One of the passions in my life is working and supporting those who are in the transition community (job search, to those of you who are lucky enough never to have experienced the event). When, as VP Marketing, I parted company with Unilever, it provided me with the best opportunity of my life – speaking, consulting and writing on business, motivation, leadership. I now do a lot of pro bono work, showing people how they can SHEIFGAB the World.
For many the transition process is a deeply painful, distressing and de-motivating experience. It hurts financially and it hurts psychologically.
I am convinced though that many executives who are in paid employment suffer similar “psychological overdrafts” related to lack of job satisfaction and, strong frustration levels associated with corporate bureaucracy, career rut, work life balance etc.
There are a lot of mid-level, mid-career executives out there who hate their job, hate going to work in the morning and who are stuck in a twilight zone of poor job satisfaction and de-motivating work environment. Unfortunately for them, they are either afraid to change or do not have the financial wherewithal to gamble and jump.
A recent study by HR gurus and as they like to say “Human Capital Solution Providers,” Hudson Highland Group, provides some interesting insight on this topic. Hudson conducted a global survey of more than 2,100 professionals in full-time and independent roles, in the U.S., Australia, Belgium, France, Germany, the Netherlands, and the United Kingdom. The survey was conducted amongst Full Time Professionals (FTP) and Independent Professionals (IPros) to determine attitudes to work, job satisfaction etc. The report The Lure of Autonomy: A Global Study of Professional Workers is available at http://www.hudson-index.com/node.asp?SID=5466
Key findings include
* Independent professionals are more pleased than full-time employees with the type of work they do, their employer and the industry in which they work.
* While both groups are most satisfied with achieving high levels of competence and expert knowledge, IPros are more satisfied with their autonomy and doing interesting work.
* Full-time professionals rate paid vacation and health benefits among the most satisfying aspects of their jobs.
* If full-timers could change one thing about their situation, it would be working fewer hours and no longer feeling as if they are “on call” at all times. One full-time professional states, “The term ‘full-time’ has come to mean 60+ hours per week. I would like to see that number come down.”
* Neither IPros nor full-timers are particularly satisfied with their job security. While full-time employees are more satisfied than independents, neither group scored satisfaction with their security higher than 6.9 on a 10-point scale.
You might say, “Nothing too surprising in those results.” Maybe not, but as an iPodding IPro (sorry just had to throw that in), I do believe that job satisfaction is substantially better for the independent who has escaped the corporate world. I did enjoy corporate life, but the level of independence, the sense of autonomy and the opportunity to learn as I deal with different clients, different corporate cultures and industries has provided me with a growth experience I would not have got in corporate land. Sure there are downsides to being an IPro. If anyone expects to work less hours than in corporate land, it don’t happen. The difference is, you are doing it for yourself. Interestingly, Hudson also suggests the IPro has a higher income level the FTP, at least based on survey respondents. It should be noted that the average IPro surveyed had been out of corporate land for at least seven years.
If you can survive out in that independent jungle for the first few years, the benefits do come. For the IPro, income security initially is an issue, but Hudson’s findings that FTPs scored job security at only 6.9 on a 10-point scale is lower than I would have expected. Sure, the days of the job for life are gone, but I don’t recall seeing such a low rating in a cross industry, multi-country survey before.
Ah – the benefits of the IPro: Job satisfaction, job security (at least it is in your own hands), flexibility, blogging. What more could you want? Well, another high paid speaking engagement, maybe!!
Keep the shovel tippin'
Conor Cunneen
Thursday, April 20, 2006
Tuesday, April 18, 2006
Krispy Kreme - A Great Brand Going Stale
The good ol’ days for Krispy Kreme seem a long way off right now. Not so long ago, the Krispy Kreme brand had the same type of cachet and consumer loyalty which Starbucks continues to exhibit. It was “everyone’s” favorite donut. For many that may still be the story, but the icing sure looks pretty tacky on the famous brand these days. Today’s share price of $7.99 is a long way from its peak in the high $40’s during the glory days of 2003.
So what went wrong with one of the most touted brands of recent years? Great brands need great, or at least good management. Starbucks, Harley-Davidson, Apple, McDonald’s in recent years have benefited from quality execution of a relevant strategy.
Krispy Kreme does not seem to have been as fortunate. To some extent, the company founded in 1937, underwent a mid-life crisis in recent years. Former CEO, Scott Livengood drove the brand’s expansion from 27 to 43 states between 2000 – 2004. It is easy to say the business expanded too fast, but who questions the speed of expansion of Starbucks for instance?
The difference seems to be that Starbucks has strong financial leadership, a truely visionary Chairman,does not franchise and at least to date has not been impacted by macro-trends such as the short but impactful Atkins craze.
To some extent the financial, if not the consumer success of Krispy Kreme was smoke and mirrors. A special internal committee investigation following Livengood’s departure presented a damning report in August 2005.
"In our view, Scott A. Livengood, former Chairman of the Board and Chief Executive Officer, and John W. Tate, former Chief Operating Officer, bear primary responsibility for the failure to establish the management tone, environment and controls essential for meeting the Company's responsibilities as a public company. Krispy Kreme and its shareholders have paid dearly for those failures, as measured by the loss in market value of the Company's shares, a loss in confidence in the credibility and integrity of the Company's management and the considerable costs required to address those failures.”
Even more damning the report went on to suggest that the “number, nature and timing of the accounting errors strongly suggest that they resulted from an intent to manage earnings.”
Since these apparent financial shenanigans became obvious to management, all hands have been on the tiller attempting to steady the ship. Sales continue to plummet. Numbers announced for the quarter ending January (only released yesterday, April 17th!) show system-wide and company average weekly sales per factory store decreased approximately 9% and 10%, respectively, compared to the fourth quarter of fiscal 2005. By any standards that is a huge decline for a once shooting star.
