I’m a Google fan because most of their corporate MAP (mindset, attitude, philosophy™) agrees with the stuff I believe. Not very scientific, but I’m allowed.

The links today are to some interesting Google bits, I hope you enjoy them as much as I did.

First is a great McKinsey interview with Eric Schmidt (may require free registration). It doesn’t matter that it was in November, the information that he shares makes it great reading anytime.

An article in December’s Wall Street Journal Online brings you up to date on what Google was doing to deal with the economic chaos that more than halved their stock price.

A more recent article in the NY Times talks with Jeff Huber, senior vp of engineering, about how and why Google chooses the products it kills. Useful information that you can use evaluating your own projects.

I found the write-up on the changing of the guard at Google.org, the company’s non-profit and why they are changing their philanthropic approach.

It took many years and several product maulings before people reacted to Microsoft—the original 500 pound canary.  But Justice is sniffing around and concern is rising,

“You almost feel sorry for Google,” said Danny Sullivan, editor in chief of Search Engine Land. “They’re doing a good job and people are turning to them. But when they pass 70 percent share, people are going to be uncomfortable about Google becoming a monopoly.”

Some might say that between the sinking stock price, monopoly worries and the economic debacle that Google, or any stock, isn’t the place to be.

But you know what? It might come as a surprise to investors who can’t see three inches in front of their face, but a company is a whole lot more than what a short-sighted trader who only cares about a quarterly set of numbers knows. Google is for the long term, as are many others—my only regret is that I don’t have the resources to invest.

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I’ve always thought of life as a corridor with dozens of doors opening, each one representing an opportunity.

You may open one or pass them by—it’s your choice.

Each time you do open one and enter that door closes forever and you move down a new corridor full of doors.

The door you entered is sealed because whatever lay behind it changed you, so you can’t go backwards, only forward.

Some people to through life opening as few doors as possible, changing as little as possible and staying as safe as possible.

Others launch themselves through the most interesting doors with gusto, taking advantage of whatever opportunities are concealed and then on to the next door.

In honor of all those who are, or lean to, the latter description I dedicate these two Rules. They are especially apropos today.

Watch for big problems—they disguise big opportunities.

Welcome the unexpected! Opportunities rarely come in neat, predictable packages.

You can’t open every door and you don’t have to stay long if you don’t like what you find, but if you pass straight through never opening any doors you’ll stay in pristine condition and you don’t really want to arrive at the end as untouched as you were when you started—do you?

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If I suggested that you spend five times more money to sell your product than you are currently the most polite thing I can imagine you saying is, “You’re nuts!”

Yet that’s what it will cost you every time you turn off a current customer and have to find a new one to replace her.

An article at the Gallup Management Journal on customers reminds you that

“Frederick F. Reichheld, author of the widely read The Loyalty Effect: The Hidden Force Behind Growth, Profits and Lasting Value, showed that making loyalists out of just 5% more customers would lead, on average, to an increase in profit per customer of between 25% and 100%. Reichheld’s analysis showed that the cost of acquiring new customers was five times the cost of servicing established ones. The implication is that managers who depend on all manner of snazzy products and flashy ad campaigns to lure new buyers will always be playing catch-up with companies that concentrate on keeping established customers happy. “

Loyal is different than satisfied.

“Proprietary Gallup research shows that the key to wooing customers isn’t price or even product. It’s emotion.”

What’s better, Gallup explains its new 11-question metric of “customer engagement,” called CE11, including the actual questions and formulas involved. I highly recommend that you click the link, read it, print it, discuss it with your team and develop your own version to use.

Stats and surveys are great, but my own experience says that what makes learning easiest are stories from the trenches. In this case, stories of companies who are using spectacular customer service to retain what they have, as well as grab new market share.

Stories galore, along with cautionary tales, are offered up in Business Week’s cover story Customer Service in a Shrinking Economy that includes the top 25 companies in BW’s third annual customer service ranking.

“Top performers are treating their best customers better than ever, even if that means doing less to wow new ones. While cutting back-office expenses, they’re trying to preserve front-line jobs and investing in cheap technology to improve service.”

According to a study by The International Customer Management Institute, “eliminating just four reps in a call center of about three dozen agents can increase the number of customers put on hold for four minutes from zero to 80.”

That is a huge hit if the 80 include your most loyal customers.

Amazon took first place and I think Jeff Bezos’ comment on the difference between customer service and customer experience is well worth taking to heart.

“Customer experience includes having the lowest price, having the fastest delivery, having it reliable enough so that you don’t need to contact [anyone]. Then you save customer service for those truly unusual situations. You know, I got my book and it’s missing pages 47 through 58.”

