Everyone is a customer

If you can only focus on one thing in your business, make it customer service. Not just to the paying customers--though treating them nice is a good thing--but to the internal customers as well. Who are the "internal customers?" Everyone. Every employee, driver to Director, is a customer.



Customer service is the key performance indicator. It shows (among other things) whether your company processes are running efficiently and links each job to the paying customer. Good things to know.

Tom Peters says:

we urge participants to make the level of customer satisfaction the primary basis for incentive compensation and annual performance evaluation for virtually every person at every level in every function throughout the organization. We also urge every organizational unit in every function to develop key quality measures. Progress should be posted on charts in every work space, and a quantitative goal report should be the first item of business at every staff meeting, regardless of topic.

The video explains how and why each person in the company is a customer, and a supplier. And a worker too, dang it. Each job has three phases: receive input, do work on the input then send the output to someone else. You are a customer when you receive and a supplier when you send, and a worker in between.

The Daily Dick No.1

Today I introduce a new feature, The Daily Dick. An ongoing (but daily?) conversation between Dick, myself and the blog, a chance to chronicle the trouble, travels and travails (and triumphs, right Dick?) Dick lives through. Interesting times (meant not as a curse) too, weaving multiple time zones and multiple cultures into a profitable gig.

You will like Dick. I do. But then I have a thing for smart, intellectually curious, best-idea-wins, results-count-but-people-matter-too people. Don't meet enough of them.

Dick 1 finds Dick in well-known-city, India, hiring new and getting to know (month) old staff, both as individuals and examples of Indian culture. He's been away from home close to two weeks and he's tired. But still observant:

Daily Dick No.1
It can be very stressful running a start-up, and there are times when I wonder what I got myself into setting up this company. Fortunately, this doesn’t happen very often, but when it does all I have to do is look outside

and watch the workers who have been demolishing the building next door to our office to get a proper sense of perspective.

These guys are doing grueling and dangerous physical labor for less than US$2 per day without any real job security or safety net in the form of insurance. Most of them are working hundreds of miles from home, and rarely to get to see the families that they are working so hard to support.

Worse still, they don’t have any choice but to sell their physical labor because they lack the necessary education and skills for finding other work, and most of them will spend their lives grafting away on building sites.

Unlike these laborers, I was lucky enough to have the choice to create this company, and now I have made this choice I have the responsibility not only to make it successful but also to provide an environment in which the people who have chosen to join me can grow and develop themselves and their careers.

This is a huge responsibility, and it is one that I need to remain constantly aware of. Having chosen to go along this path and persuaded others to follow me on it, there’s no turning back.

Dick describes the always grueling and often gruesome reality of developing India and China, waves of menials selling physical and emotional hardship in a desire for a better life for their family. Selling it to the physical and emotional desires of the new middle class for a better life for themselves. What Dick is watching is the death of one way of life and the birth of another, the changing of a culture.

Birth can be pretty but is always messy, and death can be noble but is always disturbing.

And starting a company can be exhilarating but is always tiring. Good on'ya Dick. Welcome to the blog.

Ideology and Pains From The "Gut"

The worst thing to be in a Political Science department is apolitical: ideologues on both sides understand each other, and even grant grudging respect, but neither understand "neutrals," nor do they trust them. How can you trust someone when you don't know what s/he will do?

Being fiercely apolitical likely had more to do with my standing among professors and classmates than anything else (though my "Success Without College" T-shirt probably came close). I always sat by myself in seminar rooms, and no discussion was complete until everyone turned and looked at me, waiting for ... heresy, at least to one side.

It is a complicated and often confusing world we must make sense of, and I understand the comfort one can get from a set of rules and principles that simplifies and explains everything. Order from chaos, truth instead of uncertainty, answers not questions, it is like putting on warm socks: all-enveloping comfort. What's not to like?

Nothing, as long as you don't mind being a lemming, occasionally following your idea off the cliff.

Allowing anything, idea or person, to do your thinking for you is a losing strategy. Comforting, at least until you hit the valley floor. Every time a person gets wedded to an idea or way of looking the world, and shapes reality to fit that idea or perception, s/he is guilty of abdicating personal responsibility for ... life? Results? Making the world better?

I raise this subject now because of the US election reality show. I'm a Canuck so can't vote, but as I see the US when I look out the window (across the Strait of Juna de Fuca) I feel I can have an opinion. And my opinion is, are the Republicans nuts?

