Articles on winning and keeping customers abound on the Internet. They generally focus on achieving and maintaining “customer service excellence“. They talk a lot about tactics but miss the strategic aspects of customer satisfaction and retention.

What drives your customer service (aka, customer relationships), anyway? Your company policy, of course. Your mission and vision drive your overall company policy, in which you lay out your overall objectives that guide your strategic plan. From there come your sales and marketing plans, your operational plans, and so forth. You might think of your policy as a juncture of internal and external forces.

So, why do I bring up this subject? An article appeared last week on “Mashable” that makes a very good point about the importance of a strong, well-written company policy to your customer relationships.  This article explains why no one reads privacy policies, and they cite Facebook and others as examples.

Why don’t customers read privacy policies? The article has several answers, including:

• The longest privacy policy of the “top 1,000″ websites takes 45 minutes to read at 244 wpm⁽¹⁾; and
• The average of the privacy policies cited takes about 10 minutes to read.

It’s not just privacy policies, of course — it’s every kind of policy. They’re lengthy, full of confusing verbiage, and put off their audience. They do neither the company nor its customers any good. So, why are wordy, obtuse policies (in “nanofonts”) foisted on customers?

• In the modern business environment, legal departments owe their employers a duty to protect them. Unfortunately, this is often interpreted to mean “let’s cover every contingency we can think of”. Clarity is invariably sacrificed for thorough attention to detail.
• Modern culture seems to have promoted discord, vitriol, and revenge over cooperation, conciliation, and harmony. I don’t know where this warrior mentality worked its way into business but being humble and nice is now a sign of weakness. This line of thinking leads companies to draw in and protect rather than be exposed to danger.
• Companies seem to prefer “customer acquisition” over “cultivating relationships”. They need (or they prefer) the quick payoff rather than the slow-and-sure.

What’s most puzzling is that the last issue persists even though the need for short-term profits is what largely brought about the current global economic recession. When will we learn?

If a company had as one of its stated purposes “to reduce customer goodwill and retention”, they still couldn’t do a better job of driving people to look for alternatives than by writing bad policy. Badly conceived, poorly written company policy is avoidable; well-written policy is a necessity.

“So, what is a well-written policy?”, you ask. It’s a policy that’s:

• Clear;
• Concise;
• Direct;
• Easy to comprehend;
• Not written to its audience but written with that audience foremost in mind; and
• Written with SMART objectives behind it.

What’s your company policy? Does everyone understand it? Does it help your customer relationships? Call or write and let’s talk policy.

As always, thank you for your time.

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⁽¹⁾Font type and size have something to do with that figure, as do the complex wording and convoluted syntax common to “legalese”. Naturally, we read faster and retain more of some documents than others (Novels v. Contracts, for example). I recommend checking out these sites and others for more information on reading speed:

• TurboRead - http://www.turboread.com/interpretation.htm.
• Speed Reading Center - http://www.speedreadingcenter.com/average-reading-speed/.
• Free Speed Reading - http://www.free-speed-reading.com/articles/what-is-the-average-reading-speed-of-americans.

An article appeared in today’s online Wall Street Journal (“It’s Snowing. Do We Get The Day Off?“, 4 Feb 2010) that pointed out how vulnerable small businesses are to natural forces than are their much larger business “brethren”, such as Wal-Mart, Royal Dutch Shell, and Toyota:

• This week’s snow-and-ice storm that swept through the midwestern and eastern U.S.;
• The floods that have absolutely devastated Australia’s Queensland state; or
• The earthquake that hit Haiti over a year ago and two major quakes in the last decade affecting parts of Indonesia.

Of course, the large-scale destruction that accompanies some flooding and quakes will be the death knell for your business when your geographic expanse is limited to one office, which is in the flood/quake zone. In those cases, company policy had better include careful risk assessment and ongoing risk management, including major disaster and contingency planning.

Fortunately, most business disruptions are not nearly so large in scope. Like the ice storm that hit us (St. Louis, MO, and parts north, east, and west of us) just about a week ago, a day of down time — or even two or three — might not be critical. We might be able to continue working in the cloud, so our core functions continue whether we’re “there” or not. We can telecommute when the need arises. Having a bad weather policy seems like a non-issue for us.

