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The Difference between Airline Hard and Soft Products

The Difference between Airline Hard and Soft Products » Singapore Airlines

Essentially, an airline’s hard product is the plane itself, and the airline’s soft product is the service, food, and the drinks.

Hard product can also be non-airplane constituents, such as lounge amenities. Consequently, the food and drinks in the lounge is soft product, while airline lounge showers are hard products.

The real differentiation is that hard product is hard to alter (requires construction), while soft product can be changed in 5 min with a phone call. Accordingly, limo service is a soft product for the airline (and a hard product for the limo company, at least as far as the car goes). For airplanes, the actual cost of the hard product is the airplane’s downtime during fit out (often greater than the cost of the hardware being added).

Travel consultant and blogger Ben Schlappig (“Lucky”) provides a rule of thumb:

A first/business class hard product is anything physically attached to the plane, which doesn’t differ from flight to flight. For example, the seat, onboard amenities (shower, bar, etc.), size of the entertainment screen, etc.

A first/business class soft product is anything which can differ from flight to flight. For example, food, drinks, service, amenity kits, etc.

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Posted in Airlines and Airliners

Quotations from Starbucks Founder Howard Schultz’s Book “Pour Your Heart Into It”

Howard Schultz‘s Pour Your Heart Into It touches on the best management and business practices and the techniques that Schultz used to found and lead Starbucks to the international coffee corporation it is today.

Starbucks has become an emblem of the current specialty coffee movement and a “hip” lifestyle. Starbucks coffee bars have opened in small towns and major cities alike, first in America, then around the world.

Starbucks Founder Howard Schultz

“Pour Your Heart Into It” Chapter Titles and Lead Quotations

Starbucks is a international coffee house chain with more than 17,000 stores. Founded in 1971 to roast coffee and sell it straight to drinkers at branded shops, it was only a regional company until Howard Schultz purchased it in 1987.

  • Chapter 1: Imagination, Dreams, and Humble Origins
    “It is only with the heart that one can see rightly. What is essential is invisible to the eye.”
    Antoine de Saint-Exupery in The Little Prince
  • Chapter 2: A Strong Legacy Makes You Sustainable for the Future
    “A hundred times every day I remind myself that my inner and outer life depend on the labors of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received.”
    Albert Einstein
  • Chapter 3: To Italians, Espresso is Like an Aria
    “Some men see things as they are and say ‘Why?’ I dream things that never were, and say ‘Why not?'”
    George Bernard Shaw, often quoted by Robert F. Kennedy
  • Chapter 4: Luck is the Residue of Design
    “Whenever you see a successful business, someone once made a courageous decision.”
    Peter Drucker
  • 'Pour Your Heart Into It' by Howard Schultz (ISBN 0786883561) Chapter 5: Naysayers Never Built a Great Enterprise
    “We judge ourselves by what we feel capable of doing, while others judge us by what we have already done.”
    Henry Wadsworth Longfellow, Kavanagh
  • Chapter 6: The Imprinting of the Company’s Values
    “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”
    Martin Luther King, Jr.
  • Chapter 7: Act Your Dreams with Open Eyes
    “Those who dream by night in the
    dusty recesses of their minds
    Awake to find that all was vanity;But the dreamers of day are dangerous men,
    That they may act their dreams with open
    eyes to make it possible.”
    T. E. Lawrence (of Arabia)
  • Chapter 8: If it Captures Your Imagination, it Will Captivate Others
    “Whatever you can do, or dream you can, … begin it. Boldness has genius, power and magic in it.”
    Johann Wolfgang von Goethe
  • Chapter 9: People are nor a Line Item
    “Wealth is the means and people are the ends. All our material riches will avail us little if we do not use them to expand the opportunities of our people.”
    John F. Kennedy, State of the Union address in January 1962
  • Chapter 10: A Hundred-story Building First Needs a Strong Foundation
    “The builders of visionary companies … concentrate primarily on building an organization—building a ticking clock—rather than on hitting a market just right with a visionary product idea.”
    Jim C. Collins, Built to Last
  • Chapter 11: Don’t Be Threatened by People Smarter Than You
    “The best executive is the one who has sense enough to pick good men [and women] to do what he wants done, and self-restraint enough to keep from meddling with them while they do it.”
    Theodore Roosevelt
  • Chapter 12: The Value of Dogmatism and Flexibility
    “The only sacred cow in an organization should be its basic philosophy of doing business.”
    Thomas J. Watson, Jr. “A Business and Its Beliefs,” quoted in Built to Last

