United Airlines will get bigger, ruder, and less efficient

United Airlines has just announced that they are buying Continental Airlines for just over $3 billion in stock. A company that lost $651 million last year is buying a company that lost $282 million so they can form the world's largest airline. Who will this benefit? Certainly not us.

Last year, United Airlines ranked last in the American Customer Satisfaction Index for major airlines with a score of 56. Their poor service became even more legendary last year with Dave Carroll's video, United Breaks Guitars, that has generated more than 8 million views on YouTube.

It's hard to imagine a company run as poorly as United Airlines can handle a massive merger with grace and style. In the short run, customers should expect even worse service as employees face the fear of uncertain job security, potentially contentious union negotiations, and the general confusion that is sure to come from this deal.

The one bright spot may be that Continental's CEO, Jeffery Smisek, will be at the helm of this new company. Contintental scored a 68 in last year's American Customer Satisfaction Index for major airlines, second only to Southwest which scored an 81.

Do you fly United or Continental now? If so, it may be time to cash in those frequent flyer miles and start looking for another carrier.

 

Too busy to get anything done

We all know a lot of busy people these days. What amazes me is how many people are so busy they don't actually get anything done.

  • Small business owners are too busy to close new sales.
  • Operations managers are too busy to improve productivity.
  • It seems like nearly everyone is too busy attending meetings to take any action.

By contrast, my email inbox is completely empty right now. I know what you are thinking. I must either be some sort of productivity wizard or I'm alarmingly unpopular. Neither happens to be true. In fact, I'm naturally one of the most disorganized and inefficient people you'd ever hope to meet but I've managed to overcome this and appear to be very organized and disciplined. I feel less stress and get more done as a result.

Here are three things you can do to get unstuck and improve your own productivity:

Step 1: List your priorities

Priorities can provide us with a clear guide on how to allocate our time and what to work on next. You can gain some clarity by making a short list of your priorities. The essential step is to list them in rank order. There will inevitably come a time when you have to make a choice and having your priorities in order make it clear which way to go.

 

Step 2: Track your actual time spent

Spend a week tracking your time. You can use our time tracking worksheet to help you out.

Does your time spent align with your priorities? Are there any surprises? How much time did you spend on non-valuable activities such as pointless meetings, preparing PowerPoint decks nobody cares about, or making sure you get that new cover sheet on your TPS Report?

 

Step 3: Get unstuck

The third step is the hardest. It involves taking small steps toward aligning your actions with your priorities. Here are a few suggestions:

  • Block off some time to set up your time management system. There isn't one system that's right for everyone, but your goal should be to spend less time organizing and more time doing.
  • Enroll in a time management workshop. Yes, ours is awesome (thanks for asking!).
  • Find a great guide. My all-time favorite is Getting Things Done by David Allen. Below is a link to the book on Amazon.

Is it time to hire more people?

Years ago, a new line of business caused me to staff up the small call center I was running in anticipation of a spike in customer calls. The new business tanked and the calls never materialized but I kept my team busy with 'make work' projects while we waited for our fortunes to change. After weeks of waiting, I came to work one Friday and our President told me I needed to cut my team in half by the end of the day to help ward off a cash flow crisis.

Many companies faced similar challenges in 2008 and 2009 and now they may be reluctant to add new employees despite signs that business is picking up. My own experience was painful, but I learned a valuable lesson about staffing that I'd like to share.

The hidden cost of high productivity

There may be a hidden cost to growing productivity by delaying staffing increases. Customer service can suffer in customer-facing positions if you don't have enough people to handle your volume. Product quality can decline if your people are moving so fast to deliver your product or service that they don't take care to do it right. Whatever your people are doing, there is a limit to how much they can do.

How do you balance cost versus quality? Compare your employees' output against how much you are spending on them. This can vary quite a lot in the short-term, creating a curve that looks a bit like a roller-coaster. You can control costs AND improve quality if you look for ways to smooth out the curve.

Here's an example from a real client who had customer-facing employees. Points below the lower red line indicate poor productivity. Points above the higher red line indiciate productivity may have come at the expense of poor service. (We don't know if service really suffered, but it's a sign we should investigate.)

Does this business need to add employees? One graph doesn't provide all the answers, but it does suggest my client should start recruiting and interviewing candidates so he can immediately increasing staff if this trend continues.

Is it time for you to add employees? Or, do you still have too many? Perhaps you don't even know how to measure your employees' output to create this type of graph in the first place?! Feel free to drop me a line at jeff@toistersolutions.com. I'd be happy to help you take a look.

