Today’s quotes are a sampling of comments I found in Business Week’s profiles of CEOs Of Tomorrow. Take a moment and click through the whole series, I think you’ll find it interesting.
“Numbers tell only part of the story. People get things done.” –John S. Watson, Vice-Chairman, Chevron
“It’s important to have fun as a team. When it is time to hop in the pine box, you’ll wish you had high-fived more people and taken more risks.” –Tim Armstrong, Chairman and CEO, AOL
“Revenue is important, but customer satisfaction is even more crucial. I’ve always believed that it’s not just what you do but how you do it that’s important.” –Natarajan Chandrasekaran, Chief Operating Officer, Tata Consultancy Services
“We have a company we believe absolutely has to be the fastest-growing-and you have to take some chances to grow faster than everyone else.” –John C. Compton, Americas Foods division, PepsiCo CEO
“Act with urgency; keep things simple; it’s all about the execution.” –Jeff Henderson, Chief Financial Officer, Cardinal Health
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.
“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.
“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.
One item today, because it has several parts, all revolving around a new, way outside-the-box book.
I’m referring to Jeff Jarvis’ just-released What Would Google Do?, exploring how to apply the lessons of Google to other industries and companies.
Jarvis teaches at the City University of New York Graduate School of Journalism; his blog is BuzzMachine.
Business Week published an excerpt describing how a car company run by Google might function and why the auto industry would be resistant to the approach. Be sure to read through the comments, they’re as interesting as the article.
I like the Management Tip Sheet; here are the headings, but the real value is in the details, so be sure to click the link.
Manage Abundance, Not Scarcity
Make Mistakes Well
Give Up Control
Get Out Of The Way
Low Prices Are Good (Free Is Better)
Don’t Be Evil (Contrary to popular opinion the phrase has an internal focus, not external.)
Finally, here’s a video of Jarvis talking about his ideas; there are several other interviews that offer different slants and information.
Just to be clear, this isn’t a book recommendation. I think there are good lessons to learn from Google, but there are good lessons to learn from most truly innovative companies.
I know of none that can be applied straight across the board or are one-size-fits-all.
But all the companies that still believe “if we make it they will buy” are in for a very rude awakening when the economy turns around—as it will.
Profits guaranteed. Isn’t it nice to know that some folks will make money as a result of the current disaster—and it isn’t even off stock options. All you need is a law degree and a spot at the right firm. Of course, you know who’s going to foot the bill, right?
Two other bits from Business Week; one could be considered investment intel and the other answers the question of why Ponzi schemes are popping up like mushrooms after a heavy rain.
Let Them Eat Big Macs
The swelling ranks of jobless can’t afford to dine out like they used to. While that’s bruising full-service restaurants, austerity is usually a plus for McDonald’s. The chain, which has been playing up its cheap eats, said on Jan. 26 that same-store sales jumped 7.2% worldwide in the fourth quarter, while operating income rose 11%. To pump up its numbers further in 2009, McDonald’s said it will spend $2.1 billion on construction, including 1,000 new outlets.
Ponzi, Ponzi Everywhere
Bernard Madoff may have pulled off the mother of all Ponzi schemes, but the downturn seems to be exposing lots of smaller-fry variants. On Jan. 26, for example, Nicholas Cosmo, suspected in a $380 million scam, surrendered to federal authorities on Long Island. The next day, FBI agents arrested Arthur Nadel, a Florida hedge fund adviser accused of bilking clients of tens of millions of dollars. Other cases in Florida, Georgia, Idaho, and Pennsylvania have recently come to light. Why now? Because in a downturn, investors often try to get their money out—and there’s no new cash coming in to pay them.
Six weeks ago I started Seize Your Leadership Day; each post had info and links to resources or articles I felt would interest/be or use to you.
Based on your reaction to date, it’s been of little use to you—a giant yawn.
So I thought I’d ask you directly, do you like the feature?
If so, is the content I find of use to you or does it need refining?
If not, what would you like to see here on Saturdays?
Please don’t be shy. The worst thing for any blogger is to ask for guidance from readers and not get any. Makes us wonder if anyone is reading.
In the meantime, Here are a couple of goodies for today.
Margaret Heffernan’s two most recent posts (1/6 and 13) are the start of a series and offer smart, real-life examples on dealing with the recession. As Heffernan says,
“Think of recessions as tests. Companies that fail them die. Companies that survive live to fight another day. But a few companies emerge stronger than ever.”
They’re short, with solid lessons and ideas for you to start using immediately.
