about gaining and keeping loyal customers:



Having and keeping loyal customers must be the purpose for the company to exist. It must be the mission, vision and creed of the company. It must be in the blood of every (yes every) manager, supervisor and employee. Anything less results in less than 100% loyal customers.

• Making money is not the purpose for the company but comes as the result of having loyal customers and running an efficient operation.
• Being the largest, biggest or number one company in the market, city or world is not the purpose of the company, but can come from having loyal customers.

What is your company’s purpose/mission/vision? If you don’t have one, that says a lot about your leadership or the lack there of. If you do have one, does it have “loyalty” in it? If not, what is your goal? Do you want loyal customers, what is your strategy for getting them?



Jeffrey Gitomer (1) says, “Loyalty must be given before it is received.”



Your customers will never be treated better than your employees are treated. If you do not have loyal employees you will struggle to get and keep loyal customers.



Loyalty is not just an attitude but is also a process. In a customer research report on customer expectations (2), Bruce D. Temkin determined that customers want their interactions with companies to be: useful, easy and enjoyable.



To be useful, one must make sure to deliver the project on time, within or under the budget and with quality work.



To be easy to use one must make sure the key processes and systems are working and designed with the user (AKA customer) in mind.



To be enjoyable, it must be useful and easy and done by employees that care about the customer. Change orders are usually not enjoyable but can be if they save the customer time and/or money. Knowing and calling people by their names makes life more enjoyable. Doing the little things that show one cares about doing the job right adds to the enjoyment.



Mr. Gitomer claims, “the one element that is most important is great service. Memorable service. Loyalty-based service. And that flies in the face of satisfaction (the lowest level of acceptable service). Giving great service is an integral part of the loyalty process and it’s a fundamental part of ‘giving loyalty before loyalty is received.’”



Here are a few ideas on how to improve your service levels:

1. List all reasons that customers call you for work. These are the things you do right.
2. List all barriers that you place in front of your customer. (Automated phone messaging system with lots of numbers to push before speaking to a human being, voicemail, no communications on job status, and a standard invoice that doesn’t have the information the customer needs.) These are things you are not doing right.
3. Take your two lists and with a cross-functional team including senior management and front-line people determine ways to improve your services and how to make it easier to do business with you. Record everything.
4. Prioritize your ideas by validating them with your customers. Start implementing the top priorities. You may need to create standard processes so everyone does it right the same way. You probably will need training to ensure that everyone can do it right and knows why.
5. Don’t announce these actions to brag as you are implementing them. Instead, focus to make sure each improvement is working as intended. Monitor loyalty. If it is good for the customer they will let you know by bragging for you and giving referrals.

All senior managers must support this improvement effort both verbally and visually. Mr. Gitomer states, “If you’re going to evolve from satisfaction to loyalty, it has to be ‘hands on,’ not just ‘words on.’ I wish more companies would add to their mission statement that they’ll be loyal to their employees -- so that their employees would be loyal to their customers -- so that their customers would be loyal to the company.



“That is a loyalty chain. And it doesn’t start with satisfied customers. It starts with senior management understanding that loyalty is a way of life, not just a word. That loyalty starts at home, not at a customer’s place of business.”



(1) Jeffrey Gitomer, #816

(2) “Customer Experience Index, 2008” by Bruce D. Temkin with William Chu and Steven Geller. December 12, 2008.

Employee Focus – Want Engaged Employees?

In today’s weak economy one might conclude that having loyal employees who are engaged in making the company better is an idea of the past. Just like the owners and senior managers of a company who worry about the fate of their company, most employees are worried about if they will have a job throughout 2009. In many cases employees have been told so many different things that trust is at an all time low. A paradox exists: As employees worry more about their job, they actually work less at doing a good job. One would think the opposite would be true. How do you engage your employees?



Harvey Mackay, noted business writer, has a time proven suggestion – say encouraging words to your employees. By encouraging them, Mr. Mackay says the workers will work even harder to excel. He cites research recently done by Personnel Today that found the number one factor for influencing workplace productivity is a positive environment where employees feel appreciated. Two thirds ‘felt a lot more productive when they received recognition for their work.’ The survey reported that 84% of the respondents said they get very frustrated when they don’t feel productive. Most workers want to do a good job and the research found that being recognized for doing it is a strong motivation. Mr. Mackay offers these three tips for praising employees:

“Be sincere. Give praise only where it is due.”

“Praising in public is a good way to raise general morale. Praise loudly, blame softly.” Sadly, somehow this idea has been lost on many construction managers and supervisors.

“Be specific in your praise. Name exactly what it is the employee has worked on and what he or she has accomplished.”

To do these tips successfully I feel a manager needs to go often to see the work being done and needs to know what good work looks like. You won’t see it sitting in the office all day. Employees know when their manager knows what is happening and when he doesn’t. They become more engaged with honest, direct encouragement and praise. This idea isn’t new to most managers, we heard it before. The research confirms that while not new it is still valid. It is still not being done enough, especially in construction. Recognizing employees does not cost a lot of money and pays great dividends – such a deal in today’s business environment.



Source: Like their work? Give praise often by Harvey Mackay, Dec. 2008

Learning Opportunities

You may be interested in attending one of these training seminars by Dennis Sowards:

• Jan. 15, 2009 - Introduction to Lean in Construction, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
  
• Feb. 19, 2009 - Eliminating Treasure Hunts- Applying the 5S’s for Lean Construction – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
  
• March 19, 2009 - Job Planning that Really Works – The Last Planner System, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
  
• April 16 & 23, 2009 - Making Meetings Work for You (must attend both session), – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
  
• May 14, 2009 - Problem Solving Lite (No Carbs) - Getting to the Root Cause, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
  
• Sept. 17, 2009 - Customer Loyalty by Design, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
  
• Oct. 15. 2009 - Introduction to Lean in Service, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy

Contact Dennis Sowards if you want a special workshop exclusively for your company.

Thought for the day

The greatest problem with communication is the illusion that it has been accomplished.

- George Bernard Shaw

For more information about doing the High-Performing Contractor assessment process contact Dennis Sowards at 480-835-1185



PRIVACY STATEMENT: I respect you and your privacy. Your name or e-mail address will never be sold, traded, rented or bartered, or given away - nor will it be used for any other purpose than to communicate with you. Period.



If you find this newsletter helpful, please forward it to anyone you know who will benefit from this information. You may help them improve their company.