I recently stayed at a Crowne Plaza hotel and decided to treat myself to breakfast in bed, so I ordered up some room service. Not only was my order brought incorrectly, which is a whole other story, but there was a $2 delivery charge on the bill. When I asked what the $2 charge was for, I was told it was a delivery charge for ordering room service. I was floored by this. My immediate response was "you are now charging people for room service. Isn't that one of the value adds of a hotel, that you can eat in your room?" I could not get over this….the whole purpose of room service is to have food delivered to your room and now I am paying an extra charge for it? It is sort of like buying a plane ticket and then being charged extra to use the washroom once you are on the plane (watch out, some airline exec might steal this as the next great revenue-generating idea). Don't charge your customers for ridiculous things just to make a buck or you will find that less customers will want your stuff.
Check out this great video on how to implement sustainable change.
According to a recent Harvard Business Review article, more than 90% of the top 200 companies are currently run by baby boomers. When interviewed, the next generation of potential leaders of these companies, those of us from Generation X, felt like they were being bypassed for the younger generation (Generation Y). If this is in fact the case, we are in for a leadership vacuum the likes of which we have never seen. As boomers start to step down and retire, can we really expect those that are two generations removed to take over control of these companies? I am not convinced this will work. I am all for succession planning, generating new ideas and throwing people right in the middle of a tough situation to see how they handle it, but if the trend is to move towards Gen Y as the new leaders, what happens to all of the Gen Xers? Are they left in middle-to-senior management roles for eternity? How do companies think this will go over from a morale perspective? Not very well I would imagine. This does not seem to make a lot of sense from a practical perspective, so the driver must be financial. Maybe Generation Y commands lower salaries? Are they easier to mentor? Do they have inherently better leadership skills? I don't think there is data available to support these points on one side or the other. What I do know is that if companies ignore my generation as potential leaders of these organizations, there will be a leadership vacuum between boomers who are on the way out and Gen Yers who are too young to run a large company. There is something to be said for experience. I don't believe there is an ultimate profile for the CEO of a large company, but certainly one of the criteria should be experience. With experience comes the ability to inspire and lead others, to communicate effectively, to assess the strengths and weaknesses of an organization. Aren't these all characteritics we want for company leaders? There is no doubt, some people are born leaders, but without the experience, there will always be something lacking. A great leader surrounds himself with great people, but if Gen Xers are being overlooked for leadership positions, why would they want to be second in command to make someone else look good? Very few of us are that altruistic. I hope that companies realize the value that both Gen X and GenYers have to offer and that strategies are developed to leverage the best of both generations. In any case, the boomers will soon be leaving the leadership positions of these companies and someone will need to fill the void. I just hope it is the right people, and not those based on the lowest cost.
Long time no speak. Sorry about the delay since my last post. A few updates. In one of my recent posts, How BMW sells cars, I left you not knowing which car I had decided to buy. Well, I decided on the beemer and I am picking it up tomorrow. I am very excited. But let's talk about greed for a minute. Is greed the reason for all of the different financial crises we read about every day? What about the collapse of so many US banks? How much money is too much? Now, you might think this is interesting commentary from someone who, in the previous paragraph, talked about getting a BMW. But to me, these are two different points. Greed is when you have more than one person could ever need, yet still want more. I am not greedy, I just like a nice car (but I only need one, not 10). Case in point: the bank CEO who makes $10m per year and still tries to get more by using business practices that may not be the most ethical. Case in point: the professional basketball player who makes $16m per year and sells marijuana to little kids. Case in point: the world-class sprinter who uses performance enhancing drugs to get even better. You think these examples are fictional? Look at Richard Fuld of Lehman Brothers, Zach Randolph of the Memphis Grizzlies and Marion Jones, then get back to me. Greed has ruled our countries for too long and it is the greed of a few that hurts everyone else.