“Well, that’s just fine for some B2B”, you might be saying to yourself, “but that’s not us.” If our business depends in part on foot traffic — people showing up at our office/storefront to do business — we can’t have workers not show up and expect that to have zero impact on our cash flow, or our company’s reputation. Our customers have come to rely on us to be there for them, regardless of what it’s like outside. If there’s a lot of competition in our area of business, one little “glitch” could send our customers elsewhere.

At the same time, we can’t risk the health or well being of our employees. What do we do?

We establish a “rain day” (or a snow day or ice day) policy, we put it in writing, and we make sure all employees — as well as our customers — know what that policy is. We establish clear, easy to follow procedures to ensure that the policy is carried out and we train all our employees periodically and when the likelihood of the threat is on the increase.

Does your company have an inclement-weather policy? Do you think it needs one?

How many times have you seen this in the movies — the “last stand”? A group of soldiers is heavily outnumbered, supplies are getting thin, and nerves are frayed.

Throne of Blood (Kurosawa, 1957)

Reinforcements are nowhere in sight. The enemy’s commander is just outside the gate, calling for the group to surrender.

Now, imagine yourself in the place of the officer in charge. Your organization is the castle/outpost/fortress under siege. You can fight or you can surrender; you’re surrounded, so retreat is not an option. It looks like there’s little chance of a favorable outcome for your small group. What do you do?

Your company might not be literally “under siege” but in our current economic state, you can be excused for feeling sometimes like the vultures are circling overhead. When times are tough for your business, what do you do?

1. Be a leader, not merely a boss. Get out in front of your employees. If you don’t demonstrate leadership capability, who will follow you?
2. Stand on your principles. There’s the expedient thing to do and there’s the right thing to do. If you believe in yourself, your product, and your employees, you’ll do the right thing.
3. Maintain employee morale. Convince yourself there’s no such thing as impossible, then demonstrate your conviction to your troops.
4. You know who your employees look up to — make those individuals part of your circle of command (“C of C”). Don’t lock yourself into one hierarchy.
5. Within your C of C, quickly determine your options.
6. Realistically assess your resources, strengths, and weaknesses.
7. Plan for the best- and worst-case scenarios.
8. Lay out the options for all your employees and explain why you prefer option ”x”.
9. Give your employees a choice whether to take a stand with you or cast their lot elsewhere. Those who aren’t firmly with you will weigh you down.
10. Execute your plan.

Remember — anyone can play a leader when things are going well. It’s in times of crisis when we find out who our true leaders are.

Maybe you and your business have been — or are — in a scenario like the one above. What kind of leadership did you display in that time of crisis? Do you have other ideas on how to lead in a crisis?

We were asked this by a reader not long ago, in reference to writing a quality procedure. Exactly what procedure, the reader didn’t say, so I’ll keep my explanation brief and general.

In the policies and procedures we offer on the Bizmanualz web site, we generally include a statement of purpose. That is, what’s the purpose of the procedure outlined in the document? Not only is what you do important — why you do it is just as important.

Again, why am I doing this?

Overall, the purpose of any procedure is to serve as training material. In addition, an important purpose of procedures is to ensure consistency. Procedures are designed to help reduce variation within a given process.

Furthermore, clearly stating the purpose for a procedure helps you gain employee cooperation, or compliance, and it instills in your employees a sense of direction and urgency.

The statement of purpose is a “soft” statement of reasons and goals. Objectives, on the other hand, are about quantifying and measuring. For any of your business processes, you must have measurable objectives. How do you know if your processes are working if you’re not tracking and measuring the results? How do you improve your processes if you don’t establish a baseline, then measure output against the baseline? And, how do you compete effectively if you’re not continually improving?

In short, a procedure’s purpose addresses the “why” and the objectives address “what”, “when”, “how”, and “how much”. The purpose is general, where the objectives are specific.