How Starbucks Became Successful

  • Chapter 13: Wall Street Measures a Company’s Price, Not Its Value
    “There are only two guidelines. One, what’s in the long-term best interests of the enterprise and its stakeholders, supplemented by the dominant concern of doing what’s right.”
    Robert D. Haas, President, Levi Strauss & Co.
  • Chapter 14: As Long as You’re Reinventing, How About Reinventing Yourself?
    “The difference between great and average or lousy in any job is, mostly, having the imagination and zeal to re-create yourself daily.”
    Tom Peters, The Pursuit of Wow!
  • Chapter 15: Don’t Let the Entrepreneur Get in the Way of the Enterprising Spirit
    “No organizational regeneration, no national industrial renaissance can take place without individual acts of courage.”
    Harvey A. Hornstein, Managerial Courage
  • Chapter 16: Seek to Renew Yourself Even When You’re Hitting Home Runs
    “To stay ahead, always have your next idea waiting in the wings.”
    Rosabeth Moss Kanter
  • Chapter 17: Crisis of Prices, Crisis of Values
    “It is by presence of mind in untried emergencies that the native metal of a man is tested.”
    James Russell Lowell, “Abraham Lincoln,” in North American Review, ]anuary 1864
  • Chapter 18: The Best Way to Build a Brand is One Person at a Time
    “What comes from the heart, goes to the heart.”
    Samuel Taylor Coleridge, Table Talk
  • Chapter 19: Twenty Million New Customers are Worth Taking a Risk For
    “Security is mostly superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure or nothing.”
    Helen Keller, The Open Door
  • Chapter 20: You Can Grow B1g and Stay Small
    “The fundamental task is to achieve smallness within large organization.”
    E. F. Schumacher, Small is Beautiful: Economics as If People Mattered
  • Chapter 21: How Socially Responsible Can a Company Be?
    “The evidence seems clear that those businesses which actively serve their many constituencies in creative, morally thoughtful ways also, over the long run, serve their shareholders best. Companies do, in fact, do well by doing good.”
    Norman Lear, Founder of the Business Enterprise Trust, Quoted in David Bollier’s Aiming Higher
  • Chapter 22: How Not to Be a Cookie-cutter Chain
    “Art is an adventure into an unknown world, which can be explored only by those willing to take risks.”
    Mark Rothko, In The New York Times, June 13, 1943
  • Chapter 23: When They Tell You to Focus, Don’t Get Myopic
    “If you can keep your head when all about you
    Are losing theirs and blaming it on you,
    If you can trust yourself when all men doubt you,
    But make allowance for their doubting too; …
    If you can fill the unforgiving minute
    With sixty seconds’ worth of distance run,
    Yours is the Earth and everything that’s in it,
    And—which is more—you’ll be a Man, my son!”
    Rudyard Kipling, “If”
  • Chapter 24: Lead with Your Heart
    “Leadership is discovering the company’s destiny and having the courage to follow it. … Companies that endure have a noble purpose.”
    Joe Jaworski of the Organizational Learning Center at Massachusetts Institute of Technology (MIT)

Starbucks Founder Howard Schultz's 'Pour Your Heart Into It'

Selections from Howard Schultz’s Analysis of Starbucks’ Spectacular Success

Schultz sponsored Starbucks as the “third place,” distinctive from home and work. Many of its shops have comfortable padded chairs and sofas. In recent years they offer free Wi-Fi for customers who want Internet access for their computers. Some Starbucks are in shopping malls, bookstores, supermarkets, college campuses, and airports. Baristas mix a range of coffee drinks.

  • “When you really believe—in yourself, in your dream—you just have to do everything you possibly can to take control and make your vision a reality. No great achievement happens by luck.”
    Howard Schultz
  • “I believe that the best way for an entrepreneur to maintain control is by performing well and pleasing shareholders even if his or her stake is below 50 percent. That risk is far preferable to the danger of heavy debt, which can limit the possibilities for future growth and innovation.”
    Howard Schultz
  • “It’s one thing to dream, but when the moment is right, you’ve got to be willing to leave what’s familiar and go out to find your own sound.”
    Howard Schultz
  • “Whatever your culture, your values, your guiding principles, you have to take steps to inculcate them in the organization early in its life so that they can guide every decision, every hire, every strategic objective you set.”
    Howard Schultz
  • “Every step of the way, I made a point to underpromise and overdeliver. In the long run, that’s the only way to ensure security in any job.”
    Howard Schultz
  • “If you want to build a great enterprise, you have to have the courage to dream great dreams. If you dream small dreams, you may succeed in building something small. For many people, that is enough. But if you want to achieve widespread impact and lasting value, be bold.”
    Howard Schultz
  • 'Onward How Starbucks Fought for Its Life' by Howard Schultz (ISBN 1609613821) “Treat people like family, and they will be loyal and give their all. Stand by people, and they will stand by you. It’s the oldest formula in business, one that is second nature to many family-run firms. Yet in the late 1980s, it seemed to be forgotten.”
    Howard Schultz
  • “While Wall Street has taught me a lot, its most enduring lesson is an understanding of just how artificial a stock price is. It’s all too easy to regard it as the true value of your company, and even the value of yourself.”
    Howard Schultz
  • “At a certain stage in a company’s development, an entrepreneur has to develop into a professional manager. That often goes against the grain.”
    Howard Schultz
  • “Whatever you do, don’t play it safe. Don’t do things the way they’ve always been done. Don’t try to fit the system. If you do what’s expected of you, you’ll never accomplish more than others expect.”
    Howard Schultz

The Recipe to Starbucks Success

The name Starbucks is borrowed from the first mate of the whaling ship in the Herman Melville novel Moby Dick. The logo for Starbucks is also nautical, a siren who in the original image had a mermaid’s tail.