Steve Jobs changed the face of competition when he announced that the Apple iPhone and iPad would not support Adobe Flash technology. This has created a feud between the two former business partners that is leaving a trail of bad blood. Adobe has recently taken out newspaper ads telling customers how much they love Apple. Are they taking the high road or pining for sympathy? I go with the latter. They realize that without being on Apple's platforms, they will lose much of the market share that they currently hold as more consumers use their iPhones and iPads to replace laptops and computers. No doubt there is a hint of sarcasm in Adobe's loving message, but I am not sure taking on Apple with kid gloves is the way to win this war. This reeks somewhat of desperation – a last ditch effort to save what might be an application whose better days are behind it. Although most of us use Flash technology and don't even know it (through videos and websites), a new technology, html5 is taking hold. Don't ask me to explain the new technology because that is not what I am here to do (besides, it would only confuse you more). The point being that Adobe needs to think strategically about how it will play this game. The ads they are running speak to wanting to ensure that everyone has a choice as to the technology that they use and the applications that they download. Adobe claims that Apple is taking this right away from users by not permitting Flash to be used. My question is: does the average person really care what technology is used? I am all for fair competition but Apple obviously has a reason for doing this, and as self-serving as that reason must be, what can be done about it? Is this any different than Microsoft embedding their own products are part of their operating system? In principle this situation is the same, however, the big difference is that html5 is not Apple technology. So what does Apple have to gain by blocking Adobe Flash from their machines? Apple has repeatedly claimed that Flash is "buggy" and causes its Macintosh computers to crash. How often this happens is being debated. Apple seems to know what they are doing, but a by-product of their decision might be to polarize developers. Up until recently, it has never been an either/or choice. You could develop software using Flash or html5 and it would be compatible anywhere. Now what will Flash developers do? Apple products are growing faster than any other handheld device and all signs are pointing to the fact that people will use their cell phones and handheld devices more and more in the future. These Flash developers are many of the same developers who build apps for Apple products. Will there be an underground revolution started by Flash developers and advocates? As with everything else, there is a Facebook group that has been started so you can follow along and see what transpires.
In my most recent post, I praised the experience that I had with BMW when looking for a new car. I sit here to talk about the exact opposite experience I just had when looking at an Audi. The experience was so poor that I feel it necessary to tell you that the culprits were Uptown Audi. Imagine going into a dealership, being asked if you have any questions and saying "not really, tell me a little bit about the car." Then being told that it had a big trunk and all wheel-drive, but nothing about the safety features or gadgets or unique technology (I had mentioned that my kids would sometimes be riding in the car, implying safety was important). There was not one piece of information to get me excited about the car or the experience. We then moved over to the salesman's desk where he pulled up a spreadsheet and started crunching numbers for me (not at my request, by the way), each one showing a number above my budget. After 5 minutes of this I said "let's not worry about the money, I have not even driven the car yet." The salesman gets me the keys for a test drive and says "I won't be joining you as one of my appointments just arrived." So I took the car for a test drive by myself. No opportunity for him to sell me on the car, no opportunity to build a relationship, no opportunity to relate to me as a potential buyer. I finished the test drive, dropped the keys on his desk (where he was sitting with another customer) and said thanks and walked out. Advice to all salespeople: if you are with another customer or know that someone is coming in shortly, tell me. Don't try and juggle two customers, it won't work and you might end up losing both. Tell me up front and I will either decide to wait or you can refer me to another salesperson. Don't make me feel like a second-class citizen or like someone else is more important than me. You are not going to sell me a car in 10 minutes, so don't try to. It is an emotional purchase, so appeal to my self-interest. Safe to say I went ahead and got the BMW and a major reason was the treatment I received there. The treatment you receive at the beginning is indicative of the treatment you will receive throughout, so think about how you treat customers and potential customers.
Do you want to know how to accelerate the sales cycle for your business? Take a lesson from BMW. I am in the market for a new car and one of my options to research was a Beemer. Why not? Now take note, I had never even been inside a BMW before, let alone drive one. Well, what an experience they provided. The experience (and I say experience because it is just that) begins with you walking into a beautiful facility with lots of windows, state of the art design, and of course, mountains of beautiful cars. Nobody jumps on you as you walk through the door, but you are permitted to wander for a few minutes before asked if you want some help. "Yes," I say, "I am in the market for a car." The first thing I am told is that driving a BMW is like no other experience I will ever encounter. I am intrigued. The conversation goes on and I find out all about the features of the model I am interested in. There was a special focus on using words like "performance" and "unique." By the end, I could not believe that a car could do all of these things. Then comes the kicker, all service is included for the life of the car. This is not a huge dollar value necessarily, but a billiant marketing move. I am drooling at the prospect of driving this car. Then comes the test drive, the piece de resistance. We pick up the car and I enter the passenger side. I am then chauffeured around sharp turns and straightaways at speeds I did not think were possible. I was then told to "brace myself" as my driver slammed on the brakes going 80km/h with his hands in the air to show me the control of the car. It was then my turn to drive. Yes, it was better than expected. The car is an amazing piece of machinery and like nothing I have ever driven. I will digress from the story to say that there are two things that companies can learn from BMW:
- Offer your customers a unique experience – I don't know or care if the car I drove is the best on the market. The experience provided to me was like nothing I had ever witnessed before and that will definitely factor into my decision.