When laying off, companies tend to do it bottom up and “bottom” frequently means customer service/customer support—which is just plain dumb.

Jeff Bezos understands that as do the CEOs of the other 24 companies on the BW list and thousands of small and medium companies across the country.

When you do sit down to analyze where to save remember two things

• if you don’t keep your current customers really happy you won’t be around; and
• if you decimate product development it won’t matter.

That said, perhaps it’s time for companies’ “across the board” cuts to include the senior staff. You can pay a multiple customer service/support people for the cost of one vice president.

Cross training at all levels should be standard and asking people to cover two jobs should apply to upper management and executives, too.

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Now check out Dodd’s Wall Street results

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You’re swamped with advice from a wide variety of experts, gurus and pundits on how to survive the downturn in 2009,

• Increase spending on R & D. Now is the time to build your product portfolio for the upturn in 2010.
• Increase your spending on marketing. Now is the time to build your brand.
• Increase your investment in sales. Now you can steal market share from competitors.
• Employees are your greatest asset. Nurture them.

Given that wonderful advice, don’t you feel foolish looking at a 25% revenue decline and corresponding expense reductions. Somehow the economic and business pundits still know best how to spend your money, in spite of their forecasts that just continue to get it wrong.

As the person in charge, you know that you have to reduce spending somewhere, somehow. So the question is not how to spend more money, but how to make spending cuts. One possibility:

Cut spending strategically.

Use Hard Choices to Sharpen Your Focus

In difficult times, where you cut spending may be the most important decision you make. The cuts demonstrate dramatically what you consider to be the most important priorities in your company. So, let’s back up one level. What are your company’s most important assets? If you had to preserve only one, single facet of your organization to restart your business in 2010, what would it be?

What is your company’s single most important asset?

Ultimately your revenues will tell you where you are today. What is the largest source of your current revenue? Is it a single product, a single sales person, a single customer, or even a single technology asset? What can you do to focus your company on that revenue source?

What is the single largest source of your revenues? AKA, what pays the bills?

Politely we can ask, what is the single largest source of your revenues? But in a small organization, you know the real question: What pays the bills? You have to look much deeper than the accounts receivable report. Consider:

Single Customer—If that revenue source is a single customer, then how can you protect and grow that relationship? Does it make sense to relocate your entire company next door to that customer?

Single Product—How can you extend that single product? This is the perfect moment to jettison the R&D project to explore another market. For you, now is the time to steal market share from other competitors. While they may lose focus, you can capture a few key customers.

Single Supplier—Maybe your single largest revenue source is anything from China. Your team speaks Chinese, both Mandarin and Cantonese dialects. When Wal-mart calls, you can find a Chinese manufacturer for anything Wal-mart wants to sell. Then shut down your initiative to build suppliers from other countries. Hire another Chinese speaker. Build on your successes with China.

Single Expertise—For instance, if you can trace your product dominance to a single technology, then your R & D team may truly be the best in that specific technology. In this market you can probably hire a few well-known experts to enhance your team. Cut your expenses elsewhere, say marketing. Build your technology team and send them out with your sales team to win a few key customers.

Single Person—Is your company really a corporate vehicle for a superstar? If so, why not focus on that person? How can you enhance that person’s reputation and value? A superstar often creates some jealousy, but this year just suck it up and build on the strength of the super star. Anyone who cannot support the star needs to find a new opportunity.

In summary, don’t cut vertically. Don’t cut horizontally; Cut whatever does not support your single greatest asset.

Get Off Your Butt

One last suggestion—just in case you haven’t done this already, get out of your office!

You need to be out in front of the parade, not kibitzing in the stands. What is your personal strength?  Get out of your comfortable desk chair. Go create some value—in the lab, in a customer’s office, or even in India.

Do what you do best and skip the rest.

You don’t have the luxury to be comfortable as Chief Executive. Get in the game. Rediscover yourself as Chief Inventor, Chief Salesman, Chief Mandarin Speaker, or even Chief Superstar.

And if you’re none of those things then do the one thing you’re sure of doing well.

Get out there and support your people, managers and employees, and move the company in ways that take the best advantage of their strengths.

To your success!
Richard Barrett

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Some managers, especially executives who should know better, have two teams—one is the one to which they pay lip-service and talk about in public.

The other is the one that takes priority and stays front and center in all decisions.

Let’s use the CEO as our example, remembering that this attitude can happen anywhere on the management ladder.

CEOs are always talking about ‘the team’ and it’s taken to mean all the company’s employees.

But, for those the shoe fits, it actually refers to their direct reports and their pets.

