Category: Business Excellence

The Problem with Short-Term Bosses

The Problem with Short-Term Bosses

Jon Rennie
Too many companies rely on short-term fixes to address long-term, complex problems. The result is a series of failed attempts at resolving fundamental, underlying business challenges.

I was talking with some former colleagues the other day about a manager we all knew who had recently been fired. Her time in the role was short and now it was over. None of us were really surprised. She was brought in from outside the company to stir things up. And she did. Upper management wanted quick results so she focused on short-term fixes. She was a bull in a China shop. She brought in her own people, boosted the financials by deep cost-cutting, fired long-term employees, and instituted a top-down autocratic management style. She was laser-focused on short-term results and refused to listen to the concerns of employees and other managers. Anyone who challenged or questioned her authority was let go.

As you can imagine, the business results improved but morale dropped sharply. The good employees eventually all left the company and most of the institutional knowledge left as well. The only people who remained were those that were loyal to her and those that were quietly waiting for her to leave. Fear and anxiety became the norm. As a result, company performance ultimately fell off and all of the short-term gains she had made vanished. The company began to lose money and market share. Eventually, upper management had no choice but to fire her. The damage was done.

“You can’t build a long term future on short term thinking.” Billy Cox

Time and time again, I see companies bringing in short-term managers to fix long-term systemic problems. Often these companies have fundamental, structural flaws that need to be addressed. They have complex problems that need long-term, systemic thinking. Consider the examples of Radio Shack, Sears, K-Mart, and General Electric. Each of these companies has deep-rooted issues that have taken decades to develop. For years, leaders of these companies have focused on a series of attempts at short-term fixes. In the end, this short-term mindset has done little to address the underlying, long-term problems.

“For every complex problem, there is an answer that is clear, simple, and wrong.” H. L. Mencken

Consider a similar company, Levi Strauss & Co. The iconic denim brand reached its peak in 1996 with $7.1 billion in sales. After that, sales declined rapidly. Competition from other brands and a lack of creative and new ideas pushed it from the center of American culture. Young customers were fleeing to newer and trendier “designer jeans.” Levi Strauss was going the way of Blockbuster. It was just a matter of time.

In 2011, a 28-year Proctor & Gamble executive named Chip Bergh took over as CEO. He inherited a company steeped in debt, struggling to reinvent itself in the highly competitive U.S. denim market. Instead of a series of short-term actions, however, he developed a long-term plan to put the iconic brand “back in the center of culture.” Instead of cutting costs, he invested in innovation and a new research-and-development center called the Eureka Innovation Lab. He also went back to basics. He focused the company’s efforts on making the best jeans, especially for women. He purposely stopped chasing other clothing categories that were a distraction. He also became less reliant on retail chains like J.C. Penny’s and Macy’s. Instead, he expanded the network of Levi-branded stores.

What’s even more surprising, is that Levi’s board gave him the time to execute his plan. And, it worked. After six years of implementing his turnaround strategy, Bergh finally saw the results. Levi sales grew by 7.7% in 2017 and by 13.9% in 2018. Last week, Bergh announced plans to take Levi’s public after a 34-year absence from the stock market. Bergh now feels that Levi Strauss has the potential to be a $10 billion company. He stated that “Levi’s lost a generation of consumers in the early 2000s, but today our customers are younger than ever—and we’re gaining momentum as we bring them back.” Long-term thinking brought Levi’s from the brink of collapse back into the center of culture.

“Long-term consistency trumps short-term intensity.” Bruce Lee.

Stories like this give me optimism. Senior managers of other struggling companies should be able to see the extraordinary turnaround of Levi Strauss and realize the time and effort that was required to make this happen. This is clear evidence of the power of long-term thinking and the patience required to allow these turnaround plans to come to fruition. Maybe someday we will see an end to short-term managers and the illusion of quick fixes.

Long-term thinking saved your favorite jeans. It can save your organization as well.

As always, reach out to me on Twitter and let me know what you think.

