The Perils of Productivity

Can't you just see the airline senior staff meeting around the conference table with the American Airlines chairman reveling in this cost reduction? Some eager beaver in accounting is proudly announcing how he has carved out more savings from the AA passengers. Just an olive here and a can of Coke there back in coach and pretty soon, we're talking about real savings. The AA press release proudly trumpets these savings and receives wide attention and publicity. This is good - right?

Actually - no. First, consider all the first class airline passengers reading that article and angrily considering how some nerd in accounting has just cheated them out of an olive they paid dearly for. Whether they left the olives on their plates or not, customers don't like services taken away.

Then think about the much larger group of passengers who would love to fly in first class but now see it diminished in value. The question all passengers must ask is if they cut out the olive, where else have they cut corners. On-Board Service? Maintenance? Back office? In fact, as I was flying to DC last week, seated in humble Row 9, with the hoi polloi, I was tempted to sneak into First Class and poll the denizens there as to which of their food items we could remove to cut costs. I would suspect not many would be swayed.

What I think we can learn is that programs that cut services to customers probably have only a short-term value to an organization. Customers remember, and when they do, they make other choices. Or if not choosing other companies to do business with, often regard the offending company with suspicion and disdain.

What we have to remember in productivity is what happens with the programs and processes we initiate. The key words to consider are ""efficient and "effective". Consider this definition of efficient.

In the 80's, we liked to think that we were "efficient". Consolidations were rampant and CEO's spouted out phrases like "redundancy deleted" and "economy of scale efficiencies accomplished." The result was the merger of unlikely companies where holding companies suddenly owned divisions that made air conditioners and produced food items. Tasty eh?
Our run for "efficiency" left staff and customers confused and often underserved. In luxury retail, we cut back on our service staff and found that customers still expected a hand to carry big packages to their cars. When store general managers had to leave meetings to do carry out, we took a second look at that efficiency.

Then in the 90's, we began to discover "effective" and what we found was that programs that served customers "effectively" left them feeling well served while still providing cost reductions. The era of computer availability at the consumer level was now easily accessible and customers jumped in with both feet. So we accomplished a lot in this transition.

But, you have to be careful with words like "accomplished". Do you want your savings initiative to be the "missing olive" equivalent of standing on an aircraft carrier and stating "mission accomplished"?

Consider the guiding words of the dictionary regarding effective and you can see the difference. For me, I would rather be effective and know that the plans I have made encourage growth and service. And that would be the best plans I could make.

Are Your Rules Driving Your Customer Crazy?

I recently went to a vacation resort whose rules drove me crazy! They had a requirement that you had to make reservations in advance for their three restaurants. The problem is that they did not have the menus available until around 11am in the morning. By that time you might have to eat either real early or real late. We also missed a couple of tours because we didn’t let them know a day in advance. Just what you do not want to do on vacation…think and plan ahead!

You may be thinking, well they have to make sure they have enough seating and food to accommodate everyone, so these rules are not that unreasonable. Of course I see that point too. However, I would think that they would be able to have a pretty good estimate of eating patterns and demand after being in business for a while so as to not to drive their more spontaneous customers crazy.

What drives you crazy as a customer and what companies make it easy to do business with them? Here are a couple of examples:

Think about movie theaters. They offer newly released movies more often and in more theaters anticipating that the demand will increase at that time. You don’t need a reservation to go to a show but you have the option of purchasing tickets ahead of time if you want to make sure you have a seat. They use their experience and options in serving their customers.

What happens if you have to go to a new doctor? They require about 3-5 lengthy forms to be completed on your medical history and other requirements. Quite often they expect you to arrive at your first appointment about 30-60 minutes early to complete the forms. Not respectful of your time. The last two new doctors I consulted had their forms on their websites. You could download them and fill them out when you had time avoiding adding extra time to your first appointment. Their process was much more customer friendly.