Another useful reminder for recession managing comes in an 18 month old article in Business Week on the value of failure in achieving success. It’s more important in today’s economy than it was then, because without a safe environment in which to fail there can be no innovation and a company without innovation is a company on the slippery, downward slope to mediocrity—or worse.
I hope they’re of use to you.
Don’t forget to leave your thoughts and preferences for Saturday subjects as requested earlier. If you’d rather send them for privacy, you can reach me at miki@RampUpSolutions.com (please put Leadership Turn in the subject line to avoid filters).
If I had spent the entire year scouring for business quotes to fit this title I probably wouldn’t find as perfect a selection as the ten offered up by Business Week in the Worst Predictions About 2008.
Here are my favorites, which do you like?
The Bad
“I’m not an economist, but I do believe that we’re growing.” —President George W. Bush, July 15, 2008 Nope. GDP shrank at a 0.5% annual rate in the July-September quarter. On Dec. 1, the National Bureau of Economic Research declared that a recession had begun in December 2007. (I thought that’s why presidents have advisers, so they didn’t have to be an expert in everything.)
The Worse
“A very powerful and durable rally is in the works. But it may need another couple of days to lift off. Hold the fort and keep the faith!” —Richard Band, editor, Profitable Investing Letter, Mar. 27, 2008 (This is not the guy you want editing your investment advice.)
“I think Bob Steel’s the one guy I trust to turn this bank around, which is why I’ve told you on weakness to buy Wachovia.” —Jim Cramer, CNBC commentator, Sept. 15, 2008 Two weeks later, Wachovia shares lost half their value from Sept. 15 to Dec. 29. nearly failed as depositors fled. CEO Steel eventually agreed to a takeover by Wells Fargo. (Can you imagine who he distrusts?)
The Ugly
“I expect there will be some failures…. I don’t anticipate any serious problems of that sort among the large internationally active banks.” —Ben Bernanke, Federal Reserve Chairman, Feb. 28, 2008 In September, Washington Mutual became the largest financial institution in U.S. history to fail. Citigroup needed an even bigger rescue in November. (Come on. If you’re gonna head the Fed you need to prognosticate at least as well as you obfuscate!)
“In today’s regulatory environment, it’s virtually impossible to violate rules.”—Bernard Madoff, money manager, Oct. 20, 2007 On Dec. 11, Madoff was arrested for allegedly running a Ponzi scheme that may have cost investors $50 billion. (Unless your name is Bernie and you’ve been doing it for a decade.)
OK, your turn now. Click the link and choose your favorites or supply your own in comments.
Today I’m going to share with you articles about three folks whom I consider superb leadagers.
Let me know if you agree.
First is Dan DiMicco, CEO of Nucor Steel, who was just named Businessperson of the Year by the Charlotte Business Journal. I’ve followed Nucor for a long time and DiMicco just keeps impressing; more so since he always sidesteps taking personal credit, focusing instead on his senior staff and employees. He’s also produced one of the most forward thinking cultures in the corporate world, especially considering he’s heavy industry, producing a real product that has neither chips nor software, and created the largest steel company in the country by successfully acquiring and integrating 22 companies over the last eight years.
Next up are the collective CEOs of Corning, who, for the last 157 years, have nurtured and facilitated a culture of innovation allowing Corning to reinvent itself time and time again and thumbing its nose at every analyst and pundit who predicted its demise. Whoo hoo, these guys rock!
Third is Idris Jala, CEO of Malaysia Airlines, who did an initial turn around of the state-owned airline in three-and-a-half months because that was all the operating cash he had and no bailout was offered. I wrote about him a month ago and there’s a link to the full McKinsey interview (requires free registration) in the post. Well worth reading if you missed it the first time.
Finally, 24 short CEO profiles offered up by Business Week; their selection includes a dozen of the best along with a dozen of the worst. I think you’ll enjoy them.
According to Wikipedia, “An engaged employee is a person who is fully involved in, and enthusiastic about, his or her work.”
What I have for you today is employee engagement on steroids, in action at a place called Nucor Steel.
Way back in May 2006, Business Week wrote, “In an industry as Rust Belt as they come, Nucor has nurtured one of the most dynamic and engaged workforces around.”
I’ve written more about Nucor and its culture several times, but it’s come to the fore again.
On January 2, 2009, the Charlotte Business Journal named Nucor CEO Dan DiMicco Business Person of the Year for 2008.
First, a bit of history,
“Ken Iverson, Nucor’s pioneer and guiding spirit, stepped down as chief executive in 1996… Earnings remained flat through 1998, when board dissidents forced Iverson out of the chairman position and off the board. Nine months later, they ousted John Correnti, Iverson’s handpicked successor as CEO.
