National Clothesline

We all make resolutions. Right? Not just New Year’s resolutions, but resolutions for every day of the week. Do these resolutions sound familiar?

• “From now on we are going to get out every order on time.”

• “From now on there will be no more double creases on pants.”

• “From now on, every shirt will be carefully inspected and absolutely all missing or broken buttons will be replaced. Follow the process and we should never miss a broken or missing button! I am sick and tired of hearing complaints about missing shirt buttons. ”

Developing objectives is essential and motivational. They energize us and give us a purpose — for a week or two. Then something will distract us and these wonderful plans get put on the back burner and inevitably forgotten.

The following resolutions will offer you something different. Here is my promise to you: If you read these resolutions carefully, absorb them, work on them, involve your people in the process, truly believe them and then monitor them throughout the year, your profits will start increasing until you will say, “Wow! I am actually making this happen.”

Jim Collins, in his inspirational book, Good to Great, said that revolutionary companies didn ’t become great because of some revolutionary processes. They became revolutionary through a series of evolutionary changes.

Greatness is not a condition of circumstance. It is a condition of conscious choice.

This series of articles will help you answer these questions in an effort to make conscious choices: Where do you want to go? What is the best way to get there? Who are your target customers? What do they want? How do we get it for them? Do you have the right personnel? Have you defined all the best systems and processes for your business and employees?

Stretch your imagination and try to visualize your business as a bus — not a plant, not a route system, not a chain of stores, but a bus that you are going to drive on the road to profitability.

No business can maintain its competitive edge by mere instinct or accident. Before you define the route your bus will take, you need to define what factors are important to the success of your business. These will be the centers from which you will concentrate your efforts: customer satisfaction focus, personnel recruitment and retention, improved production facilities and your financial resources. I call these key business fundamentals, your Critical Success Factors (CSF).

Here are the ones we identified at Tuchman Cleaners.

• We must exceed our targeted customers’ expectations.

• We must have a skilled, motivated and loyal workforce.

• We must search for new business opportunities, sites, services and products.

• We must have a creative marketing plan to assure profitable annual sales increases.

• We must have financial stability.

Pretty cerebral stuff isn’t it? But have patience, and when you finish reading you will be armed with all the tools you need to start your next period with the vision, strategies and tactics to make this year an exciting and profitable one!

Assignment 1. What are the few critical factors that you think are crucial to the success of your business (CSF)?

1.______________________________________________

2._____________________________________________________________________

3._____________________________________________________________________

4._____________________________________________________________________

5._____________________________________________________________________

6._____________________________________________________________________

As the owner or Chief Executive Officer of your company, the first thing you, the leader plus your key people, must do is to define reality and be crystal clear where it is that you want this bus to go. Your vision is your picture of the future. It is where you want to be, not necessarily where you are today. It is a bridge to your future.

You might say:

• I want my business to gross $1M, $2M, $15M — whatever.

• I want to earn 20 percent on my sales.

• I want to merge or acquire competitors.

• I must exceed my customers’ expectations by developing customer advocates for my company.

• I want to start a national drycleaning company.

• I want to retire in 15 years so that my retirement account will afford me a $250k (you name the amount) annual income.

• I want to add a new (rental, medical laundry, rug cleaning, etc.) service.

• What else?

There are rules to help you define an attainable objective. It is not manageable to declare, “We want to be the best cleaner in town!” How do you measure that declaration? It must be more specific, realistic and attainable with a time frame.

All objectives must meet the following five requirements (sometimes known as the “SMART” rules”).

• Specific.

• Measurable.

• Attainable.

• Realistic.

• Time Related.

Here is an example. The objective for Package Plant or Store #2 is a 5 percent increase in total sales for the month of September. Does this objective answer all SMART rules for objectives?

The point is that you must be absolutely clear where you want to take your bus — not pie in the sky. And unless you involve your key people in this objective, and unless your objectives are aligned, they will only be dreams with no chance of successful execution.

I started business with my dad and brother in a 1,200-sq.-ft. building that served as our plant and store.

We added a few hundred square feet at a time until there was no more room to grow to accommodate our ambitions. At that time I said, “Enough of this nonsense. Let’s get a piece of property and build a state-of-the-art drycleaning plant!”

Done! But how? We didn’t have two cents in the bank nor credit to match our ambitions.

The following story is meant to illustrate how finally saying our objective led to change — not a revolutionary change but an evolutionary change.

In the eighteenth century, Johann Wolfgang Goethe made this statement:

“At the moment of commitment, the whole universe appears to help you.”

What a prophet! The minute we made this commitment to build a building to match our ambitions, opportunities abounded. Within a year, we were able to get someone to build and lease back a building to us with a provision to buy it in years to come.