The first Starbucks location opened in the United States, in Pike Place, Seattle in 1971 and the company developed globally with a brand recognition that has been compared to the longer standing, brand-distinctive McDonald’s Fast-food Empire.

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Posted in Business and Strategy Leaders and Innovators

Aegir Bryggeri Pub & Microbrewery in Flam, Norway

Aegir Bryggeri Pub & Microbrewery in Flam, Norway

Deep inside the world’s longest (204 km) and deepest (approx. 1,300 meters or 4,300 feet) Sognefjorden—“King of the fjords”—valley, you’ll find tranquil Flam. This beautiful country town nuzzles amongst mountains as high as the fjord is deep. Flam began to draw visiting cruise ships as long ago as the 19th century when visitors firstly began to travel up the idyllic and dramatic Flam valley.

Aegir Bryggeri Pub & Microbrewery in Flam, Norway

Flam is home to the Aegir microbrewery is named after the giant who brewed beer for the gods. Their bar is themed like an old Viking hall, with wooden carvings and chairs made from stumps.

Aegir Bryggeri Pub & Microbrewery in Flam, Norway Aegir Bryggeri and Pub from 2007 is a microbrewery, built in Norse Viking style where they produce a wide selection of fine beers for sale locally and further distribution.

Visit the brewery with slate floor, driftwood walls, dragon heads, and 9 meters high fire from floor to ceiling. In a short time, they have received awards and prizes for their good beers.

Aegir Bryggeri Pub & Microbrewery in Flam, Norway

Aegir Bryggeri was awarded “Brewpub of the Year” three years in a row! Try their beers and light meals in the brewery.

Aegir Bryggeri Pub & Microbrewery in Flam, Norway

The Aegir Bryggeri BrewPub building at Flamsbrygga is now one of Flam’s biggest attractions. The building style is inspired by Norse mythology, with the exterior reminiscent of a stave church. Inside are driftwood walls, dragon heads and a feature fireplace that radiates warmth and coziness, with a chimney extending 9 m through the middle of both stories.

Aegir Bryggeri Pub & Microbrewery in Flam, Norway

The port of Flam, with its newly constructed dockside amenities, welcomes all types of cruise ships, regardless of length, height or depth. The harbor is well-known for its remarkable infrastructure and good communication routes via both road and rail to Bergen and Oslo.

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Posted in Music, Arts, and Culture Travels and Journeys

Small Remedies Reap Big Rewards

When is a dirty bathroom a broken window? This question could govern your success or failure. Answer that question properly—and use that answer as a guiding light—and your business could dominate its competition forever. Ignore the answer, and you will soon reprove your business to failure.

The “broken windows” philosophy was first set forth by criminologists James Q. Wilson and George L. Kelling, deliberating on petty criminal acts like graffiti, purse snatching, or jay walking, and how they can lead to larger crimes such as murder. Something as small as a broken window sends a signal to those who pass by every day. That means more serious breaches—theft, defacement, violent crime—might be overlooked in this area.

If a window in a building is broken and left unrepaired, all other windows will soon be broken since people perceive that the owner of this building and the community around it don’t care if this window is broken: They have given up; disorder reigns here. Do as you will, because nobody cares.

Broken Windows in Business

Pay attention to every detail in leadership That same theory applies to the world of business. If the restroom is out of toilet paper, it gestures that management isn’t paying attention to the needs of its people. Perceptions are a vital part of every business, and if a retailer, service provider, or company sends signals that its approach is lackadaisical, its methods halfhearted, and its execution indifferent, the business could suffer severe—and in some cases, irreparable-losses.

When broken windows are ignored, fatal consequences can result. Small things make a huge difference. A messy reception area might lead customers to believe that the company doesn’t care about cleanliness or quality. We all bear some responsibility to stand up for what we want and have every right to expect from a company to which we give our hard-earned money. In a capitalist society, we assume that a company will do its best to fulfill the desires of its customers. If the company sees sales slipping but doesn’t have data from consumers as to what made them decrease their spending, the company will not know what to fix.

Still, businesses that don’t notice and repair their broken windows should not simply be forgiven because their consumers don’t make a fuss. Leaders are responsible to tend their own house—and the time to repair broken windows is the minute they occur.

Prevent Broken Windows

Since small things can snowball into large problems, smart owners prevent broken windows at—or before—the first sign of trouble.

In a business, the broken windows can be literal or metaphorical. Sometimes a broken window really is a broken window, and a new pane of glass needs to be installed quickly. However, most of the time, broken windows are the little details, the tiny flaws, the overlooked minutiae that signal much larger problems either already in place or about to become reality.

Companies that fail to notice and repair their broken windows suffer greatly. Those that attend to every potentially broken window win.

People want to feel that the businesses that they work for and those they buy from care about what they want. Consumers are looking for businesses that anticipate and fulfill their needs and do so in a way that makes it clear the business understands the consumers’ needs or wants and is doing its best to see them satisfied.

