Do You REALLY Know How Your Business Runs? – ProfitGuide.com

by Derek Champoux, 6 years ago

Spend time in the trenches of your business and you’ll be shocked by the opportunities you discover

It’s amazing what you don’t know about your business even after years running it. Gary Muldoon has been in the pest-control industry for 20 years—the past seven as president of Orkin Canada. But his eyes opened wide when he donned a wig and a fake moustache and posed as an Orkin trainee technician for an episode of TV’s Undercover Boss Canada.

On the job, Muldoon learned that Orkin was booking so many service calls to rid residences of roaches and rodents that there was no leeway for unavoidable delays. “I realized we were so focused on the numbers that we were scheduling our people way too tight,” says Muldoon, whose Mississauga, Ont.-based company employs 750 staff across 30 locations. “Every time something went wrong, the technician I was working with said, ‘Well, here’s another night when I won’t be home until eight o’clock.’ That bothered me. So, we’ve now changed our schedules substantially and hired more people.”

Another revelation came when a technician inputting information about a service call on her handheld had to re-input it, then again when the signal kept cutting out. Orkin had spent about $2 million on this new handheld system, and Muldoon had thought that complaints about the system were coming from staff who disliked change: “But when you go out and work with them, you see, ‘You know what? We have more work to do on this thing.’”

Muldoon also had some pleasant surprises. He was wowed by one technician’s mastery of dealing empathetically with a client stressed out by seeing a rat run under her washer. He spotted an opening to ramp up Orkin’s customer service by focusing employee training far more on communicating compassionately with clients.

Orkin’s workforce is large and dispersed enough that no one Muldoon worked with realized the “trainee” was actually the big boss in disguise. It’s unlikely an entrepreneur could pull this off in a small business. Still, bosses at smaller firms are finding that working alongside employees—without a disguise—can be a powerful tool for finding out what’s really going on in the business. Just how powerful is up to you. If you can convince your people there’ll be no repercussions for negative feedback and you’re sincere in your wish to understand better how the firm runs, many of them will open up to you. After all, you have the power to improve their place of work.

Speaking directly to front-line employees avoids the distortions common when information reaches you through layers of management due to bias, transmission errors and CYA—that is, “covering your ass.” True, even hearing straight from staff is imperfect, because they’ll be torn between wanting to be candid and not wanting to be seen as complainers or to reveal problems they may have contributed to. Still, even if your people aren’t fully frank, if you seem like a decent sort, they’ll probably tell you plenty that you wouldn’t hear otherwise.

"Leaders can lose touch due to staff bias, poor communication and CYA—‘Covering Your Ass’"

That’s far from the only benefit of the exercise. Working next to employees gives you a first-hand view of your business processes in action and how well these are serving your clients. It’s the combination of what you hear and see that can deliver an unvarnished view of how things run and fresh insights into how to run them better. It’s amazing how much you can learn just by getting out of your office.

And there are other ways to learn how your business actually operates. You can ask employees to fill out a short, anonymous online survey every six months that asks pointed questions such as “What’s the biggest thing that needs fixing in each of departments A through E?” If you’re a retailer, you can hire a mystery shopper to report on how your front-line people treat customers. And in any sector, you can simply phone your company as if you were a client to find out what the experience is like from the other side.

If you try this final tactic, says Jim Davidson, you’re likely to uncover customer- service gaps of some sort. Davidson, principal of Markham, Ont.-based Competitactics, which conducts undercover customer-service audits, says the person fielding your call may forward you to someone who can’t answer your questions. If you ask about the company’s products, she may spew out a laundry list instead of first asking questions so she can narrow in on those products likely to interest you. Or she may shock you by revealing sensitive information, such as about a new product coming down the pipeline.

Why bother with any of these tactics? It’s easy to see how a big-company CEO can lose touch with life in the trenches; less so in owner-managed enterprises. But, in fact, top executives at small and mid-sized firms admit that a worrisome gap can open up between how they think things work and day-to-day reality in such key areas as production processes, employee relations, quality control and customer satisfaction.