It will be interesting to see if new President and CEO Daryl Brewster – a Kraft veteran, will be able to steady the ship. Despite all of its problems, most of them self-incurred, Krispy Kreme still has a brand cachet and equity to be envied. Assuming quality management is in place, this brand equity will provide the corner stone for a smaller but more profitable donut chain. Don’t be surprised if Krispy Kreme becomes a takeover target once all those little financial issues have been sorted. I’m sure Starbucks has never gazed covetously at the struggling donut chain!
So what went wrong with one of the most touted brands of recent years? Great brands need great, or at least good management. Starbucks, Harley-Davidson, Apple, McDonald’s in recent years have benefited from quality execution of a relevant strategy.
Krispy Kreme does not seem to have been as fortunate. To some extent, the company founded in 1937, underwent a mid-life crisis in recent years. Former CEO, Scott Livengood drove the brand’s expansion from 27 to 43 states between 2000 – 2004. It is easy to say the business expanded too fast, but who questions the speed of expansion of Starbucks for instance?
The difference seems to be that Starbucks has strong financial leadership, a truely visionary Chairman,does not franchise and at least to date has not been impacted by macro-trends such as the short but impactful Atkins craze.
To some extent the financial, if not the consumer success of Krispy Kreme was smoke and mirrors. A special internal committee investigation following Livengood’s departure presented a damning report in August 2005.
"In our view, Scott A. Livengood, former Chairman of the Board and Chief Executive Officer, and John W. Tate, former Chief Operating Officer, bear primary responsibility for the failure to establish the management tone, environment and controls essential for meeting the Company's responsibilities as a public company. Krispy Kreme and its shareholders have paid dearly for those failures, as measured by the loss in market value of the Company's shares, a loss in confidence in the credibility and integrity of the Company's management and the considerable costs required to address those failures.”
Even more damning the report went on to suggest that the “number, nature and timing of the accounting errors strongly suggest that they resulted from an intent to manage earnings.”
Since these apparent financial shenanigans became obvious to management, all hands have been on the tiller attempting to steady the ship. Sales continue to plummet. Numbers announced for the quarter ending January (only released yesterday, April 17th!) show system-wide and company average weekly sales per factory store decreased approximately 9% and 10%, respectively, compared to the fourth quarter of fiscal 2005. By any standards that is a huge decline for a once shooting star.
It will be interesting to see if new President and CEO Daryl Brewster – a Kraft veteran, will be able to steady the ship. Despite all of its problems, most of them self-incurred, Krispy Kreme still has a brand cachet and equity to be envied. Assuming quality management is in place, this brand equity will provide the corner stone for a smaller but more profitable donut chain. Don’t be surprised if Krispy Kreme becomes a takeover target once all those little financial issues have been sorted. I’m sure Starbucks has never gazed covetously at the struggling donut chain!
Thursday, April 13, 2006
McDonald's - THE Most Impressive Turnaround?
McDonald’s reported another set of impressive results this morning, something which they have been doing now for thirty-five consecutive months. Results for March show same store sales in U.S. grew 6.6% for the month and the quarter.
Do you remember when it was a basket case? A little over three years ago, it announced its first ever quarterly loss - $343m, ditched Chairman and CEO Jack Greenberg, while analysts wrote the obituary, not just of McDonald’s but the fast food segment in general.
Today, the Oakbrook, IL based hamburger behemoth is a poster child for corporate turnaround. Just as those tarnished Golden Arches a few years ago led the downward consumer attitude to fast food, now it is leading consumers and media back up that perception curve.
The best decision the corporation made in recent years was also one that got little initial favorable reaction. McDonald’s invited ex-Vice Chairman Jim Cantalupo to be Chairman and CEO in January 2003, after it exited Greenberg.
I and many others could not see the logic of bringing back to the organization a man who had retired but eight months previous and however you look at it, must bear some responsibility for the appalling results the company had been generating. In his memoir, In the Arena: A Memoir of Victory, Defeat and Renewal, Richard Nixon wrote that the most creative time of his life was after he left the White House. He had time to think without the mad pressures of day to day activity.
Maybe the eight months out of the organization allowed for the same creative thinking and clarity of vision for Cantalupo. The man who unfortunately only lasted sixteen months in the position before taken by an apparent heart attack, returned with a very clear and compelling vision as to what a successful McDonald’s unit might look like. At his first investor conference – Jan 16, 2003, he proclaimed “Clean restrooms and hot food served in our restaurants would be a change.” He repeated that line consistently while his successor as CEO, Charlie Bell regularly said “We will have the cleanest restrooms in the industry.”
Analysts were not impressed at Cantalupo’s ideas following that conference call. Comments included:
“A continuation of the recent past”
“Plans were vague and did not inspire confidence”
“Unimpressed,” suggested another industry sage.
In my book, Why Ireland Never Invaded America, I reference the concept of The ER Factor – Drivers of Corporate Health. The idea is that E (Execution) of an R (Relevant) strategy will drive corporate health. I admit I dreamed that concept up after listening to Cantalupo and Bell speak on a number of occasions. Bell, in particular spoke about being “relevant” to the McDonald’s consumer and executing properly. Today, the corporation truly is offering relevant products and being rewarded for it. I’ll comment on their premium coffee at a later stage.
The bottom line is it went back to basics and got it right. It updated its menu, it has positioned itself as a provider of healthier offering, but the first and most important thing was that Chairman Cantalupo demanded the restaurants get back to basics – clean restrooms and hot food.