I'm not a Democrat, just a democrat. While I easily quote fluff like the Anarcist's creed, that "The change of rulers is the joy of fools," I believe my vote counts, and that it is my duty to make it an informed vote.

One of the most useful ideas about leadership comes from philosopher Peter Koestenbaum, specifically his Leadership Diamond (also here and here; used in sports as well) explained in his book, Leadership: The Inner Side Of Greatness. It is a book John McCain should read.

I will explore the Leadership Diamond in much more details later: for now just a quick summary and one excerpt. The concept behind the diamond is that there are four critical aspects (called "strategies") to achieving leadership greatness: vision, courage, ethics and reality. The excerpt is about the latter, reality, is that:

A realistic leader always responds to the facts, for realism means to have no illusions ... Realism means that you are competent, that you are in command of the hard facts of the business. Realism ... is a commitment to obtain extensive information and maintain a stance of aseptic objectivity. [It] stands for detachment, research, facts and calculations.

There, the problems of the Bush years explained in one paragraph: the Bushies read the words then did the opposite. Too much going by the "gut," too much "knowing" and not enough objectivity. And don't get me started on performance. "Good job Brownie" sums it up.

America is in a mess. Income inequality is at a level not seen since the 20s (here, here and here) and the middle class is farther way from the Leave It To Beaver fantasy family than ever (even in Alaska). Ozzie and Harriet simply would not recognize America now. Something has to be done.

I watched damn near the entire Republican convention (I should get out more), and heard damn few arguments based on "detachment, research, facts and calculations." Reforming the senate and congress are laudatory (and needed) goals, but ending earmarks and pork barrel projects hardly will help those struggling in the 20th income percentile.

Would Obama be a good president? Who knows? There certainly are valid questions about his experience, or lack thereof. Would McCain be a good president? Again who knows? There certainly are valid questions about his temperament and decision making. (I will leave alone the point that he has equal or less "executive experience" than Obama.)

One thing I always look for in a leader (client, friend, spouse) is someone who thinks their way through an issue, who is open to facts and dissenting opinions, who chooses an action only after deciding doing it is the best current choice. I run from people who say they "know" the answer, "know" the "right" thing to do. People who "know" give me the heebee jeebees. I look for people who think, not know.

Here the conventions did answer one thing: Obama thinks and McCain knows. Just like Bush II, and we all know how that has turned out. Has there ever been a group so poorly managed as the US has been for the past 7+ years?

As this is a business blog, the Business Dictionary defines ideology as

A system of ideas that explains and lends legitimacy to actions and beliefs of a social, religious, political, or corporate entity.

To this I add beliefs in plans, strategies and tactics. Few things in business hurt more than falling in love with your (or your boss's) idea, and closing your eyes to any datum that contradicts your preferred, pre-chosen reality.

Certainly an entrepreneur (like Dick) has to have an all-encompassing idea, yet believing in your idea when others doubt you is different than closing your eyes to facts. The two Steves had an idea, a personal computer, and believed in it even when all the "experts" scoffed. As Apple grew the idea didn't change because it didn't have to: the market was ready for a personal computer.

I am not sure the market is ready for a Pit Bull with or without lipstick. Does anyone seriously think that the anti-science teaching of creationism will help the US compete with the schools in India and China pumping out legions of engineers?

Does anyone seriously think that making decisions based on gut instinct is what America needs? I mean, it didn't work for Coca-Cola and the New Coke. I think the stakes are a tad higher here.

Legacy Problems

The easiest way to build the newest, best, most-efficient anything is to start with a blank page, with no constraints from what came before. Sure, knowledge and experience are also important, as are learned skills and skinned knees, and can`t forget deep pockets. But Microsoft (to cite just one case) has all these things in abundance, but to no avail. Or at least no efficient avail.

Gate's gang, er, Balmer's bunch, have to use their skills, experience and dollars building upon an existing system, Windows, an uncertain vista if there ever was one. Indeed, Windows is perhaps the best technical example of a black hole (the opposite of a blank page), where new applications and features must be built upon and made compatible to whatever was done in the past, going back even to DOS.

(That would be a Disc Operating System, the first computer universe for everyone, Windows on just 64K; no mouse, no hard drive, just strange commands like autoexec.bat and configsys, where everything you did started the same way, with c:/ -- the command prompt.)