The board made DiMicco CEO in September 2000. Nucor’s four other executive vice presidents and CFO Terry Lisenby, were candidates for the top job that went to DiMicco. But all stayed, sharing his basic vision for a bigger Nucor built on reinvestment in mills, exploring new technology and market niches, strategic acquisitions and international growth through joint ventures.”
And a pay system that many (most?) companies should adopt, “…it’s not only the workers who get paid mostly on performance. Managers all the way up to the top executives have a relatively low base pay supplemented by specific performance goals.” But they won’t, because most management, as well as the rank and file, believe they should be protected from the results of their actions—unless, of course, they’re positive.
The team took over in 2000 just as the dot com bomb blew up the economy and now, just eight years later Nucor is the largest steel maker in the US.
It’s another economic meltdown; Nucor has $2 billion in cash, so I expect it will emerge even stronger.
All of this is still more impressive when you consider that Nucor actually makes something—as opposed to pushing money around—and their product contains neither chips nor software.
If you want to know more about what truly engaged employees do, how real leadagersact and what a culture should be. Take the time to read the articles—then tweak as much as possible to use in your company.
Today I’d like to thank you, all of you. You are what make writing Leadership Turn worthwhile—even though you aren’t as chatty as the Prison Break readers.
But today is the day; today I’m asking you to get chatting and tell me what you want from Leadership Turn in 2009.
What features do you like? Which do you hate? What would you like me to do differently?
Click here, while you’re thinking about it, and tell me what you want. Or you may call me at 866.265.7267 or email miki@rampupsolutions.com.
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One more thing, last year I shared Business Week’s Marc Miller’s rhyming wrap-up of 2007; yesterday I posted Jib Jab’s 2008 wrap and now I have the pleasure of presenting parts of Miller’s rhyme for this year. Click the link to read the whole thing—it’s worth it!
At Christmastime 2008,
In this, our fragile fiscal state,
We search our economic soul
And find the world’s a lump of coal,…
You’re Big Biz? Well, it’s still no dice:
The credit market’s Arctic ice.
The Dow fell stomach-churningly,
And Bear Stearns is a memory,
Nor is there any point in dreamin’
Richard Fuld will bring back Lehman…
On the front page, Bernie Madoff;
On Page Two, new thousands laid off.
’08’s theme, if such there be,
Is simply negativity,…
In the business world, success
Was rarer than a C.D.S.
That didn’t wind up in a mess,
Yet some achieved it nonetheless….
Mr. Gates, with less to do,
We’re counting on good works from you.
(We’re confident at Microsoft
Steve Ballmer will keep things aloft.)
T. Boone Pickens, going green,
A blessing on your wind machine,…
For next year, we merely wish
A climate not so Hades-ish,
Where every week we don’t convene
To tear apart the magazine
And start from scratch, because we find
The landscape newly redesigned,
A market not so cellar-bound
(We can’t imagine turnaround),
Some leadership in Washington
That actually gets things done,
And globally, a brotherhood
That stumbles toward a common good.
I can’t say why, I don’t know how,
But if you’ve read this up to now,
You too may sense the universe
May soon get better (can’t get worse).
So raise a glass to auld lang syne,
And see you in 2009.
I really urge you to read it in it’s entirety, it’s worth your time.
Have a wonderful holiday today; I look forward to your thoughts on my direction.
Just two links for your pleasure, today, but each hold more than two goodies.
First we have The Best of BNET 2008. It includes links to their best stories, as well as videos and podcasts. Dig around; I think you’ll enjoy it.
Next, for my tech-oriented readers, are The Hottest Tech Developments of 2009 from Business Week. Yes, I’m sure there are more detailed lists, but you don’t need a tech education to enjoy this quick look at OS software.
That’s it for Odd Bits this year. Don’t forget to share any interesting odd bit links you have in comments or send them to me and I’ll use them to the next Odd Bits post. (You’ll find contact information in the right column.)
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
“Numbers tell only part of the story. People get things done.” –John S. Watson, Vice-Chairman, Chevron
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!”
One item today, because it has several parts, all revolving around a new, way outside-the-box book.
Just three short goodies today.
Six weeks ago I started 
If I had spent the entire year scouring for business quotes to fit this title I probably wouldn’t find as perfect a selection as the ten offered up by Business Week in the 
Today I’d like to thank you, all of you. You are what make writing Leadership Turn worthwhile—even though you aren’t as chatty as the 
Just two links for your pleasure, today, but each hold more than two goodies.
