Customer Driven Management: Outsourcing

If you want to lower cost in todays sales and service world one of your first options is outsourcing. Whether within the USA or to some other country around the world outsourcing can lower your cost. In fact, lowering your cost is the number one reason to outsource. This is followed closely by a desire to "leave the work to the professionals", focus on our core competencies, global/seasonal support issues and last but not least an expectation for better customer satisfaction and sales/profits. Not every company is willing to outsource. Many choose to retain sales and service as an offering directly from their employees.

Customer Driven Management is the "outsourcing" of your coaching, advice, instruction, feedback and encouragement to your customers. This form of outsourcing is open to companies who have chosen to outsource their operations and to those that have kept services in house.

Let's look at Customer Driven Management is through the lens of outsourcing results. In CDM:

1. We don't outsource to another company; we outsource to our customers.

2. We don't decrease our cost by paying another company less than it costs to do ourselves; we reduce our cost by enabling customer resources to perform functions we pay our employees to do for us today.

3. We do "leave the work to professionals; the professionals are our customers.

4. We do "focus on our core competencies"; we learn and change from the voice of our customers.

5. We do outsource for "global/seasonal issues; we engage customers everywhere and round the clock.

6. We expect better customer satisfaction and higher profits; we are closer and more connected to our customers. CDM impacts first call resolution, customer loyalty, employee turnover and customer experience. All of these areas increase customer satisfaction and impact the bottom line profitability of the organization.

The negatives of outsourcing ( We respect and appreciate professional outsourcing of all types. A well thought out decision to outsource combined with a professional delivery benefits customers and companies. It does have strengths and weaknesses.) are loss of control, risk of alienating pre-agitated customers with delivery of service from outside the company (international or domestic), and loss of connectivity with customers. Done right outsourcing can be spectacular. Done wrong and it is a nightmare. There are also many companies that would never outsource because they feel that the core competency of delivering sales and service is not something they are willing to give up or have reside outside of their company.

With CDM, there are no similar negatives to outsourcing to your customers:

1. Customers provide advice, instruction, feedback and encouragement. Each one of these increases company perspective and most important employee perspective. Customer advice received by an employee is credible and valued.

2. Only customers that seek to provide you with advice participate. There is no risk of agitating customers that do not want to participate.

3. This is the "ultimate" connection with your customers. They connect directly with your employees. Customers that are involved are more loyal and more likely to stay your customers. Customers providing input develop a vested interest in your company and your people.

Outsourcing your coaching to your customers is a win-win-win. Customers, employees and the company all win.

Customer Driven Management

CRM- You see this term everywhere. It stands for Customer Relationship Management. It often means technology, process and measurement. The process of "relating" to Customers. Kind of simple and maybe even woefully inadequate as a definition but for this blog, let's go with it. We "relate" with customers using technology to help be efficient and effective with those precious customer relationships. The technology helps our employees have the right information, tools, and answers for the customers. The customer wins because they get better service, product and support. The company wins because they deliver products and services by maximizing their resources (people, process and goods) and hopefully increasing profits and revenues. The term is well known, the industry has accepted it and most companies are either "doing it" or considering "doing it". As with most technologies some do it very well and others not so well. Some are "all-in" and some are just getting started. This blog segment is intended to introduce a new term. This term is called Customer Driven Management.

CDM changes the relationship between your customers and your companies more specifically between your customers and your employees. The "relationship" as we know it; changes dramatically. The customers drive your employees, coach your employees, encourage your employees, train your employees, help you with their year end reviews and simply help you; help them get better at their job. The company gets passionate, credible, reliable, cost effective and in some cases infinite resources to help them coach and improve their employees. Customers get the opportunity to enhance and improve the very service and support they depend on to meet the needs of the products or services they buy. The relationship as we know it is "driven" to new areas. It enhances CRM by bringing customers closer to your company and your process.

We are not talking about being a "customer driven company". That means we listen to our customers and try to react and respond to their needs and wants. This customer driven management is just that; customers "managing" employees. Customers working directly with our employees to make them better.

The result? Higher profit, higher quality, lower cost, lower turnover, higher customer satisfaction and experience; you get the picture. In the coming blogs we will pursue each one of these above and see how your customers can impact your organization.

Coaching Employees

Tonight the world series begins, Yankees vs. Phillies. I grew up a Yankee fan and I confess I also am an Arod fan as well. I like excellence. I like watching the best in the world and like even more watching the potential "best of all time". Like Michael Jordan, Tiger Woods and Peyton Manning, AROD just might end up being the greatest that ever played.