It is frightening to think of the total of all IQs at Microsoft, a giant, ferocious brilliance in one company. Yet projects arrive late, programs arrive bloated, not because of a lack of anything but because of too much of something: legacy. businessdictionary.com defines a legacy system as

obsolete computer system that may still be in use because its data cannot be changed to newer or standard formats, or its application programs cannot be upgraded.

Windows adds a third issue, that of creating new features or processes while simultaneously insuring that prior features, processes and programs, even from 3rd parties, still work. In other words if a mistake was made in the past you must continue using and building on the mistake. The legacy system is the environment within which you must work. It is the reality.

I am neither a hard nor soft computer professional (or even gifted amateur), so I mention this not to discuss computers in general or Windows in particular, but to introduce the problems of legacy systems. Why? Because of the N=1, R=G world described by C.K. Prahalad and M.S. Krishnan's in their book, The New Age Of Innovation.

P&K describe a world where services, products and delivery systems are customized at the most basic level: the individual. This is the N=1. (R=G describes a focus on access to resources--on a global scale--not ownership of resources.) All fine stuff, yet something kept me coming back to their ideas. Eventually (yesterday actually) I realized it was legacy systems.

P&K use medical insurance and diabetes in India as an example of N=1. Diabetes sufferers pay a unique-to-them premium based on their individual behavior and lifestyle. They argue that

This could be achieved (and the technology is already in use) via remote monitoring of blood sugar and other vital statistics, once a day at random, based on sensors attached to that person's watch or cell phone.

Through this data, the insurer, doctor and patient--based on the patient's full consent (italics added)--could assess the level of compliance of that person to a recommended regimen of medication, diet and exercise. <snip> If, however, the person refused to change her lifestyle and did not comply, the ... premium would then go up.

Personally I have no problem with this. I am a strong believer in user pays and being responsible for your own actions. I believe most obese people are not victims of the fast food industry but are simply lazy, and should have to pay more for health insurance (and for airplane seats, a pet peeve of mine when I fly). I would of course agree to a safety net for true victims and the truly disadvantaged, but for the most people, you do the crime you do the time, period.

Back to P&K. Such personalized N=1 service requires sharing information, personal information. Possible perhaps in India and other communal/collectivist-societies, would it be possible in individualistic-societies like the US or Great Britain? If there is a difference, and I believe there is--check a column by David Brooks in the Aug 11 New York Times for a good description of the differences--what do these differences mean for the N=1 service model?

I will continue this theme and what it might mean for Dick and Acme. In one sense Dick has the best possible position, a blank page upon which to build a company. Many questions arise though: how will his plans and structures fit into different societal types? Will Dick be forced to do N=1 on a macro scale, offering different service models to different locations? If so, what does that mean to business plans? How can Dick create a blank page environment in a dark hole area?

That's enough for today. It is now off to another day of downsize hell. Sigh. I'd much rather sit here and write all day. Heck, I'd much rather do anything. But I was (and still am) influenced by a quote from R.L. Stevenson, that (paraphrasing) "The true measure of a man is not in how well he does the things he likes to do, but in how well he does the things he does not like to do, but must do."

Helping my parent's downsize is a good example of the latter: So far I've done a pretty good job. I think.

We've Always Been On The Moon

Dick plans to offer custom services (N=1) to every customer, big or small; each will receive a service unique-to-them. From watching my daughter and her friends accept unique-to-them services as a given, like air or electricity, I realize N=1 is not an academic exercise but a reality, indeed a tsunami racing towards us.

Old people everywhere tend to remark, usually with a negative moan, that the young people today think differently, act differently, dress and speak differently. Luckily still remembering my hippie, counter-culture, long-hair (well, everyone else had long hair) background, I can see the situation from both sides. The young are different. They "see" things differently. And, as the pace of change (in culture and society as well as technology) gets faster and faster the difference in "seeing" increases as well. A story.

A few years back my good friend Robert told the story of the first moon landing to his young daughter. A space and technology buff, Robert explained the excitement of that day, his family (and mine, and most) glued to the grainy black-and-white TV images, thrilling to the time-lapse, echoey, "One small step for man, one giant leap for mankind," Neil first-foot-on-the-ground Armstrong homily.

Patience worn thin from listening to her dad wax on and on--as old people tend to do--about how the wonder of the event, his daughter answered,

But Daddy, we've always been on the Moon.

Yikes. To our generation the landing was a true seminal event, the culmination of Sputnik and of seeing the blue, green and white world suspended in the blackness of infinite space; we never felt more like global citizens than we did on that July 20, 1969 day.