Back when this attitude was common it was also honest. Managers were ‘us’, workers were ‘them’ and everybody knew where they stood.

Then organizations started to change. Volvo focused the world on the power of teams. Research showed that productivity increased when people were more invested and engaged in their work.

Academics, management gurus and the leadership industry introduced language that was supposed to be inclusive and empowering.

And it was when used by the CEOs who bought it, owned it and meant it; to the rest it was pap—good for keeping all those not on the ‘real’ team in line.

Now, with the severe downturn, more managers, from CEO to first line supervisor, are slipping back to the old mindset—often without even realizing it.

So the next time you’re preparing to speak to your team, take a step backward and ask yourself to whom you’re talking…

Who is your team?

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See all mY generation posts here.

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A slightly odd combination today, but one I hope will prove of use to you.

A thought-provoking commentary from Rakesh Khurana, a professor at Harvard Business School and Andy Zelleke, co-director of the Center for Public Leadership at Harvard’s John F. Kennedy School of Government, discussing why a cap on CEO pay will have little to no affect of the rampant greed so pervasive these days in the corporate suite.

This CNET post last year regarding the legal implications of employee blogging is a must read. Granted it’s not an in-depth study, but it does give you a heads up on some of the concerns and legal implications.

Here’s an interesting item for those of you in companies of 50 or less employees. I’m a long way from knowledgeable so you need to talk to your experts, but I do know that insurance is a very tough road for small companies, especially in the current economy.

“Section 125 plans let companies and their workers pay for health insurance premiums with pretax dollars. Businesses and employees save 7.65% in FICA and Medicare tax, and workers save on taxes by lowering their taxable income.”

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Dan Erwin has a great guest post about delegation over at Slacker Manager. I strongly urge you to take a moment and click over, read it, print out his Three Keys to Effective Delegating and use them.

Dan accurately touched on one kind of control issue in his post, but my reference is in terms of politics,  MAP and abuse.

Political power stems from control.

The only two things worth controlling are money (obvious) or information (not so obvious).

Managers frequently control both, whereas non-managers are limited to information.

It’s pretty obvious how controlling of money gives someone power, but what about information? These stories are true—

The new engineering VP didn’t like a top performing manager. He cut the manager’s budget, but didn’t reduce his objectives. The manager was forced to lay-off, couldn’t meet his objectives and was fired for poor performance at his next review.

The damage from controlling information is more insidious and in some ways worse. It’s the ultimate micromanagement and destroys people a little at a time by undermining and tearing them down.

A VP of Marketing forced his marcom manager to come to him each time she needed competitive or marketing information, but worse, he berated her constantly for being over budget—but wouldn’t tell her what the budget was. He also complained to the rest of the senior staff about her “neediness” and how she couldn’t manage her budget to the point that they all lost confidence in her. She finally resigned, but not before a lot of damage had been done.

Although it’s more common for managers to use to on their people, I’ve seen non-managerial people wield it against their colleagues, often with devastating effect.

X has information that Y, or even the whole team, needs to do their share of a project. Y asks for the info, but rather than giving it all X gives as little as possible forcing Y to return over and over. Often when responding X uses the opportunity to make subtle comments about Y’s ability, undermining his confidence; X might even start rumors about Y’s competency to do the work.

Over the years I’ve used these and other examples with managers guilty of their own version of information control; some were horrified and worked hard to change their own action—and usually succeeded, but others saw nothing wrong.

It didn’t happen often, but it happened enough that it made me realize information control isn’t always an overt political move or even subconscious insecurities coming to the fore.

Sometimes information control is based in a malicious attitude that permeates the person’s MAP.

MAP can change, but the individual has to desire it and they don’t.

The fact that they spread pain and destruction every place they work doesn’t preclude them from promotions and if they find a position in a dysfunctional culture they thrive.

I call them destroyers.

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Richard’s recent posts (here and here) questioned what happens to culture and people as assets during a tanking economy.

Is culture anything more than lip service? Glib words to throw around during an expansion, but hollow and valueless otherwise?

Yes—and no

Unfortunately, too many executives still see people as an expendable resource—interchangeable and replaceable.

But not all.

The companies with strong, innovative cultures where executive action supports an environment that challenges and encourages growth will come out of this stronger and miles ahead of their lip-synching competitors.

They also know that keeping their people motivated and as happy as possible is the only option if they want to keep their customers happy.

Think Apple, Nucor, IBM and dozens of others, large, medium and small, where the execs practice what they preach.

But no matter how authentic the culture, the economy happens and companies have to deal with it—and even the best may face layoffs.

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