Trust Rules

I had an important customer service experience a few weeks ago with Thrifty, the car rental company, when I rented a car from them for 3 days in Tallahassee.  As I was checking out, the Thrifty employee said to make sure I fill up the car before I return it, and I said I would.  During my trip I drove up into Alabama for my meetings, and then back down through southern Georgia before filling up the car with gas and returning it to the Tallahassee airport.  I put about 250 miles on the car over the 3 days.   When I arrived to return the car, the Thrifty employee checked out the car, noted the mileage and fuel level, and asked me how the car was.  I said it was fine.  And then he asked me if I filled it up with gas.  I looked at him skeptically, as I wasn’t sure if he was kidding or not.   I had watched him note the full tank.  I said, of course, I did – the tank is on full, and I put a few hundred miles on the car.  He then asked me for the fuel receipt. 

Let’s stop for a second: I’m the customer, and I’ve told him that I filled up the car with gas.  I know there are some people who will rent a car and drive a few miles to their meeting and back and return the car without filling it up, because the tank still says it’s full.  However, he knows the miles that I put on the car during my trip, so I would have to have filled it up for it to be on full.  I said to him, “Don’t you trust me?”  He said, of course, but his company policy is to ask for the receipt.  I showed him my receipt, and I suggested that in the future he should really trust the customer.  Good relationships are all about trust.    So what does this experience say to me about Thrifty, and how much they trust me? 

I recently ran across a great quote by Antoine De Saint-Exupery: “If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give orders.  Instead, teach them to yearn for the vast and endless sea.”   In other words, inspire your people and trust that they will figure out the best way to make it happen.  Trust is a key characteristic of best in class companies. 

Truth Number 6 from The Truth About Leadership (Kouzes and Posner, copyright 2010) is Trust Rules.   Keep in mind, in this case the word ‘trust’ is a noun and ‘rules’ is a verb, not the other way around.

The Ownership Thinking Steering Committee

I am often asked about the role a steering committee should play in the organization. A steering committee is a cross-functional group of employees who act as a “corporate conscience” for Ownership Thinking in the company. By this I mean that their role is to ensure full engagement of employees through effective communication and the use of Ownership Thinking tools such as rapid improvement plans (RIPs), scoreboards, huddles, forecasting and incentive plans. Their role is not to solve every problem but rather to serve as a catalyst of communication, enabling an easy flow of issues, solutions and celebration throughout the company. Different companies define this role in different ways.

Within each company, the steering committee is responsible for defining their role and boundaries in the company. For example, the role of the steering committee at a benefits consulting firm is to establish a list of potential rapid improvement plans that could be developed from key performance indicators that the company tracks. Once a RIP is identified, the steering committee pulls together the people in the company who know the most about that key issue or are most directly affected by it, and they form a temporary committee to outline the details of the rapid improvement plan, including the specific measurable objective, the duration, the actions and people involved, the celebration and so forth. In this way, their steering committee is essentially a RIP catalyst committee.

At a geo-thermal pool heating company, the steering committee has a much broader role. In addition to serving as a catalyst for rapid improvement plans, the committee also organizes regular company-wide WGO (What’s Going On) meetings, ensures that scoreboards are updated, that huddles are happening and has even developed a company library to encourage employee personal development.

Steering Committees often have a chair who calls the meetings, sets the agenda and encourages participation. Employees rotate in and out of steering committees on some frequency, sometimes annually, sometimes more frequently, and they meet often enough to achieve the role they set for themselves in the company. Overall it is important that they establish a mission and vision for themselves. Establishing this level of discipline and organization enhances their credibility and their ability to get things done, as well as helps them address any nay-sayers.

Please let me know your steering committee experiences or questions.