I write and speak a lot on corporate and personal vision. Some of the vision and value statements expounded by companies are garbage, dreamed up by executives during a corporate retreat in Naples Florida or Laguna Beach, California. But sometimes, executives get it AND make it happen. Cantalupo could clearly see and visualize what a successful unit would look like and demanded it happen. He was lucky that McDonald’s had their Premium Salads ready to roll out some three months after he took office (although one year BEHIND the launch of Wendy’s Salad Sensations.) This was an “innovation” that the hamburger giant implemented exceptionally well and which helped re-energize the organization, something that is obvious in the results it continues to generate.
Cheers
Conor Cunneen - C.A.S.H.
Consultant, Author, Speaker, Humorist
Do you remember when it was a basket case? A little over three years ago, it announced its first ever quarterly loss - $343m, ditched Chairman and CEO Jack Greenberg, while analysts wrote the obituary, not just of McDonald’s but the fast food segment in general.
Today, the Oakbrook, IL based hamburger behemoth is a poster child for corporate turnaround. Just as those tarnished Golden Arches a few years ago led the downward consumer attitude to fast food, now it is leading consumers and media back up that perception curve.
The best decision the corporation made in recent years was also one that got little initial favorable reaction. McDonald’s invited ex-Vice Chairman Jim Cantalupo to be Chairman and CEO in January 2003, after it exited Greenberg.
I and many others could not see the logic of bringing back to the organization a man who had retired but eight months previous and however you look at it, must bear some responsibility for the appalling results the company had been generating. In his memoir, In the Arena: A Memoir of Victory, Defeat and Renewal, Richard Nixon wrote that the most creative time of his life was after he left the White House. He had time to think without the mad pressures of day to day activity.
Maybe the eight months out of the organization allowed for the same creative thinking and clarity of vision for Cantalupo. The man who unfortunately only lasted sixteen months in the position before taken by an apparent heart attack, returned with a very clear and compelling vision as to what a successful McDonald’s unit might look like. At his first investor conference – Jan 16, 2003, he proclaimed “Clean restrooms and hot food served in our restaurants would be a change.” He repeated that line consistently while his successor as CEO, Charlie Bell regularly said “We will have the cleanest restrooms in the industry.”
Analysts were not impressed at Cantalupo’s ideas following that conference call. Comments included:
“A continuation of the recent past”
“Plans were vague and did not inspire confidence”
“Unimpressed,” suggested another industry sage.
In my book, Why Ireland Never Invaded America, I reference the concept of The ER Factor – Drivers of Corporate Health. The idea is that E (Execution) of an R (Relevant) strategy will drive corporate health. I admit I dreamed that concept up after listening to Cantalupo and Bell speak on a number of occasions. Bell, in particular spoke about being “relevant” to the McDonald’s consumer and executing properly. Today, the corporation truly is offering relevant products and being rewarded for it. I’ll comment on their premium coffee at a later stage.
The bottom line is it went back to basics and got it right. It updated its menu, it has positioned itself as a provider of healthier offering, but the first and most important thing was that Chairman Cantalupo demanded the restaurants get back to basics – clean restrooms and hot food.
I write and speak a lot on corporate and personal vision. Some of the vision and value statements expounded by companies are garbage, dreamed up by executives during a corporate retreat in Naples Florida or Laguna Beach, California. But sometimes, executives get it AND make it happen. Cantalupo could clearly see and visualize what a successful unit would look like and demanded it happen. He was lucky that McDonald’s had their Premium Salads ready to roll out some three months after he took office (although one year BEHIND the launch of Wendy’s Salad Sensations.) This was an “innovation” that the hamburger giant implemented exceptionally well and which helped re-energize the organization, something that is obvious in the results it continues to generate.
Cheers
Conor Cunneen - C.A.S.H.
Consultant, Author, Speaker, Humorist
Wednesday, April 12, 2006
Bill Clinton - A Great Communicator
Don't laugh. Forget the man's politics, if you wish. Forget "It depends what the definition of 'is' is," Bill Clinton is one of the most impressive speakers and communicators on the circuit today.
I'm currently posting a number of "Great Speeches You May Not Have Heard" on my website at www.irishmanspeaks.com and at least two Clinton speeches will appear.
I got particularly interested in Bill Clinton after I saw his remarks at the funeral for Coretta Scott King. Even right wing opponents gave him credit! A son of the segregated South, he became a powerful advocate for Civil Rights. But he was also not afraid to make some blunt comments. Many commentators suggest that Clinton's most impressive Civil Rights speech was when he spoke at the Convocation of the Church of God in Christ in Memphis, November 13, 1993.
President Clinton was still relatively new to the presidency when he spoke in Memphis and had yet to undergo the well publicized travails about his White House indiscretions. Clinton is a gifted orator and communicator if sometimes long-winded. Irrespective of his politics, he has the ability to empathize with people and make them feel good.
In Bob Shieffer's memoir, This Just In, Schieffer writes of his wife's reaction after meeting Bill Clinton for the first time. "He's got it. When he shook my hand, he held it just an instant longer than a person normally would, and he held eye contact just a second longer than someone you meet usually does not long enough to call it flirting, but just long enough to make you feel at that moment, you're the most important person in the room."
This speech and a number of others where he speaks from the heart does resonate strongly with the listener and reader. Interestingly, his speech writer Josh Gottheimer says Clinton spoke extemporaneously relying largely on notes he had scribbled on the original speech. Awesome!
Clinton basically decried the culture of violence which was destroying many aspects of the African-American community. He asked the audience "(If Dr. Martin Luther King)were to reappear by my side today and give us a report card on the last 25 years, what would be say?
The following are some truly powerful lines Clinton threw out. I quote them to show Clinton's ability to empathize with an audience and show how a brilliant orator can paint vivid, sometimes painful pictures.
"You did a good job, he would say, voting and electing people who formerly were not electable because of the color of their skin. You have more political power, and that is good. You did a good job, he would say, letting people who have the ability to do so live wherever they want to live, go wherever they want to go in this great country.