My baseball diversion was to make note of the fact that in baseball the lead guy is called a manager. In other sports such as basketball and football, they are a coach. In business virtually everyone is called a manager. Very rarely is a leader defined as a coach and if the term is used it is often the front line manager or "lead" that is called a coach. Why the distinction? Who knows? Business needs far more coaches than they do managers. Let me rephrase; they need far more "coaching" than "managing". Leaving baseball behind ( I know the manager "coaches". ), let's focus on the difference between these two terms in a business environment.

1. Coaches make employees better- A coach helps an employee get better and thus helps to increase their performance. At least that is what a good coach does. Coaching is really needed to make one thing happen; change behavior. That is what a great coach does. They help employees change their behavior. That could be an increase in use of skills, attitude, attendance, or simply anything that gets an employee to change a behavior for the better of the employee and betterment of the company. Some coaches do this with high energy, high expectations or simply high involvement. They are active in the process. When employees change behavior in areas that are beneficial to a company you get better productivity, quality and most likely profitability. The more employees impacted by a single coach or a group of coaches that can truly change behavior the better the results. You already know your good coaches. They are easy to pick out and you see the results.

2. Managers "manage"- Yes, this is going to be negative. Managers move resources around. Resources can be people, things, ideas. Unfortunately a bad manager can make a person feel like a thing. Managers by nature do more watching and telling than actual coaching. They often manage problems and reports. As a result they get movement but it is often not sustainable or worse in the wrong direction. When you manage vs. coach you have a tendency to be at the beginning of a process or performance or at the end; you rarely are a participant. As a result most work (sometimes harm) at the front or back of an event or process. Behavior is rarely changed because the manager is not involved with the work product. We are not saying that all leaders need to be actively involved in every step of their employees, simply that if you want behavior change it must be done through coaching and not managing.

Are your supervisors and managers more like the coach above or the manager? If they are like coaches the sky is the limit for you. If you are doing well; keep going. If you need to make changes; no problem. Coaches can change behavior. If on the other hand, they seem more like managers, then if your doing well your managers will be able to tell you. If you are doing poorly, you are at risk because while they can tell you how poorly they are doing, they can rarely help you fix it. Why? Because with employees it is very hard to manage your way to changes in behavior. You need a coach.

Next up: Using your customers as coaches.

Emotional Perspective

Over the past year, I have become actively involved with my family in a business that serves the wedding and events industry www.piazzainthevillage.com. The business services families that have a wedding and reception along with business meetings, training, parties etc. We built a 15,000 square foot facility that has a wedding chapel, courtyard and an events/ballroom center for the wedding reception and business event.

The business is fascinating on many levels. For this corporate perspective, I wanted to focus on the "emotional decision" that a bride and her family goes through. This "emotional decision" happens a lot in business but my guess is that we miss it. We miss the emotional decisions made by employees, customers, board members, vendors and even the ones we make ourselves. We shouldn't miss them anymore.

A bride and her family comes to make a decision on where they are going to have the most important day of their life. The bride has been thinking about it since she was a very little girl. The mom has been thinking about it longer than the bride existed. Sometimes she has thought about it since the very day she chose to make her future daughters wedding day different than her own. The father has either been trying to figure out how he would pay for it (weddings are the second largest savings for a daughter after college), wondered about who the guy would be or how he was going to hold it together walking down the aisle. For now we will just leave out of the equation: the grandparents, siblings, groom, grooms parents, etc.

The decisions to be made are multiple (location, photographer, flowers, date, video, dress, tux, gifts, hotels, honeymoon, etc., etc.)and they need to be made far in advance. What makes these decisions even more complex is how much emotion is tied to them. Everyone is emotional and not always completely rational. Everyone has a different reason and a different perspective. Sometimes the smallest thing sets off behavior or reactions that just were not expected or planned for. With all this pressure and stress they still find a way to make it happen, make it turn out how they had "dreamed" and have their perfect day even with all the emotion.

Brides make it happen with the emotion because they have the following:

1, Brides have vision- They know what they want. They have "seen it" over and over again in their heads.
2. Brides work hard (mothers included here...)- Brides get engaged and they get focused. They have lists, expectations and plans. They are purposed and they get to it.
3. Brides seek out experts and references- Brides look to other brides, professionals and all resources that help them find the right solution. They use other peoples expeience to help them.
4. Brides follow their heart- When all is said and done (yes, they must be able to afford it.) a bride just knows that it is the right fit for her, groom and family. She knows it because she has lived and breathed it for so long; she just knows this is her selection.

