Downsizing the business is a fast and effective way to reduce expenses, maintain profitability, and ensure the continuation of the business. But how you lay people off will a have long-lasting effect on those who remain with your company. Poorly handled decisions today can impact productivity and morale now and for a long time in the future.
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More and more companies are forced to lay off employees as the world economy continues to tumble.
Downsizing the business is a fast and effective way to reduce expenses, maintain profitability, and ensure the continuation of the business. But how you lay people off will a have long-lasting effect on those who remain with your company. Poorly handled decisions today can impact productivity and morale now and for a long time in the future.
Employees who stay with your company after a layoff often have confused emotions as they wrestle with the changes brought about by the reorganization. A paradox of conflicting loyalties stirs within them. Feelings of concern for former colleagues are juxtaposed with feelings for oneself. Previous feelings of loyalty to the company now conflict with loyalty to oneself. Employees question their previous work effort as they worry about whether they have a future with your enterprise.
While employees are going through these internal emotional struggles several other factors impact their future motivation and commitment.
Invariably surviving employees are expected to take on more work. Normally they are asked to do more work for the same pay or, worse yet, for less pay because of the company’s declining financial position. Since most layoffs are undertaken to cut costs, the downsizing often results in salary freezes for those who stay with the company. Moreover, some former motivators may also have been eliminated, such as company cars, travel and entertainment budgets, or professional development expenses. Finally, there may be less career advancement opportunities after a downsizing, making one’s future with the organization less certain.
The Importance of Communication
The most important thing you can do to maintain morale and commitment after a layoff is to openly communicate with your employees.
Many managers are hesitant to share information with employees after a reorganization, particularly if the information is of a negative nature. However, your workers expect you to bring up all relevant issues in a straightforward manner, especially any negatives that might impact them directly. Avoiding these issues sends a message that either the issues are not important or, worse yet, the employees themselves are not important enough for you to share information with them.
The absolute worst thing you can do after a layoff is to send a message to remaining employees that they are not important. The more information you share with your employees during difficult economic times, the more they will feel you are concerned about their future. Likewise, the more employees feel you are concerned about their future, the more they will be concerned about the future of the business.
One critical thing to remember during a reorganization is that when people lack real data, they make up their own. Usually what people make up is far worse than reality. You can stop the rumor-mills that typically run rampant during a downsizing by being up front with the employees.
There are three crucial objectives you should have for your communication with employees during a reorganization.
First, you should do everything you can to mitigate the usual fears employees have when an organization is in transition.
Second, you should view every employee contact as an opportunity to build rapport with your workers.
Finally, your message should be formulated and presented so well that it focuses the energy and effort of the employees where you want it – on the customers – rather than on the company. What you say must eliminate from the employees all doubt, worry, gossip, wondering, and hesitancy.
At the conclusion of your message you want the workers worrying about their work, not worrying about their jobs or their employer. To do this you must understand the psyche of the employees and address the concerns they worry about the most during a layoff.
What Employees Want to Know
Invariably there are five predictable questions employees will have during a company downsizing. Although the specific verbiage of the questions highlighted here may not be exactly how the employees would articulate their concerns, the answers to these questions will address most of the issues employees will be wondering about. When you know these questions in advance you can target your communication to address the employees’ concerns before they come up. This in turn shows the workers you are empathetic to their needs, thereby building rapport between you and them.
Your answers to five critical questions will determine whether surviving employees will remain motivated and loyal to a company after a layoff.
The questions are: 1) Was the downsizing integral to the business’ overall strategy to survive?; 2) What does the future look like for the company?; 3) Is there still a place for me in the company with continued opportunities for advancement?; 4) Will those employees who are let go be treated fairly?; and 5) What is expected of the employees who remain at the company after a downsizing?
Integral to Business Survival
Employees want to know that the reorganization is not random or whimsical. Remaining employees have to be assured that the layoffs were necessary and not just done arbitrarily. A clear business need for the change must be supported by facts and figures. Employees need to know and understand the business reasons for the layoff and what the consequences would have been had the layoffs not occurred. The layoffs must be logically tied to the future business needs of the company and should have only affected those departments that were non-productive or no longer essential to the business.
At the same time employees must perceive there is a clearly identified and well-thought-out strategy to return the company to stability and long-term profitability. They need assurance that by downsizing and taking hits now the company will be much better off in the future. Perceptions of unnecessary or illogical reductions in staff cause employees to lose confidence in your ability to protect the future viability of the company. Fears of future layoffs persist when employees see no clear linkage between the reduction in staff and management’s plan to return the company to profitability.
You must be adept at understanding and explaining the business imperative for the change. Employees can buy-in to a reduction in staff, even the elimination of their own positions, given a reasonable business need for doing so. Managers who want to motivate surviving employees must take workers into their confidence and clearly outline the logic behind the downsizing decision.
Outlook for the Future
In a down economy when layoffs are necessary the future is often unknown. People generally are afraid of the unknown. To alleviate their own fears, the remaining employees will latch on to any information they can get about the company’s future plans to return the business to profitability. This is why rumors run rampant during a reorganization. It is the natural human need for information – any information – even if it is false. Surviving employees will remain fearful about the future until they have information that will assuage their fears.
Before addressing the employees you should have a clear vision of where you want to take the company in the future. Leaders who possess and can communicate a confident view of the future can infuse confidence within surviving employees by sharing their vision. Employees are more apt to follow leaders who have a clear view of what the future entails.
Although you may not have a clear view of the future when economic conditions have not yet stabilized, you must share what you know, assume or hope for the future. You must help employees to see the future themselves. Let employees know what they can expect to see and experience in the months ahead. Explain what changes or non-changes the company anticipates over the next one, three, six or twelve months. Share your plans. Be as open, specific and precise as possible. Any hesitancy or waffling from you will damage the confidence and commitment you will receive from your employees.
Future Opportunities for Advancement
Surviving employees want to know what their future prospects are with the newly reorganized company. Since traditional career paths may have been eliminated, new opportunities for “advancement” must be created. These typically entail such things as compensation for performance rather than position, greater autonomy and decision making authority, or opportunities to improve one’s “employability” through exposure to more aspects of the business. Employees in the new organization will want to work on projects that develop their skills while achieving company goals.
You need to identify the advancement opportunities that will be in play after the reorganization prior to implementation of the change. Nothing demotivates employees faster than to have career options for which one has been striving to attain suddenly become unavailable because of elimination of positions or layers within the company.
Treatment of Downsized Employees
Surviving employees are greatly influenced by how downsized employees were treated when they were let go. Surviving employees want to be assured, should it happen to them, that laid off employees were “cared for” through severance pay, outplacement services, ample advanced notice, and fair and consistent treatment throughout the reorganization. Employees predict how they will be treated in the future based upon how the company treated displaced employees in the past. You will be wise to remember that employees have a long memory when it comes to company reorganizations. They recall exactly what was said back when and who did what to whom. Be very careful when making decisions about how to treat downsized employees.
Expectations of Remaining Employees
Finally, although employees may not know they have this last need, and therefore generally may never articulate it, workers who stay with the company have an inherent desire to know: What is my charge?
Once employees have decided they want to stay with the company after a reorganization, they need clarity on what the company expects of them. What do you want them to do? Should they carry on as they have been doing in the past, or should they do something different? What are their new marching orders?
If you expect employees to change, you must tell them so. If you expect employees to continue doing what they have been doing in the past, you must tell them this also. Never assume that the employees will conclude what you want them to conclude. You must tell them.
After you have gone through a downsizing you must give the surviving employees their charge. You should share with your employees the things that matter most in the new business model. Tell them:
• What it takes to win in the new company
• What they can do to contribute to the success of the company, as well as to their own success
• What is in it for them if they do contribute to the future success of the company
People need hope in the future. Employees need to know that their future will once again be bright as they work to return the downsized company to profitability. Everything you do during a reorganization must be designed to build hope, not destroy it. When you answer point-by-point every question outlined in this article, you mitigate the fears of the employees, you build tremendous rapport with them, and you refocus their energy and effort on the future success of the business. You get people focused on the customers instead of focused on themselves. §
Innovative Management Group is adept at bringing about successful organizational change, particularly on how to maintain employee commitment after a downsizing. We know how to engage your employees at every level of your company and get them to commit to the new organizational conditions. Please call us to learn how we can help focus your employees on the things that matter most.