You did a good job, he would say, elevating people of color into the ranks of the United States Armed Forces to the very top or into the very top of our Government.
You did a very good job, he would say.
He would say, you did a good job creating a black middle class of people who really are doing well, and the middle class is growing more among African-Americans than among non-African-Americans. You did a good job; you did a good job in opening opportunity.
But he would say, I did not live and die to see the American family destroyed.
I did not live and die to see 13-year-old boys get automatic weapons and gun down 9-year-olds just for the kick of it.
I did not live and die to see young people destroy their own lives with drugs and then build fortunes destroying the lives of others. That is not what I came here to do.
I fought for freedom, he would say, but not for the freedom of people to kill each other with reckless abandon, not for the freedom of children to have children and the fathers of the children walk away from them and abandon them as if they don't amount to anything. I fought for people to have the right to work but not to have whole communities and people abandoned. This is not what I lived and died for."
Over the years, presidential speech writers have torn the passion out of presidential speeches. Clinton, like George W. Bush (and indeed most other speakers, presidential or not) when speaking from the heart, when not hidebound by
protocol and etiquette can and does connect.
I'm currently posting a number of "Great Speeches You May Not Have Heard" on my website at www.irishmanspeaks.com and at least two Clinton speeches will appear.
I got particularly interested in Bill Clinton after I saw his remarks at the funeral for Coretta Scott King. Even right wing opponents gave him credit! A son of the segregated South, he became a powerful advocate for Civil Rights. But he was also not afraid to make some blunt comments. Many commentators suggest that Clinton's most impressive Civil Rights speech was when he spoke at the Convocation of the Church of God in Christ in Memphis, November 13, 1993.
President Clinton was still relatively new to the presidency when he spoke in Memphis and had yet to undergo the well publicized travails about his White House indiscretions. Clinton is a gifted orator and communicator if sometimes long-winded. Irrespective of his politics, he has the ability to empathize with people and make them feel good.
In Bob Shieffer's memoir, This Just In, Schieffer writes of his wife's reaction after meeting Bill Clinton for the first time. "He's got it. When he shook my hand, he held it just an instant longer than a person normally would, and he held eye contact just a second longer than someone you meet usually does not long enough to call it flirting, but just long enough to make you feel at that moment, you're the most important person in the room."
This speech and a number of others where he speaks from the heart does resonate strongly with the listener and reader. Interestingly, his speech writer Josh Gottheimer says Clinton spoke extemporaneously relying largely on notes he had scribbled on the original speech. Awesome!
Clinton basically decried the culture of violence which was destroying many aspects of the African-American community. He asked the audience "(If Dr. Martin Luther King)were to reappear by my side today and give us a report card on the last 25 years, what would be say?
The following are some truly powerful lines Clinton threw out. I quote them to show Clinton's ability to empathize with an audience and show how a brilliant orator can paint vivid, sometimes painful pictures.
"You did a good job, he would say, voting and electing people who formerly were not electable because of the color of their skin. You have more political power, and that is good. You did a good job, he would say, letting people who have the ability to do so live wherever they want to live, go wherever they want to go in this great country.
You did a good job, he would say, elevating people of color into the ranks of the United States Armed Forces to the very top or into the very top of our Government.
You did a very good job, he would say.
He would say, you did a good job creating a black middle class of people who really are doing well, and the middle class is growing more among African-Americans than among non-African-Americans. You did a good job; you did a good job in opening opportunity.
But he would say, I did not live and die to see the American family destroyed.
I did not live and die to see 13-year-old boys get automatic weapons and gun down 9-year-olds just for the kick of it.
I did not live and die to see young people destroy their own lives with drugs and then build fortunes destroying the lives of others. That is not what I came here to do.
I fought for freedom, he would say, but not for the freedom of people to kill each other with reckless abandon, not for the freedom of children to have children and the fathers of the children walk away from them and abandon them as if they don't amount to anything. I fought for people to have the right to work but not to have whole communities and people abandoned. This is not what I lived and died for."
Over the years, presidential speech writers have torn the passion out of presidential speeches. Clinton, like George W. Bush (and indeed most other speakers, presidential or not) when speaking from the heart, when not hidebound by
protocol and etiquette can and does connect.
Monday, April 10, 2006
Satisfaction - Why Toyota Camry "costs" more than the Malibu
Just finished reading
Satisfaction
How Every Great Company Listens to the Voice of the Customer
Chris Denove and James D. Power IV of J.D. Power and Associates
In the foreword to this interesting book, J. D. Power III, the founder of J. D. Power and Associates recalls two meetings where he presented to Pontiac representatives. Meeting one took place in January 1980 when he detailed the Japanese automakers emphasis on quality. He predicted that the then GM market share of 48% would drop to 33% by the end of the decade. Not too surprisingly, some of the Pontiac / GM representatives did not take too kindly to the prediction.
Famed baseball player and sometime philosopher reputedly said, “Predictions are notoriously difficult – especially predictions of the future.” Power’s anecdote provides living proof of this little witticism, because he got his prediction wrong. The GM share fell to that 33% share two years earlier than predicted! Power made a similar presentation to Pontiac executives in 1989, providing similar dread warnings. GM’s share today is in the mid-twenties and most people are familiar with the terrible financial situation this once proud industry behemoth is now in.
Power’s overall point. – Product quality counts. It is a key determinant of customer satisfaction. Customer satisfaction leads to improved financial performance. The author’s make the point that executives know this correlation but do not always live and breath this philosophy.
