Wickenburg Business

Music

Recently I was in a business that was being managed by a teenager.  He was playing what I think would be called hip-hop or rap.  The business catered to all ages.  Clearly the music was for the benefit of the employee rather than the customer.  Obviously, this is a clear mistake in customer service.

5 star service

While away I managed to break two new fishing rods, (due to stupidity not big fish).  After calling the shop I discovered that they would be covered by warranty and all I had to do was bring them to the shop and he would send them back for replacement.  I would be charged for shipping both ways.  I was certainly pleased with that outcome, but when I got the shop I was wowed by truly great service.  The shop owner took the broken rods, immediately replaced them with new ones off the rack, and didn't even ask for the shipping charges.  I insisted in paying for the shipping, and was greatly pleased that I wouldn't have to wait a couple of weeks to get my new rods.  Needless to say, the shop has earned by loyalty for a long time to come. 

Sorry, was away

I just returned from a two-week vacation in Colorado where it was down right cold!  I considered posting that I would be away and not making any posts, but determined that announcing that the house would be vacant to the world might not be the smartest thing.  So, I am back, and will be making posts.  Thanks for understanding.

New catering company shows off its stuff

Last night at the Town of Wickenburg's volunteer appreciation dinner Greg Calloway and his company Culinary Visions outdid themselves with food and presentation.  The dinner was fabulous and the beauty of the food table was a work of art.  Many people had seen my Sun article on the new business and took note that this was a new local business.  The quality of the food became the talk of the evening overshadowing the awards.  This was a great example of how a new business must make a good impression at start up.  It has to hit the ground running.  Your first impression could be your last impression if it is not good.  In this case, the first impression was great.

What is the truth?

Reading a piece in the Phoenix paper this morning made me realize how cautious we have to be when reading or listening to any news items.  It’s easy for any writer to slant news for a particular agenda.  “Mortgage foreclosures up ten times in the Phoenix market.” Very bad you say?  “Mortgage foreclosures much lower in Phoenix than the national average.” That sounds really good.  What’s the truth?

Both may be accurate but each certainly tells a different story.  The first is misleading because a couple of years ago the housing market was so hot that there were virtually no foreclosures in the Phoenix market.  Consequently, if you have 10 foreclosures, and then have 100 a couple of years later, the increase is a factor of ten but the actual number is still low and could represent a low total when compared to the rest of the country. 

What did we learn from this?  If we read something, we have to carefully read the whole story and sort out the truth.  Second, if we are in business we need to manage the news to make sure we tell a story with the best possible “spin.”

Incentive pay

Incentives, games, and incentive pay may be keys to morale and productivity. It has been said that an organization needs to accomplish only two things to be successful – to serve the customer and do it more efficiently. Most business owners know that to be true but to motivate employees to actually do it often seems to be impossible.

Last evening I watched a couple of episodes of an old Discovery Channel series, “Deadliest Catch.” It’s about king crab fishing in the Bearing Sea.  The connection between crab fishing and business?  Easy, note that the crews that work in commercial fishing share in the profit from the catch.  It’s that simple.  The pay is almost or completely incentive based. The crews take huge risk exposed to adverse elements and danger. They have the opportunity to make a lot of money for a short amount of unbelievably hard work. But if the boat doesn’t find crabs, the crew doesn’t make money.

Watching the crews work it’s easy to see that they are productive.  They work hard, they have great morale, and do what they are told.  There are no “union” coffee breaks and the captain doesn’t have to plead with the deck hands to get productivity.

Can we learn from this?  Many companies have adopted creative ways to incent workers for additional sales and cost savings.  Ideas go all the way from an incentive for selling a particularly profitable product or service all the way to providing employees with a significant share of the organization’s profit.  

Free enterprise at work

NEW YORK (Reuters) - Wal-Mart Stores Inc. said on Tuesday that it will contract with local hospitals and other organizations to open as many as 400 in-store health clinics in the next two to three years.