Monday, October 10, 2011
Tuesday, October 4, 2011
How to Avoid Wasting Your Time in Unproductive Meetings
Managers across the nation report they spend between 60 to 90 percent of their time in group meetings. Yet much of this time is wasted or inefficient.
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Do you ever feel like you waste a lot of your time sitting in unproductive meetings?
Managers across the nation report they spend between 60 to 90 percent of their time in group meetings. Yet much of this time is wasted or inefficient. Many managers have a misconception that employees need to meet often in order to ensure effective communication and coordination. Yet, in reality, much of what is done in meetings can be achieved through less time consuming methods.
Innovative Management Group offers a one-day training course entitled “Effective Meeting Management” that helps managers realize that effective teams don’t have to meet together as often as one might think. During the workshop participants learn how to produce quality results without having to spend a lot of time in meetings. They recognize that production occurs on the shop floor, not in a conference room. Consequently, they find ways to share important information and solve group problems without attending long meetings.
The first thing participants learn in the Effective Meeting Management workshop is how to determine whether or not to hold a meeting in the first place. Several innovative and inexpensive techniques for communicating without meeting are explored during the course.
Once it has been decided that a meeting is necessary, there are several things a meeting leader can do to make the meeting more productive and less time consuming.
First, there needs to be a specific goal or desired outcome for the meeting. The topics to be addressed during the meeting should be designed to achieve the goals for which the meeting was called. Topics that do not move the group toward the goal should be eliminated from the agenda.
Meetings are more effective when the participants come prepared. Advance notice of the meeting’s purpose and the topics of discussion should be given to those who will be attending the meeting. The meeting leader should send out the agenda in advance. When the goals of the meeting and topics to be addressed are published in advance both the meeting leader and the participants will be able to ensure that the right people attend the meeting. There is nothing more wasteful and frustrating than not being able to make a needed decision during a meeting because the right people were not in attendance.
Attendees at IMG’s Effective Meeting Management course learn how to accelerate their meetings by sending out pre-meeting announcements that fully prepare the members to participate in the meeting. The information also ensures the meeting members stay focused during the meeting.
Another skill taught at the workshop is how to quickly move through the agenda by sequencing the agenda items to accomplish the best possible results. They also explore ways to create an open environment of trust and respect during the meeting so attendees feel comfortable participating in the meeting.
One of the greatest complaints about meetings is that they either start late or go longer than scheduled. This frustrates those who try to plan their day or manage their busy calendars. Attendees in the Effective Meeting Management course learn the value of time control and are given specific tools for focusing and controlling the discussion during meetings.
One method of controlling off-purpose discussions during a meeting is to manage the expectations of the participants during the meeting. Too often meeting attendees turn minor agenda items into major points of debate. Typically this occurs because the meeting members had an expectation that every topic was open for discussion. Conversely, sometimes meeting attendees are silent when advice or open discussion is warranted.
This problem can be rectified by letting people know in advance the type of agenda item being addressed. Normally there are four types of agenda items in a typical meeting.
“Informational” agenda items are not open for discussion. These items usually entail merely sharing information for clarification only. During informational agenda items participants should listen quietly or ask questions for clarification. No other discussion of the agenda item should take place.
During “advisory” agenda items the leader is soliciting input from the members. The group’s role is to give advice. They should not expect to make the decision or to argue or debate after the advice is given and the decision is made.
“Problem solving” agenda items are placed on the agenda when the group is needed to discuss the item and make the decision during the meeting. Obviously, problem solving issues are the most time consuming items on the meeting agenda, while informational agenda items should be brief. Long meetings result when attendees try to turn informational or advisory agenda items into problem solving issues.
The fourth type of agenda item is “Solicitation for Help.” This is an item that is not open for discussion during the meeting, but brought up by an individual who would like help from someone inside the meeting later outside the meeting. Too often in meetings people bring up these type of issues and people end up providing the help inside the meeting when the item should have been addressed outside the room.
During the Effective Meeting Management workshop meeting leaders are provided with tools to manage the meeting to achieve productive outcomes. They learn how to control off-purpose behaviors that may arise in meetings. They also receive techniques to ensure action items are assigned, followed-up on, and completed.
Someone once said, “When the outcome of a meeting is to hold another meeting, it has been a lousy meeting.” Attendees leave the Effective Meeting Management workshop with everything they need so they won’t have to attend another lousy meeting. §
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Do you ever feel like you waste a lot of your time sitting in unproductive meetings?
Managers across the nation report they spend between 60 to 90 percent of their time in group meetings. Yet much of this time is wasted or inefficient. Many managers have a misconception that employees need to meet often in order to ensure effective communication and coordination. Yet, in reality, much of what is done in meetings can be achieved through less time consuming methods.
Innovative Management Group offers a one-day training course entitled “Effective Meeting Management” that helps managers realize that effective teams don’t have to meet together as often as one might think. During the workshop participants learn how to produce quality results without having to spend a lot of time in meetings. They recognize that production occurs on the shop floor, not in a conference room. Consequently, they find ways to share important information and solve group problems without attending long meetings.
The first thing participants learn in the Effective Meeting Management workshop is how to determine whether or not to hold a meeting in the first place. Several innovative and inexpensive techniques for communicating without meeting are explored during the course.
Once it has been decided that a meeting is necessary, there are several things a meeting leader can do to make the meeting more productive and less time consuming.
First, there needs to be a specific goal or desired outcome for the meeting. The topics to be addressed during the meeting should be designed to achieve the goals for which the meeting was called. Topics that do not move the group toward the goal should be eliminated from the agenda.
Meetings are more effective when the participants come prepared. Advance notice of the meeting’s purpose and the topics of discussion should be given to those who will be attending the meeting. The meeting leader should send out the agenda in advance. When the goals of the meeting and topics to be addressed are published in advance both the meeting leader and the participants will be able to ensure that the right people attend the meeting. There is nothing more wasteful and frustrating than not being able to make a needed decision during a meeting because the right people were not in attendance.
Attendees at IMG’s Effective Meeting Management course learn how to accelerate their meetings by sending out pre-meeting announcements that fully prepare the members to participate in the meeting. The information also ensures the meeting members stay focused during the meeting.
Another skill taught at the workshop is how to quickly move through the agenda by sequencing the agenda items to accomplish the best possible results. They also explore ways to create an open environment of trust and respect during the meeting so attendees feel comfortable participating in the meeting.
One of the greatest complaints about meetings is that they either start late or go longer than scheduled. This frustrates those who try to plan their day or manage their busy calendars. Attendees in the Effective Meeting Management course learn the value of time control and are given specific tools for focusing and controlling the discussion during meetings.
One method of controlling off-purpose discussions during a meeting is to manage the expectations of the participants during the meeting. Too often meeting attendees turn minor agenda items into major points of debate. Typically this occurs because the meeting members had an expectation that every topic was open for discussion. Conversely, sometimes meeting attendees are silent when advice or open discussion is warranted.
This problem can be rectified by letting people know in advance the type of agenda item being addressed. Normally there are four types of agenda items in a typical meeting.
“Informational” agenda items are not open for discussion. These items usually entail merely sharing information for clarification only. During informational agenda items participants should listen quietly or ask questions for clarification. No other discussion of the agenda item should take place.
During “advisory” agenda items the leader is soliciting input from the members. The group’s role is to give advice. They should not expect to make the decision or to argue or debate after the advice is given and the decision is made.
“Problem solving” agenda items are placed on the agenda when the group is needed to discuss the item and make the decision during the meeting. Obviously, problem solving issues are the most time consuming items on the meeting agenda, while informational agenda items should be brief. Long meetings result when attendees try to turn informational or advisory agenda items into problem solving issues.
The fourth type of agenda item is “Solicitation for Help.” This is an item that is not open for discussion during the meeting, but brought up by an individual who would like help from someone inside the meeting later outside the meeting. Too often in meetings people bring up these type of issues and people end up providing the help inside the meeting when the item should have been addressed outside the room.
During the Effective Meeting Management workshop meeting leaders are provided with tools to manage the meeting to achieve productive outcomes. They learn how to control off-purpose behaviors that may arise in meetings. They also receive techniques to ensure action items are assigned, followed-up on, and completed.
Someone once said, “When the outcome of a meeting is to hold another meeting, it has been a lousy meeting.” Attendees leave the Effective Meeting Management workshop with everything they need so they won’t have to attend another lousy meeting. §
Monday, September 26, 2011
Customers Will Pay a Premium Price for Exceptional Service
It doesn’t take much to wow your customers. You merely have to notice them. Notice who they are and what they like. Just pay attention and do a few minor things that make a difference. It’s the little things that create loyal customers.