Customer satisfaction builds loyalty. Good customer service often generates good word of mouth advertising – no matter what the industry. I found it interesting that one of the nation’s largest house builders, Pulte Homes, suggests that 45% of its sales are influenced by the positive recommendations of another customer. I might have been a little dubious of that figure had I not learned at a recent conference for mortgage brokers I attended, that the top performing brokers got up to 40% of their business from previous customers!!
Satisfaction contains numerous product references featuring good and bad performance by manufacturers and service providers. Not too surprisingly, JetBlue and Lexus get significant coverage reflecting a very high level of customer satisfaction. The book was finished before JetBlue ran into some loss making quarters which it could be argued undermines the thesis of the book, although I think it would have taken an absolute genius (or a SouthWest executive ) to figure out just how dramatically aviation fuel would increase. It will be interesting to see how JetBlue performs over coming quarters, but I tend to believe that their renowned customer service combined with very strong customer advocacy will bring them back to profitability.
Lexus figures prominently in the book simply because they are THE best and consistently so. It really is astonishing that Lexus was able to take brand leadership in the luxury car market, against Mercedes-Benz, Cadillac and BMW within ten years of entering this market sector.
One of the many interesting chapters in the book refers to Different Companies, Different Touchpoints. Here the authors suggest that a company’s ability to understand the various ways its business touches customers and then uses that knowledge is what determines success. For instance the touch points for service providers:
* Objective quality of the service provided
* Subjective experience of how the service is performed
* Process by which the service is acquired
differ from the touchpoints differ for product manufacturers e.g. Lexus
* Product execution
* Product quality
* Sales experience (as perceived by the customer)
* Service experience
The continued success of Lexus isn’t just due to the quality of the car itself (which is superb) but also due to the overall customer experience and the satisfaction of all touchpoints. I can vouch for this personally, because when I bring in my ten year old Lexus for a winter service, the loaner car out in the parking lot has had its engine running for many minutes. Thus I sit into a nice warm car and off we go. Maybe other dealers do this, but I know that I regularly talk up Lexus (become an advocate) for the brand after visiting the dealership.
Enterprise Rent-a-Car gets kudos from the authors also. It is another organization that maintains very high levels of customer satisfaction which has helped it become the largest car rental company in the United States. Do you remember when Avis would proudly claim “We’re number two – we try harder”? Seems as if it will have to change that to “number three” today.
If you need good solid evidence of the value of quality and customer satisfaction, look no further than the price of a Chevrolet Malibu as compared to its Toyota competitor, the Camry. Both models target basically the same market and provide roughly same functionality and mileage. Indeed, the authors suggest that the current real quality gap between the two cars is quite small. Indeed in writing this review, I checked the J.D Power site www.jdpower.com and compared the two vehicles. The Malibu rates better in total!! Yet, the authors state that because of the perceived reputation of the Camry, the car normally sells for about $2,000 more for a comparable specification. Given that GM sells about 250,000 Malibus per year, that is a significant drop in revenue. Effectively, the cost of many years of lost Satisfaction.
A good book written by people who know the benefits of quality.
Satisfaction
How Every Great Company Listens to the Voice of the Customer
Chris Denove and James D. Power IV of J.D. Power and Associates
In the foreword to this interesting book, J. D. Power III, the founder of J. D. Power and Associates recalls two meetings where he presented to Pontiac representatives. Meeting one took place in January 1980 when he detailed the Japanese automakers emphasis on quality. He predicted that the then GM market share of 48% would drop to 33% by the end of the decade. Not too surprisingly, some of the Pontiac / GM representatives did not take too kindly to the prediction.
Famed baseball player and sometime philosopher reputedly said, “Predictions are notoriously difficult – especially predictions of the future.” Power’s anecdote provides living proof of this little witticism, because he got his prediction wrong. The GM share fell to that 33% share two years earlier than predicted! Power made a similar presentation to Pontiac executives in 1989, providing similar dread warnings. GM’s share today is in the mid-twenties and most people are familiar with the terrible financial situation this once proud industry behemoth is now in.
Power’s overall point. – Product quality counts. It is a key determinant of customer satisfaction. Customer satisfaction leads to improved financial performance. The author’s make the point that executives know this correlation but do not always live and breath this philosophy.
Customer satisfaction builds loyalty. Good customer service often generates good word of mouth advertising – no matter what the industry. I found it interesting that one of the nation’s largest house builders, Pulte Homes, suggests that 45% of its sales are influenced by the positive recommendations of another customer. I might have been a little dubious of that figure had I not learned at a recent conference for mortgage brokers I attended, that the top performing brokers got up to 40% of their business from previous customers!!
Satisfaction contains numerous product references featuring good and bad performance by manufacturers and service providers. Not too surprisingly, JetBlue and Lexus get significant coverage reflecting a very high level of customer satisfaction. The book was finished before JetBlue ran into some loss making quarters which it could be argued undermines the thesis of the book, although I think it would have taken an absolute genius (or a SouthWest executive ) to figure out just how dramatically aviation fuel would increase. It will be interesting to see how JetBlue performs over coming quarters, but I tend to believe that their renowned customer service combined with very strong customer advocacy will bring them back to profitability.
Lexus figures prominently in the book simply because they are THE best and consistently so. It really is astonishing that Lexus was able to take brand leadership in the luxury car market, against Mercedes-Benz, Cadillac and BMW within ten years of entering this market sector.
One of the many interesting chapters in the book refers to Different Companies, Different Touchpoints. Here the authors suggest that a company’s ability to understand the various ways its business touches customers and then uses that knowledge is what determines success. For instance the touch points for service providers:
* Objective quality of the service provided
* Subjective experience of how the service is performed
* Process by which the service is acquired
differ from the touchpoints differ for product manufacturers e.g. Lexus
* Product execution
* Product quality
* Sales experience (as perceived by the customer)
* Service experience
The continued success of Lexus isn’t just due to the quality of the car itself (which is superb) but also due to the overall customer experience and the satisfaction of all touchpoints. I can vouch for this personally, because when I bring in my ten year old Lexus for a winter service, the loaner car out in the parking lot has had its engine running for many minutes. Thus I sit into a nice warm car and off we go. Maybe other dealers do this, but I know that I regularly talk up Lexus (become an advocate) for the brand after visiting the dealership.