Broken windows indicate to the consumer that the business doesn’t care—either that it is so poorly run it can’t possibly keep up with its obligations, or that it has become so oversized and arrogant that it no longer cares about its core consumer. Either of these impressions can be deadly.

Tiny details—the smaller, the more important—can make a big difference in success or failure. A broken window can be a sloppy counter, poorly located sale item, randomly organized menu, or an employee with a bad attitude. It can be physical, like a flaking paint job, or symbolic, like a policy that requires consumers to pay for customer service.

The Broken Windows Pledge

Small Remedies Reap Big Rewards Broken windows are everywhere, except at the best businesses. I invite you to take the Broken Windows for Business Pledge. It’s a serious statement outlining the tenets of the broken windows for business theory.

  • You can pay attention to every detail.
  • You can correct any broken windows I find in my business, and you can do so immediately, with no hesitation.
  • You can screen, hire, train, and supervise my people to notice and correct broken windows as soon as possible.
  • You can treat each customer like the only customer my business has. You can be on constant vigil for signs of Broken Windows Hubris and never assume my business is invulnerable.
  • You can mystery shop my own business to discover broken windows.
  • You can make sure every customer who encounters my business is met with courtesy, efficiency, and a smile.
  • You can exceed customer expectations.
  • You can make a positive first impression and assume that every impression is a first impression.
  • You can make sure that my online and telephone customer service reps solve a customer’s problem perfectly the first time.
  • You can be obsessive and compulsive when it comes to my business.

If you live up to the promises in the pledge and make them second nature, you will discover your business—and your life—running more smoothly than ever before. You will never look at a broken window-or an unbroken one—the same way again.

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Posted in Management and Leadership Philosophy and Wisdom

How to Foresee Vision-Related Conflicts in Your Company’s Strategic Innovation Framework

How do you uphold growth and profitability in an age in which rivals quickly erode most any competitive advantage? One option is to initiate entirely new businesses.

Consider how some companies have redefined their customer, the value offered, and the delivery method—a process we call strategic innovation:

  • In 1996, General Motors formed a new business unit, OnStar, to commercialize an integrated information, safety, and communications system.
  • In 2001, Procter & Gamble launched Tremor, a new marketing service for other companies.
  • In 2003, the Walt Disney Company introduced Moviebeam, a wireless, no-hassle, in home video rental store.

How to Foresee Vision-Related Conflicts in Your Company's Strategic Innovation Framework If you follow several such innovation stories—each a tale of a new businesses (New_Company) within established and successful organization (Core_Parent_Company). You will be less interested in where the path-breaking ideas came from than how companies managed the process of going from idea to profitability. Nurturing creativity within an organization usually merits a great deal of attention, but the need for creativity is high only at the beginning of New_Company’s life. Once a business plan is in place, the need for creativity begins to decay rapidly.

An entirely new approach is needed—one that emphasizes neither the creativity that inspires New_Company’s launch nor the discipline that Core_Parent_Company demands to deliver bottom-line results.

New_Company Faces Three Distinct Challenges in Its Journey from Idea to Profitability

  • Forgetting: New_Company’s business model is invariably different from Core_Parent_Company’s model. The answers to the most fundamental business questions—Who is the customer? What value do we offer? How do we deliver it?—are intensely different. The essence of the forgetting challenge is ensuring that Core_Parent_Company’s success formula is not imported to New_Company.
  • Borrowing: New_Company’s biggest advantage over its competition is the wealth of resources and assets within Core_Parent_Company. The essence of the borrowing challenge is gaining access to these resources, and doing so in a way that does not damage Core_Parent_Company’s own commitment to excellence.
  • Learning: New_Company’s business is highly uncertain. It must methodically resolve the specific unknowns within its approach as quickly as possible, and zero in on the best possible approach. Learning requires an entirely different approach to planning.

All three challenges obviously create tensions. To forget, New_Company must be distinct from Core_Parent_Company. At the same time, to borrow, New_Company must be linked to Core_Parent_Company.

At points of interaction, stress inherently arises unswervingly because of the differences in business models, values, styles, and priorities. Learning also leads to stress, because it requires an analytical discipline—much different from the operational discipline of execution and performance.

These are the types of tensions that can be healthy for New_Company, and when a corporation achieves them well, the journey from idea to profitability is a smooth one.

But is it worth the risk? Contemplate the risk of the alternative—sticking to the knitting—a choice that inevitably leads to decay. Without growth, CEOs lose jobs, employees stagnate, organizations become stale, and competitiveness languishes. Strategic innovation, on the other hand, can deliver breakthrough growth and generate new life-cycle curves. It enables companies to stay ahead of change by creating, growing, and profiting from new business models.

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Posted in Management and Leadership

The Gift of Customer Loyalty Begins with Employee Loyalty

Customer Loyalty Flourishes

Employee and customer loyalty are one in the same. The gift of customer loyalty begins with employee loyalty. Nurtured and directed employee loyalty will create worlds of energy, inoculating against the apathy and distrust endemic in many organizations. It can also result in synergy, the energy-laden connection that emerges in a group channeling momentum toward the common good. Trust, added to the mix, instills confidence, which helps employee loyalty grow, and customer loyalty flourish.