- Know your target market and appeal to them – BMW knows its' drivers like to drive fast. They don't hide that, they relish in it by using words like performance, but also stress the safety of the vehicle. The premise being, buyers will enjoy the car even more (aka go faster) if they feel safe inside.
Remember that customers need to feel special and that will create the emotional reaction that pushes them to buy your products over the competition. Make sure you provide that experience for them. I have not decided yet which car I will buy, but I can certainly tell you that I will never forget my journey into the BMW dealership because of the feeling of anxiety and nervousness walking in, compared with the feeling of adrenaline and comfort walking out.
Did you know that 70% of family-owned businesses don’t make it to a second generation? What about the fact that 90% of these businesses never make it to third generation? Those are pretty scary statistics. Granted, many of these businesses were not created to provide a legacy from generation to generation, but what about those that were? What happened to them? Many times there is a difference of opinion between parent and child on how to run the business, other times there is a lack of interest from the children in getting involved and other times the business is just not sustainable. If you are the owner of a family-owned business and you want to know how you can avoid being in the statistics above, here are three things you can do to buck the trend:
- Have the succession planning discussion with your kids early and often
- Align your personal objectives with the objectives of the company
- Determine roles and responsibilities and develop a transition plan
By taking these three steps, you will be ready to hand off the business successfully to the next generation, or at least know that they are not interested so another strategy can be developed. Have the succession planning discussion with your kids early and often Too many small business owners just assume that their children have the desire (and the capability) to take over the business and run it successfully. This is not always the case. Get your family involved in the business early, summer jobs, internships, projects, etc. to give them insight into the business. Let them decide if it is right for them. If they show interest, have discussions about how they would manage the business, changes they would suggest how the transition might work. Help them visualize what their life would be like if they were running the business and ensure that you are comfortable handing over the reins. The biggest mistake business owners make is bringing in younger family members to run the business, but not getting out of the way to let them do it. If it turns out that your children are not interested in taking over the business, you know early and can develop an alternate exit strategy. Align your personal objectives with those of the company If your children show interest in taking over the company, and you are comfortable with that, then the family’s personal objectives need to be aligned with those of the company. Is the job for the next generation to grow the company? To reduce the cost structure? To provide enough income for the parents? Maintain a retirement nest egg? All of the above? This is an important step in determining how the business will be run. The next generation will come in with new ideas, but those ideas need to be executed in order to help meet the company objectives. Those objectives need to be agreed upon by all family members involved in the succession planning of the company because those objectives need to be consistent. Without consistent objectives, the business will have no direction and each family member will have a different perspective on what needs to be achieved. Determine roles and responsibilities and develop a transition plan Once you have decided that your children will be taking over the company, you need to develop a transition plan identifying roles, responsibilities and timelines. When will the transfer of power take place? What needs to be completed before that can happen? How long should the transition take? These are all important factors to consider. You need to know if your child should work in the business for a year to get to know customers, employees and suppliers before just taking over as President. You need to avoid creating two camps within the company between those supporting the old guard and those supporting the new guard. There needs to be a clear, public, transfer of power so that there is no misconception as to who is in charge. The change needs to be supported at all levels of the organization so as not to impact company performance. Handing over control of your business will be one of the more difficult things you will ever do. You have likely spent most of your life growing this business and putting your blood, sweat and tears into it and now someone else will be running it. However, you should be proud that it will be staying in the family and by following the advice above, you know that you will be leaving the business in good hands and going in a direction that is consistent with your vision.