Enterprise Rent-a-Car gets kudos from the authors also. It is another organization that maintains very high levels of customer satisfaction which has helped it become the largest car rental company in the United States. Do you remember when Avis would proudly claim “We’re number two – we try harder”? Seems as if it will have to change that to “number three” today.
If you need good solid evidence of the value of quality and customer satisfaction, look no further than the price of a Chevrolet Malibu as compared to its Toyota competitor, the Camry. Both models target basically the same market and provide roughly same functionality and mileage. Indeed, the authors suggest that the current real quality gap between the two cars is quite small. Indeed in writing this review, I checked the J.D Power site www.jdpower.com and compared the two vehicles. The Malibu rates better in total!! Yet, the authors state that because of the perceived reputation of the Camry, the car normally sells for about $2,000 more for a comparable specification. Given that GM sells about 250,000 Malibus per year, that is a significant drop in revenue. Effectively, the cost of many years of lost Satisfaction.
A good book written by people who know the benefits of quality.
Friday, April 07, 2006
Starbucks - This is ridiculous
Starbucks just doesn’t get it.
Someone should have told Howard Schultz when he first got involved in Starbucks that selling high priced coffee wouldn’t work. (Actually, a lot of investment firms and Wall Street gurus did and would not invest). Now someone needs to tell the Chairman and Jim Donald, Starbucks President and Chief Operating Officer that no one in today’s competitive world is supposed to post same store double digit growth – 10% growth. Results March 2006. January saw similar store growth while February showed a “much weaker” performance – only 8% growth. Just not good enough guys!!
This organization is just amazing. Much of the commentary about Starbucks relates to their incessant growth – today 11,000 units, and by the time you have read this, that number will be wrong. Starbucks suggests that it could grow to 30,000 units globally over coming years, with a major emphasis on China.
But how does an organization which “everyone visits all the time” continue to grow same store sales so consistently. Starbucks has posted same store growth of at least 5% for fourteen consecutive years.
In my book Why Ireland Never Invaded America www.whyirelandneverinvadedamerica.com I write about The ER Factor – Drivers of Corporate Health. The basic concept is growth comes from Execution (E) of a Relevant (R) strategy and surely Starbucks is a poster child for this concept. By the way, I will also give particular credit to McDonald’s for being a prime example of The ER Factor.
Starbucks can post this growth – and by the way management consistent advice is that 3-7% is more realistic - because of the famed Starbucks Experience. This does not just mean that the stores have a welcoming, homely ambience (how can they achieve this with so many units?), but also staff (partner) recruitment consistently seems better than average. Combine this with an extremely successful beverage innovation program, incremental sales such as music and now involvement in promotion of family friendly movies and you have an organization that presents consistently superb results.
When speaking on the concept of a Clear and Compelling Vision, I often reference the comment from Howard Scultz’s autobiography Pour Your Heart Into It – How Starbucks Built a Company, One Cup at a Time. Schultz had come to Chicago to set up the first Starbucks unit outside the West Coast. At a time when money was so tight that he and Starbucks investor Jack Rogers shared a hotel room, Schultz said to his colleague as they walked Chicago streets “Five years from now, everyone of those people will be walking around holding a Starbucks cup.” His colleague told him he was “Crazy.”
It was a ludicrous, outlandish vision for a business that at that stage was unknown. Thankfully for Starbucks investors and customers, Schultz and Co. do not seem to have a problem with “Crazy – Ludicrous – Outlandish.”
It is inconceivable that Starbucks will not hit a speed bump at some stage, but its ability to implement The ER Factor so consistently well suggests substantial good results for a long time to come.
Cheers
Conor Cunneen - C.A.S.H.
Consultant, Author, Speaker, Humorist
Someone should have told Howard Schultz when he first got involved in Starbucks that selling high priced coffee wouldn’t work. (Actually, a lot of investment firms and Wall Street gurus did and would not invest). Now someone needs to tell the Chairman and Jim Donald, Starbucks President and Chief Operating Officer that no one in today’s competitive world is supposed to post same store double digit growth – 10% growth. Results March 2006. January saw similar store growth while February showed a “much weaker” performance – only 8% growth. Just not good enough guys!!
This organization is just amazing. Much of the commentary about Starbucks relates to their incessant growth – today 11,000 units, and by the time you have read this, that number will be wrong. Starbucks suggests that it could grow to 30,000 units globally over coming years, with a major emphasis on China.
But how does an organization which “everyone visits all the time” continue to grow same store sales so consistently. Starbucks has posted same store growth of at least 5% for fourteen consecutive years.
In my book Why Ireland Never Invaded America www.whyirelandneverinvadedamerica.com I write about The ER Factor – Drivers of Corporate Health. The basic concept is growth comes from Execution (E) of a Relevant (R) strategy and surely Starbucks is a poster child for this concept. By the way, I will also give particular credit to McDonald’s for being a prime example of The ER Factor.
Starbucks can post this growth – and by the way management consistent advice is that 3-7% is more realistic - because of the famed Starbucks Experience. This does not just mean that the stores have a welcoming, homely ambience (how can they achieve this with so many units?), but also staff (partner) recruitment consistently seems better than average. Combine this with an extremely successful beverage innovation program, incremental sales such as music and now involvement in promotion of family friendly movies and you have an organization that presents consistently superb results.