We were able to get our bank to lend us the money to buy the equipment we needed to produce the ambitious sales volume we were projecting.

Everyone said it would be impossible, but we were so passionately sure of our future and confident of our ability that we convinced others of our inevitable success.

If you don’t know where you’re going, you will undoubtedly end up somewhere, but not the best place you had anticipated. And that ’s the point. Hoping for change is worthless. Making profitable changes in a company are not done by the seat of your pants, but by conscious choice!

Consciously setting objectives provide the conscious choice.

If you are not absolutely sure of where you want to go and how to get there, there will be too many temptations taking you down too many dead end roads.

How many people have you met who’ve tried routes and failed? How many have put in drop stores and found they were unsuccessful?

Why?

Because they did not have a clear vision of where they wanted to take their bus; because the strategies weren ’t clearly thought through; and because the action steps were not carefully documented, executed and controlled.

Research has proven that managers and executives who set goals and objectives for themselves and with their subordinates are ten times more likely to achieve those goals than those people who never set objectives?

That makes sense, doesn’t it? If you have a burning desire to accomplish something, and those objectives conform to the SMART rules, with everyone on the team aligned, then isn ’t it obvious that you will have a better chance of accomplishing your objectives?

Assignment 2A. What are your objectives for 2007?

Consider objectives that will make each of your Critical Success Factors a reality.

1. What are your sales objectives?

2. What are your production objectives?

3. What are your profitability objectives?

4. What are your personnel objectives?

5. Other objectives?

Some companies like to project one or two stretch objectives for each year. These are objectives that focus on doing something different as compared in the past (e.g. start drycleaning routes for the first time, or enter the uniform rental or medical services for the first time, or reduce productive labor by 25 percent while scoring 98 percent on quality measurements.)

One thing to consider on stretch objectives is to think big, but implement small (e.g. for routes you don ’t want to start with twenty vans, but start with one or two and work out the kinks.

Assignment 2B. What are your stretch objectives for 2007?

1.__________________

2.__________________

3.__________________

What new processes need to be reengineered to accommodate a stretch objective of reducing productive labor 25 percent?

The goals you and your team have chosen are just empty words unless you develop the effective systems and practices to turn these words into realty. The Action Plan sheets shown below were designed to answer all the SMART rules: specific, measurable, attainable, realistic, and time related.

A reminder: You cannot manage what you cannot measure!

In order to drive the bus on the road to profitability, you need to define reality and describe your situation as it really is. You can ’t travel this road by yourself. To get to where you truly want to go, you must have the right people on your bus.

I once heard a famous entrepreneur said there were five factors that contributed to the greatness of his company. Those five things were:

1. People.

2. People.

3. People.

4. People.

5. People.

As Jim Collins said in Good to Great, the only way to make your dreams of reality come true is to not only have the the right people on the bus, but you must have the right people in the right seat on the bus. And finally, you must get the wrong people off the bus!

One of the phases in my career was operating a central plant. Thirty-five stores and routes came into one central location.

We grew from humble beginnings. I brought the work in from a route, my brother did the cleaning and my father did the sewing and alterations. We grew through having great people — one by one. It didn’t happen overnight. It was an evolutionary process.

In my opinion, we had one of the best spotters in the world. If he couldn’t get out a spot, no one could. Sales were booming. We couldn’t do anything wrong.

But then we had our first choke point: polyesters hit the clothing market. Sales declined over 30 percent. We had to do something or go broke, so we decided to go into the uniform rental business.

We soon ran out of room in our main plant, and needed to make room for this new diversification. Therefore, we decided to switch work coming into the main plant to package plants.

We promoted our experienced spotter to run our first package plant in one of the most affluent areas of Indianapolis. He was a magnet. The customers loved him. He was hot!

However, a serious problem soon emerged. Choke Point #2: employee turnover was enormous. Every week this manager called and said, “Sid, send me a customer service rep. The one I’ve got is awful,” or “Send me a presser. Mine just quit with no notice.” There seemed to be no end to his requests for people!

It was soon evident that this man was a great drycleaning technician. He was equally wonderful on the counter, but he could not develop a team. He was brutal and too autocratic with his team. He was promoted to the wrong seat on the bus.

We rectified it by bringing him back to his rightful, talented seat at the main plant.

The objectives and values of the people on your bus must be aligned and in complete agreement with the objectives and values you have envisioned in the first and second resolutions.

Many an organization has been torn apart because the managing partners do not share the same vision, or when a manager or supervisor and his team ’s goals (think of a team as the cleaner through the bagger) are not aligned. Misalignment breeds disaster. I will discuss in a future article under Resolution #6: Core Values.

Not only do you have to have the right people on the bus, you must have the right people in the right seat on the bus. And finally, you have to get the wrong people off the bus.