I hope that helps clarify the issue. If it doesn’t — or if you have a differing opinion — let me know, won’t you? Thanks.

Anyone will tell you it’s impossible to know how well your business is doing if you aren’t taking measurements. Those same people will tell you you have to measure the “right” things.

Yes, it’s just that simple…or so they’d have you believe. How do you know you’re measuring the right things, though?

W. Edwards Deming

W. Edwards Deming was one of the pioneers of management by measurement. Dr. Deming recognized that all processes are flawed — some more than others — and that variation can and does occur at every step in a process. The causes of that variation need to be identified and reduced if product quality is to be improved.

Deming believed that organizations must continually monitor and measure their processes. He taught that process data should be examined by managers to determine the causes of variation, eliminate them, and improve the process. This idea became known as the “Plan-Do-Check-Act” (PDCA) cycle.

The “plan” phase of the cycle is where, among many things, you state the goals you have in mind for the process. What are the expected results? In other words, how do you know the process works if you’re not tracking (measuring) its progress?

Your objectives have to be SMART – specific, measurable, attainable, relevant, and time-bound. If your objectives aren’t all of the above, your best-designed process plan is still doomed to failure.

Specific – Define your objectives in concrete terms (i.e. increase by 50%); fuzzy won’t do.

Measurable – Objectivity is the key here. Weight, time, growth, revenue — these are things we can measure with ease. We can’t measure “goodness”, “attractive”, or “quality” with certainty; they’re all relative (and subjective) terms.

Attainable – Your objectives must be realistic. Perfection is impossible, especially the first time around. No process is 100% efficient — variation will occur. One of your implied objectives is to reduce the variation in your process.

Relevant – While increased efficiency and decreased variation do result in cost savings, not every process can be directly measured in terms of euros, yen, or dollars saved. Make sure the people directly involved with the process can understand the process objectives.

Time-bound – Efficiency is determined by comparing output with various costs, like time and money (e.g., dollars per hour, units produced per minute). Even with pure research and development projects, you don’t have an infinite budget; you have to say, “We need tangible results by ‘x’ date.”

Does any of this ensure you’ll be measuring the right stuff from the outset? Well, no. You’ll actually have to rely on experience and research to help you set objectives the first time through. But, once you have the process in place — you’ve been through the “plan” phase and now you’re “doing” it — you’ll be gathering enough data from your process that you can “check” it and determine if you’re headed in the right direction.

You then “act” on that information and make corrections, if necessary. That’s the surest way to know — keep measuring and comparing as you reiterate the process.

Any questions? Comments?

I and a colleague of mine began a couple of informal polls last week as a result of the response to a recent blog post in which I asked the question, “Leaders: what makes us want to follow them?“. We set up a questionnaire on Survey Monkey, asking participants to identify the top three leadership characteristics from among those I listed in the post.

So far, participants in that poll believe the top three leadership qualities are:

1. Decisiveness (especially in a crisis);
2. Doing what’s right (not what’s popular); and
3. The ability to plan effectively.

Similarly, we asked members of a group on LinkedIn (Smart Leaders) an open-ended question: ”What do you feel are the two most important qualities a leader can have?” Participants in this case weren’t restricted to a list of a dozen or so items; instead, we wanted the first thing(s) that popped into their heads.

Nearly all men can stand adversity but if you want to test a man’s character, give him power.
Abraham Lincoln (1809-1865)

Naturally, responses are all over the place. Interestingly, a number objected to being limited to just two leadership qualities and gave us a half-dozen or more “most important” leadership qualities. For now, the two most important leadership qualities according to Smart Leaders are:

1. Vision; and
2. Passion.

There’s a host of other characteristics tied for 3rd place (e.g., courage, inspiration, empathy). As we get more responses from the LinkedIn group, the “top three” should become clearer. Of course, we’ll keep you updated.

Now it’s time to ask you — our readers — how you feel. What qualities do leaders need most, in your opinion? Are there two or three characteristics they need more than all the rest?

Do leaders need different qualities now than they did a decade ago, or a century ago? Are there people you work with who don’t have “leader” in their formal job title but are, in fact, leaders?