When speaking on the concept of a Clear and Compelling Vision, I often reference the comment from Howard Scultz’s autobiography Pour Your Heart Into It – How Starbucks Built a Company, One Cup at a Time. Schultz had come to Chicago to set up the first Starbucks unit outside the West Coast. At a time when money was so tight that he and Starbucks investor Jack Rogers shared a hotel room, Schultz said to his colleague as they walked Chicago streets “Five years from now, everyone of those people will be walking around holding a Starbucks cup.” His colleague told him he was “Crazy.”
It was a ludicrous, outlandish vision for a business that at that stage was unknown. Thankfully for Starbucks investors and customers, Schultz and Co. do not seem to have a problem with “Crazy – Ludicrous – Outlandish.”
It is inconceivable that Starbucks will not hit a speed bump at some stage, but its ability to implement The ER Factor so consistently well suggests substantial good results for a long time to come.
Cheers
Conor Cunneen - C.A.S.H.
Consultant, Author, Speaker, Humorist
Wednesday, April 05, 2006
Katie Couric - The Right Choice?
The imminent departure of Katie Couric from the NBC "Today" show to the CBS Evening News program is not surprising. The question is, 'Is it the right choice for either party?'
I like Katie Couric and believe she is very, very good on the "Today" morning show. She is a solid journalist, does generally good interviews and as far as I'm aware is a good professional. She is also very likeable with a wonderful, warm, welcoming on air personality. It is this likeability and personality which has been one of the key factors in her ratings.
This is where the potential problems arise. The evening news programs seem to demand a different type of personality. In fact the basic requirement is: Show little personality, present a high level of gravitas and above all rarely smile or joke with your colleagues or guests.
Psychologist Albert Mehrabian suggested that communication consists of verbal, voice tone and body language. Words accounts for 7% of message, voice tone 38% and body language 55%. Now much of this research related to emotional situations and many query Mehrabian's statistics, but there is not much doubt that voice tone and body language make a huge contribution to the communication message.
Katie Couric will not be able to show her full personality on the CBS news program. In other words, the likelihood is that the smiling, vivacious, likeable Katie Couric will be replaced by a serious, passionless, grave Katie Couric. I don't doubt she can, and has presented this image when necessary. The question is will the "Evening News" Katie Couric be as popular as the "Today" Katie Couric. From a career and job satisfaction point of view, it is an interesting and worthwhile challenge for Couric. It will be interesting to see if it will be the right move.
I like Katie Couric and believe she is very, very good on the "Today" morning show. She is a solid journalist, does generally good interviews and as far as I'm aware is a good professional. She is also very likeable with a wonderful, warm, welcoming on air personality. It is this likeability and personality which has been one of the key factors in her ratings.
This is where the potential problems arise. The evening news programs seem to demand a different type of personality. In fact the basic requirement is: Show little personality, present a high level of gravitas and above all rarely smile or joke with your colleagues or guests.
Psychologist Albert Mehrabian suggested that communication consists of verbal, voice tone and body language. Words accounts for 7% of message, voice tone 38% and body language 55%. Now much of this research related to emotional situations and many query Mehrabian's statistics, but there is not much doubt that voice tone and body language make a huge contribution to the communication message.
Katie Couric will not be able to show her full personality on the CBS news program. In other words, the likelihood is that the smiling, vivacious, likeable Katie Couric will be replaced by a serious, passionless, grave Katie Couric. I don't doubt she can, and has presented this image when necessary. The question is will the "Evening News" Katie Couric be as popular as the "Today" Katie Couric. From a career and job satisfaction point of view, it is an interesting and worthwhile challenge for Couric. It will be interesting to see if it will be the right move.
Sunday, April 02, 2006
Irishman Speaks
Irishman Speaks
As a professional speaker on Business, Motivation and communication, I like to study and appreciate good communication.
One of the most impressive speeches I have heard in recent times is Irish rock star Bono's recent speech at the National Prayer Breakfast 02/02/06. This breakfast was attended by President Bush.
You can get speech text at http://www.data.org/archives/000774.php
The combination of a great artist who definitely has "the gift of the gab" with a powerful compelling message on Africa is what makes this speech compelling.
Good speech development included
* Personal anecdotes
"I remember how my mother would bring us to chapel on Sundays… and my father used to wait outside. One of the things that I picked up from my father and my mother was the sense that religion often gets in the way of God."
*Powerful evocative phrasing
"But in truth, I was wrong again. The church was slow but the church got busy on this the leprosy (he is referring to AIDS) of our age.
Love was on the move.
Mercy was on the move.
God was on the move."
AND
"God is in the slums, in the cardboard boxes where the poor play house… God is in the silence of a mother who has infected her child with a virus that will end both their lives… God is in the cries heard under the rubble of war… God is in the debris of wasted opportunity and lives, and God is with us if we are with them."
AND
"A number of years ago, I met a wise man who changed my life. In countless ways, large and small, I was always seeking the Lord’s blessing. I was saying, you know, I have a new song, look after it… I have a family, please look after them… I have this crazy idea…
And this wise man said: stop.
He said, stop asking God to bless what you’re doing.
Get involved in what God is doing—because it’s already blessed.
Well, God, as I said, is with the poor. That, I believe, is what God is doing.
And that is what He’s calling us to do."
I am lucky to have seen video of the actual speech. The visual obviously reinforces the message because of the true emotion Bono feels and communicates with wonderful Irish passion. I do admit to bias.I happen to think Bono is the 21st century version of Mother Teresa, a person with great vision who not only talks but walks the talk. Indeed, George Bush commended Bono after the speech with a very humorous joke highlighting that the rock star was a "doer."
posted by Conor Cunneen @ 11:33 AM 0 comments
As a professional speaker on Business, Motivation and communication, I like to study and appreciate good communication.