The double-edged sword of giving referrals

Referrals are a double-edged sword.

Many of us like to refer our friends and family members to businesses and services we enjoy.  Asking for referrals from others can make it easier to make a buying decision. Some businesses even offer discounts or other incentives to encourage us to refer.

There's also a potential downside that occurs when the referral doesn't pan out or we discover a friend doesn't share our impeccable taste.

The Bad Experience
It's embarrassing to refer a friend to a trusted person or company only to have that person or company not deliver. Poor service can happen, but it feels a bit personal when you refer someone and they come back to you and say, "Gee, thanks for the crummy referral".

The Crazy Friend
I sometimes find myself questioning a friend after they've had a bad experience with a referral. Secretly, I think "Maybe you are a difficult, needy customer who is impossible to serve." Outwardly, I start feeling defensive and asking if my friend did anything wrong or suggesting my referral may have just had a bad day. The conversation usually concludes with "Well, I've never had that kind of experience before..."

Too Many to Choose
What if you get multiple referrals? If you choose one, do you have to explain yourself so your other friends aren't insulted?

What to do about it
Here are a few ways you can avoid feeling like you are trapped in a Seinfeld episode called "The Referral":

  • Use a consumer rating source like Yelp instead of a friend. Sure, there are a lot of quirky reviewers on Yelp, but at least they're all averaged out. If your friend is quirky, there's just your friend.
  • Have a few criteria in mind. I recently solicited referrals for translation services and received quite a few. It was easy to preserve relationships with the people whose referrals I didn't choose because I could honestly say, "Thanks for the great referral, but the one I chose was a personal friend who was unexpectedly available. I'll definitely keep your referral in mind for future projects."
  • Do some detective work. Find out who your friend uses without asking for a referral directly. Facebook posts, your conversations, and their homes are full of clues about where they shop. Take note, but don't ask so you can avoid the awkwardness. Unlike a good detective, I'd suggest you stop short of diving in your friend's dumpster.

Do you have a good referral story to share? Let's hear it!

New social media stats: helping is better than entertaining

An article in the latest issue of Fast Company magazine provides some great lessons on effectively engaging customers through social media. It uses real data and real companies to highlight each of the key points. The first comparision was Dunkin' Donuts vs. Starbucks.  Dunkin' Donuts has approximately 80% fewer Facebook and Twitter followers, but those people are 35% more likely to recommend the brand. Quality clearly seems to work better than quantity in this case.

Read the article from Fast Company

The common themes from this study support the findings from my social media experiment. Here are a few of my take-aways from the article:

  • Engaging your customers leads to better results than just generating buzz
  • Not every company needs to use social media
  • The key is communicating with your customers and not just at them

Success stories wanted... It is sometimes easier to identify what isn't working than to see what does work well. If you know of a social media success story, please share it by commenting below.

Ask a few questions, THEN guess

Organizational leaders are paid to act. They are expected to move quickly and decisively with limited data to make things happen. This approach is seen as a necessity to keep up with the speed of business today. The downside of rapid fire decision-making is leaders are often so busy taking action they don't actually get anything accomplished.

I've recently started facilitating sessions with leaders to help them learn how to ask a few questions, then make an educated guess on how to improve performance. The session's called Solving Performance Challenges on a Scratch Pad and it guides managers through simple exercises that get much better results than simply going off of gut instinct.

Here's a quick case study example. Take a moment to read it and then decide what you would do.

A payroll department with four employees was having trouble keeping up with the organization’s growing workforce.  The time required to process payroll at the end of each pay period had increased from three to four days over the past year. The company did not offer direct deposit, so the additional processing time meant paychecks had to be shipped overnight instead of 2nd day air to the company’s 100+ locations.  Managers often submitted their timecards past the deadline, which slowed the process.  The department sat in an open room and the entire team was frequently distracted by visits from local managers dropping off their payroll or stopping by to ask questions.  Their other duties, such as adjusting an employee’s withholding, filing, researching past payroll records, and correcting errors never seemed to slow down either, making their jobs even more difficult.

Implement new technology? Switch to direct deposit? Hire more people? These solutions may all work, but they'll also cost time and money. You can read the case study to find out what worked.

Try our Quick Fix Checklist if you are trying to solve a performance challenge and don't know where to start. Or, feel free to contact us if you'd like some help.

Seeing things from a customer's perspective

This is an update from a post that's now two years old, but I like to revisit important concepts from time to time. In this case, the point is to try and see things from a customer's perspective.

The picture below is from the ice cream cooler in a hotel gift shop. Look at the third flavor down. It either means "assorted" or it is the worst flavor possible.