Yet to Robert's daughter the moon landing was old news, just part of the furniture that makes up her world. Nothing special, no wonder attached.

(Which makes me wonder what might make this generation (X? Y? Z?), weaned on cell phones, text, Facebook, MySpace and iWhatevers, feel wonder? I recall the founding of Greenpeace for example, and wonder at what Rachel Carlson and her book, Silent Spring, created, the green movement that today has largely taken over--even if not always accepted. What will make my daughter feel wonder?)

Good Friends?

Anyway, I began this post with the intention to describe a truly fascinating example of N=1, the offering in India of 100% customized medical insurance based on each person's health and lifestyle, monitored on a daily basis by an R=G grouping of partners. An amazing example!

I will continue this post tomorrow (I promise!), my goal to use the medical insurance example to examine: a) what such a system requires; b) the obstacles facing implementing it today in Western countries (especially the US); and c) how the new generation (above) might accept this "based on lifestyle" method.

To bring this back to Dick and Acme, it is crucial that Dick and his key team do not simply use the way they "see" the world and the market to set policies and plans. In argument logic this is called the fallacy of Provincialism, that the way you and your friends think is the only (or the only correct) way to think. Dick must be able to step outside of his generation's and his culture's way of "seeing" if Acme is truly going to embrace the N-1, R=G world.

Assumptions: Turning Shovels Into Sticks

"I'll call you if we have power." Hm, not a sentence that easily rolls off the tip of most Western tongues, it is the reality that Dick faces in India.

Making a business plan is never about certainty, nothing about the future is ever "certain," just more or less probable or likely. We assume X will happen for W reasons, which, as long as the W reasons are accurate and inclusive, is the best we can hope for. Certainly there is more, volumes about planning and decision making fill bookshelves and MBA curriculums, formulas to follow and techniques to use abound, but ... in the end it all boils down to making assumptions. Guessing.

I thought we were going to use a truck.

Not all assumptions are equal. Making assumptions in/about your own country is always easier than in a new land, always easier to make in your own field than in a new area. Assumptions are also easier to make in slow-moving fields (like, say, accounting, landscaping or railroads) than in dynamic, fast-changing fields (like high tech, fashion or medical research). Yet equal or no, easy or hard, assumptions must be made.

Rolling blackouts are not something easy for most Westerners to include in a plan, brought up as we were in an environment where electricity was much like air, water or beer, there when we wanted it. No one in an OECD country included a line in a plan that, "We will achieve X if the electricity stays on."

Not so in most of the world. Adding such uncertainties into a plan is a necessary skill in the third world. * A favorite story is when the German company shipped the huge printing press to the client location in China only to find that there was no concrete floor, only dirt. Making things worse was that payment required the press be commissioned, hard to do on a dirt floor. Mind you, most Westerners would assume that the floor would be concrete.

Even the savvyist and most sensitive Westerner can make assumption mistakes. A Canadian from CIDA (Canadian International Development Agency) came across farmers in a poor village in India ploughing the dirt with sticks. Realizing that while a tractor was what they really needed, there was no infrastructure (no diesel) for such a high tech solution. Thinking outside the box the official decided that shovels would be appropriate, so sent shovels when back in Canada.

As luck would have it the official was in the neighbourhood the next year and thought he'd look in on the village to see how well the shovels were working. Expecting great things he was amazed when he saw farmers still tilling the fields with sticks, though now nice round oak sticks; the shovel handles. Why?

Well, the farmers didn't have shoes, and you can't use shovels without shoes. The farmers were very happy with the wonderful sturdy stciks though, and benefitted from selling the shovel heads for scrap. They thanked the official for his help.

Not all "unique" events like blackouts have to have bad consequences. If you can think of them beforehand you can plan for them, thus mitigating bad effects. But if you don't think of them ...

Dick and I finally found a time when we both were free and he had electricity. He told me about the effect of an office with no power, and fessed up to a mistake. Sitting in his dead-machine office he lamented, "I should have bought laptops, not PCs, for the office staff. If I had they could still be working (until the batteries died)."

I don't consider it a mistake but a lesson, that he (we) must examine not just our business-specific assumptions but all assumptions, especially the basic ones. In business communication I advise Westerners in Chinese Asia to STOP whenever they make the assumption that "I don't need to explain this; s/he will already know that." It is always easier to assuage someone's hurt feelings--why did you tell me that?--than to find your shovels turned into sticks, or your capital budget spent on PCs sitting silently.