Our employees make decisions every day about how they are going to work and support our companies and our customers. Front-line management makes decisions every day on leading their teams and their response to customers and upper management. Everyone at every level is making decisions. The reality is that far more of these decisions are wrought with emotion that we fail to see or we were not able to see. It might be problems at home (divorce, sick kids or parents, etc.), politics at work, health issues, past employment experiences, the economy, fear of layoffs, fear of failure to just name a few.

While we might expect an emotional bride; we are often blindsided by an emotional employee or what seems like a irrational decision. The next time it just does not look "right" to you; take a closer look at the emotion surrounding the decisions or behavior. For many unions do not seem remotely rational. Nor do some of the behaviors or decisions made. Maybe is is simply the "emotion" getting in the way.

Take a "bridal view" as shown above. Get vision, Get focused, Get professional help, Get right with your "gut or heat".

If brides can make their perfect day through the emotion; your business can as well.

Nike was wrong

Times are tough. Does not take a rocket scientist to figure that out. When times are tough we have a tendency to cut corners. We need to cut costs, utilize our employees to their fullest yet we always need to do it "right".

Here is an exerpt from The Four Minute Customer:

Truth 10: Nike Was Wrong: Losers “Just Do It” Winners “Do It Right.”

Who am I to argue with a 100 million dollar advertising campaign? They’re Nike; after all!

In sales and service, there is a tendency to participate or survive rather than pursue excellence and flourish. Doing it right may sound obvious but we often miss it. Many organizations have a “just do it” kind of attitude. This does not mean they are careless, lack focus or are not professional. It means that they are surviving (see earlier chapter) vs. trying to pursue excellence. Doing it right in sales and service means having a clear plan or strategy, installing an operating system, pursuing excellence, measuring the results, making changes and starting the process all over again. The pursuit of excellence sounds like a sports slogan. “Natural” service and sales people who were born to be great can often overtake this part of our business. They see a situation and they react. While it is wonderful to have these people, we must be able to build an organization of people that can respond professionally to customer situations whether sales or service.

How to measure?

1. Is my organization on purpose about achieving excellence not simply results? (In other words, how we do it not just did we succeed?)
2. Do we measure the accomplishments that lead to the results (i.e., the number of cold calls made in a sales environment rather than just the end sales numbers.)
3. Do we have a plan and an operating system for customers and employees? Is it in writing?
4. Are we serious about competing for employees?
5. Do we pursue customer experience and synchronize that with our services and sales offerings?
6. Do we invest in our front-line management team?

You need lots of yes’s in order to be going in the right direction. Any no’s and there is work to be done.

Do it right and you will not only survive but you will prosper as well.

Perspective

This past week I had the privilege to participate in a group of meetings focused on the newspaper industry. If you have not read the "papers"-no pun intended- the newspaper business is in a state of turmoil. Readership is down, large papers are going out of business and as you would expect much of the decline is the result of the internet.

The group was friendly and professional. You could feel the malaise that was surrounding their industry and business. I kept wondering who their real competition was. Almost all of them were one paper towns, no competitor doing what they did. They were all active on the web as well. It leads to a discussion of competing. One of my favorite subjects.

When you compete; you need to have a game plan and execute it. If you listen to a newspaper talk it is confusing to figure out who their real competition is. Who do they compete against? Who is the "bad guy" in their scenario. If you are not careful you might pick the "internet" as their competitor. That would be a mistake. You can't compete with something that has no real owner nor can you compete with something that is so big you could not possibly come up with a strategy to overcome it an finally each one of them is already invested in the internet as well.

You need to know who your competition is and what your plan is. Maybe its a union when it comes to the EFCA. Maybe it is your congressman that is voting for it. Maybe it is a call center down the street that is stealing your people. Maybe it is a couple of employees that are steering the rest of your employees to be organized.

Do you have a list of who you compete against? You compete for your employees everyday. You compete against advertisements in the very newspapers we are talking about here. You compete for their focus with texting, emails, web browsing, etc. You compete for your customers everyday with the other companies they connect with by phone, web, in person each day. Don't think that your customers are comparing you against other firms like you. They compare you against the bank, the cable company, the retailer or whoever they do business with that day, week or month. Don't miss this. You are not competing only against the company you think you are.

Being able to know who your competitor is helps you to focus and make a plan. Without one you will fail.

Stop here if you could care less about newspapers.