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Anyone who knows me knows I am a cheapskate. I have a real hard time spending money on myself. I’m one of those people who will look for the lowest price and buy that item even if the quality isn’t quite what I want.
At least that’s what I’ve always thought. Then something happened to open my eyes to reality.
Since I travel so much I use a laundry service to wash and press my shirts, pants and suits. Fortunately there is a cleaner just around the corner from my home. Each time I return from a trip I take my dirty clothes to this cleaner the next morning.
Several months ago I noticed this particular cleaner is fairly expensive. My wife told me I could get my shirts cleaned for almost 25% less than what I am paying. But I refuse to change, regardless of the cost savings. At first I thought my hesitancy to switch was out of convenience. Another cleaner is several blocks away while this cleaner is just around the corner. But the other day when I went to my current cleaner it dawned on me why I am willing to pay more and stick with the cleaner I’m using.
As I walked toward the shop the owner had already pulled my ticket and had the conveyor belt spinning as she looked for my clean clothes. As I entered she smiled broadly and said: “Good morning, Mr. Mac.” She also had a new ticket ready for my dirty load of clothes and had written my name on the top of the ticket. She did all of this after recognizing my car as I pulled into the parking lot.
As I walked out of the cleaner I had a big smile on my face. I realized the way I was feeling at that moment was the reason why I’m willing to pay more at my cleaner. I like the way they make me feel. They know me. They make me feel special. They act as if I’m an important customer and they want my business. I don’t know if they treat every customer like that (I like to think that it’s just me), but I certainly notice it and am willing to pay a premium price because of it.
It doesn’t take much to wow your customers. You just have to notice them. Notice who they are and what they like. Just pay attention and do a few minor things that make a difference. It’s the little things that create loyal customers.
The other day, while on a business trip back East, I was in a restaurant waiting for my dinner. I normally order room service but the hotel where I was staying did not have this service. I hate eating alone in a restaurant because it’s boring sitting and staring at the empty table.
On this occasion another waiter (not my own) noticed that I was alone and that I had been waiting for some time for my food. He came over and, in a concerned voice, said: “One of our cooks called in sick today so our service is slower than usual. Can I get you a newspaper to read while you wait?”
Needless to say, I was impressed. I gave him a tip when he came back with the paper.
Several years ago I read a survey where people were asked to identify the one thing that would cause them to take their business elsewhere. The results were surprising. Only 20% of the respondents said they would take their business elsewhere if they were treated “rudely.” But 86% of those surveyed said they would stop doing business with a company if they were treated “indifferently” — as if their patronage was not important.
Most customers are more than willing to pay a premium price for service providers who simply notice them and then proactively respond to their needs without prompting. My cleaner has convinced me of this. §
Innovative Management Group has helped companies create loyal customers for over twenty years. We know how to align the performance of your employees to the priorities of your customers. Our patented Consistent Service Model® shows how to create consistent service deliver within every department and from every employee at every level of your organization. We know how to ensure you stay focused on the things that matter most to your customers.
------------------------------------
Anyone who knows me knows I am a cheapskate. I have a real hard time spending money on myself. I’m one of those people who will look for the lowest price and buy that item even if the quality isn’t quite what I want.
At least that’s what I’ve always thought. Then something happened to open my eyes to reality.
Since I travel so much I use a laundry service to wash and press my shirts, pants and suits. Fortunately there is a cleaner just around the corner from my home. Each time I return from a trip I take my dirty clothes to this cleaner the next morning.
Several months ago I noticed this particular cleaner is fairly expensive. My wife told me I could get my shirts cleaned for almost 25% less than what I am paying. But I refuse to change, regardless of the cost savings. At first I thought my hesitancy to switch was out of convenience. Another cleaner is several blocks away while this cleaner is just around the corner. But the other day when I went to my current cleaner it dawned on me why I am willing to pay more and stick with the cleaner I’m using.
As I walked toward the shop the owner had already pulled my ticket and had the conveyor belt spinning as she looked for my clean clothes. As I entered she smiled broadly and said: “Good morning, Mr. Mac.” She also had a new ticket ready for my dirty load of clothes and had written my name on the top of the ticket. She did all of this after recognizing my car as I pulled into the parking lot.
As I walked out of the cleaner I had a big smile on my face. I realized the way I was feeling at that moment was the reason why I’m willing to pay more at my cleaner. I like the way they make me feel. They know me. They make me feel special. They act as if I’m an important customer and they want my business. I don’t know if they treat every customer like that (I like to think that it’s just me), but I certainly notice it and am willing to pay a premium price because of it.
It doesn’t take much to wow your customers. You just have to notice them. Notice who they are and what they like. Just pay attention and do a few minor things that make a difference. It’s the little things that create loyal customers.
The other day, while on a business trip back East, I was in a restaurant waiting for my dinner. I normally order room service but the hotel where I was staying did not have this service. I hate eating alone in a restaurant because it’s boring sitting and staring at the empty table.
On this occasion another waiter (not my own) noticed that I was alone and that I had been waiting for some time for my food. He came over and, in a concerned voice, said: “One of our cooks called in sick today so our service is slower than usual. Can I get you a newspaper to read while you wait?”
Needless to say, I was impressed. I gave him a tip when he came back with the paper.
Several years ago I read a survey where people were asked to identify the one thing that would cause them to take their business elsewhere. The results were surprising. Only 20% of the respondents said they would take their business elsewhere if they were treated “rudely.” But 86% of those surveyed said they would stop doing business with a company if they were treated “indifferently” — as if their patronage was not important.
Most customers are more than willing to pay a premium price for service providers who simply notice them and then proactively respond to their needs without prompting. My cleaner has convinced me of this. §
Innovative Management Group has helped companies create loyal customers for over twenty years. We know how to align the performance of your employees to the priorities of your customers. Our patented Consistent Service Model® shows how to create consistent service deliver within every department and from every employee at every level of your organization. We know how to ensure you stay focused on the things that matter most to your customers.
Friday, September 23, 2011
How to Maintain Employee Motivation and Commitment after a Layoff
More and more companies are forced to lay off employees as the world economy continues to tumble.
Downsizing the business is a fast and effective way to reduce expenses, maintain profitability, and ensure the continuation of the business. But how you lay people off will a have long-lasting effect on those who remain with your company. Poorly handled decisions today can impact productivity and morale now and for a long time in the future.
Employees who stay with your company after a layoff often have confused emotions as they wrestle with the changes brought about by the reorganization. A paradox of conflicting loyalties stirs within them. Feelings of concern for former colleagues are juxtaposed with feelings for oneself. Previous feelings of loyalty to the company now conflict with loyalty to oneself. Employees question their previous work effort as they worry about whether they have a future with your enterprise.
While employees are going through these internal emotional struggles several other factors impact their future motivation and commitment.
Invariably surviving employees are expected to take on more work. Normally they are asked to do more work for the same pay or, worse yet, for less pay because of the company’s declining financial position. Since most layoffs are undertaken to cut costs, the downsizing often results in salary freezes for those who stay with the company. Moreover, some former motivators may also have been eliminated, such as company cars, travel and entertainment budgets, or professional development expenses. Finally, there may be less career advancement opportunities after a downsizing, making one’s future with the organization less certain.
Importance of Open Communication
The most important thing you can do to maintain morale and commitment after a layoff is to openly communicate with your employees.
Many managers are hesitant to share information with employees after a reorganization, particularly if the information is of a negative nature. However, your workers expect you to bring up all relevant issues in a straightforward manner, especially any negatives that might impact them directly. Avoiding these issues sends a message that either the issues are not important or, worse yet, the employees themselves are not important enough for you to share information with them.
The absolute worst thing you can do after a layoff is to send a message to remaining employees that they are not important. The more information you share with your employees during difficult economic times, the more they will feel you are concerned about their future. Likewise, the more employees feel you are concerned about their future, the more they will be concerned about the future of the business.
One critical thing to remember during a reorganization is that when people lack real data, they make up their own. Usually what people make up is far worse than reality. You can stop the rumor-mills that typically run rampant during a downsizing by being up front with the employees.
There are three crucial objectives you should have for your communication with employees during a reorganization.
First, you should do everything you can to mitigate the usual fears employees have when an organization is in transition.
Second, you should view every employee contact as an opportunity to build rapport with your workers.