If you are looking for a good book on long-term thinking, you should read Go Long: Why Long-Term Thinking Is Your Best Short-Term Strategy. This book reveals how some of the world’s most prominent business leaders resisted short-term pressures to successfully manage their organizations for the long term, and in turn, aim to create more jobs, more satisfied customers, and more shareholder wealth.

These Four Words Set Great Leaders Apart

These Four Words Set Great Leaders Apart

Jon Rennie

“Bad bosses are small-minded. Great leaders are mission-minded.”

The best leaders are great communicators. They understand the importance of clear, concise, and continuous communications with employees. These leaders know how critical it is to get every employee rowing in the same direction. They appreciate the significance of getting employees to recognize and carry out the organization’s mission.

So, why do most companies and leaders ignore their mission statements? The problem is that these statements are typically long, complicated, and boring. They are written by committees and end up sitting in binders on dusty shelves or in cheap frames in the company’s lobby. Few have ever read them and even fewer can recite them. They’re completely irrelevant to the day-to-day operation of the business.

“When everyone knows the mission, there is cadence. When no one knows the mission, there is chaos.”

But, what if there was a better way? What if there was a simple solution to embed the company’s mission in everyday discussions? What if there was an easy way to get everyone on the same page?

This can be done and it’s easier than you think. Let me give you an example.

More than 20 years ago, my wife was a first-year teacher teaching at a small public school in Georgia. She had an amazing principal who was leading that school. The school had a mission to maximize the teaching time for each student. He wanted teachers to teach and not conduct other school business. He found a simple way to communicate his mission, he used just four words. In every meeting and interaction with his teachers, he simply said, “Get up and teach.”

If teachers found themselves grading homework or working on lesson plans when the students were in the classroom, he wanted his words to remind them of what to do. He wanted them to put down their pens, get up out of their chairs, and teach students. Four simple words, “Get up and teach,” was all he needed to communicate the mission.

What’s interesting is that all these years later, my wife still has those words echoing in her ears. Any time she sits down in the classroom and she’s doing something other than teaching, her former leader’s words come to her. If she’s grading a paper or doing some administrative work, she hears his words, “Get up and teach.” So she does. She puts down her pen, gets up, and she teaches because she knows that’s really what she’s there to do. These four simple words have stood the test of time. A mission statement she will never forget.

This is something I have adopted in my business.

I run a manufacturing company called Peak Demand Inc. which I co-founded in 2016. We started this company because we believed that customers were tired of the existing suppliers in the industry. Lead times were long, prices were high, customer support was poor, and the buying process was complex. We wanted to change that. This was our mission.

I chose four simple words to communicate that mission. I remind employees daily that we are a “Different kind of supplier.” Our mission is to provide something to the market that they can’t get from the other guys.

For example, other suppliers take 4-6 weeks to ship their product, we do it in 24 hours. Other suppliers have complex buying processes but you can order our products online and pay with a credit card if needed. If anything goes wrong in the field, the other guys make it hard to get it resolved. We have people on the phone 24 hours a day with the goal of getting the problem fixed as quickly as possible.

We’re different. We’re customer-driven, friendly, and we make things easy. When an issue comes up with a customer, I want my words echoing in the ears of my employees. When they start thinking like a big company, I want my words to remind them. I want them to choose a solution that would be different from the rest of the industry. I want them to be a “Different kind of supplier.” It’s a quick and simple way to remind my employees of what the mission of our company is.

Great leaders are mission-minded. if you want to be a great leader, you also need to be a great communicator. You need to communicate your mission daily. To do this, all you need is a simple, easy-to-remember way, to remind your employees of what’s important. Think about my wife, more than 20 years later, she is still reminded of those four simple words, “Get up and teach.” She’s still following them today even though she’s no longer part of that leader’s organization.

Make your mission statement so simple and so effective that when your employees hear it, they get it. They internalize it. It becomes part of who they are. If you do that, you’re going to build a mission-driven organization and be a much more effective leader.

Can you communicate your mission in just 4 powerful words? Will your team remember it 20 years from now?  Mission-minded leaders answer yes to both these questions.

Reach out to me on Twitter and let me know what you think. I’d love to hear from you.