Years ago a French manager explained how the verb "assume" clearly shows the danges, that if you assume you can make an "ass" out of "u" and "me."

* can I still call it the "Third World?" Or is that no longer politically correct? Maybe the proper parlance is undeveloped, or underdeveloped, or less developed, or developing, or ... anyway, I mean no offense by the numerical term I did use. Call it--and myself--a product of my age. I am a fossil.

Motivation: We Are All Human

So, Dick has grown the India office from zero to around thirty in 5+ weeks (with another 30 or so to be added ASAP). Not bad, but which is more important, quantity or quality? Are fifteen excellent employees worth more than thirty so-so staff? Can so-so staff be turned into Acme assets? How do you keep excellent staff motivated?

Hard questions, but then if they were easy everyone would want to start a business.

In yesterday's post I touched on how Western managers have to adjust their ideas when working outside the rich, first-world crust. But not everything changes, and therein hides a big lesson: just because some things are different does not man all things are different.

I've seen many an expatriate manager 'discover' that his/her local staff are different--usually after bad results from refusing to treat them differently--and then throw out everything in the Western manager handbook. This 'baby and the bathwater' disposal leads to more bad results. To paraphrase (badly) the "serenity" poem/prayer, success comes from knowing what should/can be changed and what shouldn't/can't, and how such affects your actions.

There are two broad strategies: dumb down policies and procedures to meet local conditions or raise local staff abilities to match normal policies and procedures. Dick is trying the latter, a good choice.

No matter where you manage, no matter the culture, economic level or societal type, people are people. Every (?) human is motivated by the same things: being treated with respect; being thought of as capable of learning and doing more; being treated fairly; and ... by being paid on time.

Certainly there are an uncountable number of unique characteristics between people of different cultures, characteristics savvy managers need to know and pay attention to.* But there are also equally-important "human" characteristics to pay attention to. This is what Dick is doing.

Continued tomorrow, along with what "empowerment done properly" means.

* to be a subject of a later post, for now let me say that there are three types of expatriate managers, the Good, the Bad and the Ugly. All can "know" about the unique cultural characteristics, yet only Good managers pay proper attention to such.

Pay Them On Time

How do you attract and keep good employees? Give them challenging jobs with real chances to grow. Offer attractive benefits, daycare center, health insurance and gourmet cafeterias. Give competitive-to-high salary/extras packages. Provide quality training. Pay them on time.

Pay them on time? Not an answer on any OECD country's Top Ten list, but crucial to Dick and Acme in India and elsewhere. Probably the biggest concern Dick has--so he thinks--are the size twins, scalability and capacity. "Sure, " I say, "but having that is the dream: how you get there is the reality you have to pay attention to."

Dick needs to attract and keep good employees. Fine. So does every other CEO: It's in the job description. Two problems: managers may define "good" differently and cultures can have quite different motivational hot buttons to press. Pay on time fits into number two. (I'll look at what "good" tomorrow ... or soon anyway.)

This thread began with Dick describing how "crowded" the office has become. He spent last week and this merrily interviewing and hiring, interviewing and hiring, so now, well, in Dick's own words.

We had a conference room, which is nice [to have], but now that is full. That's okay. But my old office, it's now full too and that is hard: I have no place to think. It is becoming quite crowded.

Don't know about you, but I get mental pictures of a sweatshop somewhere, not in color but in sepia and shadow. I asked if such "crowded" conditions would affect employee retention if not recruitment, he said no, that

It wasn't that bad by Indian standards, everyone had their own desk, and a PC that worked. And we pay them on time.

Oh, a desk, PC that works and regular pay: why didn't I think of that? Easy. Because I am from a rich, first world culture.

We from the West (or Japan, or 3 out of 4 Chinas) take regular pay and a working PC for granted, and if not hoteling, a desk as well. These are near the bottom of a business Maslow pyramid, above absolute necessities as heat, light and oxygen but below benefits, training or daycare.

If only the rest of the global pie was the same as the rich crust of first-world cultures. It is not, and thinking it is, because more comfortable and, well, correct, is dreaming, not reality.

Western managers, no matter rank, area or enterprise, must pay attention to other sets of rules, other levels on the needs pyramid.

Dick is lucky; he already knows this as well as I do. I offer this post as a brief introduction to the cautionary tale to follow, that unless you open your eyes to how others see things you go broke. Waste money anyway. Guaranteed.