Finally, your message should be formulated and presented so well that it focuses the energy and effort of the employees where you want it – on the customers – rather than on the company. What you say must eliminate from the employees all doubt, worry, gossip, wondering, and hesitancy.
At the conclusion of your message you want the workers worrying about their work, not worrying about their jobs or their employer. To do this you must understand the psyche of the employees and address the concerns they worry about the most during a layoff.
What Employees Want to Know
Invariably there are five predictable questions employees will have during a company downsizing. Although the specific verbiage of the questions highlighted here may not be exactly how the employees would articulate their concerns, the answers to these questions will address most of the issues employees will be wondering about. When you know these questions in advance you can target your communication to address the employees’ concerns before they come up. This in turn shows the workers you are empathetic to their needs, thereby building rapport between you and them.
Your answers to five critical questions will determine whether surviving employees will remain motivated and loyal to a company after a layoff.
The questions are: 1) Was the downsizing integral to the business’ overall strategy to survive?; 2) What does the future look like for the company?; 3) Is there still a place for me in the company with continued opportunities for advancement?; 4) Will those employees who are let go be treated fairly?; and 5) What is expected of the employees who remain at the company after a downsizing?
Integral to Business Survival
Employees want to know that the reorganization is not random or whimsical. Remaining employees have to be assured that the layoffs were necessary and not just done arbitrarily. A clear business need for the change must be supported by facts and figures. Employees need to know and understand the business reasons for the layoff and what the consequences would have been had the layoffs not occurred. The layoffs must be logically tied to the future business needs of the company and should have only affected those departments that were non-productive or no longer essential to the business.
At the same time employees must perceive there is a clearly identified and well-thought-out strategy to return the company to stability and long-term profitability. They need assurance that by downsizing and taking hits now the company will be much better off in the future. Perceptions of unnecessary or illogical reductions in staff cause employees to lose confidence in your ability to protect the future viability of the company. Fears of future layoffs persist when employees see no clear linkage between the reduction in staff and management’s plan to return the company to profitability.
You must be adept at understanding and explaining the business imperative for the change. Employees can buy-in to a reduction in staff, even the elimination of their own positions, given a reasonable business need for doing so. Managers who want to motivate surviving employees must take workers into their confidence and clearly outline the logic behind the downsizing decision.
Outlook for the Future
In a down economy when layoffs are necessary the future is often unknown. People generally are afraid of the unknown. To alleviate their own fears, the remaining employees will latch on to any information they can get about the company’s future plans to return the business to profitability. This is why rumors run rampant during a reorganization. It is the natural human need for information – any information – even if it is false. Surviving employees will remain fearful about the future until they have information that will assuage their fears.
Before addressing the employees you should have a clear vision of where you want to take the company in the future. Leaders who possess and can communicate a confident view of the future can infuse confidence within surviving employees by sharing their vision. Employees are more apt to follow leaders who have a clear view of what the future entails.
Although you may not have a clear view of the future when economic conditions have not yet stabilized, you must share what you know, assume or hope for the future. You must help employees to see the future themselves. Let employees know what they can expect to see and experience in the months ahead. Explain what changes or non-changes the company anticipates over the next one, three, six or twelve months. Share your plans. Be as open, specific and precise as possible. Any hesitancy or waffling from you will damage the confidence and commitment you will receive from your employees.
Opportunities for Advancement
Surviving employees want to know what their future prospects are with the newly reorganized company. Since traditional career paths may have been eliminated, new opportunities for “advancement” must be created. These typically entail such things as compensation for performance rather than position, greater autonomy and decision making authority, or opportunities to improve one’s “employability” through exposure to more aspects of the business. Employees in the new organization will want to work on projects that develop their skills while achieving company goals.
You need to identify the advancement opportunities that will be in play after the reorganization prior to implementation of the change. Nothing demotivates employees faster than to have career options for which one has been striving to attain suddenly become unavailable because of elimination of positions or layers within the company.
Treatment of Downsized Employees
Surviving employees are greatly influenced by how downsized employees were treated when they were let go. Surviving employees want to be assured, should it happen to them, that laid off employees were “cared for” through severance pay, outplacement services, ample advanced notice, and fair and consistent treatment throughout the reorganization. Employees predict how they will be treated in the future based upon how the company treated displaced employees in the past. You will be wise to remember that employees have a long memory when it comes to company reorganizations. They recall exactly what was said back when and who did what to whom. Be very careful when making decisions about how to treat downsized employees.
Expectations of Remaining Employees
Finally, although employees may not know they have this last need, and therefore generally may never articulate it, workers who stay with the company have an inherent desire to know: What is my charge?
Once employees have decided they want to stay with the company after a reorganization, they need clarity on what the company expects of them. What do you want them to do? Should they carry on as they have been doing in the past, or should they do something different? What are their new marching orders?
If you expect employees to change, you must tell them so. If you expect employees to continue doing what they have been doing in the past, you must tell them this also. Never assume that the employees will conclude what you want them to conclude. You must tell them.
After you have gone through a downsizing you must give the surviving employees their charge. You should share with your employees the things that matter most in the new business model. Tell them:
• What it takes to win in the new company
• What they can do to contribute to the success of the company, as well as to their own success
• What is in it for them if they do contribute to the future success of the company
People need hope in the future. Employees need to know that their future will once again be bright as they work to return the downsized company to profitability. Everything you do during a reorganization must be designed to build hope, not destroy it. When you answer point-by-point every question outlined in this article, you mitigate the fears of the employees, you build tremendous rapport with them, and you refocus their energy and effort on the future success of the business. You get people focused on the customers instead of focused on themselves. §
Innovative Management Group is adept at bringing about successful organizational change, particularly on how to maintain employee commitment after a downsizing. We know how to engage your employees at every level of your company and get them to commit to the new organizational conditions. Please call us to learn how we can help focus your employees on the things that matter most.
Downsizing the business is a fast and effective way to reduce expenses, maintain profitability, and ensure the continuation of the business. But how you lay people off will a have long-lasting effect on those who remain with your company. Poorly handled decisions today can impact productivity and morale now and for a long time in the future.
Employees who stay with your company after a layoff often have confused emotions as they wrestle with the changes brought about by the reorganization. A paradox of conflicting loyalties stirs within them. Feelings of concern for former colleagues are juxtaposed with feelings for oneself. Previous feelings of loyalty to the company now conflict with loyalty to oneself. Employees question their previous work effort as they worry about whether they have a future with your enterprise.
While employees are going through these internal emotional struggles several other factors impact their future motivation and commitment.
Invariably surviving employees are expected to take on more work. Normally they are asked to do more work for the same pay or, worse yet, for less pay because of the company’s declining financial position. Since most layoffs are undertaken to cut costs, the downsizing often results in salary freezes for those who stay with the company. Moreover, some former motivators may also have been eliminated, such as company cars, travel and entertainment budgets, or professional development expenses. Finally, there may be less career advancement opportunities after a downsizing, making one’s future with the organization less certain.
Importance of Open Communication
The most important thing you can do to maintain morale and commitment after a layoff is to openly communicate with your employees.
Many managers are hesitant to share information with employees after a reorganization, particularly if the information is of a negative nature. However, your workers expect you to bring up all relevant issues in a straightforward manner, especially any negatives that might impact them directly. Avoiding these issues sends a message that either the issues are not important or, worse yet, the employees themselves are not important enough for you to share information with them.
The absolute worst thing you can do after a layoff is to send a message to remaining employees that they are not important. The more information you share with your employees during difficult economic times, the more they will feel you are concerned about their future. Likewise, the more employees feel you are concerned about their future, the more they will be concerned about the future of the business.
One critical thing to remember during a reorganization is that when people lack real data, they make up their own. Usually what people make up is far worse than reality. You can stop the rumor-mills that typically run rampant during a downsizing by being up front with the employees.
There are three crucial objectives you should have for your communication with employees during a reorganization.
First, you should do everything you can to mitigate the usual fears employees have when an organization is in transition.
Second, you should view every employee contact as an opportunity to build rapport with your workers.
Finally, your message should be formulated and presented so well that it focuses the energy and effort of the employees where you want it – on the customers – rather than on the company. What you say must eliminate from the employees all doubt, worry, gossip, wondering, and hesitancy.
At the conclusion of your message you want the workers worrying about their work, not worrying about their jobs or their employer. To do this you must understand the psyche of the employees and address the concerns they worry about the most during a layoff.