One of the most impressive speeches I have heard in recent times is Irish rock star Bono's recent speech at the National Prayer Breakfast 02/02/06. This breakfast was attended by President Bush.
You can get speech text at http://www.data.org/archives/000774.php
The combination of a great artist who definitely has "the gift of the gab" with a powerful compelling message on Africa is what makes this speech compelling.
Good speech development included
* Personal anecdotes
"I remember how my mother would bring us to chapel on Sundays… and my father used to wait outside. One of the things that I picked up from my father and my mother was the sense that religion often gets in the way of God."
*Powerful evocative phrasing
"But in truth, I was wrong again. The church was slow but the church got busy on this the leprosy (he is referring to AIDS) of our age.
Love was on the move.
Mercy was on the move.
God was on the move."
AND
"God is in the slums, in the cardboard boxes where the poor play house… God is in the silence of a mother who has infected her child with a virus that will end both their lives… God is in the cries heard under the rubble of war… God is in the debris of wasted opportunity and lives, and God is with us if we are with them."
AND
"A number of years ago, I met a wise man who changed my life. In countless ways, large and small, I was always seeking the Lord’s blessing. I was saying, you know, I have a new song, look after it… I have a family, please look after them… I have this crazy idea…
And this wise man said: stop.
He said, stop asking God to bless what you’re doing.
Get involved in what God is doing—because it’s already blessed.
Well, God, as I said, is with the poor. That, I believe, is what God is doing.
And that is what He’s calling us to do."
I am lucky to have seen video of the actual speech. The visual obviously reinforces the message because of the true emotion Bono feels and communicates with wonderful Irish passion. I do admit to bias.I happen to think Bono is the 21st century version of Mother Teresa, a person with great vision who not only talks but walks the talk. Indeed, George Bush commended Bono after the speech with a very humorous joke highlighting that the rock star was a "doer."
As a professional speaker on Business, Motivation and communication, I like to study and appreciate good communication.
One of the most impressive speeches I have heard in recent times is Irish rock star Bono's recent speech at the National Prayer Breakfast 02/02/06. This breakfast was attended by President Bush.
You can get speech text at http://www.data.org/archives/000774.php
The combination of a great artist who definitely has "the gift of the gab" with a powerful compelling message on Africa is what makes this speech compelling.
Good speech development included
* Personal anecdotes
"I remember how my mother would bring us to chapel on Sundays… and my father used to wait outside. One of the things that I picked up from my father and my mother was the sense that religion often gets in the way of God."
*Powerful evocative phrasing
"But in truth, I was wrong again. The church was slow but the church got busy on this the leprosy (he is referring to AIDS) of our age.
Love was on the move.
Mercy was on the move.
God was on the move."
AND
"God is in the slums, in the cardboard boxes where the poor play house… God is in the silence of a mother who has infected her child with a virus that will end both their lives… God is in the cries heard under the rubble of war… God is in the debris of wasted opportunity and lives, and God is with us if we are with them."
AND
"A number of years ago, I met a wise man who changed my life. In countless ways, large and small, I was always seeking the Lord’s blessing. I was saying, you know, I have a new song, look after it… I have a family, please look after them… I have this crazy idea…
And this wise man said: stop.
He said, stop asking God to bless what you’re doing.
Get involved in what God is doing—because it’s already blessed.
Well, God, as I said, is with the poor. That, I believe, is what God is doing.
And that is what He’s calling us to do."
I am lucky to have seen video of the actual speech. The visual obviously reinforces the message because of the true emotion Bono feels and communicates with wonderful Irish passion. I do admit to bias.I happen to think Bono is the 21st century version of Mother Teresa, a person with great vision who not only talks but walks the talk. Indeed, George Bush commended Bono after the speech with a very humorous joke highlighting that the rock star was a "doer."
posted by Conor Cunneen @ 11:33 AM 0 comments
As a professional speaker on Business, Motivation and communication, I like to study and appreciate good communication.
One of the most impressive speeches I have heard in recent times is Irish rock star Bono's recent speech at the National Prayer Breakfast 02/02/06. This breakfast was attended by President Bush.
You can get speech text at http://www.data.org/archives/000774.php
The combination of a great artist who definitely has "the gift of the gab" with a powerful compelling message on Africa is what makes this speech compelling.
Good speech development included
* Personal anecdotes
"I remember how my mother would bring us to chapel on Sundays… and my father used to wait outside. One of the things that I picked up from my father and my mother was the sense that religion often gets in the way of God."
*Powerful evocative phrasing
"But in truth, I was wrong again. The church was slow but the church got busy on this the leprosy (he is referring to AIDS) of our age.
Love was on the move.
Mercy was on the move.
God was on the move."
AND
"God is in the slums, in the cardboard boxes where the poor play house… God is in the silence of a mother who has infected her child with a virus that will end both their lives… God is in the cries heard under the rubble of war… God is in the debris of wasted opportunity and lives, and God is with us if we are with them."
AND
"A number of years ago, I met a wise man who changed my life. In countless ways, large and small, I was always seeking the Lord’s blessing. I was saying, you know, I have a new song, look after it… I have a family, please look after them… I have this crazy idea…
And this wise man said: stop.
He said, stop asking God to bless what you’re doing.
Get involved in what God is doing—because it’s already blessed.
Well, God, as I said, is with the poor. That, I believe, is what God is doing.
And that is what He’s calling us to do."
I am lucky to have seen video of the actual speech. The visual obviously reinforces the message because of the true emotion Bono feels and communicates with wonderful Irish passion. I do admit to bias.I happen to think Bono is the 21st century version of Mother Teresa, a person with great vision who not only talks but walks the talk. Indeed, George Bush commended Bono after the speech with a very humorous joke highlighting that the rock star was a "doer."
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