 
The store sees one thing while some customers might see something else. It's natural to be a bit myopic when it comes to self-examination, but the sign is a great reminder that we should try to see things from our customer's perspective whenever possible.

Here are a few other examples where a customer's perspective could help:

  • Service providers who apologize for a delay or problem by sharing their excuse rather than telling me what they're going to do to fix it.
  • Cashiers who hand me my change with the coins on top of the bills, especially in the drive-through line. You have to be careful to catch the coins before they go flying!
  • Valet parking attendants who leave my seat all the way back and my radio blasting on a station I don't listen to.

What are your examples of situations that could benefit from a customer's perspective?

It's time to fix your terms and conditions

Does anyone actually read the terms and conditions for a product or service? I must admit that I usually do. Part of it comes from wanting to understand what I'm getting myself into. Another part of it comes from a small paranoia that the company has buried a clause in the agreement stating that they will sell my information to identify thieves.  

Unfortunately, terms and conditions are getting longer and harder to understand. Some of these documents are even unfriendly. I recently enrolled in American Express's OPEN program and was struck by the provision that clearly stated that if I had any feedback about their service I should keep it to myself.

I have a few suggestions for anyone who is writing these documents.  Please leave your comments with your suggestions too!

  1. Use lawyers sparingly. It's OK to have a lawyer advise you on your terms and conditions, just don't let the lawyer write them. The term "forthwith" should never stand between me and conveniently sharing photos online with friends.
  2. Confine them to one page or less. A terms and conditions document should never be confused with War and Peace. One thing that's great about parking services is they can fit their terms and conditions on the back of a ticket. Try that with yours.
  3. Make it sound as friendly as your marketing copy. It's ironic to read the warm, friendly tones of a company's marketing materials and then read their terse, unfriendly terms and conditions.

What other suggestions do you have?

Has Undercover Boss jumped the shark already?

I regularly watch the CBS show, Undercover Boss, where top executives go 'undercover' in their own companies to find out what's really going on. Like many shows, there's a formula. Generally, a formulaic approach yields predictable results. If the formula yields predictable results, it better have good drama (see Law & Order). Undercover Boss has good drama, but it's more the daytime talkshow variety than the business variety. I think I'm losing interest.

Go ahead, watch the latest episode here first if you want.

Daytime talkshow drama

During the show, the undercover boss spends a day with five different employees. He inevitably discovers that several of them are facing quite a few obstacles and hardships in their personal lives. Later, the boss summons the employees to the corporate office, reveals he is the big cheese, and awards many of them fabulous cash and prizes to deal with their hardships. Just like any daytime talkshow host would.

This week, Rick Arquilla, President and COO of Roto Rooter met several employees who later received fabulous cash and prizes. One of them was Darrell, a technician who had recently returned to work after missing several months due to illness. Darrell's disability insurance claim was denied and he was now facing some financial hardships. During the 'reveal', Rick told Darrell that he had investigated the insurance claim and found out that a paperwork error had stopped Darrell's claim. Rick fixed the error and arranged for Darrell to receive all his disability payments. That's the kind of good a company can do when it cares about its employees.

But wait, there's more.

Rick also offered to buy Darrell a home gym, hire a nutritionist, and buy him food from a local health food store so he could improve his health. It was a great turn of events for Darrell, but absolutely unsustainable and meaningless for the rest of the company's thousands of employees. What about a wellness initiative that helps all employees get healthier while potentially reducing health insurance premiums over the long-term? How about working with the company's benefit's administrator to audit their process so other people don't get needlessly denied their disability claims?

Here are some of the other fabulous gifts and prizes from the show.

Candace received tuition for her special needs child to attend a private school. She's also getting $5,000 to apply towards her mortgage. Great move, but what about all the other employees with special needs children? What about all the other employees who could use $5,000 to apply towards their mortgage?

Chris is becoming a public speaker to share his struggles with addiction and help others. He has a great personal story, though I wonder how many other Roto Rooter employees have dealt with addiction issues and would like to get paid by the company to share their tale?

Henry is getting a 15 passenger van to help shuttle his son's basketball team to practices. What about all the other Roto Rooter employees who coach their kids' teams?

Dan is getting a garage so he and a few of his co-workers who are car enthusiasts can use it to work on cars. I'm at a loss for words on this one.

C'mon Rick - aren't you supposed to be a big picture guy? Well, we don't know if he is or not because we only see him lavishing Darrell and others with gifts. It's up to the show's editors to decide whether to share the rest of the story.