CASCADING

There’s a great visual metaphor for business related to the concept of cascading. The idea is that you can conceive of your company as a waterfall in which the decisions made at each level affect the choices made further down the waterfall all the way to the pool. You can imagine that the decisions made at the top of the waterfall are quite strategic. They revolve around: what business are we going to be in, what’s our mission, our vision, what are our values, our strategies? The choices made further down the waterfall are bound by the choices made above.

Let’s say a CEO decides to create a candy company. Given that decision, the president of the company might ask the question, “how will we win in the candy business?” The president’s choice is still broad and fairly abstract but it must be made within the confines of the choice made upstream. Suppose the president decides that they will win by manufacturing organic chocolate with superior new product development capabilities. These choices will impact the decisions made throughout the organization: hiring, marketing talent, strategic purchasing, well-trained sales and customer service teams and so on. The employees at these various levels make decisions within the confines of the upstream decisions.

At each level of our expanding waterfall more people are involved in the decisions and the choices become more tactical and operational in nature. One of the tools used at the top of the waterfall should be a leadership scoreboard. The leadership team should meet formally and regularly to communicate progress, identify issues and forecast results on both financial and high-level operational issues. Deeper into the organization, scoreboards should be used as well, but the key performance indicators (KPIs) on these scoreboards should focus on operational KPIs and issues the staff in these departments can impact. For example, # of new product introductions, # qualified prospects, overtime, downtime, waste, quality, on time delivery, cases shipped, order accuracy, etc.

At the base of our waterfall I suggest companies design rapid improvement plans (RIPs). RIPs are high involvement formalized plans to improve performance on a particular key performance indicator in a short period of time. RIPs involve everyone in an organization. They support the notion of a high engagement culture. RIPs are potentially the most impactful component of doing Ownership Thinking because they help employees at all levels of a company (the waterfall’s ‘pool’) stay financially focused, and they do so in a fun, high involvement, empowered way.

The leaders at the top of the waterfall must work hard to create an environment where those below them understand their rationale for making certain decisions. They must signal that information flows upstream as well and they need to be open to engaging in mature discussions. This is important because the results from their downstream decisions affect not only themselves, but also the upstream decisions that compelled their choices.

Entitlement Mentality

Entitlement mentality is ruining our country. You can't really start there though, because that is the result. You can go back a few steps and see it is ruining our states, our city budgets, our companies. Back further though and we can see it all starts with the individual. How did we end up here? Where did this entitlement mentality come from??

My feeling is we all believe self-esteem is important. I believe it, and I bet most Americans do too. We want our kids to be confident and sure of themselves. As our country has gotten wealthier over the generations, we lost sight of how people get self-esteem, and as parents we have tried to give self-esteem to our kids. We started doing some crazy things like giving our kids trophies for participating, giving 12th place ribbons, turning the score off in games if one team is losing badly and so forth. All to protect our kids' fragile self-esteems. The thinking is, "if they don't feel failure, they will feel like winners". The problem with that though, is it's not really winning. And worse, the child doesn't know the joy of accomplishment.

There has to be a chance of failure in order for the joy of accomplishment to feel earned. The reality is you can't give self-esteem to someone - they have to earn it. And when people live with an earning mentality, that have effectively eradicated entitlement.

There is a concept called "cognitive surplus" that I recently encountered, that really resonates with me. I first read about it in a business book I read a few weeks ago - I can't remember which one - and as I was searching the web trying to find the book, I came upon a presentation delivered by Clay Shirky at a Web 2.0 Conference in April 2008 (http://laughingsquid.com/clay-shirky-on-cognitive-surplus/). It's a 15 minute speech, very well delivered, and focuses on information technology as it relates to cognitive surplus. But this term fits perfectly with the subject about which I talk to business leaders: tapping their employees' cognitive surplus, i.e. tapping that incremental knowledge they have that they are either not asked to use, or are not given the opportunity to use, in a business environment. Engaging your employees; drawing them into the daily goings-on in the business. In order to do that, they need some tools, like business acumen training, key performance indicators, scoreboards, rapid improvement plans, effective incentive plans, etc...