August 6, 2017 by Ken Goldstein - 3 Comments

You Can’t Fix Morale

Here’s a phone call I sometimes receive, usually from someone senior in executive management or the investment team behind a once promising company:

Inquirer: Hey, we need your help with something. We have a situation and we’re not sure what to do about it.

Me: Sounds intriguing. What is the situation?

Inquirer: Well, we’re having… I’m not sure what you would call it exactly, I guess a problem with morale.

Me: What would you like me to do?

Inquirer: We would like you to help us fix morale.

Me: Oh, that. I’m sorry, I can’t help you.

Inquirer: We haven’t spoken two minutes and you already know that?

Me: Yes, I’m quite sure. I certainly would like to take your money because I’m sure you are willing to pay a lot to do something about this, but I only take on projects where I can actually help someone.

Inquirer: How can you be so sure?

Me: You can’t fix morale.

Inquirer: What do you mean? Morale gets fixed all the time.

Me: Yes, exactly. Morale gets fixed because whatever is causing it to deteriorate gets fixed, but that is where you need to look, at the disease, not a symptom.

Inquirer: Are you saying we need to fix something else in our company so that maybe it can have an impact on morale?

Me: Yes, that is what I am saying. In fact, you probably need to fix your company.

Inquirer: So a contract to fix morale is not big enough for you? You want a bigger contract to fix our company? But our company is not broken.

Me: Then you probably don’t have a morale problem and don’t need any help.

Inquirer: You’re not doing yourself any favors turning this down. It’s a big project. We have a sizeable budget for it.

Me: It’s tempting, but why don’t you have another look at the situation and maybe we can talk again.

The call usually ends there and we don’t talk again. Every once in a while we do talk again and then I tend to get involved in long stretches of dialogue with team members up and down the line. We talk about a lot of things: leadership talent, product quality, business model. We talk about creativity and innovation, passion for excellence, dedication to the customer experience. One of the things we never talk about is trying to fix morale.

Let me say it again: You can’t fix morale.

Bad morale is a byproduct, most often of poor direction, sometimes of impossible goals so ridiculous no one ever feels appreciated, other times of uneven credit and compensation in times of success. There are successful companies with good and bad morale, and struggling companies with good and bad morale. Good morale is also a byproduct — you achieve it by focusing on the right things.

I view morale as a result of process and outcomes. Process involves day-to-day workplace routines that reinforce or strip away employee engagement. Outcomes involve the continuity or deadend at the culmination of a milestone, the reward or repudiation for the commitment of time, expertise, or passion. If your process is bad, morale will be bad. If your outcomes are bad, morale will be bad.

Suppose your company wildly missed earnings targets three quarters in a row. You’ve seen your second round of layoffs in less than two years. More than half of your VPs were fired and hired in the past ten months. The CEO, also rumored to be teetering, has said repeatedly everyone needs to “work smarter, not harder,” but no one is sure which product in the pipeline is going to carry the day. Employee morale as you would expect is rotten all around you. Your colleagues are irritable and nasty. Every week someone you like leaves the company for another gig.

Let’s look at some options for addressing this:

The company hires a consultant to run a survey on employee satisfaction and weeks after you fill out your survey they find out what everyone knew before the survey: Morale stinks like a decaying carcass. The CEO announces Fridays will be half days, the company will be publishing a weekly newsletter celebrating its best employees, and all VPs and above will be taking classes in how to write better reviews and talk nicely to their teams. Everyone is told he or she is appreciated and reminded to work smarter, not harder.
The company holds an executive offsite where all the VPs get to articulate everything that is wrong with the company. The VPs report back to their teams that the CEO agrees, there are not enough resources in the company to go around, the timelines for deliverable are insane, and the competition has an edge on the industry that is daunting. Starting today you will have realistic goals, more resources, flexible timelines, and as long as everyone is doing their best, then management will back off and be satisfied.
The CEO pulls together a half-dozen of the best minds in the company to conduct an honest post-mortem of why the company’s strategy is failing. That team then strips away all the derivative efforts that are draining resources from the company’s true mission and recommits to a narrowed product strategy that capitalizes on the company’s identified competitive advantage. The CEO then directs the executive team to align the best talent in the company with key roles on the narrowed agenda and hire new talent where mediocrity is being tolerated, then communicates the new plan to the full company in verbal and written detail, not just in an inspiring kickoff speech but in regular progress updates that are candid and coherent.