What Employees Want to Know
Invariably there are five predictable questions employees will have during a company downsizing. Although the specific verbiage of the questions highlighted here may not be exactly how the employees would articulate their concerns, the answers to these questions will address most of the issues employees will be wondering about. When you know these questions in advance you can target your communication to address the employees’ concerns before they come up. This in turn shows the workers you are empathetic to their needs, thereby building rapport between you and them.
Your answers to five critical questions will determine whether surviving employees will remain motivated and loyal to a company after a layoff.
The questions are: 1) Was the downsizing integral to the business’ overall strategy to survive?; 2) What does the future look like for the company?; 3) Is there still a place for me in the company with continued opportunities for advancement?; 4) Will those employees who are let go be treated fairly?; and 5) What is expected of the employees who remain at the company after a downsizing?
Integral to Business Survival
Employees want to know that the reorganization is not random or whimsical. Remaining employees have to be assured that the layoffs were necessary and not just done arbitrarily. A clear business need for the change must be supported by facts and figures. Employees need to know and understand the business reasons for the layoff and what the consequences would have been had the layoffs not occurred. The layoffs must be logically tied to the future business needs of the company and should have only affected those departments that were non-productive or no longer essential to the business.
At the same time employees must perceive there is a clearly identified and well-thought-out strategy to return the company to stability and long-term profitability. They need assurance that by downsizing and taking hits now the company will be much better off in the future. Perceptions of unnecessary or illogical reductions in staff cause employees to lose confidence in your ability to protect the future viability of the company. Fears of future layoffs persist when employees see no clear linkage between the reduction in staff and management’s plan to return the company to profitability.
You must be adept at understanding and explaining the business imperative for the change. Employees can buy-in to a reduction in staff, even the elimination of their own positions, given a reasonable business need for doing so. Managers who want to motivate surviving employees must take workers into their confidence and clearly outline the logic behind the downsizing decision.
Outlook for the Future
In a down economy when layoffs are necessary the future is often unknown. People generally are afraid of the unknown. To alleviate their own fears, the remaining employees will latch on to any information they can get about the company’s future plans to return the business to profitability. This is why rumors run rampant during a reorganization. It is the natural human need for information – any information – even if it is false. Surviving employees will remain fearful about the future until they have information that will assuage their fears.
Before addressing the employees you should have a clear vision of where you want to take the company in the future. Leaders who possess and can communicate a confident view of the future can infuse confidence within surviving employees by sharing their vision. Employees are more apt to follow leaders who have a clear view of what the future entails.
Although you may not have a clear view of the future when economic conditions have not yet stabilized, you must share what you know, assume or hope for the future. You must help employees to see the future themselves. Let employees know what they can expect to see and experience in the months ahead. Explain what changes or non-changes the company anticipates over the next one, three, six or twelve months. Share your plans. Be as open, specific and precise as possible. Any hesitancy or waffling from you will damage the confidence and commitment you will receive from your employees.
Opportunities for Advancement
Surviving employees want to know what their future prospects are with the newly reorganized company. Since traditional career paths may have been eliminated, new opportunities for “advancement” must be created. These typically entail such things as compensation for performance rather than position, greater autonomy and decision making authority, or opportunities to improve one’s “employability” through exposure to more aspects of the business. Employees in the new organization will want to work on projects that develop their skills while achieving company goals.
You need to identify the advancement opportunities that will be in play after the reorganization prior to implementation of the change. Nothing demotivates employees faster than to have career options for which one has been striving to attain suddenly become unavailable because of elimination of positions or layers within the company.
Treatment of Downsized Employees
Surviving employees are greatly influenced by how downsized employees were treated when they were let go. Surviving employees want to be assured, should it happen to them, that laid off employees were “cared for” through severance pay, outplacement services, ample advanced notice, and fair and consistent treatment throughout the reorganization. Employees predict how they will be treated in the future based upon how the company treated displaced employees in the past. You will be wise to remember that employees have a long memory when it comes to company reorganizations. They recall exactly what was said back when and who did what to whom. Be very careful when making decisions about how to treat downsized employees.
Expectations of Remaining Employees
Finally, although employees may not know they have this last need, and therefore generally may never articulate it, workers who stay with the company have an inherent desire to know: What is my charge?
Once employees have decided they want to stay with the company after a reorganization, they need clarity on what the company expects of them. What do you want them to do? Should they carry on as they have been doing in the past, or should they do something different? What are their new marching orders?
If you expect employees to change, you must tell them so. If you expect employees to continue doing what they have been doing in the past, you must tell them this also. Never assume that the employees will conclude what you want them to conclude. You must tell them.
After you have gone through a downsizing you must give the surviving employees their charge. You should share with your employees the things that matter most in the new business model. Tell them:
• What it takes to win in the new company
• What they can do to contribute to the success of the company, as well as to their own success
• What is in it for them if they do contribute to the future success of the company
People need hope in the future. Employees need to know that their future will once again be bright as they work to return the downsized company to profitability. Everything you do during a reorganization must be designed to build hope, not destroy it. When you answer point-by-point every question outlined in this article, you mitigate the fears of the employees, you build tremendous rapport with them, and you refocus their energy and effort on the future success of the business. You get people focused on the customers instead of focused on themselves. §
Innovative Management Group is adept at bringing about successful organizational change, particularly on how to maintain employee commitment after a downsizing. We know how to engage your employees at every level of your company and get them to commit to the new organizational conditions. Please call us to learn how we can help focus your employees on the things that matter most.
Tuesday, September 20, 2011
Why Employees are Not Motivated
In motivating employees managers need to match the goal and the rewards based on the employees’ needs. They need to find out why employees are not motivated and remove the inhibiting factor.
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Several years ago a Harvard Business Review study identified eight reasons why workers may not be motivated to work.
First, the goal is too distant. It’s difficult for people to be enthused about something that is too far in the future. Long-term goals should be broken into smaller, more immediate actions. Immediate goals with immediate payoff have the greatest odds of motivating employees.
Second, the payoff is too small. The reward is not worth the energy and effort required to perform the task. If employees feel the task is huge and the payoff is small, they will be reluctant to take on the responsibility.
Third, the path to the goal is too difficult. If it will take a Herculean effort to perform the work many employees will pass on the task. Again, it’s not worth the effort when one sees the hoops that must be jumped through to achieve the end result.
Fourth, the goal satisfies no personal need. There’s no clear benefit to the individual for accomplishing the task. Before starting a task, employees invariably want to know what is in it for them. Employees tune in closely to station WII-FM (what’s in it for me). If the accomplishment of the task does not fulfill a personal need, the employee may be less inclined to do it.
Fifth, the individual’s personal need can be satisfied by a different goal. For example, an employee who enjoys the recognition he or she receives while visiting excessively with colleagues in the break-room may not be motivated by supervisory recognition for staying on task.
Sixth, the employee denies the goal satisfies a personal need. Managers often use increased responsibility or greater company exposure as motivational tactics, only to discover the gesture had the opposite effective. Some employees fear the accountability that comes with new responsibilities. Others may be nervous in the presence of upper management. Although the employees may wish to advance, they decline a promotion because of these fears.
Seventh, the employee is focused on a lower level need. It’s often difficult to get excited about a new title or office if the anticipated pay raise does not come with it.
Finally, the employee lacks the skill to perform the task. If the employees do not feel confident performing the work, no amount of persuasion can get them to do it. People who do not have the skills to do the job cannot do them even if a gun were pointed at their heads.
In motivating employees managers need to match the goal and the rewards based on the employees’ needs. They need to find out why employees are not motivated and remove the inhibiting factor.
---------------
Innovative Management Group offers a variety of executive, manager and supervisor training programs on performance management issues. Please contact us for a list of our customized training courses.
-------------
Several years ago a Harvard Business Review study identified eight reasons why workers may not be motivated to work.
First, the goal is too distant. It’s difficult for people to be enthused about something that is too far in the future. Long-term goals should be broken into smaller, more immediate actions. Immediate goals with immediate payoff have the greatest odds of motivating employees.
Second, the payoff is too small. The reward is not worth the energy and effort required to perform the task. If employees feel the task is huge and the payoff is small, they will be reluctant to take on the responsibility.
Third, the path to the goal is too difficult. If it will take a Herculean effort to perform the work many employees will pass on the task. Again, it’s not worth the effort when one sees the hoops that must be jumped through to achieve the end result.