Do you want to be a better leader?  Sign up for my free leadership newsletter where I share important leadership tips and I don’t waste your time. 

The Real Cost of Poor Quality

The Real Cost of Poor Quality

Jon Rennie

It’s one thing to have a quality problem but the way you address it can make all the difference in the world.

You may have heard that Wal-Mart is trying to compete with Amazon in online shopping. They are offering features like in-store pickup, short lead-times and free shipping. I thought I would take a chance and try them out. I found a set of two acacia wood outdoor chairs with a five-star rating and I ordered them. I assumed the chairs would require assembly and I was ready for it.

The package arrived ahead of schedule and I was impressed. I was also impressed with the quality of the chairs. The wood was finished to perfection, the cushions were well-made and the construction of the chairs was substantial and sturdy. The assembly instructions were clear and written in perfect English. I was ready to go.

This is when the problems began.

Each chair was missing one critical structural part which made it impossible to complete the assembly. Fortunately, there was a phone number for the manufacturer and instructions to call if there were any problems. I called them right away and they picked up.

The call center was off-shore, but that was OK. What wasn’t OK was that they required all the Wal-Mart ordering details before they would even help me. This was frustrating but after searching through e-mails and paperwork, I finally found the number they needed and reported the problem.

After being placed on hold for what seemed like an eternity, the support associate told me that they didn’t have the parts and they couldn’t send them to me. I was surprised by the response and suggested that they go to the warehouse and open a complete box and send me the missing parts. I was placed on hold again. When he came back he said they would not be able to do that. I asked him what I should do with these chairs and I was placed on hold again.

After another long delay, he offered me a $20 discount if I just bought the parts on my own. I was confused and asked him where I could buy these parts. He suggested going to Home Depot and buying a piece of wood to manufacture the replacement parts myself.

I was shocked by this answer and I offered the following observations to the young man on the phone. First, I wasn’t sure if Home Depot sells acacia wood. Second, I have no idea what these parts actually look like. Third, if I could carve chair parts out of solid wood, I probably wouldn’t be buying chairs from Wal-Mart. I asked him for another option and I was placed on hold again.

After another long delay, the associate offered me a $40 discount if I just “made” the parts on my own. This just seemed like a desperate response from a company that didn’t really have a plan for a missing part. I told them their options were unacceptable. I was placed on hold again.

This was the longest delay of the phone call. Eventually, he returned and told me they would send two replacement chairs and I could keep the other chairs. Yes, that is correct. They couldn’t send me the replacement parts from a box in the warehouse but they could send me the complete box.

This was probably one of the most bizarre support calls I had ever made and there are some interesting lessons here about the real cost of quality.

Make sure your quality is right. Getting things wrong costs money and a loss of goodwill with your customers. It is mission critical to do whatever it takes to make sure your products are right the first time, every time.

“Quality is never an accident. It is always the result of intelligent effort.” – John Ruskin

Have a plan when things go wrong. If things go wrong, have a plan to take care of the customers. Make things easy for them because they are already frustrated. Make sure your processes don’t create more irritations. Be genuine, apologetic and generous in your solutions to fix the problem.

“Quality is free. It is not a gift, but it is free. What costs money are the ‘un-quality’ things – all the actions that involve not doing jobs right the first time.” – Phillip Crosby

Listen to your customer’s suggestions for solving the problem. Your customer may have a solution to fix the problem that is better than your plan. Listen to them and do what you can to accommodate their requests. Give your support teams the authority and flexibility to go above and beyond for customers.

“Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.” – Donald Porter

In the end, the combination of poor quality, poor planning and poor support is deadly. The real cost of poor quality is leaving your customers feeling confused and frustrated. And frustrated customers look to your competitors for their next purchase. I don’t think Wal-Mart is ready to compete with Amazon yet. In my opinion, they still have a lot of work to do. I think I’ll stick with Amazon for the time being.

If you are looking to improve quality and create a workplace culture where employees are absolutely obsessed with customer service, I recommend this book: The Service Culture Handbook by Jeff Toister.

{Photo credit: IKEA}