We recently returned from the Southern Wholesalers Association’s annual meeting in Hammock Beach, Florida. As part of our company’s evolution, we take the kids and grandkids to immerse them in our great industry. It was a great meeting as always. Hats off to the SWA staff — Terry Shafer, Linda Wilbourn, Michele Fort and the SWA board, outgoing president John Simmons and incoming president David Popek.
As Rich was watching one of Jen’s kids at the beach, he had the opportunity to nag one of them, “Picking that scab will just make it worse!” That nag probably goes back thousands of years — as long as there have been children and adults who supervise them. Jen can attest to Rich’s nagging for almost that long. In fact, the latest wisdom tells us that, in most cases, protecting the scab and leaving it the heck alone works the best.
In our experience, running a business is almost the exact opposite. In business, “scabs” seldom get better if you leave them alone. They may remain about the same but, in many cases, will erode over time. In many instances, action must be taken and energy must be applied in order to simply maintain the status quo. Significant action and much energy must be applied to make the situation significantly better.
Productivity is Not an Accident
The productivity levels achieved by high-performance wholesalers is not like falling off a log. Howard Putnam, a former CEO of Southwest Airlines, spoke to the SWA group. He described an early realization that the company could no longer afford four airplanes. To survive, it needed to sell one and operate all their routes with just three planes.
He then connected the dots and determined the airline needed to achieve productivity levels unheard of in the industry in order to survive. Airplanes are only generating revenue when they are in the air, so the objective was to cut ground time and increase in-the-air time for the remaining three planes. Southwest needed to turn its planes around in 10 minutes in order to achieve profitability.
At the time, even the most forward-thinking airline executive could not imagine making this a reality. Sure, you could set up a Guinness World Records record-breaking situation and achieve a 10-minute ground stop, one time, but doing it every day for every flight was unfathomable.
Southwest execs analyzed each of the steps required to turn around a plane at the gate: get passengers off the plane, clean the plane, fuel the plane, baggage off, baggage on, load peanuts, load drinks, change crew, put passengers back on and do required paperwork. At the time, other airlines were doing the same turnaround in about 60 minutes, so it was going to require some radically different thinking. FAA/TSA regulations might not allow them to do some of the things they had to do to achieve the 10-minute goal. (The legend says they did the ticket-taking and passenger manifest while already in the air.)
The point is that this unimaginable level of productivity was only reached because the airline was committed to (forced into) improving and dedicated itself to achieving the goal. It did a detailed assessment of the current process, didn’t allow the word “impossible” to dominate its thinking, fostered a sense of urgency and kept an open mind about the solution. The result was the highest productivity airline in the world at the time. From the numbers we could find online, its productivity appears to still be at the top of the industry.
In our industry, people, not planes, have been and will continue to be the productivity problem. It will be increasingly more difficult to attract and keep people in the industry. Salary and benefit costs will increase faster than revenue growth. Increasing productivity will be the key to your competitiveness going forward. To repeat, good productivity does not happen by accident.
Respecting Rules and Standards
Sadly, our society seems to be evolving toward the idea that rules and laws should only apply to others. It is logical that this attitude will seep or maybe mud-slide into our businesses. As employment rates rise, we also are seeing an attitude of, “If you make me follow the rules, I’ll just go somewhere else where I can do whatever I want.”
We have no solution to this problem but we recommend that some of your energy must be dedicated to adherence to the company’s rules. Safety rules cannot be negotiable. They must be followed by everyone, always. Executives and managers must set an example by walking the talk and holding the team accountable for respecting the rules. You should review your rules to decide if they are still appropriate, reasonable and current to the world as it is now.
Cell phone use at work is one of our hot buttons. When a customer has to wait for the counter person to complete a phone call or while the yard guy argues with his significant other about the water bill, you have a problem.
In many ways, respecting standards is similar to respecting the rules — with a twist. Some employees have an attitude of “I want to do it my way,” regardless of the company-established best practice. We are huge proponents of best practices created by a company and then consistently used throughout different departments and locations.
We see so many instances in our industry where people are forced to adlib their jobs because the distributor has failed to establish baseline best practices. In other instances, the company standards are ignored because they are no longer current or because the individual wants to do it his way. (Having just finished the Florida trip with a tired 4-year-old who wanted to do things her way, we understand that significant energy might be required to enforce standards — but there is no alternative.)
As the late, great Yogi Berra used to say, “You can observe a lot by just watching.” Data and telemetry numbers are great but simply taking time to watch your operation will yield a wealth of ideas and opportunities for improvements. Clients are amazed at how much we understand their business and its problems after watching the counter and warehouse operations for an hour or two.
Empowering Employees, Selling Online
Watching a couple minutes of professional basketball over the last month, it is clear most players at that level are not afraid to take the ball. They want the ball. Some players are crazy to get the ball —to take the shot, to score, to be a winner. Part of the leadership task is to determine which members of your team want the ball and who will score. Then get the ball to those who are eager.
Not every member of your team is eager to do more, to do better, to take the shot and score. To be clear, you need people in the organization who are not eager to get the ball. Many of them play important and even vital roles in the company. Enable them to do their jobs but don’t feed them the ball.
“The customer isn’t always right, but he/she is always the customer.” Rich has used this mantra for his entire business career. It is at the heart of many thriving businesses. It doesn’t matter what you like selling; what matters is what customers want to buy and how they want to buy it.
While the number is far smaller than it was a couple of years ago, we still know of executives in our industry who don’t want to sell online. Whether the customer is right or wrong, smart or dumb doesn’t matter — customers have voted and many of them want to buy online. You must decide if you want those folks as customers in the future.
We’ve said this before: Selling online is not an information technology task, it is a marketing assignment. IT orientation often worries about technology first and what the user wants/needs second. The right store isn’t always the most high-tech, latest acronym-laden, fully cloud-compliant piece of techno-crud. The right store is what the customer wants to use to buy product from you. Figure out what your customers want first, then decide on the best technology to provide the best customer experience.
We know; it’s summer, it’s hot and our prescription for you to exert more energy toward the success of your business sounds like work. The only good news we have is that after you get the ball rolling, the amount of energy to keep it rolling is a lot less.