Greig Clark, a Toronto-based serial entrepreneur and strategic advisor to growing businesses, says that working alongside employees is the single most effective way to find out what’s going on in your business. Clark got religion on this practice decades ago as the founder of College Pro Painters. He used to pitch in on jobsites— averaging one day every two weeks—to get a view unobstructed by the seven layers separating him from the crews. From this, says Clark, “I learned dozens of things about how to run the business better.”

Alexander Handa, whose company is a tour operator for youth and students, says he realized the value of working alongside employees only after deciding two years ago to stop doing so. Handa, president and CEO of Toronto-based S-Trip!, used to join tours for a day or two as one of the tour guides. But, he says, it didn’t seem responsible to keep spending time on this, given the fast-expanding demands of running one of Canada’s Fastest-Growing Companies: “Why should I focus on a group of 20 people on one of our trips when we serve 35,000 people a year? It didn’t seem like part of my main role anymore.”

 

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Yet, Handa soon missed the steady stream of ideas the trips had yielded. He says he loved the fresh thinking he’d hear from, say, “a 21-year-old we’ve just hired as a tour guide who has no idea who I am, but says, ‘We should do it this way instead.’”

During Handa’s stints as a Regular Joe, he discovered customer-service issues he’d been unaware of. One morning in Mexico, he watched travellers seethe after arriving at 9:30 a.m. for a bus trip to a Mayan pyramid, only to be told that the actual departure time was 10:00. “We thought it was important to give ourselves a margin,” says Handa. “But because I was there, I could see how much people hate waiting around on a holiday, even for half an hour. Now, we tell them the real time and that the bus will leave at 10:00 sharp.”

Trevor Bouchard also spotted a failing in his firm’s customer service while in the trenches—or, more accurately, a consumer’s living room. On behalf of a retailer, Bouchard’s firm QuickContractors.com had hired a contractor to install a home appliance. Bouchard, president and CEO of his Cambridge, Ont.-based firm, watched as the installer called QuickContractors to get a routine extra charge okayed—only to be left languishing on hold looking apologetically at the homeowner while the call-centre agent polled her coworkers on how to handle this request. This incident spurred Bouchard to take steps to improve internal knowledge-sharing.

Even entrepreneurs who build companies around their own functional expertise can be astonished by how their firms handle that same function. After 12 years as a salesperson, Ryan Atkinson co-founded Toronto-based Redwood Global Inc., a sales-driven IT staffing agency. Drawing from past experience, he implemented a system that left his salespeople free to pursue clients in any sector. Atkinson loved this culture, and thought his sales team did too.

But through spending time on the sales floor, making calls and yakking with reps, Atkinson made a startling discovery: his salespeople preferred the boundaries he’d rejected. “I learned that our people craved more structure and accountability for certain deliverables,” he says. “I had made too many assumptions about what made people happy; I had assumed that it was the same as what would have made me happy when I was a salesperson.” The company subsequently assigned reps to specific sectors. Atkinson says his reps are now happier, sales are up and the firm can identify its top performing sectors and transfer best practices from one sector to another.

Sometimes, top executives get a front row view as their firm’s systems misfire in the real world. Fast-food veteran Ron Baugh had such a moment while observing staff at a Wendy’s restaurant when he was a senior VP of the burger chain. As he watched a cook working, Baugh noticed an opportunity to serve customers more quickly by revamping misguided operating procedures: “I realized that what had seemed like a good idea at head office was impeding staff, such as requiring the grill man to take unnecessary steps that slowed him down or do things in a sequence that didn’t make sense.”

But why did it take a senior executive hanging out at a restaurant to uncover this problem? After all, it’s the job of middle managers to identify opportunities for improvement and push them up the chain of command. But in practice, says Baugh, “They tend not to be into critical thinking and figure if it’s in the manual, they won’t question it.” And most staff just get on with the job and seldom think about how to do it better—unless you ask them to.

Baugh often struggled to overcome a common roadblock while watching employees and asking a few questions: many people are wary about opening up to a top executive. “They attach an artificial level of respect to your job,” he says. “I see my role as an enabler, but many employees put you in the box of being a big boss.”