Head to either of our online polls (Survey Monkey or LinkedIn), or leave your comment on leadership below.

Thanks, and best wishes for the coming year,
Steve

Real leaders — not those people who run for office every other year, promising “real” leadership for a change — possess a combination of qualities and characteristics that make us want to follow them. Whether we naturally gravitate to these quality individuals or we subconsciously recognize their leadership, we follow them. We’re pretty good at recognizing greatness in certain people.

Why are some people great leaders? What do they possess that we don’t?

“What makes the sphinx the seventh wonder? What makes the dawn come up like thunder?”
Cowardly Lion, “The Wizard of Oz” (1939)

Leaders generally possess these characteristics:

• They are credible;
• They’re persuasive;
• They’re able to plan effectively;
• They have a strong belief system (a sound moral/ethical code);
• They communicate extremely well (direct, to the point);
• They’re confident, both in their abilities and in the abilities of others;
• They’re goal-oriented;
• They’re charismatic;
• They do what’s right, not necessarily what’s popular;
• They are decisive, especially in crises;
• They are responsible;
• They’re knowledgeable and experienced (and they share their knowledge and experience);
• They don’t become complacent (they don’t rest on their laurels);
• They trust, but don’t assume; and
• They have an eye for talent.

“Lead, follow, or get out of the way.”
Thomas Paine, The American Crisis, No. 1 (1776)

But where does it come from? Is there such a thing as innovative leadership quality? It seems anyone can be trained to be a manager, but leaders are cut from a different cloth. Why? It’s not that they’re born that way. They can be made, but there’s no easily reproducible process, no easy-to-follow recipe or we’d be doing it all the time.

The service academies seem to have the greatest success in this regard — they purposely educate and groom individuals to be leaders by instilling discipline, self-sacrifice, and an unshakable work ethic and by constantly emphasizing the need to plan for the best but prepare for the worst. Still, even they don’t have anything close to a perfect track record when it comes to turning out leaders. Similarly, there are outstanding leaders throughout history who never served in the military.

“The real leader has no need to lead; he is content to point the way.”
Henry Miller (1891-1980)

How are leaders best made, in your opinion? Or are they born? Do you go looking for leaders or do you wait for them to come to you? Does your organization have a process for identifying and training potential leaders?

The United States Senate gave its approval to a food safety bill, commonly known as “The Food Safety Modernization Act”, last week. The bill has to be reconciled with a similar one that passed the House over a year ago before the President will have anything to sign and the country will, in fact, have a law that specifically addresses food safety. Now, whether the implementation of said bill will actually ensure food safety is another thing altogether…

The Food and Drug Administration (FDA) has been in existence for over 100 years — it actually predates the Pure Food and Drug Act of 1906 — and was begun mainly in response to the proliferation of patent medicines and the often dubious claims people made of them. Food safety was first addressed by the passage of the Meat Inspection Act, which fell under the jurisdiction of the USDA.

Some kind of food safety regulation has been around for more than a century. Yet, while passing various health and food safety legislation for decades, Congress hasn’t actually done much to ensure our protection. They often assign enforcement of food safety laws to the FDA or USDA but the FDA, in particular, has been rendered toothless — ineffective — in recent history as funding for qualified personnel, training, research, and testing have dried up. This typically has the effect of passing the burden (i.e., expense) of ensuring safety on to other parties, such as the consumer. (Don’t believe me? Read the labels on the entrees and side dishes in your freezer.)

Furthermore, food safety standards that are more universal in nature — after all, we’re dealing with a global food supply chain — have been in existence for decades. HACCP (hazard analysis and critical control point) plans –not developed by or for the FDA, incidentally — have been commonplace for nearly forty years because they work!

Food businesses and other organizations (like ISO) have developed a number of easily implemented and universally applicable standards for reducing risks associated with growing, storing, processing, transporting, and consumption of food. ISO 22000 for food safety management systems was released in September, 2005. A complimentary standard, PAS 220 (designed to tighten specifications for food processors’ prerequisite programs, or PRP), was released three years later.