Employee & Customer Loyalty Case Study: Sam Walton and Wal-Mart

At the time of Sam Walton’s death in 1992, Wal-Mart had annual sales of $44 billion. One out of every five retail items purchased in America came from a Wal-Mart store. His personal fortune exceeded $23 billion. Sam once said: “There is only one boss: the customer. And he can fire everybody, from the chairman on down, simply by spending his money somewhere else.” When asked how Wal-Mart was able to grow so fast, Sam replied, “The answer is always the same-people. Not only the right kind, but interested, dedicated, enthusiastic, and loyal people. That makes our company exceptional.”

Southwest Airlines Customer Service

Employee & Customer Loyalty Case Study: Herb Kelleher and Southwest Airlines

Southwest Airlines devotes a considerable budget to celebrating its employees with parties, banquets, gifts, birthday cards and outings. Accountants have told Herb Kelleher how much money he could save if he didn’t budget for these activities. His reply: “Southwest Airlines has the fewest customer complaints in the industry. How much is that worth?”

Kelleher believes that the front office is there to support the employees. He said: “Southwest has its customers, the passengers; and I have my customers, the airline’s employees. If the passengers aren’t satisfied, they won’t fly with us. If the employees aren’t satisfied, they won’t provide the product we need.” Southwest employees make flying a fun experience. They try to surprise and delight the customers.

Employee & Customer Loyalty Case Study: Nordstrom Rules

Nordstrom leaders also inspire employees with actions and directions that are surprising. For example, the Nordstrom Handbook says: “Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them.” And Rule 1 simply reads: “Use your good judgment in all situations. There will be no additional rules. Please feel free to ask your department manager, store manager, or division manager any question at any time.”

The founders of Nordstrom maintain what they call a “worshipful relationship” with the customer, resulting in delighted customers, enthusiastic salespeople, and high profits. They actively practice “doing virtually anything possible to please the customer.” The founders also do virtually anything possible to please their employees.

The Gift of Customer Loyalty Begins with Employee Loyalty

Employee & Customer Loyalty Case Study: Ritz Carlton: Discovering what customers savor

A few months ago, I was involved in a seminar in Pasadena at the Ritz-Carlton Hotel. During lunch I asked my waiter for a burger and a chocolate shake. When he let me know that they didn’t offer milkshakes, I setfled for a glass of water. I was surprised when a chocolate shake arrived with my hamburger. Manuel Avila, my waiter, on his own initiative, found chocolate ice cream and cold milk in the kitchen and created a shake. Manuel felt free to exercise initiative on my behalf because of the positive creative examples set by his leaders.

When Employees are Cared for, They Care for Customers

The way employees treat customers reflects directly on the way they are personally treated. Many employees are truly loyal. The question is; how do we retain and increase our loyal employees, thereby increasing our customer loyalty base?

The way employees treat customers reflects directly on the way they are personally treated. How can you emulate these four cases to improve loyalty in your organization?

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Posted in Business and Strategy Uncategorized

Most Workers are Starved for Recognition

'Employee Recognition That Works' by Cindy Ventrice (ISBN 1576756017) Most workers are starved for recognition. In fact, some of your employees may be experiencing a recognition deficit.

While most managers believe that pay is the most important factor in whether employees stay or go, employees consistently rank recognition for their good work as number one. The mother lode of employee motivation and job satisfaction lies in the cycle of challenge, achievement, and recognition—the CAR motivational cycle, as first presented by Frederick Herzberg, the father of modern motivation theory. His study showed that the factors that produce job satisfaction are, in order: achievement, recognition, the work, responsibility, advancement, and growth. These factors are related to job content. Factors that may take away job satisfaction but not produce it—demotivators—are related to job culture: policy, administration, supervision, relationship with boss, work conditions, salary, relationship with peers, personal life, relationship with subordinates, status, and security, in that order.

You may be measuring what counts, and what you are measuring may be getting done, but unless you recognize and reward what is done, the productivity of your people will decline, along with your retention rates.

Most Workers are Starved for Recognition

Why Managers Don’t Recognize People

Many managers get low motivational millage out of the CAR cycle because:

  1. They subscribe to the philosophy, “If you don’t hear from me that means you’re doing a good job.” This low-energy, low maintenance management practice is popular among autocratic managers who have worked for managers who treated them this way. Many managers who use this style think: “My people are expected to do their job, and they get paid to do it.” They resist employee recognition practices, and resent employees who are governed by their feelings and who need more praise and recognition.
  2. They believe that “rewards and recognition” is the responsibility of the human resources department. Some programs have the unintended effect of letting managers off the hook in providing recognition. If managers do not “own” the practice, they may never do it.
  3. They do not spend enough time observing or measuring employee performance to know if they are achieving results in the first place. Obviously, if they do not know who the top performers are, they will be reluctant to recognize and praise anyone.
  4. They do not know how to recognize and are afraid they will do it the wrong way. If you haven’t been taught how to recognize results, and if you aren’t being recognized yourself in creative and appropriate ways, how would you know how to do it?

