December 10, 2009 - What Mistakes are You Making?

Main Idea

When are you most likely to make mistakes?  When do good and bad things happen more frequently?

Expansion of Idea

I made a mistake this week.  It is not the first and I am afraid it won’t be the last.  I forgot to get something to a client that should have been there yesterday.  It was fairly easily remedied, but the point is it could have been more difficult to fix.  I do not like mistakes, especially my own.  Whenever I see mistakes, I look back at how they happened and try to determine why.  Occasionally there is no real reason.  But more often than not, the mistakes happen when something is in transition, is brand new or is unusual.  That alone should not be a problem, but we sometimes don’t have the systems in place to ensure that we perform properly.  This particular problem occurred because we were doing something new for a client.  The system fix was very easy.  I just had not put the system in place and therefore, I made the mistake. 

The real problem for me is that I did not spend the extra time to fully implement a system.  Whenever we are in transition, we need to stop and ask if there is anything we need to do to insure our performance.  Too often, because of the transition, we are scrambling to put out a fire and we don’t step back from the situation to see what else we should be doing.  This is really obvious when you look at a professional football game.  If the offense adopts a no-huddle offense, they do not give the defense time to implement their systems.  When this happens, a lot of good things happen for the offense.  The key part of this transition is creating the right systems to implement.  And those systems need to be set up in advance.   

• Start by Asking Yourself these Questions:

• Are you in transition in your job? 

• Have you been given some new duties?

• Is there a new or unusual transaction occurring at your business?

• Have you stepped back and looked at what could go wrong?

June 24, 2009 - Are Your Systems Simple?

Main Idea

How complicated is your life?  Why is that?  How complicated is your business?  Does it run smoothly?  Do you have a 5 hour process to determine a customer’s satisfaction when a 5 minute phone call will do it easier and quicker?

Expansion of Idea

My kids introduced me to the TV show “The Big Bang Theory”.  If you have not watched it, the story line is about two genius-nerds and their two friends who live next to a beautiful young waitress.  It is pretty funny.  One episode is about the four intelligent genius-nerds redesigning a bookshelf that needed to be assembled.  They were going to spend 30-40 man-hours each to assemble this bookshelf that the waitress ends up assembling in a couple of hours.  The problem for them is that they were looking to improve something which is good, but that can also be an impediment to getting something done, which is bad. 

The best solutions to problems, customer service, employee relationships and to life in general are the simplest system possible.  Our businesses and the systems are living, breathing ever-changing processes that mutate periodically.  We add little pieces to systems to fix something.  We keep doing that over years and soon, we are pretty far from where we started.  Periodically, we need to reexamine our systems and see how we can simplify them.  This will help simplify our lives.  And the best part is that we will probably improve our customer service and employee retention because we can focus on the truly important issues.

Areas to Start:

1. Ask your team what systems are complicated or are breaking down a lot.

2. Ask your spouse what systems are complicated or are breaking down a lot.

3. Determine what you can eliminate.

4. Brainstorm how to simplify them.

April 8, 2009 - Do You Have Special Growth Systems?

Main Idea

Do you think you can grow your business by focusing on systems?  Are there key points where your systems, or lack thereof, determine what happens next?  Have you thought about the power of questions in your customer service delivery?

Expansion of Idea

Growth systems can take many different forms.  They may be a carefully displayed sign, an unusual question, a prompt follow-up, or a valuable piece of advice.   These systems can be critical in helping potential customers deal with you as opposed to your competition.  There are small windows of opportunity for you to help a potential customer buy from you.  Your job is to figure out how to help these potential customers make the right decision. 

Too often we compete on price because that is the only thing that the customer can evaluate.  Your job is to separate your products and services from the competition in a creative way that is not focused just on price.  You must add value as defined by the customer.  When you can consistently do that, you will create a customer for life.  If you think this is theoretical, I want to leave you with two words, “HAPPY MEAL”.

Suggested Areas to Start

1. Make a list of key contact points with potential customers.

2. Evaluate your processes in handling the interactions.

3. Measure how effective the systems are in converting potential sales into actual sales.

4. Brainstorm ways to improve those processes.

March 25, 2009 - What is a System?

Main Idea

What do you think about the word “Systems”?  Does it put you to sleep immediately or does it take at least 3 minutes?  Is there anything in the world more boring than looking at systems?  (Try reading the tax code.)

Expansion of Idea

Right now, everyone is looking to find new business.  We are trying to replace customers that are not buying or have gone out of business.  We are always looking outside of our business instead of sometimes looking inward.  The answer for a lot of us is to improve our systems.  This is one of the four main ways to grow your business and is actually the key to everything. 

We are going to discuss systems and various examples over the next few weeks.  The starting point is to define what a system is.  A system is how work is performed.  Systems are either soft systems or hard systems.  A hard system may be how the financial statements are generated or how goods are shipped out of your warehouse.  A soft system would be how you answer the phone or how you manage your people.  Systems only work when there is consistency of application.  (There is a place for appropriate use of exceptions also.)  Your team must understand and embrace the systems.  

A great example of using systems to bring a group together is the University of Missouri basketball program.  The new coach, Mike Anderson, put systems and policies in place which insured that the team would play hard and at a high level.  In just three years, he has taken a program that was miserable and will play this weekend in the NCAA Sweet Sixteen.  Frankly this is unbelievable considering the shape that the program was in when he took over.  The key is the relentless focus on systems and the discipline to accomplish them. 

Suggested Areas to Start

1. Define your systems

2. Review your systems with your team and determine if they are being followed.

3. Commit to spending some time every week to work on systems.

December 17, 2008 - What Are Your Default Systems?

Main Idea

Why does your new computer come with software preloaded?  And why do they have a duplicate of the software on the hard drive?  Why does Southwest Airlines fly only one kind of airplane?  Why does the food selection decrease when you go into a higher priced restaurant?

Expansion of Idea

Last week I heard about a loan officer in Pennsylvania, who, when standing on a hill, can honestly say that he finances every farm within sight.  He also has zero loan delinquencies.  Not only that, he has only had one late payment in 20 years.  Is this unbelievable?  Not really if you consider that he finances farms in an Amish community and it is against their culture to borrow very much and on top of that it is extremely humiliating if you do not pay your bills.  This loan officer picked his customers very well.  The only thing different about his servicing of the customers is that he had to create a default system.  He had to go to his customers every month to collect their monthly payments.  This is very unusual for a loan officer but it did two things.  First, it kept him close to his customers and second, it collected the monthly payments.  I am sure he serviced these customers very well.  I would also bet that these loans are not as sensitive to rate changes as normal loans.  (These loans are a little different because they could not be sold on the secondary markets because the houses do not have electricity.) 

In hindsight this default system is obvious.  So are many other genius ideas. Do you have default systems in place?  Are they working for you?  One of the main changes I have made in the last 4 to 5 years is that I will not take a new client that will not allow us to look at his interim financial data for his business.  If clients are not that proactive, then I do not want them.  Some of these potential clients keep good books and it would normally not be a problem.  But if, in a given year, they do not have good records, then my office has to make up the difference during tax season and that creates problems for me and for other clients.  This is a default system that is good for clients and for me. 

Action Items

1. Where are you having problems in your customer service delivery?

2. Are there adjustments in how you approach the sale and service delivery that would benefit you?  (Remember these are probably small adjustments.)

3. Are you trying to be all things to all people just to make the sale?

4. Have you set up systems to protect against the 1% of customers who create problems?