What’s my point? One, that we can’t bank on legislation alone to ensure the safety of the food we consume. The food industry appears to be well ahead of any legislative efforts.

Two, that wherever your company is located in the food supply chain, there are universal standards you can comply with that will ensure the safety of your product no matter where you and your customer are located. Complying with ISO 22000, PAS 220, and similar standards will greatly increase the likelihood that you’re compliant with whatever food safety legislation exists in any locale.

To help you further, Bizmanualz offers its “ISO 22000 FSMS Policies, Procedures, and Forms” manual — one that enables your company to ensure food safety and comply with ISO 22000 requirements with relatively little cost or effort on your part.

So, back to the original question: Is the world safer thanks to regulations like the Food Safety Modernization Act? Do you think more is needed? Or, to put it another way…

What ISN’T being done to ensure food safety?

What are procedures? Procedures are documents that describe business processes. Procedures are one tool we can use to train new and current employees how our processes work, and sometimes we show them how processes interact. Procedures can also help ensure a high degree of consistency in how processes operate and in the results they yield.

From "We Want Our Mummy", Columbia Pictures (1938)

Procedures are also a pain for many companies to write and maintain. Many organizations write procedures with one goal in mind — compliance. Not that there’s anything wrong with that. Either there’s a compelling business reason for you to comply, like a larger organization that says they won’t do business with you unless you comply with a certain standard, such as ISO 9001. Or, there are laws with which you have to comply simply to stay in business (for instance, worker safety and food safety regulations).

Strangely, when compliance is the most important — or the only — goal, companies often forget about their procedures once they’ve implement them. Instead of monitoring and measuring, reviewing, and adjusting their performance — gradually and continually improving the process — they put the Almighty Book of Policies and Procedures in a hallowed place on the shelf and ignore it.

From "vodex.co.uk" site

Why is that? Well, here’s what some companies say about procedures:

• “Writing procedures isn’t our business”
• “It’s a cost center, not a moneymaker”
• “It takes time and money to maintain procedures”

Writing Procedures Isn’t Our Business

It’s true — your customers aren’t buying your internal procedures. What ARE they buying? Yes, they’re purchasing a product…but is it just the product or service they’re buying? Of course not.

Besides paying for goods or services, your customers are paying for the quality of your product, your ability to produce a consistently good product, and/or your ability to act on problems quickly and efficiently. They like the fact that you don’t make excuses — you just fix problems. And how do you do that without implementing effective policies and procedures, like “how to conduct an internal audit” or “how to take corrective action“? You might, if you’re lucky, but luck doesn’t guarantee your customers consistently high-quality results.

Procedure Writing Is a Cost Center

True, it costs you time and money to develop, implement, and maintain procedures. The fact that you have to research, write, review, and approve procedures can appear expensive and time consuming.

But what does it cost you NOT to have procedures? Like we said earlier, effective internal procedures are what help you gain and keep customers. Without the high quality and consistency that procedures help ensure, you risk losing your hard-earned reputation — and your hard-won customers. It’s much easier to keep a satisfied customer than it is to obtain a new one and it’s infinitely easier to keep them than it is to win them back once you’ve disappointed them.

It Takes Time and Money to Maintain Procedures

“Besides”, many companies insist, “our people know what they have to do. They don’t need procedures once they have the proper experience ‘under their belts’.” But how did your employees get that knowledge in the first place? Were they given in-depth training? Was the training consistent? Are they able to build on that knowledge?

Besides, business circumstances change (look at the recession we still seem to be going through). Customers’ needs change over time. Regulations are added all the time — some don’t affect you but others have a great impact on your business. Are you accounting for these types of change in your procedures?

In short, maintaining your procedures will cost you something but not maintaining them will cost your company a great deal more. You run the risk of falling behind your competition, falling to the back end of the technology curve, or falling out of compliance if you’re not looking at your procedures as “living documents”. If you’re not continually looking to improve the way you do things, you run the risk of stunting your company’s growth.