So who does the newspaper industry compete with? In my humble opinino it is the following;
1. The truth- The internet is "great" yet we have no idea whether any of it is true at all. Newspapers have built a history of telling the truth. One of the reasons that they are slow is because they get it right. I would be pitching;" News you can depend on to be right and researched."Make your business and personal decisions based on what we tell you; you can count on it."
2. Speed of information- News has turned into a speed deal. Who can report it first becomes more important than what is reported. Headlines of newspapers should shift from being about what happened last night and more about what is important to people for a longer period of time.
3. Personalities and familiarity counts- Individual make a difference on the web and they do in newspapers as well. Columnists often make news. Columnists in your paper should have less access on the web. At worst case, slow down access. In Texas, I will read Randy Galloway a sports reporter for the Fort Worth Star telegram. Today, I can read him on the web at the same time I can read him in the newspaper. If it took a day to read him on line, I might be more pre-disposed to read him in the paper first. Speed can work against you as well. Newspapers will never be faster than the web but they can be faster with their own information.
4. Local is okay. The web has driven us to get as much access as we can as quick as we can. In other words what we say locally can effectively be broadcast to the world almost immediately. Who cares? If we have local information that is valuable locally. Hold onto it. Make it come out when you are ready after you have gained value from it. Then release it. In reality who cares if the rest of the world knows anyway.
5. Change the name,- Just the fact that it says news-paper is bad enough. On my Kindle, I can get the Austin American statesman. Very cool.

Clark Kent would be proud.

You get what you pay for

The second "truth" of sales and service is "You only get what you pay for". See the "trust" truth in an earlier blog. Simply put we reap what we sow. In the ever present shadow of the Employee Free Choice Act is the issue of wages and their impact on an organized drive within your company. What ever your position as an organization what you pay people has an impact on the performance of your organization and on the attitudes and direction of your employees. Let me be clear; I live by the motto for companies to""Provide the highest quality of sales and service for the least amount that is profitable to the client and profitable to the company. This means companies should pursue every competitive advantage possible to compete. This includes paying wages that are responsible. Just beware of what you choose.

Here is the 2nd truth:

"Truth 2: You Only Get What You Pay For

Yes, I inserted the word “only.” The reason? Most people still don’t get it. You can’t pay dirt, invest no money in training, recognition, supervisors, quality, workforce management, administrative support, treat everyone lousy and expect great customer experience. A better perspective might be that when you don’t invest in sales and service appropriately you get even less than what you pay for. Performance is even poorer.
We have a conundrum in that many entry-level jobs have such high turnover that companies are afraid to invest (tools, training, etc.) in a job that has a high turnover rate. The result is a self-fulfilling prophecy that we cannot invest if they leave; yet we are unhappy while they are with us because they don’t do a good job.

One of our challenges is that we are equally reticent to invest one level up at the frontline manager. The majority of these folks are our “star front-liners” promoted. We need to invest in making these people successful right from the start. If we don’t teach them what to do the results will be unfortunate. The reason is prior to this move they were only responsible for themselves. Now they are responsible for a team of people.

Let me be clear; money does not solve all problems. Some of the worst organizations we have seen overpay their people. Steven Covey, in his book “The Eighth Habit” states that organizations consider land, material and technology assets yet “they?” consider people liabilities.

If you are reticent to invest in people then invest in the process and operating system that these people use. Install the “right way” to lead, coach, run meetings, measure performance metrics, build winning culture and then no matter who comes in or out you are guaranteed to get quality results.
Companies that don’t invest in their people (both the value-side and the able-side) lose every time."

Choice

On Monday, Citicorp made a "choice" to downgrade the stock price of Walmart with the expectation that the Employee Free Choice Act would harm their profitability. Read it for yourself.
http://www.marketwatch.com/news/story/citigroup-downgrades-wal-mart-hold-unionization/story.aspx?guid=%7BF079F734-3FA2-4F34-A910-D1579223B32F%7D&dist=msr_1

The other side is fighting as well:
http://voices.washingtonpost.com/44/2009/03/10/the_employee_free_choice_bill.html?hpid=topnews

This bill is all about "choice". For this blog I would like to shift from looking at the employees "choice" in the future and the ramifications of that in this bill to the choice they make each day today in working for you. Each day that they make these choices; it affects your profitability today and potentially "organized labor" tomorrow.

How are you doing with these employee choices?

1. The choice to trust your organization and more specifically their manager.
We have discussed the impact the front line manager makes on your organization. The employee is asking; "Does this person have my best interests in mind?" Are they looking out for me? Are they treating me fairly? If they trust the manager, you have a much better (but not certain) chance they will trust the company. Do you trust your managers?