Fourth, the goal satisfies no personal need. There’s no clear benefit to the individual for accomplishing the task. Before starting a task, employees invariably want to know what is in it for them. Employees tune in closely to station WII-FM (what’s in it for me). If the accomplishment of the task does not fulfill a personal need, the employee may be less inclined to do it.
Fifth, the individual’s personal need can be satisfied by a different goal. For example, an employee who enjoys the recognition he or she receives while visiting excessively with colleagues in the break-room may not be motivated by supervisory recognition for staying on task.
Sixth, the employee denies the goal satisfies a personal need. Managers often use increased responsibility or greater company exposure as motivational tactics, only to discover the gesture had the opposite effective. Some employees fear the accountability that comes with new responsibilities. Others may be nervous in the presence of upper management. Although the employees may wish to advance, they decline a promotion because of these fears.
Seventh, the employee is focused on a lower level need. It’s often difficult to get excited about a new title or office if the anticipated pay raise does not come with it.
Finally, the employee lacks the skill to perform the task. If the employees do not feel confident performing the work, no amount of persuasion can get them to do it. People who do not have the skills to do the job cannot do them even if a gun were pointed at their heads.
In motivating employees managers need to match the goal and the rewards based on the employees’ needs. They need to find out why employees are not motivated and remove the inhibiting factor.
---------------
Innovative Management Group offers a variety of executive, manager and supervisor training programs on performance management issues. Please contact us for a list of our customized training courses.
Positioning Your Company for Success in a Yo-Yo Economy
Today’s economy is like a yo-yo. We have been dangling on a string in a “sleeper” recession for quite some time. The world economy continues to spin at the bottom. Everyone has been wondering how long the spin can continue at the abyss before experiencing a collapse of the market. Thriving in the new economy requires a business model that matches the values and spending habits of customers today. It could entail a complete change in the way you do business.
------------------------------------
When I was a young boy I liked to play with my yo-yo. I became fairly proficient at performing fancy tricks with interesting names like “rock the baby,” “walk the dog” and “skin the cat.”
I also could do a yo-yo trick called “the sleeper.” This motion entailed throwing the yo-yo down without bringing it back up immediately. If the string tension was correct, the yo-yo would spin for several seconds at the bottom of the string. The difficulty of the trick was knowing when to pull the yo-yo back up before the spin petered out. If I left it down too long the yo-yo would collapse and die at the end of the string.
Today’s economy is like my yo-yo. We have been dangling on a string in a “sleeper” recession for quite some time. The world economy continues to spin at the bottom. Everyone has been wondering how long the spin can continue at the abyss before experiencing a collapse of the market. It’s hard to tell whether the economy is improving or not because the economic indicators keep yo-yoing between signs of improvement and signs of continued economic decline. The recent combative legislative debate over the debt ceiling just added to the economic confusion.
Survival Requires a New Business Model
Sadly, too many companies have been sleeping too long. At the beginning of the Great Recession some businesses refused to accept the notion that things could get this bad. They responded slowly to the crisis, hoping the downturn would be brief. A significant number of these companies no longer exist because they refused to take the necessary actions to save their enterprise.
Some companies did respond to the crash – typically by lowering prices to continue to attract customers – but they never changed their actual business model. Perhaps they thought the spin at the bottom would be short, and they could pull their prices back up when it looked like the sleeping economy was nearing an end.
Fortunately, a few insightful companies realized early on that the economic downturn was going to last a long time. They wisely learned the trick of keeping their company spinning strongly so there would be enough strength in their business after the long spin to pull the business back up. They changed their business model to survive in a sleeping economy. They adjusted what they do to match the conditions of the new world. And they realized that when the economic spin does come to an end, the world will be much different that it was before. Consequently, they repositioned their products and services to appeal to customer needs and expectations in this new market reality.
Changing Priorities of Customers
The world has changed and any company who refuses to change their business model to match the new world is in danger of petering out. Customer behaviors have changed forever and they will not return to where they were before the recession – at least not in this generation.
The majority of customers have changed their spending habits. They now perceive their discretionary money in a different light. They have a completely different view of the value they expect for the money they spend. Customers are putting a lot more thought into their purchases to make sure what they buy is the best possible value for the price. They are less impulsive and more cautious about how they spend their money. They want to be assured that they are spending their money wisely.
If your company wishes to survive in the new world you must change your focus to align with the changing priorities of your customers.
For the most part, companies in the past focused on providing tangible and intangible products that appealed to the excessive and indulgent nature of their customers. Manufacturing companies produced cell phones, computers and other electronic gadgets with more bells and whistles than a person could possibly use. Casinos built massive, opulent resorts with every amenity imaginable to immerse guests in a sensory experience that appealed to their base desires. Restaurants sold the sizzle instead of the steak, emphasizing presentation and ambiance over the quality of the food. Customers spent thousands of dollars for an “experience” or access to products that would make them feel hip or cool. People paid far too much for far too little and flashed their materialistic possessions as indicators of their social or economic status.
What Customers Want Today
Today’s value-conscious customers want more than window dressing. They want ASSURANCE that what they are buying is worth the expense. They must feel confident that the investment of their hard-earned money will provide something of significant value. They need justification – or an excuse – for spending their discretionary money at a time when saving their money may seem like a more prudent action.
No longer are name-brand products or the “premier resort destination” the automatic purchase choice of many customers. People are evaluating their options and scrutinizing which choice gives them the biggest bang for their buck. They’re reviewing previous customer comments for assurance they are making the right purchasing choice. They are seeking to connect on an emotional level with products and services that match their current values.
Customers also want assurance of the RELIABILITY of your products and services. They want to buy products that work. They want whatever they buy to perform at the level promised. And, as the old throw-away attitude diminishes, customers are looking for products that last longer and won’t have to be replaced in a few months with a new generation product.
Customers want service companies to actually deliver quality service. They expect your employees to be friendly, efficient, knowledgeable, attentive and helpful. They want their hot food hot and their cold food cold. In many cases customers expect even higher levels of service during tough times because they expect you to truly compete for their business.
They expect you to stand behind your products and services and guarantee you will deliver what you promise. And if, for some reason, there is a problem with your delivery, today’s customers expect RESPONSIVENESS from your employees who quickly address their concerns and to fix the problem.
In tough times customers expect you to have EMPATHY and understand what they are going through. Very few people in this country have been untouched by the tough economy. Many people have lost their jobs, their home and even their possessions. They’ve downsized their lifestyle significantly. They’ve postponed their retirement. Those who are still employed may be underemployed, having had their hours or their wages cut. Some families may have more than one wage earner who has been affected by the downturn.
Consequently, when these customers do spend their money on a vacation, at a restaurant, bar or theater, they expect your employees to show APPRECIATION for the investment the customer is making. Stressed out customers expect your employees to understand their need for escape, relaxation, rejuvenation and a life free from the hassles of their daily grind. If they purchase a product from you, they want that product to be easy to use and not add any additional burden to their life. If they have to interact with your employees, customers want the experience to be pleasant and problem-free. They expect your employees to be totally focused on ensuring they have a good experience patronizing your business.
Aligning Your Business Model to New Customer Demands
It’s time to pull the yoyo back up and regain control of your company’s economic future. Innovative Management Group can help position your company for success in the new economy based on the realities of the market conditions you can expect over the next 3-5 years. We will help you:
• Define your strategic focus and outline your strategic intentions
• Reclaim your brand identity or redefine a new one based on the new market realities
• Identify your value premise and unique product differentiation
• Determine which of your current products and services match current customer needs
• Identify new products and services needed to create customer demand
• Align your marketing strategies and tactics with the new world
• Ensure consistent product and service delivery to create customer loyalty
• Engage your employees in making the changes necessary to succeed in today’s competitive world
• Ensure the commitment of your executives, managers and employees to focus on the things that matter most
During difficult times your company needs to stay focused, or refocus if your current strategies and tactics are ineffective or no longer appropriate. Now is the time to identify strengths, weaknesses, opportunities and threats. Tough times require clear, creative thinking to minimize the weaknesses and threats and take advantage of the strengths and opportunities in order to drive value to your business. It is a time to rediscover the fundamentals of the business — the critical success factors that will keep your organization spinning successfully for many years to come.
Good leaders make good decisions in tough times. Call Innovative Management Group today to help you maintain or regain a strong competitive position in a weak economy. §
------------------------------------
When I was a young boy I liked to play with my yo-yo. I became fairly proficient at performing fancy tricks with interesting names like “rock the baby,” “walk the dog” and “skin the cat.”