When people on the bus have different views of quality or service, they are less likely to be as motivated to exceed customer satisfaction as you are. Imagine the dents you ’ll get as the bus moves along and how getting to your destination will be stalled.

Victoria Aviles owns Bridge Cleaners in Brooklyn, NY. She seems to produce more dollars per square foot than most cleaners in the United States. She and her husband, Jose, started modestly, and today, they are enormously successful.

How did they manage to become so successful?

She admits that it would never have been possible to produce such volume with such high standards of quality without having the right people on her bus. And she guards her people ’s satisfaction zealously. She understands in her gut that the wrong person on her bus, no matter how talented, creates too many adverse personnel problems.

Victoria told me she had hired one of the best silk finisher’s she had ever hired. When this gifted employee was through with a $6,000 Armani garment, it looked like it had just stepped out of Bergdorf Goodman. That ’s the good part.

Unfortunately, she was always arguing with her team members and often angry. Plus she made fun of other people and caused them to have anxiety.

When Victoria realized the dissonance her talented silk finisher was causing, she called her into her office.

As I recall, she said something like this, “It is obvious you are not happy here and it is not worth working at a place you do not enjoy. We spend a lot of time together and we all work pretty darn hard. I am going to do you a favor because I like you so much. Here is a check for two weeks which will give you some time to look for another job. ”

Victoria understands why the wrong people on the bus can foul the atmosphere aboard.

The big mistake most employers make is they hire for hard skills and fire for soft skills. We hire someone because she is a good presser and fire her because we can ’t stand her. She creates trouble. She’s not available when you need her. She creates turnover with other employees because employees don ’t want to work with people they dislike. Again, Jim Collins in his great book, Good to Great, asks his readers to do this: Think about someone in your organization that disturbs you. Ask yourself these two questions:

1. Knowing what you know about this person, would you hire her or him now?

2. If this employee said she/he was leaving for a better career opportunity, how would you feel? Sad? Glad?

He added this:

• When in doubt, don’t hire. Keep looking.

• When you need to make a change — ACT!

Your job? Get the right people in the right seat on your bus and get the wrong people off the bus!

Where do you get good people like this for your bus to empower you to greater customer satisfaction, greater employee satisfaction and, of course, greater profitability? How do you hold on to them?

A recent Gallup Poll uncovered three reasons why people quit their jobs, and conversely why they are asked to leave the bus.

1. They dislike the boss.

2. They can’t get along with their co-workers.

3. They don’t share the core values of the company.

Jim Collins said, “The people you want on the bus to drive you on your road to increasing profitability must be disciplined people with disciplined thought and understand the process of disciplined action. ”

If you believe this, doesn’t it make sense that in the interview process, an employer must struggle to determine if the prospective employee will get along with the boss, with his co-workers, and will share the same core values of the company?

To learn how to hire quality employees who possess both hard and soft skills, your must develop a creative interviewing process. Here is an overview from Vicki Heath, director, Business Performance Pty. Ltd., Melbourne, Australia, July 19, 2006:

• Spell out competencies and characteristics required for each job.

• Ask behavioral-based interview questions about candidates’ past experiences, and be consistent by asking them of all candidates.

• Use appropriate testing and assessment tools.

• Use at least two interviewers instead of just one interviewer to get diverse perspectives about each candidate.

• Include the job seeker’s prospective supervisor and team members on the interview panel.

• Conduct thorough reference checks.

• Ask the candidates what would entice them enough to take your job rather than that of key competitors. You must make sure you are meeting their needs as well. Check to be sure salaries, rewards and conditions are market-competitive.

• Select from a wider pool of candidates, if possible.

In order to determine how the applicant will get along, the interviewer must ask “experience-based questions.”

Don’t ask, “How did you get along with your boss or fellow employees.” Few prospects would say, “I hated my boss.”

Here are some experience-based questions you should include in every employee interview:

• Tell me about an incident where you and your boss were in disagreement. How did you resolve the disagreement? What did you like and dislike about your boss?

• Tell me about the worst boss you ever had and why.

• Tell me about the best co-worker you ever worked with.

• Tell me about attitudes you like in co-workers. (Press the candidate for his values and beliefs.)

Assignment 3. People

1. Do you have the right people on the bus? If not, what is your plan to recruit them?

2. Do you have the right people in the right seat on the bus? If not, what is your plan to switch them around?

3. If you have the wrong people on the bus, how are you going to replace them?

4. Do you need a new process to recruit, interview, hire, orient, train and a more talented workforce? If so, when will you develop an Action Plan and who will be accountable for the results?

5. How will you provide incentives for all your personnel?

6. What strategy should you put in place to maximize the retention of your best personnel?

Coming in Part II: How do owners and managers of businesses learn how to be more effective in the leadership and management of their companies?