Two Ways to Recognize Results

Employee recognition has become a large industry, providing prizes, travel, cash, and praise. Many managers believe that only cash rewards/bonuses, raises, and promotions are effective for motivating and keeping their best performers. While money is important to all employees, it is more important to some than others are. Money can help to motivate and retain when given promptly in recognition of a specific achievement. However, the top motivator is the chance to be challenged, achieve results, and be recognized.

Informal Recognition and Rewards

Informal rewards that managers initiate to recognize and motivate certain individuals in a timely way. Here are six ways to get the most out of informal rewards:

  1. Match the reward to the person’s personal preferences—some people are more motivated by a letter of appreciation.
  2. Match the reward to the significance of the achievement—don’t overdo when recognizing people for small achievements;
  3. Give the reward as soon as possible after the achievement;
  4. Explain why the reward is given;
  5. Recognize groups and individuals within groups—recognize everyone on the team, but single out those who made the greatest contributions;
  6. Find out what your workers value as rewards—if the yearly bonus, for example, is now considered an entitlement, it no longer has the power to motivate.

To encourage specific achievements or contributions by key performers on highly valued assignments, consider the following seven rewards:

  1. Outstanding Employee Award, based on completing urgent projects, collaborating cross-functionally, generating money-saving ideas, and fostering teamwork;
  2. Productivity and Quality Awards that provide meaningful incentives or rewards;
  3. Employee Suggestion Awards that encourage employees to submit more ideas;
  4. Customer Service Awards that encourage the highest standards of service;
  5. Sales Goal Awards that reward high performance;
  6. Team Awards that reward all the members; and
  7. Attendance Awards that encourage employees to be prompt and not miss workdays and Safety Awards that recognize employees for following safety procedures and minimizing accidents.

Formal Employee Recognition and Rewards

Formal Recognition and Rewards

Formal recognition and rewards that the organization initiates to motivate all employees. A well-designed formal rewards program will help keep your most valued employees. Here are some ideas:

  1. Multilevel reward programs and point systems that are tailored to the needs of different employees and recognize a few employees in a dramatic way.
  2. Contests that run a short time, have simple rules, offer desirable prizes, and reward performance directly and promptly.
  3. Field trips, special events, and travel that provide “bragging value.”
  4. Education, personal growth, self-development, training and services that build needed skills.
  5. Advancements or promotions that add responsibility, give special assignments, or allow people to mentor younger employees or lead a cross-functional team can yield payoffs in visibility and job enrichment.
  6. Stock or ownership incentives, such as employee stock options, that motivates performance and retention.
  7. Celebrating employee anniversary dates helps to keep long-term employees.
  8. Custom benefits, health, and fitness programs that allow employees to select benefits that best fit their needs.
  9. Charities, volunteer activities, and service projects that encourage employee participation.

Relate formal rewards to organization and employee needs, ensure the reward’s fairness, and present the rewards in a timely manner. Talk up the value of the rewards, but do not oversell the program. If you are not sure what recognition to give, just ask! If you do not tailor the reward to the employee, the reward will not have the motivating effect you desire. Give them several ideas to choose from and a chance to write in their own ideas and submit their preferences.

Ask Two More Questions for Employee Preferences for Recognition

To get the desired effect from your recognition and reward efforts, ask your people two questions:

  1. For what do you want to be recognized?
  2. How would you like to receive your recognition?

'1501 Ways to Reward Employees' by Bob Nelson (ISBN 0761168788) Start recognizing your workers, not as you would like to be recognized, but as they would like to be recognized. Instead of focusing on big events, work to create a culture of appreciation.

Make acknowledgment a part of the daily routine. Become an obsessive observer. Notice what other people are doing and acknowledge their efforts.

A simple “thank you” or “awesome job”—sincerely conveyed can transform a relationship.

Grade your organization on recognizing results what can you do to improve in this area.

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Posted in Management and Leadership

How to Build Lean and Agile Management

How to Build Lean and Agile Management

Hierarchical is out; horizontal is in.

There’s no room today for the multiple layers, slow decision making, and dependence on leaders. Successful organizations are characterized by consultation, collaboration, and cross-functional problem-solving, decision-making, and planning.

Why are horizontal organizations so much more nimble? Extended product development cycles are replaced by rapid movement from design to market; decision-making bottlenecks are eliminated; leaders empower and delegate; and the focus is on the success of the business, not individual functions.