To sum up, you really should develop, implement, and maintain business procedures because it’s just plain good business and not just because somebody’s making you.

What do you think? Can an organization’s growth be held back because of poor or nonexistent procedures?

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If you find your company is having trouble developing effective, meaningful procedures, check out our full line of business policies and procedures. They’ll make your policies-and-procedures journey easier to start and make it easier for you to stay on the right path.

For many companies, it’s that time of year — time for year-end performance reviews. Time to see if we can find our performance reviews from last year, or head over to Human Resources to get a copy. For managers, time to dust off the performance reviews from last year and see if anything’s changed.

If you’re like most of us, you haven’t kept a daily diary of your accomplishments, so you have to construct an account of the last 12 months from long-buried memories in just a few days. You don’t bother listing your close calls, almosts, and never-weres — you need to put a positive spin on your year.

You might go into the review feeling you did a “more-than-adequate” job, even if you can’t quantify it exactly. Then again, you might approach the review with a sense of foreboding. You’re not well prepared. Maybe you feel like you’re going to get slammed. Maybe you wish the shoe were on the other foot. Maybe you wish everybody would just forget about it.

The performance review, as most of us know it, is a broken process. Lately, there appears to be a groundswell of support for the idea of doing away with performance reviews. According to an article in a recent Wall Street Journal, many HR professionals are “frustrated that managers don’t have the courage” to give constructive feedback.

In an interview from July, 2010, UCLA business professor Samuel Culbert said that performance reviews should be dispensed with altogether because annual reviews don’t promote candid discussions about problems in the workplace or their potential solutions.

Going back to 2006, the Harvard Business School’s “Working Knowledge” page ran an article by James Heskett, one of the HBS faculty, in which he called into question the main objective of performance reviews. Professor Heskett asked, “Is (the objective) to weed out poor performers? To recognize the so-called A players? To provide the basis for compensation decisions?” He concluded that we don’t do a good job of establishing or communicating objectives.

W. Edwards Deming, one of the gods of quality, called the performance review one of the “deadly diseases of management“. You’re not going to find a much stronger indictment than that.

It’s been a few years since I’ve had a formalized performance review. The manager in question got much more out of the typical performance review because he always had the performance of the group in mind. He linked my performance to that of my teammates, which helped create and maintain a team ethos.

Unfortunately, his type of performance review wasn’t the norm. Too often, the performance review is an exercise with no apparent purpose, except to satisfy a regulatory requirement or follow a decades-old policy. We go through the motions but don’t accomplish anything. By conducting performance reviews the way we do, we miss so many opportunities for improvement.

We all deserve better from this “process”.

* * * * * * *

I’m currently conducting a performance review poll on LinkedIn. Please drop in (it’ll only take 10 seconds, if that) and register your opinion. Or, post a comment below.

What do you think? Do performance reviews work for your company or your group? Or, do you think the performance review should’ve been retired with the mechanical adding machine and green eyeshades?

* * * * * * *

REFERENCES

• Light, Joe, “Human Resource Executives Say Reviews Are Off the Mark”, Wall Street Journal (Nov 7 2010) – http://online.wsj.com/article/SB10001424052748704405704575596723632340284.html
• NPR Staff, “Annual Job Review Is ‘Total Baloney,’ Expert Says”, NPR-dot-org (Jul 8 2010) – http://www.npr.org/templates/story/story.php?storyId=128362511
• Heskett, Jim, “What’s to Be Done About Performance Reviews?”, HBS Working Knowledge (Nov 27 2006) – http://hbswk.hbs.edu/item/5563.html
• “Management’s Five Deadly Diseases – a Conversation with Dr. W. Edwards Deming”, Encyclopedia Brittanica Educational Corporation , 1984 – http://www.youtube.com/watch?v=ehMAwIHGN0Y. (Video is approx. 15 minutes long.)

FURTHER READING

• Peralta, Eyder, “Top 10 Performance Review Euphemisms”, NPR-dot-org (Nov 9 2010) – http://www.npr.org/blogs/thetwo-way/2010/11/09/131189907/top-ten-performance-review-euphemisms