2. The choice to contribute and be part of the team or create problems.
Most simply contribute but some have more activity planned. In every organization you have trouble makers. What happens to them? Are they punished fairly? Do they get away with it? Is one manager easier than the other? Bad folks corrupt good character. It always starts somewhere. Passed over for a raise, faulted for something they did not do, penalized as a group for something management should have controlled, troubles outside that they are allowed to bring inside.
3. Similarly, the choice to be part of the solution or part of the problem.
Once problems exist, employees choose to help out or let it ride. Some even make it worse. If being a part of the solution is not rewarded, recognized (most important) or simply encouraged then it makes it easy to just be a part of the problem. You pick it: quality, tardiness, calling in sick, gossip, lack of respect, complaining, whining; you get the idea.
4.The choice to be pro-company.
If there is an environment where it is 'cool" to be pro-company then your job is easier. Being a company "lifer", cheerleader, encourager, waste finder, new employee finder are all examples of creating the kind of culture you want. If these folks are rewarded and recognized they will be followed.
5. The choice to seek employment elsewhere.
Nothing helps you measure your success with employees better than your turnover rate and how big the line is to get into your company. Are you a place people are breaking down the doors to get in; or busting down the doors to get out? If you can not hold onto your roses (your best employees) you will be stuck with weeds. Weeds are not good for profitability!

If you think it is a good "choice", please send this link to someone that might like to read it or learn more. Thanks. http://tamerpartners.blogspot.com/

Time to start preparing

Biden supports bill to make unionizing easier
By KELLI KENNEDY – 22 hours ago
MIAMI BEACH, Fla. (AP) — Vice President Joe Biden pressed the White House's agenda for a new labor bill Thursday before the nation's largest union.
The AFL-CIO "brought me to the dance a long time ago. And it's time we start dancing, man," he told the group, one of his biggest supporters during the election.
Biden spoke warmly during the nearly hourlong speech in Miami Beach, addressing many members by name and offering support for the Employee Free Choice Act, which would give workers the option of unionizing by signing cards or petitions instead of holding secret ballot elections.
On Tuesday, President Barack Obama offered some of his most supportive comments for the Act since he took office, telling AFL-CIO members in a videotaped message that he will work to pass the bill.
Biden's speech was the latest signal of the new administration's pro-union tilt, including the appointment of Labor Secretary Hilda Solis, the daughter of union members. She was also in Miami this week drumming up support for the bill.
Before the inauguration, AFL-CIO President John Sweeney said he'd been to the White House only once in the past eight years. Now he visits at least once a week.
"He gave a strong statement of support for workers, their wages ... collective bargaining and the Employee Free Choice Ace," Sweeney said.
Biden echoed the Obama administration's platform during the campaign saying they were committed to raising the standard of living for the middle class, the spine of the economy.
"For too long the middle class has been dealt out. I'm here to tell you in this administration it is dealt in. It is the first card on the table," he said.
Obama's first bill was the Lilly Ledbetter Fair Pay Act, an equal-pay bill that is popular with labor and women's groups. It's expected to make it easier for workers to sue for decades-old discrimination.
Labor officials say the Employee Free Choice Act could rebuild dwindling membership; one in eight workers today is a member of a union, down from about one in five 25 years ago.
Business groups vehemently oppose the legislation and claim passage will put many of their members out of business.
Copyright © 2009 The Associated Press. All rights reserved.

Gaining momentum

You just don't have to work very hard to really make a point when there are so many others that will do it for you:

http://blog.aflcio.org/2009/03/03/solis-meets-with-workers-in-first-public-appearance/


The most important line of this whole article is the very last one where it talks about the next meetings for our new secretary of Labor and the gentleman that will follow her in the meetings. The next gentleman is Vice President, Joe Biden.


As stated earlier, Washington is in a feeding frenzy right now. Never has the opportunity to spend money been so high and so prevelant. As a result, all politicians are focused on spending money. This is a unique set of circumstances we are in and there may never be another time in history when spending will be this high and this easy. Washington will stay focused as long as the times are this good for them.


Once this passes, however, the next natural step is payback for the past election. Number one on the list in the Employee Free Choice Act. It has to be. Too much money was given, too much support provided by unions to not deliver back. Maybe the legislation will be watered down but my guess is that there is no reason to water it down. They have the votes and they have a President that will sign it.


This blog is a call to action. Not a call to action for legislative lobbying but a call to get your business in order so you have some sort of control over your employee base. The call to action is so that you can compete for your employees against organized labor. If you have been reading you already know that we believe the same actions you take to protect your employee base are also the same actions to make you a more competitive organization. You compete by having a workforce that delivers more productivity and customer satisfaction because they work for a company that brings out their best. When this happens; everyone wins. The client gets a superior product and service, the company gets profitability by lower costs and higher revenue and the employee gets to work in a environment where they can do their very best.


And yes, it is pretty hard for organized labor to gain any sort of a foothold in that type of company