I also could do a yo-yo trick called “the sleeper.” This motion entailed throwing the yo-yo down without bringing it back up immediately. If the string tension was correct, the yo-yo would spin for several seconds at the bottom of the string. The difficulty of the trick was knowing when to pull the yo-yo back up before the spin petered out. If I left it down too long the yo-yo would collapse and die at the end of the string.
Today’s economy is like my yo-yo. We have been dangling on a string in a “sleeper” recession for quite some time. The world economy continues to spin at the bottom. Everyone has been wondering how long the spin can continue at the abyss before experiencing a collapse of the market. It’s hard to tell whether the economy is improving or not because the economic indicators keep yo-yoing between signs of improvement and signs of continued economic decline. The recent combative legislative debate over the debt ceiling just added to the economic confusion.
Survival Requires a New Business Model
Sadly, too many companies have been sleeping too long. At the beginning of the Great Recession some businesses refused to accept the notion that things could get this bad. They responded slowly to the crisis, hoping the downturn would be brief. A significant number of these companies no longer exist because they refused to take the necessary actions to save their enterprise.
Some companies did respond to the crash – typically by lowering prices to continue to attract customers – but they never changed their actual business model. Perhaps they thought the spin at the bottom would be short, and they could pull their prices back up when it looked like the sleeping economy was nearing an end.
Fortunately, a few insightful companies realized early on that the economic downturn was going to last a long time. They wisely learned the trick of keeping their company spinning strongly so there would be enough strength in their business after the long spin to pull the business back up. They changed their business model to survive in a sleeping economy. They adjusted what they do to match the conditions of the new world. And they realized that when the economic spin does come to an end, the world will be much different that it was before. Consequently, they repositioned their products and services to appeal to customer needs and expectations in this new market reality.
Changing Priorities of Customers
The world has changed and any company who refuses to change their business model to match the new world is in danger of petering out. Customer behaviors have changed forever and they will not return to where they were before the recession – at least not in this generation.
The majority of customers have changed their spending habits. They now perceive their discretionary money in a different light. They have a completely different view of the value they expect for the money they spend. Customers are putting a lot more thought into their purchases to make sure what they buy is the best possible value for the price. They are less impulsive and more cautious about how they spend their money. They want to be assured that they are spending their money wisely.
If your company wishes to survive in the new world you must change your focus to align with the changing priorities of your customers.
For the most part, companies in the past focused on providing tangible and intangible products that appealed to the excessive and indulgent nature of their customers. Manufacturing companies produced cell phones, computers and other electronic gadgets with more bells and whistles than a person could possibly use. Casinos built massive, opulent resorts with every amenity imaginable to immerse guests in a sensory experience that appealed to their base desires. Restaurants sold the sizzle instead of the steak, emphasizing presentation and ambiance over the quality of the food. Customers spent thousands of dollars for an “experience” or access to products that would make them feel hip or cool. People paid far too much for far too little and flashed their materialistic possessions as indicators of their social or economic status.
What Customers Want Today
Today’s value-conscious customers want more than window dressing. They want ASSURANCE that what they are buying is worth the expense. They must feel confident that the investment of their hard-earned money will provide something of significant value. They need justification – or an excuse – for spending their discretionary money at a time when saving their money may seem like a more prudent action.
No longer are name-brand products or the “premier resort destination” the automatic purchase choice of many customers. People are evaluating their options and scrutinizing which choice gives them the biggest bang for their buck. They’re reviewing previous customer comments for assurance they are making the right purchasing choice. They are seeking to connect on an emotional level with products and services that match their current values.
Customers also want assurance of the RELIABILITY of your products and services. They want to buy products that work. They want whatever they buy to perform at the level promised. And, as the old throw-away attitude diminishes, customers are looking for products that last longer and won’t have to be replaced in a few months with a new generation product.
Customers want service companies to actually deliver quality service. They expect your employees to be friendly, efficient, knowledgeable, attentive and helpful. They want their hot food hot and their cold food cold. In many cases customers expect even higher levels of service during tough times because they expect you to truly compete for their business.
They expect you to stand behind your products and services and guarantee you will deliver what you promise. And if, for some reason, there is a problem with your delivery, today’s customers expect RESPONSIVENESS from your employees who quickly address their concerns and to fix the problem.
In tough times customers expect you to have EMPATHY and understand what they are going through. Very few people in this country have been untouched by the tough economy. Many people have lost their jobs, their home and even their possessions. They’ve downsized their lifestyle significantly. They’ve postponed their retirement. Those who are still employed may be underemployed, having had their hours or their wages cut. Some families may have more than one wage earner who has been affected by the downturn.
Consequently, when these customers do spend their money on a vacation, at a restaurant, bar or theater, they expect your employees to show APPRECIATION for the investment the customer is making. Stressed out customers expect your employees to understand their need for escape, relaxation, rejuvenation and a life free from the hassles of their daily grind. If they purchase a product from you, they want that product to be easy to use and not add any additional burden to their life. If they have to interact with your employees, customers want the experience to be pleasant and problem-free. They expect your employees to be totally focused on ensuring they have a good experience patronizing your business.
Aligning Your Business Model to New Customer Demands
It’s time to pull the yoyo back up and regain control of your company’s economic future. Innovative Management Group can help position your company for success in the new economy based on the realities of the market conditions you can expect over the next 3-5 years. We will help you:
• Define your strategic focus and outline your strategic intentions
• Reclaim your brand identity or redefine a new one based on the new market realities
• Identify your value premise and unique product differentiation
• Determine which of your current products and services match current customer needs
• Identify new products and services needed to create customer demand
• Align your marketing strategies and tactics with the new world
• Ensure consistent product and service delivery to create customer loyalty
• Engage your employees in making the changes necessary to succeed in today’s competitive world
• Ensure the commitment of your executives, managers and employees to focus on the things that matter most
During difficult times your company needs to stay focused, or refocus if your current strategies and tactics are ineffective or no longer appropriate. Now is the time to identify strengths, weaknesses, opportunities and threats. Tough times require clear, creative thinking to minimize the weaknesses and threats and take advantage of the strengths and opportunities in order to drive value to your business. It is a time to rediscover the fundamentals of the business — the critical success factors that will keep your organization spinning successfully for many years to come.
Good leaders make good decisions in tough times. Call Innovative Management Group today to help you maintain or regain a strong competitive position in a weak economy. §
Satisfying Customers is Cheap and Easy
If you satisfied your dissatisfied customers when they are “Neutral”, you won’t have to atone for your errors when they are “Annoyed” or feel “Victimized.”
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Have you ever received such horrible service you just wanted to scream at the top of your lungs?
Have you ever wished you could tell the whole world how poorly you were treated so no one would ever patronize that business again?
I recently took my relatively new car back to my “friendly Chevrolet dealer” to fix a horrible squeak in my front-end suspension. I was not looking forward to the experience. The last ordeal I had with this dealer was very unpleasant. I tend to become irritable when I sit in the dealer’s “customer courtesy lounge” for several hours on three separate occasions only to be told after the wait that they ordered the wrong part.
After my last blow-up I had with the service rep, service manager, and the general manager of the dealership, you’d think they would have flagged me as a difficult customer. You’d think they would have placed a statement in their computer saying, “Next time this guy comes in, whatever you do, don’t upset him. Fix his car right, and get him out of here.”
Apparently there were no red flags in their computer because they really out-did themselves this time in providing horrible service.
When the service manager asked me what was wrong with my car I pressed down on the hood of the vehicle so he could hear the squeak. His immediate response was, “You need a new fan belt.” That was an amazing diagnosis since the car wasn’t even running.
When I told him that I thought the problem was in the suspension and also mentioned that the car pulled strongly to the right, he told me they would give me an alignment too.
I begged him to please take a look at the suspension. He just shrugged and said, “No problem.”
I was told it would take several hours to fix my car, so I took their “courtesy van” home. At least the bus was there this time. Last time the courtesy van, that “leaves every 30 minutes,” didn’t leave for three hours.
They also told me they would call me to let me know what was wrong with my car prior to doing any work on it. But instead, I had to call them five times to see when my car would be done. Twice I was told it was “being lubed,” even though the car did not require this service. The third time they said, “Our service manager is test driving your car right now to check it out.”
Several hours later, on the fifth call, the service manager told me he had just driven my car and it now was ready. The squeak was fixed. After each of the four previous calls they told me they would call me when my car was ready. I guess my fifth call came just as it was finished.
