Dancey Growth Group

Mismanagement

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Keeping Your Briefcase Full

Keeping Your Briefcase Full Image

My grandfather recently told me the story of a consulting engagement he had in 1972. My grandmother asked him, “What makes you qualified to be a consultant?” His answer? “I charge a lot and I come from out of town!”

After we finished chuckling, I thought about the mindset of hiring an outside professional to come into an organization. Are price and distance really the determining factors?

Price:

I’ve heard from multiple professionals in the industry who say that charging enough is critical as proof of value. The immediate thought when someone sees a low price is to question the value of the service they are getting. (I learned as much as I increased my rates trifold in the first six months).

In addition, people continually underestimate their own expertise. For many industries, there are no number of certifications and letters after your name that will convince a small or medium sized business owner that you are an authority worth hiring. More often, the social proof of referrals, testimonials, case studies, and fit in an organization will be the deciding aspect.

Distance:

When I think distance, what I really hear is ‘outside of the organization’. I have been on both sides of the coin-inside when an outside professional has come in, and outside as the ‘experienced professional’.

In both cases, communication is the key to success. Institutional buy-in, cooperation, and a true desire to teach or learn are the means to accomplishment in the organization. When all parties understand their roles, how the outside presence will affect them, and can see what the path forward looks like, then they can fruitfully move forward under the baseline expectations.

My grandfather also told me he brought an expensive leather briefcase to his gig. He said it was because successful people carried briefcases, and it was a signal that he was for real. Of course, it was completely empty. My advice though, is that you’d better be careful-any professional will be exposed in the long run if their metaphorical briefcase is empty.

Sorry Pop!

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Great Expectations

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The other day I told my daughter to finish eating and brush her teeth. At the same time I told my son to put his shoes on and bring the trash bin back in from the street. I was proud in how they listened so quickly, until I realized what had actually happened. After she brushed her teeth, she sat back down to finish eating. And after he ran outside to get the trash bin, he proceeded to put his shoes on.

Were they wrong? No! I failed to set the right expectations for them, and they acted accordingly.

The key to success in operational initiatives is setting and managing expectations.

This flows in many directions:
1. Management to employees
2. Internal staff to external vendors
3. Internal staff to external customers
4. Department to department

Management to Employees

This is the most easily understood flow, but often the most miscommunicated. A good boss or manager will set the metrics that are important to the company and the employee, and use incentives to hold the employee accountable to monitor and act on those metrics. They will also meet periodically to check in on these metrics and troubleshoot issues. Conversely, in a good work environment, the employee will be empowered to share valued feedback with the manager.

Internal Staff to External Vendors

I’ve learned from experience that “if it is not written down, it doesn’t exist”. When you are purchasing goods or services, assume nothing. Over-communicate to the vendor (via email, purchase order, or RFP) to guarantee your needs on delivery deadlines, shipping method, lead-time, product quality, pricing, design requirements, etc. are met. If the vendor doesn’t have a confirmation process, create one. Ideally every vendor is a perfectly oiled machine, but be sure to keep your own can of oil around if they start squeaking.

Internal Staff to External Customer

This is the most crucial to the success of your business. Never take for granted any customer knowledge. At all phases – quoting, sale, delivery, post-delivery customer service – anticipating what expectations your customers have will allow you to confirm or redirect to smooth their experience. Nothing leaves a worse taste in the mouths of customers than disappointment due to unmanaged expectations.

Department to Department

Frequently overlooked, this is vital to company success. Many departments simply don’t understand what each other does, let alone why they do it. Sales will follow no rules, Finance will have too may rules. Marketing never gets back to you, and Customer Service won’t pick up the phone. Departments, in order to most productively work together, must have an understanding of the what and the why, and continue to adjust expectations back and forth as required. Making interdepartmental transparency a priority will prove valuable for the growth of your company.

In interdepartmental projects, the operational role is often project manager. Ensuring that all participants understand their specific role, the timing of deadlines, and how each portion triggers the next step in the process is crucial. And even more important is that each participant understands the reason why and how their component interacts with the next, and the importance of the finished product as significant to achieving the overarching company goal.

While no experience will perfectly match expectations, even incremental corrections can vastly improve the inner workings of any company.

Now, if I could just apply these principles to my children and their inter-sibling squabbles…

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Market Basket’s Super Mistake: Forgetting about Employees and Customers

Market Basket Image

The supermarket chain Market Basket is in a battle: between rival family members, between the new management and employees, and between the new management and its once loyal customers. (See a quick recap here.)

Families disagreeing with each other and taking sides against one another always happens, but rarely so publicly.

This time, however, the situation blew up, and Market Basket ownership risked its very loyal customer base and future profits. How?

  1. They underestimated company culture and loyalty. The new board miscalculated, perhaps irreparably. They did not realize how strong the ties are between the employees and their leader, Arthur T. Demoulas. It does not matter if new management thought he was spending frivolously. It does not matter if they wanted their own CEO to represent the new strategy of the board. What matters is the reaction of the employees and the customers.
  2. They failed horribly at Change Management. They did not have risk management or good communication plans in place for implementing the decision. Employee protests and boycotts have resulted in empty shelves, unloaded deliveries, and plummeting revenue, up to 90% in some stores (See story here). The employees love Arthur T., and their loyalty is rewarded with above average wages and robust benefits packages. It does not matter if those wages and benefits were representative of a sustainable financial strategy, or not. It does not matter if the new management issues a statement urging employees back to work. New management missed the boat on earning the trust of the employee base.
  3. They missed the boat on PR and public sentiment. The customer interaction has added another very powerful wrinkle here. Very rarely can a consumer have such an immediate and definitive impact on an ‘unjust’ corporate action. Usually, we watch and listen from afar while offering thoughts to laid off workers or feeling dismay at blatant displays of corporate irresponsibility. In this case, customers loyal to the idea of Market Basket hopped on board with the employees to fight the (perceived) good fight. We honk while driving by a protest in front of an empty parking lot. We take our business to other stores, as those competitors lick their chops.

The perception is reality in this case. The unusual us vs. them story here links together the entire corporate hierarchy: from CEO to stock person. The perception is of a well-liked leader ruthlessly fired by the rival family member who wrestled control away. The loyal employees stood behind him, with him, boycotting their work, risking their livelihood, all for the perception of the ‘right thing’. (See story here).

The counter story is of a family finally regaining control so many years after it had been taken from them, realizing the company’s financials were not on solid ground, and seeking to right the ship with their own leader.

Which story is the reality? It does not matter. The perception of the vengeful board, of the wronged leader, of the courageously loyal employee, yields the customer solidarity that we are seeing. And when perception and loyalty and public sentiment get tangled together? A company’s reputation is in ruins, revenues nosedive, and customers are lost, possibly forever.

The new board is currently reviewing an offer from Arthur T. Demoulas to purchase the company. But will it matter? How do you think Market Basket could have handled this differently?