

10% of the personnel and 10-15% (or more) of forecasted expenses. Do more with less…A hunkering down mode would begin and fear
was in the hearts and minds of everyone.


Then the 3rd quarter results would come in, and
not enough was done in the 3rd quarter to put things back on track
and it was full-on panic. The craziness would ensue. Everyone was required to
do anything and everything humanely (even if insanely) possible to make


Then the year-end results would come in, and they’d done it. They had succeeded in the near impossible feat of making up for the earlier budget misses while still making their quarterly requirements. Celebrations were everywhere, and everyone – those who were left anyway – would go into the year-end holiday season fat, happy and exhausted. In January, we were back to the “happy go-lucky” fresh start mode and the cycle would begin again. This happened every year I was there. You could set your calendar by it. You could always tell what time of year it was by the attitude and temperament of the environment. It was awful….and completely unnecessary.
I wish I could say this behavior was limited to just an
isolated company here or there, but it’s not. I saw similar behaviors in many a
company. The most significant factors I saw creating this dysfunction were: (i)
because they couldn’t see the impact of the process
chain of cause and effect and what impacts what, they focused almost entirely on end results; (ii) the
companies were managing their performance by quarters instead of longer term performance
that would produce greater success over time; and (iii) because of the first
two factors in (i) and (ii), they weren’t incentivizing most of the activities
that actually created the results they wanted, so they were having to recreate
the short-term circumstances to produce those end results every year. While there is a
serious problem with the American culture with its shareholders expecting – no,
demanding - continual increases in a company’s profitability and revenues
quarter after quarter, creating an unsustainable corporate model over the long
term which produces the behavior in (ii) above, I will address only the issues
reflected in (i) and (iii) here. Solving (i) and (iii) will help with the
unrealistic, dysfunctional and destructive culture behind (ii) and we’ll leave
the discussion of (ii) itself for another article.
In order to incentivize the behavior that produces the results
you want, you have to actually understand what behavior and activities actually
do produce those results. It’s not as simple as “good sales people produce revenues”. If you aren’t creating the system that
fosters the results, you are having continually to start over and recreate
every sale and every relationship over and over again…the hamster on a wheel…you
never get ahead because you’re always fighting and you end up doing little more
than replacing the sand that falls out of that sieve. Therefore, you end up
relying nearly 100% on just your sales people and everyone else just becomes “sales
support” (and we all know sales people with this sense of entitlement). The reality
is that most every division or person in a company has a role to play in
identifying, recruiting, soliciting, selling, supporting, servicing,
manufacturing for, distributing to and retaining a customer that spends money
with the company. If you don’t understand how every
person in your company
impacts a customer or a revenue dollar, you can’t understand the milestones or
activities that you want to promote that will make it easier for the company to
achieve its objectives. The vast majority of companies have bonus plans only
for senior managers and sales people. The problem with that is that everyone in
the chain can either satisfy, dissatisfy, retain or lose a paying client. We
all know how that goes with diversion of resources and management trying to
save a customer, money going out the door in free 

Here is where your numbers come back into play. These objectives
and metrics need to be measurable…. “doing a good job with a smile on your face”
in that list of job duties isn’t sufficient. Is there a timing component, is
there a service or productivity component…what would tell you whether someone did well, just “ok”
or terribly? Put a key performance indicator and metric on those … and here’s
the important part…tie it to a bonus or some other financial incentive. That’s
right…give every single employee an opportunity for a performance bonus and
financial incentive. Every. Single. Employee.
You do this for 2 main reasons. First, every single employee has an
impact on the chain of processes that produces or supports something that
touches the customer and you want that part of the process to go smoothly,
productively and with the highest degree of intention and quality. Second,
every single employee needs to understand how they touch or support the
customer and the business objectives, and needs to feel that they are an
important part of the chain. Because a customer can be lost at any point in
this chain, you need to have a strong chain

This is how you keep both customers and employees. Retained
customers continue to buy from you, alleviating you from having to always start
over finding new customers and making up for lost revenues or the end of sales from
that customer. Retained customers also forgive missteps easier and refer other
customers to you, providing valuable references and contributing to that strong
foundation and corporate reputation that brings in new customers without you
making as much effort. This allows you to truly grow your customer and revenue
base, filling up those holes in your bucket that allow you to step out of hamster
on a wheel mode running furiously trying to put more sand in the bucket to
replace the sand falling through the holes. Instead, it helps you create a
bigger sand box.