You might think the answer is obvious, but sadly it is not — especially to less experienced management teams where too many influential individuals have achieved authority through battlefield promotions. Here we are talking the bedrock of directing process and refocusing outcomes. Good process takes a lifetime to learn. Steering through outcomes whether planned or unplanned requires a deft touch. There are no shortcuts. If you don’t have the energy or commitment to take apart process and outcomes one building block at a time, you have little shot at repairing morale.

I often ask people to share with me whether they have had a single good manager in their careers. You would be surprised how many say no. In fact these days it is the rare exception of people who actually rave about a boss from the past and talk about how they are putting that learning to work. The ones who are tend to have fewer morale problems on their hands. Too many leaders’ lives are filled with morale problems because they haven’t learned how to steer past them.

Now think about all those unicorns out there — you know, the 150 or so privately funded startup companies currently valued at $1B or more. Those should be some of the happiest places in the world for people to work, big idea places filled with promise and hope for future riches. Go take a random walk through those gardens on Glassdoor. You might be surprised at what you find. They have a lot of problems. When the majority of them are unable to achieve liquidity for their option holders, they will have even more. With that will come a wave of demoralization sweeping through employee workstations. How would you go about fixing that?

You can fix a product. You can’t fix a byproduct. Fix what’s wrong in your company, not the normal human emotional reaction to what’s wrong in your company.

You certainly can fix engagement. You fix engagement through authentic vision, brilliant product design, and a rallying cry around consistent execution. Fix engagement and morale fixes itself.

Align the finest talent you can identify with challenging projects that allow them to do the best work of their careers. Keep an eye on process. Celebrate outcomes and share the wealth. Be generous with people who are meaningfully contributing to company success. Morale will be swell and you’ll have bragging rights to let everyone around you know what a great environment you’ve created for the next wave of outcomes.

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Image: Dilbert.com ©Scott Adams

April 13, 2015 by Ken Goldstein - 3 Comments

Do You Care?

Here are a few marvels of bad business practices I’ve experienced in the past month:

In the middle of a presentation pitching me for a strategic business services contract, the presenter nonchalantly said the words: “We don’t really need this business.” He didn’t get it.

I reviewed two proposals for a project: one a two-pager with one paragraph personalized and the balance consisting of the company’s credits; the other a five-pager all personalized around my project with a single paragraph at the end articulating the company’s vision. The five-pager won.

I received via snail mail a stock market overview newsletter from one of the largest financial services companies in the world. Inside was the business card of some guy I have never met. There was no note, no signed cover letter, not even a form letter. Does he think I’m going to read the newsletter, pick up the phone, call him, and move my portfolio to his firm so he can manage it? Straight into the shredder it went. Cost of printing and postage vaporized.

Our phone rings in the evening. Often. With no Caller ID recognizable on the little screen. Occasionally I pick it up. There’s a pause, handing off my call from the much-despised auto-dialer. Someone tells me he is a building contractor of some kind and he is going to be in my neighborhood tomorrow and can he stop by and offer me a free estimate on work around the house. No, you can’t have my address. You lost me at much despised auto-dialer.

Another contractor who was referred by a good friend actually came to the house, walked through the prospective project with us, took a copy of our site plans, and said she would get back to us with a proposal. A month later we hadn’t heard from her. My wife called and emailed, asking if she was still interested in the project. Still didn’t hear from her. The next email from my wife asked her to return the site plans. Coincidentally, we were subsequently asked for a reference on this contractor by another friend. You can surmise how that went.

What are the key takeaways here?

First, if you want a piece of business, care enough to go out and get it. If you don’t, don’t waste your time or mine.