Horizontal Leadership Success

Leaders intent on this transition must take four actions:

  1. Horizontal Leadership Success Look into the mirror. The top team sets the tone. Before expecting others to “go horizontal,” senior managers must ask, “What are the decision-making patterns on our team?” “To what extent do we see ourselves as accountable and responsible for one another’s success and for the outcomes of our team?” “Do we depersonalize conflict and confront one another honestly and openly?” If the president is still calling the shots; if team members are constantly lobbying for resources; or if internal conflict has brought decision making to a halt-it’s time to practice what we preach.
  2. Align all your teams-beginning at the top. Raising team performance and refraining team behavior begins with alignment. Ask seven questions to determine whether or not a team is aligned: Does the team have clear goals? Are those goals aligned with the strategy? Do all team members know who is responsible for what and how they will be held accountable? Are protocols or rules of engagement agreed upon so everyone knows how decisions will be made? Are rules in place for how conflict will be managed? Are relationships between and among team members healthy and transparent? Do people assert their point of view honestly and openly and treat disagreement not as a personal attack but as a business case?
  3. Shift from commanding to influencing. In the new paradigm, the one who wins isn’t the person with the most clout, but the one who possesses the right strategic instinct, content capability, rapport, and persuasion. When Susan Fullman was director of distribution for United Airlines, she was a cross-functional player in a hierarchical context. Her success hinged on her ability to influence rather than command: “I had to sell my vision to each director. And I couldn’t do that without learning to clearly articulate my ideas, depersonalize the way I made my case, develop my powers of persuasion-and learn to listen to each person and address their concerns.”
  4. Become a player-centered leader. The horizontal organization calls for a shift in the role of the leader to a new “player-centered” model. The question becomes: How prepared are the players to handle increased authority and responsibility? As teams proliferate and decision making becomes decentralized, people must step up. Managers must know each person’s capabilities and skills and adjust his or her “style” accordingly.

'Lead with Lean' by Michael Balle (ISBN 154480844) For example, when managing an inexperienced team leader, a senior manager needs to provide a high level of direction, structure, and support; but as team leaders become more competent, the senior manager can adopt a more hands-off style. The goal should be to inspire and empower, not prescribe or direct. Provide coaching and collaboration as each player requires.

Many leaders talk about decentralization, delayering, and empowerment. But decisions continue to be made by the CEO; functional heads are still vying for resources; and further down are vacationers and victims.

Horizontal organizations are more states of mind than states of matter. It’s not as much about titles and boxes as it is about every employee showing up, every day, as an energized, strategically focused team member.

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Posted in Management and Leadership Mental Models and Psychology

The Magic of Customer Enchantment

Reality Check on Customer Enchantment

The Magic of Customer Enchantment We love hearing those service champion stories—always laced with awe-inspiring heroics and “happy ever after” endings. These way-beyond-the-call-of-duty stories are generally exotic, extravagant, and frequently involve helicopters, champagne, and penthouse suites. Then, we go back to work, thinking “My boss would kill me if I did something like that.” As the cold reality of work quickly freezes out the story’s warmth, it gets dropped in our brain’s “fairy tale” file.

But, is there another side to these enchanting stories? Could extravagant service have a return on investment of sufficient size to warrant repetition? Should managers challenge their employees to “bring me more lavish bills for unplanned, unbudgeted red carpet treatment for customers!” In this era of tight margins, ferocious waste reduction, and microscopic expense control, how do you cost justify an encounter which is by nature extravagant?

Service extravagance does have an important role in any service quality effort. Power, however, lies first in its uniqueness. A steady diet of extravagance and you not only abuse the bottom line, you turn unique into usual—and the magic disappears. However, what mileage can be gained by going the extra 10 miles? Assuming unique is kept unique, there are advantages to encouraging an occasional service extravaganza.

Experiment with service extravagance and customer enchantment

Three Big Benefits of Customer Enchantment

While the CFO might have to take a leap of faith, there are great payoffs of service heroics. Service indulgence fosters customer love and other benefits.

  1. Service Extravagance Releases Employee Power. When the subject of empowerment is discussed with leaders, they all bewail that employees have far more power and authority than they typically use. And, it is generally true. Get a group of employees together and they will quickly gripe about their lack of authority. Empowerment (or lack of it) is often code for fear of failure. Celebrating service heroics can encourage employees to “take it to the limit” and “push the edge of the envelope.” When their confidence is matched by affirmation, they learn to take risks. The goal is to encourage employees to experience the limits and, if they go too far, learn that the leader response will be support and coaching rather than punishment and rebuke. Empowerment begins with error; error begins with risks. Employees risk when they believe failure will spark growth, not censure.
  2. Service Extravagance Keeps Service Quality Top of Mind. The challenge in creating a service culture is how to keep the “shine from wearing off.” The early elation of the “The year of the customer” kickoff quickly turns to exertion when incensed customers make unreasonable demands on an already fatigued front line. How do you insure excitement wins over despair? Part of the answer is celebrated heroics. Effective service celebrations begin with “see.” The telling of heroic service stories provides a graphic pictures of what great service looks like. Too often those witnessing a celebration learn who but not why. They depart with little to emulate. So, tell the story in detail, along with the philosophy or attitude.
  3. Service Extravagance Builds Teamwork at Its Best. Service extraordinaire events, when instigated and implemented as a team, can raise morale and reinforce important lessons in interdependence. The adage that “nothing pulls a team together more than a crisis” can be expanded to a “celebration” as well. And, since teamwork is a decisive commodity in today’s service, the winners in the eyes of the customers are less likely to be the single acts of excellence, and more apt to be the collaborative efforts of colleagues who craft an experience which customers retell over and over. Simply the act alone can fuel teamwork.