Should current market forces continue, the world's largest retailer said up to 2,000 clinics could be in Wal-Mart stores over the next five to seven years.

As health care costs go up you know that it wouldn't be long for one of the country's most efficient companies to figure a way to bring the prices down for the consumer.  In many rural towns primary-care docs are unwilling to take Medicare patients saying that the reimbursement doesn't cover the costs.  I can guarantee that Wall Mart will take everyone because they will have figured a way to be more efficient and drive some of the bureaucracy out of health care delivery.

Watch for this trend to continue. Competition and the free-enterprise system will eventually lower health care costs as soon as long as competition is not trampled on by a monopoly.

What is your purpose?

Understanding the purpose of a business may have everything to do with its success.  What is the purpose of a business?  Is it to make a profit? To serve customers? To produce a product? I would suggest that the purpose of a business should be to produce a product or service of the highest quality in the most efficient manner.  When we do this we should make a profit, but the profit is the byproduct of the primary purpose of serving the customer.

An article in today’s national news about Toyota’s surpassing GM in auto sales probably says a lot about this issue. The spokesperson for Toyota had the following to say about achieving the milestone, “Our goal has never been to sell the most cars in the world," Paul Nolasco said. "We simply want to be the best in quality. After that, sales will take care of themselves."

With that attitude, Toyota has the key to success.

More than 20 years ago management expert William Ouchi in “Theory Z Management” pointed out that the Japanese were long-term thinkers and would surpass the US because they weren’t out after the short-term gain. Thinking long term and concentrating on quality and service will bring both sales and profits in the long run.

The highest purpose of an organization should be to serve the customer and do it in an efficient manner.  That rule should be for non-profit organizations, governments, churches, and profit-making businesses. When that is accomplished society is best served and owners will profit. 

Budget time

Budget season is here again for the Town of Wickenburg and it should spark interesting debate.  The budget takes a long and arduous route through staff, the finance committee, through Council work sessions, and finally to the whole council. Next Monday at 0900 it will have its first hearing at the council budget work session.

While most might think that budget stuff is dull, in fact it is probably one of the most important documents for the town.  This is where priorities are set.  Last year public safety won big with the council deciding to go to a paid fire department and add to the police department.  By spending money in that way there was little left for other priorities.

This year’s first draft again has money allocated to police and fire for more people with most other requests being turned down. There will probably be some rumblings in favor of an increase in the sales tax to meet some of the other requests.

Unfortunately in the halls of government there is little or no discussion on how to save money and operate more efficiently.  I honestly believe that most managers want to be efficient and get the most from their people, but unfortunately the system does not reward that.  In any bureaucracy if you can justify a larger budget and supervise more people you are deemed to be more important and deserve a greater raise.  That system rewards non-efficiency.  As a member of the finance committee I can attest to plenty of decisions having been made that are far from efficient.

I urge that people who want to have an influence on how our local government is run should attend Monday’s budget session.  See where they set priorities.  Watch your government at work.

The Key is Service

For the past 15 years or so I have been studying the extent to which successful business practices are based on what is often called the “Judeo-Christian Ethic”  For all of those years I have discovered more and more of a connection.  Clearly good business practices are coincident with Biblical principles.

            During this Easter season Christians focus on the death and resurrection of Christ. At a service today I was drawn to the concept that Christ died for the benefit of us. In fact, he was willing to go to the cross for our benefit.  That is the ultimate of service.

            In business, service is a key in two ways.  Managers and owners should serve their employees.  Rather than rule over them, we are told in the Bible that those who wish to be leaders should be the servants of all.  Good leadership is servant leadership. 

If you want to read more on that subject, check out the classic, “Servant Leadership” by Robert K. Greenleaf.” It was originally published in 1977, but the 25yr. edition is now available on Amazon for less than $15.  I ordered it again since I last read it when I first went into consulting in 1981.  I’m anxious to read it again.

            The second aspect of serving is to serve the customers.  The more a business can instill that concept into its employees, the better the customer service will be as will be the success of the company.