Second, never confuse tonnage of time invested in vast outreach with proper, focused, caring effort. You can allot infinite hours to scouting the wild, but if your approach is lazy and lacking in detail, your results are likely to reflect your lack of innovation and thoughtful initiative.

Pitching is not perfunctory. Much like dating or interviewing for a job, it’s how you get to know someone before you decide if you want to pursue a more involved relationship. Don’t tell me in the Digital Age a sales call is somehow different from yesteryear. A sales call is still just that—it’s one of many steps in securing prosperous deal flow. It requires the art and science of selling. If you’re not going to bother preparing, being respectful, being responsive, or following through, just stay away. We’ll both be a lot happier—although you won’t have my business, my endorsement, or my goodwill.

Not a problem. You probably don’t care. But you should.

Here’s the thing: you may have enough business now, at this very moment, but you won’t always. No one does. What matters when you don’t have enough business is how wide your network has become—the glowing part of your network. You have no idea where one client can lead you, where one prospect can lead you, where one seemingly casual handshake can lead you. What you can know for sure is that a burned bridge leads nowhere, usually in perpetuity, and the swiftness with which a bridge can be burned forever pales in comparison to the time it takes to build a relationship.

Relationships are worth it. You need them. We all do.

Here’s the corollary: if you don’t have enough business right now, there are no real shortcuts to landing new work. You may think it’s a numbers game and you can just dial and smile, carpet bombing the business terrain with junk mail and door-knocking. What kind of clients do you think that is going to bring you? A crappy sales pitch that does lock in a piece of business is likely to land you a crappy piece of business. Think about who would respond to your unpolished approach. Now imagine their sophistication in carrying out the contract, paying their bill, and passing you along to another prospect. If a crappy pitch and a crappy client are the foundation of your business, I think you can fill in the blank with the adjective that best describes that business.

Imagine instead a well-researched approach to a narrower set of prospects. Imagine doing your homework, preparing a written, phone, or in-person pitch that speaks to your desire to do a job that will capture a client’s imagination. Imagine being sharp, creative, and personal in asking for the business. Imagine following through with a great job that exceeds customer expectations. Then imagine the reward of future business from that client (repeat business is the best of all, because your sales costs are so low), or the networking value that will come from future business you could otherwise never access. Is that what you want, or would you prefer to continue dialing and smiling—and generally soiling your name and reputation before you even get a chance to demonstrate what you can do?

When I get an email offer letter from Yosemite, they refer to my last visit and craft a well-priced offer that speaks to me as a person. We recently were referred to another contractor, who showed up on time and had already had a look at the yard so he had ideas to share immediately after we said hello. One of the national non-profits I support calls once a year just to thank me for my donations and ask if they can send me any information about upcoming programs, without requesting an incremental dime. A market research vendor recently reached out to me on LinkedIn and invited me to a conference that was relevant to one of my business interests, spent time with me at the conference, and is now at the top of my list when I might need his services.

None of this is very hard to understand, but it is immensely hard to do consistently, which is why it gives those who do it a competitive advantage. What they all have in common is one simple thing: they care about my business. They convince me that they want my business, not just any business. They don’t take it for granted. I’m not lost in a carpet bombing campaign. I want to respond. I want to be an evangelist for them.

Before you formulate your next pitch, before you pick up the phone, before you hit send on that email, before you waste the money on postage, ask yourself the one simple question that will make your sales pitch better: Do you care?

October 20, 2014 by Ken Goldstein - 2 Comments

The Art of the Winback

Last month I wrote a post called How to Lose a Customer for Life for Ten Bucks. I received a lot of feedback, mostly private and positive, but some people didn’t understand my point. I have no interest in punishing a business that lets me down. I simply choose to redirect my business to someone who wants it more. I applaud entrepreneurs at every level, but first and foremost, my mantra of “People, Products, Profits—in that order” is not directed exclusively toward the People who run the business. It extends to the customers who are served by the business, the suppliers and partners who support the business, and even the investors who champion the business. The People part of business is unending, complex, fascinating, and a noble bedrock on which to establish competitive advantage.