'Delight Your Customers' by Steve Surtin (ISBN 0814432808) Remember: Celebrate customer extravagance as extra-ordinary. And, teach employees the principle behind the peculiar. Give leeway for the exceptional, and your employees will have exciting standards for excellence that can energize them to produce service performances customers will remember as special.

Experiment with service extravagance and customer enchantment.

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Posted in Management and Leadership

How to Be More Creative and Capable in Creating Meetings That are More Effective

The greatest myth that exists about meetings is that they are inherently bad, unavoidably painful, unproductive, and necessary evils. Bad meetings are a reflection of bad leaders. Worse, they take a devastating toll on a company’s success.

Fortunately, for those leaders who challenge the notion that meetings are unfixable, it is possible to transform what is now tedious and debilitating into something productive, focused, and energizing. The key to improving meetings, however, has nothing to do with better preparation, or agendas.

Creating Meetings That are More Effective

Better Meetings

The first step in transforming meetings is to understand why they are so bad. There are two basic problems. First, meetings lack drama, meaning they are boring. Second, most meetings lack context and purpose. They are a confusing mix of administrivia, tactics, strategy, and review. This creates unfocused, meandering conferences, with little resolution or clarity.

  • Produce drama. The key to making meetings more engaging (less boring) lies in nurturing the natural conflict. The best place to learn how to do this is Hollywood. Directors and screenwriters know that movies need conflict to be interesting. Viewers need to believe that there are high stakes, and feel the tension the characters feel. They realize if they do not nurture that drama in the first 10 minutes of a movie, audiences will disengage. Leaders of meetings need to put the right issues (often the most controversial ones) on the table at the beginning. By demanding that their people wrestle with those issues until resolution has been achieved, they can create genuine, compelling drama.
  • Create context and purpose. Drama will not matter if leaders do not create the right context for their meetings and make it clear to team members why the meeting is occurring and what is expected of them. To create context, leaders must differentiate between different meetings. Too often, however, they throw every possible conversation into one long meeting. This creates confusion and frustration among team members who struggle to shift back and forth between tactical and strategic conversations, with little or no resolution of issues.

Nevertheless, be warned, by creating context, leaders might have more meetings. They may spend less time in meetings, but have different types of meetings.

Time for Meetings

Teams should ideally be having four distinct meetings regularly:

  • Daily Check-in is a schedule-oriented, administrative meeting that lasts 10 minutes. The purpose is to keep team members aligned and provide a forum for activity updates and scheduling.
  • Weekly Tactical is what most people know as staff meetings. These should be about one hour in length, give or take 20 minutes, and should focus on the discussion and resolution of issues that affect near-term objectives. Ironically, these work best if there is no pre-set agenda. Instead, the team should quickly review one another’s priorities and the team’s scorecard, and then decide on what to discuss. This will help them avoid wasting time on trivial issues, focus on issues that are relevant and critical, and postpone the discussion of more strategic topics.
  • Monthly Strategic is the most interesting meeting for leaders, and the most important indicator of strategic aptitude. It is the place for big topics that have a long-term impact. These issues require more time and a different setting-one in which participants can brainstorm, debate, present ideas, and wrestle with one another in pursuit of the optimal long-term solution. Each strategic meeting should include just one or two topics, with two hours for each topic.
  • Quarterly Off-Site Review is a chance for team members to reassess issues: the interpersonal performance of the team, the strategy, the performance of employees, morale, competitive threats, and industry trends. These can last one or two days each quarter.

Creating More Effective Meetings

The key to making this four-pronged meeting structure work is to overcome the objection: “How am I going to get my work done if I’m spending all of my time in meetings?” There are two ways to answer this. First, these meetings require about 20 percent of a leader’s time. Most leaders spend even more time on meetings anyway. Second, leaders need to ask: “What is more important than meetings?” If they say “sales” or “e-mail” or “product design,” they should reconsider their roles as leaders. A leader who hates meetings is like a symphony conductor who hates concerts. Meetings are what leaders do. The solution to bad meetings is not to eliminate them, but to transform them into meaningful, engaging, and relevant activities.

'Meetings Matter' by Paul Axtell (ISBN 0943097142) Leaders need to cascade communication. Members of an executive team should leave each meeting having agreed on a set of messages that they will communicate to their respective staffs within 24 hours. Then, members of their staffs communicate those same messages to their staffs. This forces executives to get clear about what they have agreed upon and what actions they will take. Employees in different departments hear the same messages from their respective leaders. This gives employees confidence and allows them to pursue their work without doubts and distractions. Cascading communication also allows people to implement decisions quickly and promotes action and buy-in.

Because of its personal nature, cascading communication evokes more trust. There is no substitute for personal, interactive communication when it comes to inspiring people to act. Therefore, take 10 minutes at the end of their meetings to get clear about what has been decided and what needs to be communicated to turn decisions into actions.

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Posted in Life Hacks and Productivity