Now examine your rules. Do your rules drive your customer crazy or do you make it easy to do business with you? Here are a few tips:
· Examine the Purpose of the Rule: Was the rule designed for your benefit or the benefit of your customers? Some rules are put in place to track internal productivity or to give feedback to employees which is great as long as it does not impact the customer experience.
· Legal Requirements: Some rules are put in place to ensure your company complies with state or federal laws and regulations. Ask your legal department to examine whether you can comply with the regulations without the type of “fine print” that people usually do not read anyway and that drives customers crazy.
· Look at the Rule from a Customer Point of View: Take turns playing a “customer for a day.” Experience your sales and service process as a customer and honestly ask whether your rules would drive you crazy if you were a customer.


If you offer a unique service or product, your customers will put up with tiring rules. However, if there are many competitors in your industry, your customers will have buying choices. I prefer companies that make it easy to do business with them. Who would you rather do business with?

Your Questions on Coaching Are Answered

Have you ever wondered why some leaders have coaches and other don’t? Want to know what the investment in coaching might be for your organization? Then check out the survey results at http://www.sherpacoaching.com/SherpaExecutiveCoachingSurvey2009.pdf to get the answers to the following questions and more.

· Who are executive coaches
· What do these coaches do?
· When is coaching needed?
· Where is coaching used?
· What is the cost of coaches?
· Why hire or train coaches?
· How are services and training delivered?

Travel Tricks 1: Driving Directions

I love traveling to new places and sharing knowledge with others, but I dislike driving, so I avoid that whenever I can. Unless I have multiple engagements in the same area, I try to use hotel/airport shuttles or have someone pick me up whenever these options are available. This way I can reduce both travel expenses for my clients and stress for me. How? I avoid car costs and the possibility of getting lost. If you have to drive, I recommend that you always get a cell phone number for your contact at the new destination. Having their office phone is not enough because they may have left for the meeting place by the time you realize you need their help or want to follow-up on something.

As far as driving goes, I am directionally challenged and prefer to know if I need to turn left or right instead of North, South, East, West (N/S/E/W). From experience I know the driving instructions you download from the internet can tell you to turn right when you should have turned left. Then you end up miles out of your way (or the next town) before you stop to find someone to ask or pull out the cell to call your hotel or contact for directions. However, I learned to remedy this problem by making sure the instructions also include directions like N/S/E/W. Since the highway system uses compass directions on their signs, you can follow the signs to be sure you are turning the correct way. Remember, if you do get lost: (1) do not panic and put a fun spin on it by trying to think of it as an adventure (2) do not be embarrassed everyone gets lost occasionally so pick-up the phone and call for help when you need it.

I find most driving directions work great if you can arrive at your destination city during the daytime. However, driving after dark can be a little scary in a new place. Detours for out-of-towners can get us lost in the dark. I’ve also been in towns where I would swear they turned all the lights off by 10 PM, even on the highway signs. So I could not tell which exit was my road. I had realized I missed my turn when I saw my hotel go by. So of course I had to take the next exit and try to go back. Missed it again! I kept seeing it to my side or in rearview mirror. Once it took me 3 circles and 2 phone calls before I finally figured out how to pull into that hotel parking lot. Sometimes it helps to find out what the street before the one you need is so you can be looking for the correct turn as soon as you pass that one. That time, if I had just known MLK (it did have a light) was 3 streets before my hotel’s and that I needed to turn under the overpass (not right per my downloaded instructions) I would have found my hotel the first time.

I know some of you think with new technology, why download directions anymore? Instead why not just get yourself a GPS? I have tried multiple GPS products. Yes - most of the time these gadgets are great, but they too can make mistakes. I once had a GPS tell me to drive across a small lake to get where I wanted to go - the lake had no bridge! Most of the time the GPS tells you to drive on major highways and toll ways when you can sometimes get to your desired location in less time and miles using other roads. For this reason, I try to always pick up a map at the rental car place and check out the best possible route before driving off. You can verify your chosen routes with a local working at the rental car desk, in the hotel lobby, or call your contact. Another problem I had with one GPS was that it kept popping off the window and under the passenger seat at just the time I need to check a street name. If anyone knows of a GPS that will tell me the upcoming turn street names and exits rather than making me read them – I’d love to know about that product! Also, please share any other travel tips you may have for driving in an unknown area.

The next post will be some of my hotel experiences.