Nowhere is this more true than in the discipline and practice of customer service. My key point in the tale of enforcing restaurant corkage as specified by company policy despite customer confusion was not that the restaurant owner had upset and lost me as a customer by not showing concern for my concern. It was that he had willingly tossed into the incinerator an opportunity to bond me as a customer forever, future cost of acquisition priced at zero.

This is the takeaway that matters: Any botched moment in a transaction is a moment of truth, a distinct fork in the road that will lead you to one of two places, separated or hitched. Mess-ups are good. Mess-ups are big-ticket fountains of light. A momentary instance of failure is the single best opportunity a business will ever have to connect with a customer’s conviction. Understanding that a boo-boo is not a lethal wound is as simple as knowing that almost anything gone wrong unintentionally and without malice opens the door to a celebrated winback.

When something goes wrong, you have a unique opportunity presented to you on a platter. This is opportunity you can’t create intentionally in good faith; it happens when things go astray in a way you hadn’t planned. When something goes boom, you can lose your customer or you can save your customer. They are likely both forever choices. You get to decide. You just have to make that decision on the spot, quickly and correctly.

The error can be your friend if the winback is always what you keep top of mind. Do it right, reach beyond the customer’s expectations, they’ll be back again and again. It works every time.

You just bought your child an ice cream cone from a local vendor in the park. Your child takes a bite and drops the cone on the ground, eyes already beginning to tear. The vendor can offer up a free replacement before you ask, or else charge you for another one. Of course the free one hurts his pocketbook. Which choice makes him the hero you always come back to find?

You arrive at your hotel room late at night and discover the bed is not made. You’re tired, perturbed, and frankly a bit shocked. You call down to the front desk, not exactly joyful. The attendant at the front desk sees no other rooms available on par with yours, leaving the options of sending up a housekeeper or upgrading you to a suite. It’s a busy time of year and the attendant is pretty sure he can sell the suite in the next hour at triple the discount price you paid. What’s the attendant’s best move?

You pick up a half-dozen shirts from the dry cleaner. Your favorite one has been returned with frayed cuffs. The owner has seen this shirt come through more than a few times, and everyone knows that laundering can be harsh on pressed cotton. You complain that this was your favorite shirt and you really hadn’t sent it to the cleaner that many times, although maybe you had. The owner can delete the cost of cleaning that shirt, offer not to charge you for that order, or offer you the replacement cost of the shirt. What will serve you and the owner best?

What is at stake here is nothing less than the lifetime value of your customer. In any one of these cases, the customer might refuse the act of good will and make due, but your kind offer is unlikely to be forgotten or undervalued. If the customer does take you up on your generosity, you might have invested in ten times or a hundred times the business. All three of these examples are real for me, not the exact circumstances, but close enough. As a result, I make a point of where I buy ice cream, which hotel chain I favor, and which dry cleaner gets my laundry bag every single week. Honestly, I can’t remember whether I took their offer or not, but I remember the point of failure, I remember the response attitude, and I now am as loyal a customer as I could ever be, way more so than if the failure had never occurred. The winback is that powerful. It makes bad into good, good into great, temporal into forever. No advertising can do that, no coupon can do that, no promotion can do that. Only a person can do that by making a smart choice that is authentic and heartfelt.

Are there awful customers who will take advantage of merchants and service providers? Of course there are. As I said in my prior article, the customer is not always right. Sometimes a truly miserable customer will force the point of failure to see what goodies will come, even lie about the unmade bed to sneak a free upgrade. Yes, there are good customers and there are bad customers. Decide which one you’re dealing with and act accordingly. My experience is that if you worry less about whether there is a charade before you and more about the immeasurable value of the winback opportunity, the bucket of winback business will fully offset the times you get beat for your graciousness.

Good business starts at the front lines, where those who interact with customers are meeting their true boss. All the small things we can do to make businesses better at any touchpoint can add longevity and prosperity to the enterprise. It’s that kind of creativity I most encourage when a winback is at hand.

Go on, get out there, and start winning ’em back! Reach way out. It’s worth the stretch.

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