I bet you can guess what happened when I went to pick up my car! When I opened the door and sat down in the driver’s seat I heard the horrible squeak. It was just as loud as before. They hadn’t fixed it. But they did replace my fan belt and align my car for $153.
This time I complained with gusto! You should have seen them jump. I had six service people around my car in seconds. Unfortunately it was quitting time. They wanted me to bring my car back in the morning. I refused and suggested they give me a loaner car instead. You would think I had just extracted teeth from the service manager’s mouth, but he did give me a car.
The next day they actually delivered my car to my home. They had washed and hand-waxed the exterior, put ArmorAll on the tires, shampooed the carpets and filled my gas tank with gas. I was almost sorry I had caused such a big fuss. That is until I got in the car and heard the squeak!!!
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When customers receive poor service they usually react in one of three ways.
The typical response to poor customer service is NEUTRAL the first time it happens. Although the service may not have been as good as the customer expects, the poor service doesn’t really bother a person who responds neutrally. Neutral customers seldom complain. However, when they do complain, they typically follow their complaint by saying something like, “It’s alright. Don’t worry about it.”
Some customers become ANNOYED when they receive shoddy service. This normally occurs when service is particularly bad. Neutral customers can become annoyed when several service errors occur or when a problem is not fixed in a reasonable amount of time.
Finally, customers with severe service problems feel VICTIMIZED. They feel entrapped in a nightmare of poor service. Victimized customers get the impression the service provider is deliberately doing things to irritate them. At this point the service is so bad or flagrant the customer feels personally affronted by it.
Although most neutral customers seldom tell anyone about the poor service they received, people who are annoyed typically tell ten others. Those who are victimized tell everyone they can. They would shout it from the rooftops if they could.
The amazing thing is neutral customers can easily be satisfied just by an expression of surprise that the poor service occurred, the offering of a sincere apology, and a fast resolution of the problem.
With annoyed customers you need to show greater concern for the customer’s problem. You should display a sense of urgency, enlist the customer’s help to find an acceptable solution to the problem, and offer a value-added symbol of your regret.
To satisfy victimized customers you need to pull out all of the stops. The customer will expect to receive an apology from the highest levels of your organization. Get ready to grovel and pay for your transgression.
With victimized customers you need to express your understanding of and empathy for their situation. Allow the customer to vent for as long as it takes. Fully acknowledge their concerns. Listen actively. Address every issue and fix every problem.
Then you must atone for your error with a significant value-added symbol of your regret.
Finally, you must follow-up afterwards with a personal contact to ensure you have resolved the problem completely to the customer’s satisfaction.
--------
My car has now been fixed. But I haven’t been.
The car dealer could have saved a lot of time and money merely by telling the truth, delivering what they promised, keeping me informed, and apologizing for their mistakes. They could have satisfied me with words.
Instead, the dealer has spent thousands of dollars and countless man-hours to finally fix my car. And, even though my car is fixed, I’m still irritated! So irritated in fact that I am writing an article about it, publishing it in my newsletter that goes out to thousands of businesses, and telling my story to everyone I meet.
I really don’t think you want to irritate me if I’m one of your customers! §
---------------
Innovative Management Group offers two-, four-, and eight-hour customer service training programs for executives, managers and employees. Please contact us for a list of our customized training programs.
---------
Have you ever received such horrible service you just wanted to scream at the top of your lungs?
Have you ever wished you could tell the whole world how poorly you were treated so no one would ever patronize that business again?
I recently took my relatively new car back to my “friendly Chevrolet dealer” to fix a horrible squeak in my front-end suspension. I was not looking forward to the experience. The last ordeal I had with this dealer was very unpleasant. I tend to become irritable when I sit in the dealer’s “customer courtesy lounge” for several hours on three separate occasions only to be told after the wait that they ordered the wrong part.
After my last blow-up I had with the service rep, service manager, and the general manager of the dealership, you’d think they would have flagged me as a difficult customer. You’d think they would have placed a statement in their computer saying, “Next time this guy comes in, whatever you do, don’t upset him. Fix his car right, and get him out of here.”
Apparently there were no red flags in their computer because they really out-did themselves this time in providing horrible service.
When the service manager asked me what was wrong with my car I pressed down on the hood of the vehicle so he could hear the squeak. His immediate response was, “You need a new fan belt.” That was an amazing diagnosis since the car wasn’t even running.
When I told him that I thought the problem was in the suspension and also mentioned that the car pulled strongly to the right, he told me they would give me an alignment too.
I begged him to please take a look at the suspension. He just shrugged and said, “No problem.”
I was told it would take several hours to fix my car, so I took their “courtesy van” home. At least the bus was there this time. Last time the courtesy van, that “leaves every 30 minutes,” didn’t leave for three hours.
They also told me they would call me to let me know what was wrong with my car prior to doing any work on it. But instead, I had to call them five times to see when my car would be done. Twice I was told it was “being lubed,” even though the car did not require this service. The third time they said, “Our service manager is test driving your car right now to check it out.”
Several hours later, on the fifth call, the service manager told me he had just driven my car and it now was ready. The squeak was fixed. After each of the four previous calls they told me they would call me when my car was ready. I guess my fifth call came just as it was finished.
I bet you can guess what happened when I went to pick up my car! When I opened the door and sat down in the driver’s seat I heard the horrible squeak. It was just as loud as before. They hadn’t fixed it. But they did replace my fan belt and align my car for $153.
This time I complained with gusto! You should have seen them jump. I had six service people around my car in seconds. Unfortunately it was quitting time. They wanted me to bring my car back in the morning. I refused and suggested they give me a loaner car instead. You would think I had just extracted teeth from the service manager’s mouth, but he did give me a car.
The next day they actually delivered my car to my home. They had washed and hand-waxed the exterior, put ArmorAll on the tires, shampooed the carpets and filled my gas tank with gas. I was almost sorry I had caused such a big fuss. That is until I got in the car and heard the squeak!!!
--------
When customers receive poor service they usually react in one of three ways.
The typical response to poor customer service is NEUTRAL the first time it happens. Although the service may not have been as good as the customer expects, the poor service doesn’t really bother a person who responds neutrally. Neutral customers seldom complain. However, when they do complain, they typically follow their complaint by saying something like, “It’s alright. Don’t worry about it.”
Some customers become ANNOYED when they receive shoddy service. This normally occurs when service is particularly bad. Neutral customers can become annoyed when several service errors occur or when a problem is not fixed in a reasonable amount of time.
Finally, customers with severe service problems feel VICTIMIZED. They feel entrapped in a nightmare of poor service. Victimized customers get the impression the service provider is deliberately doing things to irritate them. At this point the service is so bad or flagrant the customer feels personally affronted by it.
Although most neutral customers seldom tell anyone about the poor service they received, people who are annoyed typically tell ten others. Those who are victimized tell everyone they can. They would shout it from the rooftops if they could.
The amazing thing is neutral customers can easily be satisfied just by an expression of surprise that the poor service occurred, the offering of a sincere apology, and a fast resolution of the problem.
With annoyed customers you need to show greater concern for the customer’s problem. You should display a sense of urgency, enlist the customer’s help to find an acceptable solution to the problem, and offer a value-added symbol of your regret.
To satisfy victimized customers you need to pull out all of the stops. The customer will expect to receive an apology from the highest levels of your organization. Get ready to grovel and pay for your transgression.
With victimized customers you need to express your understanding of and empathy for their situation. Allow the customer to vent for as long as it takes. Fully acknowledge their concerns. Listen actively. Address every issue and fix every problem.
Then you must atone for your error with a significant value-added symbol of your regret.
Finally, you must follow-up afterwards with a personal contact to ensure you have resolved the problem completely to the customer’s satisfaction.
--------
My car has now been fixed. But I haven’t been.
The car dealer could have saved a lot of time and money merely by telling the truth, delivering what they promised, keeping me informed, and apologizing for their mistakes. They could have satisfied me with words.
Instead, the dealer has spent thousands of dollars and countless man-hours to finally fix my car. And, even though my car is fixed, I’m still irritated! So irritated in fact that I am writing an article about it, publishing it in my newsletter that goes out to thousands of businesses, and telling my story to everyone I meet.
I really don’t think you want to irritate me if I’m one of your customers! §
---------------
Innovative Management Group offers two-, four-, and eight-hour customer service training programs for executives, managers and employees. Please contact us for a list of our customized training programs.
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