There’s an art to overcoming employees’ reticence. People need to believe it’s safe to bring up anything and that you will respect their opinions, says Theodore Peridis, an entrepreneurship professor at the Schulich School of Business in Toronto. And you need to do something that can be tough: shut up, listen closely and stifle your impulse to tell an employee an idea is unworkable. “Many times, the CEO rightly thinks, ‘This guy doesn’t see the whole picture and doesn’t care if I make a profit. But I have other concerns,’” says Peridis. “Yeah, but don’t expect your janitor or security guard to understand finance. You didn’t ask him to take your role; you asked him to tell you what he thinks from where hestands.”

Atkinson advises gaining employees’ trust gradually, as when you start dating someone: “Don’t spook them. Start purely on a social footing, getting to know them as people and sharing things about yourself. Buy them coffee, then lunch and then ask, ‘Can I spend half a day working with you, because I truly want to understand this business from top to bottom?’”

Clark offers advice on what to do next based on his many years of working on the front lines. After first putting a painter at ease by asking, say, where he went to school and how he learned about College Pro, Clark would ask this revealing question: “What drives you crazy about your job?” One painter shared his frustration at wasting two hours because he was missing a paint scraper. This sounded trivial until Clark discovered it was part of his firm’s much broader failure to deliver supplies to jobsites on time. College Pro saved big on costs by properly scheduling this.

Clark gained many business-building insights in the trenches partly by avoiding common pitfalls. One is undercutting your managers. If painters complained to Clark about an issue that they hadn’t already raised with their boss, he says, “I always made sure they first worked through the reporting structure. I told them, ‘If you’ve done that properly and nothing was done, then you can call me.’”

Handa stumbled into one trap on his first turn as a tour guide on a company trip. “I made the mistake of being too critical, such as telling people they should run their staff meetings differently,” he says. “I got a big backlash from employees, who didn’t like feeling they were being judged. Now, instead of suggesting better ways to do things, I tell them how important their work is and ask how I can help out.”

Serial entrepreneur Kevin Kruse, now an employee-engagement consultant in Richboro, Pa., found an effective counter to another potential pitfall: staff who waste your time by being cheerily unhelpful. These are the folks who parry your efforts to hear the straight goods about your business by saying, “Everything’s great!” Kruse’s reply to that was: “I’m glad to hear that, but what’s one thing the company could be doing better?” If that failed, he’d ask employees what they hear other staff saying the company could improve.

Even if employees do share their thoughts, warns Kruse, you can still blow it: “If they feel their ideas have gone into a black hole, they’ll shut down.” He says it’s essential to have a followup plan, such as committing to evaluate each idea within, say, 30 to 90 days, and then get back to your people. You might list 10 ideas in your company newsletter, suggests Kruse, with your yes/no decisions on each and a sentence or two explaining why.

Fortunately, says Einar Westerlund, a specialist in employee engagement at the Centre for Business Venturing at Queen’s School of Business, most employees don’t expect immediate fixes and are satisfied as long as you have a game plan: “If the warehouse is dark and dirty, they need to know that in six months, you plan to do something about it.” As well, he advises, “Look for low-hanging fruit, such as getting rid of a horrible administrative procedure that drags down morale. Symbolic early wins are key to getting traction out of this exercise.”

Given the effort required and the pitfalls to dodge, is spending time on the front lines really worth it? Handa is adamant that it is.

He resumed going on his company’s tours last summer. In part, he did so to turn the ideas tap back on. But another reason was even more important: Handa saw how easy it was to adopt a head-office mindset that S-Trip!’s most important challenges are finance, expanding into the U.S. and opening new sales channels. “In fact, putting on amazing tours is the most important part of our business,” he says. “To see the president dropping everything to go back on the front lines really reinforced that message with employees.”

Handa now spends about 20 days a year in the trenches, mostly on weekends. And rather than being the big boss flying in to call the shots, he does the work of any tour guide: folding flyers, staffing the info centre and even cleaning backed-up toilets. “One guide told me she was amazed to see me there,” says Handa. “She said she’s worked for 10 tour companies and she’s never seen the top executive do that.”

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